
Before sale to IBM for billions, Red Hat started in cofounder's closet - goldminer88
https://www.cnbc.com/2018/11/01/before-sale-to-ibm-for-billions-red-hat-started-in-cofounders-closet.html
======
gorkish
I have a fond memory of the original redhat distros involving a closet.
Sometime in the mid 90's, I was installing RedHat on an old (even for the
time) 486/33 server that we had managed to acquire with the understanding that
it be relocated the next day to a closet in another building across campus.
Since the machine was actually on a desk, we thought we should do the install
before having to move it to a cramped space. The installation ended up taking
like 18 hours on that box, and it came time to move before it was finished. So
we unplugged the UPS and had a bunch of people walk the thing across campus
along with its tiny monochrome monitor still showing the RedHat installer
filling up progress bars over and over. It prompted a lot of questions and
strange looks. We were worried that the batteries were going to give out, but
we made it. The machine carried on dutifully for many years longer than it
should have. The Redhat distro along with rpm really made Linux a workable and
supportable platform, and they deserve a lot of credit for their efforts.

~~~
Fnoord
Its actually APT (apt-get) which made Linux a workable platform because before
that we had to manually hunt for package updates (such as RPMs). That was
horrific. It is the sole reason I ever went to try (and switch to) Debian,
coming from RPM-based distributions.

~~~
InclinedPlane
Yup. I've been using linux/unix since before package managers were common and
debian was like a breath of fresh air. Even with RPMs it was generally always
just easier to build stuff from source than to deal with RedHat's funky
package system. And APT? APT was easy mode, it worked like magic. If you
needed something you just installed it and the OS picked up the latest package
_and all the dependencies_ and installed all of it for you. It seems trivial
today but back when always connected broadband internet was not the norm it
was transformative. It took years and years for RedHat to catch up. I still
have a sore spot about RedHat because of those earlier experiences.

Things are so much easier now in so many ways. For one it's a lot less common
to have a computer that can't access the internet because it doesn't have the
right drivers already. For another it's a lot less common to only have one
computer (including smartphones) and thus only one way to download stuff.
Computers are also way faster so doing anything that requires installing or
compiling stuff isn't as big of a time sink.

------
happy-go-lucky
> "The $34 billion success has nothing to do with me. I will take some credit
> for spotting the initial opportunity. The actual execution of that
> opportunity, the credit goes to much smarter guys than me."

I respect Young for such an honest attribution.

~~~
todipa
"Young now calls his wife "probably the single-most important contributor" to
the initial success of Red Hat. "Without my wife Nancy's sterling credit
rating, I wouldn't been able to raise the money that got us to profitability,"
he says."

I can relate to this.

------
dmschulman
Red Hat was initially financed by opening 8 different credit cards and
accruing $50,000 in credit cart debt before they began bring profitable. I
never knew this before but really drives home how hard/risky it was to
bootstrap your own business back then.

~~~
hindsightbias
Interestingly, the kernel of IBM (Bundy Manufacturing) started in 1889 with
$150K. [https://history-computer.com/People/BundyBio.html](https://history-
computer.com/People/BundyBio.html)

I wonder how common that funding level was in the late 19th Century.

~~~
adventured
Most of the major success stories you're familiar with from that era, involved
entrepreneurs that had rolling levels of success. They built up reputations
first, which enabled them to raise large amounts of capital as needed to fund
ever larger ventures. Elon Musk's latest successes are of that mold (which
makes sense, when you consider that his latest businesses share more in common
with old industrial ventures than dotcoms; Zip2 and PayPal gave venture
capitalists and other partners the confidence to back him on Tesla and
SpaceX).

Rockefeller did that for example before creating Standard Oil. He built up a
sterling reputation first working as a bookkeeper, then as a partner at a
trading firm. He got to know the owners of capital in doing so. At times
during the early years he required extraordinary sums of capital, his
reputation enabled him to raise it in an evening by riding around town and
meeting personally with bankers. He did that once to buy out a large
shareholder who had become conflictory; and other times to acquire businesses
quickly.

Henry Ford went through multiple iterations of messing around with
commercializing his creations (including the Henry Ford Company), before
finally founding The Ford Motor Company. After his very early experiments with
vehicles, his later efforts all required the support of financiers and lots of
capital. Over time he had demonstrated a knack for pulling complex engineering
efforts together and attracting talented people.

Edison always had capital backers for each of his major commercialization
efforts. He operated his own lab (at times funded by outside capital) and then
typically made arrangements for each set of inventions with financiers to take
them from prototype to commercialization and distribution. Nikola Tesla had
some similar backing arrangements at times, although his history in business
was even more haphazard.

Before George Westinghouse founded Westinghouse Electric (which is what made
him particularly famous in the era), he started with The Westinghouse Air
Brake Company, which he founded at 23 years old. And even before that, he
started by creating useful industrial inventions, receiving the first patent
for a rotary steam engine at 19 and a bunch of smaller railroad-related
inventions, before striking commercial gold with the air brake.

~~~
hindsightbias
Interesting. Has anyone ever written a book about founders across the ages? I
remember that the US was always a bit Patent crazy and wonder how that
translated into getting capital. Bundy invented the time clock but seems to
have been a successful marketeer for his earlier clocks.

The Wright Brothers blew a lot of energy defending their patents and not
competing in the market.

The balance between hard skills, showmanship and ruthlessness would be an
interesting study.

------
partycoder
> While at CMU, Marc Ewing was known to wear a red hat as he walked between
> classes. Because of his computer expertise, people would ask for help from
> the "man in the red hat". Ewing and co-founder Bob Young named their initial
> software after the hat, and the name Red Hat stuck.

[https://en.wikipedia.org/wiki/Marc_Ewing](https://en.wikipedia.org/wiki/Marc_Ewing)

~~~
zekrioca
Still.. No one talks about him any longer, and the Wikipedia article is so
short that we cannot know what else he did after leaving Red Hat..

~~~
icebraining
Apparently he left the tech industry, co-founded the Alpinist[1] (he has sold
it since), and started pursuing sailing on a competitive level.

He has also a sparse Github profile:
[https://github.com/marcewing](https://github.com/marcewing)

[1]
[http://www.alpinist.com/p/magazine/AboutUs](http://www.alpinist.com/p/magazine/AboutUs)

~~~
cgh
What the...? I had no idea about this. I am a subscriber to Alpinist. In fact,
I renewed my subscription not too long ago via one of my laptops, which is
running Fedora. Thanks for a couple of great things, Marc.

------
robotsquidward
That's it, I'm moving my startup under my stairs.

~~~
vidanay
Yer a wizard Harry!

------
throw7
props. humble guy. credit to the rpm guys... binary builds from clean
untouched tar files sealed the deal for me back then. i still miss the box
sets.

------
jayliew
\- The lower-level the category the more customers want support on it.

\- The more you can commoditize the layers below you, the more the market
likes it. Red Hat does this for servers.

\- The lower-level the category the more the market actually “wants” it
standardized in order to minimize entropy. This is why low-level
infrastructure categories become natural monopolies or oligopolies.

source: [https://kellblog.com/2014/11/18/it-aint-easy-making-money-
in...](https://kellblog.com/2014/11/18/it-aint-easy-making-money-in-open-
source-thoughts-on-the-hortonworks-s-1/)

------
teddyh
The article portrays this as a success story, but was making “billions” the
_point_ or _goal_ of Red Hat? If it wasn’t, then they have now failed. Because
that’s all you get when you “exit” like this – you get money.

------
delinquentme
Didn't someone in SV say "Software is eating the world"?

[https://en.wikipedia.org/wiki/List_of_largest_pharmaceutical...](https://en.wikipedia.org/wiki/List_of_largest_pharmaceutical_mergers_and_acquisitions)

I suppose 34B is a good run. I mean its not $110B, but its not Biotech so.

