Innovation at Stake: Startups Must Opt In to Politics


Startup entrepreneurs have to get political. While legislation such as SOPA grabbed the attention of the internet community, less controversial public policy affects different types of businesses around the country -- from the neighborhood tapas bar in Providence, RI, that uses Square, to the newest mobile developer making a transit app in Seattle. Skyfire, a Silicon Valley based startup, has firsthand experience with how Washington, D.C. policy choices affect startups far from the Beltway. 

 “We’re still in early innovation mode,” says Jeffrey Glueck, CEO of the cloud computing startup. Founded in 2007, the company has around 50 employees and is a “typical small business in many ways”, according to Glueck. 

Skyfire isn’t what too many people across this nation would consider ‘typical’. Its product, serving mobile wireless operators and ultimately, consumers, eases the burden on cell towers during peak times and can free up to 60 percent of the available bandwidth. The cloud company can detect when a neighborhood cell tower is overloaded, and can take large data requests on the tower, like video, and determine the best and most efficient streaming rate for the device requesting it. In 200 milliseconds, Skyfire transcodes the video clip to a less data intensive bit-rate. This “intelligent optimization”, as Glueck calls it, comes as a result of intensive research and development, which the company spent its first few years conducting to create its product. 

And the product is doing very well. The Skyfire iPad app was the best-selling utility in the Apple App Store last year, and the company has raised venture funding to allow them to figure out how to take their expertise in video and multimedia processing and translate it into a user-friendly, workable solution to combat the spectrum crunch. “Unlimited data has been an unusual gift, but it’s ending soon,” Glueck predicts. Consumer demand for mobile broadband services is ever increasing, and even with expanded use of the more efficient LTE wireless technology, spectrum is scarce and the demand from consumers only continues to grow. Optimization strategies will be key in managing the crunch. 

As a company whose core product was conceived in order to help solve a complex policy problem, Glueck and the rest of the Skyfire team have a keen understanding of their place in the policy landscape -- and they know that spectrum isn’t the only issue that affects their business, or any other startup for that matter. The following are some of the policy issues Glueck identified as being relevant to his own and other startups: 


Skyfire has filed 20 patents over the last five years, but so far not one of them has reached final review. And yet slow USTPO reviews are only the tip of the iceberg in terms of patent issues that are currently affecting small businesses, and technology startups in particular. “Friends of mine with startups have been subjected to ridiculous lawsuits from patent trolls, and this use of patents as a billy club with which to beat small startups absolutely has a chilling effect on innovation as a whole and in particular on startups. Even a meritless patent suit can cause a company to go out of business.” 


Then there’s the immigration system, which Glueck has found particularly trying. “We do all of our development in America -- we believe in having the power of top notch talent in one room in a collaborative fashion,” he says. He believes that low-wage, offshore processes can’t create at the pace of the Silicon Valley development model, which makes it particularly frustrating when he is then unable to procure visas for the hard-to-hire, highly specialized software experts that are foreign-born. “We had several employees who were rejected for trivialities on their H1Bs,” Glueck says. “If we can’t hire the right people then we’ll go out of business, and 50 people will lose their jobs”. 

Open Internet and Net Neutrality 

Glueck and Skyfire were actively involved in the internet campaign against copyright legislation SOPA/PIPA last year -- Skyfire is pro open internet. “We stake our businesses and our careers around the growth of the internet”. Glueck has also been involved with the net neutrality debate, and testified to the FCC on the issue. They came to the debate both as a mobile app developer and as a company that actively helps mitigate the spectrum crunch. “We think the FCC in the end reached a good balance,” Glueck says. 

Glueck is a CEO that is plugged into the policy issues that affect his business, and fluent enough in the ways of Washington to actively fight for policies that help his business thrive, and against the ones that are harmful. But for every Skyfire, there are other startups with less time, the political capital, or the inclination to get involved. Because running a startup is an all-consuming project, and entrepreneurs by nature would rather focus on the market and customers than to paying steady attention to the ups and downs of legislation and regulation. 

But staying informed and engaged with policy is essential for the continued success of startup companies. The SOPA win preserved the internet as a fertile ground for innovation. If passed, skilled immigration bills like Startup Act will ensure the continued success of startups and other U.S. businesses that need highly specialized workers. As we move forward, the active engagement of all startups in the political sphere will be key to making sure that government doesn’t impede entrepreneurialism or innovation.

 Skyfire is an Engine member. Click here to sign yourself or your company up to stay informed and active around policy issues that affect you.