Bob Young co-founded Red Hat, the first company to build a successful business around open source software, and helped shape the modern internet in the process. In this episode, Bob shares the story of how Red Hat went from a CD in a Ziploc bag to a billion-dollar business that inspired GitHub, Coinbase, and much of the cloud infrastructure we use today.

But this conversation is about more than just software. Bob opens up about betting his family’s finances on Red Hat, the moment he realized he wasn’t meant to be a public company CEO, and why he believes capitalism, when done right, can be a powerful force for good.

He also shares what he’s building now (including a needlepoint company), how he thinks about failure, and the one principle he thinks every founder should live by.

Where to find Bob:

Lulu.com

Needlepoint.com

Timestamps:

(00:00) The challenge of fragmented attention and overbooked schedules

(05:09) Red Hat’s founding story and the philosophy behind open source

(08:56) Why the internet is the world’s largest open source project

(13:34) From newsletter publishing to reinventing Linux

(19:49) Why customers chose Red Hat: control, not cost

(22:12) The business model insight that changed everything

(24:44) How IBM’s services model inspired Red Hat’s structure

(27:36) Scaling Linux for enterprise and dealing with constant updates

(36:24) Proprietary software as a modern feudal system

(43:33) Racking up $50K in credit card debt to keep Red Hat alive

(49:01) Trust, marriage, and startup risk

(55:05) Leaving Red Hat and why Bob stepped down as CEO

(59:23) What sleep taught Bob about optimism and recovery

(01:06:10) Red Hat’s culture of ownership and accountability

(01:14:24) Why Bob still builds: making the world a better place through business

(01:15:02) The importance of discipline and organization

(01:17:08) Founders’ advice: serve customer needs, not just wants

In this episode, you’ll learn:

• How Red Hat became the first successful open source company
• Why control—not price—is the real value of open source software
• What makes transparency a business strategy, not just a virtue
• How capitalism and idealism can actually align
• Why understanding customer needs matters more than their wants
• The difference between proprietary and democratic tech systems
• How to build culture that owns mistakes and learns out loud
• What it really means to commit to your co-founder and spouse
• How to navigate failure, burnout, and your own limitations as a leader
• What keeps Bob starting new companies in his third and fourth acts