Subject: Is knowledge being flushed down the toilet?

From: "Nadav Har'El" <[email-masked]>
Date: Sat, 12 May 2001 18:30:08 +0300

Sometimes I see a company selling some interesting new algorithm or software,
and think to myself "too bad - nobody is going to buy this software at such
prices, and instead of everybody benefiting from this new bit of human
knowledge, only a few dozens (plus several thousand pirates) will. Even
the author won't benefit much because very few people will ever buy this
software".  I still don't accept this (I'm writing now a "manifesto" which,
among other things, will talk about issue, but it is not ready yet), but have
come to see this as a fact of life.

But lately, with the collapse of many start-up companies, I'm beginning to
feel an even more disturbing waste: companies which had great ideas, and
even prototypes or full implementation, collapse; So what happens with the
idea or the actual code on which many person-years were spent?
In the past month I've interviewed many people for the company I work for,
so I got to talk to a lot of failed-startup "refugees" about what they were
doing in the startup. Many of them told me of very interesting products they
were working on, many were at operational stage but now had to be shut down
because they no longer had the money to pay the salaries of their employees.
So, what do these companies actually do with their knowledge and code?

I assume (please correct me if I'm wrong) that 95% of these companies never
manage to find a buyer for their technology. I also assume (again, correct me
if I'm wrong) that 95% of these never release their code into the public
domain or as free software (or allow their former employees to freely publish
the work they did). If so, why is that? Why don't we see a free ICQ-like
server coming from one of the failed ICQ lookalikes, a free e-commerce server
coming from one of these failed companies? And so on? [1] Do most of these
companies hang on to their "intellectual property", hoping it will someday
be worth something, until it is worthless even as free software?

The latter reminds me of something that someone working in a large institution
in Israel told me. They had a farm of PCs. Whenever the PCs got outdated and
a new line of processors or computers came out (say, 486's were replaced by
newer Pentiums), they would gradually replace the PCs in the farm by newer
computers. The old computers, say 2-3 years old, would be sent to a storage
room in this institution. Once this guy asked his superior what they were doing
with these computers, and the superior said that they are keeping them in
the storage and not doing anything. The guy asked, in that case, to take one
home, or perhaps even buy one from the institution. He was denied: these
computers were worth money, so they couldn't be given for free; On the
other hand, they couldn't be sold because the superior wasn't authorized to
sell off the institution's property, and the storage guys weren't interested
in dealing with people wanting to buy a single computer. This guy looked into
the issue further, and he learned that at the same time the storage room
was throwing away some old 286 computers that nobody wants now. So, in
short they take valuable property, refuse to give it away and help others
because they hope they'll be able to sell it, wait 5 years without selling
it, and then, when NOBODY wants it, not even for free, they throw it in the
dumpster. This is a terrible waste, and is quite similar to what may be
happening now with intellectual property in failed companies.

Or am I missing something?

[1] I'm not exactly familiar with the history of StarOffice, but it may be
an exception: a company that created a word-processor and failed to make
money out of it turned it into free software (in certain senses).

-- 
Nadav Har'El                        |     Saturday, May 12 2001, 19 Iyyar 5761
[email-masked]             |-----------------------------------------
Phone: +972-53-245868, ICQ 13349191 |In Fortran, God is real unless declared
http://nadav.harel.org.il           |an integer.