March 2006

Google’s acquisition of Writely is another data point in support of Paul Graham’s thesis that hiring is obsolete. In a brilliant essay (and really, all of his essays are brilliant), he argues that for the smartest folks in the IT industry, it no longer makes sense to get a job at a big company:

The most productive young people will always be undervalued by large organizations, because the young have no performance to measure yet, and any error in guessing their ability will tend toward the mean.

What’s an especially productive 22 year old to do? One thing you can do is go over the heads of organizations, directly to the users. Any company that hires you is, economically, acting as a proxy for the customer. The rate at which they value you (though they may not consciously realize it) is an attempt to guess your value to the user. But there’s a way to appeal their judgement. If you want, you can opt to be valued directly by users, by starting your own company.

The market is a lot more discerning than any employer. And it is completely non-discriminatory. On the Internet, nobody knows you’re a dog. And more to the point, nobody knows you’re 22. All users care about is whether your site or software gives them what they want. They don’t care if the person behind it is a high school kid.

Graham thinks this model is the future:

I think this sort of thing will happen more and more, and that it will be better for everyone. It’s obviously better for the people who start the startup, because they get a big chunk of money up front. But I think it will be better for the acquirers too. The central problem in big companies, and the main reason they’re so much less productive than small companies, is the difficulty of valuing each person’s work. Buying larval startups solves that problem for them: the acquirer doesn’t pay till the developers have proven themselves. They’re protected on the downside, and they still get most of the upside.

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James DeLong links to a ridiculous Larry Ellison quote about open source software:

“Open source becomes successful when major industrial corporations invest heavily in that open source project,” Ellison said at a Tokyo news conference. “Every open source product that has become tremendously successful became successful because of huge dollar investments from commercial IT operations like IBM and Intel and Oracle and others,” he said. He highlighted his own company’s work in developing and promoting Linux, and said the operating system would not have enjoyed the success that it has without vendor backing.

“There’s a lot of romantic notions about open source,” Ellison said. “That just from the air these developers contribute and don’t charge. Let me tell you the names of the companies that developed Linux: IBM, Intel, Oracle–not a community of people who think everything should be free. Open source is not a communist movement.”

Obviously, if a company sinks a billion dollars into a software project, it’s going to cause some improvements. But only a legendary blowhard like Ellison could believe that because his company donated some programmer time to the project that they therefore deserve all the credit for its success. In the first place, Linux is 15 years old. It didn’t begin receiving serious corporate support until 1999 or 2000–long after it had become a fully functional operating system. In the second place, “Linux” is not monolithic. Oracle has done work on the aspects of Linux that benefit his company, such as the file system. Other companies have done work on other aspects of the operating system. There are still other aspects that are still the province of volunteers.

So obviously, Linux would not have been as successful in the aspects that Oracle worked on without Oracle’s help. But so what? The same is true of each of the volunteers who contribute to various parts of the operating system. It makes no more sense to say that Linux is a purely corporate project than to say it’s an entirely volunteer-driven one. They both contribute, and they both deserve credit.

More to the point, Linux is the exception. Most open source projects do not receive substantial corporate support, just as Linux did not until after it had matured into a full-functional operating system. Perl, Apache, BIND, SendMail, Samba, the GNU tools, PostgreSQL, Python, PHP, CUPS, and dozens of other products are are all primarily decentralized, volunteer-driven efforts. And, in case these are not familiar names, these are all wildly successful open source products. They’re used daily by millions of people.

Of course, from Ellison’s perspective, a product isn’t “successful” until it generates a bunch of revenue on a coprorate balance sheet. But that’s precisely the point: for open source projects, the measure of success is how uesful it is, not how profitable it is. I realize it’s hard for Mr. Ellison to imagine that anyone could ever be motivated by anything other than money, but strangely enough, there really are people who enjoy developing software solely for the intellectual challenge it presents, and the pleasure of seeing it used by others.

Personally, I think contributing to a major open source software project sounds like a lot of fun, and I wish I had the time and expertise to do it. I guess that makes me a communist.

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