This morning’s news brings a story of a small manufacturer of add-on
hardware suing large computer manufacturers for alleged illegal price-cutting.
I was surprised. I thought the lawyers had finally learned the futility of suing
hardware makers over pricing.
Ordinarily, I have an aversion to lawsuits, and even to news about
lawsuits, but my surprise told me I might learn something if I looked further
into this one. It seems that the company’s sale of add-ons had fallen by some
thirty percent in one year. Stockholders usually want explanation when sales
drop even by a factor of one percent, so management looked around and
discovered that the big guys had dropped their prices on similar add-ons, just
around the time sales began to fall.
My older sister, Charlotte, is a lawyer. Charlotte’s always bragging that
law school is great training in logic.
She taught me the logical fallacy that goes by the Latin name,
post hoc ergo propter hoc, which in English means “after
this, therefore because of this”. The fallacy lies in thinking that because one
thing comes after another, the first thing is the cause of the second. Because
manufactuers dropped their add-on prices, the plaintiff’s lawyers reasoned, its
own sales fell.
The courts will decide whether the company’s post is truly the
manufacturers’ propter, but obviously there is another explanation. Anyone
who has studied the history of hardware prices knows that once a particular
line starts losing value, it drops incredibly fast-along with any add-ons.
So it could be that the company was the victim of its own belief that it
could continue making profits with an obsolete technology. If so, they
wouldn’t be the first to make that mistake in reasoning.
I never went to law school, but this fallacy is so common among high tech
managers that it deserves an impressive Latin sounding name. Forgive me, but
let’s call it bonus antequam, ergo bonum postquam”: it was good before, so it
must continue to be good.” Or, if you prefer Street English to Fractured Latin,
“Shut up and keep rowing!”
The high tech business has great appeal for people who would like to
make a lot of money. One good idea can make you as rich as Midas-but a
second good idea can transfer the golden touch to someone else and put you in
the poorhouse. It is no business for cowards. As soon as you lose your nerve,
you stop investing in new ideas. And as soon as you stop investing in new
ideas, your days are numbered.
Hardware or software, it makes no difference. Poor managers destroy the
environment that nurtures new ideas, the ideas run dry, someone with more
daring improves on your idea, and finally, sales plummet. Some managers
react by going outside to buy new technology. Better managers react by
changing the environment to get the ideas flowing again. The worst managers
call in the lawyers and sue the competition for stealing their ideas or competing
In a high tech market, the return on resources invested in new ideas is a
thousand times greater than a similar investment in lawsuits. Lawsuits are
tempting only when innovation is drying up-at least in the organizations that
were the early leaders.
That’s easy to see from the outside, but it doesn’t feel that way to the
insiders. When this happens to us, we feel genuinely robbed, cheated, and
betrayed. These angry feelings destroy our ability to keep innovating, so
lawsuits seem the only reasonable alternative.
I understand these angry reactions because I’ve felt that way myself when
someone had “plagiarized” my work. Sometimes entire paragraphs and even
articles have been copied word for word without a hint of credit.
When I cool down, I begin to see things differently. I’m in the ideas
business, not the lawsuit business. My big payoff comes from writing
something new, not hanging onto things that are done and gone. Sure, if the
culprits have actually copied word for word, I’ll have my secretary write a mild
letter suggesting that they must have made a clerical error in forgetting to
obtain permission and make a reference. People, who have to copy the work
of other verbatim are not much of a threat to my continued existence, so why
threaten them? (I have sued once, and won a bundle, when the plagiarizer
claimed I had plagiarized him. That behavior triggered a different kind of
When the copy is not exact, I often write a personal letter to the copier,
noting the remarkable similarity and suggesting that our thoughts and interests
have a lot in common. This sometimes brings apologies, and sometimes starts
a long-lasting friendship with someone whose thoughts and interests do run
parallel to mine. One such friendship is worth the price of hundred old ideas-
even if they were actually stolen-and is often the source of a hundred new
But sometimes I have trouble cooling down and getting rid of my
irrational desire to sue. Lately, I’ve come to understand that this anger actually
is a symptom of something else-a strong feeling of inadequacy. Just like those
managers who fear that innovation is finished, I’m afraid that I no longer have
what it takes to turn out new ideas.
Instead of reacting by creating a batch of new ideas, I start grasping for
ways to protect the ones I’ve already produced. In short, I’ve lost my nerve.
I’m not ashamed to admit that I sometimes feel that way. When it takes
all the running you can do to stay in the same place, it’s no shame if you
sometimes feel weary of running. Every technical hotshot, at some time or
another, has to face the feeling of wanting to stop and live off past glories.
Each time that happens to me, I get frightened, and angry, and unable to
produce new ideas. Then I rest for a while, do some new things (like writing
novels) and eventually get back into the racket again.