I love to read Joel Spolsky’s stuff – in addition to being a well known software developer, he’s an excellent writer and superb story teller. His ode to Bill Gates – “My First BillG Review” – is a blast from the past.  In addition to a really interesting story, you get to find out why the data functions in early versions of Excel work differently for January and February 1900.

Ross – my “IT guy” – stole my HP z545 Media Center PC a while ago.  I wasn’t really using it because there was too much “marital resistance” to this particular change in our AV infrastructure (plus, I never really got it working the way I wanted.)  Imagine my surprise when Ross suggested that it was the core of the best digital media solution he could envision (after he put it all together, of course.)  Ross has an extensive post on his blog up about his Media Center configuration and why he thinks it is the best solution – following is a teaser. 

The race for your digital living room is on, and you won’t believe who’s winning

Microsoft. Ok, so I didn’t want to keep you in suspense for too long, I guess that proves I’m not a great writer. But the fact is that right now in the race to win your digital living room Microsoft is smoking everyone else. That’s right, Microsoft. Ok, now let me tell you why and a little bit about my setup. First the goals for my system.

– Ability to access all my digital media (TV Shows, Movies, Pictures, Music).
– Ability to record and watch live TV (ala TiVo)
– Ability to playback virtually any codec type (from DivX, WMV, Quicktime, etc).
– Ability to output a HD signal and playback HD content
– Ability to program my existing remote controls to operate the system
– Easy to use, rich and attractive interface
– Must pass the WAF (wife acceptance factor) test (remember my wife works in IT too so this isn’t too hard for me)
– Common interface on ALL my televisions (Plasma in bedroom, Projector in Home Theatre, 32″ CRT in living room)

Click through to the full article

Carolyn Curiel wrote an editorial yesterday in the NY Times titled “Let’s I.M. as You Read This.”  A friend sent it to me with the suggestion that Carolyn might have been thinking of my treadputer when she said “Still, something feels missing. I think of the executive who positioned his office computer above a treadmill, so he could walk constantly, keeping fit as he ran a business.”  If only she knew how much more I actually concentrate on my three hour conference calls when I’m on the contraption.

John Funk, a partner in Evergreen Innovation Partners, recently had a nice summary of the minor victory eBay just had in at the Supreme Court in the universe of defending against software patents.  As John points out, it’s a minor victory, but helps reinforce that an injunction and system shutdown is not an automatic outcome when a court finds a company to be infringing on a patent.)

John and I have been colleagues (I was an investor in Exactis (fka Mercury Mail / Infobeat – his first company), adversaries (Infobeat sued a company I co-founded – Email Publishing – for patent infringement – which was eventually settled for $1 and a cross-licensing agreement between Exactis and MessageMedia (the company that acquired Email Publishing)), and once again friends and colleagues (I’m an investor in John’s latest company, Evergreen IP.) 

John has been around patents and the law for a long time – I expect he’ll continue to have great insights (some which I’ll agree with, some which I won’t) up on his blog in the future.

After listening to I’m The Decider,  I decided I wanted to go find something on the Stephen Colbert 2006 White House Correspondent’s Dinner Roast.  So – I went to del.icio.us, clicked on my Bush tag, and then clicked on the YouTube link I’d tagged.  Imagine my surprise when I saw the following:

Last week there were a series of back and forth posts between Fred Wilson, Jason Calicanas, with comments from Dave McClure and a bunch of others about whether or not YouTube was legit or if they simply stole content.

YouTube’s Copyright Tips page is extensive and does a great job of describing the rules of engagement for copyrighted material.  I have no idea when this appeared – if it’s recent then someone at YouTube appears to be paying attention to this debate.

I then wandered over to Google Video and quickly found the Google Video version of the Colbert 2006 Dinner Roast.  It’s got C-Span info and links, including a link to purchase the White House Correspondents Dinner DVD all over it, so presumably it’s legit.

Interesting.

For the past few months, whenever I talk to someone about a Web 2.0 application and hear that they already have “10,000 users”, I’ve been telling that them the first 25,000 users are irrelevant.

Josh Kopelman has a perfect post up today called 53,651.  This is the number of RSS subscribers to Michael Arrington’s great TechCruch blog, and is exactly at the core of the “first 25,000 user” issue.  Since there are 53,651 RSS subscribers of TechCrunch (at least as of 5/12/06) , if something gets reviewed there, it’s likely to get 5,000 to 10,000 users in the next 24 hours “just to try it out.”  As so many traffic graphs of these “TechCrunched” products show, there is a huge spike in use for a day or two, and then it goes right back down to where things were before they were TechCrunched.  For example:

Unfortunately, many entrepreneurs (and many VCs) confused one time “tryout users” with real sustainable users.  As an analytics freak (I’ve invested in a number of web / Internet analytics related companies over the past 10 years, including NetGenesis, Service Metrics, and now FeedBurner), you only have to ask two more questions to know whether (a) the company really understands its traffic / user base and (b) whether they’ve got the “first 25,000 user problem.”

Thanks Josh for the outstanding post and putting the gap between the Web 2.0 geeks and Mainstreet USA front and center.  Remember – the first 25,000 users are the same dudes (such as me) that play with everything.  Oh – and yes – I’ve fallen victim to this also.

It’s time to go La Vache hunting.

As you probably know from prior rants on this blog, I think the U.S. Patent System is completely screwed up, especially with regards to software patents.  Since I’m in Paris right now, I was pondering French food when I remembered Eric von Hippel and Emmanuelle Fauchart’s brilliant paper titled Norms-Based Intellectual Property Systems: The Case of French Chefs.

Norms-based IP systems are an alternative (or a complement) to legal based IP systems.  The Case of French Chefs is a superb example of how this works.  If you care a lot about IP protection – especially if you think our current system has issues – this paper is definitely worth reading and pondering. 

* Stuff in italics below was taken directly from a presentation that von Hippel gave in April 2006. *

von Hippel and Fauchart studied 500 chefs including “1 and 2 star”, “those waiting for a star”, and “2 and 3 fork” dudes.  These folks – when asked about the “importance [your] customers place upon finding original recipes (your own creations) on your menu” responded with an average of 4.52 (std dev: 0.72) where 5 was very important.  So – originality is very important.

However, traditional IP law doesn’t work to protect recipes for the following reasons.

• Patents: Recipes almost never meet the novelty requirement for patent protection.
• Copyright: Chefs can copyright the graphics and text associated with presenting information about a recipe as in a cookbook – but not the recipe itself.
• Trade Secrecy: Chefs can protect secrets such as the ingredients used or the technical instructions to accomplish the recipe through contractual means such as confidentiality clauses in contracts with employees but chefs say they seldom do this, citing the reason that it’s too expensive to enforce this through the courts.

Given that originality is important in this domain, you’d think these guys would have come up with a way to protect their recipes.  Well – they have – using a “norm-based IP system.”

The concept of social norms to influence behavior have been floating around for a while years.  “Social norms are pervasive and powerful structural characteristics of groups that summarize and simplify group influence process.  They generally are developed only for behaviors which are viewed as important by most group members (Hackman 1976).”

From the research, von Hippel and Fauchart determined that French Chefs have three rules of “correct behavior” that follow:

1. Right to not be copied exactly: Chef’s expect that “honorable” chefs will not copy their recipes exactly even if the information needed to do so is public.
2. Right to selectively reveal: Chefs expect that those to whom they reveal a recipe in confidence will not “abuse their trust” by passing that information on to others.
3. Authorship right: Chefs expect to be credited as the authors of the recipes they develop.

These social normal work extremely well – in French Chef society, if you violate one of them, you are outcast.  For example:

• Functionaly similar to patent: “If another chef copies a recipe exactly we are very furious; we will not talk to this chef anymore, and we won’t communicate information to him in the future.”
• Functionaly similar to contracting regarding trade secrets: “If I give information to another chef I trust him to not pass it on.  I do not have to say this.”
• Functionaly similar to contracting regarding trade secrets: Said to a chef who didn’t credit another chef as the source of a recipe: “Sir: Your [TV] presentation has revealed a rare ingratitude … You should admit that presenting recipes that are mine and that I taught you without referring to my name constitutes an unacceptable indelicacy.”

In addition to anecdotal evidence, von Hippel and Fauchart’s paper has a series of statistical studies that substantiate their hypotheses and the conclusion that – while there is still a lot to learn about norms-based IP with regard to information sharing among French chefs – it’s clear that this is a powerful and effective approach to enforcing IP ownership in this domain.

Now – try substituting “software developer” for French Chef.  While there are definitely some things to work out, if we add a few simple lessons from open source software development communities, you can almost imagine a norms-based IP approach for software.

I spoke on a panel last week at the Silicon Flatirons Telecommunications Program titled “Re-examining The Patent System.”  My panel was the last one and came after a few hours of stimulating discussion about the problems with patents, the problems with patent reform, and the reason our government is struggling so much with what to do.

When I was at MIT in the 1980’s, copyright and patents were just starting to be a major issue in the personal computer software business.  I vividly remember attending a lecture in one of my classes by the general counsel of Lotus who was suing Borland for copyright infringement between Quattro Pro and Lotus 1–2–3.  This was around the same time that Apple vs. Microsoft / Xerox vs. Apple lawsuits appeared, as well as the nonsense Ashton-Tate vs. Fox Software lawsuit.  Forget about patents – this was about copyright! 

Some of the research I did when I was a doctoral student at MIT was around the sources of innovation in the software industry.  In the late 1980’s, the three primary mechanisms for protecting innovation were copyright, patents, and trade secrets.  Copyrights (as evidenced by the legal action above) was the most active area and I – among many others – thought that copyrights were a problematic way to fundamentally protect software innovation, especially around look and feel (which was all the rage at the time.)  Of course, with the widespread emergence of the GPL and open source, the dynamics of software copyright have changed radically in the past decade, which is likely part of the reason the focus has shifted to patents.

I personally think software patents are an abomination.  My simple suggestion on the panel was to simply abolish them entirely.  There was a lot of discussion around patent reform and whether we should consider having different patent rules for different industries.  We all agreed this was impossible – it was already hard enough to manage a single standard in the US – even if we could get all the various lobbyists to shut up for a while and let the government figure out a set of rules.  However, everyone agreed that the fundamental notion of a patent – that the invention needed to be novel and non-obvious – was at the root of the problem in software. 

I’ve skimmed hundreds of software patents in the last decade (and have read a number of them in detail.)  I’ve been involved in four patent lawsuits and a number of “threats” by other parties.  I’ve had many patents granted to companies I’ve been an investor in.  I’ve been involved in patent discussions in every M&A transaction I’ve ever been involved in.  I’ve spent more time than I care to on conference calls with lawyers talking about patent issues.  I’ve always wanted to take a shower after I finished thinking about, discussing, or deciding how to deal with something with regard to a software patent.

I’ll pause for a second, take a deep breath, and remind you that I’m only talking about software patents.  I don’t feel qualified to talk about non-software patents.  However, we you consider the thought that a patent has to be both novel AND non-obvious (e.g. “the claimed subject matter cannot be obvious to someone else skilled in the technical field of invention”), 99% of all software patents should be denied immediately.  I’ve been in several situations where either I or my business partner at the time (Dave Jilk) had created prior art a decade earlier that – if the patent that I was defending against ever went anywhere – would have been used to invalidate the patent. 

When I made the assertion that we should simply abolish software patents entirely, I noticed a lot of lawyers heads moving vertically up and down.  I took this as a good sign, especially since a number of them had gray hair (and a few were on the earlier panels and sounded very intelligent and experienced, especially for lawyers.)

After wrestling with software patents for the past 15 years, I’ve concluded that there simply is no middle ground.  If we continue on the path we are on, patents will continue to increase in their overall expense to the system, everyone will feel compelled to continue to apply for as many (and as broad) patents as possible, if only for defensive reasons (one of Fred’s VC Cliche’s of the Week was “Patents are like nuclear bombs, you just got to have some.”)  Let’s take a page from geopolitical warfare and focus on global disarmament, rather than mutually assured destruction.

The difference between Microsoft and Apple is clearly explained in this 2 minute and 55 second video on Google.