Thursday, August 16, 2012

Removing Barriers for Linux Hardware

Since 2007 I've had to send emails saying: "Sorry, we do not ship to your country."

I have squirmed in my seat while typing that reply. Free and Open Source Software doesn't have borders. The hardware shouldn't either.

It's impressive that people seek out GNU/Linux hardware builders, but it's even more impressive when people email asking, "Here is my background ___. Could I set up a ZaReason shop in my area?" Antonio, Marcus, Tommi, Richard, and so many others, when you emailed us expressing that you wanted to set up shop, I looked you up. All of the people, approximately 125, who requested this were "viable prospects", smart people who could follow through.

Please know that typing the "no" reply was literally painful. It's a problem I have not been able to solve.

For the first five years of ZaReason's beginning, I asked people in Silicon Valley for advice on global expansion, seemed the obvious source of support. 

There's always a part of the conversation where I have to clarify my personal intentions: "I'm not in it for the money." 

At that moment, I lose their respect.

Occasionally, there's an unkind comment indicating I'm financially clueless. 

Actually I'm financially savvy. I'm just not ruled by it. I have different priorities.

Today, I had lunch with @kiwiseabreeze an experienced lawyer. I said, "I'm not in it for the money," and instead of giving me that look that says, "You hippy twit," instead her eyes glowed, she "got it"; no more trying to explain the impossible. What a breakthrough! For the first time, I was able to express my main objectives without being dismissed.


She respectfully heard me out, listened to some of my goals and objectives, mulled them over. It's the first time I've been able to get past that initial first step.

Result: I can see more potential options for The Next Step.

It looks like the wish I've had since 2006 might be possible. My wildest hope:

1. We put together "the packet" that allows ZaReason shops to be set up in other countries by people other than myself.

2. We send out word to those who want Linux hardware in their country. "Find two people who have the time and energy to set up a shop and contact us." 

3. At our Berkeley headquarters, Tony Lam, the CTO, has fully transitioned to doing the core of R&D. Iqbal Haider, the CFO, has fully transitioned to taking care of all ZaReason finance, making sure we're profitable, so Earl & I have been free (since April 2012) to set up other shops. Problem is there are only 2 of us and 20+ countries that could use Linux hardware asap.

Description of shops: 
Early days at Berkeley, CA shop, L-R, Earl, Vincent, Mark Terranova ("Hi Mark!"), Aaron Thomas, Kory
  1. 1,400-1,600 sq ft / 130-150 sq m of ground floor retail / office
  2. two salaried employees: Tech Lead and Office Manager
  3. access to both full-time and plenty of part-time employees, flexible employees, preferably walking distance to research university
  4. near a major port (preferable) to reduce shipping costs

Sidenote: When a company takes the "light & local" approach, it's usually called a franchise. A regular franchise costs five to six digits to get going and franchisees anticipate these fees, including licensing fees (shiver-cringe). 

But ZaReason won't be run by people who attend franchise fairs.

ZaReason will be run by people with deep experience in the Tech Sector.

* people who have already had careers programming, developing, managing and are more than qualified to run a ZaReason shop

* recent grads or people with untapped enthusiasm who recognise the value of building high-end hardware for Linux only 

* LUG groups, maybe previously inactive, coming back together to form a group who run the local shop, combining talent and expertise

Since ZaReason in US and NZ don't have "extra" funds, the people setting up ZaReason shops in different countries will cover the startup costs such as getting their country's site set up, getting initial inventory, legal docs to set up business, and similar costs.

For initial funds, maybe they'll self-fund, a Loan from Shareholders like we did, small outlays in incremental steps, $500 initial investment, a bit of bootstrapping and reinvesting profits. 

ZaReason US is doing alright, chugging along. ZaReason NZ, set up in a country of only 4 mil people, the size of just San Francisco, is doing alright also. NZ gets crummy service (or none) from most computer companies because the country is "too small". We figured if we could survive in NZ, we could survive anywhere. And NZ has done nothing but delight. (Thank you!)

We've had a bit of success and aren't proprietary / greedy. We just spent some time wandering while trying to figure out a non-corporate way to build a FOSS hardware company. As of four hours ago, our plan was for my husband and I to set up every shop ourselves (a spine-crushing amount of work). Even our 11 year old could see that our approach was insane: "Mom, that's like trying to write an entire game engine on your own. That's a freakin' waste of your time."

Ah, the wisdom and clarity of an 11 year old boy. Somehow the business advice of a kid making disgusting noises seems more sane than advice from SF business sharks.

I haven't been able to wrap my mind around the appropriate type of business structure while I've been surrounded by regular business people, talk of licensing, market segmentation, profit margins, and all sorts of fees that raise the cost of "the product".  (I refer to my laptop as "my trusted companion", not "the product".)

But NZ business people are different. Of course they want to make money so they can feed their kids and go surfing on weekends, but the thought of big profits is a "meh". I've been surrounded by the Kiwi business culture for five months now and my mind has finally opened up to new possibilities.


Ah-ha moment -- I couldn't conceive of the appropriate structure because the appropriate structure for building and distributing FOSS hardware involves essentially giving ZaReason away to the world at large. No one gives away a successful start-up. 


But FOSS is some sort of organic, wonderful thing that often reminds me that the human race does have some redeeming qualities.

SF Bay Area
In the afternoons I sometimes wander on Mount Victoria where scenes from The Hobbit were filmed. I've been loosening up to ideas: Maybe the people who've offered to set up Za shops will Kickstart it for their country (could run through Za US since Kickstarter is still US based). I don't have the energy to single-handed produce a Kickstarter video, but who am I to stop others from doing so? 

Maybe they'll raise the funds themselves. Maybe they'll bootstrap it like Earl & I have done, starting both ZaReason North America and ZaReason Australasia out of a house to keep overhead as close to $0 as possible. 

Maybe they'll pool together their own investor funds. 

Here's the kicker -- the core work, the R&D has already been done to get these machines out to people. The supply chain is in place. There are still hurdles, like keyboards in your country's layout, but we've been working on global expansion since 2007 and have structured ZaReason to handle this type of growth.

Over the last six years we have fine-tuned the structure for ZaReason. It is profitable. Our shop in NZ is in the black, barely, but it's an amazing start. 

Since 2007 we've received requests, "Can I set up a ZaReason shop in _____ (name of country)." We set up ZaReason's procedures so that it would adapt easily to the EU, South America, Scandinavia, and at my son's request, Iceland, at my daughter's request, France, and so many others. 

"I envision hundreds of ZaReason shops dotting the globe. Light, lean, local. Computers built and supported in-country."

We're pulling together a list of potential shop owners now and will do it on a mix of first-come, first-served + viability. Please email if interested. 

It's time to stop saying no.

Tuesday, August 14, 2012

Follow-up to "Pricing Hardware that Runs GNU/Linux"

Update: It took a few hours, but we found what we need. We found a team that can answer these questions and more. For those who helped, thanks for your input!


In Pricing Hardware that Runs GNU/Linux, I started what I hope will be a new practice at ZaReason -- giving rebates at the end of each accounting cycle, giving back any profits that occur during that time period.

For the last two weeks I have been cringing, literally cringing. How do I tell people that there won't be any rebates this cycle? It was break-even.

GNU Free Documentation License en:User:Amal
Enough computers went out the door to cover costs. Technically it should be counted as a loss since one cost is, "Donate 10% to FLOSS-support group." We donated about 2% plus the cost of a tablet, the ZaTab that will be given as a prize at NZOSA, New Zealand Open Source Awards.

Interesting note: In the last month ZaReason could have reasonably given $100,000 ($1.2m/yr) to various organizations who could have made great use of those funds: the FSF, SFC, EFF, Ada Initiative, Partimus, and numerous LinuxFests and volunteer-run conferences. These orgs need the funds to function. Think about it: ZaReason makes hardware, a tangible item that costs money. ZaReason could be and should be a part of the engine supporting these groups.

The ZaReason Australasia base has such minimal overhead, you would think there would have been significant profit for our first month. For the first month's accounting, I didn't include any start-up costs, none. There still isn't any payroll. But, a large part of our costs for the first few months will continue to be shipping, getting inventory in-country at a rate that doesn't require investment funds (smaller shipments more regularly). We're building inventory slowly, currently: "Get enough to cover the next week's orders." It takes at least a week for inventory to ship from US / Asia --> the base in NZ.

Waiting for hardware is horrid. If you doubt, talk to one of the people who have ordered an UltraLap 430 and have had to wait. Even better, ask Brenda Wallace (current one of the rulers of the Internet in NZ).

CC-SA Cathy Malmrose
Ask her how she feels about having to wait for her shiny new laptop to arrive. She has the patience of a goddess, but she wants it now for good reason. Every geek within earshot of this blog post will be able to empathize -- our hardware is crucial to the work we do and waiting is nearly intolerable.

So, help me with this solution? Put yourself in my shoes?

Public domain Medjaï
Or any shoes that fit? Just take a moment to walk with me, give this concept of "hardware for the community" some brainspace.

Perhaps I was using the wrong tool for the task?

Task = make ZaReason community-driven, give it that "we're all in this together" vibe.

Tool = REI style rebates to make sure there's no profit motive + give back to community

Perhaps the tool should be:

Tool = community ownership of some type with profits going to a mix of organizations that support FLOSS.

Public domain
The Spark: Last week we had lunch with a brilliant thinker named Daniel Spector. I walked away with a dozen quotable quotes and a brain overflowing with sparky ideas. The most interesting was the concept of possibly making ZaReason an employee-run cooperative.

But to do any type of business shift, I need a business person to help. I need The Eben Moglen of Global Business Development, someone who understands why FLOSS is important, who won't waste my time on a profit-for-CEOs type of business structure.

I'm no Utopian, but I do think corporate business structure is, as my 11 year old son would say, "Freakin' unfair." I don't see any reason why ZaReason can't run differently than regular US corporations. I just need to figure out how.

If you haven't met or hear Eben Moglen speak, the top three traits we need are:
CC-Attribution, Share Alike 2.0 Palosirkka

1. Brilliant, well educated, deep experience.

2. Practical, gets the job done,

3. Currently retired, leaving the legacy of accumulated experience

I need a business person to come in and say, "Here's what a co-op would look like in the tech hardware industry and here's how you access the talent to get it done."

I need someone who understands the concept of limited time and won't dump a task list on my over-full plate, someone who knows how to build engines, in this case an engine for FLOSS as a whole.

Note that I haven't given up the 100 days promise. The first week of September, I'll review costs for August and hopefully there will be surplus. Who knows? ZaReason has seen all types of fluctuation in the past and there's nothing I would love more than to issue monetary "thank yous" to those people who believed in us enough from the start.

CC-A-SA 3.0 unported Fir0002
Please comment or email me if you know of someone who could be the Eben Moglen of Global Business Development for ZaReason.

Help me find my way through this particularly dense forest of corporate structure? So I can better build what's needed for hardware that supports FLOSS?

As always, thank you.

Wednesday, August 1, 2012

Why does it matter? Keyboards for FOSS

1. having actions and thoughts in alignment
2. the state of being whole, entire, or undiminished
3. a state of accuracy that gives strength

In 2007 we began shipping laptops and desktops to people who wanted Linux-specific computers. One day I had a --FREEZE-- moment.

Packaging a laptop to be shipped, as I began to close the lid I saw... the logo of an operating system we don't use. It was plain as day on the Start key.

It shocked me. How could we, as a Linux / FOSS supporter, in good conscience, ship out a laptop with only the insides, the hidden part, being Free and Open Source Goodness while the outside was obviously something else?

We found a manufacturer in the US who could do the custom keys for us and took a deep sigh of relief. Whew. Our laptops now had an Ubuntu key. (Later a Tux key, then later, after the key manufacturer went out of business, Ubuntu sticker / Tux sticker.)

A few months later I realized the less obvious -- every desktop we shipped out would end up with a keyboard that's easily available. It would end up with a similar lack of congruity / lack of integrity.
CC-Attribution/ShareAlike Wikisoft


After all the hard work we do to make Free and Open Source, all the late nights and unpaid grunt work and we end up with someone else's logo on it? What a waste.

We did R&D on an Ubuntu keyboard and ordered 100 of them. They were most popular with the Italians. The keyboards were $25 and shipping was $28, so they paid more for shipping than for the keyboard itself but they ordered them anyway and often sent their Thanks. It was a gratifying project.

After the Ubuntu keyboards sold out, people kept asking for Linux-branded keyboards. We found a manufacturer who would do them, but made a mistake. We ordered a small run of them without doing testing. We figured, “What could be so difficult about making a custom keyboard?” That was the first and last time we made a mistake like that.

The key responsiveness wasn't right. We stopped selling them. If coders were putting so much effort into writing clean code, the least we could do is make high quality hardware to match.
Keyboard in backpack, CC-SA, Earl Malmrose

After that we were a bit nervous about quality. Earl, our R&D lead began working with OEMs to build a quality keyboard. He rejected all of them except one, a keyboard that he hauled around in his backpack to differenet conferences for more than two years. If the keyboard could handle being carried in a backpack (being jolted, twisted, dropped, stepped on, spilled on) then it could pass our quality test.

But, the OEM's minimum run is 1,000. They would prefer we do 10,000 but 1,000 is plenty for an initial run.

We figured that it was probably likely we could find 1,000 people in the world who loved Linux enough to want to have a keyboard that showed it. But how to fund it?
ZaReason works backwards from most companies -- instead of asking, "how much can we charge" like most companies do, when we are working on a new product we base the price on, "How little do we have to charge in order to do the project properly and support it long-term?"

It's "how little" vs "how much", polar opposites. It's the FOSS way of approaching the exchange of tangible goods. So, funding a run of 1,000 keyboards wasn't in the budget because there was no budget, no surplus.

Whenever ZaReason does have surplus (usually by accident, by having a product that's more popular than we anticipated) we either use that surplus for R&D to create products like the ZaTab, a rooted tablet with an open bootloader, or we give the excess away.

Glyn Moody's book, excellent read
I asked around about the funding issue and several really smart people including Glyn Moody of Rebel Code fame and others encouraged us to use Kickstarter.

But that would best be covered in a Part 2 post tomorrow when my eyes aren't so bleary.

Teaser: I will be asking for photos and videos clip contributions. If you have some eye candy that shows FOSS goodness we might be able to use it for the Kickstarter video. We also need a few photos of truly dirty keyboards.

For more details check in again tomorrow! Thanks!