Subject: Re: small worlds and better than ransom
From: "Stephen J. Turnbull" <>
Date: Sat, 06 Oct 2007 14:32:56 +0900

Thomas Lord writes:

 > NSF and similar programs work well for some things and
 > quite poorly for others.   I'd rather not digress into an analysis
 > of NSF if it isn't important.

You made a blanket statement that "you're not selling R&D, you're
selling past work", and I'm simply pointing out that that model seems
to work well for certain areas of speculative R&D.  (For values of
"well" == "providing the incentives the NSF claims to want to provide"
as well as any other proposal I've seen.)

 > I do it because I'm very good at it and I'm not very good
 > at many things.

So far you haven't been terribly good at making money at it, though.
At least not proportionate to your contribution.  So why are you still
at it?

 > I do enjoy it

That's my guess. :-)

 > By one route, some people get funded through the relatively
 > dysfunctional credential-based allocation of research funds (but,
 > again, I don't mean to digress into NSF).

I used to think that.  Then I spent 18 years in a system which is a
truly dysfunctional credential-based allocation of research funds.
I'm now of the opinion that the NSF is best of breed. :-)

 > The skills needed for achieving success by either route are not the
 > same as and are not a superset of the skills needed to be inventive
 > with software.  Those funding systems are absolutely wonderful when
 > the work but there has to be a third way for when those systems
 > just get in the way.

Well, there's at least one third way: get a day job and hack as a
hobby.  OK, that's not good enough (even if it did work for Albert
Einstein).  So we need a fourth way. :-)

 > If there is a systematic way to invent new "basis sets" of
 > technology, and to reward the investors in that system with an
 > advantage in claiming value from the resulting "spans"

Traditional IP is a way to provide such an advantage, but it doesn't
encourage basis set creation as much as it creates a tragedy of the
anticommons in a basis set.  But basis sets are exactly the "ideas"
that nobody (except robber barons) wants to be patentable or
copyrightable.  So I think you're in trouble here; on the traditional
side you have a very inefficient way to encourage fundamental
research, on the more comprehensive side you have an "advantage" that
scares all right-thinking people to death (and causes Bill Gates to
drool like a two-year-old).

 > > This looks to me to have all the disadvantages of VC funding, except
 > > from the researcher's point of view (he doesn't have to give up
 > > equity).
 > Oh, it's quite different.   You're looking at it the wrong way.

I didn't say it was the same; I said the disadvantages were the same.

 > I'm suggesting that the start-up folks partially outsource
 > their brainstorming work.

I don't see where you're suggesting that (note that "outsource"
implies a contract for what gets delivered), but I'll take it as given
for now.

 > This is heretical in the valley where the paradigm is that first
 > you invent the transistor in your garage and then you become
 > chairman of a multinational corporation but, mythology aside, it
 > seems a realistic approach to driving the VC engine, to me.

Don't you know that you can only ask a riddle of an elephant once?
The elephant never forgets the answer ....  There's a reason why the
first thing the startup folks do is to make the actual inventors sign
NDA/NC agreements.

The problem that you started with is that the most inventive people
rarely are good businesspeople, or even if they were, they "should"
concentrate on inventing (a much rarer talent).  The businesspeople
then are dependent on the inventors, and that's the important thing
about IP: it's transferable from those who know how to generate the
IP, to those who know how to exploit (to use an appropriately
distasteful term) the IP.  This reduces the dependence, and thus
provides incentive for business creation.  Not an optimal outcome, but
I don't see where your scheme helps to create businesses, so (unless
I'm completely missing it), your scheme can't hold a candle to
traditional IP for this purpose.

 > If there are enough customers with conflicting goals and some
 > are paying well below what the R&D firm wants to spend
 > addressing the low-paying customer's needs then, yes, the low-paying
 > customers lose.  (But, not always:  if a lot of low-paying customers
 > all have similar needs, they can add up to a regular customer.)

True, low paying customers are most likely to lose, but software
development is uncertain, as you point out: big spenders can lose
too.  Your scheme increases uncertainty with no benefits to anyone --
except the inventor.

 > There are natural advantages to being the customer of an open
 > source R&D firm.   When a customer expresses their point of
 > view to the firm, that influences the direction of future research.
 > When the firm reports developments to a customer, that customer
 > gets a leg up on competitors at understanding the new, evolving
 > technology.

Scratch "open source" from the above, and you've said something
important.  (As a leading example, that's precisely the Ghostscript
business model.)  Leave it in, and it's merely disingenuous.

 > I guess I am saying that open source R&D is simply
 > "the business of having customers".

Again, the "business of having customers" is redundant.  You are in
business if and only if you have customers.  The question remains: how
do you attract those customers?

 > > DNA Lounge, anyone? *chortle*
 > Touche.

Yeah, but it's Jamie who's going to have a new Heidelburg-style scar
on his cheek. ;-)