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Be Good

paulgraham.com

151–160 of 209 posts

Re: Be Good

#151
Since Malaria was a specific example, this headline caught my eye yesterday:

Web guru targets malaria with social network site http://news.yahoo.com/s/nm/20080420/tc_nm/britain_malaria_dc...

I admit some skepticism but haven't read beyond the article. Maybe it is possible to "Facebook" malaria out of existence...

Re: Be Good

#152
post #109

Earlier quoted context omitted.

That would be more like asking Digi-Key for the contents of their warehouses.

No. Digi-Key and certain other parts companies are suppliers, not manufacturers; hence they are in the information business. Octopart is really an aggregator of aggregators. Should we expect Orbitz to make their content available to MyNewTravelStartup.com?

I'm not sure I understand - Octopart does not sell any parts. Digi-Key's core function is to sell parts. They do in fact have a warehouse of parts and a team of salespeople, whereas we are three guys working out of cafes. Our interests certainly overlap to a high degree in that we both want accurate part information. But Digi-Key is in the information business in the same way that Walmart is in the information business (a company that also re-sells most of its inventory from manufacturers in its supply chain).

Re: Be Good

#153
Hey PG, I bought www.benevolentcorporation.com a few months ago while thinking about these memes.

I'll sell it to you for $5M ;-)

Re: Be Good

#154
post #147

Earlier quoted context omitted.

Digi-Key is considered evil because they are trying to kill Octopart in order to preserve their monopoly pricing. They are making the frivolous claim that Octopart is acting illegally when it displays public information and links back to their webpage. Basically, Digi-Key is using their size in order to prevent free market competition in their industry.

I need to hear a much stronger case for Digi-Key having monopoly pricing power than just an assertion. Aren't the distributors market shares fairly fragmented (the assumption I'm operating on)? Digi-Key seems to have a large market share because it has built some kind of service reputation. I don't really understand the legal position of scraping (and I'd love to see an accessible semi-authoritative explanation of th…

In an earlier post, I pointed out some price discrepancies between the electronic parts industry and the consumer electronics industry (http://news.ycombinator.com/item?id=168796). This is the evidence that I'm basing my assertion on. Incidentally, this comparison was not possible before Octopart.

There is no difference between what Octopart is doing and what Google is doing. Both companies crawl the web and mine their data sets for useful information. Typically, the word "scraping" is used to imply mal intent but I don't think it has a good technical definition.

Re: Be Good

#155
post #152

Earlier quoted context omitted.

No. Digi-Key and certain other parts companies are suppliers, not manufacturers; hence they are in the information business. Octopart is really an aggregator of aggregators. Should we expect Orbitz to make their content available to MyNewTravelStartup.com?

I'm not sure I understand - Octopart does not sell any parts. Digi-Key's core function is to sell parts. They do in fact have a warehouse of parts and a team of salespeople, whereas we are three guys working out of cafes. Our interests certainly overlap to a high degree in that we both want accurate part information. But Digi-Key is in the information business in the same way that Walmart is in the information busine…

Digi-Key's strategy obviously diverges from Wal-Mart when we look at profit margins.

You make a good point; I don't think I can argue against what Octopart is trying to do from any kind of good vs. evil ethical standpoint. However, I can understand a business such as Digi-Key wanting to maintain control, and they could easily argue it is for the benefit of the customer. For example, when a customer searches Octopart, are they going to also get a list of complementary parts from each supplier? I doubt it. What about helpful charts, material safety data sheets, and CAD schematics? If someone was just scraping my site and hijacking the search functionality but failing to deliver the rest, I'm not sure I'd want my name attached either.

Of course this is really coming at it from the wrong level. The truth is that Digi-Key can simply ignore you, and it doesn't hurt them in the slightest. And while doing so, they can be sure they aren't reaping any of the negative consequences of being associated with you either.

Re: Be Good

#156
Hi Paul, Great essay. The idea of a purpose to business transcending mere "stockholder value" is a powerful new meme, which I believe Forbes has labeled "Capitalism 2.0":

http://www.forbes.com/columnists/forbes/2008/0310/030.html

Here's hoping the idea takes off -- and not just for startups! Sincerely, Dr. Ernie http://ihack.us/2005/10/07/capitalism-20/

Re: Be Good

#157
post #152

Earlier quoted context omitted.

I'm not sure I understand - Octopart does not sell any parts. Digi-Key's core function is to sell parts. They do in fact have a warehouse of parts and a team of salespeople, whereas we are three guys working out of cafes. Our interests certainly overlap to a high degree in that we both want accurate part information. But Digi-Key is in the information business in the same way that Walmart is in the information busine…

Digi-Key's strategy obviously diverges from Wal-Mart when we look at profit margins. You make a good point; I don't think I can argue against what Octopart is trying to do from any kind of good vs. evil ethical standpoint. However, I can understand a business such as Digi-Key wanting to maintain control, and they could easily argue it is for the benefit of the customer. For example, when a customer searches Octopart,…

This discussion of whether we are adding value or not seems very hypothetical to me. We aren't forcing anyone to use our site, presumably if people are using our site, it is because they find it useful.

Re: Be Good

#158
post #152

Earlier quoted context omitted.

I'm not sure I understand - Octopart does not sell any parts. Digi-Key's core function is to sell parts. They do in fact have a warehouse of parts and a team of salespeople, whereas we are three guys working out of cafes. Our interests certainly overlap to a high degree in that we both want accurate part information. But Digi-Key is in the information business in the same way that Walmart is in the information busine…

Digi-Key's strategy obviously diverges from Wal-Mart when we look at profit margins. You make a good point; I don't think I can argue against what Octopart is trying to do from any kind of good vs. evil ethical standpoint. However, I can understand a business such as Digi-Key wanting to maintain control, and they could easily argue it is for the benefit of the customer. For example, when a customer searches Octopart,…

The problem is not that Digi-Key is ignoring Octopart, but that they are making frivolous legal claims in order to rack up Octopart's legal bills. Digi-Key is acting the same way Microsoft did when they sued Linux for patent infringement.

Re: Be Good

#159
post #131

Earlier quoted context omitted.

The reason Paul is calling Digi-Key evil is because they are actively trying to kill Octopart in order to preserve their monopoly pricing, not because they won't cooperate. Octopart needs as much cooperation from Digi-Key as Google needs from Wikipedia.

Monopoly is a misnomer here. Is Wal-Mart a monopoly? The parts supply industry is not an industry of monopolies. There are a few large names--Grainger, McMaster-Carr, MSC, Digi-Key--that probably account for 25% of the market, and then a very, very, very long list of names most people have never heard of. Ironically, Ma & Pa Electronics are frequently the ones with the highest prices. Large distributors like Digi-Key…

Monopoly isn't the most technically accurate word, but behaviorally I'd say that Digi-Key is acting like a monopoly. Typically monopolies like to hold on to existing business practices rather than adapt to changing market economies. Regardless of 'good', 'evil' or 'monopoly', it seems to me that it is inevitable that online price comparison will start to become the norm for most markets. Digi-Key's reaction to this is very monopoly-like (in another world, they could choose to work with us and make sure they get the lion's share of traffic from our site).

Re: Be Good

#160

Earlier quoted context omitted.

Recommendations for good Drucker books, particularly those with appeal for the Startup and/or Hacker mentality?

Start with "The Essential Drucker" - it's a collection of chapters from all his books, and then you can pick out what seems most interesting from that. I'm currently reading "The Post-capitalistic society", which is fascinating, and I recall really enjoying "Innovation and Entrepreneurship" as well. I don't remember where the bit about profits came from - I think it was in The Essential Drucker. (To be honest, all th…

Thanks.
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