
How the Wright Brothers Blew It (2003) - jitix
http://www.forbes.com/2003/11/19/1119aviation.html
======
6stringmerc
Wow, it basically reads like one of dozens of 'creative person is successful,
not good with their money or the business parts' stories, just with the Wright
brothers.

I mean, sure, if establishing a monopoly and aiming for maximum monetary
extraction from a market is the primary goal - which it seems to be for many
people (here and otherwise) - then yeah, they "blew it" so to speak. Still,
first in flight, history remembers this, and all pilots must speak English if
they expect to land in the United States and most well-to-do nations. Oh, and
this tidbit:

> _In October 1915 Orville sold the Wright Company to a group of investors for
> a reported $1.5 million._

...a quick calculation makes it look like in today's value that'd be around
$35 million. Might not sound like a lot for the Forbes business crowd, but
that's a good chunk of change in my opinion.

Their secrecy surely didn't help them, but trying to apply that to today's
environment is just stupid. The likelihood of being 'ripped off' is more of a
concern now than ever - if the idea can make it to China, it can be made in
China without recourse. Try playing whack-a-mole with lawsuits while trying to
do business as the originator? Sounds like a terrible business plan.

I'm going to be writing an essay about 'Why I keep secrets as a struggling
inventor' soon, and will submit it here for discussion. In it will be one
design from years ago that I feel comfortable showing in public. Grand scheme
of things I know I have to pay for protection in the patent game, but even
with the patent, there are still risk factors in the global scene.

------
lordnacho
Great article, reminds me of several things:

\-
[https://en.wikipedia.org/wiki/Starlite](https://en.wikipedia.org/wiki/Starlite)
: An amazing material, apparently. There was a BBC show where it protected an
egg from a blowtorch. Unfortunately the guy who made it was extremely
protective, so we'll never know quite what it was or whether it was really as
effective as it seemed.

\- I had a long discussion with my old partners about whether trading models
should be kept secret. The big problem is that once you've decided you've got
something - and over short periods, it may well look that way - you start to
think you can walk on water. I still wonder which way round the causality is.
Did we keep everything secret because we thought we'd found a goldmine, or did
we think we were brilliant, and the secrecy was a way to flatter ourselves? In
any case, once people develop the attitude that they are better than everyone
else, it becomes very hard to get any new ideas in there.

\- Once you decide your edge is in some kind of knowledge, rather than some
kind of execution of a business plan, you are going one way only. Sure, you
need some knowledge, but you'd better believe other people have that knowledge
as well. There's only one principle involved in steering a plane: change its
shape. But there's a HUGE number of ways you can do that, and a huge number of
ways to shape your business to explore those ways.

\- It seems the patent system was broken a hundred years ago, and it hasn't
been fixed. For me the main issue is it causes people to have idea fixation:
the idea that ideas are somehow more important than everything else in a
business. There's a whole list of interesting things to say about patents as
well, but I'll stop here.

~~~
graycat
> Sure, you need some knowledge, but you'd better believe other people have
> that knowledge as well.

For any _chunk_ of knowledge, except for very unlikely ties, there was a first
person who had that knowledge, and for that person, then, the claim is false.

It really is possible to do research that is genuinely new. Indeed, the usual
criteria for publication are "new, correct, and significant". Criteria for a
Ph.D. dissertation are sometimes "an original contribution to knowledge worthy
of publication". Each each paper published in a peer-reviewed journal of
original research is supposed to be an example. When the US NSF or NIH give
research grants, there is supposed to be research that will be publishable in
a peer-reviewed journal of original research, that is, new, knowledge that did
not exist before.

In computing, we write software. It takes in data, manipulates it, and puts
out data.

For my startup, I wanted some software that would take in some available data,
do some powerful manipulations, and put out some valuable data. So to get some
powerful manipulations, difficult to duplicate or equal, and to know right
away that the manipulations were correct and likely powerful, I wrote out some
original applied math. I have to doubt that anyone else in the world has
written out anything really the same. Then I wrote software to perform the
data manipulations specified by the math.

The software and the math are my proprietary intellectual property, and I
intend to use trade secret protection. Tell the world the details? Heck no.

Am I able to do such original math derivations, "original contribution to
knowledge", "new, correct, significant"? Yup, as demonstrated by my Ph.D.
dissertation and published, peer-reviewed papers.

~~~
lordnacho
>>For any chunk of knowledge, except for very unlikely ties, there was a first
person who had that knowledge, and for that person, then, the claim is false.

For practical purposes, if you want to make anything resembling a business out
of your knowledge, you are going to need time. And chances are people in the
field would have been aware of what interesting things there are in that
field, and would have some idea of what you've come up with. They may not have
some very specific things like particular implementations, but they will
nonetheless have a good idea of what's up and down in the field.

Obviously you are the only person writing your code, but should you assume
that someone with a similar background could not come up with something quite
similar if he wanted to research it?

~~~
graycat
> And chances are people in the field would have been aware of what
> interesting things there are in that field, and would have some idea of what
> you've come up with.

So, do some research that others are not likely to do. Then carry that
research all the way to a successful business.

My research is some math, based on theorems and proofs, based on some advanced
prerequisites. Sure, at least in principle, there are some university
mathematicians who could duplicate what I derived.

It's been a while since I was a teenager. Since then I've spent a lot of time
around low end business, and high end research mathematics, business,
startups, and computing. Sure, a lot of that experience has just junk quality
information, but the experience does let me have some understanding of the
people and cultures. Based on that understanding, there are at least three
bottlenecks that help protect me:

(1) To duplicate my research, the university research mathematicians would
mostly need a relatively clean formulation of the the math part of the real
business problem as a math problem. That formulation requires also
understanding some of my _business model_ , which is not mathematics, in
particular, what data to get and how to get it and, then, what the heck data
to give the users/customers that they will like, a lot, and why.

E.g., first cut a lot of people will say that I will need ballpark 10^27 bytes
of data. Nope! Just why not is a bit clever; although the basic reason is some
solid math, it's a bit novel; also need to understand and keep in mind the
business model; only a small fraction of research mathematicians have all the
math prerequisites; and, net, only a small fraction of people in pure math
would think of it.

Some of what I'm doing most people who are close to such things will say I
can't do that. For things close to what I'm doing, they are right. For exactly
what I'm doing, they are wrong. I found a narrow path through the woods that
works for just what I'm doing. If my path were broad instead of narrow, a lot
of books would have to be revised.

(2) The research I did is relatively applied, i.e., would be regarded by the
research mathematics community as a niche; then such mathematicians would have
to do the work of focusing on the niche; that would take them away from their
main stream of research, get them few or no academic promotion points, and is
something they wouldn't want to do.

(3) Even among good university research mathematicians, some of the crucial
math prerequisites are not well understood.

For a human, there is little so obscure as some math theorems and proofs where
the human is missing the important prerequisites.

Outside of university research math departments, the chances of anyone even
being able to duplicate my work is much smaller.

Then there is the issue of _business_ : The university research mathematicians
are a very long way _culturally_ from a startup in _information technology_ ;
they don't have nearly enough background in the basic computing; e.g., they
don't really know in any good detail how a Web server works, or TCP/IP, know
an appropriate programming language, understand server farm system management,
etc.

Then in business, they don't understand information technology startups. E.g.,
they haven't been reading Hacker News, VentureBeat, AVC.com, Mark Andreessen,
etc.

They couldn't, and even if they could likely wouldn't, do the work alone (too
big of a distraction from their university research career) and with just the
math wouldn't be able to attract a team without some significant bucks.
Further, for a VC, a professor with a math paper and a dime won't cover a 10
cent cup of coffee.

My effort is yet another example of something classic in innovation -- field
crossing. So, for the _fields_ , there are some advanced math prerequisites,
some understanding of some niche topics in pure and applied math, the
particular, niche math research I did, the computing, and, to tie it all
together, the whole business model I have in mind.

So, early on, no one will bother trying to compete with me. Later I will have
some barriers to entry from the data I've gathered, some viral and network
effects, some happy users who won't t want to try something else or pay
_switching costs_ , and will have some publicity, and a brand name.

Or, until I'm quite successful, people who could do the math couldn't easily
and wouldn't do the rest; the people who could and would do the rest won't do
the math; and no one with a suitable checkbook would cough up enough money to
put a team together that could do all the required _field crossing_. Later?
Mostly too late unless someone wants to buy me out and I'm willing to sell.

> Obviously you are the only person writing your code, but should you assume
> that someone with a similar background could not come up with something
> quite similar if he wanted to research it?

The "code" is not the point. The crucial, core point is the math. Given the
math, nearly all the code is quite routine, and the rest is not much more
difficult. The real, core technical challenge of the code is the math in the
_design and specifications document_ for the code.

Saying that I did some math research doesn't give away much; it just puts one
in the QA section of a research library with racks and racks of books and
journals where one can easily get totally lost for many lifetimes. And, for
the rest of the news, my work is very likely not in the that library at all.

Can I do original math research? Done it often enough in the past!

~~~
gmarx
years ago I was working on a pitch for a startup based on tech I had
developed. My adviser, a successful serial entrepreneur told me not to call
the tech "revolutionary" (or something like that) because potential investors
hear it all the time and it smells like BS.

But dammit, some things are revolutionary!

~~~
graycat
I thought about that, too. In the end, I came up with another description of
the investors:

Well, I can't explain that one; here we don't want NSFW material!

So, I'll give a SFW version; I'll concentrate on _information technology_
since _biomedical_ is at least a little different:

(1) The investors are not very technical people. Often we're talking people
with backgrounds in _business development_ , marketing, routine software,
former CEOs of startups that were largely non-technical, etc.

In contrast, the people in high end research university STEM field research
know how to evaluate technical work, e.g., as reviewers and editors of good
peer-reviewed journals. And if some paper is outside the field of some prof,
then he will still know how to get the work reviewed by others, e.g., as the
editor in chief of a journal gets the editors and reviewers to do the work.

Then, just think a little about what is involved in such peer-review and,
then, begin to see how hopeless it would be for the usual investors to do such
work. For the VCs, such technical review work is hopeless, and they don't do
it.

Or for your description that they hear hype, that's not really the problem;
instead, hype or not, "revolutionary" or not, they just ignore anything like
research.

Or look at the bios of the VCs: Could hold a convention in an airplane wash
room for all of them able to do or even able to direct peer-review of STEM
field research.

(2) Evaluating research is something the VCs just won't do. Likely if one of
their limited partners (LPs) caught one of their VCs using an evaluation of
some research, then the LP would make sure that VC never got another dime, at
least not from that LP.

(3) Sometimes VCs make money, and sometimes they don't. On average the don't
make very much. In any case, they don't try to make money with the results of
research.

(4) Mostly VCs don't evaluate the technical work. Instead, for _early stage_
investing, their criteria are fairly simple: (A) Look for _traction_
significantly high and growing rapidly. (B) Be sure the work is for a really
large market. (C) Usually be sure the CEO and company HQ will be a short drive
from the VC's offices. (D) Look for anything that is really wacko that would
be a disqualification.

If (A)-(D) look good, then contact the CEO and argue that a check of equity
funding would help their growth rate enough to more than pay for the stock
dilution.

Have a term sheet that for the CEO is just onerous and puts the VCs in solid
control, e.g., able to replace the CEO with someone loyal to the VC.

For _seed_ funding, the VCs look at the product, although not at any technical
internals, and try to estimate how the target users/customers would like the
product.

For later stage funding, the VCs look mostly just at what an accountant does.

And for any VC funding, they look at what they know about the _market_ :
Commonly VCs claim to have "deep domain knowledge"; in terms of anything
technical, that is a wild belly laugh; could break a bone slapping a thigh
over that one. But they do have at least a cursory, from 10,000 feet up, view
of the _markets_. So, they have heard of viral, social, local, mobile,
sharing, photo apps, own both an iPhone and an Android, have used Google,
Facebook, PInterest, SnapChat, InstaGram, and Uber, have heard about tablets,
laptops, Windows, Apple, Linux, have seen articles on Apple's watch, have
gotten a lot of pitch decks, attended a lot of pitches, and have listened for
a few minutes each to a few.

For more, they know most of the other VCs on, say, Sand Hill Road, and attend
morning _what 's hot_ pick-up seminars in coffee shops. For exits they know
about _acquihires_ , _pitchforking_ , M&A, and maybe even IPOs.

While in some sense the VCs understand that the need to find companies that
are new and exceptional, they look for patterns they have seen from the past,
patterns that must reject most new and exceptional companies.

Really, they dream of a CEO of a company they funded calling them and telling
them about the next SnapChat.

Sometimes they make money, and sometimes they don't, but that's what they do.

The VCs commonly say that their funding is not for everyone, and that is very
true. While what the VCs do sometimes makes money, in no way are the VCs a
broad source of innovation funding.

For revolutionary technology, the VCs couldn't care less. Actually, they would
prefer that anything technical not be important -- the don't want to get
involved in anything technical.

~~~
FiatLuxDave
So, what is an inventor to do? It sounds like you are in a similar boat to the
one I am in, with a math-software based invention (mine is field crossing
between telecommunications and super-resolution mathematics), for which it is
hard to get attention in this day of cat-video apps and labor cost
arbitrageurs. Twenty years ago I found Steve Jurvetson, who is one of those
rare VCs who can actually do technical review. But unfortunately he is now too
successful to evaluate out-of-the-blue opportunities,and finding the next one
like him is probably going to take just as long as it took me to find him.
Likely longer, since last time I was looking was not at a bubble peak with all
its attendant noise and wannabes.

Where do you look for funding for actual revolutionary technology, or are you
just as frustrated as I am?

~~~
puredemo
What are you looking for funding for, a sales team? I watched your video,
interesting stuff.

Have you done consulting to see how well 20fold works in practice yet?

~~~
FiatLuxDave
Yes, and also for further development work to make the product fit better into
cell towers and phones. Basically, funding would make the same growth process
go a lot faster than doing it in my spare time with my own wallet, and patents
have a limited lifetime. So far, the main interest has been from ham radio and
satellite comm folks, but we know that cell phones are where the real money is
at. We really need contacts in the mobile phone infrastructure industry, more
than anything.

B2B infrastructure is a hard area in which to run a bootstrap startup. I'm not
really sure how to fit 20fold into a consultant mold. I am interested if
anyone has any advice on how to do this, though.

~~~
puredemo
Telecoms are notoriously difficult to market to. Actually I wouldn't mind
discussing this with you further, my email is on my profile page for the time
being if you'd like to get in touch.

------
hliyan
This is the most telling part for me:

    
    
        they were unwilling to show the machine to anyone who 
        might steal its design, since enforcing their patent 
        rights could be a long, laborious, and very expensive 
        process. Having conquered flight, they wanted to cash 
        out before going any further.
    

What happened was the exact opposite. I still have trouble convincing young
people with startup ideas that there's really no point being secretive about
their 'invention'. Ideas are rarely stolen with impunity. When they _are_
stolen successfully, it's usually because the inventor was so secretive that a
clone was regarded as the original by the public and the media.

~~~
vlehto
"Although Brewster patented the kaleidoscope in 1817 (GB 4136), a copy of the
prototype was shown to London opticians and copied before the patent was
granted. As a consequence, the kaleidoscope became produced in large numbers,
but yielded no direct financial benefits to Brewster. It proved to be a
massive success with two hundred thousand kaleidoscopes sold in London and
Paris in just three months."

These days you should promote any invention as soon as you get patent pending.
But I can see why Wright brothers we're suspicious back then.

Other major failures we're early concentration to military sales and not
taking competition seriously. Military sales are take it or leave it, you
either win big or nothing. If some conservative major gets assigned to deal
with the purchase and you are sellign something really new, the sale might be
doomed before you start.

------
aylons
Anyone reading this would also enjoy reading this special issue on Santos-
Dummont life [1].

In the text shows Santos-Dummont as a really applauded guy, recognized on the
street, with incredible PR skills. He called the press before any presentation
and even meetings, he did not applied for any patents and shared his prizes
with workers that needed it. Just the opposite from the Wright Brothers.

Sadly, this special issue is in Portuguese only. But I do think it is worth
the pain of the automatic translation if you are interested in comparing the
stories. It really shows how important it is to share and to see science and
technology as the social endeavors they are.

[1]
[http://infograficos.estadao.com.br/especiais/a-redescoberta-...](http://infograficos.estadao.com.br/especiais/a-redescoberta-
de-santos-dumont/)

~~~
jacquesm
And that also pays a much more meaningful tribute to those that paved the way,
after all, any scientific advance is a minute layer added to a mountain of
existing knowledge.

------
audunw
I can recommend "Against Intellectual Monopoly" for more stories about how
patents can be as much of a hindrance to innovation, as it is a stimulant.

Personally I don't think patents are worth it. It may help with a few
innovations, but it's not worth the massive cost and bureaucracy, and for
other innovations they may delay development by years.

~~~
jgeada
But they benefit lawyers, and since they get to dispense legal advice ...

------
PilotOverPiatt
For anyone that is particularly interested in this specific story, this
article is almost an exact summary of the the book Birdmen by Lawrence
Goldstone. He frames the story as a rivalry between Glenn Curtiss and the
Wright Brothers, but also goes through all of the business missteps and failed
attempts at establishing a monopolistic market from which they could extract
rents from for the rest of their lives.

I would highly recommend as a case study for what not to do if you reach a
groundbreaking development.

------
phkahler
This seems wrong. Firstly, the army didn't believe them to the point of not
even looking. The Wrights wanted to sell to the army, and were willing to
deliver a working plane that met specific requirements. This path ultimately
worked, but it took time for the army to change their mind.

They also flew publicly in France in 1906, thus demonstrating what they had.

They defended their patent when Curtis invented ailerons. Today Curtis would
have been handed their own patent and won the battle, but back then they were
given wide latitude.

In the end, they sold their patent for something like $1M. I don't recall if
that was after Wilbur died.

In my opinion, they did most of it right.

My favorite story was the one where the army put it out for bids (required
process) and there were 3 bidders. One of them tried to win by undercutting
the Wrights price - he didn't have a plane but planned to buy one from them
and thus make himself a middle man. When the Wrights told him that would not
happen, he dropped out and they won the bidding process and indeed sold a
plane to the army.

I see some misinformation in the article, and didn't get far enough to see any
suggestion of an alternative path. There were hints that selling out would be
a suggestion. Cave to "real" business people.

------
venning
idlewords wrote a similar story [1] a month after this one was published, if
you're looking for more humor with your discussion of patent law.

[1]
[http://idlewords.com/2003/12/100_years_of_turbulence.htm](http://idlewords.com/2003/12/100_years_of_turbulence.htm)

------
joeevans1000
Flight was going to happen and was pushing out of the ground like so many
grass sprouts. This ridiculous tale is about the absurd flurry of activity to
own a basic concept. It would be better that people had cooperated as well as
researched this for the common good. This is why universities should not be
trying to make a greedy buck off patents and IP, and why there shouldn't be,
say, an 'Amazon Professor of Machine Learning' at the University of
Washington. Lack of greed is why we're all enjoying tools like Linux. Let's
hear it for open source software.

------
mannykannot
That they fell victim to their own monopolistic goal and its pursuit through
secrecy is ironic, given that they initially benefitted greatly from
information given freely by others working on the problem.

------
skbohra123
Fascinating read, any innovator would relate to it. It's always in the
hindsight that we can pin point the errors they made, but there's a lesson for
all of us in here.

------
duncan_bayne
Interesting that patent wars were a thing in 1914. Bad idea then...

~~~
jitix
.. bad idea even now. Patent lawsuits' original use was to prevent theft of
original ideas, which is a good thing. But suing for billions for common
things like pinch-and-zoom and rounded icons is simply taking things too far.
This stifles innovation.

~~~
sokoloff
I'd argue that multi-touch and pinch-to-zoom combined represents an
innovation. Now, whether that should protected for 17-20 years is a completely
different matter.

I'd be happiest with a world without software patents, but 12-18 months from
filing might be a reasonable compromise position for software/electronics
patents. That is short enough that you might simply take the filings, assign
each a number (do no review), immediately publish the claims, and then after
the fact adjudicate any complaints that someone raises. (lazy evaluation for
patents, basically)

IMO, that's enough incentive to get us the iPhone, multi-touch, Bluetooth /
LE, NFC, etc, etc, without every startup being worried about a company-killing
judgement hanging over their head.

~~~
jitix
I agree. Software and electronics innovation moves at a faster pace and
because of the long validity of patents we have the patent trolls. However for
things like medicines, etc the turnaround cycle is longer so its ok to have
longer validity.

Maybe the stakeholders should start a discussion about bifurcation of patent
laws based on the field, because the one-size-fits all clearly isn't working.

