Insights by Danielle Fong

notes from a girl from the future

Category: Dictionary

Trade Trade Secrets

Your revolution will not be stolen.

Great ideas can’t change the world by themselves. They need people.

There are two kinds of revolutionary ideas. The explosive, and the subversive.

The explosive ideas seem to spread like wildfire. What people miss is that wildfires need kindling. One might spark the spark that lights the fire, but the ideas are in nascent forms in other minds as well — the very minds that would popularize and manifest that idea were they just slightly further ahead. One person — a Rosa Parks of a revolutionary movement, might come to symbolize it. But this revolution was never theirs alone. Rosa Parks was a heroine of disobedience, but the movement would have been sparked by any of those who grew to so fervently support it. One can’t steal such a revolution. Instead, one simply becomes a part of it.

Subversive ideas are a different beast, and are perhaps more truly revolutionary. They are not of their time — they push too hard against the zeitgeist. It is these ideas that are truly original; they can offer tremendous, untapped advantages to those who can realize their products, but in their development they require great effort, intellectual rigor, and dedication.

Perhaps the most challenging aspect of this work is in changing minds. The idea contradicts the conventional wisdom; hence, in addition to the real work, you are asked to produce a sweeping theory for why the right of the world could have been so blind or so wrongheaded. It is challenging enough to get people you employ to consider your ideas. It is even more difficult to have your ideas stolen.

If only it were so easy to change the world.

Harvard Mark I

“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.” – Howard Aiken (primary engineer of the Harvard Mark I)

Subversive revolutionary ideas cannot simply be stolen. Adopted, with difficulty and without credit, perhaps, like an adopted child kept from their biological parents. But not stolen. Such ideas, before development, are too new, too fragile, and too ill-defined. These ideas only become real as the hard work and dedication required to develop them is put forward.

More than three years ago, I had the central ideas for what became LightSail Energy. Over that period of time, I and my extraordinarily talented colleagues have invested, collectively, the greatest efforts of our careers into developing the product and the understanding necessary to make it, a process that involved hundreds of experiments, thousands of decisions, and tens of thousands of tasks. We have almost two years ahead of us before our first product even ships.

One can not simply steal the kind of knowledge and expertise so developed. The momentum developed by one technical group cannot be simply transplanted into a competitor, it transcends documentation. No — it resides in our greatest assets: our people, the minds we’ve trained, the conventional wisdom we’ve transformed, the reputation that, through our trials, we have deeply entrenched.

While startups are growing, while their greatest advances and products are in their future, they need not worry about a competitor stealing their work or ideas. Startups are in a race against time, not others.

Theft

This whole picture changes once a product is released, once made whole.

A novel may be simply transcribed, code copied. An engine, reverse engineered. Once there’s proof that something works, it’s easy for some to imagine that they could simply copy it.

But it takes much more than an opportunistic interest to bring most things to market. Even as Facebook began their long ascent, they feared that Google, or someone else who knew what they were doing, would just make their product. “And look how long it took them!” Mark Zuckerberg exclaims.

Google couldn’t simply steal Facebook, even though they knew how it worked, even though they had access to the clientside code. There was a barrier — the users and data of their growing population. And if one is going to simply copy something, one might as well try to improve upon it. The same urge to simply copy a work now becomes a stroke of inspiration.

The crucial factor? The common thief is lazy, and the lazy thief is thwarted. As you see, the thief is rarely a person of great motivation, excepting for personal vendettas. If other victims make better targets, one is safe. If all victims defend themselves more vigorously than the notion of honest work in the lazy thief’s mind, an honest society becomes an inevitability.

Theft != Transcription != Transformation != Inspiration

We must distinguish these concepts. There are simple semantic distinctions that our law and policy makers continuously evade. But they are incredibly important.

  • Theft implies that the rightful person, an owner is denied access to something of value.
  • Transcription is simply the copying of something, leaving the original intact.
  • Transformation is the manipulation of a work into something of a different essential quality, message, or utility.
  • Inspiration is a transformation less direct, acted upon through the medium of our imagination.

The great danger of laws that ignore these is not that they will prevent theft, but that they will so heavyhandedly prevent transformation and inspiration: the engines of our entire civilization.

Copyright has its merits, but most importantly, compared to patents, it induces limited collateral damage. Authors are protected, by property laws and window locks, from the most egregious of violations, theft, and by copyright, from commercial and transcriptions of their works, which might, it could be said, constitute theft of the market for their authorship.

Where copyright is dangerous is where it spreads. It spreads to non-commercial sharing of fragments, in music, criticism, and art, to the use and transformation of fragments. It spreads to the prevention of the dissemination of works to those who cannot pay, wouldn’t pay, could never pay. It prevents even the growth of the stature of the artist: it dramatically tips the balance of power of such industries away from the artist to those with the organizational resources to enforce their copyright monopoly on others: in music, the record labels, in movies, Hollywood, in science, Reed-Elsevier, Springer-Verlag. Their corporate lobbies will declare that they are protecting the artist, but in reality, the artist is dehumanized. The artist plays only a small role: second fiddle to the giant, thrumming machines of distribution, promotion, copyright enforcement, and market analysis in the publication industry’s leviathan mass.

What does this do?

Musicians, actors, filmmakers, and authors are enthralled to the callous calculations of multinational corporations, by structure insensitive to the local, cultural sensibilities that artists wish to convey. Those artists outside of a mature mass market industry where the promotion machine, defended by copyright, can create hits by bulldozing over works of artistic merit, are steadily seduced by those monied coffers: sell-out or be squeezed out. Indie artists are remarkable for their resilience and their art, but also for their poverty.

Remixes are prevented. The sampling of other’s work is believed to be theft. Internet services engaged in the promotion of new works are embargoed by those entities enforcing copyright. The remixing of footage of ten thousand films, which, as YouTube amply demonstrates, are deemed not inspiration nor transformation but the acts of criminals. And scientists, like me, outside of academia, outside of institutions which can mindlessly purchase the scientific journals of highest repute, are systematically shut out of the products of academic scientists, the works of public investment, which should rightly be the domain of everyone. Scientists are seduced by the well defended and financially supported reputations of journals in much the same way as artists are seduced by the distribution and glamor of the labels and studios, as models are seduced into posing and surrendering their image, for their glamor, their paltry salary, their many admiring eyes, their fame.

A better system, one could imagine, would draw the distinction between the theft of property, the theft of market share or opportunity, and the transcription or transformation implied by these other examples. A remix scarcely steals the market of the original work unless unreferenced. An immigrant entrepreneur scarcely steals the jobs of the natives unless they hire only immigrants as well — and even then this is unclear.

The heavyhanded application of copyright law is tantamount to the mislabeling of transcription or transformation as theft. If we are to grow as a knowledge economy, we must not commit such a grave error.

But all of these problems pale in comparison to the collateral damage done by the patent system.1

Illegitimizing Inspiration and Independent Invention

It is a peculiar feature about a patented invention that it need not actually work.2

It need not actually satisfy any needs.

It need not be, on its own, economically viable.

It need not ever have been intended to be made real, nor spread out into the world.3

It is an even more peculiar feature of patents that they do not grant you any rights, that is, other than that of taking away rights.

Rights to use of equipment that you own.

Rights to a methodology of medical practice.

Rights to manufacture or sale or application of an invention.

But most importantly, rights to inventions that you neither described nor anticipated, but that some aspect of your patent, another invention happens to incorporate.

Even if your patent discusses only the barest of sketches, and all of the hard work, and the vast majority of the good ideas necessary, were the result of other minds, whether independently, or by inspiration arising from the original work.

The patent system, then, makes a terrible sacrifice. Our physical property laws protect our stuff. Copyright, to a great extent, protects our creative, transcribable works. But patent law, in shoring up the defenses against these other violations, ‘protects’ us against, and illegitimizes both inspiration and independent invention.

But the patent system continues to grow. Business model patents. Medical patents. Use patents. Design patents. Continuations, and continuations in part. Nations even measure their inventive efforts by their cumulative accretion of patent applications. The scope of this heavyhanded mechanism continues unrelentingly, and unrepentant, chanting their mantra “We are protecting our ideas. Ideas have value.”

Ideas do have value. Great value. But the value of inspiration, of innovation, of allowing someone to make an improvement on an unfinished, or incompletely adapted idea, and bring it out into the world, is far greater.

If the ideas for stories could be patented, modern artists as great as J.R.R. Tolkien, George Lucas, and Steven Spielberg would have been sued as derivative.  The hero’s journey deeply underlies many of their works, in many forms. And who would have patented the love song?

SOPA – The Thermonuclear Option

The absolute misapprehension of these semantic differences, and the total disregard for collateral damage, in the past months reached a fever pitch with the introduction of the SOPA or Stop Online Piracy Act. It seemed as if everything that could be wrong with it, was.

True, as its proponents claim, it would give the corporate copyright and distribution monopolists one more tool to prevent sharing from degrading their dying business model.

But in a SOPA world, if one person shares one element and one corporation makes one complaint, then in one moment with zero due process and zero transparency, a website can be blocked, and the possibility for any transcription, transformation, or inspiration destroyed.

But not just for the offending material. For everything.

Share, once, the wrong content to Wikipedia, and the entire project, the greatest encyclopedia of all time, one of the greatest efforts of all of civilization, is threatened with extinction.

SOPA has been prevented — so far. But what halted process was that the ‘technical’ aspects of the internet confused our lawmakers. It is deeply disturbing that it was not the semantic distinctions between theft and inspiration, or the threat of inordinate collateral damage, that halted the efforts of SOPAs proponents. It makes one fear their judgments in other matters equally.

While it is tempting to make an analogy to our current middle eastern conflict, it would not, in truth, reflect our military operations adequately. The military aspired to surgical precision. Predator drones. Counter-insurgency tactics.

SOPA represents a different stance. To threaten wikipedia with destruction is to threaten to vaporize the nations thought to harbor Osama bin Laden. SOPA is absolutely the thermonuclear option. It, and the efforts behind it, must be stopped.

What this Means for Startups

Do not be threatened by others copying your idea. Do not even be threatened by others copying an unfinished product. They cannot copy you, nor the imagined futures in your head, nor the organization that you’ve built, nor the reputation you’ve gained.

Your job is to create something wonderful, get it out in the world, and make it so convenient and clear that you should be the one to buy from, that you should be the one to trust, that hardly anyone would attempt to compete with you. iTunes costs money, but is so superior an experience to Kazaa that hardly anyone would choose the latter.

Once you’ve released your product, your goal is to stay ahead of it. To improve it, refine it, and when the time comes, to supersede it — to have the success of your past project propel you into the next.

On rare occasions, a work or invention may operate, its works hidden, for the relevant time period of the interest of its creator. A high tech company might build their product in China, but integrate a single element, hard to make, hard to understand, at headquarters on american shores. A piece of software might require a special key; a chemical process an essential catalyst.

A business might hold a monopoly over these trade secrets for as long as they can, perhaps to wring continued business benefits out of it. This may provide some advantage.

But it will not last. At best, it will buy you time. And at worst, keeping secrets will hamper your own work; your story, your promotion, and all the internal communication of the company. Communication is hard enough when people are open and honest. Operating on need-to-know bases is torture — you don’t know what you need to know. Worst of all, it will keep you in the past — a cruel death to the innovative spirit, and a poor trade for a temporary advantage over a determined competitor.

Trade Trade Secrets

This risks of people discovering the secrets of your work are, frankly, almost always overstated, and the advantages of sharing, truly underrated.

We live in a global world. Interested, helpful parties can emerge from any of its corners. The more that you share, and the clearer that you make it, the further your reach. Helpful parties from any corner can bring gifts, information, criticism, or their own efforts. So much of what we now are at LightSail emerged from the people who over time approached us, fascinated by our mission.

We have secrets, of course. But it is impossible to track them all without hampering every conversation. So we will stay open. Not wide open — not exhibitionist — we can’t spend all of our time showing the world who we are and what we do, but open. We will let the conversation flow. And just as often as we share what we’re doing, people share amazing ideas of their own.

So don’t just keep trade secrets. Trade them.4

Footnotes


1 – Notably, the one area in which patents are decently functional is the one where they are most similar to copyright: pharmaceutical patents. It is unambiguous whether a drug is chemically identical to another, just as is it unambiguous whether it is, despite a different printing process, the same book. Pharmaceutical patents are the exception that prove the rule.


2 – Though in principle, patented inventions are supposed to work, it is beyond the ability of the patent office to determine this. As a result, many incomplete, aspirational inventions are patented — lying in wait as traps for those who discover how to make related inventions practical and real.


3 – Historically, patent models were required from 1790 to 1880 to demonstrate how the invention was supposed to work. Only perpetual motion machines are required today to provide such working models, as proof of their operating principle.


4 – It has been suggested in the comment threads about whether or not the patent system makes possible the sharing of trade secrets. While I do agree that patents do make some form of sharing possible, I believe in the best of circumstances that this is incomplete, and there are significant negative externalities to the fact that it is a patent traded, and not another form of knowledge. Such trades can be as informal as describing the basic shape of the traded invention, in iteratively greater detail, or may comprise such formalities as documents shared under escrow, or contractual obligations to work together to get the inventions working usefully for one another. Importantly, one must be careful to document the invention at a level of detail that will prevent others from patenting the concept and preventing you from practicing it!

The Humor Event Horizon

Where laughter becomes more hilarious than whatever half-forgotten thing preceded it.

Also known as H.E.H.

Heisenthought.

heisenthought,

\ˈhī-zən-thȯt

alt. he-is-en-thought, as in, he is in thought, don’t disturb him… (thanks to Marc Chung @heisenthought)

noun.

1. A thought subject to mental collapse triggered by interruption.

2. A mental event or sequence characterized by coexistence of loosely related, sometimes contradictory, sets of knowledge or tasks. Highly dispersed in knowledge space, though it may support well defined momentum. Apt to tunnel through imposing technical or energetic barriers.

Collapse triggered upon the observation of the state of current knowledge by a third party. During the beginning states of observation, keen thinkers engage in a mad scramble to save mindstate, which may at some later time be partially reloaded. Status reports are heisenthought’s natural predator. Occasionally, members of a team will spontaneously ‘go dark’, in an attempt to think through some difficult problem — sometimes the only strategy which will work to extricate oneself from local extrema in solutionspace.1,2 Caution should be taken when observing said people, as doing so will both collapse their progress into a single, likely suboptimal path, and be likely misinterpreted as disloyalty, hubris or laziness, since they have disengaged from discussion with no apparent progress.

3. A mental event or sequence characterized by firmly specified and demarcated generating bodies of knowledge, and ill discernible forward movement. Induced by overspecification of problem, method, or solution. Collapse upon observation of current direction of progress by a third party. “‘Are we moving forward on this?’ ‘The heisenthought collapsed; we’re moving, just not in the right direction…'”

4. A coherent collection of thoughts sufficiently isolated from random outside influence. Obeys the relation Δknowledge Δmomentum ≥  ħ/2.

5. A tongue-in-cheek term invented to cast off workplace ‘pings’, ‘check-ins’, ‘status-reports’ and ‘how’s it goings?’.


Notes:

[1] – For example, read the interviews with Max Levchin in chapter 1 and Blake Ross in chapter 29 of Jessica Livingston’s Founders at Work.

Max discusses how he went dark for a year, and came up with the something that really mattered — a way to fight fraud.

We had this merger with a company called X.com. It was a bit of a tough merger because the companies were really competitive—we were two large competitors in the same market. For a while, Peter took some time off. The guy who ran X.com became the CEO, and I remained the CTO. He was really into Windows, and I was really into Unix. So there was this bad blood for a while between the engineering teams. He was convinced that Windows was where it’s at and that we have to switch to Windows, but the platform that we used was, I thought, built really well and I wanted to keep it. I wanted to stay on Unix. [...]

I had this intern that I hired before the merger, and we thought, “We built all these cool Unix projects, but it’s kind of pointless now because they are going to scrap the platform. We might as well do something else.” So he and I decided we were going to find ourselves fun projects. [...]

It was me acting out, but it was kind of a low time for me because I was not happy with the way we were going. Part of having a CEO is that you can respectfully disagree, but you can resign if you don’t like it that much. But then eventually I became interested in the economics of PayPal and trying to see what’s going on in the back end, because I was getting distracted from code and technology. I realized that we were losing a lot more money in fraud than I thought we were. It was still early 2001. If you looked at the actual loss rates, they were fairly low. You could see that we were losing money, but, given the growth of the system and the growth of the fraud, fraud was not that big of a problem. It was less than 1 percent—it was really low. But then, if you looked at the rate of growth of fraud, you could see that, if you don’t stop it, it would become 5 percent, 10 percent of the system, which would have been prohibitive.

So I started freaking out over it, and this intern and I wrote all sorts of packages— very statistical stuff—to analyze “How did it happen; how do we lose money?” By the end of the summer, we thought, “The world is going to end any minute now.” It was obvious that we were really losing tons of money. By midsummer, it was already on a $10 million range per month and just very scary.

[2] – Blake discusses how, by necessity, they closed up the source and process during the early stages of work on Firefox.

Phoenix was basically a fork of the Mozilla code base that we controlled. We closed off access to the code, because we felt it was impossible to create anything consumer-oriented when you had a thousand Netscape people in search of revenue and a thousand open source geeks who shunned big business trying to reach consensus. We just wanted to close it off and do what we thought was the right thing. We went through a couple name changes, Mozilla offered us more support, and that’s kind of how it all got started.

Thanks to Marc Chung and Joel Muzzerall for reading drafts of this.

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