What has Michael Robertson accomplished this past year?

I resigned from Linspire exactly one year ago on July 31st, and still no shareholders meeting or word from Michael Robertson to the minority shareholders as to what happened with their investment in Linspire.

This past year Robertson had time to predict the iPhone would flop, falsely accuse good people of crimes, shrink several companies, come up with dumb and exploitive new product names, and as recently as today, have his lawyers harass me, but he still seems to have no time for those employees and investors who wrote out checks to buy stock in his company.

Yes, Michael, we know, we know, YOU'RE #1. We got it.

Kevin

Online Chat Hits a Wall

Chat rooms "should" be fun, but rarely are. Here's what I'm doing to change that.

Kevin

The Very Heart and Soul of Conservatism is Libertarianism

"If you analyze it I believe the very heart and soul of conservatism is libertarianism." ~ Ronald Reagan

Read more of Ronald Reagan's views on Libertarianism from this interview he did in 1975. At that time, Reagan used the term "libertarian-conservative" to describe his political philosophy. Reagan’s record, while generally conservative, was not particularly libertarian, but one’s administrative decisions, constrained as they are by existing laws, institutions, and politics, do not necessarily mirror one’s underlying philosophy (consider Mitt Romney when governing the very liberal state of Massachusetts). This interview gives an interesting glimpse into the real Ronald Reagan.

It's good to get to know where a candidate comes form, where their true roots lie and what their underlying philosophy is. Elections have a way of pulling candidates to the center as they pander for votes, so if you want to know what will actually drive a politician once they're in office, look to their core values and beliefs, and not just what they say months before an election.

Ronald Reagan was, in my opinion, a great President, because deep down he believed in the libertarian ideals of smaller government and more personal responsibility. Barack Obama is one hundred and eighty degrees from Ronald Reagan in that belief. Obama may be pulling to the center to win your vote, but if you look at what he has said and done in years prior, you'll see someone who can't wait to raise taxes and let government step in and start solving your problems.

It's hard to find many things government does right, so why would anyone want to turn to government to solve more of their problems? This would be like choosing the worst shooter on your basketball team to shoot the technical free throws. It makes no sense.

Another good quote from Ronald Reagan, "I don’t believe in a government that protects us from ourselves."

I couldn't agree more. If I need protecting from myself, I hope friends, family, church, neighbors, and community support groups will be there for me, not the Federal Government.

Kevin

My 4th of July Project--Jayson Haws Web Site

Last year when I left Linspire, I decided it was time to get involved with independent music again. One of the most talented recording artists I ever had the pleasure of managing and working with was the singer/songwriter Jayson Haws, lead singer for the popular Salt Lake City band The Given.

Jayson was only about 20 years old at the time, and anyone who worked with him knew he was a musical prodigy and the classic "triple threat," being a solid song writer, with an amazing voice, and a powerful on-stage presence. I watched, time and time again, Jayson blow people away as they watched him perform, be it in the living room of my house with just his acoustic guitar, or on stage in front of hundreds at popular clubs in LA.

Of all the thousands of musicians I was exposed to during the MP3.com days, Jayson was the one I always knew just HAD to break out.

So, what happened?

Like me, Jayson, also took a detour away from music for a few years. Fortunately, these were very good years for Jayson. He made a tremendous amount of progress in his life, got married, had a son, and successfully snubbed out most of the demons of his youth, emerging out the other side better than ever.

Jayson and I had stayed in touch over these past years, and when I left Linspire, I knew I had to get together with him and catch up. I was pleased to discover how Jayson had been spending his time, not only becoming a better man and father, but musically, he was better than ever! I knew this was the time for us both to finish what we had started all those years ago.

Jayson and I started planning his return to the studio, only this time on his own, without The Given. We both instantly agreed who the perfect producer would be for Jayson's first solo CD, our friend and Grammy-winning producer John Jones (Duran-Duran, Fleetwood Mac, Celine Deon, Alan Frew).

I remember that first time John and Jayson met. I'll never forget the look on John's face all those years ago, when Jayson and I drove over to John's house in the Hollywood hills, and Jayson sat on John's couch with just his guitar and sang. John, as I expected, was blown away. (A bit of trivia for any "Lindows" fans, John was my musical cohort for all those silly Linspire parody videos.)

It didn't take any convincing at all. John too knows what a phenomenal talent Jayson is. With just one phone call, John was in his car driving from LA to San Diego for a weekend meeting with Jayson and I. And, so it began. A new year, new songs, and new attitudes.

These past months, we've been working together on the new record. The CD is about 80% done, and we're all giddy with excitement to soon be sharing it with everyone. We're all very happy with how the songs are turning out.

Because we were getting close to finishing, it was time to start thinking about a website for Jayson and his first solo CD project. So, yesterday, for the 4th of July, I decided to get creative and play around with Flash and put together some rough ideas for a website for Jayson. In less than a day, and with the help of a cool new Flash tool (wix.com), here's what I came up with...

http://jaysonhaws.com

There's not a lot of content there yet, but it was a lot of fun just being creative and playing around with ideas for the site. I'll be getting with Jayson in the days ahead and filling in the content and adjusting things to his liking, or scrapping this one all together and doing something different.

I hope you'll all take a look at the new site, and let me know what you think, and PLEASE sign up for Jayson's mailing list, so we can notify you when the CD is finished. You won't regret it!

Kevin

PS: Emily, the "star bursts" are for you. =)

My Video Interview with Chris Pirillo about Linspire's Last Days

I've known Chris Pirillo for several years, and he's one of only a handful of people I follow on Twitter because he's ALWAYS got his pulse on the latest, coolest stuff. In following my blog, he was surprised to learn about some of the "weird stuff" that was going on with Linspire, so he invited me to his live chat room for an Interview. I tried to be as candid as possible with my perspective as to how Linspire came to an end.

Chris posted the interview in two parts...

PART 1 - Part one ended abruptly when there was a technical glitch that blew our connection up momentarily.

http://chris.pirillo.com/2008/07/03/kevin-carmony-interview-part-1/



PART 2 - Q & A - Part two was a very informal Q & A with some of the people in his chat room. You can tell I was more informal and relaxed during this part, as I end up rocking in my comfy office chair for most of this section. =)

http://chris.pirillo.com/2008/07/03/kevin-carmony-questions-and-answers/



Kevin

Michael Robertson's Ego Refuses To Believe Desktop Linux Will Ever Succeed

The ego has landed...

Because Michael Robertson failed at desktop Linux, he now implies in this article that Ubuntu and others will fail at it as well. In classic Robertson form, he's blaming Microsoft for HIS failure.

I have always said that Linspire failed because WE failed, myself included. Ubuntu and others just did things better. Yes, Linspire did a lot of things right, but we also did enough things wrong to never become the leader. We didn't lose out to Microsoft, but to Ubuntu, Fedor, OpenSUSE, and others.

Robertson's ego refused to accept this. Just because HE couldn't do it, doesn't mean others, far brighter than him, won't be able to succeed (and already are).

Michael is like the guy who runs a 9-minute mile saying it must be impossible to run a 4-minute mile.

Desktop Linux certainly CAN succeed, and I'd encourage those who are involved to not listen to this defeatist attitude. Apple is finding success on the desktop, why not Linux?

To err is human, to admit it divine.

Kevin

Michael Robertson Speaks--Intentions Revealed

Michael Robertson finally broke his silence about what the 100 Linspire shareholders can expect from the sale to Xandros. No, this didn't happen in a shareholder meeting, but to a reporter. Apparently reporters matter more to Michael than shareholders. He has time to give them a call, but apparently no time for the 100 people who invested money and years of hard work into his ideas.

Michael was quoted this morning in a San Diego Union-Tribune story. The reporter, Mike Freeman, did try to contact me yesterday, but when I called him back a few hours later, it was past the deadline, and his story had already been sent off. I did speak with Mike this morning, however, and discussed with him what I'm sharing below.

I'll comment on a few of the quotes from the story...

Robertson said that in any transaction, preferred shareholders and investors are at the front of the line to get paid.

"Any" transaction? That's certainly not true, but it does show how Michael views minority shareholders.

To further understand Michael's attitude to minority shareholders--when I was at Linspire, Michael said he wanted me to transfer $1,000,000 from Linspire's account to himself because "MP3tunes needs some money." (MP3tunes is another company that Michael owns, unrelated to Linspire, with completely different shareholders.) He also wanted me to transfer $500,000 to his father-in-law. I objected, of course, saying that the cash was a Linspire asset.

Linspire had a very good year, so we had money, and I told him we could certainly make a dividend in these amounts to him and his father-in-law, BUT that we'd also have to give the same per-share dividend to all the other shareholders as well. He said that because he and his father-in-law were "preferred" shareholders, they were "entitled" to this special dividend and that "this is a common practice in companies and happens all the time." I knew, however, that Linspire and Michael's preferred shares were not structured in that way (Linspire had two different law firms confirm that point), so I certainly never made these payments.

I guess Michael still needed the cash, and he didn't want to have any money go to the other shareholders, as he then set about removing everyone that stood between him and the money. Within a matter of days, Michael sanctioned a plan to fire the CFO and Controller. He next, without a shareholder meeting, removed myself and our CFO from the Board of Directors, leaving him as the sole member on the board. It was becoming very clear to me that Michael's plan was to see the Board, CEO, CFO and Controller gone, leaving no one to stop him from turning Linspire's assets into his personal piggy bank.

After I left Linspire, because I was fearful that Michael's intentions were to misappropriate Linspire's funds to himself and his father-in-law, I had my attorney arrange for me to review the Linspire books. Michael refused and his lawyers pushed back my requests. To this day, even though I'm a significant shareholder, I have not been allowed to see the books, nor has Michael held a shareholder meeting.

When Michael realized I was putting up road blocks to prevent him from just reaching in and taking out cash, even after all the officers had been removed from his way (and him going so far as to falsely accuse good people of embezzlement for accepting reasonable severance payments), it appears he set out on a new course of action to get at the cash...liquidation.

Every company has different rights for preferred and common shareholders. At Linspire, the liquidation rights of the preferred shareholders were very weak (see S1), being not much different than those for the common shareholders. The difference in liquidation preferences between common and preferred shareholders at Linspire is very small, and it appears Michael set about structuring everything to navigate all the cash from Linspire to him, through that tiny space of differentiation. (It may apparently take a lawsuit to uncover if he was successful in that operation.)

He said he couldn't get into specifics of the deal or say whether anything will be distributed to minority shareholders.

Not even with the 100 shareholders? By law, he will be forced to "get into specifics" to those of us who have invested and hold shares in Linspire.

“I personally have invested more than $20 million in Linspire,” Robertson said.

Pure nonsense!

An investigation in the public documents filed with the SEC can give anyone insight into what Michael has invested. Michael invested equity into Linspire and, at times, extended it loans. Before I left, Linspire had paid back any and all loans to Michael, and the company still had millions of dollars of retained earnings in the bank. Michael's EQUITY investment into Linspire is nowhere close to $20M! In fact, at no point in time was Michael's equity investment COMBINED WITH HIS LOANS anywhere close to $20M. This would be like me loaning you $10 every day for lunch, you pay me back in full at the end of each week, and then 7 years later I say "I invested $18,200 in you!"

“It's important to know that when there are distributions, the investors always get their money back first, and if there's nothing left over it's not a devious plan to screw shareholders."

So, let's get this straight Michael...the tens of thousands in CASH that employees "invested" into Linspire when they purchased their stock doesn't count, but your cash does? You're an "investor," and they're all just peons to be taken advantage of? Do we not even warrant a shareholder meeting? You said you invested $20M--is that the number you're using to cut first in line? What deal did you structure to navigate your weak liquidation preferences through to the cash? Was this a "liquidation, dissolution and/or winding up of the Corporation," or was it an "acquisition of Linspire" as stated in the press release. Will there be a distribution, or will we be writing off our investment in Linspire? Can you blame shareholders for finding you "devious" when you don't hold annual shareholder meetings, refuse to let us review the books, and then liquidate the assets without sharing any information with us about the deal and how it effects us? WHEN WILL YOU HOLD A SHAREHOLDER MEETING AND ANSWER THESE QUESTIONS???

"It's the way it works.”

No, Michael, it's the way YOU work. Hopefully prospective investors in any Michael Robertson ideas are paying close attention.

If you ever find yourself on a boat with Michael, and it starts to sink, don't be surprised if you spot him pushing women and children out of the way as he scrambles for the only life boat, screaming "I'm first in line!"

Kevin

PS: On a minor point, Hoovers was wrong in their quote of $3M in revenue and 18 employees. Revenue is 2007, the year I left, was substantially higher than that, and departing employees have said that Linspire has around 8 employees left today.

Also, Xandros claims to be the 3rd largest Linux company and largest privately held one. Well, you'd have to ignore IBM, Intel, Nokia, etc. who probably employ more Linux engineers than Linspire, Xandros, Canonical, Mandriva, etc. combined and limit it just to Linux distro companies. I'm quite sure Canonical (Ubuntu) is larger than Xandros in terms of employees, users, and I'd imagine revenue as well. As for impact on the space, that's not even close.

Michael Robertson--Where's the Cash?

Linspire Shareholders,

When I left Linspire there were lots of assets in the company (computers, furniture, servers, trademarks, employees, and millions in cash), and virtually no liablities. What happened to these assets and cash?

I have been contacted by several Linspire employees and shareholders, asking me what the Linspire asset sale to Xandros means. I put together this short video using "buckets" to try and explain what happened in very simple terms, based on what information was provided in the 3-paragraph "memorandum."


Since Larry and the other employees now work for Xandros, Michael appears to be the only remaining employee of Digital Cornerstone, Inc., the company we now all own shares in.

So, Michael, the shareholders want to know...

1. What assets remain in the company?

When I left, there was a lot of cash in the account. I assume this has grown, since you sold off the other assets to Xandros.

2. What is the value of our shares?

When I left, I offered $.50 a share to buy stock in the company. The shareholders are all curious what their stock is worth today, ten months later. Have you grown or shrunk the company since then? You always told us to trust that you would take care of the employees and shareholders. Time for you to honor that trust.

3. Since all the assets have now been sold, how do we cash in our shares?

Perhaps Michael is hoping we'll all just forget about "Digital Cornerstone, Inc." and he can keep all the assets for himself? Perhaps he'll use some clever legal maneuver to make sure the 100 shareholders never see anything for their investment in Linspire? Perhaps instead of cash, we now all own Xandros stock or shares of Michael's other companies (both worthless in my opinion).

Without Linspire ever holding shareholder meetings, we remain in the dark, and left to speculate.

Here are just some of the many employees who worked for Linspire over the years (as found on the Linspire website from a Linspire Letter), many of which paid cash to exercise stock options and are now shareholders. Michael asked them all to "trust him."

I have no intention of forgetting, as I'm sure is the case with many other shareholders. I would suggest that Michael Robertson hold a shareholder meeting ASAP to answer these questions.

Kevin

Xandros / Linspire - Here Comes the Spin

In my blog yesterday, I shared how Michael Robertson had sold Linspire to Xandros without a shareholder meeting or any input from the 100 some-odd shareholders.

Today, Xandros' CEO, Andy Typaldos, did a Q & A (spin) about this deal.

I thought I'd add some additional "color" to some of his answers.

Q: What are the financial terms of the deal?
A: Like many private commercial transactions, the financial terms of the agreement are not being disclosed.

Not even to the 100 Linspire shareholders? Robertson, all by himself, sells the assets of the company and doesn't have the courtesy (let alone corporate governance) to communicate with the shareholders? If this deal was good for Linspire shareholders, Robertson wouldn't be hiding, he'd be proudly explaining to customers and shareholders how great this is for everyone. I have a feeling it will take a lawsuit to sort all this out. Where is all the cash Robertson? Did you take it, squander it, or use some legal maneuver to get it and leave the shareholders with nothing? None of these speak very highly of you. Please, prove me wrong, and let the shareholders know where they go to cash in their shares (hopefully for at least $.50 per share, the price I offered you ten months ago).

Q: How many Linspire employees are coming to Xandros?
A: All of the engineering, support, and key sales staff have been retained, apart from a small number of administrative and related resources, given redundancy with Xandros in a number of such areas.

Linspire had a round of layoffs recently. I spoke with one of the employees who was laid off, and he told me that Linspire was down to eight employees total. Anyone can do the math to see that's not a lot of engineering talent Xandros will be gaining. All the best talent has already left Linspire.

Q: Will Linspire CEO Larry Kettler and other Linspire managers be joining the Xandros management team?
A: Yes, Larry Kettler will be joining our executive management team as VP of Business Development.

Of all the hundreds of employees involved with Linspire over the years, there are only two I'd never do business with again...Michael Robertson and Larry Kettler. Larry was the weakest executive at Linspire, a total "yes man" (which worked out ideally for Robertson these past ten months).

Q: How many employees are on the combined payroll?
A: Xandros has been on a fast growth path for the last couple of years; has an aggressive headcount and revenue growth plan at this time; and is currently in heavy hiring mode. We believe that at this point Xandros is already the third largest Linux Company in the world, and that we may already be the largest private Linux Company in the world.

Spin speak for "not many." As I said, Linspire was apparently down to eight employees, and I know Andy likes to outsource to India. It's unlikely he will ever answer this question directly.

Q: Will Freespire continue to be maintained as an open source project?
A: Yes.

Check back on this in six months. Xandros has never had a free, community distro.

Q: Will Xandros maintain separate Xandros and Linspire/Freespire lines of desktop products?
A: Pending further planning, at this point both product lines will be maintained.

Check back on this in six months.

Q: What will happen to existing Linspire/Freespire users?
A: No changes are planned

Check back on this in six months.

Q: What, if any, desktop technologies from the two companies will be combined?
A: No plans are developed yet in that regard.

Further strengthening my belief that this was a cash grab for Robertson and a press release move for Xandros to raise money.

Q: What are the total sales and profits for the combined company?
A: Since Xandros is privately held, these figures are not publicly disclosed.

Click here for an idea as to the answer to this question.

Q: What are the benefits to Xandros from this deal?
A: It provides Xandros with advanced CNR technologies and Linux expertise. It also enlarges the Xandros customer base and support network.

Linspire has shrunk to relatively no customer base (see link in last question) and gone from nearly 100 employees at one time, to apparently now, just eight.

Q: How does this acquisition affect existing Linspire and Freespire customers and brands?
A: We believe that it will help them, by making them part of a larger community of Xandros users, and by providing them with the support of a large, global, full-product Linux solutions company, with larger product and technology footprint, and greater development, support, and financial resources.

"Larger Xandros community?" Linspire/Freespire probably have more users than Xandros, but that's not saying much. (Note: If an Eee PC user is a "Xandros user," then I'm sure Microsoft would be interested in that. Andy, are the Eee PC users covered under the patent agreement between Xandros and Microsoft?)

Kevin