Wealth Shift: The Decline of Ethics in America
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Lesson #9 – What’s Yours is Mine

Cash, property, and time aren’t the only things capable of being Wealth Shifted. People can Wealth Shift ideas as well. And while there may be laws in place to protect these ideas, as anyone who has ever experienced the pain associated with having an idea stolen will tell you, those laws aren’t worth the paper they are written on. Once again, the lure of monetary gain is too much of a temptation for people who have cut their teeth on Wealth Shift. And, once again, the ethical paradox comes into play. Behavior that is unethical to one person is perfectly acceptable to another and the law is not equipped to adequately protect the person who had the idea in the first place.

There are plenty of legal documents out there that are designed to keep this from happening. Nondisclosure agreements, non-compete agreements, licensing agreements, patent and copyright laws – the list goes on and on. But there are so many loopholes in these rules that they might as well not exist. Non-compete agreements are often unenforceable, patents don’t cover innovation that results in a better (or even just a different looking) “mousetrap”, copyright laws don’t try to determine which came first – my chicken or your egg – where computer code is concerned. As long as your computer code looks different from my computer code (i.e. you didn’t hack my computer to steal it) the courts are reluctant to get involved.

So if my idea is just going to get stolen by someone bigger than me, someone who has the money to roll it out faster than me, how am I possibly going to be able to compete?

Yes, that’s the sixty-four million dollar question.

One of my clients recently took an investment in an internet start-up company founded by his cousin and a couple of very bright computer programmers. My client’s cousin was a bit too flashy for my taste -he simply couldn’t resist talking about his program (which was still in the development stage) to every Tom, Dick, and Harry that he met.

This was the cause of considerable friction between my client and his cousin. Every time we turned around, we caught the guy spilling his guts. We’d tell him to shut up and fly under the radar, and the next thing we knew he was at a trade show, not only talking the idea up, but also showing screen shots of the web site to prospective customers.

While I won’t go into detail about the litigation that my client’s now-defunct minnow of a company is currently involved in with a whale of a competitor, I will say this: if you fail to play your cards close to your chest, don’t get all surprised and indignant when someone else peeks.

My client’s story is not unique. While once it may have been relatively easy to develop a site and bring it forward without too many eyes looking on, now that the internet has birthed so many dot-com millionaires it seems that every major company is out there scrutinizing the internet for the next big idea to Wealth Shift.

We must do more to protect our innovators and make it profitable to invest in research and development. We need to do a better job of protecting ourselves from copycats, including international copycats. It doesn’t do America a whole lot of good if we, the most innovative country in the world, aren’t allowed to protect our profits by the establishment of stricter laws. Tighter laws, tighter lips – they are both necessary in a Wealth Shifty world.

I’ll give you a real-world example:

In 2001, Artisan Entertainment released a movie called Startup.com, which followed the trials and tribulations of two guys named Kaleil Isaza Tuzman and Tom Herman as they tried to get an internet start-up off the ground. Their web site idea, govWorks.com, was compelling. It intended to make conducting business with municipal governments (think paying traffic tickets, etc) a snap by offering online payment options.

While nobody can fault Tuzman, the guy in charge of raising the money, for sharing the concept with potential venture capital partners, unfortunately for govWorks, Tuzman didn’t stop there. Despite the fact that the web site was still in the process of development and needed serious de-bugging, Tuzman couldn’t resist going out and showing, not just one card or two, but his company’s entire hand to the world. Tuzman’s ego was so out of control that it couldn’t stop running around the country writing all sorts of PR checks that his company could neither cash nor receive advantage from.

From May 1999 to December, 2000 (when govWorks.com went under), Tuzman appeared on Fox Network’s “Digital Jam” and other broadcast media shows. He was on the cover of Dinero Magazine. Forbes Magazine rated govWorks.com as one of its “Best of the Best” before the site was even functional, and articles about the company appeared in the New York Times, Smart Money and Alley Cat News.

Not surprisingly, govWorks caught the attention of Bryan Mundy and Ed Trimble, two Atlanta-based entrepreneurs, who, in November, 1999, started a competing site called ezgov.com. In the documentary Startup.com, Tuzman, a Harvard graduate with apparently no common sense whatsoever, even invited Mundy and Trimble to visit govWork’s offices to show off their program! Needless to say, ezgov has survived while govWorks has failed.

While it is tempting to say that Tuzman and his govWorks got what they deserved, Tuzman also took $55 million in venture capital and all his workers down with him. While the VC companies are now a bit poorer, hopefully they are also wiser, and now insist on “zipped-lips” provisions in their contracts. Tuzman, who went on to write a book about the lessons he learned at govWorks, now lives, at least part-time, in the glitzy jet-set city of Dubai. Ain’t life grand?

Executive Summary: Coming up with a new idea is so exciting that it is often hard to keep it a secret. But in this Wealth Shift world where what’s mine is mine and what’s yours is also mine (and there aren’t enough laws in place to protect you), “breasting” your cards is the only way to make sure your idea will stay yours at least through the development and early implementation stages. It is not just the whales you have to watch out for – even an Average Joe, if he has the technical expertise, is more than willing to Wealth Shift your best ideas right out from under you.

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