Is he implying some sort of unethical behavior as the second way?
[UPDATE: before you downvote this answer you should know that I am the OP.]
I think there are two main cases:
1) business models based on the exploitation of others, and
2) low margin businesses where ethical players get crushed by those willing to take unethical/illegal shortcuts.
Luckily you _can_ become successful even if you rigidly adhere to the highest ethical standards, you just have to choose your business model carefully.
However, it's not good to go to the other extreme. I've seen companies fail because the CEO bent over too far backwards to be ethical and as a result let people walk all over him. One of the qualities that seems to be required in a successful founder is a willingness to be an asshole when circumstances demand it (and being able to tell what those circumstances are!)
The parent is rationalizing unethical behavior by classifying it as merely assholish. If you read the post carefully you can see the point where the cognitive dissonance takes place. The parent even said "the other extreme" is being too ethical, so he's clearing arguing that acting too ethical is undesirable.
So, status quo for tech companies is to not read on patents (avoid knowing infringement), grow as fast as they can no matter what patent laws they violate, accumulate their own patents where possible for use in self-defense, and build up lawyer money. One day, when the attacks come, the company will be ready for a solid defense where it claims it didn't know about the patents, they're void, or they're overpriced. This might also be leverage for a better deal during an acquisition.
The operating environment is unethical in its very nature with certain things such as patents, trademarks, copyright, lock-in w/ formats/protocols (eg walled gardens) and so on. So, those that can use them will get a financial advantage. Those that don't might get so much less of the market they get squashed or denied a fortune they could be doing a lot of good with. Lots of grey areas to think through in these sorts of things.
Smart people can come up with elaborate justifications for anything, if they take the time to "think it through". Arguments that "they could be doing a lot of good" is basically "the end justifies the means". That's the opposite of morality.
Maybe an executive is doing a lot of good and so it would be bad for society if he went to prison for a hit-and-run. Better cover up the crime so the good guy can keep doing the good things he so goodly does. All for the benefit of society, of course.
The law says I can't reproduce what's in a patent without permission/license from the patent-holder. The law also says that your intent doesn't matter: unknowingly infringing is also a violation but with less penalties. The big players defining markets or entering mature ones file patents on as much of them as possible to maximize chance new competition will infringe on one of their claims. They also acquire companies for their patents. So, newcomers often have to violate patent law or pay some large amount to a bunch of companies just to get their product in the market if keeping it legal.
Or they just build, grab market share, and pretend patents don't exist. That's how almost all of them make it. The alternative is endlessly Googling patent databases about almost everything your business is doing in tech. I say good luck to a startup or SME trying to do that.
"You have an unusual set of ethics there."
The above advice was given to me by people who create patents for big companies. They said it's what their employers do. It's not my ethics so much as the only option that works without putting one player in a defensive, weak situation. That player still might get hit by NPE's, though. Whatever isn't deterred will involve a big payout to patent-holder or a bigger payout to lawyers that, if defense fails, results in an even bigger payout to patent holder.
"I doubt you'd find many people in the tech industry who would equate potentially infringing someone's patent to adopting source code you don't own into your product in a copyright-infringing way."
In their minds, that might be true. It wouldn't surprise me given that patent provisions aren't in a number of FOSS licenses. In legal reality, they're both a monopoly on a something that require a license to legally use. Thanks to bribery of politicians, the game is also rigged in favor of patent-holders and big incumbents most of the time.
By the way, my patent lawyers (both in startups and at a big tech company I worked at) tell me that patent cases are crapshoots and there's no good way to predict what's going to happen in them. This also means that I really don't have any idea if I'm actually infringing someone's patent, even if I knew about it. Which I don't, because that advice to never read anyone else's patents is good advice for any inventor.
Larry Page and Sergey Brin do not.
The problem with this vague advice is it leaves it to the reader to interpret what is and isn't ok. And readers are notoriously bad at this.
No, I don't think so. But I have a conflict of interest here because in 2008 I made my own attempt at starting an Uber-like thing (I called it iCab). It failed before launch because we were unable to get any of the local cab companies to work with us. The idea of using black cars never occurred to us, so Travis gets props for that. I think he's gone way too far towards the dark side. But on the other hand, he succeeded where I failed so take that into account when deciding how much weight to give my opinion.
> The problem with this vague advice
Well, the problem is more fundamental than that: it's a judgement call, one which always depends on a totality of the circumstances at the time. I can't give you a formula for how to decide how ass-holey to be, just as I can't give you a formula for making any of the other myriad decisions it takes to successfully build a successful company. If I could do that, I'd be running my own successful company instead of wasting time hobnobbing on HN.
Uber was not yet a thing until 2009.
The idea of hailing cabs electronically is not new. A confluence of factors helped Uber figure out how the idea could work, in hindsight.
> "The idea of using black cars never occurred to us, so Travis gets props for that."
lisper is right: using blacks cars was a much better strategy than trying to negotiate with local cabs in trying to gain traction
What decision have you made? Howling with the wolves or getting back to being a sheep? I'm still unclear in this part and actually hoped for some suggestions in one or the other direction.
Seriously though, I do have a strong preference for erring on the side of being ethical and respectful of others. (But that could be the reason none of my companies have succeeded.)
If anyone thinks this is wrong, please say so. I'm interested.
I don't understand why he'd be cagey about telling us that, though.
While any sentence-long description will be an oversimplification, I think fitting everything under the sun in a "1st way" is counterproductive. If all we're talking about is how they succeed with Ron's components in mind, then there are at least a few ways.
I see the the need-being-met thing as a spectrum. The more unmet the need is, the less likely competition is a problem at that moment, so just solving it is sufficient (who knew having a car was actually a 'problem' versus purchasing transit from 'a' to 'b'?)
I've also seen that sometimes a product that focuses on a niche and does it REALLY well is better (for that niche) and NOT cheaper, but they succeed too (e.g. Veeva).
Sometimes a product that focuses on the lower end of the market is cheaper and not better (i.e. functionality) but ppl underestimate the long-tail of non-users. (maybe like Gusto vs. traditional payroll providers or RelateIQ vs. Salesforce)
On acquisitions, I've heard that acquihires usually make little-to-no money for the investors. But as beambot also mentioned, the business could be acquired for hard tech that, even if no customers/bizmodel, some other business would find value in having (maybe like Facebook>Friendfeed or Linkedin>RunHop). But to reverse engineer that from day 1 I imagine would be even harder than building a product to an unmet need haha. You don't know if the bigger co is working on it internally or if they'd scoop up somebody else. Wonder if this was Meerkat's plan, gone awry <-- speculation. ¯\_(ツ)_/¯.
All of the focus seems to be on getting to the next series of funding. The survivability metric used is not income over burn rate, it's investment dollars over burn rate. The whole goal is to get as big as possible then exit.
That's note quite true. You might choose to compete on, say, price, but that certainly isn't required. Likewise, you don't necessarily have to have a better product, if you are so much more operationally efficient that you can sell you product cheaper than the competition. It would be better to say that you need to be better than your competition in some combination of "better, faster and/or cheaper".
For more on this topic, I recommend The Discipline of Market Leaders by Fred Wiersema and Michael Treacy.
It worked as the foundation for several now big startups, but was the perhaps ethical breaking of said rules some kind of gateway drug to unethical behavior? Kinda looks that way in Uber and AirBNB's case.
And then again breaking perceived rules, ideas like Big Oil will be here forever or you have to be a defense firm to get a rocket launch contract, is bold and lucrative (or apparently future-lucrative). There is a fine line between bold and foolish.