Game Consoles: The Last Remaining Walled Garden

The reddit user kmesithax wrote a brilliant comment yesterday about the realities of game console development, describing the tools and costs:

Well, no, there is no OpenGL or any graphics API for that matter, it’s all some stupid low-level hardware API that you have to tickle to get any 3D rendering to work.

and

So let’s say you get over your initial API shock, you have a decent handle on what all the little libraries do, and you wanna buy some development hardware now. Well, uh, okay. That’ll be anywhere from $2,600 (leaked 3DS devkit figures) to $10,000 or more (leaked Xbox 360/PS3 devkit figures).

This reminds me exactly of the pre-iPhone “walled garden” mobile app world, when you needed ~$10,000 for a development license for Qualcomm’s “BREW“.  The original article  “The Minecraft Test” (e.g. could your platform spawn the next Minecraft?) is a fabulous way to think about platform openness.  (Also see Nate Brown’s post “Stupid, Stupid Xbox!!” for an insider critique).

The console platforms have completely missed the market transition to open, low-friction developer on-ramps, and it’s no surprise the console market is now anemic.  In contrast, the new OUYA console (I have one on pre-order) has a fledgling, but very open SDK and just had a “game jam“.  The OUYA is under-powered relative to current consoles, but I bet the openness will more than make up for that issue.

Gorilla Anti-Trust Posturing

As the big four (Google, Apple, Amazon, and Facebook) continue to wield disproportionate influence over the digital ecosystem, these gorillas are having to worry a lot more about anti-trust issues.  Nobody wants to be broken up like the Bell System.

For example, last month, Liz Gannes wrote about Facebook’s search plans:

…the fact that Facebook has finally made its search intentions known could actually be really good for Google. That’s because regulators — especially those in Europe, who are in the thick of deciding whether to settle with Google over antitrust — now have the prospect of additional search competition to consider.

Also, Google now has Gmail, Maps, and Chrome on the iPhone, where Apple had previously rejected apps that “duplicate the functionality” of built in iOS apps.  But it doesn’t look good (in anti-trust terms) for Apple to reject competitive apps, and Google’s smart to get as many apps as possible to dilute Apple’s platform influence.

I think it’s net-good for consumers, as it increases the chances that more of our devices and systems will interoperate.  But what we really need are some new gorillas.

IP-Delivered TV: Are We There Yet?

I’ve started watching Netflix’s new original show, House of Cards.  I’m only ~2 episodes in; it’s rough in some places, but I like it.  It definitely has a unique feel and visual style.  More deeply, it’s a $100m bet by Netflix they can “become HBO faster than HBO can become us.”  (One of the clearest strategy articulations I’ve heard in a long time.)

I think they’ve got a decent shot.  I’ve always felt television, in the limit, will be delivered over IP.  Specialized, proprietary cable TV distribution is gradually giving way to big, fast, cheap IP pipes. Your phone, tablet, and TV screens will be iOS or Android-powered, and will stream video from anyone. Of course, HTML5 & native apps will enable the long-awaited vision of “interactive TV”.

I’ve written about this before (going back years):

What’s taking so long?!?

The problem isn’t technology; it’s the business model.  The way our traditional television content is produced, financed, and distributed is balled up in a big legacy with a lot of inertia.  Payments flow in various ways between advertisers, production companies, traditional TV networks, premium networks (e.g. HBO), and cable companies.  This makes it hard for anything to change quickly; if HBO wanted to sell direct Internet subscriptions, they’d be shooting themselves in the foot.

It’s good to see Netflix getting enough critical mass to stir things up.

Why You Can’t Find Any Mobile Developers

In case you haven’t noticed, it’s impossible to find mobile developers. People ask me all the time if I “know anyone”, and I’ve all but given up helping with referrals.

The reason is “self-publishing” is now a reasonable option.  The app store ecosystem has removed most friction from the system, provided a clean and easy business model (70/30 revenue split), and eliminated almost all barriers to entry.  If you have talent, a laptop, and a coffee shop wifi connection, you have a chance at writing the next great app hit.

As a result, many good developers have (or believe they have) a better chance at doing their own thing vs working for someone else for salary or an hourly rate.

Letter to Carmen Ortiz about Aaron Swartz

Stepping off my usual entrepreneurship topics, here’s a letter I sent to Carmen Ortiz, Stephen Heymann, and Scott Garland (the prosecutors in the Aaron Swartz case) earlier this week.

I’m expecting precisely zero effect on anything here, but it captures my analysis of what happened.  Apart from the sadness and tragedy, I think we all need to be very mindful of the growing gaps between technology and our laws.

 

January 28, 2013

The Honorable Carmen M. Ortiz
United States Attorney for Massachusetts
John Joseph Moakley
United State Federal Courthouse
1 Courthouse Way, Suite 9200
Boston, MA  02210

Dear Mrs. Ortiz:

I’m writing you (and Mr. Heymann), as many have, regarding Aaron Swartz.  I know emotions are high, and I’m sorry the criticism has been so unfair and uninformed.  I’m sharing constructive comments I hope will be helpful as you consider this matter.  I’ve reviewed the public court documents and several relevant legal opinions.  I am a pioneer of the Internet economy, and a technology and business method expert in the subjects of this case.

It is clear Swartz did something wrong and should have been punished.  However, I have come to agree the prosecutorial stance did not match the severity of Swartz’s deeds.

I believe that you and Mr. Heymann were doing “what any good prosecutor would do”, and as you’ve noted, prosecutors don’t make the laws and penalties.  However, the CFAA is unusually broad and ambiguous, by design, to address a major policy issue.  Technology is advancing much faster than our laws, and the Justice Department has argued for legal flexibility with this Act (e.g. Richard Downing’s House Judiciary Subcommittee testimony in Nov, 2011).  That flexibility requires discretion in application, perhaps more than any other statute you prosecute.

This case is a nearly perfect test of that discretion, because it’s missing most of the typical criminal elements.  Swartz was not pursuing financial gain.  He wasn’t trafficking in credit cards, passwords, national secrets, or confidential/proprietary information.  He didn’t destroy data or access personal records.  He didn’t access something he wasn’t supposed to; he accessed more than he should have.

Swartz, like any MIT guest, was allowed to download JSTOR articles.  He enjoyed no greater access than any normal user would, but he violated JSTOR’s Terms of Service (ToS) by automating his download process.  His violation of MIT’s guest ToS is less clear:  MIT is famously and widely known for an open campus and network, and there’s a reasonable argument MIT’s effective ToS is much more permissive.  (Also, MAC address manipulation is not analogous to VIN tampering; if it were, it would criminalize the “Change MAC Address” feature available in nearly every consumer router.)

Regarding damages, JSTOR’s articles are freely available at 7,000 institutions worldwide, and many documents are public domain.   MIT’s $50,000 annual subscription amounts to $136/day, a starting point for calculating damages.  However, subscription fees have limited use in determining damages, because they mix the access costs with document value.  For example, PACER’s public documents “cost” $0.10/page, but their value is zero.  JSTOR’s quick civil settlement, their public stance in this case, and their subsequent public release of millions of articles are all extremely telling.

Swartz did not destroy or damage data or infrastructure.  There’s no (public) evidence his actions caused more than minor service outages and investigation costs at MIT and JSTOR.  Swartz’s actions were “minimally criminal”, and justice should have been sought on those terms.  (In addition, if your case had prevailed on the basis of ToS violations, there’s a solid appeal to void this interpretation for vagueness.  It’s nearly impossible to pass the “average citizen” test for defining criminal behavior with CFAA+ToS.)

At this point, you will likely say Swartz would have had every opportunity to make these arguments.  That’s true of course, but I’d respectfully say it’s disingenuous.  From the moment you indict and issue a press release, you frame the case.  The use of Secret Service resources, the home search warrant, the discovery refusal to provide raw hard drive images, the superseding indictment, and the reported plea negotiations & constraints; these all signal that Swartz’s acts were extremely serious, worthy of government resources.  Furthermore, Mr. Heymann is a seasoned prosecutor and computer crime expert;  the judges, jury, MIT, and JSTOR take cues from his stance.

Again, the unique ambiguity in the CFAA demands a prosecutorial duty of discretion above and beyond normal.  Our goal is to seek justice, and to that end, I share several suggestions.  First, I strongly recommend you proactively and immediately release all non-exempt case documents, and consider selectively waiving FOIA exemptions for other material.  The content may be unflattering, but transparency would be a very powerful leadership act on your part.  The people have a right to know how their attorneys conduct business, and the full record will help us enact the best policies.

Second, I would encourage you to support sensible CFAA revisions.  For critics, this case is a poster example of why the statute needs to be less vague.  Congress looks to Justice for advice, and you now have the best perspective of any prosecutor on finding a balance between (a) a flexible law, (b) a clear definition of criminal behavior, and (c) the prosecutor’s duty of discretion.

Third, I suggest you consider future CFAA cases more carefully, especially cases missing the obvious criminal elements.  The computer fraud case volume is relatively thin, making each case a bounds test almost by definition.

I pray you find these thoughts helpful in this sad and tragic story, and I hope they constructively capture the broader criticism about proportionality.

Finally, if an informal discussion regarding this matter (or fraud policy in general) would ever be useful, I would welcome that opportunity.

My email is <andy [at] payne [D O T] org>.

Sincerely,

Andrew C. Payne

Cc:       Stephen P. Heymann, Assistant U.S. Attorney
Scott L. Garland, Assistant U.S. Attorney

Patents and Software Startups

Occasionally, I hear from a software entrepreneur with a “patented” or “patent pending” idea.  Many people view patents in a almost glamorous way:  “Get a patent, and you can control your idea“.  I’ve done a lot of patent work (15 issued, including two of the most cited patents in US history), and it’s never that simple.  Patents are very tricky.

For startups, patents make the most sense in industries with (a) relatively long development times and (b) significant R&D budgets.  The PTO doesn’t move quickly:  for some art units, it can take 2-3 years (or more) to get a patent issued.  That’s fine for a biotech company bringing a new drug to market, but is much too long for a software company launching a product in six months.

Also, patents can be very expensive.  For a $750,000 seed round, it may not make sense to spend ~5% of that (or more) on getting US patents filed.  International?  Budget six figures.

Finally, fundraising entrepreneurs frequently overplay the value of patents, missing the other elements needed to make a successful business and making themselves look naïve.  For example, “provisional patents” don’t exist:  it’s a provisional application that gives an option to file for a utility patent later (and it’s just that, an application).  “Patented” means patent issued and in force, “patent pending” means a patent filed but not issued.

If you don’t have an issued patent, it’s a long and expensive journey:  claims are often rejected entirely or issued very narrowly.  It’s nearly impossible to know what a patent is worth until it issues.

Built-in QR/Barcode Scanning?

I wish Apple (and Android) would build QR code/barcode scanning into all phones, either in the camera app or as a dedicated scanning app.qrcode.10740790

QR codes are so helpful for connecting the physical and digital worlds:  imagine scanning the bottom of a product to see the current owner’s manual, or to get reorder information.  Or scanning codes at a museum or park to get more information about an exhibit.  Or scanning the “missed delivery” door tag that FedEx left, to figure out your delivery options.

It’s not a new idea, but for the first time we’ve all got scanners in our pocket.  However, QR codes are still a little geeky:  you need to know what they are, and install an scanning app.  It’s a chicken-and-egg problem, and including scanning as a built-in phone feature would go a long way to seeding things.

A “Starter” Mobile Strategy

You have to be living under a rock to miss the shift in Web usage from “traditional” devices (desktop and laptop) to mobile devices (phones and tablets).  For example, in India, mobile phones now account for nearly 50% of consumer Internet usage, and mobile usage is growing rapidly world-wide.

As Web site operators watch mobile usage grow, the next thought is usually:  “let’s build a mobile app!”  It’s a good instinct, but I think it’s also a great way to waste a lot of time and money.  Leaping in without any insight on mobile usage is a good way to build the wrong app.  Also, it’s easy to end up with something that only partially replicates Web site functionality, frustrating users and creating two different UIs to maintain in parallel.

For a better strategy, Facebook is a good example to study.  They took way too long to focus on mobile, but their sequencing is a good place to start.  (Note:  this advice is really for existing Web sites).

Following their example, here’s a “starter” mobile plan:

Step #1:  Mobile-enable your Web site.  Remember m.facebook.com?  You can get pretty far these days with just HTML5.  Use your mobile usage data to figure out what areas to prioritize (Google Analytics will break out mobile usage).  Consider both tablet and phone cases:  depending on your application, you may want to deal with them separately.

Step #2:  Develop a native app, with generous use of embedded browser widgets.  Consider which app elements must to be native for the best experience, and do the rest using embedded browser widgets (e.g. WebKit).  Most of your app will actually be HTML5 served from your servers, and you can change content on the fly without having to do an approval cycle with Apple (which can take weeks).

You should be able to leverage the HTML5 work you did in step 1.  Use your existing mobile usage data to prioritize Android vs iPhone and phone vs tablet.

Step #3:  Go 100% native.  (If needed)  At this point, you should have a good sense of the most important use cases, platforms, and form factors.

Edit to taste!

Paul Graham on Hardware

I think Paul Graham’s recent essay on The Hardware Renaissance was very interesting:

 …one of the most conspicuous trends in the last batch was the large number of hardware startups. Out of 84 companies, 7 were making hardware. On the whole they’ve done better than the companies that weren’t.

After doing software for nearly 20 years, I’ve now been spending most of my time on hardware, and especially, hardware projects that have a large software component.  (See my post last year on the Coming Bits and Atoms Disruption.)

As the essay points out:  it’s getting cheaper & easier to design and build hardware projects.  I think we’re going to see a lot of interesting products over the next few years.

3D Printing: Hype and Opportunity

If you haven’t seen a 3D printer yet, you’re missing something amazing. The technology has been around for a while, but recent efforts by the “maker” community have driven printer prices down.  It’s revolutionizing rapid prototyping: you can go from CAD model to holding something in your hand in a few hours.

However, there’s also a lot of hype surrounding 3D printing:  some imagine a “printer in every home” or replacing traditional manufacturing methods.

I’m skeptical.  3D printing has some very serious limitations: printers are slow, with no economies of scale. One-hundred parts takes almost exactly 100x as long and 100x the cost of one part. Even at low quantities, traditional manufacturing methods (e.g. injection molded plastic) are often more attractive.

Also, printer technologies vary widely, with a range of materials (plastic, metal, ceramic), durability, fidelity and color options. It’s not like paper printing, where anything that puts colored bits on paper gets you in the game – different 3D printing technologies have very different applications.

Hype aside, I think 3D printing will be disruptive in a few application areas:

  • 100% custom “quantity one” parts (e.g. anything that touches the human body)
  • Low-quantity parts. Examples: the long-tail of repair parts no longer manufactured, or “parametric parts”, where the design is a function of several parameters, and it’s not possible or practical to stock all combinations.
  • Parts that can’t be manufactured any other way. What’s most interesting:  3D printers control every bit of the part volume, including the “insides”.  Most “solid” parts aren’t solid at all; they usually have a honeycomb-like interior structure to save material, but that structure could be anything.  Now, you can build parts that have interior structure that you can’t build with traditional methods.

This last category is especially exciting, and I’m hoping to see interesting designs as 3D printers get more widely deployed.