On Thursday 23rd July, the Wall Street Journal reported the experiences of over two dozen start-ups that were invited to Amazon and its Alexa Fund for investment purposes, only to later regret sharing information with Amazon and discover that Amazon has launched competing products.
In some cases, Amazon invested in the start-ups, whereas in others, Amazon expressed interests to acquire the start-up but later declined to invest. Eventually, in both scenarios, Amazon launched its own branded competing products, devastating these start-ups’ behaviour and creating even more distrust within the tech community, reducing the willingness for start-ups to share their ideas.
One start-up affected by this tactic was LivingSocial. LivingSocial is an online marketplace that allows its registered users to buy and share things to do in their city. Amazon took a 30% stake in the business but, while doing so, they ended up poaching employees, demanding access to data, then created their own product and started targeting LivingSocial’s client base. Nucleus, a video communications device, received an investment from Amazon’s Alexa Fund only for Amazon to create an almost identical device, the Echo Show. Nucleus ended up settling with Amazon for $5m and pivoted from their original target market. There are numerous other stories from other start-ups that have detailed Amazon’s practices.
Amazon responded to the Wall Street Journal report by stating that they do not use confidential information when they discuss investments and no company has been able to prove this in court. One argument that strongly favours Amazon’s defence:
“How can we know for sure what information was shared with Amazon? How do we know who has seen the information the start-ups had?”
Timescribe can help!
When intellectual assets such as ideas and product designs are stolen, it is possible to legally pursue and fight for its ownership, provided you have sufficient evidence and funds. However, the Amazon story clearly highlights that proving ownership and existence of your intellectual assets before your interaction with an individual is very difficult as that individual can claim that they had similar intellectual assets prepared even before you interacted with them.
With Timescribe, a blockchain-powered timestamping tool, founders can create irrefutable and publicly provable evidence for all their intellectual assets. Simply create an account on Timescribe and a secure public private key pair is generated that can only be accessed by you. When an asset (digital document) is chosen, Timescribe will create an encrypted hash code that is unique to that version of the document (the contents of your document will only remain accessible by you, making it completely confidential). The encrypted hash code is signed with your unique private key and then registered onto the Ethereum blockchain along with the current time. Once registered onto the blockchain, it is impossible to delete or alter the evidence and therefore, you can publicly prove that your document existed on that date.
How can LivingSocial, Nucleus and other start-ups leverage Timescribe?
The information that start-ups shared with Amazon in these initial meetings included information about financial data, customer data, strategic plans and technical specifications of their products. By using Timescribe, founders could have created irrefutable evidences for all these intellectual assets, including their pitch decks, business plans, product concepts and designs. When they discovered that their ideas were stolen, they could use the evidence created via Timescribe to build a stronger case against the infringing party. With sufficient evidence and legal advice, even a giant corporation could be brought down to its knees without actually going to court.
But what if Amazon did have a similar idea before the venture they invested in?
Amazon could easily prove that with Timescribe in the very same way. This could quickly end legal disputes, improve transparency between both parties and reduce legal costs.
We are currently offering free subscriptions so that you can protect yourself using Timescribe. Timescribe your digital assets within seconds and secure your start-up’s future.