Trying To Sue Someone Who Criticizes You Isn't The Best Way To Boost Your Reputation

from the apparently-the-streisand-effect-isn't-known-in-the-michigan-vc-community dept

And here we go again. Less than a year after a venture capital firm tried to sue the VC ratings site, TheFunded.com, another VC firm, EDF Ventures in Ann Arbor, Michigan, has sent a subpoena to the site to try to identify a critical commenter.

This is, of course, the exact wrong response.

First off, TheFunded doesn't keep records of who its anonymous commenters are, so the subpoena won't help much. But, much more importantly, in filing the subpoena, EDF has now broadcast to the world this anonymous review on TheFunded.com:

Worked with these people on several deals and they are to be avoided unless you are desparate. Beaus Laskey, the only honest straightforward person in the bunch, has left the firm.

That's pretty clearly the opinion of one anonymous commenter, and most readers of TheFunded.com would take it as such -- an anonymous ranting from someone who had a bad experience. Look at the listings on TheFunded.com and you'll see that almost every VC firm has a few such comments from an angry entrepreneur. People looking over the site understand that and take that into account. It's hard to see what's actually libelous about the statement, as it's pretty clearly just this guy's opinion.

But, of course, beyond drawing a LOT more attention to this one silly angry post than it ever would have received otherwise, EDF has also shown the world how it handles a little bit of criticism. If entrepreneurs didn't have a reason to avoid the firm before (even after reading the reviews on TheFunded.com), I'd imagined this thin-skinned guaranteed-to-backfire response that shows little understanding of how to respond to internet criticism will probably convince many other entrepreneurs to stay away. Which, of course, is exactly the opposite of what the firm probably wants.

Filed Under: reputation, streisand effect, subpoena, venture capital
Companies: edf ventures, thefunded

Who Can You Sue When It's Your Own Copy Protection That Hurt Your Reputation?

from the sue-everyone! dept

Video game maker Ubisoft has a rather long history of employing crappy DRM (and then even using someone else's code to crack their DRM when it caused problems for legitimate customers). However, this latest story involving a Ubisoft copy protection scheme may be the most bizarre. Chris Gruel writes in to let us know that Ubisoft is suing the CD duplicator firm it used to produce the video game Assassin's Creed, claiming that employees from that firm were responsible for the game leaking to the internet. It appears they have pretty good evidence that this did, in fact, happen (the leak was traced to an IP address controlled by an employee of the firm, and a copy of the game was found at that employee's home). So you can understand why they'd be upset about that (though, they had to realize that it would be pirated eventually).

However, here's where the story gets bizarre. Because Ubisoft was afraid that this might happen, the pre-release copy it sent to the CD duplicator included (on purpose!) a bug that would crash the game partway through. That was the copy that the employee leaked, so Ubisoft is complaining that this leak harmed their reputation, because people claimed the game was really buggy and crashed. Try to keep this straight in your mind here. Ubisoft put their own (crude, yes) DRM on the game because they were afraid it would leak. The game was leaked, and the DRM acted exactly as intended, and thus Ubisoft's reputation was harmed.

It makes you shake your head in wonder.

If Ubisoft had not included this DRM, then it would apparently have less to complain about. Thus, I think the only logical conclusion is that Ubisoft should be suing itself for including such damaging DRM on its own pre-release copies of Assassin's Creed.

Filed Under: copy protection, drm, lawsuits, leaks, reputation, video games
Companies: ubisoft

Reputation Is A Scarce Good... As Metallica Is Learning

from the oops dept

On Thursday, we wrote about Metallica's latest foray online, where it's attempting to build a community around its latest music. Given Metallica's history of attacking Napster all the way back in 2000, we expected there to be some pushback, but what was really stunning was how many of the comments were from people (many of whom had been big fans of the band) still pissed off about Metallica's actions, and refusing to have anything to do with the band. We weren't the only ones to notice. Wired had a story on Metallica's efforts and discovered exactly the same thing. The vast majority of the comments were vehemently negative. Clearly, Metallica really tarnished its reputation by its actions eight years ago, and it's still paying for it.

This brings up a good point, that we've mentioned in the past in the comments, but not so clearly in a post. A person, organization, band or company's reputation is an important "scarce" good -- and once damaged, it's quite difficult (though not impossible) to rebuild the shattered goodwill. When talking about what would happen in a world without copyright, for example, people often say "but in a world without copyright, couldn't someone just copy your own creation and pretend they were their own." The answer is yes, but they do so at the risk to their own reputation. If the news comes out that the person/organization/band/whatever was taking others' works and not giving credit where it was due, that would harm their reputation. And, as Metallica is learning, a tainted reputation can have serious long-term impact.

Filed Under: metallica, reputation, scarce goods

Just Copying Someone's Technology Isn't Enough

from the much-more-going-on dept

When discussing patent related stories, people often claim that without patents, copycat companies would simply copy everything and put the original creators out of business. There are a number of reasons why this isn't true (and plenty of historical evidence that it's not true at all), but for a good example of this at work, just take a look at Google. Google is by far the dominant search engine out there, and it's only been growing. It was first to market with a quality search engine, but many studies have pointed out that Yahoo and Microsoft have both caught up (and possibly passed) Google in terms of search quality. And yet, Google keeps growing. There are plenty of reasons for this, from Google's "celebrity" (as the article implies) to Google's clean interface to people generally trusting Google more than those other providers (to date, Google has done much less to piss off most people). None of those things have anything to do with the technology alone. There's this view among patent system supporters that the technology is everything, when it's really just a component in terms of what makes a business. Copying the technology is one thing, but there are advantages to being first to market, executing well, treating customers right and building a reputation. Just copying someone's technology won't get you very far on most of those other points, and shows that focusing solely on patents as a competitive advantage is unlikely to get you very far.

Filed Under: execution, marketing, reputation, technology
Companies: google