Today at the Venture Capital Forum in Hilton Arc de Triomphe, Paris, I received the EVCA “Hall of Fame” Award on behalf of MySQL AB. What a timing, to meet with investment bankers and venture capitalists now!

In these times of a deep finance crisis, of no credit handed out by banks and of general doom and gloom, it felt great to be somewhat of an “everybody’s darling”. In the VC community, MySQL is seen as a great success — and in particular, we’re seen by European VCs as a European success story (despite over 50 % of our personnel and most of our Management Team being US-based, at the point of time when the VCs exited).

Side note: I don’t mind MySQL being seen as a European success story. We’re used to portraying ourselves as belonging to whatever geography is relevant for the moment. That can be “Swedish”, “Scandinavian”, “European”, “Bulgarian”, “American”, “Silicon Valley”, or whatever you’d like. And at the same time, I never stop pointing out that MySQL was originally written in Finland, and that a disproportionate amount of the corporate DNA originates from TF, the Swedish speaking, Helan går-singing student association of Helsinki University of Technology.

Before the panel began, Paul Deninger, Vice-Chairman of Jefferies & Company gave what I learned is his traditional opening speech. I can see why he’s appreciated. With a good sense of the audience’s mixed atmosphere of horror (at the current financial crisis) and hope (for opportunities presented due to lower valuations), he introduced Jefferies as “an investment bank that unlike the now-socialised ones never became an investment firm“. Paul is also known for his yearly “PD’s list of the top 10 events of the year”, with observations on raw material prices, the advent of CleanTech, the pricing of financial instruments, Russia remaining in South Ossetia and other equivalent global events. Interestingly, Sun’s acquisition of MySQL AB made it onto his list. We’ve always joked that we’re “world famous for being humble”, but PD does give us a hard time.

Together with Robert Dighero of Tradus (a UK based eBay-of-Eastern-Europe online auction company), I was on the “Entrepreneurship Hall of Fame” panel lead by Mike Chalfen, General Partner at Advent Venture Partners and a good friend of MySQL investor and former MySQL board member Danny Rimer.

I got a number of questions, both publicly on the panel and privately in the networking thereafter. In gratitude of having been given the award, I’d like to share my answers.

Q: What was the impact of VC investors on MySQL’s business?

A: Above all, VC investments enabled faster growth (through enabling recruitment of key talent). Each of the earlier-round investors also opened the doors for the next level of investors. Our VCs certainly granted us credibility towards big customers. Sure, they also gave us valuable feedback on our business model and tightened corporate governance procedures, easing our growth pains.

Q: What could the impact have been of having more or less cash?

A: Mainly, it would have influenced the speed of recruitment. Now, we grew as fast as we could with the ambition of having the VC money mostly as a safety net, and financing growth mainly through increased sales. Cash on the balance sheet increases operational focus and creates stability!

Q: How would MySQL fare in today’s tougher climate?

A: As for sales, it’s important to understand that MySQL has a “low TCO” proposition (”destruction factor”), where the tough climate is good for us. As for IPOs and trade sales, it’s hard to identify a company that isn’t negatively impacted by today’s climate.

Q: What were the 1-2 most critical turning points in the development of the business?

A1: Entering a deal with SAP in 2003, which influenced the product technically, but most of all gave us enterprise credibility (but was dangerous technically, as it impacted our roadmap).

A2: The next-round VC evaluation meeting in Scope Capital’s Stockholm offices after our CEO Mårten Mickos came back with term sheets from the two dream Silicon Valley candidates in a round where the finalists were Kleiner, Sequoia, Warburgs, Advent and Benchmark. Our co-founder Michael “Monty” Widenius concluded with asking “Do we want to become partners with our father (referring to Kleiner) or our brother (referring to Benchmark)?“. Ending up choosing our brothers wass a key to the culture in the company, which is what really built MySQL.

A3: Moving management to Silicon Valley, easing recruitment of key people.

Q: What lessons can you pass on for VCs and entrepreneurs that are most relevant in the coming recession?

A: Four lessons. First, be smart. Choose smart people, pick the right strategy, make the right decisions. Second, work hard. If opportunity knocks, you have to seize the moment, or being smart won’t help. I don’t consider myself lazy, but my work hours pale in comparison with the co-founder’s when he grew the community around the turn of the century, and with those of our CEO ever since he took over. Third, be resistant to uncertainty. When bad things happen, never give up. Hadn’t our CEO been a replica of Admiral Stockdale, living out the Stockdale Paradox [1], we would have lost the company several times over. Fourth, be lucky. Yes, you can be smart about timing, but to succeed, you also need a big portion of luck.

[1] “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

Q: What advice do you have for VCs?

A: Most VCs are smart people, and they know that they have to pick the right entrepreneurs (who are smart, work hard, and resistant to uncertainty). They know that to be lucky, they have to buy several lottery tickets. Then, let the right entrepreneurs do their thing! Support them when they need support. On a different note, I think VCs should be happy that they belong to a caste respected by Nassim Nicholas Taleb of Black Swan fame. VC investments are potential positive Black Swans, and I think MySQL turned out to be one of them.

Q: What does it take for a buyer to want to pay up a lot of cash for a VC business?

A: A huge customer base that has money to spend. A documented, strong and sustainable growth rate. Brand recognition doesn’t hurt. Finally, and obviously, a lot of cash in the bank.

Q: Did MySQL experience a conflict between the mentalities of the “geeky” MySQL users and the “greedy” Venture Capitalists?

A: In general, it hasn’t been that challenging to keep a balance. Sure, it’s true that the geeks and the VCs form two entirely different audiences. But we target our messages. “Tala med bönder på bönders vis och med de lärde på latin”, we say in Swedish — roughly “Talk to peasants as peasants do, and to the learned in Latin” (let’s not go into which audience matches which category in the Swedish saying). And in reality, at least when it comes to MySQL, geeks and VCs have benefitted from each other. We did of course joke in front of geeks that “we fooled these VCs to give us money to be able to write more Open Source software faster”, and conversely said in front of VCs that “we exploit Open Source Software to give a larger ROI for VCs”. But neutrally speaking, it was a mutual benefit, a virtuous circle, where we’ve done our best to align commercial and community interests.

Q: You’re a serial entrepreneur, and made some money out of the Sun acquisition. Would you do it again?

A: Obviously, there is a hunger for more. Or perhaps appetite is a better word, as I am clearly more picky about the nature of the opportunity than before. During my two first entrepreneurships (founding Polycon Ab, and buying back Polycon shares from a German investor three years after the trade sale where we had sold half of Polycon), I jumped at opportunities without evaluating them in detail. By contrast, in 2001 I sold the MySQL related part of Polycon to MySQL AB based on long contemplations, but still, with MySQL I’ve been willing to relocate my family from Grankulla, Finland to Munich, Germany. I’m not so sure I’d relocate as easily again. Besides, for the time being, I’m quite happy with working for Sun — it’s an exciting job with a great learning curve and an opportunity to have an impact.

Q: What are you investing in yourself?

A: I’ve got a day job at Sun, and that consumes nearly all of my business focus. That said, I made a certain investment, together with a former angel investor in MySQL, in an IT solution provider on Åland, the islands between Finland and Sweden that are independent enough to have their own Top-Level Domain .ax. It’s called PBS Ab, for Productive Business Systems, and provide a great opportunity to apply learnings from my earlier life as a serial entrepreneur (with both Polycon and MySQL).

That’s it. Finally, I would like to extend a special thank you note to a few of the members of the MySQL AB Board of Directors that I’ve had the honour and pleasure to work with over the years. Our first Chairman John Wattin once described me as a “fireman”, as I’ve been given various tasks (”wherever there’s a fire”) since joining MySQL. Fredrik Oweson of Scope Capital, Danny Rimer of Index Ventures, Kevin Harvey of Benchmark Capital, Bernard Liautaud (founder of Business Objects) and Tim O’Reilly (founder of O’Reilly Media) have each provided all of MySQL but also myself in person with invaluable inspiration and insight over the years. Thank you, former MySQL BoD members!

Links:

• Benchmark Capital: http://benchmark.com/
• Index Ventures: http://indexventures.com/
• Scope Capital: http://www.scope.se/

At the end of the Orlando meeting in January this year when the Sun acquisition was announced, I remember sitting next to MySQL’s co-founder David Axmark in the bus going to some evening event. “What do you want to do now, with so many opportunities opening up?” was my question to him, partly as his friend, partly as his colleague and partly as his line manager. David seemed very confident in the future of MySQL within Sun, but less sure about his own future role.

With that as a background, and knowing David since well over 20 years, I was not all that surprised to read his resignation letter, and in particular his reasoning for resigning:

I have thought about my role at Sun and decided that I am better off in smaller organisations. I HATE all the rules that I need to follow, and I also HATE breaking them. It would be far better for me to “retire” from employment and work with MySQL and Sun on a less formal basis.

Let me recap what David has done for MySQL. David is the reason MySQL is FOSS. Without David, MySQL wouldn’t be GPL (Monty originally planned a closed-source product). David is also the reason people associate MySQL primarily with Sweden and less so with Finland, since MySQL AB was founded in Uppsala to be close to David (and our third co-founder Allan Larsson).

(The above scene from Stockholm harbour shows the boats of database entrepreneurs David Axmark and Larry Ellison; after the acquisition of MySQL by Sun, David may afford an upgrade, even after his donation to the Software Freedom Law Center).

I wish David would have stayed longer at Sun, but I understand why he decided to resign and I respect his decision. I’m happy he’s fine with working as a consultant for Sun, doing speaking engagements and connecting us with his huge network. It’s very much appreciated.

We share so many fond memories together, starting from our first meeting sometimes in the 1980s at Monty’s place in Gamla Skomakarböle, in the outskirts of Helsinki. And then there was the memorable trip to MySQL’s first CeBIT appearance in 2001, just after I had agreed with Mårten and Monty to join MySQL. And hiking in Larry Stefonic’s bivvy sacks on a mountain in Washington. And countless other stories.

I’ve learnt so much from David, particularly as he’s been my predecessor, role model and esteemed colleague in plenty of respects over the time at MySQL AB. He has lead Engineering, before we started to recruit people with the title of “VP Engineering”. He’s lead Internal IT. He’s lead the Community efforts. He’s worked with the FSF. He’s managed and moderated his somewhat more, ehmm, hot-tempered co-founder Monty. He’s travelled the world, with a particular fondness for Asia. And he’s taken oodles of digital pictures. Not that I’ve followed David in all aspects, but it does seem I’ve copied him in the above respects, with sometimes a shorter, sometimes longer latency.

You won’t be surprised that I feel a deep gratitude for what David has done. In particular, I want to thank him for introducing me to all the wonderful people in the FOSS community. And I’m sure all Sun Dolphins will join me in the most important thank-you note:

Thanks David for having and pursuing the vision that made you found MySQL!

Lest we become overly sentimental, let me say that I am confident David will continue in his role as an overall FOSS ambassador. Nearly a quarter century working on FOSS as a pioneer gives David insights that few of us have, that Sun is happy to continue learning from, and that I’m sure David is happy to share with budding Open Source companies.

I’m just back home from Brazil, where I went last Sunday in order to launch MySQL’s presence in Brazil and meet with MySQL users, developers, Sun customers, the press as well as with numerou Sun colleagues. “Is this your first time in Brazil?” was a frequent question (as one could expect), and I was happy to respond that it wasn’t. In fact, I have particularly fond memories of my first visit to Brazil in 2001, as that was the trip when I decided to join MySQL AB.

They say Rio de Janeiro is one of the most beautiful cities on the planet. Whoever “they” are, they’re right. The cone in the middle is Pão de Açúcar (Sugarloaf Mountain, der Zuckerhut, Sockertoppen).

As a European, I again noted that Brazil frequently feels much more like home than the US does. In Brazil, they use the metric system, they measure temperature in Celsius, they write dates and times of day in a familiar way, they cheer for Formula 1 drivers and they play football. My Brazilian colleagues and I fought a bit over whether Finland or Brazil produces the better F1 drivers, but despite Finland nearly beating Germany (thanks Jonatan Johansson, Mika Väyrynen and Daniel Sjölund!) in the World Championship qualifications last month, I had to concede to the football superiority of the Brazilians. Nonetheless, it felt good to meet with colleagues to whom I could describe the ethical dilemma my son Alexander faced (and explained in his newly started German language football blog) when MySQL 5.1 user Corrado Pandiani from Inter Milan sent him gadgets that on the one hand are objectively speaking very cool (such as a poster signed by Zlatan Ibrahimovic, Luis Figo and Marco Materazzi), but on the other hand represent a team which a Bayern München fan like him has hard to identify with.

But back to MySQL. This week, I had the pleasure of not just attending the Sun Tech Days including its press events, but also visit many customers in both São Paulo, Brasília and Rio de Janeiro. It’s great to see the broad interest for MySQL. Yet, the interest for MySQL in Brazil didn’t surprise me. We know from the download statistics that .br is a top five country for downloads, and more concretely, MySQL had a sizable following in Brazil already in 2001. When Mårten Mickos (MySQL’s then newly appointed CEO), Michael “Monty” Widenius (co-founder) and a number of friends of ours visited the Rio Carnival wearing MySQL t-shirts, we were stopped on Copacabana beach and asked whether “we are also MySQL users“. What a feeling it was, to personally experience recognition for MySQL over seven years ago, in a country where none of us had been before!

Ah, as I am walking down Memory Lane, let me share a few other pics from 2001 (the ones from this week are still in Philip Antoniades’s camera):

Mårten and Monty looking at where to go in the Rio metro. As this was during the pre-Sakila-lithic era, Monty wore an old, dragon type “mySQL” T-shirt (yes, lower case m).

Helvécio Borges Filho from EAC (to the right of me) hosted us in 2001, and over the years, we’ve met many times since at MySQL Users Conferences and elsewhere — such as last Tuesday at Sun Tech Days in São Paulo. Yesterday, Copacabana was quite a bit more rainy than above.

Cristo Redentor (Christ the Redeemer) at the Corcovado Mountain.

Monty evidently also wants to redeem (with Corcovado in the background). And I am always fond of teasing Monty for his taste for a particular artificial drink with a closed-source recipe.

As I’m sure you can tell, I was very impressed with Brazil both in 2001 and in 2008. I won’t wait seven years until my next visit!

Yesterday, I completed a most significant emotional step in the integration of MySQL into Sun. As about 75 % of MySQLers had already done prior to myself, I migrated my main mail account from MySQL’s mail server to Sun’s.

Yes, I am still reachable @mysql.com. And I was already earlier reachable on @Sun.COM, in addition to my private @arno.fi. But now Sun’s email server is the one I use for both sending and receiving email. So this minor administrative step raises questions for me whether my signature should primarily feature my @Sun.COM email address, or whether I should remain @mysql.com. Luckily (strangely? sadly?) Sun allows me to follow my own judgement on this one.

A reason for happiness is that I am reachable as “kaj” on both @mysql.com and @sun.com. This relieves me from the humiliation of constantly seeing a new, unfamiliar garbling of my last name. In Finland, we’re of course used to foreigners not knowing the final three letters of our alphabet, “åäö”. So I’ve been garbled to “Arno” on occasion in my adult life. Dropping the dots and rings is a more or less official misspelling custom of email addresses in Nordic countries, so while it still hurts my eyes, it’s something I’ve grown accustomed to. However, the Germans misspell differently. They garble me to “Arnoe”. While each country has its own customs, and I tell myself to be respectful of that, I still get frustrated every time my name is violated.

So please email me on a first-name basis. As firstname@mysql.com, as firstname@sun.com, or as firstname@lastname.countryofcitizenship.