An Old School vs New School Debate

As some of you know I’ve been watching some talk about recent purchases made by some of the current tech giants. I listened the other day to one well-known voice whom is very involved and considered “in the know” of all things in the social media space. The narrative he used in describing some of the happenings taking place within the genre, e.g.: Facebook® buying Instagram®, and Microsoft® purchasing legacy patents from Netscape® as an old school versus new school argument. Both purchases were for similar amounts of $1 Billion dollars. But if we want to buy into the new school vs. old narrative you just might find yourself getting “schooled.”

Here’s the problem with that comparison as I see it:

It has just come to light that Mr. Zuckerburg bought Instagram without telling the current board of directors until nearly the day before the transaction took place as to ensure no one could stop it. That in itself is troubling when you remember the price tag was $1 BILLION for a company that doesn’t even make a profit. Yes that sure is a new school way of thinking, but I’ll bet dollars to doughnuts Mr. Zuckerburg will never get that opportunity again. Once his own IPO goes public, actions like that will be punished mercilessly by investor funds (for my earlier thoughts click here) let alone the current board with egg on their faces. Can we get an Instagram of that photo I wonder?

Paying that kind of money in that manner which has been credibly reported (Click here for more) smacks of 1999 “Bubblishishness” when wiz kids could do no wrong, and money for nothing in the promise of something was abound. If Facebook decides it wants a mascot in the form of a sock puppet all I’ll say is beware. Groupon® as of this writing has currently lost 2/3rd’s of its IPO debut highs. We have been told by the so-called “Smart crowd” these companies have nothing in common to the tech bubble hysteria of the 90’s. (I haven’t even mentioned Pandora®) Say what they may, but to my ears, I hear enough rhyming as to enter a poetry competition.

The other side to this coin is the Microsoft purchase of legacy patents from Netscape. This is looked upon as some foolish outdated behind the times purchase. It’s being portrayed in the narrative of old school trying desperately to stay relevant. My thoughts on this are I believe this and acquisitions like these just might be the most prudent, and important buys any corporation can make today. And as many of the new social media crowd contemplate how only they get it, I want to remind you of one of the fastest growing, cost ballooning, legal entangling monsters ever to be seen in the history of business is coming down the pike to which I believe the old guard can see, but the newbies just might be blind to. Patent Trolling!

This legal quagmire confronting business of all sizes is probably one of the most destructive, and entangling nightmares that has ever hit businesses. It’s full effects are let alone not even understood by many, but worse, many don’t think it will involve them.

For more on the implications of Patent trolling I would direct you to Mark Cuban’s article from his blog. (click here to go) I was going to write my own thoughts, however I believe he hits it so squarely on the head, and from a perspective unavailable to most I could not add another word. If you are in business, or you’re a person with the entrepreneurial mindset you need to take the time and read the article. Yes, I think it’s that important.

It is quite possible that the new school, old school narrative to these two purchases might play out as some speculate. However myself being a member of the Alma Mater School of Hard Knocks. I’m tempted this time to lean toward the old school side. It just might be that a little perspective in protection might be worth a little more than what may be seen as something shiny to the new school mind-set.

© 2012 Mark St.Cyr