As promised, here is one of the places where I thought Wikinomics didn’t quite get it right. On page 190, they state:
In its current incarnation, mashups present a thorny problem—they provide pretty poor long-term incentives for innovators, and most lack protection for data owners. To illustrate, it’s worth taking a closer look at housingmaps. Housingmaps has two key ingredients: a Google Map and the rental listings from craigslist. When Paul Rademacher mashed these services together he created something new—something neither Google nor craigslist has thought of, yet it was a clever and useful application. What did Rademacher do to leverage this popularity? He stepped back from it and took a job at Google. When asked why he did not develop the tool further, and perhaps even create his own business, he offered two very salient points: 1) He did not own the data that was powering the application, and 2) The barriers to re-creating such an application were low, since his web site contained little in the way of unique intellectual property or user interface design, apart from a little bit of network code.
The first is a reasonable concern, but as I’ll argue below the fold, it’s silly to consider the second a problem.
The most obvious and important point to make here is that housingmaps might not exist at all if it weren’t for the low barrier to entry. You can’t easily raise barriers to entry for the initial innovator without also raising barriers to entry by subsequent innovators.
Second, it’s just not true that companies can’t make money with websites whose services are easily cloned. For example, the technology in YouTube is just a little Flash program that a competent Flash hacker could probably duplicate in a few weeks. There are dozens of YouTube clones out there. Yet YouTube has retained the lion’s share of the market. There are a variety of reasons for this, including a strong brand and well-designed social networking features, but in any event, it’s clear that having easily-copied technology does not make it impossible to turn a profit.
The fundamental problem, I suspect, is one that Mike Masnick has been emphasizing for a while: inventing something and turning it into a successful business are two separate skills. Running a business is a lot of work, and it’s quite possible that Rademacher just isn’t interested in dealing with that kind of stress. Working at Google allows him to continue doing what he seems to do best—making cool technologies—and let someone else worry about how to turn a profit with it. Giving Rademacher more “intellectual property rights” over this site (should he get a patent on the idea of plotting apartment listings on a map?) won’t suddenly transform him into an entrepreneur. All it will do is prevent others who might be able to take Rademacher’s idea and improve on it from doing so.
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