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Feature: Open Source

Open source entrepreneur turns his hobby into an Inc. 500 enterprise

By Tina Gasperson on October 02, 2007 (9:00:00 PM)

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iFAX, a commercial company that is built on open source fax server software HylaFAX, was recently included in Inc. Magazine's 2007 list of the top 500 fastest growing companies in the United States. iFAX founder Darren Nickerson says one of the keys to iFAX's success has been its commitment to the open source community behind HylaFAX. "Our success is tied to the openness of the software."

iFAX provides value-added services, support, and hardware to the HylaFAX open source facsimile server software. HylaFAX uses a client-server architecture that allows users to send documents through fax modems from any computer on the network. Nickerson says the company was "founded from the ashes" of a dotcom bust. "In 2000 I relocated from England to start this [other] company with a friend. He had something probably nobody really wanted, like many of the companies of that era. It never took off." The company failed, but in his newly unemployed state Nickerson found much more time to work on his true passion: the HylaFAX open source project. Nickerson had been involved with the project since 1991, when it was known as FlexFax. It was his first exposure to the concept of open source software development, and he "became very enamored with the idea." After several years of development that some said was too slow, in 1998 Nickerson was one of the community members responsible for revitalizing the HylaFAX project, when he and fellow developer Robert Colquhoun created community repository After the dotcom startup died, Nickerson says he was left with a choice. "I could go back to England, or I could continue following the roots I had planted here." He decided to make his passion into his career, launching iFAX in 2002. "That was my dream," he says. "My goal was to build a company around this software that would allow me to pay myself and other people who had been involved: to monetize it."

Nickerson says HylaFAX lends itself very well to a commercial business model. "We were particularly able to monetize it because HylaFAX has very clear business uses. [In the community], we were being solicited by companies all the time: 'We'd like some support.' But we'd never gotten organized enough. As soon as we launched iFAX, people started knocking on our door. One of our early customers was AT&T. When one of your first customers is the phone company, you know you're doing something right."

iFAX had such a good start that Nickerson never felt the need to solicit venture capital. "We're completely organically self-funded," he says. "It is our plan to remain so. Sure, it may have been a good idea to have made a bigger splash; to have come out with a larger plan earlier, but I've seen the dark side of VC in the dotcom era, and if that can be avoided, it should be. We already have two masters: the business itself, and the open source community. We can't have a third."

Nickerson considers that second master, the community, to be an indispensable part of the success of the company. Other entrepreneurs building a company on top of open source software should do the same, he recommends. "Be true to the community. Be transparent in what you do -- 100%. Make it very clear to people that you won't do anything anti-community. It's in your best interests to make sure that the software improves and is very healthy, so don't do anything to jeopardize that. It's very easy to fall into the trap: let's build some special sauce and sell that. That's the way the proprietary software industry works, but it doesn't map well onto an open source community. It generates hostility and they will leave you." Instead of creating proprietary add-ons, create superior service, he says. "In our situation, we're lucky enough to have a large line of hardware along with the software."

The biggest challenge Nickerson faces with iFAX is one that many entrepreneurs experience: a lack of balance between work and the rest of life. "It's especially difficult when you're doing it in the open source software industry because there are no business hours in open source development," Nickerson says. "They're global. People do it whenever. It's usual to see people all over the mailing lists on the weekends. I do it. Several of the employees do it. Nobody asks them to, but it is what we believe in -- it is our passion. So it's very difficult to maintain balance. If you talk to my girlfriend, you'll know. The needs of the business come first, and on the evenings and weekends, the needs of the open source stuff."

One of the principles that has guided iFAX's rapid growth is Nickerson's belief in "win-win" scenarios. "Open source just allows us to come in at a good price point. The fact that we can get the software exposed to businesses [in the community] and learn from them, and then contribute the improvements back to HylaFAX, is a win-win. We're able to come in and pitch a lower cost, high performance solution, and we can do that because the software is free; there's no line item on the quotation for software. And we come in with so many other advantages. It is open, you can modify the source, they can do it themselves. They're not locked in. It removes a lot of barriers. It's a great way to do business."

Another key to success with open source is "looking to the future," Nickerson says. "Open source project can become irrelevant very quickly, so we have diversified and taken our knowledge and built a second line of business around Asterisk, which is very similar to HylaFAX in some ways. We don't stand still -- we hit the ground running and then keep running."

Nickerson's number one piece of advice to entrepreneurs thinking of launching a new business based on open source software is "just do it. Try it. You just don't know until you do, whether it's going to take off or not."

Tina Gasperson writes about business and technology from an open source perspective.

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on Open source entrepreneur turns his hobby into an Inc. 500 enterprise

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Avitars Comunity Colledge

Posted by: Anonymous [ip:] on October 02, 2007 10:47 PM
There is a model of a web site or java script that provide school resources refrences to reading or actual study material and tests. I think its called blackboard, a program used in colledges for generic testing and group development projects. The basic idea would be to prvide an avitar university (a community colledge cariculum avoids issues associated with minors and content) most community colledges offer remedial courses thus addressing literacy and proported economic and ethnic accesability to education. Students in video production could tape courses making the teacher into an avitar to protect there privacy. Answers to questions could be interspersed with class questions and recorded to povide an interactive experiance to the course lecture, allowing questions after the lecture or homework, or as a tutorial. Students becoming teachers could as an ellective create a unit or chapter or portion of a chapter of class instruction or associated resources such as study aids and quizes to prepare them to do the same for there profesional carer. Students in business, computer science, IT, behavioral science, advertizing, marketing, science, PE (instuctional video), almost any field of endevor could make or contribute to the creation of an educational web site. Teachers simmilar to bussiness couses could make an instructional video and then recive a grade among there pears based on quiz scores of test groups after the presentation. Commercial sponsorship of these projects just like add sponsored TV, could go directly to the creator of the web page or be used to suport the project, pay down student loans, or fund community colledges. These web pages could be stored by governments or organizations seeking to promote public education. Or, on a site like curiki or simmilar projects (each of these curiculem projects should refrence each other to augment and avoid duplication). Cudos' to a propriatary software vendor that has a very profesional presentation on curiki of how to use there software. As the web page as a document formate could be a usfull tool if a resouce to link, agregate, combine abstacts were availabe. Business projects, production line scheduling, resouce distribution can be effectivly managed by a tree stucture of linked web pages each contributing a neccessary input to a total project goal. Forms can be downloaded in a java script formate for any number of fuctional utillities embeded into the web page, such as tax preparation, business contacts, T account record keeping for balance sheets, the list is limmited only by ones imagination. These educational web pages could be filtered by educational institutions for use as suplemental or alternitives to costly books and materials.- Thank You


More Adware

Posted by: Anonymous [ip:] on October 03, 2007 02:33 AM
Ad-filth article. When I come to from now on I 'll be on my windows machine with ad-aware turned on.


Open source entrepreneur turns his hobby into an Inc. 500 enterprise

Posted by: Anonymous [ip:] on October 03, 2007 04:25 AM
Article: "It's very easy to fall into the trap: let's build some special sauce and sell that. That's the way the proprietary software industry works, but it doesn't map well onto an open source community. It generates hostility and they will leave you."

. "Upon this Open Source foundation, iFAX Solutions has developed HylaFAX Enterprise Edition. Enterprise Edition takes the power of HylaFAX Open Source and adds an expanded featureset for our enterprise customers. [...] A non-free version with an expanded featureset."


Apparently it's so easy to fall into this trap, young Darren did it himself...



Posted by: Anonymous [ip:] on October 03, 2007 08:31 AM
That URL is (not .org). But your point is absolutely right. The whole article is BS. He's selling closed-source, proprietary software. "Purchase Enterprise Edition" as his web-site puts it.


Re: Correction

Posted by: Anonymous [ip:] on October 03, 2007 01:06 PM
Except that they do also seem to be major contributors to the open source project if you look at;h=HYLAFAX-4_4-branch. Looks like a new version came out yesterday.


Re(1): Correction

Posted by: Anonymous [ip:] on October 03, 2007 06:12 PM
The vast majority of the changes that have gone into the 4.3 and 4.4 branches are backports from HylaFAX+ ( The bulk of the rest of the changes are their efforts to fix things that they broke in their previous contributions. Yesterday's releases needed to be cut (and were weeks overdue), because there were critical bugs that iFAX contributions introduced that prevented the previous releases from building or functioning as it did in yet earlier releases.


Re(2): Correction

Posted by: Anonymous [ip:] on October 04, 2007 12:03 AM
All development introduces bugs - that's the nature of software development. At least they're clearly contributing! Most of the changes in HylaFAX+ are similarly bug fixes of some form or another. Release early, release often! Looks like a lot of releases of HylaFAX in 2007 - yummy. Forks are good things too, as open source's history has repeatedly shown. Why can't we all just get along?


How do you deal with patent trolls?

Posted by: Anonymous [ip:] on October 03, 2007 03:58 PM
I'm very curious. In this world of b.s. software patents, once you reach a visible level of success you have to waste more and more resources fending off parasites even if you're "open source."


Open source entrepreneur turns his hobby into an Inc. 500 enterprise

Posted by: Anonymous [ip:] on October 03, 2007 06:06 PM
90% of this article is sheer propaganda, and so is the Inc. 500 list inclusion. If the article weren't the writer would have at least bothered to read the wikipedia article on HylaFAX (

iFAX is no open-source commercial idol. iFAX forked HylaFAX to make their so-called "Professional Edition" and keeps that source code proprietary. Likewise, their other HylaFAX-centric software offerings are proprietary.

iFAX's "contributions" to the HylaFAX community have been as controversial as helpful - which controversy largely fueled the forking of the largest HylaFAX contributor to HylaFAX+ (

Yet, this is all inconsequential; iFAX is the parent company for, selling VoIP hardware... and that's where iFAX's money is being made, certainly... not in their HylaFAX business. So see this article for what it really is: propaganda.


Re: Open source entrepreneur turns his hobby into an Inc. 500 enterprise

Posted by: Anonymous [ip:] on October 03, 2007 11:48 PM
The wikipedia article on HylaFAX has been co-opted by the author of HylaFAX+ (who runs a consulting business based on HylaFAX+) to further his crusade. It was abandoned long ago as a lost cause by anyone who cared to dispute it. In wiki-land, those with the most energy/time define the truth!


Re(1): Open source entrepreneur turns his hobby into an Inc. 500 enterprise

Posted by: Anonymous [ip:] on October 04, 2007 02:32 AM
As wiki-land is untrustworthy it is curious that iFAX would sponsor wiki-land documentation as its commitment to the HylaFAX community.


So now we know who Tina Gasperson is?

Posted by: Anonymous [ip:] on October 04, 2007 12:47 AM
It's not the first time she posts propaganda and adware as articles. Someone plz do something!!!
I mean, how much do they pay her to write info-mercials?



Posted by: Anonymous [ip:] on October 04, 2007 04:30 PM
it does read very much like an info-mercial. anyone else now feel like tina forgot to mention darren's work with homeless children in impoverished nations???


Standing on the backs of giants

Posted by: Anonymous [ip:] on October 04, 2007 05:20 PM
Good thing Lee fixed it for you so it would be useable in an enterprise environment. :P


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