Sunday, May 26, 2013; 5:55:20 PM Eastern
Kickstarter for VCs
Listening to the latest Planet Money gave me an idea. They went to Kickstarter to give their fans a way to fund public radio in a fun way, by buying a t-shirt. They used this event as a way to program a few shows where they examined the economics of t-shirts, and since it's Planet Money it was hugely interesting. I love their show. And they raised an astounding amount of money. $590,807.- I thought that the way they did it might work for raising money from tech investors and successful entrepreneurs to fund the development of new open formats and protocols.
- My work generates open formats and protocols, because unlike most other entrepreneurs, I have a philosophy of no lock-in for users. This makes me more vulnerable to predatory competition, and it usually it comes from VC-backed companies. It's hard for me to compete with them not only because they have more money (lots) but they also have the halo that comes from VC investment. There was a time when money from Kleiner Perkins was a huge lift for a startup and they're still a powerful ally, but now Union Square and Spark Capital are even more influential.
- I've talked with the principal guys at these funds about changing the way they invest. Let's add a premium to investments that add to the open ecosystem instead of just consuming, but so far none of them have been willing to go for it. So it falls to me to do it for them. I'm not aware of other companies that do this, if there are any please send me an email.
- I think it's a good idea for investors to put back, so that when this cycle winds down, as it inevitably will, there are some new open formats and protocols to build on. If you depend on me to do it, the results won't be as good as they should be.
- Now, we could go to Kickstarter and ask end-users to fund development of open formats and protocols, and it might work -- it did for the Diaspora guys. But I suspect they were more investing in their anti-Facebook message, or their youthfu optimism (some might say naivete). I won't make my work anti-anything (except lock-in which isn't a thing really, it's more of a practice) and as you know I lost my peach fuzz a long time ago. ;-)
- I think successful VCs and entrepreneurs should invest. I think they should kick back into the ecosystem that made them rich. I'll recuse myself from any investments such a Kickstarter might make, in fact I'll put money in along-side them. Let's give all new companies an incentive to give freedom of choice to their users, right from the start.
- Look at it this way -- when you get good service at a restaurant, you don't have to leave a tip. But you do anyway, because it's the right thing to do. Same thing here. Open formats make people rich. Those people should give back to create more open formats for themselves the next group of investors, entrepreneurs and users.