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The Almighty Buck

ESR Writes on "Surprised By Wealth"

Posted by Hemos
from the jaw-dropping-to-floor-for-worth dept.
Everyone at this point has heard and seen about VA Linux Systems succesful IPO. Lesser known is the fact that ESR [?] is on the Board of VA. Yesterday seems to have been a time of personal reflection on the his new situation. Click below to read ERSR's musings on sudden wealth.

A few hours ago, I learned that I am now (at least in theory) absurdly rich.

I was at my machine, hacking, when I got email congratulating me on the success of the VA Linux Systems IPO. I was working on my latest small project -- a compiler for a special-purpose language I've designed called Scriptable Network Graphics, or SNG. SNG is an editable representation of the chunk data in a PNG. What I'm writing is a compiler/decompiler pair, so you can dump PNGs in SNG, edit the SNG, then recompile to a PNG image.

"Congratulations? That's interesting," said I to myself. "I didn't think we were going out till tomorrow." And I oughtta know; I'm on VA's Board of Directors, recruited by Larry Augustin himself to be VA's official corporate conscience, and it's a matter of public record that I hold a substantial share in the company. I tooled on over to Linux Today, chased a link -- and discovered that Larry Augustin had taken the fast option we discussed during the last Board conference call. VA had indeed gone out on NASDAQ -- and I had become worth approximately forty-one million dollars while I wasn't looking.

Well, that didn't last long. In the next two hours, VA dropped from $274 a share to close at $239, leaving me with a stake of only thirty-six million dollars. Which is still a preposterously large amount of money.

You may wonder why I am talking about this in public. The first piece of advice your friends and family will give you, if it looks like you're about to become really wealthy, is: keep it quiet. It's nobody else's business -- you don't want to look like you're gloating, and you don't want to be deluged with an endless succession of charity appeals, business propositions, long-lost best friends, and plain bald-faced mooching.

Trouble with the "keep it quiet" theory is that I've made my bucks in a very public way. When you're already a media figure, and your name is on the S-1 of a hot IPO, and email from friends and journalists starts coming in like crazy as the stock breaks first-day-gainplaying it coy swiftly ceases to look like a viable option.

Besides, it wouldn't be fair to dissemble. I serve a community. I'm wealthy today because my efforts to spread the idea of open source on behalf of that community helped galvanize the business world, and earned the respect and the trust of a lot of hackers. Larry thought that respect was an asset worth shelling out 150,000 shares of VA for. Fairness to the hackers who made me bankable demands that I publicly acknowledge this result -- and publicly face the question of how it's going to affect my life and what I'll do with the money.

This is a question that a lot of us will be facing as open source sweeps the technology landscape. Money follows where value leads, and the mainstream business and finance world is seeing increasing value in our tribe of scruffy hackers. Red Hat and VA have created a precedent now, with their directed-shares programs designed to reward as many individual contributors as they can identify; future players aiming for community backing and a seat at the high table will have to follow suit. In this and other ways (including, for example, task markets) the wealth is going to be shared.

So while there aren't likely to be a lot more multimillion-dollar bonanzas like mine, lots of hackers are going to have to evolve answers to this question for smaller amounts that will nevertheless make a big difference to individuals; tens or hundreds of thousands of dollars, enough to change your life -- or wreck it.

(Gee. Remember when the big question was "How do we make money at this?")

The first part of my answer is "I'll do nothing, until next June". Because I'm a VA board member, under SEC regulations there's a six-month lockout on the shares (a regulation designed to keep people from floating bogus offerings, cashing out, and skipping to Argentina before the share price crashes). So it's not strictly true that I'm wealthy right now. I will be wealthy in six months, unless VA or the U.S. economy craters before then. I'll bet on VA; I'm not so sure about the U.S. economy :-).

Assuming the economy does not in fact crater, how is wealth going to affect my life in six months? Honestly, I think the answer is "not much". I haven't spent the last fifteen years doing the open-sourcefor the money. I'm already living pretty much exactly the way I want to, doing the work that matters to me. The biggest difference the money will make to me personally is that now I should be able to keep doing what I love for the rest of my life without worrying about money ever again.

So I expect I'll just keep on as I've been doing. Hacking code. Thinking and spreading subversive thoughts. Traveling and giving talks. Writing papers. Poking various evil empires a good one in the eye whenever I get a chance. Working for freedom.

I expect most other hackers confronted with sudden wealth will make similar choices. Reporters often ask me these days if I think the open-source community will be corrupted by the influx of big money. I tell them what I believe, which is this: commercial demand for programmers has been so intense for so long that anyone who can be seriously distracted by money is already gone. Our community has been self-selected for caring about other things -- accomplishment, pride, artistic passion, and each other.

OK, so maybe I'll break down and finally get a cell phone. And cable broadband so I can surf at smokin' speed. And a new flute. And maybe a nice hotrodded match-grade .45 semi for tactical shooting. But really, I don't want or need a lot of stuff. I'm kind of Buddhist that way; I like to minimize my material attachments. (My family gripes that this makes me hell to buy Christmas presents for.)

I'm not going to minimize my attachments by giving it all away, though, so you evangelists for a zillion worthy causes can just calm down out there and forget about hitting me up for megabucks. I am *not* going to be a soft touch, and will rudely refuse all importunities.

I'm not copping this harsh attitude to protect my money, but rather to protect the far more precious asset of my time. Because I don't want to have to become a full-time specialist in deciding whose urgent pitch to buy, I'm going to turn everybody down flat in advance. Anyone who bugs me for a handout, no matter how noble the cause and how much I agree with it, will go on my permanent shit list. If I want to give or lend or invest money, *I'll* call *you*. (Sigh...)And yes, there are causes I'll give money to. Worthy hacker projects. Free-speech activism. Firearms-rights campaigns. Tibet, maybe. I might buy a hunk of rainforest for conservation somewhere. Megabucks are power, and with power comes an obligation to use it wisely. I'll give carefully, and in my own time, and only after doing my homework -- too much charity often kills what it means to nurture. And enough about that.

Ironically enough, one result of my getting rich is that I will probably start charging for speaking appearances, now that nobody can plausibly accuse me of doing it for the money. I won't charge open-source user groups or schools, but I will cheerfully extract a per diem from all the business conferences that keep wanting me to to boost their box office. Charging a price for my time will separate the expensive conferences that attract powerful people from the marginal events where the hacker community would get less leverage from my presence.

For the same reason, I'm still going to insist that anybody who wants me to give a talk has to cover my expenses and eliminate hassles. But I also expect I'll still carry my own luggage. And I'll never get too proud to crash on somebody's daybed when the local user group is too broke to cover a hotel.

But enough trivialities; I'm going to get back to work. I've got the SNG compiler stage almost done. Next up, I need to refactor the pngcheck code so I can give it a report-format option that generates SNG syntax. Then, I need to think about supporting MNG...
--
Eric S. Raymond

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ESR Writes on "Surprised By Wealth"

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My problem lies in reconciling my gross habits with my net income. -- Errol Flynn Any man who has $10,000 left when he dies is a failure. -- Errol Flynn

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