Blake Masters

Leap forward

In 1811, when Cornelius Vanderbilt was 17, he borrowed $100 from his mom to buy a small sailboat. He figured he could make some money by ferrying goods and people around New York Harbor. He was right.

When the War of 1812 broke out, Vanderbilt’s competition nearly vanished (presumably, few American transporters were keen on operating in British-infested waters). The demand for effective transport, though—particularly military transport—increased dramatically. Vanderbilt, who quickly acquired the nickname “Commodore” for his prowess on the water, was all too happy to service the need and profit handsomely therefrom.

Vanderbilt, of course, was the sort of guy who thought seriously about the future, and the future, he thought, was steam power. So in 1818 he sold his fleet, leased a steamship called Bellona from a guy named Thomas Gibbons, and began to operate his ferry business 2.0.

But there was trouble on the water. The New York legislature had seen fit to grant a monopoly on steamboat service to a couple of guys named Fulton and Livingston. Some operators, like Gibbons, respected the edict and stayed out of the water. Others, like Aaron Ogden, cowed and paid the Fulton-Livingston partnership for an operating license. But Vanderbilt was made of different stuff. He just wanted to build a great business. What good are rules when they stand in the way of building great businesses?

Unsurprisingly, suits were filed. (Ogden was the plaintiff in the one you’ve probably heard of.) Interestingly, though, this didn’t seem to matter very much. Initially, Vanderbilt paid the litigation no mind; he continued to provide excellent service and ruthlessly undercut his competition on price. Equal parts sword and shield—he employed a “crew of shoulder-hitters, ready for battle” to ensure orderly moorings at competitor’s docks,¹ while also deflecting criticism and developing a Robin Hood-ish mythology—Vanderbilt insisted on forging his own future. You might be aware that Jay-Z just executive produced Baz Luhrmann’s Gatsby; so long as we’re anachronistically weaving Hova lyrics into montages of the long-dead nouveau riche, take a moment to imagine Vanderbilt, as his marine hoplites take control of a pier, blasting:

> And government, fuck government, niggas politic themselves.²

The end of the legal battle came in 1824, when the Supreme Court heard the case and ruled for Vanderbilt’s side. (Vanderbilt, as merciless in court as he was in business, had helped his cause by hiring Daniel Webster—think Ted Olson and David Boies rolled into one—to represent Gibbons.) Doctrinally, the case was quite important, but that is the stuff of AP US History and 1L year of law school. What matters here is that Vanderbilt was venerated:

> “We owe to him,” said a prominent citizen, “the freedom of the seas as applied to us locally.”³

I think this story is pretty cool in its own right. It’s even cooler, though, to the extent it can help us understand the present. Does the Vanderbilt steamship ordeal remind you of anything more… familiar? Say, much of Silicon Valley right now? I’ll let someone else write the manifesto about how technology is and will likely continue to outpace physical-world regulators and solve problems the government can’t. But cf. Uber/Airbnb/Taskrabbit/Exec/Crowdflower/Turk/3D Printing. It’s hard not to notice that CS can be a powerful mechanism to route around inefficiency and unlock a lot of value.

Of course, disruption is risky. People don’t like to be disrupted. Aaron Ogden certainly didn’t. Neither, apparently, do the bureaucrats in DC who are coming after Defense Distributed, ostensibly because they feel weak and techno-libertarianism scored too many points over the weekend, or something. The best path is usually one that avoids head-on confrontation. But still—very often, it’s messy and complicated where the rubber hits the road. So what should we do then this happens? Play by all the rules? Ask for permission? Or just build something great? To ask the question, hopefully, is to answer it. WWVanderbiltD?

Over the last year or so, I’ve had the pleasure of watching my good friends Kyle and Dan build Leap, which, as they bill it, is “a better bus service for San Francisco.” The idea is simple: the city’s MUNI bus system ($2/ride) is slow, overcrowded, and leaves much to be desired.⁴ But biking (free) isn’t for everyone, and cabs ($20) are expensive. What if we could relieve the MUNI’s load by bringing the private shuttle service that Google and Twitter employees enjoy to… everyone? What if anyone with a smartphone could instantly buy a pass and streamline their commute on a bus with wi-fi, air conditioning, and a comfortable seat? Well, please meet Leap ($6), which launched this week with a line from the Marina to Downtown SF.

It’s always fun to watch your friends start new ventures. It’s also fun to see really good products get built. Throw in the delightful parallels to the Bellona line and it’s not hard to imagine Kyle and Dan and company as a couple of proto-Vanderbilts, just trying to get people from point A to point B in a better way.

May the streets of San Francisco be their New York Harbor.

You already know one side of the lottery ticket debate.

Now, here’s the other side, brought to you by the State of California:

Weapons of Mass Dilution

Others have written—some quite critically—about the government’s decision to charge Dzhokhar Tsarnaev with “unlawfully using and conspiring to use a weapon of mass destruction.” Colloquially, most people have come to associate WMDs with nuclear, biological, or chemical weapons.¹ But 18 USC § 2332a(c)(2)(A) says that “any destructive device as defined in 18 USC § 921” is a “weapon of mass destruction.” Section 921(a)(4)(A) in turn, says that bombs, grenades, and rockets, among other things, are “destructive devices.”²

Since the IEDs used in the Boston attacks are clearly “bombs,” the § 2332(a) charge is pretty straightforward. People can argue about whether that statute is too broad, and whether other laws against, say, murder, would suffice. But what caught my eye in § 921(a) was the grenade and rocket stuff.

It turns out that another way to say “grenade launcher” or “rocket launcher” is “flare gun.” The government knows this and doesn’t really care about your flares, so there is an exception in 18 USC § 921(a)(4) (and in 26 USC 845(f)(3), an identical provision in the NFA) that says that a “signaling, pyrotechnic, line throwing, safety, or similar device” is not a destructive device. (Presumably, the ATF would say that a signaling device that is used to launch grenades is no longer a signaling device.)

Whether certain kinds of launchers are WMDs thus depends on what sort of ammunition you use or plan to use.³ Firing unregistered grenades or rockets obviously triggers § 921(a)(4)(A) and an avalanche of criminal liability. That makes sense.

So what’s between a grenade and a flare? Well, according to the ATF, “cartridges containing wood pellets, rubber pellets or balls, or bean bags” are “‘anti-personnel’ ammunition,” so 37/38mm launchers containing such loads are d̶e̶s̶t̶r̶u̶c̶t̶i̶v̶e̶ ̶d̶e̶v̶i̶c̶e̶s̶ WMDs. That’s right: launcher + bean bag round = WMD.

DYODD and check your state laws, but it appears that in some jurisdictions one can order a pretty serious launcher and have it shipped right to his doorstep; absent “anti-personnel” ammo, the federal government doesn’t even consider it a gun. Just stick to fireworks and take care not to possess (let alone fire) any bean bag rounds if you don’t want to spend “a term of years, up to life” in Leavenworth.

I affirm.

Well, I am officially a lawyer! Yesterday the Judicata team went over to the James R. Browning Courthouse, where Alex Kozinski, the Chief Judge of the U.S. Court of Appeals for the Ninth Circuit, swore me in to the California Bar. (Or did he? Technically, I affirmed an affirmation instead of swearing an oath. More on that in a bit.)

First, we got a private tour from Kathleen Butterfield, one of the Court’s staff attorneys. The Courthouse is, in a word, incredible. I think that most of what we saw is open to the public during the Court’s bimonthly public tours; if you’re near San Francisco, please, take my advice and attend one. (You might ask if or when Kathleen is leading a tour—she is terrific.)

Some highlights:

(1) So much Italian marble it makes the Hearst Castle look budget:

(2) The bar—literally. Before law schools existed, would-be lawyers would study the law under another lawyer’s supervision. Getting admitted to the Bar involved standing behind the bar with your sponsor and fielding a bunch of questions from the judges. Get enough right and you’d be permitted to—wait for it—literally pass the bar.

(3) The bullet hole from the Hindu-German Conspiracy Trial. In 1918, not five feet from where we held our ceremony, a defendant shot and killed his co-defendant and was then promptly shot to death by a U.S. Marshal. (Amazingly, no mistrial occurred; everybody was found guilty the next week.) You can still see the damage caused by one of the bullets when it hit the judges’ bench—check out the aberration in the tilework, just to the right of the seam in the marble:

After the tour, we hung out in Courtroom One until Judge Kozinski freed up.

After the Judge came in and met the rest of the team, I asked if he’d mind if I chose to affirm rather than to swear. Legally, there’s no difference. Swearing is traditionally perceived to have a religious component to it, whereas affirming is completely secular. This is a pretty mainstream option—the U.S. Constitution explicitly follows every “Oath” with “or Affirmation,” and the official California Bar incantation reads “swear (or affirm)”—but I’d bet that it’s seldom exercised. (Of all my lawyer friends, I know just one who affirmed, and we had discussed it beforehand.)

Why would anyone be so fussy? Naturally, atheists or radically liberal First Amendment zealots tend to be quite interested in keeping things as secular as possible. But even theists have their reasons:

> But I say unto you, swear not at all: neither by Heaven, for it is God’s throne;¹

> But let your communication be ‘yea, yea’ or ‘nay, nay’; for whatsoever is more than these cometh of evil.²

Personally, I chose to affirm because (a) I could, and (b) it seems cooler. Presumably, some of our forefathers argued long and hard to win for us the right to affirm. Why not throw them a cosmic wink? Plus, if it was good enough for Franklin Pierce, it’s good enough for me.

Of course, the Judge was cool with it, and we got it done:

Afterwards, we sat down at the Appellant’s table to chat about Judicata and legal technology. For those of you who don’t know, Judge Kozinski is a pretty tech-savvy guy. After we discussed Judicata’s version of man-machine symbiosis, he dialed back the clock and dazzled us with stories about when he used to program in Fortran on IBM punch cards.

The night ended with dinner at a nearby restaurant. Naturally, the Judge and the whip-smart Ninth Circuit clerks that joined us were delightful company.

I’d like to thank Judge Kozinski and everybody at the Court who made our visit especially memorable yesterday!

Drop out or not is the wrong question

I did a keynote interview last night at kbs+ ventures for their new book’s launch event. Since I talked a bit about CS183 and the Thiel Fellowship program, a few people came up to me afterwards and asked different versions of the same question: if I wanted to be an entrepreneur, why did I get several degrees from Stanford instead of dropping out?

My quick answer was that it’s important to avoid blanket statements about education and entrepreneurship. Certainly many successful entrepreneurs have name brand college degrees. But many don’t.

Last I looked, Wikipedia’s list of college dropout billionaires is 31 people and counting (and only one of them is a drug lord). I thought that was a shockingly high number, as most of us only know the most famous three or four. If we wanted to talk about dropout millionaires, there are so many that we’d probably need scientific notation.

One of the reasons for this is that the market doesn’t necessarily wait 4 years for you to get your BS or 6 or 7 years for your PhD. In 2003 and 2004, Mark Zuckerberg had a huge advantage in that he was working furiously toward something he sensed was important while his peers were still locked into school. Starting Facebook in 2007 would not have worked.

One key distinction is between businesses that require a lot of specialized domain knowledge and businesses that don’t. Often, this tracks the distinction between enterprise/B2B and consumer models. Bright, well-adjusted 18- or 19-year-olds can develop the kind of social insight that’s at the core of many great products, maybe even better than older folks can. If their engineering skills are adequate, they can build the vision and more or less take over the world. This isn’t to say this is easy, of course—only that it’s very possible.

Facebook was one example. Another may be Gumroad, a novel e-commerce company run by 20-year-old Sahil Lavingia. If you aren’t already familiar with it, Gumroad enables anyone to sell something online in a matter of seconds. If you want to sell an e-book, for example, you create a product listing and get a unique link that you can share throughout the web. If, as Sahil says, Gumroad “becomes a thing,” he will have succeeded in turning all of Facebook and Twitter into a global online marketplace, i.e. in building a billion dollar company.

Other businesses require a great deal of domain-specific knowledge, which often entails specialized education. For example, my company, Judicata, builds radically better legal search and analytics software for lawyers. This requires great engineers, but it also requires great lawyers who deeply understand how the law works. For better or worse—and I actually suspect for worse—one almost invariably needs to go to college and then law school to become a lawyer. At the very least, being in law school affords one a structured opportunity to learn how to think about the law.

For some ventures, getting a technical or professional education is unquestionably the right move. For others, college is absolutely the wrong move. More interesting than the drop out vs. not question, I think, is the set of questions that aims at unpacking what a college education really is. To really understand the nexus between education and entrepreneurship, we’d be better off starting there.

The horrendous prose of Carmen Ortiz

In most respects, U.S. Attorney Carmen Ortiz’s statement about the Aaron Swartz prosecution is unremarkable. It’s more or less the standard fare that one expects from government officials who unexpectedly find themselves on their heels.

The most striking thing about the statement is the writing itself, which is terrible. Ortiz begins:

As a parent and a sister, I can only imagine the pain felt by the family and friends of Aaron Swartz, and I want to extend my heartfelt sympathy to everyone who knew and loved this young man.

What is the first clause doing here? Presumably it is either intended to establish empathy or sympathy. Empathy seems odd because Ortiz extends “sympathy” two sentences later. But sympathy doesn’t require mentioning Ortiz’s own family, unless she means to syllogize: “I would be upset if one of my family members killed himself. Aaron killed himself. Therefore I imagine that Aaron’s family is upset.” Much better is to avoid the token contrivance and say something like:

I want to extend my heartfelt sympathy to everyone who knew and loved Aaron Swartz. All of us at the U.S. Attorney’s Office deeply regret that Aaron chose to take his own life.

Ortiz continues:

I know that there is little I can say to abate the anger felt by those who believe that this office’s prosecution of Mr. Swartz was unwarranted and somehow led to the tragic result of him taking his own life.

This isn’t that bad. It sort of feels like it’s missing a sentence at the end. The bigger problem is that “somehow led” is too snarky. Ortiz is basically saying that anyone who believes that Aaron’s suicide was related to his prosecution is an idiot. The problem is that most people do believe that these events are related, which seems quite reasonable absent evidence to the contrary. Ortiz is pushing back on causation where she should be pushing back elsewhere instead. The weak line is “We didn’t do anything that caused Aaron to kill himself.” The strong line is “We did everything right. It sucks that Aaron killed himself. Not our fault.”

Ortiz’s second paragraph begins as haphazardly as the first one ended:

I must, however, make clear that this office’s conduct was appropriate in bringing and handling this case.

This sounds weak and defensive in the worst way. If you didn’t do anything wrong, why not take ownership and avoid the passive voice? She continues to wax Rumsfeldian:

The career prosecutors handling this matter took on the difficult task of enforcing a law they had taken an oath to uphold, and did so reasonably.

At one level, she is defending her prosecutors. On another level, it seems like she is throwing them under the bus. Also, no one wants to hear how hard your job is when you mess up (or if you are perceived to have messed up).

Ortiz then spends the rest of the paragraph aimlessly listing off some facts that she hopes readers will find mitigating. Why she doesn’t use an unordered list is beyond me. (The federal government, after all, knows how to use bullet points.) Before we get there, though, consider whether something like the following would make a better second paragraph:

I have been involved with this case since its inception. I have reviewed the record at length over the past few days. My conclusion is clear: I am absolutely certain that our conduct was appropriate in bringing and handling this case. Prosecutors make odd scapegoats in situations such as these. Our job is to enforce valid laws fairly and effectively. In this case, that meant bringing charges against Aaron. We do not pass judgment on the wisdom of laws that Congress chooses to enact. And, unfortunately, we cannot prevent the small percentage of criminal defendants who elect to commit suicide from doing so.

Ortiz’s fact section is her worst writing of all. Consider the following excerpt:

That is why in the discussions with his counsel about a resolution of the case this office sought an appropriate sentence that matched the alleged conduct – a sentence that we would recommend to the judge of six months in a low security setting. While at the same time, his defense counsel would have been free to recommend a sentence of probation. Ultimately, any sentence imposed would have been up to the judge.

That is atrocious. I don’t think it needs any more explanation than that. If you disagree, you are wrong. If you think that this horror show is necessary legalese, you are wrong. This is not a real estate contract. It does not need to read this way. Whether it’s bad enough to do any damage is unclear, but it is certainly not persuasive writing. AUSAs are typically pretty good lawyers who write well. I seriously question whether Ortiz had any of her people read her statement before releasing it. (Another possibility, as @DanGoldin suggests, is that too many people worked on it. Either Ortiz has zero proofreaders or an army of them.)

In any case, here is how one might retool the facts section:

• We recognized that there was no evidence that indicated that Aaron acted for personal financial gain.
• We recognized that Aaron’s crimes did not warrant the maximum punishments authorized by Congress.
• We never sought—or told Aaron or his attorney that we intended to seek—the maximum penalties in this case.
• When we discussed settlement options with Aaron and his lawyer, we told them that we would recommend a sentence of six months in a low security facility if Aaron agreed to plead guilty. Aaron declined.
• Judges, not prosecutors, decide sentences. All prosecutors can do is recommend a particular sentence. Note that even under a plea bargain, Aaron’s counsel would have been free to recommend and advocate for an even lesser sentence than six months.

The statement ends with:

As federal prosecutors, our mission includes protecting the use of computers and the Internet by enforcing the law as fairly and responsibly as possible. We strive to do our best to fulfill this mission every day.

That’s not so bad. But could she have ended stronger?

While anger is understandable in the wake of tragedy, anger at prosecutors, at least in this case, is misplaced. If people believe that the law should be changed, certainly they should contact their representatives in Congress. In the meantime, as federal prosecutors, our mission is to enforce the law as fairly and responsibly as possible. That is what we did in this case, and we will continue to do just that.

I don’t mean to suggest that my edits make the statement appropriate. I did them in 20 minutes on the Caltrain this morning. What I do mean to suggest is that there is lots of room for improvement. Since this was surely a statement worth getting right, I can’t help but wonder what went wrong.

Resolve to Plan

New Year’s resolutions don’t work. Discipline is hard. People yield to temptations. Resolving in abstractions—get fit, watch less TV, be a better person, etc.—is a terrible idea.

Changing specific habits, by contrast, can work. (Interestingly, evidence of habit or routine practice is usually admissible in courts to prove that a person has acted in conformity therewith.¹ This is not true of character evidence and traits.² There’s always a sense in which habit is more concrete than character.)

But even that is tricky. Most of us are aware of our shortcomings and flaws before we decide to change them. Where did they come from? Why did they persist for so long?

This is why I make plans instead of resolutions. My flaws are probably with me for good. I’m too argumentative. I’m horrible at staying in touch with old friends. There are plenty more. For the most part, though, I already behave like I want to. Being fit is important to me, so I’m fit. Eating clean is important to me, so I do. Work-family harmony is important to me, so I try to attain it. But I haven’t yet achieved much of what I want to achieve… not even close.

Whether one should publicly share his plans is an open question. Patri suggests this can be counterproductive. Others agree. Then again, Wiseman found that public accountability helps, which is the standard intuition. We’ll call it a wash. Since my bias is to share, here are some of my plans for 2013:

• Keep working on my startup and do what I can to make it a great business.
• Take a certain side project of mine from concept to fruition. Details forthcoming. But it will basically consume all free time until sometime in Q2.
• Follow Balaji’s CS184: Startup Engineering MOOC and learn some of these engineering skills. (Judicata is sponsoring a prize for best law app.)
• Run a sub 5-minute mile. (I’d guess that I’m around 5:30 right now.)
• Do a sub 4-minute Fran. (My PR is 4:30. Here is what Fran looks like in 2:29).

I hope everybody reading has a great year. Go and do awesome things!

Judicata: The Path of the Law

I’m delighted to announce that my startup, Judicata, has raised $2 million from Peter Thiel, David Lee of SV Angel, Keith Rabois, and Box founders Aaron Levie and Dylan Smith.¹ Our mission is clear: to build legal research and analytics products that dramatically advance what lawyers can do.

Legal technology is at something of a crossroads. On one hand, it is notoriously inefficient and outdated, and has been for quite some time. On the other hand—to use Marc Andreessen’s parlance—software is eating the world.² We can imagine a few different futures unfolding. One would entail the continued stagnation of the status quo. Another would involve minor, halting changes that never quite deliver on their promises. A third would see truly innovative technology that empowers lawyers to argue better and do more than ever before.

The latter is clearly ideal. So why hasn’t it happened yet? Why hasn’t software eaten the law?

Our thesis is that it’s actually quite hard. Lots of people have tried. Some are still trying. But most are hacking at the branches. Incremental change is not without value. But software can’t actually improve legal decision making unless we aim higher. Harder, but more promising, is to strike at the root of the problem. The law is information. The future of legal technology involves organizing and understanding that information. All of it.

This is why Judicata is mapping the legal genome—i.e. using highly specialized case law parsing and algorithmically assisted human review to turn unstructured court opinions into structured data. We can leverage that data to build legal research and analytics tools that are an order of magnitude better than existing offerings. The Palantir model is a rough analogue. Palantir’s software can’t tell a CIA analyst who is a terrorist. But it can identify patterns and make sense of massive amounts of information to help the analyst make that call. Great legal technology will do the same—assist lawyers in exercising their skilled, human judgment.

We believe this is possible, and that we can do it. The fusion of legal domain expertise and engineering talent is key; our founding team of three (Adam, Itai and myself) consists of two engineers and two JDs. Chris and Itai built some of the most advanced features in Google Scholar’s legal index. Patrick worked with Adam at Adap.tv. David, Beth, Adam and I were Stanford c/o ’08 together; two of us became engineers, and two went the law route. This team understands not only how law works, but also how to extract, organize, and analyze the underlying information. We revel in this stuff. (Let us know if you do too.)

Justice Holmes once wrote that understanding law is an exercise in prediction: given a dispute, and given all that have come before it, what is the court likely to do? How can lawyering impact legal outcomes? In 1897, he took a guess about what was to come:

“For the rational study of the law the black-letter man may be the man of the present, but the man of the future is the man of statistics and the master of economics.”³

Substitute “computer science” for “economics,” and we aim to prove him right.