In Google’s fight with Uber, everyone is a loser
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Uber is currently in trouble for, well, a lot of things, but one particularly problematic thing is the claim that the ride-hailing company acquired trade secrets stolen from Waymo, the self-driving car unit of Google parent Alphabet Inc. It’s also a case where Uber isn’t the one behaving badly.
According to a lawsuit filed by Waymo, employees swiped files describing proprietary self-driving technology just before leaving to start a competing company. The start-up, Otto, existed for all of seven months before it was acquired by Uber Technologies Inc. During this time, Google’s car project experienced a larger employee exodus, with many key players leaving to start or join new companies. So whatever happens, it’s looking like Google has already lost the battle.
Silicon Valley’s most valuable assets are its people, not its intellectual property. In the pharmaceutical industry, businesses revolve around patent licensing because it’s expensive and time-consuming to take a drug to market. For technology companies, the opposite is true—the industry evolves so quickly that today’s valuable property could be obsolete by tomorrow. Resources are better invested in developing new ideas than protecting old ones. Litigation is generally seen as the domain of ailing dinosaurs—Oracle Corp. has been suing Google for the last seven years over the use of Java, a programming language developed in the 1990s.
There’s an argument to be made that protecting intellectual property encourages investment in new technology, but it was liberation from those protections that created Silicon Valley in the first place. In 1951, a patent for the semiconductor transistor was awarded to William Shockley and assigned to AT&T Bell Labs. As part of a 1956 antitrust settlement, AT&T agreed to provide royalty-free licensing on all its patents. Shockley promptly moved to Mountain View, California, where he founded Shockley Semiconductor Laboratories and recruited some of the earliest engineering talent to the valley. Two years later, eight of Shockley’s employees left to start a competing company called Fairchild Semiconductor. The traitorous eight then saw their own employees leave to found other semiconductor businesses, including Intel, AMD, Intersil and National Semiconductor.
This type of procreation still happens today. For many years, Google had a company-wide policy of allowing employees one day per week to work on side projects. Google makes a point of telling new hires that the company doesn’t sue former employees for patent infringement. Its employees have gone on to start Twitter, Tumblr, Instagram, and Pinterest. The ex-Googlers, or Xooglers, even have their own investment community and Demo Day. As a Google recruiter put it to me once, Google’s appeal isn’t the job that you have while working at Google, it’s the job you can get after you leave Google.
Some of today’s popular tech companies have a median employment tenure of less than three years. Anywhere else, this type of turnover might be seen as a horrible failing. Here, it’s what keeps companies innovative. Ideas flow to where they’re treated best, even if that happens to be the hands of a competing startup. Otto wasn’t the only self-driving car company founded by former members of the Google car team. Two top engineers left to start Nuro.ai; the hardware lead received a $1 billion investment from Ford Motor Co. for Argo AI; and Chris Urmson, former head of the Google Car project, has his own self-driving company called Aurora Innovation.
It’s understandable that Google would be unhappy about losing ground to the competition, but the self-driving car industry will end up better off as a whole. A few years ago, Tesla chief executive officer Elon Musk made the company’s intellectual property available for free use. He explained that Tesla’s real competition wasn’t the other electric car manufacturers, but industry inertia. For Tesla to be successful, the sustainable transportation movement had to be successful. Self-driving cars require a similar paradigm shift, which is something Waymo can’t achieve alone. It should welcome the competition. Bloomberg