http://www.linuxuser.co.uk/features/rise-of-linux-a-hackers-historyCheck the link for the full history, it's pretty interesting.
Richard Hillesley looks back to the halcyon days of software hacking to explore the origin of the spirit of Linux
The original code of Linux was written for fun, or in Eric Raymond’s phrase, to ‘scratch the itch’ of Linus Torvalds, and later to satisfy the enthusiasm and programming itch of an assortment of hackers and hobbyists who, for the most part, had grown up in the age of the ZX80 and the BBC Micro, Acorns and Apricots, for which the code was often available – and hackable.
For those who spent their childhood or adolescence delving into the home computers of the late Seventies and early Eighties, playing with software was a learning experience, and something to be shared. Linux could be said to have grown out of this ethos as much as it grew out of the free software movement, or the early Nineties culture of Usenet where “if you wrote something neat you posted it to Usenet” and the only proviso that came with the software was that “if the software breaks you get to keep both pieces.”
As almost everybody knows, Linux came into being shortly after Linus Torvalds bought a PC in January 1991. As Lars Wilenius tells it, “He’d been using a Sinclair QL before that, which, like much British computer stuff, was ingenious and almost unusably different from everything else. Like every self-respecting hacker, Linus had written some software development tools of his own; an editor and an assembler, I think. He’d also modified the QL hardware a bit, to replace a broken keyboard, and to add a PC-compatible floppy drive. When he bought the PC, he wrote a device driver for the QL so he could move stuff from the QL to the PC.”