Subject: So... Re: offering pre-purchases
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Sun, 21 Oct 2007 16:55:50 +0900

Thomas Lord writes:
 > It's true that I'm trying to leverage a unique position but false
 > that I am against IP in any form.  I use trade secrets all the
 > time, for example.  I don't happen to think it is sustainable or
 > smart to hoard server-side apps in the style of today's web 2.0
 > company's, but there's a lot of nuance to the arguments there when
 > they are fully presented.

I wrote "capitalize", not "leverage", because I mean "turn it into an
asset separately tradeable in the market".  And trade secrets are not
IP.  They have some similar properties (including being protected by
law in certain ways), but to make sense in this context IP needs to be
protected even if made public.  Techniques embodied in distributed
software cannot be protected by trade secrets.

 > If I'm following you two correctly: in the software lifecyle, you
 > can "split up" and reaggregate the risk of buying more than one in
 > some smart ways.

No, that's what you and Don Marti are implicitly claiming in different
ways.  What I'm saying is that an alternative plausible hypothesis
about the behavior of VCs in software markets is that it is in fact
not possible to split up the risk.  Ie, a VC can only swallow projects
whole.  The VC can sell shares, and thus securitize the risk in that
way.  However, at the level of "what VCs do", somebody has to spend a
big chunk of time managing the funded project, much more than
diversified investors can do.  (I repeat, this is an hypothesis.)

 > VCs right now rely almost entirely on nepotism to find deals.  My
 > claim is that they can build markets that will reliably produce
 > deals -- but they actually need to help make those markets.

By which you mean they should be subsidizing you and anybody who looks
like you, right?  Maybe ....