Closed can not fight open. It can not find purchase to land a blow. Microsoft has fought a decades-long war against Linux, only to lose the battle conclusively as the world moves to smartphones (Android), and embedded devices (such as the Light) running Linux. Windows may remain dominant on the desktop for another decade, but computing has moved on. Linux won the long game. When we release the detailed designs to build your own Light – as we will do next week – we undermine any effort from any closed competitor to treat their intellectual property as anything other than ephemera that only has value only insofar as it helps others in their own efforts to hack light. We are not doing this as an intentional effort to destroy anyone’s business; we are doing it because we believe in openness. Yet openness renders closed business styles uncompetitive. Not immediately, and not completely, but gradually and largely.

Bravo Mark Pesce. The prize of refusing privatizing venture capital is winning the long term game!!

Excerpted from Mark Pesce:

“There are plenty of companies working in open source, a few companies working in open hardware, but no companies (that we know of) dedicated to complete transparency in their operations.

I don’t remember this being a particularly momentous decision. It arose from the need to clearly communicate to potential backers why we need to ask for so much money, a necessary explanation because of the spate of recent Kickstarter gadget project failures-to-ship. We had to be able to assure people that we had done everything to minimize the risks and maximize the chances for successful delivery of the light. The best way to do this, I reasoned, was to be completely transparent about our financial model. I ran the idea past the advisors – Tony, Brent and Kate – and they all said, ‘Go for it!’

That was the first step down an ever deepening path into a thoroughly unique business methodology. None of it seems particularly odd, even if it is not standard operating procedure. And it doesn’t sit well with everyone. Some misunderstand it, while others find no profit in it. We can rectify both of these conditions; the first by reframing our methodology in clearer terms (in our reshot Kickstarter video, for example, I dwell less on the specifics of funding and more on the requirements of mass production), and in the second case by demonstrating that an ecology of cooperating business entities stands a greater chance of success in an immature market than a selection of warring fiefdoms.

I arrived in San Francisco in 1991 to do my first startup – Ono-Sendai Corporation (our work for Sega pictured above) – and found a VR industry swollen with tiny companies, each of which wanted to ‘rule the world’, and dominate cyberspace That never happened (thankfully) because all of these little businesses held a few patents, none of which they shared with any of their competitors, forcing each firm to reinvent the wheel. Where there could have been an ecology of highly specialized and highly profitable businesses, instead we ended with wasteland of tiny, generalized companies, none of which grew to a size commensurate with the scope of their ambitious needs.

That experience set me on a course to release my work (with Tony) on VRML without restrictions on its use. I had seen firsthand how closed had failed, and cared more about getting the work out there than I cared about making a pile of money.

As it turns out, getting your work out there is not a bad way to make money. I’ve have never made a mint off of VRML, but I have never lacked for work in all the years since, in large part because VRML gave me an international reputation. Openness is its own reward, but it is not the only reward of openness.

Mature markets follow zero-sum economics: anything your competitor gains comes at your expense. New markets (and surely we are in an entirely new market with the Light) do not suffer from such constraints. For a few decades the ground is entirely clear, and businesses can grow freely, growing the market faster than any competitor can steal market share. This was true in the automotive industry and in computing, and looks to be true again in the ‘Internet of Things’. With so much capacity to transform the entire artifice of humanity into an intelligent and responsive form it feels quite ridiculous to consider any one else working in the space a competitor. It’s the equivalent of two ants competing over a metric ton of sugar.

Yet some are threatened. Until the evening at Hub Melbourne I had no idea why. During the day I had a long, deep, intense and rather involved conversation with a fellow who had helped to fund a ‘competitor’. He asked a lot of questions about our product, our plans, our business model, and so forth. I answered every one as honestly and openly as I could, and as it became clearer where he was headed – what kind of response he really wanted – I said, ‘Look, there is not going to be a war.’

And that’s when I realized why.

Closed can not fight open. It can not find purchase to land a blow. Microsoft has fought a decades-long war against Linux, only to lose the battle conclusively as the world moves to smartphones (Android), and embedded devices (such as the Light) running Linux. Windows may remain dominant on the desktop for another decade, but computing has moved on. Linux won the long game.

When we release the detailed designs to build your own Light – as we will do next week – we undermine any effort from any closed competitor to treat their intellectual property as anything other than ephemera that only has value only insofar as it helps others in their own efforts to hack light. We are not doing this as an intentional effort to destroy anyone’s business; we are doing it because we believe in openness. Yet openness renders closed business styles uncompetitive. Not immediately, and not completely, but gradually and largely.

This rule applies to all participants within the market. To paraphrase Gilmore’s Law, “Open systems drive out closed.” Twice on Thursday people cautioned me about patents, as if they possessed some sort of power to compel us to do anything at all. Apple, one said in all seriousness, has a patent on colored light. Another made whispers about Phillips NV – the largest producer of lighting products in the world – and how they had patents all over this space.

Since what we’re doing is driving LEDs via a computer – a practice that has been bog standard for well over thirty years – I can’t imagine we’d be infringing anyone’s patents anywhere. I do suspect a patent troll will rear its head should we achieve any degree of success. They might even slow our economic progress. But as we move forward, and share our techniques, more and more people will learn how to hack light. The ideas we’re exploring will continue. That’s our long game.”