Like most of the world, I’ve been following the recent market turmoil with a great burden on my shoulder. When you think about it, I’m not a stock broker, nor am I a multi-billionaire that has his funds invested in various stocks and bonds, that a single 0.1% shift in the NASDAQ translates to millions of dollars. I’m a software developer, a freelance one, dealing in the Open Source – and like anybody else, I’m worried about how this crisis immediately affects me.
Today, I came across two items, post on www.themarker.com – Israel’s topmost Internet based financial/business daily. The two items dealt with how three of the better known VC’s in Israel had started instructing their investees to start cutting down costs – mainly, firing people. The three VC’s that I’m talking about are: Carmel Ventures, Benchmark Israel and Sequoia Capital. You are probably wondering why is this interesting? the VC’s in the item had directly instructed their investees to cut down people, costs, operational costs, loose dead weight – in other words, find ways to reduce your costs. Sequoia even out did Carmel and Benchmark, by inviting the investees to a meeting called: “RIP: Good Times”!
Shortly after I finished reading the two items, I got a phone call from a friend working at one of Sequoia’s companies (a well known one in Israel) asking me if he can come work for me. I was surprised, this is the first time I’ve ever read something in the news, and was directly affected by it. As far as I gathered, his company basically took a team of 8 people and reduced it to 2. Now, I completely understand tightening up, but running an operation on a 25% man power is stupid! Running at 50% is manageable, but 25% is down right crazy. For 2 people to do the work of 8, they would need to eat, drink, sleep, live, do everything within the office – I know, I’ve been there. During the year 2003, m-Wise was more or less in the shit. In the year 2002 I had a team that consisted of another SysAdmin and 3 more support techs. In 2003 I was left alone, and I basically did everything myself! – how crazy is that. But again, I decided that I’m not going to have a life for a certain period of time – that is all, not everybody is willing to make that sacrifice.
Now, this case goes hand in hand with my previous post – the migration to Open Source technologies is no longer a myth or a “nice-to-have” issue, it is a matter of business continuity and good expense management. Think about it, the company that fired 75% of their team, could have easily replaced part of their server infrastructure from Windows to Linux, migrate their Oracle database to PostgreSQL and save thousands and thousands of dollars a year, and maybe even save a job or two in the process.
Now, here’s what I think (and I know for fact I’m gonna get slammed here): Hey, VC’s, stop telling the companies to let go people. Sure, get rid of dead weight – no one needs those M$ based shitty, money grabbing, time consuming, hardware intensive environment. Wouldn’t it be better to not pay M$ a few ten’s of thousands of dollars a year, and maybe save a man’s job, or maybe even 2? M$ has enough money of their own, all you are doing is making sure they keep on making money, while the rest are fighting for their lives. Why don’t the VC’s hire Open Source consultants, to help them examine their investees and maybe, just maybe, they will find ways to invest their funds in a wiser way and help these companies to survive the current financial turmoil.