Subject: Re: open source definition
From: "Jonathan S. Shapiro" <>
Date: Sat, 25 Apr 1998 10:26:50 -0400

> Bunyip received venture capital money for code we will be
> giving away. We will be charging for other code...
> things, but we can and will, with investor permission, be
> giving away several projects and yes, we will in exchange
> expect to make money elsewhere, using other activities
> which are themselves promoted by that code. But isn't that
> fair game? After all, if you don't make money *somewhere*
> you're not in business, you're doing charity work.

From a strictly business perspective, there are two ways I could look
at this.

The first is that the code you are giving away is a marketing loss
leader.  In that case, provided it isn't costing too much, you are
doing something that's business-wise sound, and I'm not surprised that
the investors bought in to it.

The second is that you are engaging in a form of transfer-cost
financing, taxing one (profitable) organization to prop up another
(unprofitable) organization.  The organizations can be the same
people; the business principle is that everything must stand or fall
on its own.  There is no problem in principle with doing this, but
there is a long list of practical difficulties that such a practice
invites, and it is almost universally discouraged as a managment

In the context of this discussion, though, I think Bunyip's situation
is not relevant to the intent of the question.  Your investors are
paying for a large bundle of stuff.  Some (I infer small) fraction of
that is being given away as a loss leader.  This is very different
from the investor investing in a product that will be given away as a

Investors are willing to accept some threshold of distracting
activity.  They are actively delighted to see sensible marketing
strategies.  Don't confuse yourself into thinking they invested in the
free stuff; they invested *in spite of* the free stuff.