Corporate Bad Activity Against Innovators

There’s an amazing amount of bad activity going on in the world of tech right now. It’s predictable – when things start going well the switch flips from fear back to greed and all sorts of craziness ensues. One of the things I see appear is a steady stream of crap aimed at innovators. Patent trolls are an easy one, but heavy handed regulatory activity by incumbents and random lawsuits around acquisitions are also part for the course.

I was going to write about how the FCC’s potential action on net neutrality could seriously jeopardize Internet innovation, but Fred Wilson beat me to it (he’s got an east coast time advantage over me) with a phenomenal post titled The Fast Lane, The Slow Lane, and The No Lane. I love the phrase “permissionless innovation” as well as the way Fred describes the issue:

“But that period of “permissionless innovation” is likely to come to an end soon if we all let it. The FCC has responded to a court ruling by proposing a convoluted set of rules that will allow fast lanes, slow lanes, and what’s even worse, no lanes. The FCC’s proposal will allow the telcos and cable companies that provide the last mile connection to your home or office to prioritize some bits over others. That’s how they create the fast lane and the slow lane. It also allows discrimination in which they can decide not to allow your bits through at all, creating a “no lane”.”

Go read Fred’s post The Fast Lane, The Slow Lane, and The No Lane and then hit the back button to continue here. I’ll wait.

If you wonder who is driving this, it’s the telcos and cable companies who control the last mile. Please don’t pretend that you are surprised.

But that’s just one category of bad activity that falls in the “incumbents trying to use government regulation to control their industry and suppress innovation.” Nothing new here – it’s been going on since the beginning of time.

A different version of this popped up last week. If you recall, a month or so ago Facebook announced that it was buying Oculus Rift for an eye popping $2 billion. Amazing and congrats to everyone involved in Oculus Rift. I’ve long been a John Carmack fanboy since I first played Doom and realized id Software was based in Mesquite, TX, near where I grew up. I’ve always loved his hacker spirit, amazing ability to do things no one else could envision, and willingness to open source a lot of his work to lead the way for others. So I thought it was pretty awesome when he went to be CTO of Oculus Rift to pursue the next generation of virtual reality software.

Now, I don’t know John, I’m not an investor in Oculus Rift, or Facebook, or Zenimax, but I wasn’t particularly surprised when Zenimax decided to assert that it owned part of Carmack’s brain. You can read an enormous amount of chatter about the situation, and form your own conclusion, but mine is that Zenimax is a bad actor here. Given that Zenimax wouldn’t let Carmack pursue any virtual reality work while at Zenimax resulted in the logical conclusion that he’d leave and do something else. Asserting that whatever was in his brain while employed at Zenimax belongs to Zenimax is nonsense. There’s a phrase for that: “intellectual slavery” and it’s not one I support.

If you are interested in this situation, here are some good links to understand what is going on and being asserted.

Now that I’ve been clear about what I think, I’m curious what you think.

  • http://www.drivenforward.com/ Glen Hellman

    Look at big oil and how they spend money to lobby the government to spend tax payer money on wars to keep their oil flowing, while getting government tax subsidies that taken in whole lower the price of carbon based energy so as to make it economically difficult to produce competitively priced, greener, lower carbon producing energy sources.

    Big companies are wired to protect themselves against change and disruption and big companies have big money. As long as this supreme court allows money to be more influential than votes, US innovation in big world changing technologies will be relegated to better e-commerce solutions.

    • http://www.feld.com bfeld

      Yup.

  • http://www.nextgiantleap.com/team.html NextGiantLeap

    I think $2 billion buys a lot of trouble.

    • http://www.feld.com bfeld

      No shit!

  • Rick Mason

    Concerning the Carmack situation I think we need to outlaw employment agreements that state they own all your thoughts whether at work or not. I think back in the day this nonsense was started by EDS and lots of firms copied it.

    • http://www.feld.com bfeld

      Yeah – it is idiotic, moronic, and should be outlawed.

  • http://www.kineplay.com/ben Ben Milstead

    Bullseye, Brad. John is absolutely the real deal. ZeniMax is being a very bad actor here.

    • http://www.feld.com bfeld

      Glad to have my instincts confirmed!

  • MerredithB

    So glad you and Fred are bringing this up. I was just re-reading Startup Communities the other day, and musing on the changes since you wrote it (not only acquisitions and maturations of communities, but shifts in the landscape). There has always been an element of The Emperor’s New Clothes in tech, but this shift feels more fundamental — and “permissionless innovation” may be one phrase for it. Where we started with curiosity and collaboration and loose networked connections (pardon the pun), it feels like some companies (as well as some more cynical legislators and other players) clothe all kinds of bad actions in elegantly unimpeachable principles like IP ownership, or innovation, or disruption. It’s not new; but what is new is where once it was policed , more or less, within our community, now there are many more billions of dollars and interests acting from outside that we may not even see. We may have to out-principle them, ala the anti-SOPA campaign.
    Anyway, thanks for making me think and the point to Fred’s blog. Next steps?

    • http://www.feld.com bfeld

      Expect plenty of call to action around this in the coming weeks / months.
      I personally think the best kind of SOPA/PIPA protest would be for a bunch of the large sites to drastically slow down their traffic – just choose the slow lane and show everyone what it’s going to be like.

      • MerredithB

        I like that: it is the difference between policy and impact or action, and will touch people in a more concrete way than abstractions, no matter how noble. Like the SOPA/PIPA blackout, or the Brendan Eich protest (about which I was decidedly ambivalent, but it sure was effective). Make it real.

  • http://www.tejdhawan.com/ TejDhawan
  • http://stayinyourprime.com/ Tyler Hayes

    It’s so funny, because regulation itself can actually be a good thing. I’m a fan of HIPAA for example because it gives all Americans the right to own and transport their own medical records, which was effectively impossible before HIPAA: http://noblepioneer.com/post/78140085507/regulation-is-often-a-good-thing-just-like-government

    But, unlike regulation, corporate bullying is just bad always. A corporation busting its ass to innovate and then being copied, and thus then bullying another company, I can at least understand. But corporations who sit around and don’t innovate and then lash out at others so they don’t lose their pie are working against the progress of humanity. I write my fair share about this happening in healthcare, like http://noblepioneer.com/post/75043115996/the-case-for-a-health-records-api and http://noblepioneer.com/post/75839582858/incumbents-asleep-at-the-wheel.

  • http://is.linkedin.com/in/balakamallakharan Bala

    I am just flabbergasted at the notion of intellectual slavery, how can any organization claim right to anyone’s thought? I mean seriously? This is the last of the human freedoms, the minute we are all made to subjugate our thought to an organization or a company, we have lost the battle for the soul. There is nothing more unique, fascinating, interesting and magical than the individual neurons that fire in each of us. I find it ludicrous and just plain insulting that Zenimax would have the audacity. In the world that we live in today where cognitive, self motivated, individuals unleash their ingenuity to create fantastic things to benefit society can never be put in shackles. Just the injustice of the thought that a company could claim to own a part of someone’s brain boils me. Just had to vent… I hope sanity prevails.

    • http://www.feld.com bfeld

      I hope sanity prevails as well. This happens regularly in many industries – a less insidious, but still bad version of this is the non-compete for employees who leave a company. A non-solicit and non-disparagement clause is reasonable, but a non-compete, other than for founders or in an M&A context where real value is received for a non-compete, is bad news.

  • DaveJ

    Let’s say I own some land. I want to let my friends use it, but not strangers. The government comes along and says “no, you have to provide fair access to everyone.”

    Isn’t that Net Neutrality? Isn’t Net Neutrality the regulation that supersedes the right of the property owners (cable companies, telcos) to sell access to their property as they see fit?

    This is not to make a point one way or the other about whether Net Neutrality is a good thing. And unquestionably whatever revised regulation the FCC comes up with will be bad. But if you GET RID OF REGULATION you will not have Net Neutrality. So I don’t think you are genuinely anti-regulation here. You are pro-Net Neutrality regulation.

    Reminds me of the “keep your government hands off of my Medicare” line.

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