Three Things I Learned On The Internet This Morning

1) Ron Wyden put a hold on Protect IP (Ars Technica) – I blogged about Protect IP a week or so ago. Ron Wyden is my favorite Senator for many reasons, this included. He said:

I understand and agree with the goal of the legislation, to protect intellectual property and combat commerce in counterfeit goods, but I am not willing to muzzle speech and stifle innovation and economic growth to achieve this objective.

Right on Ron. I am totally with you on this.

2) Investors are hanging out on Kickstarter looking for deals (Matter Anti-matter) – The graFighters project to create an "online fighting game" failed pretty badly. But some angel investors found the project on Kickstarter (a USV portfolio company), contacted the team, and invested $200k of seed capital. Awesome.

3) Crafters who are sick and tired of Urban Outfitters and Anthropologie ripping off their designs staged an online protest and got a particularly offending design taken down (myaimistrue) – Our portfolio companies Tumblr, Twitter, and Etsy played a part in this story. This has been going on for years in the Etsy community and it is good to see that crafters are fighting back.


Comments (Archived):

  1. Peter Sullivan

    I think there is starting to be a fine line in terms of where Kickstarter is going and where its original mindset was. I am starting to see more and more projects that could potentially be seen as companies or products rather then projects. I think both are incredible but I feel that the real success stories (Hall of Fame) category seems to come from product driven ideas rather then the artistic ones the company was founded on. People simply want cool stuff. Its basically become a way for people to pre-order these products and let the people build them without having the capital needed upfront. We used to do the same as a fraternity and would sell tickets to the party before hand, to be able to fund the party. Same concept. Time for a shameless plug. We decided to do a spinoff of the intro video we wanted to create when our site launches. We really wanted one of those emotional videos that shows the human tie to the product like the ones airbnb and twitter are successful at producing. Our investors weren’t keen on using the capital we raised to produce a video that seemed more like an art project then product development.Check it out here and help us get the project off the ground. We also integrated the LaunchRock API to crowdcast the project which we think was pretty unique.  Anyways this is the type of thing I would love the see the platform continue to be used for.

  2. maxniederhofer

    Re the Urban Outfitters story, Regretsy has a slightly different take:…

    1. leigh

      lol i just posted that too 🙂

      1. maxniederhofer

        Hivemind at work, I’d say 🙂

    2. Peter Sullivan

      Very interesting and true, ideas get recycled over and over again….

    3. andyidsinga

      just read the regretsy post – thanks – very good points raised.

    4. Robert Thuston

      Always good to get the whole story, and sometimes it comes in pieces and with a lot of gray.  Whether rip off or not, what twitter is enabling people to do is a great thing… to be heardIt’s inspiring to think that with a little work in building value based relationships on twitter (Amber noted 1000) that anyone can be heard… It’s very democratic to think about, and….we don’t all have to have 170,000 followers like Fred ; )

  3. leigh

    the power of the network (whether that be angry consumers – angry citizens at politicians etc.) are the check and balance system of the net.  Legislation and more government mostly helps thought this was an interesting post via @mathewi:twitter this morning on the other side of the Urban Outfitters debate.  It doesn’t negate the protest (clearly UO has done this a lot and crafters coming together is the bigger story) but also puts into context the complexity of the issues when it comes to IP…

    1. fredwilson

      yup. and that’s why Protect IP is such a bad idea. we need due process in disputes like this

  4. falicon

    #2 on that list is beyond awesome to hear/learn about…thanks for sharing it!

  5. Dave W Baldwin Defending Innovation and Net Neutrality at eG8 [Video]Thanks for the update Fred.  The above is a good read on the international side of things. I guess to go with my opine re the revolution comes from within, we need to encourage the revolution from within in the government…

  6. randomlobster

    The third story is especially touching. But let me play the devil’s advocate. People may start believing that things are by default more fair because of the internet. But the same factors that would have affected such a story being caught by the traditional media (in absence of twitter et. al) are in play even here, though a bit differently. It could be timing, influence or the message- like for the game developers in the second story. And they may not get lucky. TL;DR: Internet may seem more fair than it is.

  7. andyidsinga

    wow very cool in number #3 how artists are calling bullshit they should. Blatently ripping off someone elses art and design is …uhhhhhhgggg.a couple months ago i heard a thing on NPR talking about how copying fashion designs is *actually allowed*!!!?? in the U.S. so this morning i dug around and found this post at freakonomics discussing the topic …very interesting arguments ..artists in fashion have to get into this debate

  8. Patrick Dugan

    graFighter sounds fascinating and I am glad to hear they got 10x their original funding goal. Now that I think of it, I would peobably want to invest in game projects based on their Kickstarter appeal. I recently funded a young man Kickstarter project, he is doing some work with cellular automata for a procedurally genrated game – I would strongly consider hiring him for a commercial project.Out of your whole portfolio, which reads like a who’s who of successful start-ups in the past 5 years, Kickstarter continues to impress me the most. A bubbling of indie-vation continues to create.a lot of value not just through the projects, but by bringing rising talent and industry to a meeting point.

    1. fredwilson

      my tweet reply to Om a few days ago!/fredw…

      1. Patrick Dugan

        Glad we’re on the same page in that regard. Perhaps access to some meta-level metrics for a fee, sort of the LinkedIn model, would be the way for Kstarter to scale their revenues. If I were a recruiter in the game’s space, that’s what I would want to use instead of LinkedIn, and the same may correlate for other highly specialized fields. 

        1. fredwilson

          their revenue model is working great already

          1. Patrick Dugan

            Sure with 5% take on the sum of projects that average in the 5 to 15 thousand dollar range, they’re making a chunky three digits per successful funding off of a pool of thousands of projects per year. Off the Kickstarter blog:Kickstarter 2010 Statistics:Total Successfully Funded Projects: 3,910Total Dollars Pledged: $27,638,318Total Pledges: 386,373Total Rewards Selected: 322,526Total Pageviews: 50,234,521Total Visits: 15,766,248Total Visitors: 8,294,183…At 5% of 27.63mm I’m imagining a team of 22 in Manhattan is roughly breaking even. They’d need to scale the quantity of successful projects in order to achieve the kind of operating margins that successful consumer internet companies tend to attain. The problem is that what makes the product, these successful projects, so worthwhile is also what makes them fundamentally scarce.Expanding internationally will probably triple the quantity of projects while lowering the average raise from ~$7000 to maybe half, for a net gain equaling a roughly 150% increase to revenue. You could also continue to percolate within North America and grow at a low double-digit CAGR.I agree that they’re on the right track, but I think they can get at least marginal revenues out of a smaller number of people who have exponentially more dollars behind them and want to put those dollars to work employing or investing in people doing projects on Kickstarter. An additional 5% revenue right now might make a close to 5% impact on operating margins, if my math is anywhere near an accurate model of the company’s balance sheet. I hope this is helpful and my back of the napkin cartoon of the company’s finances is not seen as impetuous.

          2. fredwilson

            i’m not going to comment specifically on your math but they are doing betterthan you think

  9. Bill Clark

    #2 is a great story. It just shows how startups will benefit when the SEC relaxes the regulations for crowdfunding. I wrote a post on Mashable about it:…I expect that Kickstarter will benefit and figure out a way to offer equity for some of their projects and more will get funded because the incentives are greater.In the meantime investors can also sign up at where investors can already make an equity investment in a startup online. $1,000 – $10,000.

  10. peter

    Aren’t points 1 and 3 inconsistent positions?

    1. David Semeria

      This should be fun…

    2. Charlie Crystle

      I think –and I’m just guessing–that Fred’s IP ethic is that innovation should be rewarded, but only through active use it. Patent trolls do not actively use and improve on IP. Somewhere in there there’s a system that could work–use it or lose it. 

      1. peter

        Okay, but Urban Outfitters and Anthropologie are engaged in active use. So, not sure that your point is valid.

        1. Charlie Crystle

          they don’t own the IP.  my point might not be valid anyway.

        2. Dave W Baldwin

          @charliecrystle:disqus is right due to there is a use/lose.  In the case of jewelry per @twitter-21585434:disqus the state outline with a heart grooved out is not something you can patent.  IMHO, the Truche looks better than UO.  So the customer chooses due to artistry.  You have to develop image related to artistry and if you pegged your ‘millions’ on one design… forget it.Truche could move to humor and groove out “X’s” on the Texas pendent.  Since Truche doesn’t own the tune, UO could do a sloppy copy and market.Just the way it goes.  Otherwise design something that can’t be copied and you’ll always be ahead.

    3. fredwilson

      i don’t think so. everyone understands and is in favor of protection for the creator’s innovations. the question is what is the right approach to do that. heavy handed approaches like turning off urban outfitter’s payments systems or DNS is, as Ron Wyden put it last year, “seems almost like a bunker buster cluster bomb when really what you need is a precision-guided missile”

  11. Sasha Chh

    Regarding #3, I think this is something you should read, sure, there are plenty of cases of etsy artists being ripped off, but this one is actually bullshit:

    1. fredwilson

      that’s a great link to add to the discussion. and it points out why ron wyden’s point of view on item #1 is so important. we need “due process” in disputes like this. 

  12. dchen05

    Thanks for the graFighters shout out Fred. The power of Kickstarter is really incredible.

    1. fredwilson

      hi dave, i assume you are behind graFighters. i’d love to learn more about what you are building

  13. paramendra

    Ron Wyden put it nice. Thank God for democracy. 

  14. ShanaC

    Doesn’t number 2 speak to something about artists needing to learn to scale up somehow?

  15. Joseph Flaherty

    I know you usually write posts that encapsulate one big idea or provide a perspective on a burning issue of the day, but this quick hit annotated link list is pretty cool. It would be neat if you made this a regular feature. Kind of fits in with the “looking over the shoulder” idea.

    1. fredwilson

      i’ve done this before. it’s a fun way to write a post. i should do it more often

  16. Steve Poland

    GraFighters- go syracuse!

  17. Katie Covington

    Solve hard problems and don’t stop evolving. Thoughts on IP in tech vs. jewelry design from a jewelry designer:

  18. apartmentsdirect

    I recently funded a young man Kickstarter project, he is doing some work with cellular automata for a procedurally genrated gameProperty for Sale

  19. Derek Francisco

    @fredwilson:disqus Sorry I’m a little late to the party, but do you see the graFighters story of startups getting funded from outside investors becoming a trend?It’s good to see another Syracuse U/Syracuse Tech Garden company make good after made a bit of a splash at LAUNCH Conference.

  20. Prokofy

    Putting holds on legislation is not a device you want to foster, Fred, even when it works in your favour. At least now it’s not possible to put anonymous holds on and we know Ron Wyden is doing this. Sen. Leahy’s bill is a good compromise that addresses your concerns but really has specific actions to stop counterfeting and pirate sites. Wyden is babbling about how he’d like to do that but not addressing specific language and merely blocking others who have put in perfectly adequate language.And it’s not a cluster bomb when it is a brief sequestering to get the company to stop a violation — after all, they are causing enormous losses in the creators they’ve copied.Say, does your condemnation of the DNS extend to Anonymous attacks or do you find them “innovative” and “daring”? Are you an investor in Canvas?You should just confess that you are for liberating all property, Fred, and be done with it.I