Mountain View, Calif. — Sean Adams aims to find out just how much traction a small design team can get leveraging the open-source movement. With the assistance of hobbyist code developers, the 25-year-old engineering-school dropout has secured a small foothold in the market for music-streaming systems. Now he's courting investors to help take his 12-person startup, Slim Devices Inc., to the next level.

A corps of more than 20 open-source coders, working in their spare time, has already written more than 30 applications for the startup's Squeezebox, a paperback-sized system for streaming digital music and Internet radio from a PC to a stereo over either wired or wireless Ethernet links.

"We have a virtual development team all over the world that works for us 24 hours a day and a model that can increase a user's satisfaction with the product over time," said Adams from his small office in the shadow of a new Highway 101 off-ramp.

Some of the open-source apps let the device display news, weather, stock quotes and e-mail. Others are simple games, such as a version of Tetris or a screen saver for the Squeezebox's alphanumeric vacuum-fluorescent display. Others let the system browse an online phone book and initiate a telephone call.

"We get all kinds of contributions. It's not just plug-ins. People are fixing bugs and all sort of things," said Adams.

"This is the equivalent of the Home Brew Computer Club," the legendary birthplace of the personal computer, Bill Tai, a veteran venture capitalist with Charles

River Ventures (Menlo Park, Calif.), said of Slim Devices. Tai helped get Slim Devices off the ground by using his own money to lead a round of private investments, and he may participate in the next round.

Indeed, the Slim Devices offices invoke the early days of the personal computer cottage industry. A couple of employees working in a small back room handle final assembly and test of Squeezeboxes in batches of a few dozen units. Another room serves as a workbench, piled high with prototype circuit boards, where Adams sometimes tinkers well into the night.

And like some of the PC industry's forebears, Adams never got an engineering degree but has had a lifelong passion for discovery and invention (see story, below).

Today, a range of networked consumer systems is on the drawing board at the company. They include a next-generation Squeezebox and devices in such areas as home automation, video streaming and surveillance, and voice-over-Internet Protocol. Adams declined to discuss details but promised that "stuff that used to work only on the PC will come to other rooms in the house."

When he talks with potential investors, Adams said, "everyone wants to know how we will go up against the big companies, when they come in with systems at half the price. That's when I tell them how our open-source model differentiates us."

In June 2001, Adams posted his concept for a digital music-streaming system on Source Forge (www.sourceforge.com), an online site hosting open-source projects. The move generated a small groundswell of interest.

Hands-on project

"Without spending any money on marketing, we got the word out about the product," he said. "The first 80 systems I soldered by hand, with parts I ordered on my credit card and pre-orders I logged myself.

"We shipped the first ones without a case, and people thought it was like a high-tech objet d'art," he added. "The first customers were all technophiles. They had to string Ethernet around their homes. More recently, we were able to do an 802.11 version, and that opened it up to everybody."

Slim Devices has sold as many as 10,000 systems. Dean Blackketter, a particularly enthusiastic open-source developer, eventually became the small company's chief technology officer.

"I was building an MP3 system in my basement and didn't have the access to a circuit board, so I bought one of the first batch of Sean's systems," said Blackketter, who worked at Apple Computer's QuickTime group, startup WebTV and Microsoft before taking time off to be with his family and tinker at home. "I just tweaked Sean's software, then tweaked it some more and wound up rewriting the whole thing.

"At one stage, Sean sent me a player to thank me, then after some more work he sent me another player. Then he sent me some stock, and finally he made me a job offer." That job included co-developing the current-generation Squeezebox, released last November, and herding the cats of the startup's open-source development process.

"We have a unique business model: No one [else] we know does custom hardware and open-source software," Blackketter said. "The challenge is managing the process so it doesn't become a free-for-all. Open-source efforts have a bad tradition of devolving into geek projects. If you are building a consumer product, that can be bad. My focus is keeping the product easy to use."

That means Slim Devices carefully qualifies code from outside developers before deciding to ship it in its products. "We are not open-source zealots," Blackketter said. "Right now it's a development model that works for us, but it's not something we are religious about."

Indeed, although the Squeezebox software is written in the widely used Perl language and its motherboard sports a "geek connector" to give outside developers access to its hardware internals, the company does have boundaries around its proprietary firmware. "That's what pays the bills," Adams said.

Slim Devices also turned down a deal from an OEM looking to license its software as part of a trial for cable TV service operators because "the licensing rates they were looking for were too low," said Adams. "We are not set up to be an IP [intellectual-property] licensor; we are set up to build and sell products," said Blackketter.

Slim Devices keeps a handle on hardware development, conducting all purchasing, final assembly and testing in-house, though it contracts out board-level manufacturing. "We can put a system in a user's hands before we have to pay the component vendor," said Adams.

Adams has strong opinions about consumers' rights in the digital music era. In December he decided to contribute 10

percent of all net profits to the Electronic Frontier Foundation, which champions the cause, and Slim Devices packs a card about the foundation with every Squeezebox it ships.

"The bizarre copyright laws we have make it illegal to play a DVD if you don't have the approved software. People just want to listen to their music. But the record industry is making it difficult for people to listen to music the way they want," Adams said.