Today a friend of mine and I were discussing some of the cool new things that we’d like to develop and got into an interesting discussion about the nature of work, what it means to be creative, and how it might be possible for creative people to make a living in the new economy.
You see, we’ve both lived and worked in the “Silicon Valley” start-up environment, and to be honest, neither of us cared for it much. At the risk of sounding hopelessly backward, we value our friends and our family more than our options. We’d both rather spend a lovely Saturday having a barbeque with our friends than having a catered lunch as repayment at the office for sacrificing a weekend.
So we left the valley, and we left California. Where we are doesn’t really matter now, because it’s immaterial to our business. We write software, it sells very well, and it makes us a good living. We sell it on the web and our customers are all over the world. They can reach us by phone, fax, e-mail, the web, and even traditional mail. It’s not hard to reach us, and it’s not hard for us to communicate with our customers. And yet, with this (albeit small scale compared to a tech IPO) success, we still have time for our friends and our families, and feel like we are living good lives that are separate from our work.
But I would hate to give you the idea we are slackers, far from it. We like to create, and we are always coming up with new ideas we’d like to work on. It’s been my experience, having studied theatre and fine arts in school, and ending up in technology, that software and hardware developers are some of the most creative and inspired people that I know. What drives them (indeed, us) to create is as diverse as what drives all artists to create, and it often has nothing to do with money. That would be hard for many marketing wonks and MBAs to fathom, but really, I don’t know many engineers who do what they do simply for the money. In fact, I know more than a handful who would do what they do regardless of the pay. Now, don’t get me wrong, these are very intelligent people, and if some VP whose contributions are all filtered through a focus group is getting rich, then the engineers who designed the thing in the first place deserve a cut!
But all too often, the creators get marginalized. What started out as a truly visionary idea goes through so many focus groups and marketing studies that the end result is a often a far cry from the original inspiration. I’ve seen a number of really great, awe-inspiring ideas be lost in organization churn, or obliterated by “mass market” ideals. This always makes me sad, not just for the developer who loses their baby, but for the loss of the idea itself.
Another way great ideas are destroyed is by the whole “venture capital” process itself. Take a look at great companies with great products. Then try to find how many of the original creators or innovators are still around after going through a few rounds of VC. Not very many. Most will be replaced by a stronger management team in the blink of a stock ticker. Those that manage to stay on in a role are often turned into dead weight, as a mouthpiece, or worse, relegated to some obscure management position designed primarily to keep them out of the way. The percentages of ownership that are retained by the creator of an idea is actually pretty sickening. In an article in Business 2.0, Jim Clark points out that the most common mistake entrepreneurs make is over-valuing themselves. What??! Have you heard such non-sense? I guess that’s true in the new e-conomy. Fuck the innovators; the only people who count are the ones who grow market share. Look, I understand the value provided by good sales and marketing people. However, when company founders end up holding less than 10% of the equity in a company, I think that’s pretty crappy. Hell, if you ask me, anything less than 50% is pretty crappy. What a way to be paid for you innovation: loosing control of your company. Yeah, yeah– 10% of a 50 Billion dollar company is better that 50% of a 5 million dollar company. But come on! How much money is enough? And is that money really worth giving up control of your vision? Your idea? And watching your idea become just another mediocre product in the already rotting pool of dead .coms?
After all, it’s not just the innovators who suffer when VC enters the picture. The innovations suffer too. Many great ideas are turned from something truly creative into just another B2B, P2P, B2C solution. Focus groups can provide valuable feedback, but then again, too many cooks’ over analysis of market trends can lead to bad choices and compromises in the product development cycle of a new business.
So the process of building a business in America today leads to the destruction of the innovator and innovation. How can this be changed? How can the creative still manage to create, retain control over their ideas, and still eat?
What could possibly be our salvation?
Seriously. I think it’s an idea whose time has come. Now stop laughing. To anyone skeptical of open source reading the article: I’m serious. To any open source advocates reading this article, I think you’ve only scratched the surface of possibility. Open source doesn’t mean free, it means open, and in the end I think it can benefit creators and business interests alike.
I think we should open up everything. Everything. Software. Hardware. All of it. Why? Because it’s good for you. It’s good for me. It’s good for us. And it’s good for the market.
But the market gods cry! How can we make money! How can we protect our “industry secrets!” Why do I care? Why do you care? And why did we get all secretive in the first place? Usually, secrets exist to protect bad products. After all, if no one else can make the same product better, your market is protected. That’s why I think open source has many people on the run; open source might actually provide consumers with choice in the market, and give them access to superior quality technology. Man, in that world, there are a lot of bad companies that stand to go under.
So how does anyone make money with open source? The creators and the companies retailing products? Here’s how everyone can make money: producing innovative things people want and like. So now let’s talk about specifics with an example.
I’m a media junkie. I take in as much media, be it television, radio, the net, as possible. But I’m also a mobile guy. I’m always on the run, and I certainly don’t bend my schedule for television. I want to be able to watch Nova when I want, damn it. Not when my local PBS station airs it. And speaking of which, I might want to watch it on my computer in the office, over the network, on my lunch break. Why not? There’s no real reason I shouldn’t be able to do this.
So, let’s say I get a real itch to have this kind of “media convergence” and I decide to do something about it. I go and I build a machine for my home, based on Linux, that can capture video, encode it and make it available on the Net via my DSL connection. Let’s call this my “Convergence Box”. Cool. I need to write some software to make this all seamless, so maybe I write a web application for scheduling the Convergence Box, and some other software for selecting shows to view, stream it, etc. etc. Now, all of this is some work, and I think it’s pretty valuable. Evidently, so do companies like Tivo and Replay TV (even though they still lack some of the cool features of the Convergence Box, like networking).
Well, now that I’ve gone through the trouble of building this box, I think I’ve got something pretty cool, I show it to some friends, and they want one two. So what are my options? I can:
1. Build it for them. Hey, I don’t have the time.
2. Start a company to build these things. Sure. And go through the hell of subjugating myself and my idea to MBAs and lose all of the cool functionality that was why I built this thing in the first place.
3. Sell it to a company direct. Yeah, if you have the connections, sure. Go for it.
4. Give my friends the plans & software. Hey, my friends are smart. They can make it themselves, and they get a cool box out of it, and I get credit. Neat deal.
In fact, the whole project could stop right there. I don’t have to do anything with it. I created it on my own, I own the idea, and I didn’t do it to get rich. I did it because its an idea for something I needed or wanted, and no one sold it, so I had to build it. But I know that many times, if it’s a product or something I want, chances are someone else wants it too.
So, let’s say I take this Convergence Box and “open source” it. I publish my plans on the net, with a license that effectively says “For personal use, all these plans and software is free. If you want to use it for business, write me.” Yeah, it might cost me a little to have a lawyer review this license, but regardless, that investment is pretty cheap.
Now anyone on the net can build my box if they want to. A great idea is shared with a community of people who can take something cool, build it, use it, extend it in any way they see fit. I like that. I personally think it feels pretty good to share. We all get a cool new toy, and those with the time, knowledge and parts get to build and use my good idea.
But what if a company decides this is a product who’s time has come? What then? Well, easy. They license it too. In fact, this is the best thing a company could possibly do! After all, I’ve done the R&D. I’ve built the prototype. I’ve established a market. Now, they could license my plans, for say a nice royalty, and everyone is a winner.
The company can take my idea, maybe make it more efficient, maybe dumb it down for the mass market, and they walk away with a product they can sell to the mass market of people who don’t want to tinker with hardware and software (and that’s a pretty big market). They can even remove features that might get them into hot litigation. Whatever. They are free to do so, and I still get paid and make money from the base idea. All of the technophiles who want a feature-rich, custom machine, well, they get what they want too, from my open source license. Let’s face it, those people aren’t eating into the company’s market at all, they wouldn’t want the dumbed-down mass market version anyway. If anything, letting these people use it for free is like an investment in community development: everyone wins.
“But hey!” you cry, “there’s nothing to stop another company from licensing the idea too! So who protects the first company’s interests?” Well, okay. Let’s take a look at that. We have two companies, Company X and Company Y. They both want to make the “Convergence Box”. Fine. Why not? There’s a good chance that the market is big enough for both of them, and that my extending the base features established in the original idea, they could actually develop different markets. One might even have a machine that would appeal to those tech savvy buyers out there.
But even if Company Y wants to make a similar product to Company X, they can too. People can then freely choose between product X and Y, and base their decision on minor issues, like say, customer service. Now each company has a reason to build a good product, because the better product will win in the market. What could be better for the consumer? And people who don’t mind technical info and want a supped up version of the product get to build one themselves for the costs of supplies, all thanks to open source. Technological innovation reigns supreme, the market economy does it’s job, and we all share. The company making the best spin off product wins the market, and the developer gets to eat! What could be better?
Now, I realize this idea is not without flaws. Greed always complicates matters like this. But I offer this little diatribe as encouragement to those of you out there that are tired of seeing good ideas go to waste. For innovators who are tired of seeing their ideas compromised. For developers who want to create, but want to eat. For companies with the vision to really adapt to a new economy, and not just want to slap an “e.com” to their name. This a chance to do some real outside-the-box thinking and profit. I think there are enough of us out there that we will survive. And if I’m right, we’ll prosper. And if I’m wrong? I’d rather survive on my terms than compromise my ideals to survive on theirs.