Rob Malda launched Slashdot, built a community hundreds of thousands of nerds strong, sold his company for millions, took the IPO ride with his new corporate parent. And told his diary the whole story.
Rob Malda, aka CmdrTaco, launchedwww.slashdot.org in 1997 while he was a student at Hope College in Holland, Michigan. By mid-1999, Malda had built Slashdot into a 200,000-member online community of young Linux programmers (and wannabes and lurking journalists) discussing new software releases,Star Wars, and other "News for Nerds"; he'd sold the site for $7 million to Andover.Net, a Linux portal based in Massachusetts; and he'd overcome his geeky shyness to become one of the most-quoted voices of the open source movement/industry. Not bad for a 23-year-old who "just wanted to post stories about stuff I liked and let people talk about it." (The Slashdot buzz got another boost when VA Linux gobbled up Andover for $1 billion this February.) *
Despite the media attention, Malda remained a typical videogaming, microwaving, undersleeping coder - an Everynerd, living and working in a series of networked duplexes that he and Slashdot coworkers Jon Pater (aka CowboyNeal) and Jeff Bates (Hemos) dubbed Geek Compound 3. *
Then, in August 1999, open source software and services company Red Hat went public, launching a Wall Street frenzy. Soon Andover announced its own public offering - based on the open IPO model, which allows anyone to buy in - and Malda came face-to-face with two powerful new concepts: big business and silence. On September 17, Andover.Net entered the IPO quiet period. The following 112-day journal recounts what open source's big mouthpiece couldn't say. *
DAY 1: File S1 It's been a long couple of weeks. Andover finally announced its IPO today. The process is frustrating. We had to be careful about the actual announcement - there were restrictions even on that. I wanted to write up an explanation of the open IPO. I wanted to talk about the Red Hat letter and what we learned from it and how we wanted to do things differently. Red Hat's decision to open its offering to certain longtime open source developers set a precedent for Linux IPOs. But there were problems, both with Red Hat's list of eligible programmers and with the IPO process.
Not that the IPO changes much. I mean, I'm supposed to "maximize shareholder value," but that's just not my focus. My job is still to run Slashdot. To make it stable. To make it handle more hits tomorrow than it did today. The only thing that's changed is that I now have to wait until 30 days after trading begins to start talking again.
Since I spend most of my time working on the servers and the code, the quiet period shouldn't affect me much. I suppose it's an easy excuse to get out of public speaking. (I have absolutely terrible stage fright.) Now every time a reporter asks me anything related to "business," I'll hand it off to someone else or say, "No comment." But I do have to think before I reply to certain things that I might normally just knee-jerk.
DAY 26 I've been posting less over the past few weeks; of course, the conspiracy theorists churn out all sorts of reasons for it: I'm dying. I'm quitting. I'm lazy now that I'm supposedly about to become fabulously wealthy. The truth is that I've been pulling strings behind the scenes and rewriting large lumps of code. Server stuff. Perl. Of course, nobody wants to believe that - it's so boring.
Some reporter asked me once about our work environment, and I realized it's a lot like an episode ofThe Monkees, except our hair is worse. Happy guys swearing at each other. Someone playing a guitar. Tapping of keyboards. Hemos likes to open the window, which pisses me off because I wear contacts, and the breeze makes my eyes water, and then I can't type. I hate that.
Since I spend all my days with programmers and hackers, it's nice to spend my nights with an artsy chick. My girlfriend, Kathleen, is a graphic designer. She's been great - she puts up with me being terribly busy, and I put up with her being a Mac person. But it sucks when I have to ditch out on her because my SQL server crashed or there's an emergency phone call with the board of directors to discuss yet another IPO-related filing.
Andover hasn't changed my day-to-day life much, though. I guess I have a manager now: Adam is Andover's CTO. He's been through the corporate world and had a lot of the geek sanded out of him, but it's still there - he's got all of the ego to prove it. I'm fairly certain the Andover sales staff thinks I'm a spoiled little brat.
DAY 39: Comments from SEC I find two rules of the quiet period particularly amusing:
- Don't hype your company,
- Conduct business as usual.
I can't strut around and say we're gonna take over the world and that our stock is gonna be worth bazillions. We're not supposed to hype the market, either. Not supposed to talk about "the Linux space" and how great it is, because that might be interpreted as hyping ourselves indirectly.
The problem is that Slashdot is all about hyping Linux. It's a major topic of discussion.
It makes my head spin.
DAY 45 Red Hat (and Corel) stocks both went bananas. So the IPO buzz is high. Of course, I can't comment on it - and even if I could, I don't know what I'd say. I mean, stocks go up and down all over the place. Red Hat rumors a Corel buyout, and both stocks skyrocket.
It's craziness, I tell you. In the beginning it was just hackers writing code. We gave it away, and it got better. Money didn't enter into it - we just needed a Web server or a device driver or a window manager to get our jobs done. Or we thought, "Wouldn't it be cool if ...," and so we coded. Then came the boom, and the Red Hat IPO, and Wall Street. Some say the money will corrupt the open source movement, but I'm more optimistic. Years ago, before Slashdot, I spent lots of my time writing free software and hanging out on IRC channels like #Linux95 with other nerds like me: We coded at night and then went to day jobs or school. Many of those guys work for Red Hat and VA Linux now. The only real difference is that now our hobby earns the salary.
DAY 52 Just added a system to let people track their submissions. Used to be that once you clicked Submit, it went into space and maybe ended up on the homepage - but usually didn't. It's interesting: Now that people know when I've rejected a piece, they take the rejection as a personal insult or as proof that I've sold out.
My wrists are hurting, and I can't touch type, so I've been cleaning out my filing cabinets. I've got three old hard drives that I'm debating what to do with. They're IDE, and all of my boxes now are either laptops or SCSI. I'm pretty sure there's something worthwhile on each - porn, MP3s, the wireframe models from the animation I did in college - but I'm not sure where. I threw out 50 floppy disks, a dozen or so IDE cables, and a broken Pentium CPU fan.
DAY 55 Just read this in BusinessWeek Online: "Rob Malda: the geek who built the Linux clan's gathering ground at Slashdot.org - a window into the vibrant open source software community - he stirs the true believers with his firebrand commentaries."
Anyone who knows me knows that I don't write "firebrand commentaries." In fact, everyone also knows that I don't "stir the true believers." Ninety-five percent of the time, I word things as ambiguously as possible in order to let people make up their own minds.
DAY 69: Roadshow I ordered a couple more James Bond DVDs this morning. I'm a bit irritated. There are what, 20 movies? And only 10 are on DVD.
More clueless stories about Slashdot today. It's sorta like the computer scene in a movie when the geek spouts technical mumbo jumbo. Ninety-nine percent of the audience thinks, "Oooh, smart geek." But 1 percent is like,
"Shit! You don't have 10 megabits of disk space, moron!" Journalists have the same problem. They recite techno mumbo jumbo they don't understand. Too many reporters base a whole story on something they read on Slashdot. They take a bunch of stuff - pieces of which they understand, and pieces of which they don't - and create a Frankenstein's monster out of the parts.
Usually when a reporter mungs up something I've said, I link to the article on Slashdot with a "they got this part wrong" note. But in the quiet period, I don't get to say anything. I feel so exposed.
DAY 80 Things are looking pretty good. Final paperwork was filed with the SEC as of today. All that remains now is the auction, the IPO, and then waiting a month until the quiet period ends and life goes back to normal.
Being on Andover's board has been a crash course in business. Now I can watch CNBC and know what they're talking about. It's just a system, like programming or advertising or football. The people who best understand the system are successful.
Frankly, I'm surprised that I enjoyed it as much as I did, though it's weird - business guys deal with things so abstractly: They have graphs and charts and talk about liquidity and dilution. But underneath that is a bunch of people working their butts off!
NIGHT 80 A few minor bugs popped up in the system after we separated the SQL and NFS servers: nothing major.
More irritating is that people are complaining that Andover's created no friends-and-family stock plan. If they would only read the W. R. Hambrecht Web site, they would understand that this is because the open IPO model already allows anyone to play in. After Red Hat's problems, we thought this was the only way to go. But people are posting comments about us being evil and selfish and leeching from the open source community. And I can say absolutely nothing about it.
It hurts, but I'm trying to take it in stride. Once you decide that you're not going to let flame bother you, it can be pretty funny. I save all of my choice flame mail.
DAY 81: Set pricing OK, this quiet period officially sucks ass. There have been between 30 and 40 articles online in the last seven days regarding Linux IPOs, Linux's future, and Linux in the marketplace. Every one of them mentions Andover, and many were Slashdot-worthy.
If I post a story, am I hyping my stock? If I don't post the story, am I just turning my back on my real job? I feel like I'm letting our readers down. I know this is the game, and we're stuck with it. But it really sucks.
*Frustrated*
Kathleen made this gigantic Tupperware container of trail mix (equal parts M&Ms, peanuts, and raisins). I ate a half-pound of the stuff, plus two cups of coffee and two cans of Mountain Dew before noon.
I'm pretty anxious. We're determining pricing now. Over the next few hours, people will be able to bid on the stock. At the end of the auction, the bankers will sort the bids and price the shares at the value of the highest offer. I advocated for the auction model because it allows individuals, as well as institutions, to bid - but it certainly has made the IPO process more complicated.
I refiled most of my personal papers this morning. It was getting really messy. I put my mortgage, student loans, and credit cards in bright red folders, my bank accounts in green folders. And, of course, black folders for life insurance. Being OCD is an interesting curse, and the stress brings it out more. Kathleen can tell when I'm really anxious because I'll dust the whole house.
NIGHT 81 I've been obsessively monitoring a couple of webcams - JenniCam is my favorite. I snarf the images down with a Perl script as they update and browse them an hour or so at a time. I find it amusing that there are other people who spend their entire waking lives in front of a computer screen. It's reassuring to know that it's not just me. Plus, sometimes they get naked. And sometimes they cry. It's frightening to watch someone bawl their eyes out over a cam.
For the last 48 hours or so, I've had a slow sweat. It's kinda like how you feel right before going on a first date in high school. Not sweating, but right on the edge of a sweat.
There's gonna be a problem. The original price range - $12 to $15 - was adjusted to $15 to $18 in response to demand. But when the auction closed, the final price came out at $24 a share. We had two options: reprice (and hold the auction again), or go in at $18. We agonized but decided to take the $18 because repricing would take days. But that means folks who bid $23 won't get any shares, while people who bid $25 will get shares - for $18. It's annoying, but it's just how it has to be at this point.
I know it will make people unhappy. Of course, I can't say anything about it.
At least going ahead with the IPO means this quiet period will be over sooner.
DAY 83: Start of trading The last of the dust settled by about 10, when the bankers finished up their paperwork. Andover had sold 6 million shares at $18 to raise $72 million. Then it was just the waiting game until trading officially started.
We opened in the 40s. I celebrated with a granola bar and a shot of whiskey. After the gallons of coffee I've drank in the last three days, I need more than anything to stop these jitters.
Hemos is having a Hot Pocket and a can of Dr. Pepper. I saw CowboyNeal punching the value of his stock options out on his calculator a few minutes ago, but other than that it's been a normal afternoon since about 2:30.
It's strange to go through an IPO after reading about so many others. The irony is that this whole thing wasn't nearly as cliché before the media decided that geek was chic. It's like teenage angst or smoking weed in college or being beat up in high school. They're all stereotypes, but when you're in the middle of one, you don't realize it - you're just concentrating on not getting hit by someone bigger than you.
DAY 84 Everyone's happy, but it's mostly because VA Linux went public today and the market went nuts. It's easy to say I havex shares of Andover, but that stock is locked in. However, Ican convert my VA stock into money now - and I want a pinball table. ;)
The VA IPO made a lot of hackers a little money. It made Eric S. Raymond - the open source evangelist who wrote "The Cathedral and the Bazaar" and sits on the VA board - absurdly rich. He immediately sent out a letter to the community that talked about getting the money. He wrote that it won't change him. He not-so-subtly implied he deserved it. It's true that ESR's open source ideas are more palatable to corporate culture than the older free-software philosophy - and that, in many ways, he paved the way for the current mainstream success. But the piece rubbed me the wrong way. During the quiet period, the main rules are, "Don't talk about the future" and "Don't talk about the money." Being smack in the middle of my own quiet period, I was irritated to watch him push the line.
Not that I have any interest in writing that kind of letter - quite the contrary. The only good thing about the quiet period is it's been an excuse not to answer questions about money. The S1 explains in detail the carrots that Andover has and exactly how and when I get those carrots. But it's not a major part of my life. I downplay it because people tend to treat money as a distortion field. It bugs me that large portions of my personal finances are public knowledge. It means my cousins ask me to pay their college tuition.
Still, I don't think ESR's work will be significantly affected by his sudden wealth. And, quite honestly, the more fiscally independent hackers there are writing code, the happier I am.
DAY 112: Quiet period ends As part of the Andover purchase, the Slashdot partners got $7 million in stock at the IPO price. But I haven't even been looking at ANDN because I don't want to know. Watching it go up and down a quarter of a point just isn't fun.
As for the end of the quiet period, it's kind of anticlimactic. We broke the ice with an interview on Slashdot, but we got almost no questions about the IPO. One poster asked about our development plans, and I talked about backend optimizations and how I want to add an internal messaging system. Another asked if there's been one day since the creation of Slashdot that stood out, and I couldn't pick just one, so I wrote about the day Netscape announced it would open its browser code, and how many people credited Slashdot along with ESR for making it happen. That was a defining moment. We doubled our traffic in the following weeks. I also mentioned the day in 1998 I quit my "real" job at TheImageGroup to work on Slashdot full-time.
And, of course, someone asked if we'd let users view the story-submission queue. I didn't think twice before answering, "That's in the FAQ, dammit! I don't want to answer it again! AAAAGGHHH!"
