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So your company engages in sales practices that would be foolish without IP. That doesn't prove it is the only way to sell, or that it true for all fields. For

So your company engages in sales practices that would be foolish without IP. That doesn't prove it is the only way to sell, or that it true for all fields. For that matter, why are the big fish able to continually have so much margin in the first place except for patents? Microsoft has made how many billions over control of a narrow programming layer to run other tasks in a loop that's been covered in sophomore year of college since at least the 80s? Competition should destroy their advantages once the market gets so big and mature. Instead such companies capture a market while it's still small, then pivot from hiring engineers to hiring lawyers. Seems to me that certain industries like software are able to have so much startups and innovation because the legal system is just less effective at capturing and crippling them, despite heroic efforts.

jariel 6y ago
"then pivot from hiring engineers to hiring lawyers." MS keeps it's monopoly via market power, generally not IP protections (though partly). MS is large enough vis-a-vis fragmented hardware vendors and distribution networks that it can do play all sorts of hardball. It has deeply entrenched sales channels in to the corporate world. Most significantly, it's a platform which means huge switching costs - and - it can use that platform as leverage into other spaces i.e. desktop software. Take a moment to contemplate out how Coke and Pepsi (ostensibly commodities) can dominate their channels in a supposedly free market - it's a little bit similar. Google's monopoly in search can be leveraged into all sorts of other areas. IP laws are beneficial for 'either side' and of course they are abused willy nilly, but by and large, they are beneficial to a lot of small companies. Weirdly, even Open Source is helped by IP laws - by 'turning them upside down' using 'copyleft', they wrestle the IP laws into their favour, as the means to 'protect' Open Source, if you will. We are so wrapped up in software - consider physical things. Often, they have very long development cycles, very expensive. Also - huge operating capital requirements and capex as well. (Why do you think there are so few YC hardware companies?). Also - distribution networks are locked up and very different from software where it's almost direct. It would be almost impossible to make a hardware company without IP protections, because those with market power would instantly commoditize the competition. Many other businesses are a little bit similar: as soon as it's not 'pure software' then you realize how fragile new companies are. For 'very new domains' (i.e. 'blue oceans') it's one thing, but most markets are not that. Once you put your 'anything but software' hat on for a bit, and see how those companies sit in the value chain, IP looks a little different. That understanding can map to software. If anything, we need better, more nuanced IP laws, not to get rid of them.
- unishark 6y ago
  > Take a moment to contemplate out how Coke and Pepsi (ostensibly commodities) can dominate their channels in a supposedly free market - it's a little bit similar. You're comparing beverage companies with a market share of 30-40 percent (or less depending how you narrowly you define competitors) to Microsoft with a market share ranging from 70-90 percent. Note microsoft was able to come from behind and succeed mostly before the days of software patents. Open source is perversely helped by IP laws because it's the only way to create an alternative that can survive. Like bitcoin being anonymous, versus e-gold which was shut down by the govt. Great except we have to wait for hobbyists and others with free time to waste before competing ideas can get implemented. As for hardware being worse than software without IP protection, well it sure is worse than software with IP protection. So I guess it'll stay consistent. Maybe the lesson is the nature of hardware is to be commoditized, so you need to put your value in the bundled software.

jariel 6y ago

"then pivot from hiring engineers to hiring lawyers." MS keeps it's monopoly via market power, generally not IP protections (though partly). MS is large enough vis-a-vis fragmented hardware vendors and distribution networks that it can do play all sorts of hardball. It has deeply entrenched sales channels in to the corporate world. Most significantly, it's a platform which means huge switching costs - and - it can use that platform as leverage into other spaces i.e. desktop software. Take a moment to contemplate out how Coke and Pepsi (ostensibly commodities) can dominate their channels in a supposedly free market - it's a little bit similar. Google's monopoly in search can be leveraged into all sorts of other areas. IP laws are beneficial for 'either side' and of course they are abused willy nilly, but by and large, they are beneficial to a lot of small companies. Weirdly, even Open Source is helped by IP laws - by 'turning them upside down' using 'copyleft', they wrestle the IP laws into their favour, as the means to 'protect' Open Source, if you will. We are so wrapped up in software - consider physical things. Often, they have very long development cycles, very expensive. Also - huge operating capital requirements and capex as well. (Why do you think there are so few YC hardware companies?). Also - distribution networks are locked up and very different from software where it's almost direct. It would be almost impossible to make a hardware company without IP protections, because those with market power would instantly commoditize the competition. Many other businesses are a little bit similar: as soon as it's not 'pure software' then you realize how fragile new companies are. For 'very new domains' (i.e. 'blue oceans') it's one thing, but most markets are not that. Once you put your 'anything but software' hat on for a bit, and see how those companies sit in the value chain, IP looks a little different. That understanding can map to software. If anything, we need better, more nuanced IP laws, not to get rid of them.

unishark 6y ago
> Take a moment to contemplate out how Coke and Pepsi (ostensibly commodities) can dominate their channels in a supposedly free market - it's a little bit similar. You're comparing beverage companies with a market share of 30-40 percent (or less depending how you narrowly you define competitors) to Microsoft with a market share ranging from 70-90 percent. Note microsoft was able to come from behind and succeed mostly before the days of software patents. Open source is perversely helped by IP laws because it's the only way to create an alternative that can survive. Like bitcoin being anonymous, versus e-gold which was shut down by the govt. Great except we have to wait for hobbyists and others with free time to waste before competing ideas can get implemented. As for hardware being worse than software without IP protection, well it sure is worse than software with IP protection. So I guess it'll stay consistent. Maybe the lesson is the nature of hardware is to be commoditized, so you need to put your value in the bundled software.