Month: June 2010

Here we are in the early days of summer.

Lots of things come to mind each summer. It’s a time when we spend a lot of time outdoors as a family. Our weekends are beyond crazy. Every summer we get to see friends from out of town and we have a few vacations planned. Our firm makes a number of new investments all year long and the summer is no different. I love this time of year. 

But there is one other thing that always comes to mind each summer for me – especially since we moved back to Boston. 

In the summer of 1992, I was living Boston. I decided one day that I was going to leave Boston and move to San Francisco. I fell for this girl and who lived there and decided that is where i wanted to be. Little did I know I would spend the next 10 years there and marry her too :) 

So that summer, I packed everything I owned into my hatchback, took out my life savings (about $3,000 and stuffed it into my backpack) and started driving west. It felt in many ways like I was jumping off a cliff and didn’t know where or how I was going to land. At one point along my journey, I left my backpack and all of my money in a restaurant and drove another 80 miles or so before I realized I left it behind. I drove back to the place at the speed of light and fortunately it was still there. I felt like an idiot and but was so thankful at the same time. More than once along that drive I wondered if I was doing the “right thing” but turning around wasn’t something I considered. The voice inside said, get to San Francisco.

Since then I’ve jumped off a cliff several times. Sometimes it worked and sometimes it didn’t. But all in all I’m glad for the entire set of experiences.

I think this is something that’s important to keep in mind when you think about joining a startup. Who knows how it’s going to turn out. It’s high risk but the ride and opportunity is everything. 

Last week Eric Freidman from Foursquare reblogged my roller coaster video and wrote:

In case anyone is wondering, this is exactly what its like to work at a startup.

That’s exactly right. Startups are never easy and never predictable. It requires a leap of faith and an inner voice that says: aw hell, I’m gonna try this and give it my all even though you have no idea how it’s going to turn out

Sometimes you just gotta go for it. And that’s what I think about every time summer comes around. 

Garden City. 

Last week I took a few days off to get out of town with my family. And I pretty much stayed in vacation mode throughout the weekend.

But the YouTube/Viacom decision has been in my mind since last week. As many of you know by now, Viacom had sued YouTube for copyright infringement. YouTube believed they were protected under safe harbor under DMCA. 

The judge in this case stated DMCA works well:

The present case shows that the D.M.C.A. notification regime works efficiently: when Viacom over a period of months accumulated some 100,000 videos and then sent a mass take-down notice on February 2, 2007, by the next business day YouTube had removed virtually all of them,” Judge Stanton wrote.

That is huge and I was so pleased that the court supported YouTube in this lawsuit. 

I’m not a lawyer but to sue Veoh or Youtube to me is like suing Comcast because there is a small percentage of illegal activity taking place over email throughout their broadband network. Or like suing your phone company because someone uses the telephone to do something illegal.

Here’s the bad part: Viacom said it would appeal.

Why is this bad? It’s expensive for any company, even Google to keep defending themselves in court. But at least Google has the resources to defend itself. Startups don’t have this capability and big companies often use litigation as a competitive strategy.

I’ve seen this first hand a number of times and it feels awful. When our portfolio company Veoh was sued by UMG, the court continuously sided with Veoh but UMG kept appealing and that was deadly. 

We need a new legal system where small companies get a higher level of protection from large companies that use legal saber rattling and litigation as a weapon. Getting back your legal fees isn’t sufficient. Maybe it’s a higher penalty if the plaintiff’s case doesn’t hold up or a faster/more efficient motion to dismiss process when it’s a startup. I don’t know.

But I do know the current system needs to be fixed.

* * *

this issue of legal “bullying” is another reason why I’m concerned about our patent system. Bigger companies can apply for thousands of patents a year or pay millions to become a member of Nathan Myrvold’s patent farm which has a huge stockpile of cash and patents. It’s an unfair fight. Patent lawsuits are another common way for big companies to bully startups in the courts.