Stake Ventures

How the Man finally brought e-gold down

update Several people have mistakenly thought my slightly tongue in cheek title to mean that I’m one of the part of the fringe paranoia groups here. While the USDOJ did bring down e-gold. The term “The Man” as well as the use of references to Black Helicopters were an attempt to caricaturize those paranoia groups. Now where did I put my tin foil hat.

e-gold is an 100% gold backed electronic currency. It revolutionized the electronic currency world using pretty simple double entry book keeping technology backed by currently 2.54 metric tons of gold and innovative legal structures to keep it safe. They are in the news today and there are lots of things startups can learn from their story about trust, innovation, legal structures, transparency and how not to deal with regulators.

It is with sadness I today read Douglas Jackson’s blog post outlining the final blow to e-gold by the US government. It felt like this wasn’t written by Doug, but by Doug with the NSA’s secret alien mind control device implanted. In reality the mind control device used was the threat of 20 years of jail and a half million dollar fine.

Also as I write in the Agree2 User Agreement:

We are men of principles, but stronger men than us have changed principles with 3 hovering black helicopters over them. If you know what I mean.

This is a case where probably a bit more than 3 hovering black helicopters were hovering over them. So I guess we can only feel sad and hope the best for Doug and his family.

The Charge

The government had been after them for a while and where they finally got them to plea bargain admitting “Conspiracy to Commit Money Laundering” and “Operation of an unlicensed Money Transmitting Business”. The real important of the two was the Conspiracy to Commit Money Laundering charge, which has nothing to do with Douglas Jackson carrying suit cases filled with $100 bills into banks in the Cayman Islands. It is failure to do “Know Your Customer” or KYC as it’s known in the financial industry.

Know Your Customer

KYC requires financial institutions including money transmitters to know who their customers are. This can involve simply showing your id when you open an account in the US. Other jurisdictions such as Panama are way more conservative requiring bank references, lawyers references, information about your assets etc. In the US PayPal innovated by inventing that tiny authenticating payment to your bank account, which seems to be enough KYC for single purpose financial institutions such as payments and savings.

KYC since it was introduced in the late 90s as a requirement has been the single most destructive concept for innovation and startups in the financial space. e-gold was the last proud hold out against it as it went so against the principles of their operations. You could pretty much open any amount of accounts that you wanted to without any real documentation.

E-Golds innovation in Governance

Where e-gold truly innovated was their governance model. This is also what makes it so difficult to add a PayPal like KYC step to their technology. e-gold is built up of several different legal structures who are independent.

Gold and Silver Reserve Inc (G&SR) is the parent company of it all and run by Douglas Jackson. In 1999 they did a major restructuring, which is outlined in their e-gold Account User Agreement

The e-gold Ltd a company registered in Nevis in the Caribbean operated the book entry system. The book entry system is basically the servers containing the accounts and transactions. This is what you see when you go to the e-gold site. This site also has an innovative examiner tool as seen in the screen shots above and below:

The e-gold Bullion Reserve Special Purpose Trust is a little understood but very important part as they actually hold the title to the gold on behalf of account holders.

After that there are the 3 different gold repositories Brinks, Transguard and MAT Securitas Express AG who hold physical bars of gold in London, Zurich and Dubai.

OmniPay is the primary “exchange provider” or interface between the e-gold system and the outside world. This was/is operated directly by G&SR out of their offices in Melbourne, FL. If you wanted to buy or sell large amounts of e-gold you essentially wire them the funds and they provided you with gold in your e-gold account. From what I understand OmniPay was pretty thorough doing KYC.

Transparency and real time auditing by users

Since very early days. Probably earlier than 1998 e-gold has offered several levels of transparency that are still unheard of. When I was working in the payment space myself I liked to look at these as “live audit” tools as normal users can keep an eye on the system.

The most important tool is the e-gold Examiner which presents a live view of the accounts of the entire e-gold system. Many of the screenshots in this article come from the examiner. You can see how much Gold, Silver, Platinum and Palladium is held (the assets) and how much is in circulation or held by users (the liabilities).

Scrolling further down you can see how much is held at each repository. You can further drill down on these to see information about the exact bars held at each repository. This info includes the Brand, serial number, purity and exact weight of each. All of this information is verified annually by the auditors report.

Another interesting audit feature is the e-gold system statistics page. This contains interesting live statistics of the accounts and transactions held. As you can see there is still quite a lot of activity going on, however the amount of spends (transactions in e-gold speak) has gone down.

Account Holders

There are finally two other parties to the whole structure, the individual account holders and the independent exchange agents.

A key difference between e-gold and a bank is that as an account holder you actually own the gold in your account. When you deposit money in a bank account you strictly speaking don’t own it anymore. You lend it the bank. For this the bank pays you interest. This leads to the risks that we’re seeing again now when banks go bust depositors lose money. There are various band-aids such as FDIC to insure against this, however it is not perfect. Douglas Jackson could never touch your gold, reinvest it, sell it or otherwise.

In e-gold all transfers are final, which is one reason it became popular originally as an alternative to PayPal. The only way this can be done is by being at more than arms length distance from the banking system. The US banking system allow charge backs of just about any payment. So lets say you receive a wire of $100,000 from an investor. AFAIK theoretically speaking he could cancel that wire within a year. Foreign banks are normally the ones who are hurt most by this, but they grin and bear it. In e-gold one such chargeback could undermine the stability of the system.

Independent Exchange Agents

The Independent Exchange Agents was a very innovative idea that e-gold thought up as part of their reorg in 1999 to achieve this seperation of concerns. OmniPay would focus on large exchanges with established known players, but small independent local exchange providers would exchange between local currency and e-gold. Jackson and co decided from the beginning not to certify or regulate this, but rather let the market work it all out. This was extremely innovative, but might in the end have been one of the downfalls of the system. Theoretically this pushes legal compliance in each jurisdiction out to these exchange agents, but many of these were not following their local rules.

IceGold was an example of a really well run Exchange Agent run by Paul Vahur out of Estonia. Paul and his team would let you buy and sell e-gold at 2% below or above respectively of the official e-gold spot rate. Unfortunately a notice on his site says that they have been hit by the dreaded KYC as well:

Due to the adoption of Estonia’s new Anti Money-laundering Law on Jan 28th 2008 we have decided to stop providing exchange services. The new law requires exchangers of alternative payment systems – such as IceGold – to identify all customers face to face.

Besides good guys like Paul, there were lots of instances with fraudulent exchangers. Several industry associations such as GDCA were set up to certify exchangers, but a quick google search shows me that there are still many around that don’t exactly ooze trust. That said the Gold Pages Electronic Currency Directory still has 154 exchangers listed.

It also led to the development of a whole series of “Autoexchangers” which let you exchange e-gold automatically for other electronic currencies such as WebMoney. In his blog post Doug knowing well that he can’t force them to stop yet pleads:

We are requesting that autoexchangers – even though the technical beauty of the autoexchanger concept is sublime – cease supporting exchanges to or from e-gold for the time being. The problem with the autoexchanger concept is that although the autoexchangers themselves may be perfectly compliant with requirements [promulgated by Webmoney and e-gold] to automatically put tracking data in their memo fields, and despite the fact that Webmoney is also committed to aiding in the suppression of cybercrime, the fact is that a substantial proportion of the cybercriminals that abuse e-gold have evolved into a modus operandi that involves autoexchanging possible proceeds of crime into Webmoney, sometimes within minutes of receiving the value, thus making interdiction a matter of catch-up or closing the barn door after the horse is gone.

Good Innovation

In the end the freedom that the lack of KYC and knowing that all transfers are final encouraged lots of innovation. People built special purpose currencies on top of e-gold. An online Casino created a series of bonds as an experiment that paid back depending on how many hands were plaid during the lifetime of the series of bond. Lots of small merchants as well as sites like Get a Freelancer accept e-gold due to both perceived and real pain accepting PayPal or Credit Cards.

Bad Innovation

All of this freedom also fit great with a less nice but highly profitable set of scams known as High Yield Investment Programs or HYIP’s as well as other Ponzi like scams. These programs often claim to pay %100 interest over a period of a few weeks. There are 1000’s of them out there and many of the use e-gold. E-gold was perfect. The two aspects that encouraged innovation lack of KYC and lack of charge backs made it easy for scammers to rob money from financially uneducated people.

The e-gold mailing lists were filled with people analyzing the E-Gold Stats page for any variations. Often they noticed large increases in a certain transaction size and you could guess that another popular HYIP was making the rounds.

All though e-gold claims that they have helped law enforcement bring hundreds of criminals to justice there are thousands more small and large crooks that have slipped through the cracks and this is likely why the US Justice Department started this case.

However following that do you need to charge the Federal Reserve Chairman for conspiracy to money laundering just because US currency notes are one of the most common instruments of payment used in criminal acts. Or if you look at e-gold as a merely a web service intermediary should Sergey and Larry also face personal criminal charges because lots of Ads for scams and illegal products are placed using Adwords?

Personally I am against the case but I find it was pretty much inevitable. To create such as system even partially on US territory is pretty much impossible. While the key aspects such as the trust and gold holdings being held outside the US as long as you have one toe in the US you are an easy target.

I was personally involved in creating an alternative currency system in Panama and I really wouldn’t even recommend doing anything like e-gold in most of the traditional offshore jurisdictions such as Panama or Cayman Islands as they have way more difficult KYC requirements now than US and EU jurisdictions. The best bet is for you to do it within a major jurisdiction and follow the regulatory pain.

Alternatives

Several alternatives exist to e-gold:

Webmoney is probably one of the safest bets right now outside the US as they being in Russia are unlikely to bow to pressure from the US and EU. The downside of this of course is the image of anything todo with money and Russia. I don’t known anything about them really except they’ve been around for a long time and seem stable. They also seem to have figured out a way to create trust in a very low trust society such as Russia.

GoldMoney is another good alternative to e-gold. They are gold based and have the same no charge back policy. There are many, many similarities between them and e-gold. However being pragmatic they instituted strong KYC practices early on and AFAIK don’t allow independent exchange providers. You have to go through certain certified exchange agents.

They are regulated by the Jersey Financial Services Commision which probably means they are safe in EU. Their principals are in the US, so they could theoretically be hit by the “Operation of an unlicensed Money Transmitting Business” charge. However PayPal was hit by this and are still in business. I think as long as they are strict with KYC they will remain in businesses. This strictness though has meant that not quite as much innovation has been going on with GoldMoney as with e-gold. Granted far fewer scams have been perpetrated with GoldMoney as well.

PayPal is still around and is still the number one player in p2p and small business electronic payments (I think). Several interesting applications have been built on PayPal. That said lots of small businesses have had their businesses destroyed due to over reliance on them. Just google PayPal sucks for examples.

The interesting new player for startups wishing to innovate in e-commerce applications is Amazon’s Flexible Payment System which opens up all kinds of interesting applications. It is very similar to the payment system I was working on in Panama. I am personally very interested in trying it out and will report back in the future on this.

Amazon has built up solid knowledge of seemingly half the world so KYC is way easier for them than for just about anyone else. This doubled with their operational experience in handling their own internal payments can only bode well for them in the future. Due to the interlinking with the traditional financial system charge backs are almost certainly still a problem, but they do have various interesting features for managing this risk.

An even more interesting new trend is that many FaceBook Applications are now financing themselves with their own virtual currencies. They sell currency units and/or allow people to earn them. Then they sell virtual products such as virtual flowers to their users. It will be interesting to see how this moves on and if some of them eventually will get hit by overzealous regulators.

The Legacy of e-gold

The innovations in governance that e-gold spear headed made e-gold a trusted system. It is still operational today, except that you can’t create new accounts. Doug has done all kinds of bad moves in the past such as when he sued my old pal Ian Grigg and another friend of mine Charlie Evans in 2001. I was present at the EFCE conference in Edinburgh when they were both served. Doug and G&SR lost the case.

It is pretty interesting thought that even after this and other stupid moves by Douglas Jackson, people still had trust in the system. It will be interesting to see what happens in the e-gold economy in the coming months while they build KYC into the system.

Lessons for startups in 2008

Lessons that web startups can learn from this are i think in particular about governance and transparency. If people are relying on your service you need a user agreement that protects your users against you. Real time public statistics can also go a long way in providing transparency and trust in your system. It might even make it easier for you to get investors.

I wrote about e-gold earlier in How Doug took on the US Dollar. I should probably disclose that I have met Doug and several other people from the team during a visit to their offices in Melbourne, FL in 1999. I currently have probably less than a grams worth of e-gold in my account with a very low account number. I haven’t logged in to it in years.

update Ian Grig whom I mentioned earlier comments on the case

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Relaunching TimeCert a trusted third party time stamping service

I launched TimeCert a few years ago and haven’t given it much love since. Now I’m pleased to announce the official relaunch of it.

TimeCert is a really tiny and light web application that does one thing and does it well. It records and presents the time it first saw something. If you look at the bottom of this post you can see a small TimeCert iframe which tells you the first time timecert saw this article.

The main application of this is really for intellectual property protection. But there are also various other applications. Lets say you’ve been blogging about an idea for a while and all of a sudden someone hits you with a Patent Infringement Suit. You know it could happen. Well TimeCert provides evidence as a trusted third party that you actually wrote your blog posts when you did.

One thing to remember though is that TimeCert can’t back date any existing content. It only knows the first time it was presented with the data.

API

The API is so simple that it’s not even funny. First of all you need to create a SHA1 hex digest of the data you want timestamped. This is easy in most languages. In Ruby it’s:

require 'digest/sha1'
@digest=Digest::SHA1.hexdigest @your_data

Just perform a HTTP GET to TimeCert to one of the urls below changing DIGEST to the digest you created above:

http://timecert.org/DIGEST for end user link
http://timecert.org/DIGEST for use in an iframe
http://timecert.org/DIGEST.time for a plain text file with ini style parameters
http://timecert.org/DIGEST.ini for a plain text file with ini style parameters
http://timecert.org/DIGEST.xml for xml
http://timecert.org/DIGEST.yml for yaml
http://timecert.org/DIGEST.yml for json

The easiest way to use it in a web application is to embed an iframe in your page like I’ve done here:

<iframe src="http://timecert.org/a94a8fe5ccb19ba61c4c0873d391e987982fbbd3.iframe" width="450px" height="30px"></iframe>

This saves you from manually doing a TimeCert request as the timestamp is created on the TimeCert server when the page is displayed the first time.

Best practices in Rails

To do this from Rails first create a digest method on your model:

  def digest
    Digest::SHA1.hexdigest("#{title}\n#{body}\n#{extended}")
  end

Note this is from my blog, I’ve decided that the important content in a blog article is title, body and extended. I’m also using the raw textile data to create this. This is the safest as an update to a textile library could change the digest completely and thus create a newer timestamp.

You could also create a separate digest column and updated it an before_save. I’ll leave that task as an exercise to the reader.

Next create a helper method:

  def timecert_link(article)
    "<div class=\"timecert\"><iframe src=\"http://timecert.org/#{article.digest}.iframe\" width=\"450px\" height=\"30px\"></iframe></div>" 
  end

Now you can just include it in your views like this:

<%=timecert_link(article)%>

It would be great if someone with PHP/Python experience could create a similar example. I would expect it to be extremely simple to create a WordPress plugin to do this automatically, if someone is up to the challenge.

Open Source

This is not really a money making operation, it’s just a service that I feel is important to have. Therefore I’ve open sourced it and you can find it on GitHub. I think this is an important part of being trusted. This allows anyone with ruby knowledge to verify that I’m not doing anything strange. It also opens it up to potential competitors, which I’m absolutely cool about.

TimeCert is written in Ruby using Merb and DataMapper.

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The Black Swan and You

By now many people have heard of Nassim Taleb’s amazing book Black Swan. This book has completely changed the way I think about the world as a whole and startups in particular.

I really recommend you read the book as I can’t possibly do it justice myself. However I will give a brief overview here. Hopefully in later posts I will go on about how this all applies to startups and technology.

The Black Swan itself signifies the highly improbable. Until one was discovered in Australia, Europe thought the idea of a black swan as being impossible. See Nassim’s own video explanation here. Anyway Nassim uses the term Black Swan as meaning a highly improbable event.

The importance of these highly improbable events are that it is very hard to properly analyze and plan anything as just about any major change (both good and bad) come through Black Swans.

Analysis or just telling stories?

No one in 1999 would have thought Google would rule the world. The tech world is filled with examples. But we are also very good at following what Nassim calls the narrative fallacy. It is very easy when we look back at previous Black Swan’s and over analyze them, building up stories on why this company succeeded or this company failed.

The tech startup blogosphere is particularly guilty of this. So many bits have been filled by bloggers (including me) writing “how to guides” filled with expert hindsight advice.

We never have enough data so we make up what’s missing

The whole key to this is understanding that there is really very little you can do to analyze your way to the truth. All important events a pretty much improbable and so unlikely that the only way you could use traditional forecasting models would be if you had all the data about everything at a pretty much infinite level of precision. This is because even small errors in data cause huge swings in the outcome of results.

He believes that intuition and blind belief can sometimes lead to less risky results than putting all your faith in scientific analysis and modelling. A great example he gives is that even a few hundred years ago, you would probably have a higher survival rate going to church to pray than going to one of the doctors at the time. The doctor’s while highly intelligent people just plainly didn’t know enough yet to safely perform their operations.

You living in Extremistan or Mediocristan?

There are areas where there is enough data to analyze things and succeed. The only problem is that it’s not normally possible to succeed in the world changing way this way. Nassim calls this kind of world Mediocristan.

Mediocristan is the world that most of us have been brought up to live in. It’s the safe place without much risk. Get good grades, go to a good university and work your way up through a series of permanent jobs. This way you can theoretically be pretty sure that you will end up comfortably well off.

Most of us entrepreneurs are bored of that world and aim for bigger things in life. So do actors, writers, ball players and many other types of careers. This is where you really work your ass of with very little chance of winning. All of us entrepreneurs are pretty much here in Extremistan.

Now it is cool that there is a Mediocristan and all and it can provide us with a pretty good living and not too much stress. The only thing about it is that Mediocristan while not really exposed to too much in the way of Positive Black Swans, it is still pretty highly exposed to a boat load of Negative Black Swans.

Most people living in Mediocristan don’t like thinking about the bad things that could happen, but really if there is something history (including very recent history) has shown us that the safe cushy jobs are unfortunately not safe. The whole cushy world built up in the industrialized west in the post world war 2 world is really extremely fragile and cracking big time.

Surviving in Extremistan

At first reading of Nassim, it’s very easy to think shit, is there nothing we can do to intelligently attack the world of Extremistan?

There are various things you can do. The first is to realize that if you succeed, it’s probably not exclusively due to your brilliant mind. More than anything else it is luck. You still need a brilliant mind of course to help guide you at every step, just don’t pretend that it alone will get you where you want to be.

Managing your risk is vital. This means exposing your self to as many possible good black swan’s as possible while protecting yourself against bad swans. That may seem like simple advice and it is, but the reality is probably harder than you think.

Extremistan Valley

VC’s expose themselves to many risky investments, where each of them have a defined cost to them if they fail. On the other side there is a pretty much limitless upside if one of these investments take off.

Paul Graham is a master of this from the investment side with his YCombinator. He is making a large amount of very small investments each with an extremely risky yet potentially huge return. YCombinator as an organization is spent trying to push the success of the group as a whole. Genius.

Yahoo followed the late 90s common sense approach of wanting to be the portal for everyone. This means there was a definite potential of success, however as all aspects of their business were/are so tightly knit together that every aspect of their business was really tied to every other aspect being successful. When Google hit them in the head as a Black Swan, they really have been stumbling due probably to this. Their properties that stray most from the mold (as they were created outside) such as Flickr are probably some of the ones that are most likely to succeed in the Google era.

What about Google? Google was itself a huge Black Swan. They were extremely successful and managed to use their smarts (See it is still useful) to monetize it. What about the rest of their businesses. I’m not really sure which other parts are successful and which ones aren’t. They could probably continue as a successful business just doing search and advertising until a new Black Swan hits them. However their strategy of 20% time is probably a way more important way of exposing them selves to near unlimited upside while only risking the 20% of their employees salary in this.

Extremistan and You

What about small startups, independent coders etc. The same raw advice about creating lots of positive exposure while limiting negative risk holds true. It is however very different if you aren’t already independently wealthy.

One way you could do it is to focus on building a portfolio of small apps, essentially creating a sweat venture portfolio yourself. (Thats also why I my personal holding company is called Stake Ventures).

Rails and similar frameworks have lowered the downside risk (or upfront costs) while new platforms such as FaceBook is improving the upside risk for small micro applications. The combination of this doesn’t necessarily mean you’re going to win, but at least you are hatching more than one egg at a time.

Bootstrapping is definitely a bonus as it gives you flexibility. The minute you bring investors into it you may be forced to keep going down one track. Founder vesting is there to lower the downside risk of investors but heightens your own downside risk.

That said, the money that venture or angel capital can give you may be what you need to keep experimenting. Remember there isn’t a magic formula. Just always keep thinking about maximizing positive risk and lowering negative risk.

Getting your app out there exposes it to upside risk. Spending way too much time on features etc means you are increasing downside risk while not adding much in the way of upside risk. I’ve have been guilty of this myself on many occasions.

Once you see that one of your apps is starting to take off, you could start going down the path of finding funding to build on that momentum.

Conclusion

The Black Swan has forced me to rethink lots of things I have helt sacred for years. There is honestly a bit of a dilema in Nassim’s premise, which I’m sure he already knows about. If we aren’t to listen to experts, why should we listen to him. But I guess it comes down to faith in the end.

I know Nassim has been pretty good at answering critiques and highlighting misunderstandings around the web, so I’d love for him to comment himself if I’ve misunderstood things.

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Openness and the OAuth Legal Dance

I’m sitting at the OAuth Summit held at Yahoo in Santa Clara. We’ve had a brief discussion about the IPR policy negotiation process that has been going on in the background between a few core OAuth people and legal departments in various large companies (most notably Yahoo, Google and Microsoft).

Briefly the IPR policy allows employees at large companies to collaborate on the standard while promising to not sue anyone who uses their companies Intellectual Property through use of the standard. So basically Yahoo can’t come sue anyone using OAuth for using some patented algorithm they submitted to OAuth.

The IPR policy is important and good work. That said the current second revision of this is essentially a secret document that will be presented signed, sealed and delivered to us b-list members of the community in a week or twos time.

The community created the OAuth Non-Assertion Covenant and Author’s Contribution License which all the original OAuth spec signers have signed with the exception of Yahoo.

Eran told us today that apparently Yahoo stalled the process in their legal department as they needed a more detailed agreement. This is fine and great feedback, however these comments should somehow be made public so we the community also can follow it and make comments.

I realize that most developers don’t want to follow this, however it is important that it is transparent and googlable. I suggest a OAuth-legal group, the same way OpenID does or a continuation of the existing IPR License on Agree2 which does offer comments, versioning and a full transparent audit trail.

One comment I was given was that we should let lawyers talk with lawyers. I have to call bullshit on that. These kinds of things are way too important to be left in the hand of lawyers without any kind of external oversight.

Gabe has been doing a great job representing us (the OAuth community), however there are lots of people with opinion on this who would like to follow it and voice occasional opinions. Those of us who are building businesses around OAuth based services need to feel comfortable that we aren’t going to be screwed by some indecipherable legalese in the future. More important if there are disputes in the future the negotiation trail is key for solving them.

The final comment I heard is that large companies like Yahoo and Microsoft don’t want to make it public that they are negotiating this. I’m sorry that is even greater bullshit, thats pre-cluetrain, pre internet thought.

Get with the program. Yahoo has more to loose by not using OAuth than us in the OAuth community have to loose by them not joining us. I’m sorry if thats the way it’s done, I don’t care. This is not the world of industrial age negotiation in smoke filled private lounges. You guys are all internet companies for god sake.

OAuth is about open transparent simple standards for creating a infrastructure thats open to all of us and not just Google, Yahoo and Microsoft. Any negotiations behind it should be too.

Update July 2nd, 2008 Here is the latest version of the OAuth Non-Assertion Covenant and Author’s Contribution License For OAuth Specification 1.0

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RSpactor compatibility with newish RSpec versions

RSpactor is one of the greatest tools out there for developing Rails apps on the Mac (Yes it’s Mac only) using RSpec. It works just like autotest, just with out any configuration and without using more resources than absolutely necessary.

Andreas is working on a next generation Cocoa based tool, which looks great. I know many of us are using the original command line version of it still, which unfortunately broke, when the RSpec team introduced some API changes. No worries though, I’ve forked the older command line version on Git which you can also install as a gem:

sudo gem install pelle-rspactor --source http://gems.github.com

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Lessons learnt as a Ruby Programmer playing with Google AppEngine

I suppose I should write a detailed post at some point about this. But here are a couple of notes from working intermittently on Talk.org in the last couple of weeks.

First of all Python is definitely not Ruby. It is very different in many ways. So just accept that and get on with it. Ruby still puts a much larger smile on my face than Python does, but that might be inexperience.

Secondly Django is not at all like rails, even though most python guys seem to claim it is. Pylons seemed much more rails like. However I decided to stick with Django as it’s always good to learn something new.

The best resource I found for getting started was this example project Wuzhere that was demonstrated at Google IO. It is really a great guide to get your head around structuring your project. In particularly coming from Rails, I learnt way more just reading through this code than reading various tutorials on the web. A key piece of code to simplify your life as a rails guy coming over to Django is their view.py class, which acts kind of like a rails render method.

You should use the Django Google App Engine Helper if you are doing Django which is described in this little tutorial. However the approach to laying out your application taken by the Wuzhere developers seemed more logical to me than the approach suggested by the Google App Engine helpers.

Generally speaking I like the AppEngine design. The models are great even if they require you to think a bit differently about the design of your data model. I don’t see a clever way of doing callbacks on the models like with activerecord, but I suspect that something similar would be possible with clever use of Decorators

I would like to say though that while I am still a novice at Django/Python it does seem to me that there are design decisions in both that I’m not quite happy about. Once I’ve worked more with it I’ll see if I still feel that way and can formulate it a bit better.

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Talk.org OpenSourced and stats from Keynote

To make Talk.org a playground for more than just me, I’ve decided to open source it. You can find it on GitHub

I have released it as GPL3 as I think it makes sense for an app like Talk.org that we all get to learn from our experiences.

I will do my best to bring as many new features people create into the live application as possible. However be aware that at some point I may want to put some unobtrusive ads or something on it to make to pay future AppEngine bills. You have been warned. But then again you could do so yourself if you so please.

Anyway, it is a fairly simple app at the moment and is not seing large amount of use, however a fair amount of people came to try it out during the Stevenote.

These are the performance graphs from the Google AppEngine Dashboard:

The requests seem to take about 500ms each, which should improve once memcache is working properly again:

So far we have 58 users who have posted in total 166 posts. Not bad really for a tiny app, originally written last Friday over breakfast.

So far the todo list is:

Allow users to pick their own nickname when signing up (right now it relies on what Google gives me, which is wrong)
Atom/RSS/JSON support
OAuth
Followers
Tracking

Concensus seems to be that the best way to do IM/SMS support is for a 3rd party server todo it via OAuth/HTTP as AppEngine doesn’t yet support XMPP. This is obvious as a great separate project for some Erlang geek out there.

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Just in time for the Keynote my new Google App Engine Twitter clone Talk.org

Well it’s not exactly a twitter clone as you can’t follow or track anyone. There is no IM or SMS support either. However you are able to do some of what you would do on Twitter. So it might come in helpful during Steve Job’s keynote if Twitter goes down. Go to Talk.org to try it out.

This is my first little play project using Google Appengine

Right now it just uses Google Accounts, so for most people you don’t even need to sign up.

So what’s next for Talk.org

My original plan for this was not for it to go the Twitter clone way. There are a few features that I think might be more fun to do than trying to be an exact clone of twitter.

Following and Tracking should not be too overly complicated features to add. But I may endup being wrong about that. From my understanding Twitter’s real scalability problems are from these two features and not the messaging plat form itself.

I’m thinking that unless they’re well designed these may endup presenting problems even on AppEngine. Of course they would only be a problem if you got people with extremely large amount of followers.

I can’t see implementing IM and SMS in the current architecture of AppEngine. However it might be possible to create a separate messaging server using Amazon EC2.

There is also a really annoying bug in Memcache on AppEngine that pretty much excludes the use of the Memcache API until it’s fixed. They are working on it so lets see.

I don’t want to use too much time on this, maybe just an hour or two a week in the future, but I think I may post the code to GitHub as soon as I get it cleaned up a bit.

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Nassim Taleb's Top 10 Life Tips

Great interview with my favorite author Nassim Taleb at The Times.

I will write my own review of his theories at some point and how they apply to startups, but until then he gives these 10 tips in the above interview that I think spell them out pretty well.

Taleb’s top life tips

1. Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2. Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3. It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

4. Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can’t control outcomes, you can control the elegance of your behaviour. You will always have the last word.

5. Don’t disturb complicated systems that have been around for a very long time. We don’t understand their logic. Don’t pollute the planet. Leave it the way we found it, regardless of scientific ‘evidence’.

6. Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.

7. Avoid losers. If you hear someone use the words ‘impossible’, ‘never’, ‘too difficult’ too often, drop him or her from your social network. Never take ‘no’ for an answer (conversely, take most ‘yeses’ as ‘most probably’).

8. Don’t read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants… or (again) parties.

9. Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.

10. Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.

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Vote No to the screw your local Taqueria Proposition

I try to leave politics out of this blog, but I feel really upset about the Proposition 98/99 vote coming up here in California on June 3rd. Any non California residents feel free to ignore this unless you want to learn more about the screwy politics of this state. The Rastas may have invented the term Politrixians, but California politics seem to have perfected it.

Proposition 98 and 99 are 2 referendums to change the California Constitution to supposedly disallow Eminent Domain. The first one Proposition 98 is called EMINENT DOMAIN. LIMITS ON GOVERNMENT AUTHORITY. and the second one Proposition 99 is called EMINENT DOMAIN. LIMITS ON GOVERNMENT ACQUISITION OF OWNER-OCCUPIED RESIDENCE. So on the outset they sound very similar.

Before we even get to the differences between them…

What is Eminent Domain?

Eminent Domain is basically when the government takes private property for public use. The US Constitutions guarantees that this can only be for public use and can only be done for just compensation. Basically if they take your property they must pay fair market price for it.

Unfortunately in the past century governments have radically expanded what public use means. This is where the trickiness comes in. Local governments have come to believe taking your house and selling it to a mall developer is a public good as it could increase the tax base.

Kelo v City of New London

This whole thing was thrown into the public view a couple of years back when the US Supreme Court basically said this was valid in the court case Kelo vs New London. Where a the New London city council took away 15 homes from their private owners to give to a private developer. Not strangely there was a huge uproar about this and lots of states started passing laws to limit this kind of thing.

Eminent Domain Abuse in California

Drew Carey has made a great videos about a specific case in California, that provide a great introduction to why and how this is done in this state and good alternatives to it:

Also see this one National City: Eminent Domain Gone Wild and this article about How the New York Times forced 55 business out using Eminent Domain to build their new office.

What you can see here is that most of the victims of this are small businesses. Exactly the kind of small businesses that we like here in San Francisco. The local Taqueria, the neighborhood bar, the Filipino grocery shop and hey maybe even your local neighborhood web startup.

The Battling Propositions

All of us voters in California have hopefully been sent the official voters information guide. Which I think is a great. I have read the whole thing and you should to. If you don’t have a lot of time just read the actual texts of them which while filled with legalese is less painful than reading the patronizing rhetoric in the arguments and rebuttals.

Note, when reading it the purpose and intent is kind of like the sales pitch. The actual amendment to the constitution (coders think diff) is the text in italic. Both of these make changes to Sec. 19 of the constitution. The rest are basically implementation rules.

Proposition 98

This was the original proposition. It provides very good and very strong defense against eminent domain abuse. No one has argued that it doesn’t. I will get to the main argument against it afterwards.

The main key clause in Proposition 98 is simply and strongly:

Private property may not be taken or damaged for private use.

The rest of it is basically definitions of what “Taken”, “Private Use” and “Public Use” means. Private Use and Public Use pretty much follow regular common sense definitions of this. The definition of “Taken” is where the controversy us.

Private property includes all private property and not just owner occupied homes. It includes small businesses, farms, apartment buildings and of course owner occupied homes. Through the virtue of their landlords being protected even renters are protected.

Taken==Rent Control?

The people who wrote Proposition 98 added this:

(1) “Taken’’ includes transferring the ownership, occupancy, or use of property from a private owner to a public agency or to any person or entity other than a public agency, or limiting the price a private owner may charge another person to purchase, occupy or use his or her real property.

Reread the part in bold if you didn’t notice it. This basically eliminates rent control.

Now I am personally against rent control personally and in my libertarian mind rent control is in the similar to transferring ownership. While I retain ownership, the government limits my cashflow from it and also artificially lowers the potential sales price as earnings are lower. However most people aren’t libertarians like me and would justifiably see this as a hidden trojan horse to get rid of rent control.

As a libertarian while I’m against rent control, I do think the way it was hidden in the proposition was wrong.

Anti Prop 98 campaigners have scared lots of older people into speaking out against it because of the rent control provision. If you read the campaign you might be fooled into thinking that thousands of senior citizens will be forced to move onto the streets if it gets passed:

“If Prop 98 were to pass, it would amount to economic eviction for most seniors that can’t exist without rent stabilization. Everyday we see attacks from wealthy landlords to maximize their profits off the backs of those who can least afford to defend themselves. My wife and I are concerned about our survival if Prop 98 passes. If seniors and low-income families lose our rent control and other protections that safeguard our homes, we’ll be left with nothing.” – No on Prop 98 campaign web site

This is frankly a lie they have been fed. Section 6. of Proposition 98 specifically deals with this. No one who is currently under rent control will loose rent control if they stay in their current apartment.

If you think rent control is a good idea or even if you just want the issue to be dealt with in a more transparent manner, by all means vote against Proposition 98. Just remember it isn’t just “Big Business” who are landlords. This also affects lots of “normal people” who might rent out an apartment as they can’t afford to sell it in the current market.

Who is behind Proposition 98?

Proposition 98 is paid for by big landlords if you read the spam I’m receiving daily. This is definitely partly true, but only partly so. The main sponsors are property rights groups and groups fighting excessive taxation. However small businesses who have probably been more affected than anyone else in California by Eminent Domain Abuse and their associations are also heavy supporters.

We should also remember that just because some one is “Big Business” it doesn’t mean their interests necessarily goes against ours.

Proposition 99

This was hastily brought on the ballot by a coalition of California politicians and real estate developers. Basically the very same people who perform and benefit from Eminent Domain Abuse. It was written and worded in particularly to make sure that Proposition 98 wasn’t passed and to make it harder to pass real eminent domain reform in the future.

The basic rule is that it protects only home owners:

The State and local governments are prohibited from acquiring by eminent domain an owner occupied residence for the purpose of conveying it to a private person.

This sounds great and all, however there are 2 huge buts.

No protection for renters, small businesses or farmers

Yes, you heard it right. Your neighborhood taqueria as well as your apartment building is still fair game for developers. None of the people in Drew Carey’s two videos above would be eligible for any kind of protection.

I find it extremely hypocritical that the same people who talk about how much they love San Francisco’s small shops and restaurants are willing to remove the most basic constitutional protection these same shops have in favor of developers bringing in big box stores and restaurants as part of their developments.

No real protection for home owners either…

The thing that surprises most people about Proposition 99 is that it in a hidden way actually specifically amends the constitution to allow politicians selling blocks of private property away to developers.

Section 1.c of 99 says:

Amend the California Constitution to respond specifically to the facts and the decision of the U.S. Supreme Court in Kelo v. City of New London, in which the Court held that it was permissible for a city to use eminent domain to take the home of a Connecticut woman for the purpose of economic development.

Most people would think that this means to disallow it. However it is pure politicians double speak. It just says that the constitution should address the issue. This it does as well in section 19© and (d) of the amended text of the constitution.

(d) Subdivision (b) of this section does not apply when State or local government exercises the power of eminent domain for the purpose of acquiring private property for a public work or improvement.

No one is arguing with public work. Improvement though is the what we programmers would call the wild card. Their definition lists a bunch of specific cases and then leaves it open a the very end with this bit in the amendment – 19 (e) 5 :

and private uses incidental to, or necessary for, the public work or improvement.

It basically will still allow them to use “economic development” as an excuse.

The real danger of 99

You might say, well it does provide some protection lets just vote it in. It’s a fair point but I truly believe that if it gets voted in a real amendment with real protection for everyone will be very difficult to get votes in the future. It provides a false sense of security and would lull large amounts of people into thinking it’s someone else’s problem.

The amendment will also make it extremely difficult for people to defend themselves in court in the future.

The hidden knockout clause

Another slightly sneaky part of Proposition 99 is section 9 which eliminates 98 even if both are passed:

SECTION 9. In the event that this measure appears on the same statewide election ballot as another initiative measure or measures that seek to affect the rights of property owners by directly or indirectly amending Section 19, Article I of the California Constitution, the provisions of the other measure or measures shall be deemed to be in conflict with this measure. In the event that this measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and each and every provision of the other measure or measures shall be null and void.

So if both Proposition 98 and 99 win, 98 is to be ignored. Classic politicians move.

Who is behind Proposition 99?

It’s supporters include both politicians of both Democrat and Republican flavors as well as most other lobbyist groups out there. More importantly it has the support of large real estate developers, who depend on Eminent Domain to build their projects without having to pay market price. Their is apparently even some investigation to see if tax payers moneys have been illegally spent on the campaign.

The whole industry of professional politics depend on Eminent Domain as these are the kinds of large visible projects that they can use to show what a great job they are doing and of course for raising campaign contributions from developers.

I do think its sad that all kinds of “liberal” lobbyists like the League of Women Voters and various environmental groups are so vocally for 99. I can accept that they might be against 98 for the rent control issue, but supporting 99 is just so flatly immoral that it really does make me feel sick to the stomach. You can only imagine the political deals that are being made in the back ground for them to accept it. I grew up in and around politics and know only too well how this works, however much it still revolts me.

One spam I received from one such group who shall remain nameless said:

YES ON PROP. 99 – Real and Powerful Eminent Domain Reform with NO HIDDEN AGENDAS.
Prop. 99 would prohibit government from taking our homes to transfer to a private developer.
Prop. 99 protects homeowners from eminent domain, with no hidden provisions.

How can you seriously try to fool your supporters in such a way. It is filled with hidden agendas and provisions.

What should you vote?

You should always make up your own mind about who to vote for and not listen to me or some professional lobbyist group. Read the propositions your self. I’m assuming you like most people don’t think it’s ok to take private property to give to private developers, so I’m not even going to argue that.

If you are interested in learning more why not check out BallotPedia’s page comparing 98 and 99, they have pretty good coverage of the pros and cons and all the juicy controversy around them. This opinion piece from Victorville Daily Press also explains the facts very well.

I would urge you to vote against 99 if your analysis is like mine. I think it’s a dangerous example of the politicians playing us like fools. But then again I maybe wrong and I’d be interested to hear your analysis in the comments.

Whether to vote for Proposition 98 is simple Vote YES if you agree with the hidden rent control clause and NO if you don’t. If you Vote NO for both lets all try to support a proposition in the future that protects everyone and this time doesn’t contain any hidden clauses.

Personally I’ll be voting yes for 98 and no for 99.

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Help us review the new Agree2 User Agreement

We are getting very close to leaving beta for Agree2 and have to create a new user agreement. We’re doing this publicly and hope for feedback from you.

Please see the official announcement of this on the Extra Eagle blog.

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You are the one who will change the world, not the next president

It’s easy to get swept into the excitement of the electoral process no matter where you live in the world. In the past couple of months I’ve found myself swept into the excitement for a candidate for the coming US presidential election, who I in reality have very few things to agree with and probably wouldn’t ever vote for anyway. This because he has a certain charisma and a message that says “Lets change this crap!!!”.

However anytime I get deeper into following that process something happens to immediately yank me back to reality and realize that it doesn’t really matter anyway who sits in the White House or who is busy inserting their pork barrel into bills in Congress.

What is important is that we the entrepreneurs, coders and inventors who are actually changing the world keep doing our jobs.

Sometimes it seems unimportant and frivolous for us to be obsessive about the latest standards, rails plugins or variation of a social video startup. However this is how every single great change to the world has happened over the last couple of hundred years.

Let me repeat that:

Every important world change has been made by people like YOU!!!

Also if you don’t think you should have illusions of grandeur remember:

Every large and well known change depends on thousands of other small improvements also made by people like YOU!!!

Note. I say YOU as the people who read this blog tend to be entrepreneurial and/or geek type of people. If you happen to be a politician or bureaucrat I’m sorry, I’m not talking to you.

The obsessive nerd thinking over some small technical detail to move us as a planet ahead or a big mouth entrepreneur who refused to give up and ends up bringing down the last generation of entrepreneurs who had grown fat and complacent.

Why are we well off

Those of us in the west are well off and lead comfortable lives not due to some 19th century president, king or prime minister. We grew to where we are because of nerds like James Watt, innovative bankers like Nathan Rothchild and single minded entrepreneurs like Andrew Carnegie.

Why is the world changing for the better

You are part of the current generation who is bringing this amazing economical and social development to the rest of the world.

The web, mobile phones, YouTube and email are amongst the thousands of new technologies that are breaking age old barriers that kept people poor. People who before were ignored and poor are now all of a sudden taking their voice, demanding change, taking charge and pushing their own economies forward.

This isn’t just happening in the developing world. In the US politician’s are now in a new uncertain world, where people don’t necessarily just accept what’s going on.

More and more people are also finding that the barriers to entry to independence for themselves if getting to a lower and lower level letting more and more people make step off the corporate ladder and start businesses for them selves, thus creating a positive feedback loop for change.

Some of the people occasionally blamed for this development were William Shockley the inventor of the Transistor, Gordon Moore cofounder of Intel, Bill Gates, Linus Torvalds, Sergey Brin and Larry Page.

However every one of these famous names built upon the work of thousands of other amazingly smart innovative geeks and entrepreneurs who might not have received the fame, but were equally responsible in bringing about a huge change to this world.

I find it entertaining and to a certain extent cool when someone like Dave Winer devotes so much of his time right now to the Obama campaign, when he has probably done way more to change the world for good than any presidential candidate ever will by inventing the blog and RSS .

Loosers are also world changers

You are also responsible even if your particular startup or technology didn’t take off, as competition with you is what brought the winners ahead. I worked at Alta Vista early on, Google beat them into a pulp but they and others helped build the foundation that Google succeeded on.

What’s the point Pelle

So what exactly is my point on this rant. It’s alright to get all heated up about political campaign, just remember that your real job is improving the world. 6 billion people are depending on it. Keep doing what you do best one line of code at a time, one new blog post at a time and one new idea at a time.

Even if you haven’t got a ground breaking business idea, submitting a patch to a rails plugin that will make it easier for someone who does could be a more important step towards changing the world than who you vote for in November.

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Living it up on the cheap in Denmark

As I’m currently in Denmark for a while I’ve had to with even worse prices of groceries than normal due to the apparent sickness of my good old US$. I thought I might as well write a little guide for how you can save a krone or two if you are staying in Denmark for an extended time.

Copenhagen is normally rated ad one of the 3 most expensive cities in the world, but you can get buy reasonable if you know how.

My Bootstrappers guide for Denmark has become very popular with foreigners trying to grasp the red tape involved with running a business here, so hopefully this might be a fun little guide, whether you’re coming for a week or staying on permanently.

Groceries

If you’re used to large nice supermarkets like you have in most countries you are in for a surprise here. Laws limit the sizes of supermarkets and department stores, but even more important the neighborhood discount stores are now the most popular place to do grocery shopping.

Discount Supermarkets

The five chains I know of in Denmark are Netto, Fakta, Aldi, Lidl and Rema 1000.

Of these Netto and Fakta are Danish although you might have seen Netto in amongst other countries England. Rema 1000 is Norwegian (Thanks Trond). The rest are German chains. Netto and Aldi are the most common and just about every neighborhood has one. After that Aldi. Lidl and Rema 1000 are not very common in Copenhagen, but I believe they are very common in Jutland.

Aldi are by the way the owners of Trader Joes in the US.

Anyway the Danish tabloid Extra Bladet have compared prices for a bunch of different groceries as of April 2008 here:

Discount stores are great for your basic daily shopping as well as their special offers. The standard grocery assortment is quite small compared to a US supermarket. However their weekly offers “Tilbud” are what make them kind of fun. Go to each of their web sites above and view their weekly catalog containing special offers. The offers range from Oreo Cookies to cheap laptops.

Important note regarding international Credit Cards

One important note when going to the Danish discount stores. They do not accept international credit cards. You will need either cash or the Danish debit card Dankort. I’ve seen many a foreigner being turned away at the cash register for this reason.

You buy the bag and bag yourself

Other important note for at least Americans is that you have to buy your bags and bag your groceries yourself. After having been abroad for 14 years my first time in Netto ended up as a stare down between me and the woman behind the cash register. I was waiting for her to bag my groceries and she was waiting for me to do so with the bag I hadn’t bought.

Meat and where to buy it

The discount stores have a few choices that you might use, however they aren’t normally very good.

Better yet would be to check the more upscale supermarkets Føtex, Irma and SuperBrugsen. They normally have good quality meats available. You will notice their normal prices are quite expensive, however they almost always have good offers going on.

Føtex and SuperBrugsen often have a pick 3 packs of meat for 100kr deals. Irma normally have will have one or two offers on beef that is worth while. As in California TriTip steaks are great deals and are known as Cullotte or Cuvette steg.

Another option that is very popular with many foreigners but often less so with Danes are the Hallal butchers. Most areas with large muslim populations such as Vesterbro and Nørrebro in Copenhagen have good ones. They are normally best for buying mutton and veal. It’s normally good quality and cheaper than the supermarkets.

Vegetables

The discount supermarkets have the basics and are normally fairly cheap. The larger supermarkets such as Føtex have a good selection of vegetables and fruits but are often 50% or more expensive.

Again you might want to go into Vesterbro and Nørrebro for your favorite Turkish green grocer. They normally have a good collection of fruits and vegetables for good prices. Pick up some Olives or Hummus from the deli conter as well. I love these places.

Ethnic foods

As mentioned earlier Vesterbro and Nørrebro have lots of Turkish butchers and green grocers.

Vesterbro in the part closest to the central train station have several great Thai and Chinese shops. None of them are too expensive.

On Peter Hvitfeldts Straede in central Copenhagen you will find a small American grocery store next to a English shop that also carries Aussie and South African groceries.

A neat place I discovered are the Polish grocery stores. I think there is one on Nørregade close to Nørreport station. They have great cheap Polish beer, interesting soups, sausages etc.

Booze and where to buy it

Generally speaking the supermarkets have a good selection of wines at suprisingly affordable prices. Even with the current dollar rate it’s cheaper to buy good wine in Denmark than in the US. There are lots of great wines in the 30-50kr range.

The normal beer brands like Tuborg and Carlsberg are available everywhere. The discount supermarkets have their own Danish brewed beers that are pretty cheap at around 2kr. Some of them aren’t bad. They are cheap enough to try them all. If you are close to Lidl, they have great German beers available for 4-6kr.

You can often fine drinkable vodka and gin at most of the discount supermarkets for around 70kr. Look out for special offers on premium brands. In particular Føtex and Irma have occasional great offers.

Bottle deposits

Bottle deposits in Denmark has been a part of life for years. It’s 1kr for a beer bottle or can and 3kr for a large soda bottle. In Denmark there is no need to feel embarrassed when standing in line in front of the bottle deposit machine with the career winos, students and basically everyone.

Every supermarket has one of these machines. You basically fill it with your cans and bottles one at the time (bottom first). When you’re done press the button and it prints a receipt that you can exchange for cash or use to pay for more beer.

Transport

Public Transport

The public transport system is great and consists in Copenhagen of busses, trains and the metro system. All of them use the same tickets.

I recommend that you never buy a single ticket unless you of course only need a single ticket. A single 2 zone ticket costs 20kr. So it’s much better to buy a 10 clip multi ticket know as a klippekort. A standard 2 zone one costs 125kr in Denmark. You can buy these in many news stands

If you’re here for more than a week it’s almost always worthwhile getting a 1 month pass, which costs 310kr for 2 zones which allows unlimited travel for 30 days within the 2 zones that you pick. You need to bring a passport photo with you and buy these at train stations.

Cars

At nearly 200% tax buying a car is ridiculously expensive. Renting them as well. However if you’re in Denmark for less than a year there are good options. If you are a foreigner want to buy a car or bring your own with you have the option to register it using special tags known as “grænseplader”. These allow you to cut most of the import duties. I don’t know the details myself, but you should be able to ask a car dealer about it.

Similarly most large car rental agencies have special offers for non residents. You probably need to call them up to ask for it, but it will be cheaper and comes with such luxuries as unlimited milage.

Please add your own tips in the comments.

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Video of Keynote Panel at RubyFools 2008 in Copenhagen

Featuring Dr Nic, Matz, Evan Phoenix, Kim Dalsgaard and Aslak Helleshøj.

Sorry for the dodgy sound quality. Need to get decent equipment at some point.

Update: I’ve made a higher quality mp4 version of this available here Please let me know if this doesn’t work.

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It wont hold up in court

Rafe Needleman wrote a review of Agree2 today: Agree2 creates binding legal documents that won’t hold up in court

I am proud of his comments about the technical aspects of the site, however the title about the legal documents that not hold up in court I find problematic. That said, I am really glad Rafe brought this up. There are plenty of myths and misunderstandings about this.

Technically, I have no beef with the service. I think it’s pretty cool, actually. But although I’m not a lawyer and even though I hate trying to decipher legal agreements when I need to, the service’s tacit encouragement to create my own non-lawyer-approved agreements scares the bejeezus out of me. Sure, I could write an agreement between me and someone I’m hiring to re-wire my house. And if the contractor I’m working with were new, he or she might even sign it. But it would still, probably, be a crappy agreement. A court might agree that the electronic edits and signatures were binding, but that doesn’t mean the agreement would be legally sound. Certainly it wouldn’t be complete.

I object to the title

Saying that Agree2 agreements don’t hold up in court is like saying agreements written in Microsoft Word, don’t hold up in court.

Agree2 is a media and a framework for you to write agreements. We take care of all phases of the contract from drafting, versioning, inviting and legal binding acceptance from the parties. We provide evidence as Rafe points out in a very easy to use manner and allow you to come back and find your contracts in the same place 2 years later.

We hope to foster a community of people to share contract templates. People have already been doing this for many years, informally emailing word documents around.

Due to California law, we can not take an active part in analyzing the contract text. However we try to provide as many tools as possible for this to be easy for you and your advisors to do.

The OAuth standards group recently used Agree2 to create their OAuth Non-Assertion Covenant and Author’s Contribution License. This has been signed by amongst others Digg, Twitter, Google and AOL. I am sure Google’s legal department would not allow them to use Agree2, if they found a problem with it.

Contracts are not between your lawyers, they are between the parties

A common misunderstanding about contracts is that they have to be scary legal documents written by lawyers.

First of all a contract is not the document itself. It is the concept of an agreement the two parties have. The written contract is a handy document that writes down the terms of the agreement in such a way that there aren’t misunderstandings of each parties duties.

We perform contracts everyday. Many of them through our actions like ordering a meal in a restaurant others written like signing a credit card slip or accepting a user agreement.

Generally speaking it is a good idea to write contracts into a document to avoid disputes in the future. This is the whole reason behind writing a contract down. Avoiding disputes. If a dispute should happen in the future this document is used by a dispute resolution institution such as arbitrators or courts.

Opaque legalese is all about fear and power

When I have had to sign long contracts in the past, I can be pretty certain that the person giving me the contract doesn’t understand it one bit. They expect that I don’t understand it either. These contracts still serve their purpose, by keeping us both too frightened to cause a dispute.

That said disputes still happen, and they happen mostly because there is some disagreement between the parties about what The Party of the First Part or some such legalese foolishness actually means. (See more)

Courts are used to standard legalese terms, that is true. There are complex hidden meanings between these. However they are also perfectly able to understand plain English. More importantly if you write your contract in Plain English yourself you are probably less likely to end up in court in the first place, because you and the other party both understand your duties under the contract.

Lawyers are needed for many things

There are definitely cases where you want to bring in lawyers. I think it’s definitely a good idea for large complex contracts. Please do NOT write up a term sheet for a large investment yourself. However in most cases it is a good idea to write the meat of the contract yourself and then have a lawyer go over it. You can then use this a private (or public) template within Agree2 and have the best of both worlds.

However it doesn’t make any sense whatsoever to have pay $400ph for a lawyer to go over a contract worth $500 to you. If you are doing this repeatedly have him go over your template.

Many contracts that should be documented end up being agreed over a phone or in a brief email instead to avoid the hassle of form documents and lawyers. Agree2 gives you a much better option than either.

We are planning a feature in the future where you can give lawyers access to review your contracts and templates.

Government requirements

Most contracts can and should be simple. There are however a few types of contracts where complexity is mandated by law. In particular apartment leases and employment contracts, where just about every state/country have specific legal requirements.

Stake Ventures

How the Man finally brought e-gold down

The Charge

Know Your Customer

E-Golds innovation in Governance

Transparency and real time auditing by users

Account Holders

Independent Exchange Agents

Good Innovation

Bad Innovation

Alternatives

The Legacy of e-gold

Lessons for startups in 2008

Relaunching TimeCert a trusted third party time stamping service

API

Best practices in Rails

Open Source

The Black Swan and You

Analysis or just telling stories?

We never have enough data so we make up what’s missing

You living in Extremistan or Mediocristan?

Surviving in Extremistan

Extremistan Valley

Extremistan and You

Conclusion

Openness and the OAuth Legal Dance

RSpactor compatibility with newish RSpec versions

Lessons learnt as a Ruby Programmer playing with Google AppEngine

Talk.org OpenSourced and stats from Keynote

Just in time for the Keynote my new Google App Engine Twitter clone Talk.org

So what’s next for Talk.org

Nassim Taleb's Top 10 Life Tips

Taleb’s top life tips

Vote No to the screw your local Taqueria Proposition

What is Eminent Domain?

Kelo v City of New London

Eminent Domain Abuse in California

The Battling Propositions

Proposition 98

Taken==Rent Control?

Who is behind Proposition 98?

Proposition 99

No protection for renters, small businesses or farmers

No real protection for home owners either…

The real danger of 99

The hidden knockout clause

Who is behind Proposition 99?

What should you vote?

Help us review the new Agree2 User Agreement

You are the one who will change the world, not the next president

Why are we well off

Why is the world changing for the better

Loosers are also world changers

What’s the point Pelle

Living it up on the cheap in Denmark

Groceries

Discount Supermarkets

Important note regarding international Credit Cards

You buy the bag and bag yourself

Meat and where to buy it

Vegetables

Ethnic foods

Booze and where to buy it

Bottle deposits

Transport

Public Transport

Cars

Video of Keynote Panel at RubyFools 2008 in Copenhagen

It wont hold up in court

I object to the title

Contracts are not between your lawyers, they are between the parties

Opaque legalese is all about fear and power

Lawyers are needed for many things

Government requirements

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