The original article appeared at: http://www.troubleshooters.com/tpromag/199906/_digcreate.htm
Copyright (C) 1999 by Steve Litt. All rights reserved. Materials from guest authors copyrighted by them and licensed for perpetual use to Troubleshooting Professional Magazine. All rights reserved to the copyright holder, except for items specifically marked otherwise (certain free software source code, GNU/GPL, etc.). All material herein provided "As-Is". User assumes all risk and responsibility for any outcome.
Then how about their new Open Source product, Zope? B I N G O ! It seems like everyone's heard about Zope in the last three months. How did this company come out of nowhere to offer the most talked about web development product of the year? It's quite a story.
In 1997, Digital Creations found themselves possessing a better mousetrap, but the world was *not* beating a path to their door. Most programmers have at one time or another found and learned a better technology, only to discover it couldn't pay the bills because it lacked market share. This is exactly the situation facing Digital Creations. But instead of abandoning the superior technology they created, they made it Open Source(R), forging a path from their door to the world. But that's getting ahead of the story.
Digital Creations had enjoyed good fortune until May of 1997. Formed by a newspaper consortium and technologists (and former college roommates) Paul Everitt and Rob Page, Digital Creations had grown and hired several excellent employees. In 1996, Digital Creations Chief Technology Officer Jim Fulton began developing a Python language object oriented web toolkit. The toolkit, named Bobo, was released open source and developed both in and outside of Digital Creations. Digital Creations then built proprietary application server Principia to run on top of Bobo. These two software tools enabled Digital Creations to quickly and economically produce superior web apps for the newspaper consortium.
Meanwhile, in New York, Hadar Pedhazur was using Bobo. Hadar was Managing Director and Head of Technology for the Global Equity Derivative (GED) group of the Union Bank of Switzerland (UBS), so it's probably more accurate to say that technologists reporting to him were using Bobo. But Hadar is the kind of manager who rolls up his sleeves and gets down with the technology, so he knew a superior product when he saw it. He wanted in. Spending most of his career in the finance sector, Hadar knows money -- how it works, how to get it, and how to make it multiply. More on that later...
In May of 1997, the newspaper consortium divested itself of Digital Creations. The consortium got all software related to the newspaper industry. Minority stockholders Paul Everitt and Rob Page received the name and web building tools. So here was Digital Creations, with a better mousetrap and no world at their door, but several employees to pay. I don't know, but I would guess at this point they were undercapitalized. Did somebody say pressure?
In true fairy tale tradition, May of 1997 was when Hadar approached Digital Creations about capital infusion. In true real world tradition, talks broke down, mainly over the fact that Hadar envisioned Digital Creations as a services company, while Paul and Rob did not. Hadar went away, time marched on.
Move forward a year. Digital Creations had worked hard and survived. But they still had the better mousetrap, and the world had still not beat a path to their door. So when Hadar renewed contact, they were receptive. They hammered out an agreement to be a services company, and on October 13, 1998, Hadar delivered venture capital in the amount of $750,000. But the fun was just beginning...
Hadar envisioned all Digital Creations' software open source. Paul and Rob wanted to keep Principia proprietary (after all, it was made with theirs and their employees sweat). Discussions continued. By November of 1998 Paul and Rob had become very excited about the Open Source opportunity, and the decision was made. Bobo, Principia and their database connectivity tools were rolled into one package called Zope, licensed Open Source. Hadar was elected chairman, Paul CEO, Rob COO. They now had capital, officers, a better mousetrap, and a plan. Would they succeed?
That same software they couldn't sell "sold" like hotcakes once it became free Open Source. As programmers quickly created sophisticated web apps using Zope, word spread at Internet speed that this was the way to do web apps. Zope is on the verge of becoming a standard. At Linux Expo, Zope demos drew such large crowds you had to get there early to hear or see.
I asked Hadar how they planned to make money now that they'd given away the tools. He smiled and ticked off the three prong plan:
Troubleshooting Professional readers: if you've built a better mousetrap
but the world hasn't beat a path to your door, consider what Paul Everitt
told me at Linux Expo:
|"If we hadn't given away our software we wouldn't have gotten an
investment. Because we gave it away he [Hadar] looked at it, liked what
he saw, and wanted to participate in the company."
I'd like to add that this isn't just any investment. If you'd talked to Hadar as long as I did, I think you'd agree he invests in winners.
Notice the modularity here. Digital Creations pointed out that some of their competitors require a link between the browser and the application server. Not Zope -- it's modular.
That's something I don't take for granted. Because the crowd at their door is growing fast.