Want Help With Your Startup? Let It All Hang Out on Craigslist

It's awfully easy to go looking for folks doing stuff the wrong way ... and to find it. So it's nice to be surprised by someone doing something amazingly, shockingly, frighteningly ... right!

I was greeted by a craigslist ad in my RSS reader today, one of many startups looking for folks to, essentially, work for free. I've written about why this is a bad idea before, and it's still a bad idea.

But there's a little more to this ... the poster (the company's founder presumably) posts a link to a wiki. Maybe it's genius, maybe a trainwreck -- either way I had to look.

On the other side of this link is a company wiki. An explanation of what the company is building; where they are in the process; their calendar; UI mockups with notes and the comment stream by the creators; and other items.

This is absolute genius, and it's so rare. Plus it shows the guts that most entrepreneurs fancy themselves to have, but lack when tested. I'm not commenting on their specific business/tech idea, I haven't thought much about that to be honest.

But it is so refreshing to see someone out there on the beach letting it all hang out as it were.

I work with a lot of entrepreneurs and most of them think that they're the first ones to think up some genius idea, and the best way to be successful is to either keep it stealthy and secret, or to sign reams of NDAs and non-competes with you before disclosing (cue music) their subtle and delicate brilliance.

Just writing that last paragraph, it's a struggle to keep a professional tone. These folks are usually (97%, there are a couple of specific exceptions) complete fools. And truly, they are fooling themselves, unconsciously trying to avoid exposing their idea to someone who might not think it's so good, or who might point them to the dozen other people doing the same thing. Generally speaking, the secrecy ends up being a contributing factor to their failure. Which, since startups are highly failure-prone anyway, they will deny anyway.

That's why I was so thrilled to see this post. The founder is saying, "If you want to try and 'steal' my idea, you go ahead. But if you really believe there's a bunch of money in it, wouldn't you want to work with other people who believe the same thing and who have the will to execute? And if you go off with it and succeed anyway ... you're still helping me because you're establishing the category, while I plan to work nights and sweat blood to execute better and faster than you."

The ad is reproduced below. I was going to link it, but interestingly it has been 'flagged' for removal from craigslist. It's hard to imagine why -- the whole scenario seems rather more legitimate than the typical ad in the category. Perhaps the allusion to potential full-time work disqualifies it from the free "gig" listing ... but I think a startup seeking essentially non-paid volunteers in whatever capacity they can afford qualifies as a part-time or temporary arrangement.

Technical Wizard / Web Developer Wanted | Internet Startup (sunnyvale) An internet startup is seeking a highly talented web developer If you have experience with either: PHP/MySQL, Python, or Ruby we would love to talk with you. This a very exciting startup opportunity with massive potential. At this stage, we are looking to bring aboard those who are seeking equity share in the company. We simply do not have the capital to fund salaries. For more information, please have a look at: http://wiki.kunsoom.com All of the pertinent information will be included in the wiki page. Thanks for your interest in the project! We look forward to hearing from you.

What Does Pownce Have to Do With Bogus Internet Movie Rentals?

Maybe my point about Pownce got lost in a larger, broader, and more academic argument. That's fine; I'm glad to see Ted Dziuba (yes, uncov) pretty much made the same point about Pownce. He has a larger audience than I do. My larger point, of course, is that we're not always the hiking-in-redwoods, biking-to-work, inventing-computers-in-the-garage, tossing-whole-industry-paradigms-out-the-window-with-our-wicked-code folks that our narrative says we are. We're as ridiculous, self-absorbed, and self-referential as the folks we take swipes at on our blogs.

What does this have to do with Internet movie rentals? Well, Internet movies -- and VOD in general -- is one of those always-coming-never-here technologies. Even if does arrive, it'll be 10-15+ years into the (U.S.) broadband-penetration era, meaning it will kind of dribble out the exhaust pipe of innovation as an incremental use case long after its revolutionary potential has disappeared. But Netflix (with LG) and Apple are back to the baccarat table for another round of tech's most pleasant losing gamble.

While Apple and Netflix have made little gains, big ol' Safeway is now selling a wad of recent hit films at 2-for-$6. On DVD. With a non-revocable license to watch in perpetuity, carry around, re-encode (if you're "careful" how you do it), and pass on to one's heirs for the next 1000 years. Or you can just rent the films for $0.99 - $1.49. The studios aren't going to hassle Safeway about "$3=watch forever" pricing (and heck maybe Safeway is paying $2 for those DVDs), because it's a retail supermarket. They understand it and it makes sense in their world. The same reason Joe Teenager can sign up with a record club and, if he works his deals optimally, pay a better per-track price than Apple does (maybe 30% of retail).

The house will have the advantage as long as tech keeps thinking like a player (and believing its own mythos) and not like the casino (the other that it tells stories about). Who's the "house" ? ... well, studios, producers, broadcasters, cable networks, telcos, CE makers (guess what, they don't think of 'tech innovation' the way software folks do), even government ... and that's just a start.

I made this point before. Now I'm gonna take it a step further, and talk about one way to move forward.

If you're an innovator in one of these areas, and you need to get a foot in the door, take on another perspective in addition to your own. Try and find a place to live in the other industry's model of the world (their value chain/web/network). I don't mean philosophically, I mean literally. Think of it as hacking their worldview, if it makes you feel better.

Here are some examples:

• When ecast needed legal clearance to get running with a digital library of songs in 1999, "MP3" and "Internet download" were conversation killers with record labels. ecast needed to be a jukebox, don't worry about the gears and levers inside, nothing to see here, move along. There were some hiccups in licensing until they shifted to the latter approach. Record labels know what a jukebox is and how they make money. Problem solved.
• Mediabolic ended up taking a different course, but at one point when the firm was working on  VOD with a set-top box, they looked into subleasing excess digital broadcast spectrum time for moving their data. What does that mean? It meant they would have been in some real sense a broadcaster using TV spectrum to reach customers. Which is a whole different conversation with content owners from the "renegade startup conversation."
• When Skip Interaction focused on travel data management, and mobile transactions, I advocated becoming a travel agency. While Skip would not likely have made much (any?) money on bookings, it changes the conversation with airlines, travel agencies, and companies whose employees travel a lot. Skip would have appeared as a "known" entity in the industry. All of a sudden, instead of requiring custom arrangements to do anything, Skip would have had a huge pile of boilerplate data and access to work from.

These examples are just from my personal experience -- I'm certain that this strategy is not at all uncommon. But we don't hear about it a lot, because it doesn't fit the plotline we want.

Post-structuralism for Dollars in Silicon Valley

On the eve of one of our grand theatrical spectacles, featuring one of our industry's undisputed showmen as emcee, let's pause for a minute and imagine that we've got our mental map of the tech world all wrong. We've been drawing lines not just in the wrong places, but where the model isn't about lines at all. As a result, we're misunderstanding ourselves and a lot of other stuff. And, since the economy doesn't care about our degree of self-awareness, it means we all -- entrepreneurs, investors, engineers, designers, marketers, journalists -- are leaving big money on the table.

I'm hoping that last sentence might catch someone's attention, especially that of the VCs who have a lot to gain or to lose based on their understandings or misunderstandings.

Where do we draw lines by mistake? We live in a structuralist mythology that we make up because it's easy and it's a shared set of beliefs that we can use to argue (in circles sometimes):

• The "new" versus the "old" is of course the big daddy duality
• How about Client / server, Startup / enterprise
• Geek / management, Engineering / marketing
• East Coast / West Coast, Stanford / Berkeley
• Open source / proprietary
• Content / code
• NorCal / SoCal, Hollywood / Silicon Valley
• Entertaining / Functional

These just scratch the surface -- you can probably think of fifty pairs of your own now, along with examples of how they are convenient, self-reinforcing, and yet ultimately invalid.

They are a cliche, but they own the conversation. I want to talk about the last few pairs: think of the narratives we make and live inside, as regards Northern California vs. Southern California, Hollywood vs. Silicon Valley, and Entertaining vs. Functional.

Now look at Steve Jobs, an entertainer who could get his fans to poke out their own eyes and get in line for an iPatch. Apple is theater, the Apple store a set, a Disney experience for people who feel superior making snarky comments about Disney. Do you really think computer geniuses work at the Genius Bar? "Space may be the final frontier / But it's made in a Hollywood basement" -- and in this case the fans have already reserved tickets to the sequel.

But, wait! I'm not bashing Apple or Steve -- that would be buying into the very dualism I'm pointing up here...

Now consider also: we have another award show, the Crunchies, coming up. Before you laugh, remember this event isn't intended as a joke. And donating money to charity doesn't make you serious, just generous.

We have our gossip writers, our A-lists and even our stunts that get a third of the Valley looking self-consciously at the floor, embarrassed at having to wonder whether Carly Fiorina or Leah Culver has set feminism back further, a third watching our great-standup-with-the-dirty-mouth pretending they all get the joke, and another third just saying the heck with it and jumping on.

Ya know, maybe we're not so far away from our SoCal cousins as we think. And just to keep it clear: I'm not saying there's a middle position, a compromise, where we're all gonna end up. I'm saying that the duality itself is a fiction. So there is no middle. Until we get this, we're going to continue to have a heck of a time getting some things right. Or making money with them!

Like what? Like things that aren't quite code and aren't quite content. We never got SVG right, because it didn't fit into the categories we thought made up the world.

Is a Flash media code or content? When my mom gets an e-card, she thinks it's content, not an app.

We don't have a cross-platform vector graphics standard in 2008 (!) ... because practical vector graphics in the real world means some logic as well as geometry.

Why can music acts sell (via the carriers) all manner of wallpapers and ringtones for cold hard cash to technically unsophisticated folks, and we still can't get the average person to install or run a mobile app on their phone for free? We're playing that game wrong and we can't see it.

We have every manner of "media center" -- hardware, software, open, closed, expensive, free. Even Microsoft has been in on the act for five years now. And I still don't know any regular folks at all who use any of them.

We have tons of great ideas on the shelves because we can't understand 'the other' well enough to make the deals we need on content licensing. (They don't understand us either.)

Three quarters of "Web 2.0" is not about any kind of functionality at all; it's not even about interaction design. It's about the glossiest thinnest veneer of user experience. It's about buttons and realistic smoke ... the kind of thing that some folks refer to as "production values." Moreover, three quarters of it is free and ad-supported. Not unlike most radio and television. Unlike radio and television, its reach is minimal. Ask your aunt in Duluth what del.icio.us is. Before we spend another session making fun of the studios for not realizing where their business really is, we might think about what an adjustment in ad rates will do to our own.

One last time for the folks in the cheap seats: it's not about right or wrong, steak or sizzle. We're just not where we like to think we are. We're somewhere else. To get a better idea where we are, we need to do some demolition on our usual Monday morning narratives. It's uncomfortable. The good news is, there's a ton of opportunity. And eventually it feels good to realize we've outgrown the notion that the world is flat.

Now go to Macworld and enjoy the, uh, show.

No Uber-Soft Launches and No Stealth Mode

Uber-Soft Launches and Stealth Mode are two common practices that are usually big red flags of impending trouble.

To be clear, an Uber-Soft Launch is not a classic, small-scale launch where you release a decent version (maybe beta) of your product, but don't blast every PR trumpet you can find until you get a first round of feedback and some perf stats. There's nothing wrong with that; it borders on a best practice.

On the contrary, an Uber-Soft Launch is when the CEO or entrepreneur starts hedging about whether this launch is really the product or really the big launch he's been working toward and talking up. "We're going to just try this out and see what happens ... "

That statement is legit if it's intended as faux-modest understatement from a guy (or gal) who's clearly going for broke to make the product succeed. But if the firm or leader is really this wishy-washy and diffident about the launch, forget it. It's game over.

But then, in that case it doesn't matter because what the entrepreneur is really saying is that he doesn't expect to succeed so he's simply covering himself so he doesn't look silly after the failure. And that CYA attitude is one of the key things that indicates impending failure. It's a symptom of lack of conviction, a fear of failure that drives systematic bad decision-making.

Stealth Mode is a little less black-and-white, as there are a few cases where it may pay off. A few. Meaning not many. Luckily, Web 2.0 seems to involve far less "stealth mode" than Web 1.0 so it's less of a problem.

When might stealth mode be useful?

(1) A company has a specific physical or algorithmic invention (no, not Amazon one-click), and intends to patent it and to defend the patent vigorously (= has the massive cash to do so). Company wants to make sure it's documented and filed before anyone else files. If this is you, then you'd better be working toward the patent filing as fast as you can, no excuses. And get a good lawyer. If you're not ready and planning to defend, then stealth mode doesn't matter. Someone else can implement your technique if they want, and even patent it. You'll win or lose on execution and customer acquisition.

(2) A company's value is going to be based on a "network effect" play rather than a "hard-to-duplicate" play, and already has big the PR for the launch you lined up. In this case, since you know you're not "hard to duplicate," you don't want to spill the beans until you can fire off the giant PR cannons, at which point, you'll either grab a big enough chunk of network effect to sustain you, or else you'll drift. An example of this is Ning, which was in stealth mode for a long time. Marc Andreessen's celebrity and connections were the big PR blast, timed to match Ning's actual launch. But what if you're not Marc Andreessen or Kevin Rose and you're not going to make any headlines with your launch? Then you're not going to get a big "pop" when you come out of stealth mode, so really you're just:

Afraid of someone stealing your idea

But that's not a good reason for stealth. There are very few new ideas. If an entrepreneur thinks he or she has one, it almost certainly indicates insufficient research to find the people with the same or very similar idea before (and now), and consequently ignorance of why they failed (or might fail).

If this is you, get over yourself. Make it part of your "leadership agenda" to systematically find the previous incarnations of your idea -- or related ones. Analyze the heck out of them. Do better. Or be more popular. (Pick one or both).

But here's the twist, and if you're introspective then you saw this coming: you're not really afraid of someone stealing your idea, you're really

Afraid of someone not liking your idea

and you don't want to deal with that. You think that by waiting until you have perfect execution you will stun disbelievers with the beautiful product. That's just a delay/procrastination tactic. The underlying fear (of the product falling flat) will just make you want to delay and delay, making the product more and more "mature," so as to defeat nay-sayers.

Doesn't work. There will be nay-sayers. Embrace them. Love them. If you have money, make them into a focus group and pay them! Separate the whining pessimists from the ones with specific advice. Don't waste your time on the former, but realize that the latter are creating value in your company for free.

They are doing what your best product managers and designers should be doing -- finding and clearing roadblocks to adoption. Listen to them and verify what you think they're saying, by checking with other real people. Then you have a real bug list to work on, not getting the that drop-shadow AJAX doodad the right shade of pink.

As an entrepreneur, you're already drinking enough Kool-Aid by necessity; if you hide from naysayers, it just leads to a Kool-Aid overdose death-spiral.

I've been involved with companies that have committed both of these sins (and many more) so of course my perspective is warped by that. But don't take my word for it. Find the companies and entrepreneurs that you look up and want to learn from. Read their stories or go talk to them (being careful to filter out the Spiel and the 20/20 hindsight). Whatever you do, don't hide out convincing yourself you've invented cold fusion.

Hazardous Attitudes: Disregarding VC Due Diligence

The FAA identifies five "hazardous attitudes" that have proven so dangerous to pilot decision making over the years that they are explained in the FAA "Pilot's Handbook of Aeronautical Knowledge" and included by reference in exams and regulations. These attitudes are Anti-authority ("Don't tell me."), Impulsivity ("Do it quickly."), Invulnerability ("It won't happen to me."), Macho ("I can do it."), and Resignation ("What's the use?").

Working with startups, I've seen entrepreneurs exhibit all of those attitudes when trying to convince others (and themselves!) that they needn't worry about VC due diligence.

I would advise those entrepreneurs -- and any wannabe entrepreneurs -- to read Rick Segal's fabulous post on due diligence. In addition to giving advice, Rick explodes a commonly held notion that VC due diligence is just a formality and that, if you get to the d.d. stage with a VC, you're all set, you can just wait for the wire transfer to hit your bank account.

Due diligence is real -- Rick suggests that one or more of three deals he's currently looking at will not close because of problems at the due diligence stage. Read that sentence until you believe it. Then, before you tell yourself that it doesn't matter because you're going to bootstrap, you'll never need a VC or a corporate investor, go back and read the five hazardous attitudes again. If you think success means believing in Plan A so much that you don't bother preparing a Plan B, the odds are you'll be laughing about this failure some time down the line over a beer.

Now that we've got that out of the way...

A couple of Rick's points that deserve emphasis:

• Financial Forecasts. Of course they'll be rosy. What's important are the assumptions. Where did you get your data? How hard did you try to get good data? Is the logic that ties the data together sound?
• Business Thesis and Assumptions. "... [W]hat do I have to believe?  What do you believe?  And, of course, what are the assumptions behind those beliefs. ... You have to have the same story, metrics, thesis, etc, from day one." If you change your execution plan a few times, that's to be expected. If your fundamental beliefs about the space are changing faster than you can execute, you have little chance.

At some point between the kitchen table stage of your startup, and the time when you walk into a VC meeting, the following things will become relevant. Plan accordingly:

• "Understandings" or "Gentlemens' Agreements" with investors or employees. Unusual terms can be changed or dealt with at VC time, but I wish I had a buck for every time a CEO told me these issues would just melt away because everyone would be so pleased at the prospect of making a big deal or closing a round.
• Questionable expenditures. This can either be a few big items or systematic spending that adds up. Don't do it, and if you do, don't try to hide it or hand-wave. I've seen a VC identify a six-figure sum missing from the books, and still make the investment. The firm identified the issue and decided they would arrange the deal so as to handle it and get it under control. It wasn't a showstopper for the company, but it was the end of the line for the guy who tried to cover it up.
• Team issues. Although Rick says that not every VC would talk to all the employees in a small company (he would), it's a good bet that your core exec team -- and probably everyone in your first 8 people -- will get a good grilling regardless of the VC. The team has to be a team, and you won't be able to fake it. This doesn't mean everyone needs to agree or be buddies, but they need to function properly as a group. If you don't have a team, the VC will figure this out, and your funding is unlikely.
• Product. Ok, this should be obvious. You can spin the marketing claims ("a better way to manage your contacts" could be anything) but you can't fake the technical claims ("syncs up to 5,000 contacts to any device" is either true or it's not).
• Customers. Although some VCs seem to be trying to get all the risk out of their portfolios by investing only in companies with a solid customer base, that is their problem, not your excuse to pretend you have customers that are fictional, occasional, or just plain unlikely.

If you still think this is all hypothetical, or won't affect you, then take another look at the five hazardous attitudes and ask yourself: are you really planning for success? just closing your eyes and hoping? or fooling around and enjoying the ride?

The Hardest Thing About Having Plan B is Realizing You Might Be Wrong About Plan A

The second law of thermodynamics describes why it's easier to break a glass than put it back together; easier to write the wrong code than the right code; and easier to metabolize nutrients than to create them. Wilfred Bion's group dynamics theories provide a bit of a social parallel -- some of the reasoning why groups and organizations persistently do the "incorrect" (by their own definitions of "correct"!) thing. By default, groups tend to devolve from their own goals in more or less spectacular ways.

Our social interactions don't rigidly follow laws of physics, we can occasionally climb out of the potential well of typical group dynamics. Doing so improves our odds of success on technology projects.

One of my favorite success stories is Intel's "Yamhill Project." Yamhill is why Intel is still in business. But it's also something few management egos could have lived with, and the Intel exec team's willingness to deal is why Intel is still a going concern.

Once upon a time, Intel wanted to clean up all the messiness that had evolved over the history of the x86 architecture. Make a clean break and launch Itanium, a new 64-bit architecture and instruction set. The new chips would not be backwards-compatible, so the gamble was that if Intel said that the future is Itanium, then no matter how painful the transition for customers and partners, they would have to go along.

Given the egos, and the "all-in" nature of chip development, the typical move would be to wave the Itanium flag, charge into battle, and either win the war or die trying. Lots of famous companies have died (or become irrelevant) fighting these battles.

But Intel's team did something much better. A few folks early on said that the market might not tolerate the change and ... if an alternative emerged from a competitor ... the result for Intel would be catastrophic. Officially, Craig Barrett backed Itanium / IA-64 all the way. But in secret he gathered together some of the brightest engineers in the company and sent them off to work in a remote location on Plan B, a non-Itanium 64-bit chip that would be backward compatible.

Barrett and his team possessed an all-too-rare willingness to come to grips with the fact that the big IA-64 play might possibly go wrong. Instead of ostracizing whoever made the suggestion (more typical organizational behavior), they integrated the information and took a decision about how to work with that possibility.

As it happened, AMD came to market with a backwards-compatible 64-bit implementation. The market loved it, and, outside of a few server niches, it might have been game over for Intel right then. If they hadn't had Yamhill.

More Khakis: Build a Market for Near-Future Consumer Dealmaking

Here's an idea I've had for a while... if you're good with strategy (see Hey, Guys in Khakis) you might be able to fit the pieces together well enough to make a buck. I thought about building something like this at one point but I'm just not enough of a strategist or a consumer to have a real passion for it.

The premise is that most everyone always has some purchases they're planning, say two weeks to six months out in the future. The buyer has some characteristics in mind, a general idea of price, and is definitely going to buy in that time frame. But he or she doesn't have a specific item chosen nor a specific date when it's time to search out a deal and buy.

As just one example, if you like or need shiny gadgets, you might have thought

• I'm going to get a X-megapixel camera sometime this summer, I'm just too lazy to read all the reviews and sort it out right now.
  
  
• I'm want to buy my wife a bigger flat panel, but the prices are always bouncing around. I think I'll wait a while and see how much LCD real estate I can get for my money.
  
  
• I'm sick of encoding all these DVDs. When I see a deal on TigerDirect or techbargains I'll grab one of those DivX-capable DVD players and be done with it.
  

There's a market here: a lot of people are not actively searching today (using one of the many comparison shopping sites), but they are definitely buyers. Whether $150 is a good pricepoint or $1500, it's something they are comfortable with and have essentially already decided to spend.

Today, this is an inefficient process on both sides.

The customer waits around until eventually he or she happens to hear the Fry's ad on the radio, drives by a store, or sees a chipmunk on the way to work and figures it's time to get a camera and start posting lolmunks.

The seller has limited visibility into who is interested in what products, when they plan to buy, and how much they'll spend. If a site has an extensive profile on you (say, amazon) then maybe they could develop an algorithm to predict when you'll upgrade your camera, what you're likely to spend, and how you comparison shop. They could then communicate directly with you to try and close a sale. But most vendors have a fleeting relationship with the customer, so they spend lots on ads, make sure their products are listed on sites like pricewatch, and hope the customer comes.

The opportunity is to create a market that lets vendors go look for buyers who want certain kinds of products, and make them an offer. For example, Fuji revs their cameras constantly, so maybe I have a bunch of a particular model, and I know the next line is coming out soon. If I want to move the inventory, I put it "on sale" and pay to advertise.

What if I could go and find a bunch of buyers who have said they're looking for this kind of camera at a price point I can stand and they're buying soon? My goal is to (1) offer them a price they'll buy at and (2) make enough on the sale that I'm still ahead of where I would have been in the "put in on sale and advertise" scenario.

This system would be a win-win. But several pitfalls must be overcome. Principally: How can you tell a "true buyer" from someone who just wants to window shop some really great deals? It makes a big difference to the seller, because publishing these kind of targeted deals out into the ether (offering them to arbitrary unverified people) is essentially the same thing as just publishing a lower price. It's asking the vendor to show his cards without the buyer committing anything.

So, to make this work, one needs at least a way of limiting the pool of "true buyers" to those who are plausibly legitimate. At the same time, it cannot be a closed system of fully committed participants since a "true buyer" may sign up, see some great deals, and legitimately decide to just forget it and buys something else that catches his eye. The buyer is not likely willing to be obligated to buy through this system.

The whole mechanism needs some sophistication, and probably a few small but key innovations that will keep people (mostly) playing fair on both sides. These might include unique valid credit cards, online reputation mechanisms, social networks, and some things that haven't been invented yet.

I believe such a market can and will be built. I expect to see someone clever or lucky make a bunch of cash building this and then selling it to eBay. And although I don't love shopping nearly enough to want to build this product, I'd gladly be its first customer.

Hey! Guys in Dockers! Over Here!

Geeks love to hassle the guys with the MBAs and the "strategy" resumes. And plenty of geek entrepreneurs have showed the MBAs a thing or two making a fortune with code-first-ask-questions-later software and websites. But sometimes the technology isn't the problem and some strategy would be helpful.

In particular, I was chatting with a co-worker last week about how to set up a mass system for buying and selling used software licenses. In most countries and most U.S. jurisdictions, the "right of first sale" says that if you have a software license, you can resell your rights under that license to someone else. That's the legalese behind buying an old game from a bored gamer on craigslist. As an IP sale, it's not about the disks or even the activation key, but about the license. The seller has to relinquish the right to use the software (usually) and anything that comes with that (like support). The buyer gets it.

For big expensive licenses, like that 16-CPU perpetual Oracle license you no doubt have lying around, there are companies ready to help broker a deal. Actually there are a handful of companies ready to wheel and deal. At the consumer or low-value, low-volume level, there are some funkier ones. But there is no ebay for buying my aunt a "used" but legit copy of Word 2003.

Clearly there's a market here, and a look at the current players suggests it's not efficient or transparent. How can we get a web-based open market to work?

In this arena, it's reasonable to suppose most buyers are "legit" because most or all of these software packages could be acquired illegally for free if the consumer were not inclined to pay. It's trickier on the sell side since, in the extreme case, a seller can offer to sell a license for anything at all without possessing it in the first place. Most software licenses have no physical redemption token like a bearer bond, stock certificate, or paper money. So a buyer pays up, and the seller says, "You've got a deal, you're now the owner of a Foobar 2.0 license."

So we need some kind of clearinghouse ... but a clearinghouse for what? And how to keep it digital so we don't need a Netflix-grade DVD sorting facility to bag Microsoft Bob disks?

We're going to need digital tokens and a tracking scheme that software vendors want to participate in. Why would they want to do that? One argument asserts that a product is more valuable if a buyer knows it can be resold (think cars). And a uniform, open key registration and verification scheme could help fight software piracy without requiring each vendor to pay to maintain their own system.

The point is, I need a strategy guy (or gal) to line all the pieces up. The tech is trivial -- we have auction systems and reputation systems and crypto and tokens and all that. What we need is a scheme that arranges interests, incentives, and rewards in such a way that enough players get in to bootstrap the market.