Issue 2 | 16 Dec 2015

Every other week, the Fueled team hosts our own take on a book club. We call it Article Club and we all pop into a big conference room in our SoHo office to debate and discuss ideas and issues affecting tech. The basis of this conversation is 2-3 articles selected by senior members of the team. Articles and notes from each week appear here.

The Articles
Radical Candor - Submitted by Ryan Matzner
The Story of Etsy’s Crafty Growth to IPO and a $2 Billion Valuation - Submitted by Ilan Nass
Are Software Patents Evil? - Submitted by Perry Curac-Dahl

The first article, “Radical Candor” submitted by Ryan Matzner, delved into the effective management style of Kim Scott, former director for Google. She suggests blunt but caring guidance is the only way to provide employees with the necessary tools to advance.

Too often supervisors focus on maintaining a pleasant work environment and a positive relationship with employees. This can actually be a disservice to the employee and the team as it prohibits growth. Employees given little to no guidance are left to assume that all is well. It can be shocking when later supervisors have no choice but to fire the weak employee without providing an opportunity to improve.

Not all blunt feedback is useful. It must challenge directly and come from someone who cares personally. But, it can’t hit too personally. If an employee needs improvement, it’s best to suggest an alternative or come up with a solution that doesn’t attack the employee’s core. The other crucial component of successful criticism, is being aware of where the conversation happens. It must be in person but it also should be in private. The goal is to ensure that employees have no reason to be on the defense so that they’re open and receptive to feedback.

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After “Radical Candor,” our Article Club chatted about Etsy’s success story, led by Ilan Nass. At its’ core, Etsy is a two-sided marketplace where buyers and sellers can congregate to exchange crafts and homemade or vintage goods. Similar to other marketplaces or social networks, the value of this platform is in how many connections or how large an individual’s network is.

In the beginning, this platform was nothing more than a forum to chat about industry knowledge and trade tips. This grew into a $2 billion marketplace partially because the original target market was super niche yet scalable. Etsy focused on a craft community in Brooklyn. They discovered that the women who consistently showed up to trade shows were a new wave of feminist crafters who were rejecting the corporate lifestyle that had recently been hit by the recession. Etsy was able to leverage this already existent demographic and target influential women in the industry, to build something really massive.

Etsy’s success can also be attributed to aggressive SEO. Since many Etsy users already had a crafts blog or some sort of online presence, Etsy encouraged link backs from these independent sites. For power users who attracted a ton of one-time and repeat buyers, this optimization was key for Etsy’s growth.

Now a public company, Etsy is left to brainstorm new verticals to conquer. There was a big push internally to empower sellers through tutorials on how to market’ shops and how to utilize adwords within Etsy’s store.

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Paul Graham’s “Are Software Patents Evil?” sparked an interesting debate in how we judge the patentability of software, led by Joe Indriolo and submitted by Perry Curac-Dahl. We started off the conversation chatting about how Intellectual Property laws must evolve to meet the growing demands of a primarily digital world.

Since technological advancement is progressing at an exponential rate, it seems as if patent laws will always be trailing slightly behind. For example, there’s currently a limitation in place that prevents the word algorithm from being used in a software patent. This limitation is based on an antiquated definition of algorithm and doesn’t reflect the current use. As the number of software patent applications pour into the USPO, the old systems simply can’t keep up.

Another issue with the increase in software patents and the inability for a government-run institution to evolve, is a simple understanding of what software is. It’s easier for officials to determine with certainty if something more tangible is non-obvious, but deciding where software falls is a much grayer zone.

Patents play an interesting role for tech companies - they’re almost useless to a company’s valuation and instead are used as a defense mechanism. To have a strong patent portfolio means a greater possibility to buy out those that infringe and dominate all sales channels. Rarely do large companies go after startups for patent infringement cases unless that company is on the decline and desperate.
One of the major takeaways was that patents seem to be worth very little to startups as no one is truly interested in cases of infringement unless you’re big enough to lose money or users. It does, however, seem important that these startups begin to apply for patents at the start so that by the time they’re large enough to be bought or big enough to be attacked, they have a defensive portfolio in their back pocket.