In the News: Week of July 19th
In the news this week
The Trump administration is sending federal agents into Seattle, against the wishes of the city’s mayor. Jenny Durkan, the mayor, said that any deployment of federal agents would “undermine public safety.” A similar federal presence has remained in Portland throughout most of July, tear-gassing and snatching protestors off the street. Oregon officials believe the forces have overstepped their bounds, but a judge in Portland rejected the state’s bid to restrict the federal agents. This new presence of federal forces is due to an executive order signed by President Trump on June 26th to protect federal monuments and buildings, but they’ve mostly served to escalate protests.
U.S. officials ordered the closure of the Chinese consulate in Houston on Tuesday, and in response China ordered the U.S. consulate in Chengdu to shut down on Friday. The top Chinese official at the consulate in Houston, along with two other diplomats, used false identification to escort Chinese travelers at the Houston airport back in May, which was said to be among the reasons why the consulate was closed. An American official said China has increasingly attempted to steal scientific research that could be related to efforts to develop a coronavirus vaccine, and the State Department said China was overseeing “massive illegal spying and influence operations.” Tension between the U.S. and China remains at an all-time high after this latest escalation.
Hanna became a hurricane Saturday, and is expected to make landfall in Texas. The storm had sustained winds of 75 mph Saturday morning, and should make landfall somewhere between Corpus Christi and Brownsville later Saturday. Hanna is the first hurricane of the season in the Atlantic, and it’s possible for the storm to strengthen slightly more before making landfall. The first hurricane of the season usually doesn’t occur until mid-August, so we are running ahead of schedule. I think I speak for everyone when I say we probably don’t need a worse than normal hurricane season this year.
Headline of the Week: Man arrested in Everett after taunting police with doughnut
A teenager who taunted cops with what I can only describe as a rudimentary fishing pole with a donut for bait was initially arrested and accused of fourth-degree assault. Washington state believes a fourth-degree assault charge shows a “disregard for human life,” which, in this case, might be a bit of a stretch. The teen never touched anyone, and Snohomish County prosecutor Adam Cornell said he will probably not face criminal charges. Cornell said, “I don’t think there’s any jury in the county that’s going to convict that young man based on the evidence I know so far.” The teen is now seeking damages due to his arrest and mistreatment.
Recommended Reading: Amazon Met With Startups About Investing, Then Launched Competing Products
I’m beginning to think that Amazon might not be the most ethical company in the world. A recent Wall Street Journal investigation found that Amazon often uses the investment and deal-making process with startups to steal confidential information and develop their own competing products.
Amazon is a gigantic company, and their bottomless pockets can be too attractive for entrepreneurs to ignore. An investment from Amazon could make or break young companies. Described as a “wolf in wolf’s clothing” by a partner at a venture capital firm, Amazon essentially uses the DENNIS system (below) on unsuspecting young startups.
D — Demonstrate Value
E — Engage Physically
N — Nurture Dependence
N — Neglect Emotionally
I — Inspire Hope
S — Separate Entirely
Amazon first demonstrates value by showing the company what an investment could enable them to do. “Look at all of this money we’ve got,” basically. Amazon then engages them physically; they meet with company leadership and indulge their fantasies, making them believe they actually have a shot at some Bezos Bucks. Nurturing dependence isn’t hard; not many other companies have the capital that Amazon does, so it’s easy for them to make startups believe that striking a deal with the devil is their only way to be successful.
After Amazon has acquired the trade secrets they need, they start to neglect emotionally. They no longer return emails or respond to the naïve entrepreneurs. Startups are left wondering where they went wrong, and what they could do better next time (if there is a next time). Just when all hope is lost, Amazon shows back up. Maybe there are some documents or secrets they missed, and they need to briefly re-engage the startup one final time. Once Amazon has everything they need to duplicate the startup’s product or service, they separate entirely. This is the ugly step where the startup becomes jaded and finally realizes what Amazon did to them. If they have any fight left in them they might try to sue, but who are we kidding? None of these small companies have the financial resources to take a giant like Amazon to court.
The lawyer representing one inventor who was DENNIS’d by Amazon said, “They find technology they think is extremely valuable and seduce people to engage with them, and then cut off all communication after initial sessions with an inventor or company. Years later, lo and behold, the technology is in an Amazon device.” This particular inventor demonstrated a patented microphone array for Amazon, but never struck a deal because Amazon executives ghosted him shortly after the meeting. He now says that his technology is being used in Amazon Echo devices, which would be patent infringement. Amazon disputes this claim, and the case is slated for trial in September.
Most cases never go to trial. Amazon sometimes settles out of court for an extremely small sum of money, akin to someone throwing a penny at a homeless person on the street, but many small companies don’t have the resources for any sort of fight with Amazon. While Amazon profits from their ideas, they slowly go broke, with no money to stand up for themselves or defend their work. You don’t see Amazon stealing information from Apple or Microsoft; they prefer to pick on startups that don’t have the resources to defend themselves.
The Wall Street Journal interviewed over two dozen entrepreneurs, investors, and deal advisors who said Amazon used this process to develop competing products. In some cases, Amazon actually does invest in or buy companies, like they did with Ring. More often, though, it appears that Amazon has found it is more cost effective to steal ideas without investing money.
This is what capitalism is. Without government regulation, money and power condenses in the hands of a few giant corporations. There is no trickling down; entrepreneurs, inventors, and startups are left for dead by Amazon and slowly go broke after their once-in-a-lifetime idea is made worthless. How much greater would our country be if those actually coming up with brilliant new ideas were fairly compensated for their work? Instead of adding to the wealth of Jeff Bezos, money would go to entrepreneurs that could put it to work creating something useful.
