Innovation Works Better, Faster With Openness, Not Lock-In
from the don't-fear-the-openness dept
Dave Winer has a short, but important post discussing how a new round of entrepreneurs (and VCs) are too focused on locking in users, rather than making use of open standards.They worry that, if they provide open access to the data their systems accumulate, no one will come to their website, therefore no one will be able to enjoy their lock-in, thereby justifying their multi-million dollar valuations. Why should we care? Problem isn't that they're young, the problem is they have a too-thin value-add to support the kind of investment they've taken on.Going for proprietary solutions that lock users in is a short-term strategy from a company afraid of its own ability to innovate. Those who actually know they can continue to innovate long term don't need to worry about locking people in, because people will want to stay. Furthermore, by keeping things open, you enable a wider ecosystem to grow up around things, providing even more value (much of it you don't have to build yourself). It's the same old story around open access, open source and other similar concepts. It's protectionism vs. free markets. It's copyright vs. creative commons. Openness breeds innovations and creativity -- and that's fearful for those who don't think they can compete. They need barriers, hurdles and tollbooths to try to keep people from leaving. It's short term thinking.
Since VCs are now investing in news startups, they are really testing the value of lock-in. I wonder how many of the new crop of VCs understand how this has shaken out in the past. I remember when RSS was just getting started, there were all kinds of fancy content management APIs, some were even in the process of being standardized. They all very quickly evaporated when RSS took hold. The difference between a four-screen spec and a bookshelf. Because you need all that complexity to hide all the lock-in. There was no place for lock-in in RSS. It was too obvious how it worked.
Winer blames venture capitalists for this line of thinking:
I think the VCs do a disservice to young technologists. When I was young, I would have said no thanks to lock-in. I'm not going to be so dishonest as to create tools that offer users no choice. I want to win because my stuff is deep and powerful and performs fantastically and has the features users want. Why? I chose my profession because I love what I do. There are lots of ways to make money. I'm not looking for scams and shortcuts.To be fair, I don't think all venture capitalists push for lock-in. There are many who do, but there are also many who recognize the value of openness and what it means for the long term and building truly sustainable businesses.
We'll see what happens. The long term is a bitch, and it has a tendency to plow under get-rich-quick schemes and I know you think it's idealistic but evolution only builds on open formats and protocols. That's how technology layers. It's true some patents hold, and some lock-in gets built on. Look at PDF for example. But there's a reason HTML took us places PDF never could. The ability of anyone to do anything they wanted to, without having their API key revoked. That's a big enabler of creativity, to use terminology VCs understand.To some extent, I think this goes back to the pernicious myth of the "sustainable competitive advantage." This is a line you hear all too often from venture capitalists, and as I've said for over a decade, it's misleading in the extreme. Really successful businesses have a series of fleeting competitive advantages. The idea of a "sustainable competitive advantage" is a recipe for stagnation and resting on your laurels rather than ongoing innovation. Recognizing that a competitive advantage is always fleeting and competitors are always working hard to catch up is a recipe for continuous innovation and improvement.
It's the same thing with lock-in vs. openness. Building for lock-in leads to stagnation and resting on one's laurels. You got them in, and then you just look to set up tollbooths. Building on top of openness allows you to continue to innovate and to better serve the people who love your services and it keeps them there because they're happy, not because it's too difficult to leave. Proprietary solutions and lock-in can and do work in the short term, but it's a dangerous long-term solution that often leads to less innovation. Building on openness creates greater opportunity, greater innovation and better overall solutions.
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Filed Under: dave winer, innovation, lockin, openness, proprietary
Reader Comments
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What long term?
So? Isn't a quick buck what it's all about?
/s
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four-screen spec?
Maybe I'm being dense, but what the heck does that mean?
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Re: four-screen spec?
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Control Issues
He thought I was nuts because it was just not the way things were done. A few years later google came around, and their primary business model was designed to act as a resource and get people to leave their site as quickly as possible. Yet again we see that people's control issues override the goal of providing better products and attract more customers.
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Like disable the back button?
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This is a battle I've fought my whole career
I'm very happy to be able to point to that in arguments, because people usually understand money. However, the real reason that I fight to avoid lock-in is philosophical, and Winer hit that nail on the head when he said "I'm not going to be so dishonest as to create tools that offer users no choice."
Because, in the end, that's what I think lock-in is: dishonest. When I see other products, in any field, doing the same thing then I think of the companies that produce those products as dishonest.
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Re: This is a battle I've fought my whole career
Or even worse, the part you want from a supplier is a OEM only part. I have seen specific NSK bearings that cannot be purchased as replacements, they are only available from the OEM at either extraordinary expensive prices or you have to purchase an entire unit. In this case, a number of bearings in a gearbox needed replacing, the only way to do so was to purchase a $15,000 gearbox.
A local gearing manufacturer was willing to build the bearings to the specific sizes for a few hundred dollars.
David Oliver Graeme Samuel Offenbach
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Re: Re: This is a battle I've fought my whole career
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Re: Re: Re: This is a battle I've fought my whole career
My problem is when they build machines and devices in which they use non-standard parts where they could have just as easily used a standard part - bolts, nuts, screws, bearings, replacement blades, wheels, etc. Thin in and of itself means that they no longer require such a large inventory of spare parts. This inventory is a cost that they have to bear for at least a period of time. If standard parts are used, that is a cost they can forgo and hence a possible increase in profit margin.
David Oliver Graeme Samuel Offenbach
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Re: This is a battle I've fought my whole career
Besides, open is a necessary (but not sufficient) requirement for security...which, I hope, is on folks' radar in ways that perhaps it wasn't two years ago.
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Re: Re: This is a battle I've fought my whole career
Although this is demonstrably true, you might be surprised at the number of people who believe just the opposite.
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Re: Re: Re: This is a battle I've fought my whole career
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The lock-in `investors' are more like the record labels: blindly throwing lots of money at lots of options to break even quickly, without knowing what makes a winner. Not what Tech needs, nor what true VCs should want.
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If I want to make money I will
Once that company's sold (if it does) and the non-compete has expired, and I'm rich enough to not care about 'making' any more money, I'll contribute anything I can to the open standards open-source equivalent.
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Re: If I want to make money I will
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