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The Innovators' Ball
Babylon Rocker writes "Latest Cringely: The Innovators' Ball: Why Business Isn't as Fun as it Used to be.
'Sharp business is cheating and not getting caught.'"
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If I can beg a little impartiality from the Slashdot editors, must every story include a dig at me or my company?
Yes, Microsoft is an innovator and I don't think that is good. I'd have to disagree that microsoft is an innovator. What has microsoft done? 1. Created the first OS? Far from it. Not much of an innovation. 2. Created the first GUI? Also not true, the Apple Lisa was the first true GUI. 3. Created easy PnP? Definitley not right, OS/2, Amiga, Linux, and a slew of other OS's had PnP support. And to be fair, Windows 95 wasn't really Plug'n'Play. Microsoft's innovations are limited to trying something someone else does, and hoping it works.
And why did you staple the trout to the RAM?
It's not just the few like Enron that get onto the front pages, it's all the other businesses that it never quite seems to be worth anyone's while to bust (but damn well should be!) There are several extremely obvious examples in IT (cough*MS*cough*SCO*cough), to the extent that reading /. or any of the techy press it's hard not to see most of the industry as riddled with corruption, and I'm sure the same is true in other areas of business.
The thing is, I bet there are a lot of cases where one or two bad guys not necessarily right at the top can turn a whole company crooked (or at least semi-crooked) just because everyone else is too apathetic - or frightened - to shop them.
Of course, when the crooks really are at the top then it really sucks.
"'I pass the test,' she said. 'I will diminish, and go into the West, and remain Galadriel.'"
- JRR Tolkien.
Most inventions were based on some innovation or the other - the IC was an innovative usage of the transistor, the microwave an innovative usage of UV, etc.
As Newton opined "If I have seen further, it is because I was standing on the shoulders of giants" I've created/invented software that I'm proud of and others might term innovation - what's so wrong with innovation anyway?
No. Sharp business is 'cheating' while following the letter of the law. What he is describing is 'Sharp Criminal Conduct' which some business people and many politicians engage in. When the politicians engage in 'Sharp Criminal Conduct' they make it easier for those engaging in 'sharp business' to do really foul things without actually breaking any laws. It's a subtle, but important difference and worth remembering next time you vote.
Decent article, but regarding this part:
We've gone from following the rules to playing the odds.
And if we do follow the rules and don't play the odds, then we are figured to be suckers.
Speak for yourself. Some of us just keep doing the right thing as best we can, no matter what everyone else is doing. We usually come out better in the long run.
everything in moderation
Read the article and started to wonder if Cringley was having a bad day. For every business he's mentioned, there are several who are doing well and doing it cleanly.
.. just an observation.
Companies like Google, Berthshire Hathaway and others come to mind as good counter examples of what Cringley calls "gone from following the rules to playing the odds".
A sligh positive note in that article would have helped. Oh well
My father is a very moral man, who taught me early on that winning isn't the point in life. In fact, if "winning" is your only goal, you will never win.
He would tell me stories, like the time he quit his high school water polo team after the coach encouraged his team to elbow the opposing team whenever the ref looked away.
My father's tech company was stolen away from him in the same way as in this artical. He and several friends created a start up, and within a few years, all were shut out of the company, and the investors walked away with the prefered stock.
Companies like Microsoft practice an odd form of amorality and defend it as good business practice. It might be sound business practice, but there is nothing good about it.
Admittedly, in any capitalist society there is a dog-eat-dog quality to business, but is there really the need to specifically crush upstart companies, play fast and loose with public standards to kill competition, and other such underhanded techniques that are only good for your company, but bad for everyone else.
In the end, I think most people who were raised with a firm and grounded set of morals appriciate that there is such a thing as good business practices. I try my best to stay abrest of those companies that follow them and only give them my business. It's hard sometimes, but in the end, it might be the only way some businesses can be made to behave.
My term is 'gaming the system'. When you exploit loopholes and bend rules, you defeat the purpose and intent of a system, thus ensuring that even if you believe the system in theory should work as intended, it won't.
Some people assume if you end up with the desired goal of the system (wealth), than it has served its purpose. In reality, the system was devised not so an individual can become rich, but rather so we have a set of rules in which to facilitate improving our standard of living without resorting to social friction and unfair (subjective, I realize) treatment of others.
All the market tactics, advertising ploys, and accounting/legalese rule bendings seem to weaken the role of merit in capitalism. And I know what constitutes 'merit' is subjective, but I'd rather not give merit to those creative and smart enough to figure out how to bend rules in their favour without being caught.
"Old man yells at systemd"
What's happened is that the implementor (Joe Shmoe, lets say) has been confused with the inventor.
Few people invent radically new devices. As the cliche goes, the cell phone was invented in 1954, and yet putting a camera on a cellphone, two existing inventions together is called 'innovation'. Yeah, a cell phone with a camera was something new, but so was the first zipper painted blue! Lots of things are 'new', but only because they are simply the result of the millions of ways of combining all the technology we have. Something *truely* new, not just a recombination of things that have already existed, or an existing technology in a different shape, size, color, etc, comes along far less often than the patent office records or brochure claims of corperations will have you believe.
"Old man yells at systemd"
My recommendation is to raise money from people who already know or trust to some degree whenever possible, and ALWAYS, I repeat, ALWAYS, worry about control. Control is often times far more important than who has how many shares. Shares can very often end up worthless at the end of life of a business venture, if it is liquidated, or M&Aed away, or basically has any end-game other than an IPO, unless your shares are all on a level basis (this is a nice thing about flat LLC memberships and S Corporations as business entities, though that's certainly not necessary).
Just remember that you have to make sure that all your contracts and legal structure reinforce your power and control, and it's often better to give up some extra equity in exchange for this. Be careful who you trust. And never make yourself unnecessary before you have your exit strategy well on its way to execution.
In the US at least, shady inventors have a long tradition dating back to Thomas Edison, whose patent trickery and idea-stealing is somewhat legendary (he even invented the electric chair to make the competing A/C current look dangerous).
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Now this is a bit ridiculous. Business is a game where the winners turn a profit- which is to say, sell things for more than they are "worth," where "worth" is what these things actually cost to produce. Thus, business is not nice and never has been- hence Jesus with the money-changers, prohibition against usury, Medieval Jewish banking, anti-semitism, Shakespeare, Dickens, Marx, Steinbeck... the list goes on, defining massive areas of history, especially in the Christian world.
Cringely wants no part of that sleaze. He's a geek and a PBS writer instead.
For a while, it looked like people could be geeky and ethical while still turning a profit. This was a temporary illusion caused by a populace that had a religious awe of geeks, caused mostly by FUD, and was willing to overpay even those geeks who didn't really turn the screws. The middle managers who forked over millions of dollars (which THEY had scammed from others) for their own electronic replacements were not making headlines during the late nineties, but there were more of them than there were techie nouveau riche.
So. Every geek, and indeed every human, must ask him or herself whether to try to profit by bringing misfortune to others, or whether to embrace poverty, in the unlikely hopes that that will make the world a better place. I don't have an answer to that for myself, let alone for everybody, but claiming that the sky is falling just because the tech bubble burst months ago is worthy only of ridicule. It is good for anyone, even slashdotters, to be reminded of these Big Questions; but all in all, I think Cringely and most of the rest of this crowd are in way over their heads.
Will Warner geocities.com/wtw0308
The point of the article was that innovation was a corporate metaphor for playing politics, cheating and stealing, and invention was just invention. He said that Microsoft was an innovator, not an inventor.
This is my sig.
I maybe stretching things, but I think part of the problem is with collective decision making itself. We tend to think that if everything is done democratically, we'll get the best results. So when a company is divided up amoung shareholders, as long as they get to vote, or have representatives to vote for them, we expect things to work out fine.
Unfortunately, it's been proven, under a few resonable assumptions, that there exists no fair voting system. This was proven by the economist Kenneth Arrow who won the Nobel prize for his work. A short discussion is here.
So what ever system of democratic decision-making you might create, it has fundamental weaknesses that are exploitable by the unscrupulous.
The only way to stay out of trouble is to find other ways of raising capital.
nothing beats the happy fun ball
mirror...
Cringley builds the foundation of his entire article on a person who got screwed and was left with nothing. Yet, there is no attribution. It would seem to me this is a person who would want light shone on his plight and the evil doers who did him in.
By not providing attribution, Cringley deprives us of getting both sides of the story. That's why many news organizations frown on anonymous sources except when absolutely necessary.
I realized a long time ago that no one I ever knew who was involved in a car accident was at fault. Like here, I only got one side of the story.
Have I made my point?
Business isn't fun for inventors and creative people because it is impossible for a creative person to bring an idea to production within a bureaucracy.
This is because we allow office politics to completely absorb every single moment of every single day in "corporate" businesses.
There is absolutely no concern for a quality product or a truthful discussion of the right and wrong ways to build something in the cubicles. It's who can fuck who over so they can keep their job while simultaneously destroying someone else's career. It's who can point out the most failures. It's who can foster the most suspicion and doubt about their colleagues' competency that succeeds in the never-ending schedule of meetings.
And nobody ever talks about it. Nobody ever squarely points out the enormous amount of time and money that is wasted, man-hour to man-hour, by people building spectacular layers of redundancy to cover every possible and several impossible failure possibilities while attempting to answer the unanswerable questions posed by middle management.
These are the same people by the way, who insist on everyone being a "team player." Of course, that only applies when these people are the quarterback, not the left tackle.
Want to know where the largest source of waste in business is today? This is it: office politics. People working against each other instead of working as part of a team which actively encourages people to grow and succeed. It's a disgrace and it shouldn't be allowed to continue.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
"But sharp business is something different, it is playing the game of business so close to the boundary of good faith and legality that it is hard to tell where that boundary is or if there even is such a boundary. "
This is also sometimes refered to as a Coup de Jarnac. Jarnac won a dual against Francois de Vivonne in 1547. Jarnac got to pick the weapon, and instead of one, he picked several fo that Francois wouldn't know which one. Jarnac also knew that Francois was famous for a particular move when he fought that would expose his hamstring. So, Jarnac just played the dual to a draw until Francois exposed himself, and then he cut his hamstrings and Francois bled to death.
While technically within the rules, it was considered dirty, and hense Coup de Jarnac is a term that can be used to describe this.
So ends your history lesson for today.
Lawrence Lessig is my personal hero.
I don't know about you, but I read /. for the discussions, not the articles. If a bad article inspires great discussion, who cares about the article?
(-1, offtopic)
Condemnant quod non intellegunt.
This is the modern buisiness environment.
... themselves.
.
If you're a programmer, engineer, or even a doctor, you're just worker. You don't matter except as an "overhead" figure.
The people that do matter don't actually produce anything, the lawyers and the CEO's, they try to see how little they can pay the "overhead" while still meeting various buisiness benchmarks(production, PE ratios, etc). Then they give the lionshare of profit to
They enroll employee's in HMO's that are cheap so they can give that money as bonus to themselves for increasing the company's profits
They play fast and loose with the company savings funds and give themselves a share of that for being "innovative".
Even if it bankrupts the saving fund. The bonus still stands.
More and more the american worker is just dirt that's tilled for whatever it can produce. And it's given the same consideration as dirt. Buisiness leaders paint Unions as greedy for wanting raises that keep pace with inflation, health care benefits that can be actually used, and decent working conditions.
All while these same leaders tear the buisiness apart trying to squeeze everything they can personally take from it.(how many times do we see the CEO that led a company into Chapter 11 getting million dollar bonuses or golden parachutes as a reward for their sterling effort)
And they've made the laws and rules dealing with buisiness so convoluted that only someone who's never learned ANYTHING but buisiness can hope not to be screwed. There's nothing corporations love more than screwing over the neophyte who thinks just because they created something they should make money from it. (this story, Spiderman the movie, Forrest Gump)
Why does this happen? Because big buisiness makes all the rules, if the rules say they can't win, they have them changed. Or they just ignore them and "settle" if it goes bad, with a mandatory non-disclosure agreement of course.
MPAA, RIAA are on a war against illegal profitless file trading. Why is it illegal? Because they had the laws changed to MAKE it illegal. We sit through sanctimonius ads about "doing the right thing" and respecting the artists, the actors, and the industry workers.
While at the same time those corporations "settle without admitting wrong doing" illegal price fixing on music CD's, and they're telling the creator of Spiderman and the writor of Forrest Gump that the movies didn't make a profit so they, the creators, get NOTHING.
But they insist everyone else be ethical about respecting IP laws that THEY wrote.
This is how America works these days! It's not about whether or not it's legal, it's whether or not someone will press charges/sue/etc. EULA is oppressive, rude, annoying, and possibly illegal? That doesnt matter until it gets to court. DMCA is bad and unconstitutional? Even though lawmakers know this, it still has to be proven in court.
I worked for a debt collection company for a while. They would threaten and harass and threaten more, but they would never take a case to court unless 1) the person had reasonable credit, 2) they had an income, and (this is the big one) 3) the debt had to be over $3000! There was a little flexibility there, but basically if you owe $2000 and don't pay it, all you have to do is wait seven years.
Obviously that example is pretty specific, but "barely legal" tactics are everywhere. I would guess that it's even worse in big companies... But cheating is a way of life. You may not be cheating, but you are probably being cheated by someone somewhere!
Yeah, a cell phone with a camera was something new, but so was the first zipper painted blue!
Dr Seuss, is that you?!
Forget thrust, drag, lift and weight. Airplanes fly because of money.
... because I don't think I would have clicked on an article called "The Innovator's Balls".
It all comes down to what you consider to be the reason the company is in
business. Is it to benefit the owners, the managers, the employees, the
customers, or the community in which the business resides? While there can
be more than one reason, one of those reasons must be larger than the
others.
Public companies are supposed to benefit their owners though we've seen a
lot of stockholders burned lately by companies where the managers seemed to
come out on top. Great companies are supposed to put customers first, but
will they do so at the expense of profits? And community, whether it means
my town, my country, or the environment, is usually last of all.
I have no answers, only questions.
All the best,
Bob
This signature has Super Cow Powers
Word. And Edison improved upon the incandescent lightbulb originally (maybe not the first either) developed by Thomson (iirc), but who could not get a long lifespan out of each bulb.
Marconi did not invent radio transmission either. There were several other who used it long before he did, including Nikola Tesla (amazing guy, got screwed over by lots of people. Go read "The Man Who Invented the Twentieth Century-Robert Lomas, Headline" ISBN#0-7472-7588-2 ). Marconi simply had the best press conference.
He Schutze, He Scores!
One real problem is rewarding executives for volatility, rather than profits. We need long holding periods on insider stock, maybe five years. That way, if you do a startup, you don't get to cash out for five years, by which time it's clear whether the profits are real. The holding period used to be two years; it was changed to six months in the mid-1990s. Look what happened.
Pay for volatility encourages dumb merger and acquisition activity. Most mergers turn out to be a long-term lose for the stockholders, but a short-term win for management. Management needs to be on the hook for long-term losses.
Executive pay should be set by the stockholders. Each stockholder puts on their proxy how much the CEO's total compensation should be, and the share-weighted median is used. Executive pay is up by a factor of several hundred since the 1950s, even after inflation adjustment. Third-rate CEOs of money-losing companies are making multimillion dollar salaries. Executive pay decisions should pass through the ultimate owners, who are typically people with money in pension funds.
Those two changes alone would cut out considerable dumb financial activity.
Remember Bob? Nobody else does either. Even that wasn't invented there, really.
Amusingly enough, Mrs. Bill Gates was the Project Manager (PM) on that one.
I have been similarly disadvantaged by the "sharp" practices of so-called "businessmen".
:-)
Back in 1999, I "was" 7am News, a web business that effectively established the viability of syndicating content on the Net.
I had to fight for my success along the way, fending off attempts by "big" old-school publishers who claimed that syndicating their headlines and links to their sites was a breach of copyright and who didn't understand the difference between republishing and hypertext linking.
After starting the venture in 1997, and investing 18 hours a day, 7 days a week for nearly three years, I'd built the business up to the point where 7am.com's server was dishing out the news over two million times a day and Nielsens/NetRatings ranked it ahead of the BBC's news website, Fox News, Wired.com and even Playboy.com
By 2000, 7am.com was delivering its news content through a nework of nearly a quarter-million third-party websites and was valued at US$20m-US40m (wasn't everything in those days though?).
Back in 1998 I was offered $1 million for the business by a US-based company but chose not to sell because they wanted to simply strip it for inclusion into their own product.
By 1999 I was still working 18/7 but had the help of two part-time writers who were also producing news and the service had racked up an impressive record for breaking news on the web. (Believe it or not, 7am.com was actually the first website in the world to carry the pictures beamed back from the surface of Mars by the Pathfinder mission).
Anyway, I was eventually promised the earth by a group of investors who assured me that they were not interested in simply asset-stripping the business, but were actually planning to grow it in a way that would ensure it continued to be innovative and maintain its lead in the field of syndicated news content and independent reporting.
My goal was not to become a "get rich quick" dot-com millionaire (I knew that would be a "fad") but to set myself up with a good shareholding in a company with long-term profitability.
Well do I look stupid now?
I still have around 30% of the shares in 7am.com but through some very clever "manipulation" by the investors, and a total lack of vision and willingness to accept good advice, that shareholding is effectively worthless.
Not only did they not invest in the continued growth of the company, they also hired another company (in which they had a shareholding) to provide consulting and other services which were never delivered (but they were paid for).
It appears very much to me as if 7am.com became a company that was used to raise a bundle of cash that could then be shifted into another company that was really their darling-child. The conflict of interest wasn't disclosed until after the contracts were signed and the money paid.
What's worse, they completely ignored my advice in respect to how the company should be changing and growing to maintain its dominance of the market it had created.
As a result, 7am.com, which was once the world's most widely syndicated web-based news sercice, is now a no-name website that no longer even features on the Web rankings.
Its news content is no longer fresh, exciting and different. Its offerings are tired and old, there's no innovation, no energy, no value left.
Because it's been run into the ground, the investors have lent the company huge sums of money by way of "convertible notes."
This means that if the do manage to sell the company as a going-concern, they can convert those loans into shares and thus effectively dilute my shares to near-nothing. If however, they sell the company's assets, then they simply use the money to repay the notes (plus interest) -- effectively leaving nothing for the shareholders but an empty shell.
Whatever happens, it's not so much the loss of money and long-term income that hurts, it's the fact that a really terrific ser
Cringely leaves things hanging in his article; it's mostly a rant about "oh no, big tech companies become evil for their own survival." Lots of companies in lots of industries become evil for their own survival. It's known as part of an "economic moat" - once you're the leader, you want to stay ahead forever, so you do whatever you can to acheave that goal.
/. keep saying that all that's being done is a great game of catch-up with Microsoft, it is becoming a visible possibility that MS will be caught-up with.
Depending on your business, the answer may or may not involve crushing your rivals. A company like Johnson & Johnson, with most of its revenue coming from drug patents(in addition to the other diverse health care needs like shampoo and whatnot), is going to stay ahead by getting new patents through R&D. A company like Wal-Mart, on the other hand, cannot win on the quality of its retail operations alone, since there will always be specialized businesses that can beat the "superstore" concept for price, quality, or service in any one area. So it runs the competition out of town by losing money on a store for some time, and then enjoys the advantages of monopoly by overpricing and using the money to continue its expansion.
So why is tech a business where the most successful companies have to work like Wal-Mart?
In tech, unlike with pharmecuticals, the comparative lack of patenting makes it extremely difficult to maintain the moat. In effect, anything new quickly turns into a "commodity item," especially with software ideas. And products are hard to sell to consumers through the qualities of efficency, stability or security. This encourages almost all software for the end-user to be fairly bloated and unwieldy, because the alterative is to let the competition have more features and look better. And in turn, everyone has to re-invent the wheel for their own product; very wasteful and costly. This encourages evil strategies.
This is also why open-source has had great success - the amount of specialized training and materials needed for a software project to succeed is quite small; one talented programmer and his computer will often do. In addition, successive projects build on the old ones, so even if people on
In turn, it may happen that the business of software will actually shrink, replacing the old closed-source model with an open-source one. Development funding and jobs would then come from service-oriented enterprises and public entities, instead of companies solely focused on having the dominant product in their field.
In other tech industries it's slightly less clear, since they tend to deal with projects requiring a fairly large materials and infrastructure investment. They do not face the problem of easily being challenged by an small upstart. Thus their business strategy is likely to be less dirty and more benefical in a social sense. Their major problem is not one of retaining a dominant product that can be revised - it is of bringing out a new dominant product with each new business cycle. Since their competition usually can't be seen until it clobbers them at retail, dirty tactics are much harder to enact. For example, 3d cards - each generation has brought a slightly different competitive mix, with winners of one cycle suddenly disappearing in the next, though recently it seems to have settled between ATI and Nvidia.
If I were Cringely, I'd be pretty pissed at the world too.
"A worthy cause has never been harmed by the truth" - Gandhi
This is very true, believing something does not make it true, ignoring it does not make it go away, and fighting is never futile. If only Cringerly had the guts to fight for his convictions we'd be better off. Cringerly is wrong when he proclaims:
My readers, ... are many of them still debating in their minds whether software can even be patented. Whether it can be patented or not, in the U.S., it IS patented, and expecting that some contrary decision will be shortly made and the planets rearranged in space is just folly. This is the difference between cynicism and realism.
How bizzare for Cringerly to understand how M$ works and then recomend resignation. Software is pantented because asswipe companies like M$ made enough people believe that it was good. The only way to reverse this is to continue to understand and tell other why it's bad. How can someone understand that patent and copyright abuse are the means by which inventors are screwed by "innovators" or "sharp business", and not fight such abuse? Propaganda can and is defeated by reality. Understanding that something is wrong and not speaking out or acting is not "realism" or "cynicism" it's cowardice. Shame on you, Mr. Cringerly, for understanding the problem, anouncing it, resigning yourself to suffer and recomending for others to do the same. Knowledge, conviction and an audience have the power to change.
When laws are bad and permit immoral beahvior, people suffer regardless of how happy you tell them they are. Reasonable laws leave people free to act as they will, so long as they don't harm others. Unreasonable laws block the actions of others for the benefit of a few who seek such "protection". Restrictions are something people understand and feel, even when the activity restricted is something they don't ordinarily do.
Friends don't help friends install M$ junk.
"Nye poyman, nye vorr". In English: "Not caught, not a thief". This is pretty much the core principle of Russian 'business' these days. Funny how much we have in common with those communist pigdogs these days isn't it.