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Bob Young hung up his red hat this week, content that the software company he co-founded 12 years ago has lived up to his revolutionary expectations and is now better off without him.

The decision by the former chief executive officer of Red Hat Inc. to walk away from the Raleigh, N.C.-based company was hardly a dilemma at all. Instead, he said it was simply a case of recognizing the different traits that define an executive and a serial entrepreneur.

Mr. Young, a 51-year-old entrepreneur from Hamilton, burst onto the global scene during the technology boom with sweeping ambitions to wrest control of the personal computer from Microsoft Corp. and all the other multibillion-dollar giants selling proprietary software.

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Idealistic and personable, he became a poster boy of the open source software movement by proving that there was big money in selling free software.

Red Hat sells a packaged version of the Linux operating system with technical support. The company's annual sales have swelled from about $20-million (U.S.) six years ago to more than $250-million today. It has a market value of $3.8-billion and Mr. Young himself has a net worth of several hundred million dollars.

When Mr. Young and fellow entrepreneur Marc Ewing first started the business, supporting the freely available and adaptable Linux software, they relied on their personal credit cards for financing.

Other entrepreneurs who have created large software companies from scratch have stayed on board over the years with resounding success, including Bill Gates at Microsoft and Larry Ellison of Oracle Corp. Mr. Young, however, said there was never any doubt in his mind that he would not follow the same career path at Red Hat.

He gave up the role of CEO in late 1999 to Matthew Szulik, and in 2002 stepped down as chairman. This week he resigned as a director.

"It was my baby up to about 2000, when it became a big business and a very successful technology company with a listing on the Nasdaq. My role had been reduced to a director and I don't make a good corporate executive at the best of times, and a corporate executive without an operating mandate is not useful to Red Hat. And I like being useful," he said. "I found I wasn't making a big enough contribution to Red Hat to justify the time I was putting in."

Cleary, the market agreed with Mr. Young. Red Hat shares barely registered the news, notching upward about 2 per cent the day the news came out this week.

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"Red Hat did not desire for or ask Bob to leave," said Leigh Cantrell Day, a Red Hat spokeswoman. "He's been a valued member of our board for a number of years and we've valued his contributions."

The timing of the decision relates to another one of Mr. Young's projects, a three-year-old startup called Lulu Inc. that lets individuals publish their own books, music, video, software or other content. (Not to mention his ownership of the Canadian Football Leagues Hamilton Tiger-Cats.)

The company has been growing in excess of 10 per cent a month for the past year. "I've only every seen one other company have that kind of growth rate, and we know what happened to that," Mr. Young said, referring to his early days at Red Hat. He added that he remains the principle investor after sinking several million dollars into the firm.

"If I didn't take this time to help Lulu exploit this opportunity that we think we are on the verge of, it would be a mistake and I would come to regret it."

What makes the transition between companies easy for Mr. Young is that they both share a similar philosophy and rebellious outlook, namely that too much intellectual property gives large companies too much control over the market.

One of the greatest accomplishments of Red Hat was that it broke Microsoft's grip on the PC industry, Mr. Young said. "We convinced the financial market that Microsoft didn't necessarily own the future. We planted the seed of doubt."

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The effect was to halt the spiralling share price of the world's largest software company and eliminate its currency for hiring the best minds in the business: stratospheric stock options.

"Today, Microsoft is having a tougher time hiring all the smartest people and they're available to others, like Red Hat, Lulu and Google," he said.

The concept behind Lulu was to identify the people being hurt by too much intellectual property legislation and then build a business to solve their problems. The company, based in Raleigh, aims to level the playing field in the publishing industry, helping individuals sell niche items, ranging from works of poetry to technical manuals.

"We think there is a better way for bringing these works to market than the very narrow channel that currently exists, through the few major publishers that exist, into Chapters and Barnes & Noble."

His vision is that Lulu will do for content what eBay Inc. has done for collectibles, excess merchandise and things in old ladies' attics. It will allow someone who writes a niche piece of software to make money by finding 10 buyers for it on-line. The vision will take time, which is fine with him.

"I don't do today or next month well," he said. "I do five years from now well."

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Bob Young, co-founder, Red Hat Inc.


Current projects: Owner of the Hamilton Tiger-Cats of the Canadian Football League; founder of, an on-line publishing company

Most public success: August, 1999, IPO of Red Hat. The stock soared sixfold in its first three days of trading, from $14 (U.S.) to $85.25. It peaked a few months later at $150, briefly giving the company a value of about $15-billion.

Most public failure: Investing in Classy Formal Wear Inc. The Montreal firm went bankrupt after 85 years. "The day of the independent tuxedo rental business is over," he declared in September, 2004.

Favourite attire: Jeans, t-shirt, baseball cap

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Education: Studied modern history at the University of Toronto

Jobs prior to starting Red Hat: Typewriter salesman, computer salesman. Helped publish several computer magazines, including Linux Journal

Family life: Married, with three daughters, and lives in Raleigh, N.C.

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