When Software Piracy is OK

Software piracy is bad in most cases, especially when it involves frivolously indulging in all kinds of loot found on The Pirate Bay for the sake of simple entertainment. But what about the first-time entrepreneur who self-teaches a pirated copy of Photoshop to make a logo for her first website? Or the YouTube poster who tries his hands on professional video editing software to make his videos look better? These people might also be pirates but their impact on the organizations they pirate from is negligible at worst and beneficial at best.

They Weren’t Expected Customers

The software put out by giants like Adobe is made for a professional crowd and priced thereafter. Their customers rely on their software to make a living; buying it is an investment rather than an expense. What Adobe isn’t relying on is selling a few extra copies of its software to curious teenagers or people looking for an alternative to Windows Paint. Software piracy is only a problem if it hurts sales. Everything else is just free marketing. If {insert big company} wasn’t expecting you to buy their product (because you aren’t their customer and can’t afford it in the first place) it doesn’t hurt them. If you are using Adobe Illustrator to make squiggly graphics on your spare time you aren’t hurting Adobe’s bottom line because you would have never been a paying customer.

They Provide Free Marketing

Having people all over the world using your software without hurting your bottom line sounds like an ideal marketing campaign, and it is. Droves of people start learning your software, their peers will take up interest and you receive free brand awareness. All this knowledge and goodwill towards your company will be paid back when these people become professionals and purchase your software for their business needs. Don’t look at it as piracy, look at it as early adoption. Or even freemium.

They Become Future Customers

People who grow up around renowned pirated software products tend to stick with them in the future as well. A skilled teenage Photoshop hobbyist might turn into a graphic designer after a few years who subsequently starts a company. Companies can’t afford to risk it with pirated software and will invest in the real deal. Plus, paying for software that actually lets you earn revenue doesn’t feel like a waste of money. It feels like (and is) an investment.

Freemium is Legal Piracy

Legal piracy already exists. It’s called freemium. This model builds on everything explained above and lets the professionals pay for premium services, lets the noobs play around without risking fines or imprisonment and most importantly lets the fledgling entrepreneurs start out with minimal investment and grow with the software.

If anything, piracy is the result of incompatible world views and freemium has addressed that. Rather than making software one-size-fits-all it can now be handed out in bite-sized portions. Sample, eat one item or order the whole menu. Its fair, its modern and its here to stay.

Value vs Hype Explained

Marketing is considered important by most people. If you are an entrepreneur chances are that you spend a serious chunk of time on it. But can really great marketing fill the gaps of a lackluster product? It depends on if you are selling value or if you are selling hype.

Selling Value

If you have a real product or service that could benefit users in some way, you are selling value. Your repeat business will happen because your product or service is what drives sales and your marketing is only there to support it. Your products do the talking and your marketing prompts customers to listen to what they have to say. In other words, a successful company involved in selling widgets doesn’t make money because it has such nice ads, but because its widgets result in repeat and new purchases and the ads remind people of that.

Most big names in products and services are big because what they sell creates value for their customers. Examples are IKEA, Apple, Toyota, Samsung, Microsoft(?), Oracle, [insert big company here], you get the point. They all have fantastic marketing but it’s their products and services that do the talking and drive people to come back for more.

Selling Hype

There are a few good examples of products being sold thanks to marketing despite being good in any way at all. Those things usually come out of multi-level marketing pyramid schemes, get rich quick schemes and other deceptive marketing channels such as TV Shop. Yes, these products sell but they are not the cash cows of most of these business models. Multi-level marketing makes money on its membership fees, TV Shop actually makes money on their products thanks to their audience who are watching TV when most of us are working (read into that however you want) and get rich quick schemes make money on selling you expectations rather than results/tangible products.

So you can make money if you focus on marketing and hype, but you better be one of the business models above. If you are a business who believes in improving the life of your customer, selling something that doesn’t result in buyer’s remorse, and generally deliver an extraordinary experience, put marketing aside for a second.

The Correct Approach

If you are in the startup trenches, don’t waste your time and money on marketing before perfecting what you are actually trying to sell. Make sure your friends and family like your product or service. Test it out. Narrow down its functions to its core value proposition. Is it a good concept? Will people like it? When it’s ready, launch small and gauge reactions and feedback. If you have a winner, then full speed ahead into marketing and promotion. But remember, if your product doesn’t live up to your marketing, you create hype, buyer’s remorse and ultimately failure. It’s better to let your marketing do the introduction and your product do the talking.

Thoughts on Relativity

Protons can sporadically appear and disappear. They are subatomic and infinitely small and of almost no mass.

The universe could also have been created in a similar fashion, and will disappear in a similar fashion. But becausue of its mass, there is more inertia and time distorts and gets slower.

For a proton to instantaneously appear and then disappear almost immediately later seems really fast to us. It can happen because of its close-to-nothing mass and almost no inertia.

Measuring the age of a human in proton years makes it seem really long. Measuring the age of the earth in human years makes it seem very long. Measuring the age of our galaxy in earth years makes it seem really really long because of its mass. And measuring the age of the universe in galaxy years makes it seem really really (really) long. What happens if we measure the age of whatever the universe is part of in universe years? Probably long to the point where time stops completely, just like before the big bang.

Each step involves more mass, more mass involves more inertia and more inertia means slower time or a slower cycle. So, the universe could be just like the proton that appears from nowhere and disappears as quick, but on a universally grander and slower scale.

We are so small and live such a small fragment of this entire process that it seems eternal to us.

Ideas vs. Execution vs. Vision

Ideas, execution and vision are big words in entrepreneurship. They constitute what most success is made of. Even so, people rarely mention them in the same sentence and tend to play favorites. “Execution is more important than ideas” is a common notion held among certain business people.

The truth is a different story. To create something of extreme success you need to give each of them equal importance. Ideas, execution and vision are in fact interdependent and because of that they can result in some amazing synergy. A good idea cannot hold its ground on its own, but combined with equally good execution and vision the resulting combination will be worth more than the sum of its parts. Let’s take a closer look:

Ideas

Ideas are important. Everything around you is the result of ideas: your car, the Internet, the way your music sounds, the stitching on your IKEA couch, maybe even the air you breathe if you have an air conditioner. Then there are the more subtle things like language, social structure and even your thoughts in some very rare instances (North Korea is a candidate here). Ideas are the essence of what makes us human and what everything created by us is founded upon. This makes ideas very important.

Execution

Execute your idea with your vision in mind and build for the future; create the foundation for what your users would want your concept to be 5 years from now.

If everything around us was based on ideas then execution is what made them real. Ideas are practically useless without execution. Only thinking about ideas gives them no real value and they will remain a fragment of your imagination. Execution on the other hand is pointless without a great idea and will result in something mediocre at best. What you want to do is put your effort into executing great ideas.

Good execution takes a lot of effort. If coming up with a great idea is hard then executing it is even harder. You will need to distribute resources, develop a strategy, hire talent, learn the industry or field and work with real-world constraints. The idea might be dead simple to you while it is in your head, but imagine taking it out and placing it in front of you. While building a one-man space shuttle to take you to Mars and back might be a great idea in the future, chances are high you will be disappointed if trying to execute that today.

In addition, if your idea is complex it is likely that you do not possess the necessary skills yourself. This puts an even greater strain on execution since you need to bring in outside talent. To summarize this and quoting myself, ideas are nothing without execution, and execution is nothing without ideas.

Vision

Vision is sometimes overlooked when talking about the importance of ideas and execution. This is unfortunate because vision is what binds your ideas and execution together and completes the package. Vision is like the entrepreneurship professor who asks you uncomfortably pointed questions about your idea to make you to think:

What if someone copies you? What if demand skyrockets? How will you respond to change? What if your concept is not well received? Does your value proposition stand a chance against competition? Are you future proof?

Having vision helps you look ahead and create a long-term strategy. It also encourages you to plan for contingencies if things don’t go as planned. To create a long-term vision you need to take a step back from the smaller details and consider what type of experience your users will expect from your concept in the long run. Execute your idea with your vision in mind and build for the future; create the foundation for what your users would want your concept to be 5 years from now (the time frame depends on your industry of choice).

As an aside, Paul Graham suggests setting weekly growth rate targets. This allows you to measure the effectiveness of your strategy and reallocate your resources if they do not contribute to your growth and in effect your vision.

Summary

Putting great ideas, great execution and great vision in the same box results in some impressive synergy. Each element is of little value on its own but together they are worth more than their sum. To conclude:

A great idea is needed to draft up anything of value.
Great execution is needed to deliver anything of value.
Great vision is needed to sustain anything of value.

How to Save America

As most of you know, America is on a decline. The country (I know, America is a continent but bear with me) is struggling with jobs, lackluster spending growth and an unclear future for a country geared mostly towards consumerism. Turns out, mass tourism is the answer.

Take China. An arch foe, stealing both jobs from American factory workers and owning a pretty damn substantial $4.5 trillion of U.S. debt. Sure, China helped grow American businesses by offering dirt cheap manufacturing but “dirt cheap” has amounted to quite a lot of money and the various Chinese entrepreneurs are now ready to spend.

Here comes the good part.

Consider where China is coming from for example. All those years under strict communist rule has made the Chinese people very eager to loose the shackles and experience a free individualistic modern lifestyle. The Foreign Direct Investment in the Special Economic Zones in China (such as Shanghai and Shenzhen) also helped promote what western culture is all about (since we manufacture all our stuff there).

What do you get if you add these two together? Heaps of opportunity and a brighter future for America. Chinese people with new-found money are eager to experience all the neat tricks of western culture and America is there to provide. It’s time for America to switch to mass tourism.

The many decades of spreading American pop culture internationally (besides China) has also resulted in a pretty diverse and large group of people who love America, so why not let them come and boost the economy? There is no money left in American pockets anyways; someone else’s wallet is needed. If you can’t be an empire, being a tourist destination is the next best thing.

What do you think? Could boosting tourism actually be the viable answer to Obamacare?