It's The Execution That Matters, Not The Idea

from the ideas-without-execution... dept

For years we've tried to explain the difference between ideas and execution, and how lots of people have ideas (in fact, many have the same ideas entirely independently), but without good execution, those ideas aren't really worth much at all. This point comes up a lot in the debates we have over the patent system -- with patent system supporters often overvaluing the idea part, and grossly underestimating the importance of execution. Often this is because they've never built a real business, and don't realize how little an initial idea plays into the final product. The two are often oceans apart. But stopping others from executing well (or forcing them to fork over a ton of money) just because they executed well where you did not? That doesn't seem like encouraging innovation or promoting progress at all.

DSchneider points us to an excellent recent Jeff Attwood post about the differences between the idea and the execution. It's well worth reading as it covers a bunch of different things, including a common refrain made against those who successfully execute: that they were only able to do so because they were "well-connected." As he notes, being well connected may get you an initial head start, but if you can't execute well, no one will come back. The idea, alone, is almost meaningless.

Attwood highlights this by pointing to a recent letter to a mailing list from one of the guys who started a crowdfunding operation called Fundable a while back, which failed miserably (and very spectacularly in public, with an open letter posted to its website laying out all the dirty laundry). There were all sorts of problems with the execution, which the guy even admits:

Yes, Fundable had some technical and customer service problems. That's because we had no money to revise it. I had plans to scrap the entire CMS and start from scratch with a new design. We were just so burned out that motivation was hard to come by. What was the point if we weren't making enough money to live on after 4 years?

The "technical and customer service problems" underplayed how significant some of those problems were. And yet... now that other crowdfunding platforms are getting attention, such as Kickstarter, this guy is crazy upset that they "stole his idea."

I feel that this story is important to tell you because Kickstarter.com copied us. I tried for 4 years to get people to take Fundable seriously, traveling across the country, even giving a presentation to FBFund, Facebook's fund to stimulate development of new apps. It was a series of rejections for 4 years. I really felt that I presented myself professionally in every business situation and I dressed appropriately and practiced my presentations. That was not enough. The idiots wanted us to show them charts with massive profits and widespread public acceptance so that they didn't have to take any risks....

I cannot tell you how painful it is to watch 5 assholes take your idea and run with it and not even give you credit. I hate all 5 of them for that. If I see them, I may punch each one of them in the face. If you have never started your own company and then had someone else steal the credit for what you worked hard to develop, you don't understand.

Now, I have started my own company, and I've had lots of other people either come up with the same idea separately, or even blatantly decide to do something similar to various aspects of our business. So I do know how it feels. And, certainly when you first hear about it, it may be annoying, but it's really just a challenge. I'll be honest, there are times when others have done a better job executing on ideas than I have in the past, and in the end you either compete, or you tip your hat and move on. Competition breeds innovation and better execution since you know you need to do more. And that means not screwing up your technology and customer service and not lashing out and blaming others when someone else executes better.

And, the thing is, given what we write about, and all the business model examples we've see over the years, we're pretty damn familiar with many of the players in the whole "crowdfunding space." There have been lots of players who have come and gone, and there are at least a dozen players in the space today. And it's not because they all "took" the idea from this guy, but because lots of people recognized that it's an idea that makes sense. Kickstarter is certainly getting a ton of press these days, but that's mostly because of some top notch execution on its part.

Filed Under: crowdfunding, execution, ideas

The Questionable Line Between Crowdfunding And An Illegal Securities Offer; The Pabst Brewing Case Study

from the this-won't-last dept

We're certainly among those interested in various "crowdfunding" options out there for various business models, but the ones that seem to work are situations where people are buying something specific for their money, rather than buying "ownership" in a product or company. Once you're trying to sell ownership, you're basically offering equity, and I would imagine that's a huge no-no to the folks at the SEC who very, very, very carefully regulate any sort of equity offer. Mark Glaser points us to the fact that two ad agencies, upon hearing that the Pabst Brewing Company was up for sale decided to set up a website called Buy A Beer Company, with the goal of getting people to pledge a bunch of money that could be used to buy Pabst.

The website has the typical "tiered" options that we've seen from other crowdfunding offers (though, what you get at each level isn't clearly explained). I'm assuming that this is something of a PR stunt by those ad firms, but I'm wondering if they may run into some serious legal problems pretty quickly. They're basically offering unregistered securities in another company without having gone through any of the rather strict legal process required to make any sort of investment offer of this nature. Even if it is just a joke, it seems like the kind of joke that could end up with people in court.

Filed Under: crowdfunding, offers, securities
Companies: pabst brewing

Video Game Tries Tiered Crowdfunding Model

from the becoming-popular dept

These days, doing "crowdfunding" of music has become so commonplace that it's hardly worth mentioning any more, but it's still a bit new in other content realms. Reader Pat points us to the news that a new video game, Grim Dawn, is trying to fund itself with this kind of model. The game is a "spiritual successor" to Titan Quest, and has three tiers of support from $20 to $48. Basically, the more you pay, the earlier access you get to the game (alpha or beta stage). I'd be curious to see how well it works, but I'm not sure it really offers that much excitement. I could see big fans of the game really wanting to get in on the alpha, but I wonder if it's enough to really fund the game.

Filed Under: crowdfunding, grim dawn, tiers, titan quest, video games

How The Constraints Of 'Traditional Journalism' Sometimes Lead To A Missed Opportunity To Better Inform

from the experiments-in-breaking-out-of-the-box dept

Recently, a NY Times article about the giant patch of floating garbage in the ocean got some attention, not so much for the contents of the article, but because it was the first time the NY Times had worked with Spot.us to fund some journalism. If you're not familiar with Spot.us, it's an innovative non-profit startup, that helps "crowdfund" certain journalism projects. I'm not convinced it's a great business model, but it is one that's interesting to watch, and a partnership with the NY Times is definitely a big win for the organization.

However, I think Mathew Ingram really highlighted the most interesting thing about the whole project. While the NY Times article that came from Spot.us was somewhat mundane and didn't add much to the half a dozen or so other articles that have been written about the garbage patch, the blog written by the reporter who did this project, Lindsey Hoshaw, was a lot more interesting and compelling than the NY Times article itself. But the blog wasn't a part of the NY Times at all.

What Mathew was really showing was how some traditional publications get locked into a certain way of doing things because "this is how we do things." And in that world "the article" is the ultimate goal. It's a "deliverable." The process and the journey seem less important -- even though they're quite often the most interesting parts, to a wider community that wants to feel more and more a part of the journalism process itself. The NY Times is pretty good about doing certain topic blogs, and even brought in the Freakonomics blog under its own brand, a while back. But Mathew makes a really good point that this sort of thing probably would have worked better if the entire blog was seen as a part of the NY Times process. It could have ended with a big "story" -- or not. It's not even clear that's needed here. In the end, the real point is that the old structures don't always make sense. And while it was already a big step for the NY Times to create this story using such a new and different process as Spot.us, the end result might have been even better if they'd gone even further and highlighted the journey of the story, rather than just the endpoint.

Filed Under: articles, blogs, business models, crowdfunding, garbage patch, journalism
Companies: ny times, spot.us

Firebowls, Copyright And Crowdfunding (Oh My)

from the will-people-understand-the-nuances? dept

A bunch of people have been sending in John T. Unger's story, claiming that someone who copied his artwork is now suing him in federal court over copyrights. The general sentiment from the submitters, it seems, is to support Unger's position. I avoided writing about this for a while, because the story is actually a lot more complex, and since I think Unger is going too far, I thought it might upset some folks. Plus, the story is pretty complex. Thankfully, the good folks over at Consumerist actually really did an excellent job laying out a pretty balanced look at the issues that doesn't automatically side with Unger.

Here's the summary of the situation:

• Unger makes "firebowls" -- decorative metal bowls that you light a fire in (I had no idea such things existed).
• He copyrighted the design of his firebowls.
• He then discovered that Rick Wittrig was making firebowls that look remarkably similar, but are a bit cheaper.
• Unger got angry and sent a cease-and-desist
• Wittrig filed a lawsuit to claim that Unger's registered copyrights are not legitimate, as there shouldn't be any copyright on utilitarian objects.
• Unger writes up his side of the story (small artist being ripped off!) and asks people to fund his legal defense using popular crowdfunding site Kickstarter

As Consumerist notes, it's easy to quickly side with Unger without understanding the full story, saying that he's an artist who got "ripped off," but that's not at all clear. Yes, it does seem pretty likely that Wittrig copied Unger's designs (they match quite closely and at no point does Wittrig deny copying the designs). But it is a pretty big question as to whether or not Unger's work really is covered by copyright (or should be). Now this whole story is the type of thing that people often bring up when I write about why copyright isn't needed. This -- they say -- is a perfect example where copyright is necessary. Unger is mad because this other guy is "ripping him off" and passing off Unger's designs as his own. Except, again, that's not clear at all. Copyright was designed as an incentive to create -- not a system to block all competition. In the fashion world, as we've noted repeatedly, knockoffs are quite common, and have helped the industry thrive. It actually helps make the brand name originators of the design worth more, because people want the "real" original kind.

So, without copyright, what can Unger do? Well, he's actually already doing it. He put up a site that points out that Wittrig copies him, get lots of attention for it, and a lot more people now know about these kinds of decorative firebowls. My guess is that Unger is suddenly selling a lot more than he was before -- and that'll be true whether or not Wittrig gets the copyrights tossed out. And, in the meantime, having Wittrig around as competition should be good for Unger, pushing him to continue innovating and coming up with new designs.

Separately, I have to admit to some fascination over the use of Kickstarter's crowdfunding platform to fund a "legal defense" rather than just as a way to sell products. Even if I don't think Unger should have much of a legal argument, I think it's a cool use of the platform, which also drives more interest and attention to his own bowls.

So, in the end, I think Wittrig should be free to make these firebowls and to sell them in the marketplace and compete with Unger. At the same time, though, I think Unger should be free to draw lots of attention to his own firebowls combined with the sympathy-inducing story of how he originated the designs that Wittrig copied. In the end, then, they'd both be better off, as it ends up getting both of them a lot more attention for the bowls, and those who feel sympathy for Unger, or who just want to support the "original" artist, will pay up for his versions of the bowls, whereas those who would rather save some money will pay Wittrig. In the end, both of them end up being better off, and no copyright battle needs to happen. Unfortunately, in an age where so many content creators have been taught to use copyright as a crutch, that's not what we get.

Filed Under: competition, copyright, creativity, crowdfunding, firebowls, john unger, rick wittrig

Getting People To Pay For Investigative Reporting Directly

from the well,-there's-one-idea dept

When old school journalists complain about the supposed "threats" from companies like Craigslist and Google or things like blogging, one of the common refrains is: "but who will pay for investigative reporting." The idea is that these other services can replace the basic news facts, but it's tough to see how true investigative reporting will get funded. Yet, as with all markets in a state of flux, we've seen that if there's a real demand, new business models will come along to handle it -- and that seems to be exactly what is happening in the investigative reporting realm. The NY Times points out a few different experiments in other forms of funding investigative reporting, with the bulk of the story talking about getting interested parties to pay up front for an investigation. In other words, if there is a concerned group of folks worried about, say, dangerous chemicals leaking into the drinking water, it could put that story up, and if enough people contribute to the investigation, a reporter can get paid and do the investigation.

While there are some concerns that this would lead to biased journalism, there's nothing saying that the journalist's results have to support the initial worry. In fact, I would imagine that in cases where folks are worried about things like chemicals in the drinking water, they'd be much more relieved to find out that it's really nothing. Either way, this model fits exactly with the business models we've discussed in the past: getting people to pay for the creation of content. The creation of new content is a scarce good, and there may be some group of people for whom its worth paying for. In this case, the example fits the business model we describe for content after it's created as well, since the organization doing these investigative reports will then offer them to newspapers for free (so long as they don't want an exclusive right -- which would not be free). That's exactly how it should be: it costs money for the initial creation, but then the content is freed, where it adds much more value (and attracts more people to fund later stories). Who knows if this particular effort will work (execution is everything, after all), but the model is sound, and shows that despite gloomy whining from old school reporters, the new business models will show up.

Filed Under: business models, crowdfunding, economics, investigative reporting, journalism