Archive for August, 2007

The “Terms of Use” Trap for Web Businesses

August 31st, 2007

Every web site of any substance has a “Terms of Use” policy, if for no other reason than to make sure that the site operator can restrictPhoto courtesy of www.susqu.edu/brakke/ illegal, offensive or otherwise undesirable activity. I doubt many people would have trouble with this.

But what happens when the operator needs to change the terms?

Boring Legal Stuff- the Abridged Version
The Ninth Circuit held last month that simply telling users the terms can be changed at any time may not be good enough. In Douglas v. Talk America, AOL sold its long distance phone business to Talk America. Talk America posted revised contract terms unilaterally, Douglas sued and the Ninth Circuit drily noted that “Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side”.

It’s the Notice, Stupid
Talk America charged a fee for its services, it changed the contract after AOL and Douglas had formed it and it declined to offer notice of the changes- putting the burden on users to check back (how often?) for changes (visible how?). It’s the last point that seemed to seal the deal for the Ninth Circuit. It is patently unreasonable to expect consumers to re-check every site where they hold accounts, and to compare use terms line-by-line for changes (assuming they retained a copy of the old terms against which to compare).

So Where Does that Leave Us?
Prof. Eric Goldman points to several alternatives, none particularly attractive, that businesses can use to avoid this problem. Of the three (“starting over”, notice of the change with implied right to terminate, and don’t change the terms at all except for new users), sending notice of changes seems like the most practical. I know I have gotten notices like this from eBay and other businesses.

More than likely most users won’t even read the notice, but the process is bound to produce a certain amount of anxiety, especially for companies that aren’t yet established. Spam filters make it harder to ensure that the notice gets full distribution as well, but 100% receipt is not mandatory either (no difference here from paper mailings from your bank). Still, there’s a certain circularity to it- once the contract has been formed there is no sure-fire, legally watertight way of changing it short of terminating every account on the site and starting fresh.

As a practitioner, my response to this is to draft terms of use extremely broadly, hoping that will help my clients to iterate without turning business and user-communications issues into legal ones. It’s no brilliant legal reasoning, but at least it lets companies focus on the bottom line- keeping users happy and the platform running smoothly.

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What’s a Lawyer Doing with an HP Financial Calculator?

August 29th, 2007

My father gave me an HP 12c calculator several years ago when I talked to him about how I need to understand financial statementsimages.jpg better. He also gave me a whole bunch of stuff to read that has definitely helped me to understand how to look at a balance sheet. I’m still a better lawyer than a finance guy, but the calculator is brilliant.

In truth, I never use any of the advanced features. Fortunately, my clients rely on actual financial experts for serious data-crunching, but once I got used to the way the HP works there was no way I was going to go back to a “regular” calculator.

The best feature is that the calculator “remembers” things better than most others. You don’t need to hit “M”; it just automatically stores the last number in memory.

Along with this goes the “reverse polish” input method. Someday I’ll understand how this name came about (though it’s probably a story not worth telling), but the essence of it is that you enter a number, hit “Enter” to put it in memory, then enter the next number and then hit the function you want: add, subtract, etc. I constantly screw up when I go back to a regular calculator now and do things in the wrong order. It’s worth the trade-off, though, because if you mistype on the HP you can hit “clear” and re-start right before you messed up. No starting all over with a long string of addition. My fumblefingers appreciate this immensely.

The last really fun thing about the calculator is the manual. The 12c was first introduced in 1982 (I’m told it was incredibly revolutionary at the time). The manual hasn’t been updated since. It uses examples like “I bought a computer for $2000 and a disk drive to accompany it also for $2000”. I’m sure someone decided that these archaisms (?) made the examples much more interesting and fun, and deliberately decided not to update them.

Now you can get the 25th anniversary “platinum edition”. I’m almost tempted since I spilled a drink on mine and some of the keys still stick occasionally, but it works so darn well apart from that I think I’ll hang onto it. It’s also constructed like a tank. I bet I’ll still have mine when the 50th anniversary edition comes out. Ooh, diamond. I might have to upgrade for that one.

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I’m Waiting for the “Keith Benjamin” Effect

August 28th, 2007

I’m a little late jumping on the bandwagon about Keith’s post, now two weeks old. The logic certainly makes sense- as one type of investment loses some luster another becomes more attractive (again). I didn’t post on it earlier largely because it was so well covered elsewhere I didn’t see a whole lot to add.

But then I realized I was wrong. I have two clients raising money right now, and both have had conversations with prospective investors who are really excited about the company, but loath to give up short-term gains they see markets delivering in the next few months.

As short as the timelines can be for tech-companies to start-up, build-out and exit, it’s still hard to convince an investor he should let his money sit idle in a company’s bank account rather than generate real cash in a six-month timeframe. Startups are risky, for sure, and even in the best cases the return is 1-2-3 years out or more. It ends up something like trying to convince the investor that two birds in the bush really are better.

I’m looking forward to seeing Keith’s prediction to come true and for “hedge fund fever” to abate a bit. The calculus is still skewed toward the short-term gains savvy investors can make; when a little more of the shine comes off the apple I am hoping that investors will be more comfortable balancing “longer term” tech company bets with shorter market-based approaches.

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Found|Read Post on Getting the Most out of Your Lawyer

August 22nd, 2007

I wrote a post for Found|Read on some common complaints I have heard about working with lawyers, and how to avoid them. The title was supposed to be “How to Work with your Lawyer”, but the “with” got dropped so now it reads “how to work your lawyer”. I guess that is ok, too. 😉

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It’s Not a Social Network “Dashboard”, it’s a “Social Graph”

August 19th, 2007

Suddenly this week I’ve started hearing the term “social graph” all over. Brad Feld has been talking about it and so has Fred Wilson, though it looks like they both read the same piece published last week by Brad Fitzpatrick, developer of the LiveJournal blogging platform. As I understand it, the social graph is the glue that ties people together over the web- whether it be a set of Outlook contacts or MySpace friends.

I hadn’t heard the term before so I googled it and got a bunch of hits going back at least a few months, though it seems to have gained more currency in the last month or so. It’s a decent phrase, though a little wonky and hard to pin down (compared to say, “web 2.0”, ha!). Wikipedia doesn’t seem to recognize it officially and refers readers to the entry on “social network” instead.

Substantively, social graph is a much broader idea than the social network dashboard I have blogged about previously. Fitzpatrick’s article is essentially a manifesto for an open source framework that all networks could use as a backdrop for contacts and organization, among other things. It’s a cool idea for sure and I’d love to see it happen.

As I think about it, though, the work required for a user to flesh out a set of contacts on any social network is part of what keeps the user loyal to the platform. Loyalty means, largely, pageviews and advertising click-throughs, i.e. the main source of revenue for most networks. If my contact set becomes a “commodity” I can drop in to any network, will I jump around among networks more readily?

Maybe, or maybe not. Lots of people belong to six zillion networks already so it isn’t like we would suddenly all switch off Linkedin and turn on Facebook- maybe we just gravitate more toward one or another as featuresets evolve. More to the point, I read Fitzpatrick as saying in part that developing the social graph-building tools is hard work that essentially reinvents the wheel every time. An open-source social graph “standard wheel” would free up companies to focus more on the content. Actually, commoditizing the contacts would require networks to focus on differentiation of their content/platform/benefits rather than just locking in users.

As I write this, I realize that idea sounds a lot like Facebook’s F8 platform, but without the “inbound only” traffic flow that so many people have expressed frustration with. No wonder Fitzpatrick’s idea hit a nerve with Feld and Wilson.

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Cathedral Thinking and Magic Ponies

August 18th, 2007

I became a lawyer in part because I love words and writing and analyzing how people use language. That’s why I am inaugurating a new occasional series on this blog devoted to “neologisms”- clever turns of phrase that capture an idea especially well. Here are the first two entries:

Duke Energy’s Chairman and CEO James Rogers talks about energy issues as in need of “cathedral thinking“- just like Europe’s great cathedrals took centuries to build, weaning the world off carbon-based fuels is likely to take a similar amount of time. It is a 250px-il_duomo_florence.JPGbrilliant phrase- though I don’t know if Rogers coined it- because it evokes grandeur, an epic scale, enduring structures and also a long time frame for planning, development and construction. As head of a company built on carbon-based fuels that probably sees the end of its lifeblood somewhere in the distant, but foreseeable future, it works perfectly to capture the pace at which Duke is comfortable working on the issues as well.

Meanwhile, on Terrapass’s blog Adam Stein talks about “magic pony thinking“- where some environmentalistsmagicpony_summerdreams.jpg reject certain proposed solutions because they aren’t sweeping enough and put forward an idea like “dismantling the suburbs and trading cars for light rail and bicycles”, in Adam’s words. Adam gives full credit for the term to the John and Belle blog, and ultimately a Calvin and Hobbes strip.

“Magic pony” is a powerful turn of phrase. It is an incredibly derisive way to lambast another viewpoint as failing to address (perceived) real world facts. It’s a gem of a phrase, but also a double-edged weapon that seems as likely to lead to a flame war as a thoughtful comparison of viewpoints. Maybe sensing this, Adam offers up “distraction theory” as well, a slightly less perjorative way of saying the same thing. Fighting words, all the same.

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Athleague – a new business launches

August 17th, 2007

Update:  athleague.com is the official site being rolled out to schools.  beta.athleague.com is for the general public to check out.

I met Ravi Mishra last summer and it has been an enormous pleasure to help him get his new business off the ground. He is a terrific guy and I am thrilled to see that the new site, athleague.com, has launched in beta. I told him that his business plan was the among the very best I have ever read- and I’ve read many.

Athleague plans to bring a new level of organization to “informal” sports- intramural at schools and adult sports leagues/teams in the larger world. It is a niche that is close to my heart. I’m looking forward to seeing how it will work for my bike racing team.

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Matt Mullenweg Wants a Social Network Dashboard Too

August 14th, 2007

I have posted before about my wish for a centralized place to manage profiles, invitations and other aspects of online accounts, but started to think it was unrealistic given the privacy and walled-garden issues involved in allowing one service control to the account information for a user at another service.

It may still be a pipedream, but at least I am not the only one having it. I just watched an interview on Wallstrip with Matt Mullenweg from WordPress/Automattic where he talks about the same thing. This pleases me to no end. If people like Matt are worried about the balkanization of online identity, I have to think a solution will emerge sooner or later.

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“Study Before Action” and Other False Choices in the Climate Debate

August 13th, 2007

Brad Feld quotes an article by Freeman Dyson that talks about how little we really understand about how the climate works, and how we need to study things more before we can diagnose the problems accurately. Dyson also says that exaggerated concern about the environment takes attention and resources away from other pressing concerns, like poverty and disease. These two arguments set up false choices that drive me crazy.

Dyson is completely correct that no one understands climate perfectly. No one understand cancer perfectly, either, but that has never stopped doctors from trying to treat it. Research and action have gone hand-in-hand in medicine and just about every other discipline humans have ever studied, and every problem humans have tried to solve. To say that we need to study the climate more before can hope to act just sounds like inertia to me- we have so much momentum in one direction currently that it’s just too hard to stop.

Study or act is a false choice. We’ve never done that before, There’s no reason to act differently now.

The “we need to solve other problems first” is another one. There have always been more pressing problems that we can deal with at once, but still we chip away at all of them to the best of our ability. Saying we shouldn’t think about climate change until we have solved poverty and disease is absurd. Taken to the extreme, this argument means we would have to focus every dollar on eradicating AIDS before we touch malaria, or cancer or any other disease.

Brad’s point is that contrarian viewpoints are valuable because they can lead us to think in new ways. I agree with that heartily. If Dyson’s arguments challenge anyone to think through their beliefs, then great. They did that to me, and what I come up with is that he has his head in the sand.

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Down the Rabbit Hole Trying to Barbeque “Green”

August 11th, 2007

Update: Terrapass’s blog talks about a UK study that found lamb grown in New Zealand and flown to the UK produces less carbon than the domestically-raised variety. More to my point that even the “food miles” analysis is incredibly fine-grained. It seems almost impossible to make any assumptions without digging back to the source of every physical and energy component of everything society produces. Yikes.

I read several interesting pieces recently that made me think about how hard it is to tease apart the interwoven strands of modern life- at least from an environmental perspective. Barbeque is a good example.

Photo courtesy grillforum.comA cursory glance at the thick smoke coming out of a charcoal grill tells me that gas is greener and cleaner. The conventional wisdom seemed to agree: charcoal is made in a messy, chemical-filled process that produces lots of emissions itself. Burning the briquettes then sends out more particulates and CO2, not to mention deforestation and transport of the wood starting product (though charcoal in the developed world is mostly made from waste wood- no trees were cut just for charcoal production).

The flip side is that propane comes from fossil fuels- i.e. long dead, long-“sequestered” carbon. The CO2 emitted by burning charcoal was in the atmosphere more recently, so perhaps the net addition to the atmosphere is less. Not all CO2 molecules are equal in this analysis.

Finally, the article above notes that grilling in total results in about 0.003% of US carbon emissions annually. Brad Feld points to this article positing that the real issue is meat production. A gas grill may produce 5.6 pounds of CO2 per hour and a charcoal grill 11, but 2.2 pounds of beef on it likely resulted in nearly 80 pounds emitted before the meat hit the grill at all. Vegetables, unless very locally grown, may not be much better.

So where does this leave me? Still grilling meat on gas, and a bit worried about digging deeper. Cereals and pulses (beans and peas) may be the best environmental choice, but where do they come from and how can I cook them “green”?

I’m afraid that if I keep digging any deeper I’ll end up convinced the only foods I can eat with enviromental conscience will be grown in my San Francisco back yard and eaten raw- and that won’t leave many options!

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