.8 (20% time)
*
37.5 ( 75 hours per 2 weeks /2)
=
30 hours/week
* 1/12 (rough vacation)
=
27.5 hours/week.

Which isn't a lot of time to dedicate to projects, honestly. You should look into how cygnus did things back in the day, they had a very interesting bonus/payments structure. In fact, I'll email Gumby and point him at this.

Chris

Nice post. My company practices many of the principles you mention, so positive reinforcement is satisfying. There are a few other questions to be discussed for entrepreneurs wanting to take this route, including:

* What are software business models that are compatible with these principles? The two broad categories are services and products. The first is process-intensive and for large projects, customers usually require guarantees such as (gasp) CMMi or (double-gasp) PMP certification, which lead to a set of values that are not traditionally linked with openness. The second, product-based, approach requires investing in building a piece of technology and competing against established, probably proprietary-software vendors who are making higher margins selling licenses, leading to a high risk of early death. MySQL is obviously a success story in the second category, but how many of those can make it to sustainability?

* Should venture capital be sought? What would be the convincing value proposition in the face of competing business plans with similar ideas but simpler (read: to make money faster and more reliably) software and intellectual property models?

* What is the ethical behaviour when 2 or more FOSS-based software companies work in the same area, and provide similar services? What does coopetition practically mean?

We've been live for 3 years but we don't have easy answers to those questions. In any case, it's more fun than being a Microsoft Gold partner!

A lot of Monty's ideas seems to match the rules used for MySQL years ago… or the ones which Monty tried to use. It would be interesting to count how many are still used in the MySQL at this date.

The interesting challange is being small and efficient but at the same time being able to serve large markets, some of which may have difficulty dealing with small companies.

In my opinion these rules also mean the company should not go public (at least not to have significant portion of shares traded on stock exchange and held by institutional investors) as if it does contolling investors will care about their return rather than anything else.

I do not generally agree with cost of living thing. In my opinion the choice of country where you live is same choice as neighrboohood just on the larger scale. If american wants to move to china and get massive savings it should be his choice. Same other way around. Company may be only afford US level salaries for few positions - than so be it.

What should define salary is value person brings to the company, which can be geo based. For example consultant working in US and doing onsite jobs typically brings a lot of value due to his locality in this case salary should be adjusted.

I also think percentage numbers need to be adjusted in many cases but I simply treat these as samples
for many markets for example 5% whould not be enough to make any real Sales guy to work :)

When exploring a large problem space by stochastic process, there's no way to avoid local maxima - and in fact, no way to know that you've reached a local maximum, rather than the global optimum. In particular, if you have a relatively isolated peak, it's common for many of your strings to asymptotically approach one another at that peak, and population diversity is lost. This is the reason that many such search processes include a mutation operator - so that diversity can be added back into the population at a relatively steady rate.

So here, I'm assuming that a local maxima in the search space would be a company that's sustainable, but not (for want of creativity, or opportunity, or tolerance of chaos) doing its best. Presumably, the company's had to be in the market for a while to get to this point, and the company rules have done their job well, and employee retention is high. At this point, it's reasonable to assume that the company has reached a relatively stable state - unless something externally influences its genome (ie, staffing) or its niche (making the previous maximum less profitable), it's easy for the company to coast.

The sabbatical suggestion is an idea for introducing a self-selecting mutation operator - those conditions most indicative of financial stability are prerequisites for its exercise, and while the majority of the time it won't have an effect on company profitability, it will always have some small chance of seeding dramatic change.

So, I might suggest some kind of sabbatical program. Maybe just for VIP{1,2}? My thinking is that if a person has been with the company for a long time (say 5 years?) and is widely considered to be important to the company, and if they are widely considered to be a 'long-timer', then it's actually in the company's best interest to send that person away for a while. Time spent writing a book, ski bumming, or working for another company is certain to change that employee and to make them somewhat different from what they were. This can increase diversity, among the employees most likely to be mostly similar to one another.