This blog contains original articles as well as articles from the book "Start-Up", by Hervé Lebret, which exists both in English & French. It is available on Amazon as well as in electronic versions. To buy it, click here.
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The First Trillion-Dollar Start-up

August 18th, 2014 Comment »

Thanks to my friend Jean-Jacques for pointing to a nice historical article about the beginnings of Silicon Valley. According to The First Trillion-Dollar Startup,
“measured in today’s dollars, we believe the firm [Fairchild] would qualify as the first trillion dollar startup in the world.” I will let you read the other findings and will not relate again a story I mentioned in The fathers of Silicon Valley: the Traitorous Eight.

The authors show that Silicon Valley did not exist in 1957. No company active in semiconductor was based there as the East Coast was still the center of high-tech. But the founders of Fairchild are directly or indirectly responsible for 92 companies in Silicon Valley, today listed on Nasdaq or NYSE, worth over $2’000 billion and employing more than 800,000 people.

Here is a nice illustration of their study,
endeavor-insight-sv-2-retina
but I still love this one, a famous poster created by the author of the term Silicon Valley; I scanned it a few years ago,

the image below is taken from the previous (left and halfway up – corresponding to 1957)

HDSVBSV
The full report can be downloaded in pdf format and I find interesting their 3 lessons:
1. Great companies can develop in unlikely and challenging places.
2. A few entrepreneurs can make a large impact.
3. There is a framework for success that leaders can accelerate: ambition, growth, commitment, reinvestment.
HDSVBSV-acceleration

Space Invader in Tokyo

August 9th, 2014 Comment »

Summer is not the season for start-ups, news is rather thin, with the exception perhaps of the GoPro IPO. I also use this blog to talk from time to time about street art and in particular of Space Invader. I also found an indirect way to discover a city, physically or virtually, is to start looking for these ephemeral works.

SpaceInvaderTokyo

Japan has always been an attracting place for me, so I became interested in what the artist has done there. There are dozens of photographs online, some maps, so I made ​​my own synthetic work in pdf format as well as my own Google map of SI in Tokyo (largely through the work of Toruteam). [Other examples of SI fans in Tokyo include Nalice_Malice or True2death.]

I still have to make the actual discovery … Latest topic, Invader has launched its application for smart phone, Flash Invaders. It is perhaps this slight argument that will change my device!

flashinvaders

The (sad) state of high-tech IPOs on the Paris Stock Exchange

July 23rd, 2014 1 Comment »

I just read an excellent article in the newspaper Le Monde: Investors get tired of IPOs.
LeMonde-July14

The first reading could suggest positive news, as shown in the following charts:
LeMonde-FrenchIPOs-2
Click to enlarge

LeMonde-FrenchIPOs-3
Click to enlarge

LeMonde-FrenchIPOs-1
Click to enlarge

I looked in more detail at the IPO prospectus of 11 of these strat-ups. For reference, the 11 companies studied are:
Ask http://www.ask-rfid.com
Awox http://www.awox.com
Crossject http://www.crossject.com
Fermentalg http://www.fermentalg.com
Genomic Vision http://www.genomicvision.com
Genticel http://www.genticel.com
Mcphy energy http://www.mcphy.com
Supersonic Imagine http://www.supersonicimagine.fr
Txcell http://www.txcell.com
Viadeo http://fr.viadeo.com/fr/
Visiativ http://www.visiativ.com
and here I let you discover the 11 capitalization tables.

I show you here the two most successful and Supersonic Viadeo:

Supersonic-captable
Click to enlarge

Viadeo-captable
Click to enlarge

Why did I feel the need to use the term “sad” situation? Because:
- Valuations do not exceed €200M
- Amounts raised do not exceed €50M
With such numbers, neither entrepreneurs nor investors can not be compared with their U.S. counterparts. (I refer you to my summary of U.S. IPOs, if you are not convinced).

And if you’re still not convinced, I refer you to an excellent debate on France Culture including Osamma Ammar, founder of The Family: Is France heaven or hell for start-ups? Osamma Ammar describes the historical weaknesses of the French system, too much government intervention, IPOs (like those Viadeo rightly) that are so low that they would not take place in the USA (whereas a French start-up such as Criteo could be quoted on the Nasdaq). There is much to say from the 11 IPOS, but I leave you to think about what they mean …

Is this what Google Glasses might be about?

July 21st, 2014 Comment »

Just back from my summer break and thanks to the one who gave me the link of this brilliant (and scary) video. I doubt the future will be like this but who knows.

A Futuristic Short Film HD: by Sight Systems

Innovation and Society: are the Returns and Benefits Sufficient?

June 30th, 2014 Comment »

Here is my latest contribution to Entreprise Romande. I return to a subject that is dear to me, Innovation and Society. (If you read French, the original version is certainly better…)

ER-Lebret-June2014

The Enterprise is more than ever at the core of the political debates through its role in the creation of jobs and wealth – both individual and collective. It is indirectly the source of populism and of protectionist temptations. Inside and outside of its walls, innovation is the subject of similar tensions: are the returns and benefits of innovation sufficient for society?

Mariana Mazzucato and the Entrepreneurial State

A recent book tackles the topic of the respective roles of business and government in innovation: Mariana Mazzucato, a professor at the University of Sussex, develops in The Entrepreneurial State [1] – a fascinating and quasi-militant book – the argument that the States have not collected the fruits not only of direct investments in their universities, and even indirectly from the help and support provided to businesses, investments and supports that are at the origin of the major innovations of the last fifty years.

Mazzucato brilliantly illustrates this through the example of the iPhone and the iPad, which integrate components initially financed by the public bodies: from electronics developed for the space and military programs to the touch screen or GPS, or even Siri, the voice recognition tool (which has sources at EPFL), the author shows that Apple has masterfully integrated technologies initiated by public money. Google is also the result of research done at StanfordUniversity. Mazzucato adds that clinical trials for new drugs are mainly made ​​in hospitals funded by public money, from molecules equally discovered in university laboratories.

Mazzucato therefore advocates major reforms both on the governance of the initial support and on taxation. She fights for a new tax system that would compensate the absence or insufficiency of direct returns to universities or from businesses, all the more that it is indeed undeniable that multinational companies easily optimize their taxation. She shows how Apple has taken advantage of international rules to create subsidiaries in Nevada or Ireland to minimize its taxes.

The English researcher is convincingly claiming that Apple has to pay more. But how to pay? Paying a license for the GPS, but to whom? I’m not even sure that the GPS is patented. And if the Internet had been patented, it would probably not have had the same development – I do not ned to go over the limitations of the French Minitel. By seeking more direct financial returns (which are not as insignificant as one might think – Stanford has received more than $300M for its equity shares in Google and over $200M of the first patents in biotechnology), the risk would be very high to discourage creators and stifle innovation. I doubt that the solution lies in more rigorous national rules.

Peter Thiel and the Individual Entrepreneur

Peter Thiel, an libertarian entrepreneur and investor, is so opposed to such views that he encourages youung people motivated in entrepreneurship to abandon their studies by providing them with $ 100,000 grants and he even imagines moving businesses to offshore vessels off California so they totally escape tax. He is afraid of any form of public support which, he considers, quickly becomes bureaucratic. It is worth adding that Thiel’s motto also shows his skepticism about the social benefits of innovation: “We wanted flying cars; instead we got 140 characters.” [2]

Upstream, there is therefore the question of direct returns and the actual role of the state. But without the incredible creativity of Steve Jobs at Apple, without the extraordinary ambition of Larry Page and Sergei Brin at Google, without the vision of Bob Swanson, a co-founder of Genentech, the world would probably not have experienced the same technological revolutions. Downstream, the question arises of how to create international rules on innovation. Let me make a wide digression. The Internet, another innovation initiated by public authorities, has become a major topic in the political, economic and fiscal fields. But “neutrality and self-organization are part of the libertarian options [...] and are inconsistent with politics. Humanity must seize this opportunity to revisit what is considered important. [...] The Internet enables the emergence of a global political space, but it is still to be invented. At the time of this invention, the Internet will probably be gone!” [3]

If from experience I lean more toward Thiel’s view on innovation as an individual act of exception, actually quite far from the public investment, even if it is its seed, yet, I cannot agree with abandoning the public good. It is the soil that allows the emergence of exceptional talent. Companies also have their share of responsibility in discounting the importance of the collectivity. Just like in any complex human activity, innovation is a delicate balance between private and public actors. But especially today, issues have become global. The question is not so much as Mazzucato says that the role of the state has been largely underestimated in this process, but rather that the tax return has largely been decreased by globalization and the lack of economic governance.

Tax as a single global solution?

Does society receive any return from the public money spent on schools, roads, security? No, because it’s not an investment in the true sense of an objective of financial gain. These are infrastructure provisions that allow citizens and businesses to exist and develop properly. And they 8should) pay taxes in return. When Darpa funds Stanford, it is not sure that a student from Korea will not benefit from it and later work for Samsung. The concept of ​​supporting national champions seems of another age.

We are left with Tax, in a renewed vision of its global governance. Whether innovation is in the public or private domain, the world globalization will soon prevent from hiding behind the argument of whom is basically at its origin. Not only individuals but states also must agree upom a greater share of its profits, at the risk of serious crises. At a time when Switzerland reviews its tax policy and its citizens think they can create barriers from its neighbors as its borders, it is important to be aware that the current tensions are an opportunity to revisit the status of innovation in society before new major crises emerge. Wishful thinking?

[1] The Entrepreneurial State – Debunking Public vs. Private Sector Myths. 2013, Anthem Press, http://marianamazzucato.com
[2] Peter Thiel. Zero to One – Notes on Startups or How to Build the Future. Sept. 2014, Crown Business press, http://zerotoonebook.com
[3] Boris Beaude. Les fins d’Internet. 2014, FYP Editions, http://www.beaude.net/ie

A few lessons from disruptive innovators

June 25th, 2014 Comment »

My friend Jean-Jacques (thanks :-)) sent me a link about the CNBC Disruptor 50, a list of 50 “private companies in 27 industries — from aerospace to enterprise software to retail — whose innovations are revolutionizing the business landscape”. One could criticize the method, the fields, what is disruptive and what is not, but the list is by itself interesting. And I have done a few quick and dirty analyses. (I mean by Q&D a very fast analysis on the age of founders based on available data – their age or the year of their bachelor – my full analysis is available at the end of the post)

cnbc-disruptors

I found the following:
- Disruptive innovators are young (33 years-old)
- They raise a lot of money: more than $200M!!!
- and yes, they are mostly based in Silicon Valley.

Disruptor50-stats

Disruptive innovators are young

The average age of founder is 33 (whereas the age of founders of start-ups is closer to 39 – see my recent post Age and Experience of High-tech Entrepreneurs). As it was the case with that general analysis, founders in biotech and energy are much older than in software or internet. This was something I had already addressed in that paper: disruption might be the field of young creators.

They raise a lot of money

A really striking point is the amount of money raised by these disruptive companies. With an average age of 6 years, these companies have raised on average $200M… In energy, it is more than $400M and even more than $250M for the internet.

Silicon Valley leads

Not surprisingly though, Silicon Valley seems to be the place where to be. 27 companies are based there (a little more than 50%). It is also where they have access to the most capital ($280M on average). Then comes the East Coast (25%). Surprisingly they are based in NYC, not in Boston anymore when East Coast is concerned. Only 3 are Europeans… (Spotify, Transferwise and Fon) even if a few Europeans have also moved to SV…

Here is my full analysis which as I said before might contain mistakes (particularly on the founders’ age…). You might also disagree with my field classification…

Disruptor50
click on picture to enlarge

The unusual and amazing success of two serial entrepreneurs: Andy Bechtolsheim and David Cheriton

June 16th, 2014 Comment »

Serial entrepreneur is a buzz word. I have never been convinced by the link between serial entrepreneur and success. I even made an analysis for the ones linked to Stanford University (check Serial entrepreneurs: are they better?). But from time to time, you see such amazing and rare success stories.

Andy-David
Andy Bechtolsheim (left) and David Cheriton (right) [with Arista’s co-founder, Ken Duda).

Andy Bechtolsheim‘s is a Silicon Valley icon. In 1982, he co-founded Sun Microsystems. Born in Germany in 1995, he moved to the USA at age 20 for his master at CMU. He moved to Silicon Vallley to work at Intel but ended up at Stanford for his PhD. Sun came thereafter. He stayed there until 1995…

David Cheriton is a Stanford professor. Born in 1951, he got his BS from UBC and his PhD from the University of Waterloo. He moved to Stanford in 1981. I am not sure how they met, but they co-founded Granite Systems in 1995. A year later, it was bought by Cisco for $220M. Bechtolsheim stayed with Cisco until 2003. Cheriton is still a Stanford professor. Two years later, they met with two unknown Stanford students, Larry Page and Sergei Brin. Both invested $100’000 each in their start-up, but this is another story…

In February 2001, they co-founded another networking start-up, Kealia. In April 2004, “Sun issued an aggregate of approximately 20,000,000 shares of common stock (including assumed options) in exchange for all outstanding stock and options of Kealia” (Newswire reference). At that time, Sun’s share was worth about $4, so it would have been an $80M acquisition. That same year, Google went public (on August 19) at $85/share. They had received 1’600’000 shares for their $100k investment (i.e. $0.0625 per share, a multiple of 1’360 and with a six month lock-up, the share value more than doubled…) The Kealia success is all but relative…

arista-arastra
Granite might have had a logo, but I could not find it on the web. Kealia was apparently always in stealth mode. No logo available either

But it did not stop them. In October 2004, they co-founded Arista Networks. The name at the time was Arastra. The company just went public which is the motivation for this post. My usual cap. table follows. And because they made so much money, the two serial entrepreneurs nearly funded it entirely… Not the smallest success of all!

Arista
Click on picture to enlarge

PS: Are Cheriton and bechtolsheim good friends? I have not clue, but the Arista IPO document mentions a litigation:

On April 4, 2014, Optumsoft filed a lawsuit against us in the Superior Court of California, Santa Clara County titled Optumsoft, Inc. v. Arista Networks, Inc., in which it asserts (i) ownership of certain components of our EOS network operating system pursuant to the terms of a 2004 agreement between the companies, and (ii) breaches of certain confidentiality and use restrictions in that agreement. Under the terms of the 2004 agreement, Optumsoft provided us with a non-exclusive, irrevocable, royalty-free license to software delivered by Optumsoft comprising a software tool used to develop certain components of EOS and a runtime library that is incorporated into EOS. The 2004 agreement places certain restrictions on our use and disclosure of the Optumsoft software and gives Optumsoft ownership of improvements, modifications and corrections to, and derivative works of, the Optumsoft software that we develop.

In its lawsuit, Optumsoft has asked the Court to order us to (i) give Optumsoft copies of certain components of our software for evaluation by Optumsoft, (ii) cease all conduct constituting the alleged confidentiality and use restriction breaches, (iii) secure the return or deletion of Optumsoft’s alleged intellectual property provided to third parties, including our customers, (iv) assign ownership to Optumsoft of Optumsoft’s alleged intellectual property currently owned by us, and (v) pay Optumsoft’s alleged damages, attorney’s fees, and costs of the lawsuit. David Cheriton, one of our founders and a former member of our board of directors who resigned from our board of directors on March 1, 2014 and has no continuing role with us, is a founder and, we believe, the largest stockholder and director of Optumsoft. The 2010 David R. Cheriton Irrevocable Trust dtd July 27, 2010, a trust for the benefit of the minor children of Mr. Cheriton, is our largest stockholder.

Optumsoft has identified in confidential filings certain software components it claims to own, which are generally applicable tools and utility subroutines and not networking specific code. We cannot assure which software components Optumsoft may ultimately claim to own in the litigation or whether such claimed components are material.

On April 14, 2014, we filed a cross-complaint against Optumsoft, in which we assert our ownership of the software components at issue and our interpretation of the 2004 agreement. Among other things, we assert that the language of the 2004 agreement and the parties’ long course of conduct support our ownership of the disputed software components. We ask the Court to declare our ownership of those software components, all similarly-situated software components developed in the future and all related intellectual property. We also assert that, even if we are found not to own any particular components at issue, such components are licensed to us under the terms of the 2004 agreement. However, there can be no assurance that our assertions will ultimately prevail in litigation.

On the same day, we also filed an answer to Optumsoft’s claims, as well as affirmative defenses based in part on Optumsoft’s failure to maintain the confidentiality of its claimed trade secrets, its authorization of the disclosures it asserts and its delay in claiming ownership of the software components at issue. We have also taken additional steps to respond to Optumsoft’s allegations that we improperly used and/or disclosed Optumsoft confidential information. While we believe we have strong defenses to these allegations, we believe we have (i) revised our software to remove the elements we understand to be at issue and made the revised software available to our customers and (ii) removed information from our website that Optumsoft asserted disclosed Optumsoft confidential information.

We intend to vigorously defend against Optumsoft’s lawsuit. However, we cannot be certain that, if litigated, any claims by Optumsoft would be resolved in our favor. For example, if it were determined that Optumsoft owned components of our EOS network operating system, we would be required to transfer ownership of those components and any related intellectual property to Optumsoft. If Optumsoft were the owner of those components, it could make them available to our competitors, such as through a sale or license. In addition, Optumsoft could assert additional or different claims against us, including claims that our license from Optumsoft is invalid. Additionally, the existence of this lawsuit could cause concern among our customers and potential customers and could adversely affect our business and results of operations. An adverse litigation ruling could also result in a significant damages award against us and the injunctive relief described above. In addition, if our license was ruled to have been terminated, and we were not able to negotiate a new license from Optumsoft on reasonable terms, we could be required to pay substantial royalties to Optumsoft or be prohibited from selling products that incorporate Optumsoft intellectual property. Any such adverse ruling could materially adversely affect our business, prospects, results of operation and financial condition. Whether or not we prevail in the lawsuit, we expect that the litigation will be expensive, time-consuming and a distraction to management in operating our business.

We do not believe a loss is probable; however, it is reasonably possible. Due to the early stage of this matter, no estimate of the amount or range of possible amounts can be determined at this time.

If you want to be a high-tech entrepreneur, don’t read this. Or should you?

June 12th, 2014 Comment »

Is this a strange time or am I growing old? The point is my recent readings were not optimistic views of high-tech entrepreneurship or of Silicon Valley. I just think of
- Horowitz’s The Hard Thing about hard Things,
- Morozov’s To Save Everything, Click Here (which is so negative, I have not written a post yet!)
- HBO’s Silicon Valley – nice & funny but slightly depressing.

In a way there’s always been creations which were not absolutely optimistic, but there was always some positive point. I think of
- Bronson’s The First $20 Million Is Always The Hardest,
- Edwards’ I’M Feeling Lucky – Falling On My Feet in Silicon Valley,
- the very good Harboe Schmidt’s The Ultimate Cure or
- even very short and funny The Anorexic Startup by Mike Frankel.

NoExit

Now I just read No Exit, Struggling to Survive a Modern Gold Rush by Gideon Lewis-Kraus (thanks David!). The passion, the excitement have disappeared. The entrepreneurs are honest enough to show they are exhausted. And the gold rush again will have more casualties than winners.

I initially thought it was a fiction, but the author is a journalist for Wired. That’s why my initial reaction was it’s not a good work, I could not see the style, the rythm. After I understood it was not fiction, I was less negative, thought it’s not the best document I’ve read. But here are some interesting quotes/lessons.

“The Valley has successfully elaborated the fantasy that entrepreneurship – and, more broadly, creativity – can be systemized; this is the basic promises of accelerators (Ycombinator et al.) that success in the startup game can be not only taught but rationalized, made predictable.” (31/847 – Kindle reference) and later “Silicon Valley’s most bought book, Eric Ries’ The Lean Startup, is a spirited pamphlet of winning exhortations to hunger, speed, agility, and unsentimentality. Almost every founder in Silicon Valley has read the first 30 pages of that book.” (618/847) If you do not know the book, it’s about spending little and pivot fast and I agree there is something wrong about all these fantasies. Indeed even Steve Blank agrees now. Check Blank’s statement about learning entrepreneurship.

Even worse, “[...] the Series A crunch. Due in part to the rise of startup accelerators like Y Combinator, as well as to the surplus capital washing around the Valley from recent IPOs, it has never been easier to raise a small amount of money, say $1 million. And it has never been easier to build a company—especially a web or mobile product—from that small amount of money, thanks in part to the proliferation of cheap, easy development tools and such cloud platforms as Amazon Web Services. But the amount of “real” VC funding (i.e., Series A rounds) to be allocated hasn’t kept pace. The institutions that write the big checks, those that might support and sustain real growth, can survey what a hundred companies have managed to do with a small check and put their real money on the propositions that promise the greatest yield with the least risk” (41/847) and “The problem in 1999 was that to get $5 million you didn’t need very much. You needed one or two Stanford résumés, an idea for a prototype, and a live body to give the money to.” It’s hard to get that $5 million now in part because it’s so easy to get $500,000, especially if you’re coming out of an accelerator. One way to look at it is that the $5 million that went to one company of 10 people in 1999 is now going to 10 companies of two people. You’ve lowered the bar 10X” (753).

And the consequences are slightly different… “The Valley is the place where the astounding success of the very few has been held out to the youth in exchange for their time, their energy and, well, their youth” (60). “You know the odds on any given company’s success are long, but that’s why you make a lot of bets. In the first dotcom boom, the risk was largely carried by the investors. Now that the financiers have gotten a grip on the market, and specialized engineering knowledge has become a commodity, the risk has been returned to the youth” (760). “The worst thing is that these guys get their funding tomorrow and are stuck doing this for another year. So far, they only lost one” (778).

His comments are right, but isn’t this true of any bet you make in life, becoming an artist, a scientist. You can go for a safer life for sure. Lewis-Kraus is pessimistic, he sees the people who do not win. And this exists anywhere people try. I have more optimistic views. Even if I know it is a tough experience… I prefer what Latour said of his experience with Everpix: “I have more respect for someone who starts a restaurant and puts their life savings into it than what I’ve done. We’re still lucky. We’re in an environment that has a pretty good safety net, in Silicon Valley.”

A final quote I liked (related to my previous post about age): “There’s been a lot written recently about the age divide in Silicon Valley, but even the more thoughtful pieces — such as those in The New York Times Magazine and The New Republic — tended to miss the obvious: Older people don’t typically work at startups because they have families and can no longer stomach the perpetual crisis. It’s exactly the same reason that people in their fifties tend not to be magazine freelancers or underground-club bassists. As one investor put it to me, When I see a 40-year-old in a Series A meeting, I want to pull him aside, put my hand on his shoulder, and tell him to just go get a job.” (706).

PS: it’s still a challenge for me to read an e-book all the more with these references which are not pages anymore. So I cheated, created a pdf and printed the stuff to take notes and later copy/paste the pdf…

Age and Experience of High-tech Entrepreneurs

June 6th, 2014 Comment »

Every other year I go to BCERC, an academic conference about entrepreneurship. Not only to listen to researchers but also to add my own contribution. (You can find my previous contributions with tag BCERC). It’s also a way to confront and share ideas and results with others. This year, I wrote a short paper about Age and Experience of High-tech Entrepreneurs. The slides are available on slideshare and here they are:

Age and Experience of High tech Entrepreneurs from Herve Lebret

The paper is available on SSRN. Why did I do this, well, you can have a look at the slides or even read the 15-page paper. But my point was to react to recent claims that high-tech entrepreneurs are on average about 40-year old. I was surprised and did my own analysis based on about 570 founders… and yes, the average age is about 38. But… the devil is in the details. It is sector-, time-, region- dependant. And even more surprisingly, the higher the value creation, the younger the founders. here are just a few tables as a quick conclusion…

BCERC2014-age-vs-field-period

BCERC2014-age-vs-geography

BCERC2014-age-vs-valuecreation

The Ends of the Internet by Boris Beaude

June 3rd, 2014 Comment »

The Internet is only a reflection of technological change and globalization. As with these two issues, social and political tensions have naturally emerged, but are even more acute because of the specifics of the Network and the revolution it created in much less time than the previous World developments. (I will add below that the disappointments caused by excessive expectations from technology have also played a role.)

les-fins-d-internet-de-boris-beaude-fyp

The cover page of the book The Ends of the Internet says that the Internet has revolutionized the world in the fields of information, production, collaboration and transactions. Its author, Boris Beaude, is a geographer by training, which is an important point for the topic addressed here. Beaude has a strong contribution to the discussion about the constraints created by the Network. It is synthetic, and detailed, thanks to a short book (95 pages) however dense and exciting.

(I would not say the same of Evgeny Morozov’s book, To Save Everything, Click Here, which is also dense on related subjects, but too provocative or extreme to be totally convincing. I might come back on that book later in another post.)

Morozov-ToSaveEverything

The Internet (just like globalization) has revolutionized the World (page 15) by re- balancing the priorities (and re-creating tensions) between:

Before the Internet Since the Internet
Equality Freedom
Society Individual
Privacy Public Life / Transparency
Property Free

Beaude also mentions (page 24) problems linked to:
- Freedom of expression,
- Collective intelligence,
- Openness,
- Decentralization,
- Neutrality,
which are the topics of his chapters.

The Internet thus disturbs the local values in the territories, but the Internet (which is “a proper name just as well as France or the European Union” – page 14) is anything but virtual; it is an intangible space. Yet it must be able to survive private interests. The Internet makes distance (and time) less relevant without abolishing them, which “makes clear its disjunction with the plurality of territorial spaces” (page 23). It disrupts the States that have put some values higher than freedom (safety, property in the USA to which must be added dignity, privacy in Europe). Beaude is geographer!

He adds: “A common space for humanity is clearly not enough to spontaneously create common values. But the social contracts are at the heart of politics. They offer to give up freedoms by collectively delegating authority in the name of freedoms seen as more fundamental” (page 29). See the “my freedom ends where someone else’s begins.” The Internet is both a space of freedom and space of absence of law (intellectual property, widespread surveillance, private use of the data; the list is long.)

And this is where is one of the worst issues – among others. Not only in the world of the Internet, but also in the field of technological innovation where experts often impress politics and society. This creates a tension between the individual and society, between private and public entities, between experts and decision makers. “The computer code is now the law” (page 47).

About Collective Intelligence: “Believing in the potential of individuals is precisely not to believe in one only, and it is to accept individual fallibility, while recognizing the power of appreciation that resides in anyone” (page 38). Then follows a section on democracy and “its difficulty in organizing common will/good with individual will/good” (and the famous, the “worst system except for all the others.”) In addition, the largely minority character of the contributors to the collective intelligence on the Internet (e.g. 0.0002 % of users for French-speaking Wikipedia) is an additional limit, not to mention the loss of their independence and the privatization of this intelligence (pp. 40-46).

You should also read his excellent synthesis on free and property. The emerging intellectual property concepts of Copyleft and Creative Commons. Free only exists because a third party pays; not only advertising but also sponsors in the case of Wikipedia or Mozilla. This is not so new since both Press and TV used these methods. It is just a matter of scale and strong dematerialization. The minimal costs of copying and transmission revolutionize the world, but the initial production of goods must still be financed. Netflix and Spotify show that new models are possible, but only if only the aggregator or distributor is correctly paid, the content producers may disappear if not in quantity, at least in quality… And at the same time, Beaude reminds us that free is also a freedom factor.

Another subtle topic: hypercentrality (Google, Facebook, Twitter) poses fantastic problems, not least being the circumvention of laws and taxation (page 75). For example, the “weak links” (those which are neither daily nor intense) are also essential. And threatened?

Beaude interestingly mentions the Fourth Amendment of the U.S. Constitution, which requires a warrant for any search. It raises the constitutionality of the monitoring carried out by the NSA (page 81).

How has the Internet reached the point where the results of Google and Twitter differ depending on the country and offers by iTunes, Netflix or YouTube are different or even inexistent with geography? (Page 85). This missing neutrality will lead to the neutralization of the Internet, even its death (page 89). “Neutrality and self-organization are part of the libertarian options [...] and are inconsistent with politics. [...] Humankind must seize this opportunity to revisit what we consider to be important, really important. [...] The challenge is unusually complex. We will have to choose between the end of the Internet and the globalization of politics” (pp. 91-93).

Beaude therefore indicates that the dilemma is simple: “If in accordance with the national social contracts, the Internet is partitioned according to the Nations. By not respecting national social contracts, the Internet might be partitioned even more in the relatively near future” (page 35). “The Internet enables the emergence of a global political space, but it is still to be invented. Before this invention comes, the Internet will probably be gone!”(Page 36)

As usual my synthesis is imperfect, but if you’re interested or intrigued, read Beaude!

Thiel-FlyingCars

Finally, and this is not quite the subject of Beaude, there is also some disappointment with the promises of technology and the Internet in particular… Just read again Thiel’s motto – “We wanted flying cars, instead we got 140 characters” – that I have already mentioned here. This only would not be so bad. But then what about the citation of the former CEO of TF1 – “what we sell to Coca-Cola is human brain time made available. [...] Nothing is more difficult than getting this availability” – or that of Jeff Hammerbacher (thanks Martin for the reference): “The best minds of my generation are thinking about how to make people click ads, that sucks.” Which brings me back to Morozov whose arguments on centrism and solutionism of the Internet seem very excessive. It is not the exaggerate promises of the Internet that are so much delusional, but the risk of drift and disappearance of the Internet that is the real problem – but this is another topic!