Stealth Mode is Stupid: Why Your Ideas Don’t Matter – by “Michael W”

It’s a longstanding cliche in the world of tech start-ups. “I’d love to chat about my company, but we’re in stealth mode.” The concern is that sharing the idea is more dangerous than not sharing it. In my experience I have found the exact opposite to be true. Stealth mode is stupid for at least three reasons: 1) ideas are overrated, 2) execution is infinitely more important, and 3) freely sharing ideas can aid in their execution. This is an essential lesson for tech start-ups, but its implications reach far beyond Silicon Valley.

Ideas are Overrated

To start with, ideas are painfully overvalued, both anecdotally — by aspiring entrepreneurs, and formally — by our legal system. Right now thousands of people are contemplating the same, next big idea. But what separates these faceless masses from the one that will emerge as the next Google? In a word, execution. Ideas are everywhere, but great implementation is rare. New entrepreneurs, who have not yet gone through the most critical stage of a young company — its execution — are prone to undervaluing its importance.

The US patent system, meanwhile, similarly overvalues ideas. It protects the expression of ideas that are both “novel” and “non-obvious,” but realistically, in the digital age, for how long do new ideas remain “non-obvious”? In the Twitter age ideas spread nearly instantly. And because of our abundant access to information, in general, the process of trends converging to form new ideas is in plain view for almost anyone to see. Furthermore, the ideas that underly the most successful tech companies of the past decade — Google, YouTube, and Facebook — were neither novel nor non-obvious when they made their marks.

The Story of Facebook

Facebook, in particular, provides an excellent case study. The idea of social networking first emerged in the late 90’s. Live Journal started in 1999; Friendster in 2002; and Tribe.net in 2003. Mark Zuckerberg didn’t launch Facebook until the spring of 2004. At that point it would be unthinkable to label social networking as a new idea. But it was. In fact, two separate groups claimed that Zuckerberg had stolen the idea from them. Facebook had to settle one of the cases out of court (due to pressures stemming from contract law and public relations, not any valid IP concerns), but the very occurrence of the lawsuit, that someone could even think that the idea of social networking was somehow novel or non-obvious in 2003, underscores our societal misunderstanding of ideas.

Why did Facebook garner 400 million users, then, even though it wasn’t a new idea? Because of its execution. It was part luck, part skill, but regardless, it was the actualization of Facebook, not the idea of a social network (or even the idea of a college-centric social network), which created so much value. The same goes for every success story. Search was old news by the time Google entered onto the scene in 1997. But they implemented it much, much better than the competition. Hundreds of streaming video sites were sprouting up in 2004. But YouTube executed the idea better than anyone else.

And why were so many people working on these ideas in the first place? Because there were highly visible trends that were converging to create obvious new opportunities: the growth of the internet made search a necessity; increasing broadband penetration made internet video feasible; and in the wake of the success of the blogosphere, social media was emerging as the next major frontier on the web.

“Ideas are Just a Multiplier of Execution”

As the founder of CD Baby, Derek Sivers, put it, “ideas are just a multiplier of execution.”  He explains that varying degrees of execution are worth roughly between $1 and $10,000,000, but ideas are only worth between negative 1 and 20. Therefore, a weak idea with flawless execution can be worth $10,000,000, but the best idea in the world with poor execution is worth just $20. These numbers are obviously metaphorical proxies, but the concept is spot-on. And Sivers of all people would know: he took a relatively boring idea (selling independently-produced CD’s on the Internet), and turned it into a $20 million company.

If stealth mode was merely unhelpful it would be one thing, but it is actively harmful to new ventures. The people who appear most threatening in the stealth mode worldview — industry peers, talented coders, angel investors, etc. — are actually the people who could provide the most help. By closing themselves off to these potential resources, stealth mode companies are their own worst enemies.

What about Apple?

One common retort to this critique of stealth mode is, “what about Apple?” This of course refers to the fact that Apple, Inc., the fifth largest company in the US, uses intense secrecy as part of their unquestionably successful product development and marketing efforts. The short answer is: you’re not Apple.  They are a thirty-five year-old company with hundreds of retail locations, tens of thousands of employees, and tens of billions of dollars in the bank. Their sophisticated use of secrecy has no bearing whatsoever on a small start-up. [Note: this isn’t to suggest that Apple has a healthy attitude towards intellectual property, because I don’t think they do, but that is for a different blog post.]

Fear of Sharing: Broader Implications

The concept that overprotecting ideas can actively hurt companies is something that applies to all firms, not just start-ups. Media conglomerates, for instance, closely guard their content, because, like rookie entrepreneurs, they think not sharing it is less dangerous than sharing it. But they’re wrong.

This mistake is perhaps best illustrated by the band Ok Go, whose lead singer wrote a scathing op-ed in the NY Times this past weekend, which chronicled his band’s tumultuous experience with a major record label. Ok Go was signed by EMI in 2000. They floundered for years, until in 2005 the band used their own funds to make a low-budget music video — without the aid nor the permission of their label — that went on to become a YouTube sensation. The label, though, viewed the video as illegal, despite the fact that it singlehandedly propelled the band to international stardom, resulted in millions of legally sold records (most of the profits of which went to the label), and even earned the band a Grammy. Recently EMI disabled embedding on this video so that it can no longer be shared across the Internet, even in light of how it being shared in the first place is precisely what proved to be such a boon for the band and the label. Consequently, EMI is preventing the next Ok Go from ever emerging. Consumers lose, bands lose, and EMI loses. Why are they doing it? It’s really unclear.

Conclusion

Whether you’re a lone hacker or a Fortune 500 media company: your ideas don’t really matter. So stop trying to protect them, and start trying to implement them better.

Mashup: A Fair Use Defense – by “Ryan B”



Mashup, a style of music that combines samples from various songs, would appear to many to be the epitome of copyright infringement. In fact, a 2005 court case, Bridgeport v. Dimension, deemed the unauthorized use of even one second of a sample to be copyright infringement. Since mashup blends several samples over the course of any one song, it must certainly be copyright infringement. Right? Not so fast.

Judges do make mistakes, and no court decision is set in stone, so it is worth considering whether a legitimate legal defense could be made on behalf of the mashup artist. In establishing such a hypothetical defense, let’s turn to the fair use doctrine, which permits the unauthorized use of copyrighted materials under certain circumstances.

Fair use is a legal doctrine meant to protect works deemed valuable for society, often shielding works involving first amendment expression, such as parodies. When reviewing a fair use defense, courts consider such things as how “transformative” the work is, the substantiality of the portion used, and the effect on the market for the original work. With this in mind, could a fair use defense be made on behalf of the mashup artist?

I will now show one reason why mashup could be considered fair use. While this particular argument will certainly not apply to all mashup music, I think that it at least demonstrates that Bridgeport’s blanket prohibition of sampling does not leave space for the sort of legitimate behavior that the fair use doctrine was meant to protect.

For this hypothetical fair use defense, let’s delve into the transformative nature of mashup music. To start, mashup artists frequently splice up samples while editing the pitch, tempo, and the mix of the original work. At the end of the day, however, samples are usually meant to be recognizable. As a result, the extent of these edits is typically held within limits.

Nonetheless, mashup can be incredibly transformative for another important reason. By pairing up samples from different songs, mashup can provide an entirely new context for the original works. In this way, mashup artists can provide critical commentary on those works, expressing their own perspectives on the songs being utilized. This can spur valuable conversations that construct new perspectives, a similar process to that triggered by an SNL parody, for example. As a result, mashup can yield the sort of first amendment expression that the fair use doctrine was meant to protect.

To see this argument in action, consider the mashup artist, Milkman’s song “All About It,” which samples the vocal track from Pitbull’s “Go Girl” (listen below; the Pitbull vocal track starts about fifteen seconds in to Milkman’s song). Pitbull originally blended his vocal track with an instrumental that had a dirty feel through its use of a base drum and a repeating flute line. Milkman, however, eliminated this “dirty” sound entirely by pairing up Pitbull’s vocal track with a 90s pop song, Real McCoy’s “Another Night.” The pop context that Milkman provides the Pitbull vocal track reveals how silly Pitbull’s lyrics really are. In this way, Milkman’s sampling of Pitbull’s song acts as a sort of critical commentary on that work, and therefore could be considered worthy of the type of first amendment protection that the fair use doctrine was intended to offer.

Pitbull – Go Girl


Milkman – All About It

Do mashups always provide critical commentary on the samples they use? Probably not. Nonetheless, the Milkman example does seem to show that a mashup could be worthy of fair use protection under certain circumstances. As a result, the Bridgeport decision, which deems all sampling to be copyright infringement regardless of the particular use, seems to be going too far.

As Spotify takes off, is a service-based model the future of music? – by “Samuel D”

iTunes has been leading the charge in legal online music sales since 2003 (selling over six billion tracks in that time) by selling individual songs and albums (DRM-free since January) through its iTunes Store software. Some interesting (ostensibly) legal alternatives have popped up over the years (Rhapsody, Pandora, imeem, Lala, MySpace Music), but none pose as great a threat as 2006 start-up Spotify. Spotify takes an entirely legal, service-based, streaming model to a new level, and the results overseas have been astounding.

Spotify has reached deals with major music labels for use of their collections. Users can stream the music with no buffer delay using a free version (with advertisements every half hour) or an ad-free premium version (for the equivalent of $16US per month). Users can also buy a one-day pass to go ad-free for 24 hours (for the equivalent of $1.62US).

Sharing: One of the most popular features of Spotify is sharing. Since the entire streaming library is available to all users at all times, users can share songs and elaborate playlists with users instantaneously. One user could make a 100-song playlist for a party, send it to a friend, and the recipient could play it instantaneously without downloading any files or buying any songs.

Offline: Users can cache up to 3,333 songs for offline use. This, clearly, would be larger than most people’s iTunes library and makes Spotify a direct (and potent) iTunes competitor. It’s also a huge competitive advantage over several of its streaming counterparts.

Geolocation: Spotify is the inverse Hulu, in a way, as it is currently only available overseas in Norway, Sweden, Finland, the U.K., France, and Spain. They are working hard to bring the service to the U.S. The Stockholm-based company is opening a U.S. office this year. The U.S. launch is imminent (as they reach deals with U.S. record labels), but apparently will rely on a mysteriously “slightly different” business model.

spotifyiphone

Portability/Mobile: The basic Spotify experience works through downloadable software (synced across multiple machines), but Apple recently shocked the tech community by approving the Spotify iPhone/iPod Touch app for the App Store. The app lets premium users stream the entire Spotify library over 3G or Wi-Fi AND sync offline. Given the offline sync, the Spotify app would instantaneously eradicate the need to buy music through the iTunes Store for your iPod. An Android app is available, as well. Playlists and settings are wirelessly synced between your phone and computers.

MP3: Spotify (for obvious reasons) does not allow users to download files of songs, but does link to legal music partners (Amazon, etc.) so users could buy MP3s on their own.

The Future: Spotify clearly takes the service-based music model to a new level. Valleywag calls it “everything iTunes should be.” As Spotify adds more and more music to its library and even Mark Zuckerberg sings its praises, how will Apple respond? Spotify is now reportedly making more money for Universal in Sweden than iTunes is. Many believe a service-based model is the future of music now that mobile platforms have caught up, but do people really want to rent music?

Spotify is currently valued around $250 million and with the U.S. launch imminent, that should only grow. Expectations and buzz are certainly high. The service has six million users presently, but is setting its sights high, aiming to take the service-based model to the next level:

“If we can transcend it so that, maybe you don’t actually have to pay for the music, it’s included in your data plan with your carrier or ISP or cable operator; it might be when you buy a new product, a TV screen, that you get one year of music included … devices like new Samsung TV screens, where they’ve got Linux built in, which allows you to do software on it – they’ve got YouTube built in, they might have Spotify built in.”

Spotify Website: http://www.spotify.com/en/
Spotify on Twitter: http://twitter.com/spotify
Spotify on Wikipedia: http://en.wikipedia.org/wiki/Spotify