Today’s op-ed in the New York Times slamming Microsoft for its lack of innovation got me on this train of thought. (I do think MSFT has the opportunity to innovate, but that’s another post.)

There is a clear difference in DNA between companies that innovate and companies that don’t. A big piece of that is what I call “DRM thinking”.

“DRM thinking” is when you knowingly pit yourself against what your consumer wants, throw barriers in the face of usability, ignore market realities, and continue to convince yourself it’s okay.
DRM as it was applied to digital music is an unbelievable example of refusal to look at the whole picture. While labels and technology providers developed multiple forms of DRM, created differing levels of licensing and access for the consumer, and in general spent a whole lot of time trying to “get DRM right”, it was completely useless tech and a huge waste of time.
Anyone who wanted a perfect digital copy of a record without any copy protection whatsoever could just walk into a big-box retailer and spend $9.99 for the CD. (CD copy protection was tried, but there was never any indication that it was ever going to work, and it didn’t.) This went on for years.
Barring your front door doesn’t work very well if there is no back wall on the house.

DRM thinking is what holds back companies from innovation.

Microsoft laid off about 800 people today. One of them was my friend and former Napster colleague Don Dodge. Don was a Director of Business Development in the Emerging Businesses unit, which is a fancy way of saying he evaluated startups mainly for possible acquisition by Microsoft.

I walked around TechCrunch 50 once with Don. He was inundated by the attending startup peeps. Don’t let anyone tell you that they’re too cool to want to be bought by Microsoft.

You can read what Don has to say about today in his blog here . What struck me most, besides the fact that Don now gets to write his own ticket in tech and do any one of a million things, is that he says he’s never had the time to think about what he might want to do. And it’s true for most of us. We’re rushing from city to city, country to country, and barely have time to tend our home lives properly (and some of us neglect that too). “The gift of time”, another ex-Napsterite, Milton Olin, used to call it. You get that gift when a lunch cancels last minute or you have that weekend at home after all. Being fired sucks. But if you’re smart and capable and know how to make the most of your skill set, it can also give you the gift of time and another, priceless gift – that of perspective. Being fired is the best thing ever to happen to many people I know.

It’s remarkable to me that the conversations around digital music remain pretty much identical to the conversations we had in 2000, when Napster was supposedly taking over the world.

I showed this Atlantic monthly article by the very smart Charles Mann, which I loved, to someone very close to me who wasn’t around in the Napster days. He said, “Wait…when was this written? It could have been written today.” And he was right.

Talked about this same subject last night (Halloween night) over dinner with ex-Napster colleague Don Dodge and he agreed…when is this conversation going to change?

Is it licensing? It’s not technology.

Maybe it’s simply imagination. MUCH more on that soon.

At the core of social media today is relatively new consumer behavior in terms of not just a willingness to share content, personal information, and so on- but a downright passion for doing so. The nature of the Web begets sharing, for sure- but the first widespread activity requiring sharing of information not usually publicly exposed may very well have been peer-to-peer music filesharing.

A regret of mine is that we weren’t able to use the information Napster users exposed on their hard drives to create “tribes” or “collectives”, or to connect our users in other ways. Our “Someone Like Me” feature allowed users to search for others with similar music in their collections. This enabled better trading and music discovery, of course, but we always thought it was the beginning of a social network as well. (Not to mention a GREAT dating service….) “Someone Like Me” was disabled through most of Napster’s existence for legal reasons.

We loved the sharing concept and it was at the core of the Napster tagline I created: “Thanks for sharing.”

My Napster colleague (our VP, Product Development) Don Dodge has become a startup guru, running the Microsoft Startup Zone and conducting some of the most clear-eyed assessments of newcos I’ve seen, and doing some very cool angel investing (Zink is one). I had a blast last September at Techcrunch 50 sitting with Don in the “blogger zone”. Here’s Don’s take on the newcos at DEMO this year:

http://dondodge.typepad.com/the_next_big_thing/2009/03/best-of-demo-09.html

AT&T offers me a full support center for the 3G microcell. Small problem: I can’t buy one yet. Then again, they’re ahead on their web buildabout 23 hours ago from TweetDeck

@Steve_Gonzalez may go to SXSW, figuring it out now. If you’ve never been by all means, go.

CNET on Lala, iMeem,SpiralFrog. Labels REFUSE to license DRM-free AAC /mp3 to SpiralFrog!? That’s what SpiralFrog says. http://bit.ly/VsOn10:13 AM Mar 2nd from TweetDeck

Is the #Skittles webpage “brave” bc it focuses on social media & less on the product? There’s direct nav to products front and center10:03 AM Mar 2nd from TweetDeck

Realized yesterday that I haven’t worked at a company since Napster where I could make salacious t-shirts for the whole engineering team8:24 AM Mar 2nd from TweetDeck

@guykawasaki the pool at the Hotel du Cap is better than almost all pools listed. Although the Icelandic geothermal pool is trés sweet2:26 PM Feb 28th from TweetDeck in reply to guykawasaki

Wouldn’t it make more sense for Bluehost to adopt a policy against hate speech rather than blocking countries w/ messy regimes? Free speech?2:23 PM Feb 28th from TweetDeck

RT @Scobleizer: It’s a real bummer that Bluehost is kicking off Iranian bloggers: http://tinyurl.com/ccsfqv2:18 PM Feb 28th from TweetDeck