In the early days of Red Hat, now the most prominent marketer of the Linux open source operating system, co-founder Bob Young came up with an answer to the question everyone asked about a business that gave away its software. "It's not my goal to make my company as big as Microsoft," he said. "It's my goal to make Microsoft as big as my company." Young left Red Hat in 2002 and that same year co-founded Lulu, an online marketplace for authors, musicians, and filmmakers to offer their creative war
CEO of Lulu
Interview by Charles Babcock
Photograph by Milton Morris
Red Hat began when Marc Ewing, the originator of Red Hat Linux, merged his company with Young's ACC Corp., a Linux and Unix catalog business in New York, in 1995. "Marc did the engineering. I did sales and operations. We moved ACC down to the hills of North Carolina."
"Lulu is very different from Red Hat. Lulu is trying to create a marketplace for authors, musicians, filmmakers. On Lulu, it doesn't cost anything to publish your book. We're trying to do for content what eBay has done for things."
"We did $13 million in 2006. We project north of $30 million in 2007. Richard Brown sells a thousand copies a year of Richard Brown's Replica Watch Report, at $39.96. It costs $15 to print and he keeps 80% of the royalties. No publisher would go anywhere near it."
HOORAY FOR OPEN SOURCE
Lulu depends heavily on open source software, Young says. "We use Red Hat Linux, PostgreSQL, Apache. Eighty to 90% of our software infrastructure is open source. If we had had to buy all the elements, we wouldn't have been able to afford the engineering to build our applications."
ALWAYS A CONTRARIAN
"Our business model is the opposite of a publishing house. A major publisher would like 10 authors selling millions of books; we'd like a million authors selling 10 books each. We have a bad poetry market all over Lulu," he says with tongue in cheek. "Our authors are not trying to publish with Random House."
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