About LWN.net

LWN Interview: Jason Haas

How did this come about?

When LinuxPPC was started, it was our intention to become a non-profit organization. At the time, it was easier and less expensive to file as a for-profit organization. The reason we didn't immediately make the transition to a non-profit was due to the growth of the Linux world, the dot-com market, etc.

The fall of the dot-com market reminded us of our original intent.

Why did you originally intend to be a non-profit?

Control. A non-profit organization has no owners. A for-profit corporation is partially owned by the stockholders, who may be people that may not have the best interests of Linux in mind. They may not even know what Linux is.

Becoming a non-profit organization will make LinuxPPC blossom, both as an organization and as a distribution. Naturally, some work has to go into it to make that happen.

We will have a board of directors -- can't say right now who the initial board members will be, out of a respect for their privacy, but they are people active in the LinuxPPC community.

What is the impact on the LinuxPPC distribution?

LinuxPPC the distribution is not going away. The CDs are still for sale and will continue to still be for sale.

How many people currently work for LinuxPPC?

Six people work at the Main Office. Two more that work in different states in the US.

Are all these people currently being paid by LinuxPPC?

Yes.

Does this change in status mean that you're going to lay people off?

No, definitely not. There is a mis-conception about non-profit organizations. It doesn't mean that we won't be producing revenue. What is does mean is that the revenue, after it covers expenses, goes back to the effort to reach our goal. "It feeds the mission". Revenue feeds the mission. Our mission is to promote Linux on the PowerPC processor. That is actually our mission statement.

What are your current revenues?

We don't want to say right now. However, when we go non-profit, that information will become publicly available.

But it has been enough to cover the costs of eight staff members.

And the internet connection, and, oh, beer. An essential part of Linux development.

At this point, you have never taken in any outside money.

No, no outside investment. Many offers. Some of the offerors are no longer around. If we had taken VC money, we wouldn't be able to go non-profit without first paying them back.

Are there any regrets?

That we didn't do this a year ago. A year ago, the common thinking was that a non-profit could not succeed and would be destroyed by for-profit corporations. That didn't sway us from our plan to become a non-profit, however. Now that things have changed, the choice looks like a pretty good move.

What impact do you feel your competitors had on your decision?

None.

Do you think a for-profit Linux distributor focused solely on the PowerPC market can survive?

Well, we did.

But could you still survive if you stayed for-profit?

Yes, yes, we could, as long as we didn't also have pressures for $150,000 a year in pure profit. It is possible to do, but we think this is the best avenue for us to take. That doesn't mean that a for-profit cannot survive. I wish them luck trying to talk to venture capitalists.

What do you think that your non-profit organization status might bring you over the next year that your for-profit status would not?

One result is that either non-profit organizations or for-profit companies can receive outside money. An non-profit organization doesn't give up a portion of the company in return.

With a for-profit corporation, if someone gives you a large amount of money, they get a portion of the company in return. With a non-profit, they get nice warm fuzzies instead.

If you make a donation to a non-profit, it is just that, a donation. The donor can request or specify that it be used for certain things, but they can't buy out the company by donating enough money.

Are you expecting some donations to follow this decision?

Definitely. Over the last two years, donations made to the FSF and Linux International, just through LinuxPPC (via our order page), exceeded $20,000. These are donations that people made when they purchased a LinuxPPC CDROM.

Is that the type of donations you're expecting, small donations?

We are expecting those. It would be great if someone decided to come along and donate more, but we are not planning on that.

We can also apply for grants from foundations that sponsor non-profits. We have somebody who is researching grants for us.

Back to revenue, what were your revenue sources?

Selling CDs. That was source number one. Number two was selling Loki games, T-shirts and mouse pads. That will continue as well. The fact that we become a non-profit organization does not mean that we find commercial software evil and to be avoided at all costs.

As a non-profit, grants and donations will join selling the distribution as a major revenue source. We are planning on expanding our services.

What types of services are you planning on offering?

Support. Support is a big one. Support and related services.

So you plan on offering pretty much the same type of services that a for-profit company could offer.

Oh yeah.

As far as support, are you talking for individuals or for companies?

Both.

Let's go back to your very first question, which was the why?

Linux is a free operating system. If you're an investor and you look at a company that makes a free operating system, the return on investment is zero or negative. We feel that this is very consistent with the original spirit of Linux and Open Source software.

Something that will be in our press release -- "A return to our roots", our original intention, but we got distracted. Now we're in a position to do it.

We were distracted by the "capitalist hype".

What I heard was that a non-profit would get killed. Again, I think that there is a misconception about what it means to be a non-profit, or a lack of a conception.

What does it mean to you?

It insures that control over LinuxPPC stays where it should be, in the hands of the users and of the developers.

It puts the control in the hands of the people who should have control.

We can bring in people who are good at running an organization, and have our technical core focus on what they're good at, which is making Linux for the PowerPC a great thing to use.

What doesn't it mean, in terms of those misconceptions you talked about?

It doesn't mean we won't make money. We won't make money in the traditional sense. Or that we might not be able to advertise, or compete. That is not true, either.

They might assume your developer salaries would be less than salaries for developers in a for-profit firm?

They might, but they'd be wrong. The money to put food on the table and a roof over our heads will still be there. Of course, we can also use volunteers as well.

In a for-profit corporation with stockholders, the stockholders get dispersements. In a non-profit, there are no dispersements.

For the FSF, developer salaries are lower. Any comment on that?

Regardless of whether you are a for-profit or non-profit organization, you need to be competitive in terms of salary for your developers. You could pay them half the normal rate and some people might be okay with that. However, real-world situation here, you could make $25,000 working for a non-profit organization versus twice that for a for-profit company, plus stock options. Most people would go for the latter option. Money talks. We're realistic. In order to have quality work performed, we need to pay quality compensation.

Becoming a non-profit does not indicate a fear of money on our part. Money is a tool that, when properly used, yields excellent results.

We won't have a board member who gets 20 million shares, outrageous compensation and a jet. We won't have some higher-up squawking about how we need to move X million units so that he can make X million dollars on his stock options. Instead, we'll be sponsoring real projects that yield real software that helps real people.

Do you think other Linux community participants should consider the non-profit route?

Definitely. I think we'll be an experiment for the community. See how LinuxPPC does. If it fails, that would reflect against becoming a non-profit organization. If it succeeds, it would encourage other members of the community to go in a similar direction.

We'll be an example and hopefully a positive one.

Our motto from day one has been, "Failure is not an option".