Originally posted april 2005. With all the discussion of HP potentially leaving or selling the PC Biz, thought it would be interesting to repost this from 6 years ago

Back in the day, it was all about the desktop PC. Starting with the Altair in the 70s and accelerating with the IBM PC in 1981, the desktop PC was the focus of personal computing innovation.

Used to be all the good stuff started as an add on for the PC and found its way on to the motherboard. It was an all too predictable obsolesence curve. Remember the AST 6 Pack, Hercules Graphics Cards, 3com Network Cards, US Robotics Modems? When you bought a PC, you used to have to buy all these cards to make it get where you wanted it to go. How many slots the PC had was actually an issue because any power or corporate user expected to add features via cards. There was even a time when it seemed like a good idea to try to upgrade the CPU.

All those features migrated from seperate cards down to the motherboard. Hercules Graphics. Gone. AST. Gone. There is a long list of casualties over the years of companies who made good money for a short period of time selling products that soon would become part of the PC Motherboard.

The PC Desktop used to be a happening place. It was fun to read PC Week, PC Mag, Computer Reseller News, Infoworld and other publications that would speculate about the latest and greatest products coming to a PC near you.

Not any more. Could the PC desktop be any more boring these days? Could it be any more emblematic of a mature product?

Sure, HP, Dell, IBM, Gateway are trying to liven it up. The hard drives are bigger and faster. THere is more memory. The graphics cards can do more.The industry tried to juice the PC by coming up with afaster, better express slot on the motherboard, but next to nobody is even using it!

About the only thing even resembling anything fun is coming from Modders. Typically gamers who are putting flames on funky case designs and bumping processor speeds.The PC desktop has gotten to the point where kids turbocharge the old family PCrather than throw it away like kids used to turbocharge the old car in the garage.

The desktop is boring.

All the fun is happening with portable devices. Phones, Ipods, gaming consoles, PDAs, digital cameras, even hard drives and flash drives. All the good stuff is coming in small packages.

Remember the frustration of shopping fora PC in the 90s. Every couple months the PC would have something new and cool in it, and the price would drop. It was tough to know what to buy and whether you should do it now or wait.

That’s exactly what is happening in the portable.mobile device market. My Ipod, My Sidekick, my hard drives,my PSP, my Xboxeven my laptop all have overlapping features. Each is getting closer to each other in feature set every day.

Which means that the war for my pocket is on. Which is going to allow me to only fill one pocket rather than the 2, or 1 plus beltclip that I’m filling now.

It’s a fun time for portable.mobile devices. It’s the 80s and 90s for desktops all over again. Every timeI go into CompUSA or Best Buy to see what new stuff is on the shelves that I can play with, every phone has a new feature. Every hard drive is smaller, cheaper, faster. Every PDA has new features and software.

The implications of this transitionare huge. Particularly for the retail world. Right now most new technology is sold in big stores. Lots of room for monitors. Lots of room for desktops. But those are the stagnant products.

All the good stuff is small. All the traffic generators are small. Which means that we could see big changes in how retail stores are merchandised and in the size of future retail stores.

It won’t take much square footage to showevery possible cellphone, PDA, console, portable hard drive and attachable device. About the only”big” product that will need to be there are HDTVs.

Better yet, all of those devices, including the HDTVs are purely digital and consume and store or playback digital content. For under 20k dollars in storage (and falling in price every day),it’s feasible to store EVERY digital product and offer it for sale.

Even more interesting is the fact that we are used to buying service agreements with these devices. Our phones, our PDAs, we want phone service and more and more often, broadband service with it as well. We don’t buy them, we subscribe to them.

That can be a problem in a world where new features are appearing every 3 to 6 months, but we can’t trade out our devices for 12 to 24 months. Service Contracts will have to be more flexible, or they can impact the success of the very products and services they are trying to sell

We are enteringa golden age of features in portable devices that will far exceed the fun we had with desktop PCs. The quick rate of change in these products and how they are sold, will completelty alter both how the products are sold, and how we expect to buy them.

Finally, if you are expecting new and exciting features from your PC Desktop…forgettaboutit!

Why do we  allow our elected officials to do the same things over and over again. You know the definition of insanity ? Doing the same thing over and over expecting a different result.  We as a country are absolutely insane for thinking that another committee of politicians is going to be able to do anything different from what they have done before.

A quick history:

First we had the :

National Commission on Fiscal Responsibility and Reform in 2010.

It consisted of 18 members, all but 4 were current or former politicians. They came up with a proposal that was presented in December of 2010.  It was shot down after reminding the 23 people who read it that the economy was shitty and our future was worse . It was shot down because those same elected officials and the people who give them money  couldn’t agree on whether this particular plan gave us a roadmap on who our  economic problems should be addressed.

Then in July of 2011 as the drop dead date for the expansion of the Debt Ceiling approached, knowing our economy sucked and the future looked worse, we once again watched our politicians procrastinate, postulate,  posture and protect their election hopes rather than address our nation’s economic problems. When the deadline reached the final hour they did what all politicians of our era love to do, they pawned it off.  In this case they put it in the hands of another committee.

The Joint Select Committee on Deficit Reduction

So lets review where we are on August 17th, 2011.

In early 2010, knowing the economy sucked and the future looked cloudy because of huge federal debt and problematic tax and spending policies The President created a committee composed of 18 individuals, 14 of whom were politicians. They spent 7 months working to come up with a bi-partisan solution which was then shot down after its release on Dec 1 2010.

Eight months later knowing that the Debt Ceiling needed to be expanded and knowing the economy sucked and the future looked cloudy because of huge federal debt and problematic tax and spending policies The President created a committee composed of 12 individuals, all of whom were politicians. Its called the Joint Select Committee on Deficit Reduction.

You see what is going on here ?

We as citizens must be insane if we let politicians continue to try to solve a problem that they have demonstrated time and time again that they are unable to solve.

Which leads me to a problem that is driving me insane. I don’t know why we leave it in the hands of politicians and I don’t know what our options are to take this entire problem out of the hands of politicians.

No I’m not saying we need new politicians. Politicians are what they are, politicians. I don’t want politicians running my business or trying to solve the economic woes of this country. They got us into this mess, I don’t expect them to understand even a little bit how to get us out.

So what are our options ?

Civil Disobedience ? Can we as citizens create our own committees and present them to Congress for a vote ? Present them to our fellow citizens for a vote ?

If we can’t do the work ourselves can we stop this committee from consisting of politicians ? Can we give ourselves a voice and impact the membership ?  If it were up to me the committee would have membership requirements that said that members could not be current or former elected or appointed politicians , nor could they have donated to a politician, pac or party in the past 3 years.

The American way would be to sue someone . That is not what i want to do. Do we as citizens have any say ? Can we change the process and offer the solution ?  Can we at least force transparency ?

This is one of the biggest issues we as country will face and we are getting the exact wrong solution.

Whats a citizen to do ? Any ideas ? Suggestions ? thoughts ?

Another re-post that I thought was timely:

   Wall Street’s new lie to Main Street – Asset Allocation

Jan 24th 2011 4:18PM

The US Treasury is currently borrowing money at a Negative Real Yield. In any normal environment, if you can borrow money at a negative rate you should borrow as much as you can.  The premise is that any idiot should be able to earn a return of greater than zero with the money.  That’s a premise that should make the Democrats happy.

The problem for the Democrats is that the government hasn’t shown that they can earn a positive or even a break even return on their spending.  (Stunningly, bailouts excluded).

As the Republicans and Tea-Party will tell you, we have a spending problem.  The reality is that the problem isn’t how much we spend, it’s what we spend it on.  Our government is not very good at funding projects/investments that generate much if any return. Our government is so overhead laden that just to get the money from the Treasury to a project automatically starts it in a hole. Plus our federal government loves to hire people. That isn’t a problem in and of itself. The problem is that they over pay and let them keep their jobs forever. A basic tenet of business is that it is rarely a good idea to borrow short term funds for long term projects or employees unless you are damn sure of the returns. Our government never is.

So what to do ?

First we pick a goal. I want the goal to be employment. I want to help companies hire employees. I think the first problem to solve is creating jobs.

The Republican/ Tea-Party approach to job creation is to cut taxes. The theory being that more money in the pocket of individuals will cause people to spend more money in the economy thereby creating more jobs. Nope. Not happening. Why ? Because individuals have too much debt. Any money they get goes to pay credit cards, student loans and for the smart and fortunate into savings.

Individuals now have debt = to about 119pct of income vs historical levels  of .17pct in the 40s, 55pct in the 50s , 65pct in the 60s and a high of 133pct in 2007). It didn’t create enough jobs to have an impact and it won’t in this environment. They also think the same applied to  corporations will translate into more jobs. Nope. That is not the case. Big companies in particular are not cash poor. Whether its re-patriation of cash in foreign countries or lower tax rates, neither lead to the creation of new jobs in this economy.  It just leads to more cash in the bank.

So the Democrats are right, we should borrow more money. The Dems are wrong that the government knows how to spend the money. The Republicans/Tea Party are right that we have a spending problem. The Republicans/Tea Party are wrong that cutting taxes will result in more jobs.

So IMHO, creating  jobs isn’t about the government spending money on jobs /projects, nor is it about cutting taxes. It’s about taking a page from the technology and common sense world.

How is this for a revolutionary thought: Companies that would create jobs if they had more cash know who they are. Right ? If you own a company and are thinking to yourself “Self, if I could borrow or get an investment into my company I could hire X more people to grow the company/meet demand/release a new product/whatever”  So rather than guessing and hoping what might happen, why don’t we let companies self identify themselves ?

And not only should they self-identify themselves as companies, they should be able to bid on Government Loans or even actual equity investments. Call me crazy, but I think we should be playing a game of “I Can Name that Tune in X Notes” re-named and reformatted as “I Can Create X Jobs for Y Amount of Money”

Seriously. Call me crazy (and Im sure many of you will), but there is no reason why we can’t quickly create a federal website that allows existing companies to say to the Federal Government how much money they need and how many jobs they can create for that money and for what duration are they committing to maintain those jobs for the money.

Of course you will have to set some minimum parameters in order to prevent the dreamers, crazies and who knows whats from clogging up the system. I would set those minimums including: The company must be in business for at least 10 years. They must be have at least 100 full time employees. They must do 100mm in revenues.  And of course they must be up to date on their taxes and Im sure there are other things to think of as well.

I’m sure I have pissed off everyone who doesn’t qualify. Sorry.

The reality is that for this to work the universe of companies has to be small enough so that the system put in place is not overwhelmed. The companies must be big enough to be able to respond to any required due diligence information.  If this is made to work, the qualifications could be reduced to expand the universe of eligible companies.

Who would be the decision makers ? I would set up multiple 5 person regional committees across the country.  I’m not quite sure who would pick the members, or what their exact qualifications should be,  but I can tell you what I would set as a requirement. People would only be eligible to be on the committee if they had not made a political contribution of any kind directly to a politician or to a PAC of any sort in the last 5 years.  This can not be a politically dominated decision process.

The committees would then look at the submissions, starting with the ones that promised the most jobs at the least cost.  Then they would do their due diligence about the company and request and make a decision. Yes or No. Equity or Debt. Terms of repayment or ownership (exit or return of capital on par with other equity partners) Then on to the next.  Funding would come from short term treasury borrowings.   As long as the program had submissions and those submissions resulted in positive returns, the program would continue.

Oh, and one more important element. Transparency. You apply and get your money, the amount of money you got and the jobs you committed to and for how long will be published publicly. Visibility has a way of keeping people honest.

I know this is just a rough idea, but I wanted to put it out there for consideration. Rather than having Dems and Republicans fight ideological battles about job creation, lets get direct. Lets just ask companies to tell us how many jobs they would create and how much they need and see what it all adds up to and go from there

What do you think ?

another post from last year that i thought was relevant again:

What Business is Wall Street In ?

May 9th 2010 11:36AM

My last two posts were designed to stimulate discussion.  But lets talk the real problem that regulators, public companies, investor/shareholders and traders face.  The problem is that Wall Street doesn’t know what business it is in. Regulators don’t know what the business of Wall Street is. Investor/shareholders don’t know what business Wall Street is in.

The only people who know what business Wall Street is in are the traders. They know what business Wall Street is in better than everyone else.  To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It’s a platform to be exploited by every technological and intellectual means possible.

The best analogy for traders  ? They are hackers. Just as hackers search for and exploit operating system and application shortcomings, traders do the same thing.  A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it.  A high frequency trader wants to jump in front of your trade and then sell that stock to you. A hacker will tell you that they are serving a purpose by identifying the weak links in your system. A trader will tell you they deserve the pennies they are making on the trade because they provide liquidity to the market.

I recognize that one is illegal, the other is not. That isn’t the important issue.

The important issue is recognizing that Wall Street is no longer what it was designed to be.  Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings.  What percentage of the market is driven by investors these days ?

I started actively trading stocks in 1992. I traded a lot. Over the years I’ve written quite a bit about the market. I have always thought I had a good handle on the market. Until recently.

Over just the past 3 years, the market has changed. It is getting increasingly difficult to just invest in companies you believe in. Discussion in the market place is not about the performance of specific companies and their returns. Discussion is about macro issues that impact all stocks. And those macro issues impact automated trading decisions, which impact any and every stock that is part of any and every index or ETF.  Combine that with the leverage of derivatives tracking companies,  indexes and other packages or the leveraged ETFs, and individual stocks become pawns in a much bigger game than I feel increasingly less  comfortable playing. It is a game fraught with ever increasing risk.

The Pimco (who I think are the smartest guys on the Street) guys talk about a new normal as it applies to today’s state of  the world economy. I think just as important is the new normal as it applies to Wall Street.  Wall Street is now a huge mathematical game of chess where individual companies are just pawns.  This is money in the bank for the big players like Goldman, Morgan, etc. Why ? Because the game of chess is far too complicated for 99pct of the institutions out there investing money. So to keep up, they turn to Goldman, Morgan and the like to invent products for them. “You don’t know how to play the housing boom, let us show you”. “You think the housing boom is about to crash, let us show you how to play that”. “You think that PIIGS are in trouble because they can’t print money to pay debt holders, let us create a product to allow you to play that game”  The big houses have the best hackers in the business and they put together the games and sell them to the many, many institutions managing Billions and Billions of dollars.  They are the ultimate Hackers selling their attacks to the highest bidder, regardless of which side they are on. That is a new normal.

Again, I’m not passing judgement one or the other.  I’m just recognizing what is going on in the financial world today.

It’s rare for companies to go public these days. Just as rare for secondary offerings.  The only thing that keeps me in the market is that most of the stocks (not all) pay dividends or some other sort of cash payout. For the first time in my life, I bought outside the United States.  I bought Australia in a big way because it is becoming increasingly hard to find new domestic investments that are not influenced by the “hackers” and the games being played on a macro level. It’s hard to believe, but evaluating countries as an investment is now easier than evaluating companies . Even with all the unrest in Europe. Or maybe because of it.

So back to the original question. What business is Wall Street in ?

Its primary business is no longer creating capital for business. Creating capital for business has to be less than 1pct of the volume on Wall Street in any given period. (I would be curious if anyone out there knows what percentage of transactions actually return money to a company for any reason). It wouldn’t shock me that even in this environment that more money flows from companies to the market in the form of buybacks (which i think are always a mistake), then flows into companies in the form of equity.

My 2 cents is that it is important for this country to push Wall Street back to the business of creating capital for business.  Whether its through a use of taxes on trades, or changing the capital gains tax structure so that there is no capital gains tax on any shares of stock (private or public company) held for 5 years or more, and no tax on dividends paid to shareholders who have held stock in the company for more than 5 years.  However we need to do it, we need to get the smart money on Wall Street back to thinking about ways to use their capital to help start and grow companies. That is what will create jobs. That is where we will find the next big thing that will accelerate the world economy.  It won’t come from traders trying to hack the financial system for a few pennies per trade.

And solutions won’t come from bureaucrats trying to prevent the traders from hacking the system. The only certainty when bureaucrats step in is that the law of unintended consequences will smack us all in the head and the trader/hackers will find new ways to exploit the system that makes them big money and even more money for the big institutions that develop products for the other institutions that are desperate to play the game.

Regulators have got to start to recognize that traders are not investors and vice versa and treat them differently. Different regulations. Different tax structure.  Different oversight. Individual investors and the funds that just invest in stocks and bonds are not going to crash the market.  Big traders who are always leveraging up and maximizing the number of trades/hacks they make will always put the system at risk.  We need to recognize that they do not serve much of a purpose other than to add substantial risk to the global economy.  That their stated value add of liquidity does not compensate the US and World Economy nearly enough for the risk of collapse they introduce into the system.

Wall Street as a whole needs to be in the business of creating capital for companies and selling shares to investors who believe they are shareholders.  The Government needs to create incentives for this business and extract compensation from the traders/hackers for the systemic failure level of risk they introduce.

There will be another crash, because there are too many players looking for the trillion dollar score. They can’t all win, yet how many do you think wouldn’t risk everything, even what is not theirs, for that remote chance to score big ? Put another way, there is zero moral hazard attached to any trade. So why wouldn’t traders take the biggest risk possible ?

Update at 10pm 5.9.10

One more consideration. If there are traders of any kind that are unregulated or unmonitored, and trade for their own account, how do we know how big they are and how much of a threat they pose to the system, individually and in aggregate ?. For any High Frequency or big leverage derivative folks out there- is it possible there could be firms that have billions at risk with questionable ability to make a margin call or fulfill their side of the trade  if things went against them ?  Could there be hidden AIGs that few people know about  or a bunch of AIG like situations ,which in aggregate fail and put the system at risk ? I have no idea. Just asking the question.

Update 8-9-2011

As a follow up from a comment, I found it interesting that Australia treats professional traders very differently than individual investors that invest in shares of companies.  Traders pay regular income tax on their gains, investors pay capital gains and if held more than a year can even get a discount on the capital gains rate. Something that would make a ton of sense in the USA as well

From the site:

Carrying on a business of share trading
A ‘business’ for tax purposes includes ‘any profession, trade, employment, vocation or calling, but does not include occupation as an employee’. This definition would include a business of share trading. The question of whether a person is a share trader or a share holder is determined in each individual case. This is done by considering the following factors that have been used in court cases: the nature of the activities, particularly whether they have the purpose of profit making the repetition, volume and regularity of the activities, and the similarity to other businesses in your industry the keeping of books of accounts and records of trading stock, business premises, licences or qualifications, a registered business name and an Australian business number the volume of the operations, and the amount of capital employed. 1. Nature of activity and purpose of profit making The intention to make a profit is not, on its own, sufficient to establish that a business is being carried on. A share trader is someone who carries out business activities for the purpose of earning income from buying and selling shares. Shares may be held for either investment or trading purposes, and profits on sale are earned in either case. A person who invests in shares as a share holder (rather than a share trader) does so with the intention of earning income from dividends and receipts, but is not carrying on business activities. It is necessary for you to consider not only your intention to make a profit, but also the facts of your situation. This would include details of how the activity has actually been carried out or a business plan of how the activities will be conducted. A business plan might show, for example: an analysis of each potential investment analysis of the current market and various segments of the market research to show when or where a profit may arise, and/or the basis of decisions by you as to when to hold or to sell shares. Last Modified: Monday, 23 June 2008

 

 

It is easy to complain. Much harder to come up with solutions. Many won’t like what I propose, but who wants to make lawyers happy anyway ?

The solution ?

1.  End all software patents. Don’t make them shorter, eliminate them. 

I have no problem with software being copyrightable just as it always has been. That is more than enough protection and keeps enough lawyers un-gainfully employed.

2. End all process patents. They serve absolutely no purpose. None. 

If you create a new process, use it. The benefit is from creating the idea and using it in a business to your advantage.  Afraid that some big company might steal the idea ? That is life. When you run with the elephants there are the quick and the dead.  That is a challenge every small company faces. A process patent is not going to make your business successful. The successful execution of business processes will. If we had process patents or the culture of software litigation  in the 1980′s as we have today current technology would consist of  running terminals on DEC and Wang Computers at the local library for $10 per hour and there probably would not be a world-wide web.

No doubt that by the mid 90′s someone would have sued Marc Andreessen and his friends at the University of Illinois long before Mosaic could ever turn into Netscape. My guess is that the patent attorneys at British Telecom would have been all over them contending that hyperlinking was protected, but for $10 per download they could use them in their new browser…

Some of the benefits of eliminating process and software  ?

a. Reduce the court room costs associated with process and software patent litigation. That is taxpayer money saved.

b. Improve the efficiency of the Patent Office.

Process patents are a magnet for everyone who has ever dreamed of being awarded a patent. The flood of applications not only slows the speed at which inventions that deserve patents are awarded, it reduces the quality of investigation into applications. That is a lose lose situation. Patents that shouldn’t be awarded are awarded, which in turn creates more work as those patents are  challenged.

c. End the ridiculousness of the current Patent Arms Race.

Companies are buying patent collections as a way to defer litigation or to support their litigation efforts rather than to benefit from the intellectual property purchased. Billions of dollars are being spent on this arms race. Billions of dollars that without question impact consumer prices from these companies.

d. Patent costs cost jobs.

Uncertainty is never good. Certainty of risk is even worse. What i mean by that is that almost every major corporation is this country has ongoing patent litigation and many, many small companies (my companies included) have ongoing patent litigation as well.

How does this impact jobs and job creation ? The thing about patent litigation is that it is unlimited and unquantifiable. There is absolutely no way to look at your business and say “this is where and what my risk is”. Because of software and process patents any company could be sued for almost anything. It is impossible to know what the next patent to be issued will be and whether or not your company will be at complete risk. It is impossible to go through the entire catalog of patents issued over the last 10, 15, 20 years and determine which will be used to initiate a suit against your company.

It’s impossible to quantify just how much and how often you will be sued and what the costs associated with those lawsuit(s) will be.

The risks are unlimited.

Unlimited risk in any environment will force a company to hold back resources in an attempt to protect itself. In the case of several of my companies, it means that we have held off hiring people so that we have cash in the back to deal with current and future patent litigation.

It’s a joke, but that is the reality of doing business in this country.

e. Look overseas

Pick any country that is currently doing well, China is a perfect example. In China the Intellectual Property Laws are so weak that someone thought it was a good idea to completely replicate Apple retail stores. Compare their economy to ours. As much as I hate to compare other economies to ours, it’s worth taking a look .

It is time to change. This country needs the change.

Eliminating software and process patents won’t end patent litigation, but it certainly will be a good first step. And while it may only be a step, it will be a positive step towards improving the economy and adding jobs.

Update: I wanted to re post a comment from my last post. I think it is important. It obviously doesn’t go as far as I would like, but if you care about patent reform let your representatives know.

Unfortunately, the patent reform bill that President Obama just encouraged Congress to pass, does nothing to address the problem of patent trolls. (The full text of the bill, H.R. 1249, can be read here: http://www.govtrack.us/congress/billtext.xpd?bill=h112-1249).

This bill passed the House 304-117 and it’s companion bill (S.23:http://www.govtrack.us/congress/bill.xpd?bill=s112-23 ) passed the senate 95-5, vitally assuring that the two bills will be reconciled and signed into law in early September, once congress returns from recess. This is “reform” in name only, as the bills will do nothing to discourage the job-killing litigation tactics of the patent trolls that Mr. Cuban references above.

If you care about the issue of patent trolls, you have one month to encourage your Congressperson to amend S.23 and/or H.R. 1249 to include limiting damages from “non-practicing entities” (aka, trolls).

Update:Aug 8 – From the comments of a reposting of the blog on another site.. I couldnt resist

I agree totally with Mr. Cuban. The software industry spends too much time, money, and effort creating patents on bloody obvious ideas, and defending themselves from others who created such stuff.

“One Click Purchase” – Patented. Obvious. And I like Amazon.

“IBM Patents Changing Color of E-Mail Text” – Patented. And I used to work for IBM.

“Google Patents Country-Sp­ecific Content Blocking” – Patented. And I like Google

Software is already Copyrighte­d. Thus, one cannot copy or create derivative works.

And get this:
“USPTO Awards LOL Patent To IBM”
Yes, LOL, and IMHO were granted to IBM for a method of translatin­g abbreviati­on to/from text.

And to that, I say “WTF

Sometimes it’s not the obvious things that create the biggest problems.  In this case one of the hidden job killers in our economy today is the explosion of patent litigation.

Every technology company I have is getting hit by patent lawsuits that are the biggest bunch of bullshit ever.  Every week it seems like a new one comes up. Between having to pay our lawyers a lot of money  to review each, to increasing insurance rates and settlement costs because we can’t afford to pay to fight the nonsense, it’s an enormous expense. So much so that money that would have gone to new hires to improve and sell the product has to be saved to pay to deal with this bullshit.

I’m not talking about a new company that had an idea that someone beat us to. No sir. I’m talking about companies that have been doing business the same way for years that are getting hit by patent trolls . These aren’t operating companies that are trying to protect their business. These are companies that aggregate patents and raise capital for the sole purpose of suing companies and extorting money from them.

It’s bad for my little companies. It’s horrific for bigger companies. It’s so bad that  major tech companies are  buying big collections of patents not because theyher want to own the intellectual property but rather because they want the ability to respond to patent lawsuits with a lawsuit of their own. It’s like playing a game of thermo nuclear war. If all sides have “nuclear patents” they can respond to patent litigation with equal force . In other words, if you have enough “nuclear patents” no one will sue you for patent infringement because you have enough power to respond in kind. Its crazy and costing this country jobs.

Google just bid $900mm to buy a patent collection. Those patents ended up being sold for $4.5BILLION dollars .  That is money that for could have  gone to job creation.

We need to face the facts, patent law is killing job creation. If the current administration wants to improve job creation, change patent law and watch jobs among small technology companies  develop instantly. I know I have at least 1 company that would hire instantly. 

I haven’t been posting a lot lately, but in light of the recent activity in the stock markets and the depressing unemployment rates I thought it would be a good time to re-post a blog I wrote almost 3 years ago

How to Get Rich

Oct 4th 2008 11:24AM