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Linux Business Software

Open Source Forming a Dot Com Bubble? 222

sebFlyte writes "ZDNet is running an interesting look at the sudden upswing of investment in open source products and the ensuing debate as to whether the open source business model has given us a bubble (akin to the dot-com bubble) that is about to burst. The counter-argument is that the increase in investment is just the natural progression of a robust business model whose time has come. One point that few people, whatever their viewpoint, could disagree with is that the key to a financially successful open source project rests with the community, rather than just the technology."
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Open Source Forming a Dot Com Bubble?

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  • by Karma_fucker_sucker ( 898393 ) on Monday November 07, 2005 @04:04PM (#13972507)
    I don't disagree with you because I don't have ESP and can't read the VCs minds. But I can tell you what their strategy is and why it may seem that there's a bubble forming.

    VCs (and many entrepreneurs) use the law of large numbers. They'll sift through a hundred biz ideas just to get one that they'll invest money. They'll keep investing in a bunch of businesses with the hopes that one will hit really big. That's why when you get a VC contract, basically, they'll demand some percentage of return (like 40%+/yr compounded). Which means, even if the business is sold for a couple of million, the original entrepreneur (the one with the idea) will get nothing just so that the VC firm can get some sort of return that approaches their required return.

  • by panth0r ( 722550 ) <> on Monday November 07, 2005 @05:28PM (#13973377) Homepage
    Well, you know your karma and what your mod says your post is worth is your worth as a person... Need I refer to:

    "Why is my karma not what I expect? If you've been moderating or posting, your karma will likely fluctuate a little as you are moderated or metamoderate. Don't worry about it; this is normal. Please remember that this is just a number in a database that helps us determine who gets selected as a moderator. It doesn't determine your IQ or your value as a human being. It's simply not a big deal."

    Oh, I guess it's NOT your value as a human being, my bad. []

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