Open Sources | Rodrigues & Urlocker » Larry Augustin and "Natural Revenue Growth"

May 15, 2006 | Comments: (0)

Larry Augustin and "Natural Revenue Growth"

TAGS: Open Source

Yes, that does sound like a line from half the spam I get, but in this case it's actually an astute observation from Larry Augustin, the source of the email on which I commented late last week.

Larry raises some great points, both in his initial "rant" (his word, not mine) and in the follow up. I definitely concur, for example, that sometimes (in any business) VC money causes the startup to do things that natural, organic growth would never countenance.

I'm not a big fan of huge piles of VC cash, because I think they skew the right business mentality for long-term success: impatient for profit, patient for growth (in Clayton Christensen's words). In other words, entrepreneurs must have every incentive to operate sensibly today with a prudent growth plan that doesn't trade near-term profit for long-term inanity.

However, I disagree with Larry's implication that all open source startups are alike. I think a middleware company is different from an applications company, and that bigger ticket items will have a different (however slight) sales model than a business that thrives on smaller transactions. Not all startups are alike.

It's too soon to settle on any one model. I suspect that it will always be too soon for such. This is one reason that we need continued, open dialogue like this: to help figure out what is the best for vendors and, more importantly, what is the best for customers.

Along that path, Stephen, don't worry about "picking on Matt." Having truth on my side always makes me feel amply armed. ;-)

Posted by Matt Asay on May 15, 2006 07:17 AM

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