Subject: Re: lifestyle businesses
From: Ian Lance Taylor <ian@airs.com>
Date: 19 Sep 2002 22:47:54 -0700

Brian Behlendorf <brian@collab.net> writes:

> > Do you consider Cygnus, pre-V.C., a "lifestyle business"?  Or not a
> > member of Class A?  Why?  They seem to me like they should belong.
> 
> I would consider them class A, and while larger than a mom-and-pop
> business, I think they pretty much maxxed out their immediate market, and
> would have had to consider a new area of business in order to have, say,
> doubled; and it's not clear to me that any other technology space had the
> mix of qualities that the compiler/toolchain space had that made contract
> development there so interesting.  I really struggle with figuring out how
> generalizable the Cygnus example actually is.

The main business Cygnus was in was embedded toolchains, and Cygnus
was not the largest company in that business--WRS was (and, I think,
is) the largest (not counting Microsoft and WinCE).  So there was
clearly room, at least in theory, to double in size.  Plus the
embedded market in general continues to grow slowly.

That said, Cygnus was always casting about for new markets to enter.
These efforts generally failed, except for the embedded toolchain
market itself--embedded work was not Cygnus's original plan.

My off-the-cuff explanation for the failure to enter new markets is
that Cygnus was an engineering-driven company, and engineering-driven
companies have a hard time trying anything new, because engineers are
risk-averse.  While there were certainly people at Cygnus pushing it
in new directions, including Gumby and Tiemann on this list, the bulk
of the company was disinclined to follow.

Red Hat has generally moved away from what Cygnus used to do.  This is
probably in part because Red Hat is a much larger company (three times
the size and three times the revenue), so the embedded toolchain
market is less interesting.

Ian