Samsung Wins By Apple's Win

With so much news about Samsung infringing on Apple, people became aware they must be very similar. And they looked.  And then bought.

The sales spike suggested that Samsung actually benefit from the news of the lawsuit verdict, Daniel Ruby, director of online marketing at Localytics, noted in a blog post.

"The deluge of post-litigation press coverage both drove general attention to Samsung and suggested that Samsung devices are similar enough to iPhones to be an option for many consumers," he said.

Samsung can't lose for winning.  Check it out.



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Segway and Patent Fail

As noted yesterday, there is a correlation between patents and failure.  A key to a patent is to be the inventor (although this was recently muddied by the new patent laws.)  Suffering under the delusion that there may be some correlation between a patent and success, people cripple their hearts and minds and creativity in pursuit of what empirically truly fails.  Worse yet, they exercise their creativity subject to a violence-based system, which has a soul-corroding effect that is not noticed among those suffering form this self-inflicted wound.

Yet they go on.

Secrecy is key to a patent, and so we have non-disclosure agreements, non-compete agreements and so on, a topic that Bodrin and Levine cover well in their book.  Where courts enforce such agreements, as on the East Coast, creativity dies.  Where courts tend not to enforce such agreements, as on the West Coast, creativity flourishes.  This is why in spite of IBM, Wang, Digital Equipment all being East Coast, the computer revolution took place on the West Coast, mostly because of ignorant East Coast judges, and the childish executives who turn every business problem into a legal problem.



Secrecy is death in business.

Comes an article on the infamous Segway, a product that was going to change the world, we were all told.  It didn't.  It was a scooter with wheels in a new configuration.  That's it.  Didn't work in the rain so good.  But dozens of people, years of development, millions of dollars, massive secrecy.  And poof.  Just like about 6, 999,101 of the 7,000,000 products for which patents were issued since 1789 in USA. People don't learn because they want to believe they too can be successful with a monopoly backed by state violence.  They may not actually articulate it, but one does have to assent to the misanthropic premise of "intellectual property rights" to become corrupted, and once that happens, in for a dime, in for a dollar.

The article promises four reasons Segway failed, but for the life of me, I can find only three in the article: secrecy, hype and failure to design to market.  Secrecy and failure to design to market are two sides of the same coin. By hyping a secret idea that served no customers, as usual, the results were a disaster.  The article does not make the correct point: Open, incremental, continuous customer-centric R&D is the path to success.

Segway was sold to an English millionaire, who had high hopes of turning it into a military vehicle, going for the big bucks, the war bucks.  He was trying out a new rugged version on his estate when he scooted over a cliff and died in the fall.  I am not making this up.

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How Rail Subsidies Kill Small Business

This fellow has a fine thesis, and that is the subsidized rails allowed those who concentrated production to crush the small local business.

Existing problems of excess energy consumption, pollution, big-box stores, the car culture, and suburban sprawl result from the “massive political pressure” that has already been applied, over the past several decades, to “redesign our cities, our farming, and our lives.” The root of all the problems Monbiot finds so objectionable is State intervention in the marketplace.

Just so.

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USA Freedom and Libraries

Fresh from claiming victory in WWII,  in 1959 the USA brashly built a new Eero Saarinen design Embassy in London.  The architecture was controversial, but it made a statement: the USA is open, transparent and generous.

On the ground floor there was little if any security. You could see into the offices from the street, and the main floor was dedicated to a free and open library.

Here is the newest one, in Bagdad.



China just donated a library to Tanzania.  USA just pledged $45 million to rebels in Syria.   We are so far off track!


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Why Progressives Need Capitalism

I am told if I do not vote for Obama I am voting for Romney.

The logic is one less vote for Obama makes Romney's win all the more likely.

Four years ago I had a friend importune me over voting for Ron Paul: "If I did not vote for Obama, it was a vote for McCain."

OK... does this mean if I do not vote for Romney, it is a vote for Obama?

Because I most certainly am not voting for Romney, so a vote not for Romney must be a vote for Obama if a vote not for Obama is a vote for Romney.

Anyway, if one spends too much time being told what to think then brain begins to retain only silly ideas.

The error is the false dilemma, your only choices are Romney or Obama.  Nonsense, you are free to vote for whomever.  Usually when I see who is on the ballot I find myself begging for intercession "Jesus, Mary & Joseph!" This gives me the idea:  I write in Jesus, Mary and Joseph.  That way I am not throwing away my vote.

In the disastrous 1992 elections, Bush v Clinton, Ross Perot made a run and denied warmonger Bush a second term.  Clinton was sworn into office and began immediately implementing Ross Perot's plans (ending welfare as we know it) so Clinton could get re-elected by winning the Perot vote.  With Clinton we got little war, budget surpluses as far as the eye could see, relative peace and prosperity and a popular President.   It wasn't the people who voted for Clinton that gave us that, it was the people who voted for Perot.

But the progressives depend on the false dilemma, because the progressives depend on capitalism.  Progressivism has no economic component in its world view, it is simple redistributionism. Live and let live, let the devil take the hindmost, but mulct the front most as much as possible to fund progressive agenda.

Capitalism generates fantastic sums quickly, on credit, some of which can be peeled of to pay a sinecure to keep the progressives happy.  The progressives imagine a halo on the head as the deposit a check in the bank from the capitalists.

It does not really matter to progressives if Obama or Romney wins, they will continue to get their swag.    The only real threat is a Ron Paul of Ross Perot who might force some cutback on the swag stream.

I wish there was a third party that I could vote for and replay the economic success of the 90s.  No such option.  I know when I see the ballot again this year and see who is running, I'll be voting  Jesus, Mary and Joseph.  I do not want to throw my vote away.

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Kickstarter and Taxes

Any money you get the IRS considers income, and taxable. If people make donations to you to fund a project, then it is likely the IRS will view it as taxable income.

I wonder if the people who have raised tens or hundreds of thousands have thought of this, and have set aside money to pay the taxes.  I wonder if the donors know this, and how they feel.  It will be interesting to watch.

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A Question on IPR

Anonymous asks:

John, In the comments section of the website, I found an interesting point raised by a user. What do you do when you invested into a research project that took 4 years, 20 people, and millions of dollars? Hand out all your results to your competitors so they can clone your work and sell it? But then, won't they have an advantage since they invested nothing into the project and are now millions of dollars ahead of you? Could this be an exception for patents? In a free society, could this be one of these situations in which you keep your results secret WITHOUT preventing others from discovering and eventually using your secret? Oh, I included the employee # because I couldn't believe my eyes how an open source company could make so much money to pay all these people. You should also check out the following disturbing news: MakerBot, a leader manufacturer of open source 3D printers whose founders were always encouraging open source, has decided to CLOSE source its new 3D printer on 431 Unpatented Products

There are no exceptions to the rejection of patents.  In essence patents are a violence-based regime, and there is no way to fix that flaw.

Hypotheticals are difficult, I prefer to deal with a real case in which someone took 4 years, 20 people and spent millions of dollars on a project.  But I understand that the problem you pose never occurs in the real world, so we must work with a hypothetical.  I'll answer the question as it is:

1.  Why hand the designs out?  Offer them for sale for $100 million dollars or fifty cents or whatever.  Or not.  What does it matter what someone else does with their own means of production?  You might make some money helping the competitors getting up to speed, but why hand them out?

2.  If the copy cat proposes to offer some lower cost version, then it is not the same thing.

A. the developer sees customers prefer a lower cost version.  The developer can
  i ignore the lower cost market
  ii exploit the newly discovered lower cost market.

B. If the copy cat proposes to go head to head for the same customers at the same price, why would your customers prefer to deal with a copycat, and not the entity that designed and created the project?  How come, in the above scenario, is the developer so odious to the customers?

How is the person who has not put a dime in R&D millions of dollars ahead?  The work of marketing and production and logistics still has to be done, which requires additional dollars.  Where will they come from?  Do you expect financiers to invest the next 5 million with a copy cat instead of with the developer?  Does that sound smart?  R&D is sunk cost.  You make moneys selling things. Not designing them.  That is why design can be farmed out.

Why did someone spend four years and millions of dollars and 20 people?  Design innovation is marginal.  See Apple. Why are the people in this hypothetical not spending 3 months and $100,000 and 20 people to make more iterations better market tested?

Properly managed, a business directs R&D at customer needs.  So after 4 years, millions of dollars and 20 people, directly integrated with the needs of customers, someone else can walk in and take the business away from those who developed the item?  With no knowledge or experience?

This is grounded in the false impression that genius produces in a vacuum and the whole wolrd breathlessly welcomes the great ideas developed in secret.  Nonsense.  Great ideas are developed in consultation with customers, the customers are are very unlikely to go to a 3rd party with no experience to purchase the new idea.  The whole scenario is absurd.

Why are you surprised that an open sourced company with so many employees can make money.  Almost everything ever sold is open sourced.  Food, clothes, house, oil, the wheel, almost everything.  The IPR stuff is where we get less, worse, more expensive and slow.

Without checking, I imagine maker bot decided to close source as a condition of more financing.  That would be going way of capitalistic "grounded-in-violence" system.  We love a system that makes money for us, and everyone has a price.  But it is wrong to keep others from using their creativity to work with customers will to work with them.

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All Hail Sparkfun.com!

My post on bringing down the evil empire of "intellectual property rights" occasioned a comment which led me to a delightful retail site, called sparkfun.com.

The comments were as follows:

I forgot to mention, that company (Sparkfun) was created in 2003, and it now has 143 employees, 75 million dollars of sales, 600,000 customers and makes 431 unpatented products. on Patent Assault Starts Thursday Publish | Delete | Spam	Anonymous	at 5:55 AM
	John, I found a very nice blog post for introducing your students to the idea of competing without patents: http://www.sparkfun.com/news/963 The comments are also nice. on Patent Assault Starts Thursday

We are entering a phase of slow destruction in our economy.  It was unsustainable, and now it is over, except for the going hungry part.  That is later.  But what I see is retailers that are working on a more anarchic, cooperative structure are doing fine, like REI and PCC.

Things are changing.  An economy that borrows credit from the Chinese, obliging the Chinese to work harder to support our system,  in order that we may have a system in which pay too much for snake oil masquerading as medicine and then "giving it away for 'free'" is unsustainable.  Especially when the Chinese must forgo goods and services themselves as we go ever deeper in debt for "free" stuff.    Now we all love a system that works for us, and so far, for about 94% of the USA voters, this is a great idea.  But what cannot go on will eventually stop.

And that is just medicine.  This is not only the "free-cell phone" Obama supporters, but the welfare queens at Boeing who are Romney supporters. Or the NFL welfare queens who play their games in taxpayer-provided stadiums. It's the same for the other industries that need unregulation: banking, medicine, transportation, education, etc.

Romney promises to name China as a currency manipulator as his first act his first day in office.  So, blame the Chinese for extremely stupid USA policy?   Sheesh.  I wonder how that will work out.

If you are starting up a retail business, and it is a good time to do so, think of the structure in which your owners are your customers.  It sounds like an internal contradiction, as sparkfun.com says:

We like to think that we exist in the same group as our customers - curious students, engineers, prototypers, and hobbyists who love to create.

Right, and the people who own PCC are its customers, and the people who own REI are its customers.

I am forming Seattle Teachers' College where the owner are the customers.  When conceiving of your business, try tho reflect along these lines and see if you do not set a stronger base from which to grow.

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431 Unpatented Products

I am still delighted with sparkfun.com, especially this comment:

I forgot to mention, that company (Sparkfun) was created in 2003, and it now has 143 employees, 75 million dollars of sales, 600,000 customers and makes 431 unpatented products. 

When I was growing up, business people always bragged how many people they had working for them - "I have 2500 employees"  "I manage a 3000 employee division."  As USA policy precipitated outsourcing for tax avoidance and money laundering reasons, never for cheap labor, we heard less and less of this, to where no one says it now.

If it is selling and it is unpatented, that means you know how to market.  If it is selling, and it is patented, it means you know to use state violence to enforce a monopoly.  The latter would be shameful.

Almost none of the over 7 million patents issued by the USPTO ever turns into a product.  Did you know that?  And almost nothing patented that turns into a product is ever profitable.  Did you know that?  If there is any correlation at all, it is patents = failure.

Maybe we'll begin to hear from people how many unpatented products they sell.  Now there is a measure of success!

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