Unique Value Proposition
Some of us might not have heard of the company VA Linux. It was once among the most highly valued and explosively popular open source company. Today, almost no one has heard of it. Its unlikely fate involved not just the dot-com bust, but also lack of a unique product offering.
VA Linux started out as a company selling systems with Linux OS pre-installed. It went IPO on December 9, 1999. It’s stock went up 698 percent in its first day of trading, the biggest rise in NASDAQ’s history. But a year after its IPO, its stock price dropped to $8.49 per share. One can blame the dot-com bust for the demise of VA Linux but a lot of it also has to do with lack of differentiation.
Selling computers with Linux OS pre-installed has no differentiation and no entry barrier. Not to mention that the likes of Dell, even mom & pop shops can outsell VA Linux easily. Eventually, VA Linux got out of the hardware business altogether and focused on software only. Without a sound business model, it will be much harder for a company to generate enough revenue to survive the downturn. Read More...
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