Michael Robertson's $20,000,000 Mistake (Almost)

As most of you know, Michael Robertson is continuing his legal attack on some very good people who once worked at Linspire. As part of this legal assault, I have had to produce emails, documents, etc. in discovery. In going through the old emails I had kept, I found one that I thought I would share here.

One day Robertson and I were arguing about how to treat employees. I think employees are the most important asset of a company. Robertson yells and swears at them, tries to make them feel small, gives them crappy severance, and even ends up suing them. During one of these "how do you treat employee" arguments, I was trying to explain to him that the employees I was defending had just brought in millions of dollars in revenues and profits. He would always come back with, "Yes, and that's their job. That's what they get paid to do." He then went on to brag about how "he" got $20M from Microsoft years earlier by forcing them into a rough situation where they had to pay us to change our name.

Oh?

See the email I've pasted below which I had sent to Michael Robertson back in 2002. It's an email that I spent a great deal of time and thought on writing before sending it to Robertson. This email, and my subsequent cajoling of Robertson, would end up being worth $20M to Linspire two years after I wrote it.

"Lindows" had just gotten a favorable ruling in one of the very early rounds of the Microsoft v Lindows trademark case (a full two years before we actually settled). I remember that day very well, as we heard of the ruling right in the middle of a developer's conference that we were holding at the Lindows offices. (I'm sure many of the developers who were at that conference will remember it too, as it was a big victory for Lindows against the giant Microsoft.) After the ruling, Robertson told me that his plan was to try and settle with Microsoft and change our name to ChoicePC. He figured he could get between $100,000 to $250,000 from Microsoft on the heels of this loss for them and that they would now agree to settle. As you'll be able to see in my email to him, I thought that was a bad idea. Much of the press Lindows had been getting was coming FROM the lawsuit. Without that, we were just one of a thousand other Linux distors. We needed something to help us build our brand. To me, that was the name Lindows. I also knew we had little downside but HUGE upside to one day settle for a lot more. Knowing that you can't easily change Robertson's mind (you have to stroke his ego and make him think everything is HIS idea so he can later take the credit), I crafted this well-thought-out email. The next day, after MR had read my email, we met and I continued by tactfully cajoling him. Robertson then agreed with me and decided not to change our name. I remember the sense of relief I felt when he changed his mind. Whew! I'm quite confident that without this email and my cajoling, Robertson would have settled with Microsoft at that time. The rest is history. We continued to milk the press from the name and ultimately took $20M from Microsoft to change our name.

Here's the email.

From: Kevin Carmony [mailto:kevin@lindows.com]
Sent: Friday, March 15, 2002 8:13 PM
To: michael@lindows.com
Subject: Lindows.com

Michael,

First off, congratulations! Not sure if I actually congratulated you on the ruling, so I'll do it now. Not everyone here was as close to the legal proceedings as I was, so they probably don't fully understand how significant your direction in this case was. I was fortunate to have been able to sit in on many of the meetings, calls, e-mails, etc., and to me it was very clear. Many will congratulate our company over this victory, but I sincerely congratulate you personally. Sure, Brobeck has a good team and did some great work (especially Daniel), but I honestly give the bulk of the credit to you. Like you said over dinner, winning doesn't teach you much, but losing does. Lindows.com is the beneficiary of the experience you gained at MP3.com.

As I came back to the office and looked around this place (I was the only one here, everyone was over at the dinner still), and had a minute to think, I have come to the strong opinion that we should keep using the "Lindows" name. I suppose the argument can be made to make the change if MS comes back with a quick settlement, but something tells me they won't, and to be honest, I hope they don't and that we decide to stick with the Lindows name. Let me give you a few reasons why I feel this way...

1. Dvorak said it best, "Lindows has a name that in itself is genius." Two names have put this company squarely on the map: "Michael Robertson" and "Lindows." It was a brilliant move then, and I believe still is, for all the same reasons it was "genius" back then and now even more reasons.

2. Yes, ChoicePC is a very good name as well, BUT it doesn't have the history that "Lindows" now has. I believe the name "Lindows" now stands for much more than when we started (Linux + Windows). It now also stands for not being afraid of taking on MS, it now stands for victory, it now stands for the days of MS always getting there way are numbered. Every army needs a banner, an ensign to rally around..."Lindows" I believe has become that ensign...I'd hate to lose it.

3. Today's victory was felt by so many...you, me, Brobeck...but far more important...our employees, our customers, our Insiders, our supporters, investors, the press, fans, etc. I would feel that if we abandon the name now, in a way we're abandoning them and all the trust they've put in you to fight this fight. What will Dvorak think? What will our Insiders think? What will our employees think? So many people have felt a stake in this fight (you heard the cheers during your toast tonight), I don't want to lose their ardent support. "Lindows" has become the icon of our fight, to bring choice to MS's monopoly. I think it would be a mistake to walk away from that now.

4. I agree we need to focus on making a great product and not fighting legal battles. I believe we've proven we can do this. Our engineering team continues to plow forward, regardless of any legal entanglements. I don't see this a dilution of engineering, but rather a HUGE boost to marketing. I believe we have been handed the best pre-branded name we could possibly have, and it will take much to replace that. Sure, we could work to brand ChoicePC so that everyone comes to know the name...but will the name bring up the same emotions? David V Goliath has served us well in these early days, and I believe there is still steam in that model.

5. We can still introduce the concept of a "ChoicePC" without abandoning Lindows.com or LindowsOS. A "ChoicePC" is one running LindowsOS and shopping at the Lindows.com warehouse. We can gradually brand "choice" while keeping our Lindows banner flying proudly.

6. Lindows has been through the battle and come out victorious (yes, I know this could change, but given such a strong opinion on the PI, I'm feeling confident we will remain victorious.) This battle and victory has injected something into the Lindows name that only another lawsuit could put into ChoicePC. I fear any other lawsuits will be longer fought and perhaps not easily won. We should take this first win and wear it as a badge of honor and courage. As you say, we didn't run when the bully picked on us the first day of school...let's not let MS ever forget that!

7. Finally, I'm exceptionally proud to be associated with this company, and I know all the employees here feel the same way. Lindows is now such a huge part of that pride and our legacy...I don't want to walk away from that. I bet if you took a vote of our employees, 100% would agree. Even if it's not the logical thing to do, it IS the emotional one...and emotions are a powerful thing when trying to get employees to love a company.

You instinctively KNEW that "Lindows" was the right name when we started, just like MP3.com was the right name. My instincts are screaming to me it is even a more brilliant name now.

Just wanted to share my insight as you consider this decision.

Congratulations again! I hope you take some time to cherish the moment...not many can say the took on MS and won.

Kevin

Just wanted to make sure Robertson doesn't try re-writing history. Robertson likes taking the good ideas from employees (read this for example), but then treats them poorly, like pawns in his little world. Just ask most of those who have had the misfortune of having worked for him (or been sued by him).

Kevin