Category: Technology
My partner Jason Mendelson sent me a five minute video from Wired that shows how a Telsa Model S is built. I watched from my condo in downtown Boulder as the sun was coming up and thought some of the images were as beautiful a dance as I’ve ever seen. The factory has 160 robots and 3000 humans and it’s just remarkable to watch the machines do their thing.
As I watched a few of the robots near the end, I thought about the level of software that is required for them to do what they do. And it blew my mind. And then I thought about the interplay between the humans and machines. The humans built and programmed the machines which work side by side with the humans building machines that transport humans.
Things are accelerating fast. The way we think about machines, humans, and the way the interact with each other is going to be radically different in 20 years.
I’ve been asserting for at least six years that patent system is completely broken for the software industry. I’ve given numerous examples, dealt with the issue first hand as patent trolls have tried to extort many of the companies I’m an investor in, and I’ve had many public discussions about the topic.
On my run on Sunday, I listed to This American Life – When Patents Attack… Part Two! It is easily the best and most detailed expose I’ve ever heard on this issue. If you care to really understand how patent trolls work, spend an hour of your life and listen to it.
The issue has finally gone mainstream. Here’s a great quote on patent trolls from an article in Time Magazine (how much more mainstream can you get than that.)
“In 2011, Apple and Google spent more money on patent litigation and defensive patent acquisitions than on research and development. That’s not a good sign for the U.S. economy; in fact, it’s a stark indication that our intellectual-property system is broken. Rampant patent litigation is impeding innovation and ultimately increasing the costs of gadgets for consumers, according to legal experts and industry observers. Now President Obama says he wants to reform the system.”
There was an outcry of support last week when President Obama issued a set of executive orders and suggested legislative actions to fix the broken patent system. While the press release from the White House had a bland title, the substance was solid and the articles about it got to the point.
- Obama Plans to Take Action Against Patent-Holding Firms
- 3 Silly Abuses Obama’s Patent Troll Executive Order Could Stop
- Obama Orders Regulators to Root Out ‘Patent Trolls’
- President Obama to take aim at patent trolls with executive actions on Tuesday
As expected, plenty of people suggest all of this is misguided or overblown. I read John Sununu’s (former New Hampshire Senator) Boston Globe OpEd Who is a patent troll? Obama calls nation’s techies to arms, but enemy is difficult to define and grimaced as he mostly missed the point, while at the same time blaming it on the government and lawyers.
All of this is shining a bright light on a deeply rooted problem that has spiraled completely out of control and has become an enormous tax on innovation in the United States. While I don’t believe Obama’s executive orders go nearly far enough, they are a start in something that has been ignored by the White House and our government for far too long.
My long time friend Terry Kawaja (history question – which Colorado-based company was Terry once CFO of) from Luma Partners sent me his latest parody video titled Use Bitcoin. I knew it was a parody of something, but I didn’t remember “Wear Sunscreen” (which I saw when it first came out in the late 1990’s) until I read the liner notes on Terry’s Youtube post.
Both are awesome. But to really grok how awesome Use Bitcoin is, you have to watch Wear Sunscreen first. It follows.
Now – Use Bitcoin.
Count me inspired. And amused.
If you want something serious from Terry, his 20 minute State in the State of Digital Media 2013 is definitely worth watching.
I woke up this morning to a great article by Nick Grossman at Union Square Ventures on The Patent Quality Improvement Act. Nick does a great job of describing the software patent problem, suggesting several solutions, and explaining how the Patent Quality Improvement Act helps the increasingly dismal situation around software patents.
Nick has a great paragraph from Mark Lemley of Stanford Law School that describes a powerful solution to part of the problem – that of eliminating “functional claiming.” Regarding functional claiming, Mark says:
“This is a problem that is unique to software. We wouldn’t permit in any other area of technology the sorts of claims that appear in thousands of different software patents. Pharmaceutical inventors don’t claim “an arrangement of atoms that cures cancer,” asserting their patent against any chemical, whatever its form, that achieves that purpose. Indeed, the whole idea seems ludicrous. Pharmaceutical patent owners invent a drug, and it is the drug that they are entitled to patent. But in software, as we will see, claims of just that form are everywhere.”
Mark has written a strong paper on this called Software Patents and the Return of Functional Claiming that describes the problem – and the solution – in detail.
Fred Wilson, Brad Burnham, Jason Mendelson, and I have been talking about the problem of software patents for a long time and Fred brought it up again today on his blog in a post titled Piecemeal Patent Reform. It’s nice to see Senator Chuck Schumer proposing a simple yet powerful solution to part of the software patent problem.
While we continue to struggle with patent trolls in the US – which used to be called “non-practicing entities” (NPEs) but now apparently prefer to be called “patent assertion entities” (PAE) – the New Zealand government has announced that software will no longer be patented. Maybe someday we will be so bold.
I got an interesting email from a friend who has historically been a huge Apple fanboy. I asked him if I could repost it verbatim and he said yes. It follows – I’m curious what your response is to this.
While I’m still very involved with the art world here in Colorado and still working on conservation issues we’ve actually just returned from almost a year away, the last 6 months in India. I realize that a lot of what I see is colored with the lens of India, but maybe that’s helping to make things more clear.
Anyway, in preparation for re-entry after India (we were in rural, south east India, without much electricity so I figured home might be a shock), I started to try and catch up on things. Your blog was one of my tools for this. I read the post on creating the best product, agreed, and moved on. One of the first things I planned on doing once home was to buy a shiny new macbook to replace my 4 year old white macbook. Maybe going to the mall, rather than just buying it online was my first mistake, but the cult of apple and the temple that is that store made me gag the second I walked in there. And while my macbook may be old, my use of apple products is right where they want it to be… had the iPhone5 the 2nd day it was out, mcgyvered the Airtel sim cards to work as nano-sims card in india, have a small film production crew all working on the latest macbook pros and iMacs, iPads and iPods at home… on and on. But in the store, what I noticed was a culture of elitism and insincerity. I had a 4 year old laptop with me, and was treated like a Luddite because I didn’t look up to speed. Insulted, I kept the $4,500 in my pocket, thinking I’d keep the laptop running, which I did. Small thing I know, but my thought was “if apple doesn’t care about me, who do they care about?” Today an even smaller issue illuminated this even more. I went in again, this time to replace the defective “top case/keyboard” from these old white plastic macs, and was told that the machine was now “vintage” (that’s the official apple label), and that they couldn’t replace the “defective part” (also their official language) as they had done in the past, because it is more than 4 years old. I thought that maybe I should just get a new machine and quit belly aching, but I pushed a little just to see what apple thought about a customer like me… and called apple to ask if there was anything more they could do. After a lot of insincere apologies, I asked if there was really nothing they could do. The support supervisor insisted that there was no more senior person to address this issue but that I might try craigslist. I was pretty surprised that apple’s official support process ended with telling the customer to check out craigslist for an old mac to scrap for parts. I’m such a pushover that if he’d offered me $100 credit towards a new macbook, I’d have smiled and bought another apple product.
As I right this, it sounds too much like a rant. But I couldn’t help writing, first to say hello after a long while (I did hear about the 3D printed tooth in Croatia…amazing!) and second to just try an make sense of what apple could possibly be thinking… the “cool factor” is clearly waning, they’re products are overpriced, and now they’re indifferent, even hostile, to customer who regularly spend tens of thousands of dollars on their products. Can they really be thinking that the best product is the one that you replace really quickly with something “cooler” and more expensive? I think this time, I might really go get the chromebook. I can’t be alone, and that can’t be good for them.
tl;dr: Fuck, I don’t know. I’m not in the prediction business. But plan for it. And behave accordingly.
A lot of people have been talking about how 2013 will be harder for startups and fast growing companies. Tiresome things like the endless discussion about the Series A crunch, more conservative behavior from VCs due to the performance of Facebook, Groupon, and Zynga in the public market, and overall concerns about the economy dominate. Counterarguments prevail as different people try to predict and justify what’s going to happen.
All I know is that I have no idea what is going to happen. The macro is exogenous to me – I can’t impact or control it. So rather than try to predict what is going to happen, I’m going to assume a tougher 2013 for startups until I have evidence that it’s not.
I sent Fred Wilson’s post Advice for 2013: Deliver On Your Promises out to our CEO email list. I felt like Fred’s punch line was powerful.
“So if I can give entrepreneurs a single piece of advice for 2013 it would be to deliver on your promises. Not just to your investors but also to your team and ultimately to yourself. This is no time to be in denial. That is a lethal attribute in times like these.“
That generated a response on the email thread about actionable advice. So, I responded with two examples:
1. Recognize that your expense plan will be linked to your promises. Tighten the time frame – do what a lot of successful companies have done in the past. Rather than having an annual 2013 plan, have a 1H13 and 2H13 plan. Lag your headcount growth behind what you need by a quarter, running “hot” on all fronts as you try to get the growth you expect. Hire only when this growth materializes. Then, replan 2H13 and 1H14 at the end of 1H13.
2. Make sure you know exactly how much money your EXISTING investors have reserved for you and are willing to fund you in 2013 independent of any new outside investors. Don’t ever be in a position where you need a new outside investor to continue operating your business.
I’ve got a bunch of others, but I’m curious what you think. Operate under the hypothesis that 2013 will be harder for startups than 2012. What are you going to do different in 2013?
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Orbotix just released a new version of the Sphero firmware. This is a fundamental part of our thesis around “software wrapped in plastic” – we love investing in physical products that have a huge, and ever improving, software layer. The first version of the Sphero hardware just got a brain transplant and the guys at Orbotix do a brilliant job of showing what the difference is.
Even if you aren’t into Sphero, this is a video worthwhile watching to understand what we mean as investors when we talk about software wrapped in plastic (like our investments in Fitbit, Sifteo, and Modular Robotics.)
When I look at my little friend Sphero, I feel a connection to him that is special. It’s like my Fitbit – it feels like an extension of me. I have a physical connection with the Fitbit (it’s an organ that tracks and displays data I produce). I have an emotional connection with Sphero (it’s a friend I love to have around and play with.) The cross-over between human and machine is tangible with each of these products, and we are only at the very beginning of the arc with them.
I love this stuff. If you are working on a product that is software wrapped in plastic, tell me how to get my hands on it.
A Software Entrepreneur On The Madness Of Software Patents and Trolls
I regularly get emails and have discussions with entrepreneurs who are on the receiving end of a software patent lawsuit. Many of these are young companies, often with little or no revenue. It’s total, completely madness. If you don’t believe me, read the latest rant from a young entrepreneur on the receiving end of a software patent lawsuit from a troll.
My startup, all five employees and $0 revenue, is being sued by a patent troll. It is madness.
Software patents are weapons of mass extortion. The trolls know that the cost of patent litigation is huge- millions of dollars for a thorough defense. The vast majority of companies do a simple cost benefit analysis and settle. It costs a pittance to file a lawsuit, a fortune to fight. A troll can sue many companies and live off the settlements. Trolling is a lucrative, legally sanctioned business model with virtually no risk. The longer this continues the worse it will get.
And getting a patent is not that hard. For less than the cost of a small friends and family round you make a series of claims that describe your “invention”. Sort of a technical concept document written by a lawyer. There is no code required, no detailed product spec. You don’t have to build anything. We are being sued for having a UI connected to a server connected to a mobile device. And get this- data goes back and forth between the UI and the mobile device. Break through, right? Yes, according to the Patent Office.
And just like with illegal extortion, patent extortion causes real personal and economic pain:
- I wake up in the middle of the night with my hands clenched like lobster claws. I’ve actually cried from the injustice and worry;
- Every three hours of legal advice costs the same as an on-shore customer service representative with benefits for a week.
- A full legal defense could be my entire future Series A. And who is going to invest in that round when use of funds says “litigation”?
It is romantic to fight but the trolls know that a startup’s number one job is to stay alive. Screw romance. Screw justice. One lawyer I consulted told me not to read the patents- they were irrelevant. And the troll agrees. He said he didn’t really understand my business and didn’t care. We just looked like other companies he has sued. If your startup hasn’t been sued yet, don’t worry. You will.
What we need is leadership. But where are our leaders? In court. It’s disgusting. The millions spent haggling over the curvature of an icon could fund a massive lobbying and social action effort. Is it possible we can send a million tweets about happy cats but not stop patent extortion? We’re a community that believes in big dreams and blowing up obstacles. We can do this. We just have to try.
Google Hangout About The Broken Software Patent System – Today @ 1pm Pacific
I’m on a Google Hangout today at 1pm Pacific time hosted by the EFF. I’ll be discussing the broken software patent system with Jason Schultz and Parker Higgins.
I know this announcement is last minute – somehow the event eluded me and my calendar. Fortunately, due to the power of Twitter, I noticed that I was mentioned in a tweet about it.
I feel like it’s kind of trivial to be talking about stuff like this given the shooting in a movie theater in Colorado earlier today. I’m super bummed out about it and having trouble getting it out of my head. It’s so heartbreaking to me that we struggle with this kind of violence in our country and whenever it happens, especially close to home, it rattles me. I don’t know what to do other than send good karma to anyone who was a victim – so I’m sending out my thoughts and positive energy to whomever they are.
In the mean time, if you are interested in the ongoing saga of the broken software patent system, join me in an hour to discuss it more.