A legal spat between Scrollkit, a 2 (?) year old startup, and The New York Times, a 162 year old icon of the news industry, buzzed it’s way into the startup world this week.

Last year the Times published a story titled Snow Fall. It demonstrated some new and emerging technologies on the web, and included research and media from the Times. It garnered much attention, and I think rightfully so. It was exciting to see a large traditional media company pushing forward.

The founder of Scrollkit also liked the article. As a demo, he cloned the story (using images, video, and possibly text from the original) using Scrollkit. Then he linked to it from his company’s landing page:

The Times learned about this and sent a DMCA takedown request. Cody (a Scrollkit founder) blogs the whole thing. Now everybody looks bad. Well, this is certainly unfortunate.

The responses on startup website Hacker News totally miss the point, in my opinion. They debate whether a DMCA takedown request is appropriate, if copyright applies to this situation, and a variety of other errata.

There is only one lesson to learn from this mess: Learn about your market, and act like a good citizen of that market. I think Scrollkit handled this situation pretty badly, and entirely missed the realities of what creating a business is about. Relationships.

Artsy

Artsy is another New York company (just like Scrollkit and the Times) that provides a good counter-example. I have much optimism about Artsy’s potential to be a successful company in the art market- and the reason is relationships.

• Artsy has created rich bonds with the existing world of art sales and commentary. They don’t compete with existing galleries. Instead they work with them to find new customers and bring great artists online.
• They don’t rely on public domain images of work at a museum, or rely on their users to upload copyrighted work under the DMCA Safe Harbor provision. Instead they built a fantastic team of experienced art historians, and created relationships with hundreds of institutions in the arts. Among these are giants like The Dallas Museum of Art, SFMOMA, and The Royal Collection.
• They go out of their way to make copyrighted images non-trivial to copy or download. Yes, tech-smart people can always get around this, but that isn’t the point. Artsy listened to what their market wanted and went out of their way to deliver.

Being receptive to the needs of their market does not exclude Artsy from changing that market. The art world is ripe with opportunities for disruption, and Artsy is well positioned to exercise those opportunities. Their position comes from working within their market, and with leaders in that market.

Imagine for a moment that Artsy started using user-sourced photographs from the MoMA on their site. It doesn’t matter if you think these photos are fair use, or if you think MoMA should be supporting new ways to consume art. The reality would be that MoMA stops working with Artsy, and any other institution that aspires to be like MoMA does the same. Ignoring MoMA’s content ownership concerns would be a terrible signal to the market that Artsy doesn’t understand their world.

Scrollkit

From Scrollkit’s website:

I am not privy to any special insight about Scrollkit’s business strategy, but I imagine they want news organizations (most of whom don’t have the digital skills the Times has) to use Scrollkit for publishing engaging content. This sounds like a solid plan. I find Scrollkit’s tools pretty amazing, and I think news organizations would use them very effectively.

So why they chose to alienate the market leader in news publishing is beyond me. It doesn’t matter if Scrollkit’s clone of Snow Fall was fair use or not: They have burned an important bridge before they tried to build it.

Relationships are a keystone to a startup’s success. Understanding how players in your market perceive the world and leveraging that early is important. The New York Times is notoriously touchy about others duplicating their content. The whole news publishing world is notoriously touchy about it. If you want to have those organizations as a partner, the way to gain their trust and business is not to blatantly copy their work, then brag about it, then flame them on your blog.

I think Scrollkit has ruined any chance for a relationship with the Times, for any relationship with the individuals that built Snow Fall, and for any chance of a relationship with news organizations that admire the Times (all of them?).

I can see two ways this might have been better done. One is to copy Snow Fall, but share it directly with the Times instead and engage them in conversation. If I told the world something took me “hundreds of hours” and a startup shows me “we can do that in an hour”, I’ll sit up and listen. Then you duplicate that process with another 10 organizations (and their content). A second way out was to respond quickly and politely to the DMCA takedown, then try to directly engage the Times.

Spray and Pray

If your target customers care about content ownership, your startup needs to care about content ownership. As a small fish in any large market, you need to demonstrate that you have similar priorities, or at least an elementary understanding of the history and common practices of that market.

When you know how to code (or heck, when you hire a coder), it becomes easy to see every problem as solvable with more code. You start building without understanding who you are building for. This goes beyond product, and straight to the heart of issues like the Snow Fall clone.

In a dense city like New York, there are a multitude of opportunities to meet people you want as customers. Get outside the building, and ensure your projects aren’t tone-deaf to their worldview. Learn to be a good citizen of your market. If you don’t, you might look up to realize your company has missed the mark. And that would be unfortunate.

There are some thoughtful comments on Hacker News.