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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Have We Passed Peak Surveillance?

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Doc Searls wrote a great, very detailed post this weekend titled Thoughts on privacy where he argues we have passed the point of “Peak Surveillance.” He says, about halfway through the post:

“I can’t prove it, but I do believe we have passed Peak Surveillance. When Edward Snowden’s shit hit the fan in May, lots of people said the controversy would blow over. It hasn’t, and it won’t. Our frogs are not fully boiled, and we’re jumping out of the pot. New personal powers will be decentralized. And in cases where those powers are centralized, it will be in ways that are better aligned with individual and social power than the feudal systems of today. End-to-end principles are still there, and still apply. “

Five minutes later, I read an article in the New York Times titled Drug Agents Use Vast Phone Trove, Eclipsing N.S.A.’s which basically explains how the DEA has been paying AT&T for access to all its phone records for at least the last six years and to embed AT&T employees alongside DEA agents and local law enforcement to supply them with phone data going back to 1987. This program is called Hemisphere and – like Fight Club – is not allowed to be talked about. The text from p12 of the official presentation follows:

“All requestors are instructed to never refer to Hemisphere in any official document. If there is no alternative to referencing a Hemisphere request, then the results should be referenced as information obtained from an AT&T subpoena.”

Searls refers to a quote from Bruce Schneier about our new feudal overlords, which I think is just brilliant.

“Some of us have pledged our allegiance to Google: We have Gmail accounts, we use Google Calendar and Google Docs, and we have Android phones. Others have pledged allegiance to Apple: We have Macintosh laptops, iPhones, and iPads; and we let iCloud automatically synchronize and back up everything. Still others of us let Microsoft do it all. Or we buy our music and e-books from Amazon, which keeps records of what we own and allows downloading to a Kindle, computer, or phone. Some of us have pretty much abandoned e-mail altogether … for Facebook.

These vendors are becoming our feudal lords, and we are becoming their vassals. We might refuse to pledge allegiance to all of them – or to a particular one we don’t like. Or we can spread our allegiance around. But either way, it’s becoming increasingly difficult to not pledge allegiance to at least one of them.”

And then, I saw the hilariously sad and funny video “I Forgot My Phone.”

I have no idea if we’ve passed Peak Surveillance. But I know we are talking about a lot these days. I’m lucky that I’m married to Amy who has spent an enormous amount of time thinking about privacy (her college thesis was on the right to privacy). Our conversations about this are rich, and it’s caused me to start thinking 20 years in the future about the dynamics. This has happened before and it will happen again. So say we all.

Lavabit Commits Corporate Suicide

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I was shocked for a few minutes last week after I heard that Lavabit committed corporate suicide. I pondered it for a while and then forgot, but two things this weekend caused me to remember it.

The first was the suicide of Cylon Number One (John) near the end of Battlestar Galactica. I didn’t expect it at all (there were a bunch of things in the last three episodes that I didn’t expect.) The other was Barry Eisler’s tweet about Obama’s statement about the NSA (NSFW) from the weekend (Eisler is one of my favorite Mental Floss writers.)

I didn’t see Eisler’s tweet until Sunday morning because of my digital sabbath and it made me think of Lavabit shutting down. And then I had a moment of fear that I was reading it and considering retweeting it. The thought that crossed my mind was “if I retweet this, will the NSA record it somewhere.” Then I decided this was a fear-based reaction that was absurd, but not irrational.

Then I read Homes for Hackers gets a visit from the FBI. My friend Ben, who inspired me to buy a house in the Google Fiberhood in Kansas City, talks about the FBI poking around in his house because he has gigabit Internet. Now, Ben’s a trusting dude so he let the FBI in and was polite, but he speculates that he’s now got a surveillance device in his bathroom.

We are just beginning to understand – and struggle with – the crossover of humans and technology. When you ponder the NSA, it’s starting to feel like a giant computer run by humans, where the computer dominates and the humans are just the mechanics. Sure – the humans want to feel like the ones who are actually running things, but it doesn’t take much imagination to see this evolving along the same lines as Battlestar Galactica.

I accepted a long time ago that I had no actual privacy – that all of my data was being captured somewhere. I gave a talk at my 20th business school reunion in 2008 where I stated directly that “we no longer had any privacy.” But it’s getting worse – fast. Even if we work hard to have privacy, as in using Lavabit to send email, the government can still break through this privacy, or force the service to shut down.

I’m fascinated by all of this. Not scared – fascinated. It’s easy to be cynical, or scared, or angry. But our civilization is going to evolve in very strange and radical ways over the next twenty years. Hang on – it’s going to be a crazy ride.

Startup Day Across America on August 29

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Though it may seem as if politicians in Washington, D.C. have a hard time agreeing on anything, those on both sides of the aisle seem increasingly keen to support entrepreneurs and their communities. Some recent examples include the passage of legislation expanding crowdfunding under the JOBS Act and meetings similar to one hosted last month by the Global Accelerator Network in which we worked with the Small Business Administration to gather 16 accelerators to demo their programs for the White House and SBA funders.

Much progress has been made to ensure that those in Washington are hearing entrepreneurs’ concerns, but we still have a long way to go – especially with connecting politicians to those in the seed-stage technology sector. Politicians in our federal government are listening to entrepreneurs, but we very rarely see congressmen personally sit across the table from early-stage tech investors and their founders. When this does occur, however, representatives learn much more about what startups really want and need than they would hearing feedback through second or third parties, and they’re much more likely to take supportive action.

That is why the Global Accelerator Network is thrilled to support the first ever Startup Day Across America on August 29. This one-day bipartisan event, led by the U.S. House of Representatives Caucus on Innovation and Entrepreneurship, will connect members of Congress with startups and accelerators in their respective districts. We believe this is a great opportunity for startup communities to connect with their congressional representatives – both to highlight the positive contributions startups bring to their communities, as well as raise awareness about startups’ needs on a local and national level.

If you are interested in learning more about the Startup Day Across America, please contact Eve Lieberman in Congressman Jared Polis’ office who will connect you with the person leading the charge in your district.

The Proposed SEC Rules Undermine The Goal Of The JOBS Act

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The JOBS Act, which was approved by Congress and signed by President Obama with much fanfare over a year ago, was intended to help small business. It is, after all, called the Jumpstart Our Business Startups Act. A number of the provisions have been slow to get written into law and the SEC has missed their deadlines on a bunch of stuff, including the often talked about equity crowdfunding activity.

Recently, the SEC weighed in on a number of the things they were required to with much fanfare. Fred Wilson wrote Let The Games Begin in response to the SEC lifting the General Solicitation Ban. However, Fred, and many others, missed the new proposed Amendments to Regulation D, Form D and Rule 156 under the Securities ActAnd they look like one scary mess that could undermine the whole thing if approved.

Some posts with analysis of this have finally started to appear. A good summary is by Joe Wallin at his Startup Law Blog titled Proposed Rules Hard on StartupsAnd I’ve gotten a number of emails with similar analysis. My favorite summary was from a very experienced law firm.

“The SEC giveth (as mandated by Congress) and taketh away (by its own mandate).

It is incredible that the SEC finally got around to implementing rules to remove the ban on solicitation (as it was required by statute to do so in 2012), but concurrently proposes new rules intended to retard the benefits of easing the capital formation process (the goal of the JOBS Act).

The new proposed rules will require a Form D to be filed 15 days in ADVANCE of a Reg 506 offering and after, substantially expand the scope of information required to be disclosed in Form D and disqualify an issuer from relying on Rule 506 for one year if the issuer does not comply with the new filing requirements (including a requirement that the Form D be timely filed). The new rule also would require filing with the SEC of all written general solicitation materials. So much for deregulation!”

Seriously? More commentary from one of the emails I received follows:

“The new rules and rule proposals were a kind of packaged effort to address the Congressional mandate in the JOBS Act, while attempting to maintain investor protection. Apparently, the package was enough to mollify Commissioner Walter, but Commissioner Aguilar was unwilling to go along. In his view, the rules adopted come at the expense of investor protection. He reiterated that the record supports the argument that elimination of the ban on general solicitation will facilitate fraud and viewed the adoption of the rules without appropriate safeguards as “reckless.” He also contended that the proposal to study the practical effects and then adopt rules if necessary would come too late – closing the barn door after the horses have already escaped. Although he voted for adoption of the disqualification rule, he also objected to the narrowing of the categories of individuals covered, as well as the application to only prospective events, especially given the two-year delay in adoption of the final rule. On the other side of the aisle, Commissioners Paredes and Gallagher both objected to the proposal to facilitate monitoring of market changes resulting from elimination of the prohibition. They both viewed the proposal as placing an undue burden on capital formation and undermining the objectives of the JOBS Act.”

While the “proposed rules” are still “proposed”, hopefully the SEC will reject these new proposals, especially in the context of Congress’s mandate to Jumpstart Our Business Startups.

I Love Living In America

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I woke up to a flurry of grumpy stuff about our government intermixed with lots of posts wishing everyone a happy 4th of July. The dissonance of it bounced around in my head for a while and – when I was on my walk with Amy and Brooks the Wonder Dog – I finally asked Amy a few questions to calibrate my reaction to some of the stuff I had read this morning.

For example, in the “you’ve got to be fucking kidding me category”, the U.S. Postal Service Is Logging All Mail for Law Enforcement. I don’t send physical mail anymore (except for the occasional post card to a friend or thank you letter) so I’m not sure I care, but then I realized all my post cards were probably being scanned into a computer somewhere and I shouldn’t be writing messages like “The NSA Is Spying On You” on my postcards (or on blog posts, for that matter.)

Then there was this awesome, long post on TechDirt by Rob Hager titled Snowden’s Constitution vs Obama’s Constitution. It does an outstanding job of explaining the Snowden situation in the context of the Fourth Amendment and the concept of reasonableness. And there are some great hidden gems in the article, such as the notion that Hong Kong is rated above the US for “rule of law” and “fairness of its judiciary system.” Oops.

“By international standards, the US and its judiciary rank below Hong Kong on a 2012-13 rule of law index . While American propagandists routinely imply that the US system is a paragon against which all others must be measured, in fact, objectively, Hong Kong ranks #8 and #9 respectively on absence of corruption and quality of its criminal justice system, well ahead of the US’s #18 and #26 rankings . The World Economic Forum – which certainly suffers no anti-US or general anti-plutocrat biases — ranks Hong Kong #12 in its 2012-13 index on judicial independence. That is substantially higher than the appallingly low US ranking of #38 on the same index, which is proportionately not that far ahead of China’s #66 ranking. If due process was his priority, Snowden was clearly no fool in choosing sanctuary in Hong Kong, though he is aware of the coercive and corrupting power that the US can and does bring to bear on virtually any country. Though China is better situated than most to resist such pressure, it appears that even China preferred not to pay the cost. Or perhaps his security could not guaranteed as effectively in Hong Kong as in Moscow, for the time being.”

Then there was the semi-expected self-referential “what is a journalist” articles such as Snowden’s leaks force media self-examination and Jeff Jarvis’ There are no journalists. I love Jeff Jarvis.

“Journalism is not content. It is not a noun . It need not be a profession or an industry. It is not the province of a guild. It is not a scarcity to be controlled. It no longer happens in newsrooms. It is no longer confined to narrative form.

So then what the hell is journalism?

It is a service. It is a service whose end, again, is an informed public. For my entrepreneurial journalism students, I give them a broad umbrella of a definition: Journalism helps communities organize their knowledge so they can better organize themselves.”

After our walk Amy sent me another article about the Fourth Amendent - If PRISM Is Good Policy, Why Stop With Terrorism? that included additional applications of PRISM to child pornography, speeding, and illegal downloads.

Then I noticed my friends at Cheezburger supporting the latest Internet Defense League Standing Up for The Fourth Amendment campaign, which as a member of the Internet Defense League, I also support.

After all of this, I was able to convince Amy to go to see White House Down with me this afternoon. I love going to afternoon movies, and it’s awesome to live in a country that not only shows a movie like this, but allows it to get made!

Happy 4th of July. For all of its flaws, America is an amazing and resilient country and I’m proud to be an American.

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