Happy Birthday, Startup America

Today marks the first year anniversary of the White House Startup America Initiative, and of the
Startup America Partnership, a private sector organization led by AOL founder Steve Case. To mark the occasion, The White House announced a legislative agenda to harness the job-creating power of small start-up businesses. Over the past year, the two have partnered to pledge over $2 billion in initiatives to assist with small business growth. The year also saw the creation of Kauffman Foundation’s Start-Up Act, a list of proposals that lay out a “comprehensive agenda for start-ups”. Many of these proposals have made it into the State of the Union last week, including some already part of Start-Up Act:

Tax cuts for small businesses:
In order to encourage entrepreneurs to keep starting the new businesses that are the lifeblood of our economy, the legislation is looking to institute a series of tax breaks for small businesses, including:

- making permanent the zero capital gains tax for small businesses in order to encourage investment in start-ups

- a 10% income payroll tax on new jobs added or raises (with a $500K cap to focus the benefits on small businesses)

- an increase in claimable deductions for start-up expenses

Access to markets and capital:
Startups need access to investors in order to make the business grow and thrive.  The legislation agenda follows on from the initiatives the White House championed in conjunction with the Startup America Partnership, including:

- changing the limit on simplified Regulation A “mini-offerings” from $5 million to $50 million, meaning start-ups will have greater access to investment capital with simplified SEC filing.

- a national framework for crowdfunding, allowing start-ups to raise high numbers of small investments through an online platform - the way Kickstarter does.

- making the expensive and time-consuming process of “going public” less difficult for new companies by creating an IPO “on-ramp” - giving “Emerging Growth Companies” a larger window of time to reach full compliance with requirements for becoming public

Skilled Worker Immigration:
The National Venture Capital Association conducted research which shows that foreign-born entrepreneurs are responsible for creating thousands of jobs for American workers and generating billions of dollars in sales.  As the President made clear in his State of the Union address, we need to facilitate the hiring of skilled workers from foreign countries.  One very simple way to do this (without increasing the overall number of visas) is by reorganizing the current distribution of visas, by lifting per-country caps to ease the huge backlogs for certain countries. Rep. Chaffetz’s legislation to do this has passed the House already, and should be moved quickly through the rest of the legislative process.

The Kauffman Foundation has stated definitively that startups are responsible for almost all new net growth in jobs (you can watch their short video explaining their research findings here).  And the White House is taking action in the form of this legislative agenda that addresses some of the immediate needs of startups that organizations like the Kauffman Foundation, and Startup America and our own, have been raising awareness.  We hope that this great anniversary for Startup America can serve as a catalyst for Congressional action, and not simply another date on the calendar.

How the Internet Beat SOPA and PIPA: Advocacy in a Networked World (Part 1)

From our friend, Tina Lee, at ZeroDivide. Read more here.

The Sky is Rising

We’ve all heard how peer to peer music sharing sites are keeping dollars out of artist’s bank accounts. Or maybe we know someone who works in publishing who is throwing up their hands at how sites like Amazon are choking the industry, making it impossible for them to compete. Hollywood would like you to know that downloading pirated movies is pretty much the same as snatching a handbag or stealing a car.  So everyone is agreement. Something has to be done, before our creative industries are submerged completely by cut-rate imitations. Right?

Wrong.

What if we told you the obliteration of these industries is not nigh? That actually, our creative industries are steadily growing, and that far from being a death knell, the internet is proving to be a bastion of opportunity for artists and those who enable them?

A report published by Floor64 (and proudly sponsored by us here at Engine) highlights some pretty fascinating research which shows that our entertainment industries have not only been thriving over the last few years despite the biggest recession since the Great Depression - they have been expanding.  

Take the music industry, for example.  Ok, true, the era of the rock star might be over. Big music execs no longer have the last word on who is meteorically risen to the ranks of the famous, and when.  On the other hand, what we have now, is more.  More artists producing more quality product, more platforms for those artists to market themselves on, more opportunities to create business models that are innovative and successful. More successful than you might think.  From lowering production costs, using crowdfunding, or offering up a “pay what you think is fair” payment structure, there are several non-traditional methods which have garnered incredible success, and which co-authors Masnick and Ho have found very interesting case studies for.

So yes, there is reason for people in traditional businesses in these industries to be feeling the pinch.  But by protecting the interests of these players, we’d be jeopardizing the prospects of the industry itself, of the artist, and of the consumer.  

This report is worth your time.  Read it, share it, comment.

Engine Advocacy Turns Tech Nerds Into Political Experts

In case you missed it over the weekend, Alex Fitzpatrick at Mashable talks about Engine and tech advocacy’s future.

Read more at Mashable.

Mobile Commons Powers 200,000 Congressional Phone Calls

Using Mobile Commons’ technology, Tumblr, Reddit and Engine Advocacy enabled more than 200,000 visitors in a single day to launch calls to their Congressional representatives directly from their websites. Those were among the more than 500,000 calls launched through Mobile Commons during the anti-SOPA campaigns of the past month.

Read more: http://www.digitaljournal.com/pr/559713#ixzz1kUk7ZTeT

#SOTU and the Innovation Agenda

As ordained by the Constitution, President Obama made the short trip up Pennsylvania Avenue to the Capitol last evening to give to the Congress and the Nation remarks on the State of the Union. Americans tuned in on television as in decades past but also online and took to Twitter with the hashtag #SOTU to provide quick reaction to the speech as well. The buzz? Obama’s “spilt milk” groaner got some attention, and there’s plenty of speculation about his re-election campaign this year.  Word clouds abound.  But what caught our attention was a reiteration of many of the issues that we have been talking about for quite some time.

In the economic section of the address, President Obama began by railing against the economic waste of outsourcing manufacturing to foreign countries, and tasking business leaders to commit to bringing jobs back to the US.  “
It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America”, he said - and by rewards, we’re talking tax breaks.  Obama suggested a tax cut for American manufacturers, and said that high-tech manufacturers that make their products on home turf should be awarded double the tax deduction.  That would be nice, but hard to take advantage of if say, your skilled workers are overwhelmingly foreign born - as is the case with science and technology industries.  

But the President acknowledged that and then went on to outline his solution - a two pronged approach of investing in training and education, and reforming skilled immigration.  Noting that election year politics might stymie his hopes of comprehensive immigration reform, he suggested a stop-gap measure of awarding citizenship to “responsible young people who want to staff our labs, start new businesses, defend this country”. As for the many more responsible young people who get a US education and then go home to their own countries to start businesses and work in skilled professions? Obama counselled against letting them slip through our fingers, too.  This particular facet of the innovation agenda is on most presidential hopefuls’s
lists of talking points. When Newt Gingrich advocated for an automatic green card upon graduation for math, science, and engineering students, the other candidates quickly reiterated the point.  This isn’t Obama’s first pass at the issue, though -he has already championed a
Startup visa to encourage skilled worker immigration from overseas.

Also on the innovation agenda at the State of the Union were many of the initiatives the Obama Administration has championed with the Startup America Partnership - a public/private sector partnership created to encourage investment in startups. Specifically mentioned last night - deregulating how entrepreneurs get financing for their start-ups, tax breaks for job-creating start-ups, and investment in research and development.  When we wrote about the Administration’s commitment to these policy points a month ago, there were plenty of critics who saw the whole thing as a publicity stunt. Whether or not this is the case, it seems as if Obama is holding tight to innovation as a core peg of his economic policy leading up to his campaign.

With all these points in mind, we hope that the state of the Innovation Agenda, as well as the Union, continue, as the President said, get stronger.

Pride and Purpose

This morning, Senate Majority Leader Harry Reid posted a statement to his website announcing he would not be holding a cloture vote on the PROTECT-IP Act (PIPA) this coming Tuesday as previously planned. Less than an hour later, House Judiciary Committee Chairman Lamar Smith announced he would postpone markup of the controversial Stop Online Piracy Act in the House until “wider agreement can be reached.” 

This constitutes a stunning and major victory for Internet voices from all across America that came together in the last few weeks and months in opposition to this bill. Across the internet more than 13 million people stood up and took action against SOPA and PIPA and were able to achieve substantial change on the movement of these bills.

But the fight has only just begun. As Senator Reid said, the Senate Leadership is hoping to achieve compromise from all parties over the next several weeks. Stay tuned at

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EngineAdvocacy.org for more details on how to continue the fight as we’ll be posting new tools very shortly.

Above all, thank you all so much for your hard work, for your phone calls, for taking action online and offline. Make no mistake, today is a truly inspiring victory for the power of activism and engagement. But to find a better way forward, we’ll need more victories over the next several weeks and months. And together, we can achieve that victory.

Thank you for all that you do.

Artists against SOPA/PIPA

We’re excited to be part of a letter put together by a handful of individuals within the creative community to highlight the harms of PIPA and SOPA, and their belief in continued openness of the Internet. These are musicians, actors, and authors that the vast majority of Americans have welcomed into their lives and by virtue, into their homes.

Like all of us, these artists are keenly aware of the harms posed by copyright infringement, but wish to highlight for lawmakers that this legislation -- which is being moved through Congress at an alarming pace -- goes too far, threatening an ecosystem they rely on to reach their current fans and find new ones.

At a time when music sales are at an all time high due to distribution methods that rely on the Internet, and entertainment spending across the board is up 15% over the last decade, it is important to remember that the web continues to open up new markets and new possibilities every day. And that our favorite content creators have been able to harness that power in ways that would never have been imaginable 20 years ago.

We all must urge the Senate and House to carefully consider the ramifications of their actions and engage everyone impacted by this legislation to ensure we are protecting rightsholders’ creations
and
the platforms they (and we) rely on.

Read their letter. Call your Senator.

Our Internet

We’re excited to post a video today that we put together late last week with some great entrepreneurs in NYC. We asked them to talk to the amazing team at m ss ng p eces about why they started the business they have built, what motivates them every day, and the promise they see going forward. Each of them also spoke about why they fear legislation like PIPA and SOPA and the threats posed by legislation and regulation that have not been carefully thought through.

Now, when startups are the sole drivers of US job growth, accounting for practically all net new jobs in this country -- and the tech sector is the fastest growing among those -- is a good time to remember that protecting our Internet means letting our economy grow, and why our leaders need to ask important questions before passing legislation. And at the same time, to remember that the promise of tomorrow remains, as always, bright and innovative.

We’re grateful to the entrepreneurs who took time out of their busy day to participate in this video and the many others who volunteered to appear.

In alphabetical order:

Scott Belsky, Behance

Cindy Gallop, Consultant

Aaron Harris, Tutorspree

Chris Henry, Behance

Harry Heymann, Foursquare

Chris Mirabile, Hotlist

The New Politics of Silicon Valley - Revenge of the Nerds

Engine among others are profiled as leading the new wave of political activism in the entrepreneurial economy.

Read more at CNET.

Censorship Around the World

While we’ve been fighting SOPA and PIPA, other countries around the world are also waging battles against the dire consequences of internet censorship.

The oppressive regime in Belarus set a new law into effect today which tightens the already strict regulation of internet use by making it illegal for Belarussians to visit foreign websites.  The Eastern European country established an extreme level of control over internet use last year when it issued Presidential Decree No. 60 , under which ISPs are required to block access to certain types of content and specific URLs – which are so far not disclosed to the public.  A similar, US version of this legislation – the Communications Decency Act of 1996 -   sparked controversy in the mid-90’s and was eventually overturned for violating First Amendment rights.

The new law is ostensibly to regulate online commerce – that is, making sure only domestic domains are used to provide online services – and violating it will result in a misdemeanor with a fine not to exceed the equivalent of about $125.  However, the implications could be much more serious than a slap on the wrist and a small fine.  The law requires that internet cafes and individuals providing internet access to other parties be responsible for any illegal browsing or e-commerce, and failure to report illegal usage of foreign sites could result in the business being shut down.   This kind of excessive punishment essentially discourages public internet use.  The government also has authorization to change and add to the list of banned sites – a level of governmental control that civil rights groups are distressed by ( Freedom House rates Belarus’ press freedom “not free” with “substantial political censorship”).

Meanwhile, Spain has passed anti-piracy legislation remarkably similar to the SOPA bill. Under the new Sinde law , a special commission will be formed to react to copyright infringement complaints made by rightsholders.  Slightly less draconian than SOPA, the websites will have ten days to remove the infringing material before being shut down. However, the bill has generated major opposition in Spain to what people see as a misleading law enacted for the benefit of Hollywood.

These battles mark crucial junctions for the future of open internet.  Just as the rejection of the Communications Decency Act was a pivotal moment in the creation of an unrestricted and dynamic internet landscape back in 1996, laws like Decree No. 60, Sinde, and SOPA/PIPA could set the tone for a more closed, stifled, and creatively impoverished world wide web.  

Has Politics Trumped Truth?

The Consumer Electronics Association's Gary Shapiro on Truth, Politics and the American Way...

Read more at Forbes.

Verizon, Google Wallet and the LTE Network Agreement

Verizon Wireless has come under fire for blocking the mobile payment app, Google Wallet, from the keystone of its newly-released product line. Samsung’s Galaxy Nexus, which was developed in partnership with Google, was released last week after delays and speculation over whether or not Verizon would ship the phone with Google Wallet functionality.  Ship it did, absent the app - and it seems that in doing so Verizon may have violated its open-devices and open-applications conditions in its legal licenses for the 700MHz spectrum - the spectrum that operates its LTE network.  An open letter to the FCC was promptly dispatched by Barbara van Schewick, a professor at Stanford Law School and Director of the Center for Internet & Society.

The letter urges the FCC to investigate Verizon’s blocking of the app, as it appears to contravene FCC Service Rules which prohibit standards that block specific devices or applications or “
other services that compete with wireless service providers’ own offerings”.  For example, Verizon and AT&T’s new mobile payment application slated for launch next year ISIS, which will be in direct competition with Google Wallet.  

Van Schewick’s letter added that such a violation will have serious ramifications for all innovation in mobile technology -- not just mobile payment technology -- because investors will shy away from a business that is entirely at the mercy of wireless providers; companies that may have a stake in stifling competitive technologies.

Verizon already has a big piece of C-Block Spectrum- they recently signed a deal with Comcast and Time Warner to acquire 122 Advanced Wireless Spectrum licenses from SpectrumCo, which means they control a pretty significant chunk of the bandwidth -- a pretty hot commodity in the toll-road style spectrum system we currently have, and the very same type of license AT&T will now transfer to T-Mobile in the wake of their failed merger attempt.  So if the wireless companies can claim this much control over spectrum, do we really want to give them a monopoly over which companies and products they allow to use it?  The FCC still has to approve the Comcast/Time Warner deal. Only time will tell if Verizon’s move will play into their decision - and how similar deals are structured going forward.

Obama’s $2 Billion Early Innovation Fund - And What it Really Means for Startups

The Obama Administration recently
committed $2 billion

for small business growth as part of Startup America, a new initiative to encourage investment in startups.  The funding includes $1 billion in public funds to be put towards early stage investment by matching the investments of VC firms into small business startups.  The
Startup America Partnership

, led by Steve Case,
also announced over $1 billion in the form of services and resources for startups coming from private companies, including free legal and consulting services.  

On paper, this appears to be a positive boon for startups - but what are the real implications for the innovation economy? We’ve taken a closer look at some of the commitments:

• Regulation A “miniofferings:”  
  Regulation A currently stipulates that offerings of investment capital can be made under an SEC simplified registration process if they are $5 million or less – a number that was arrived at in 1992.  This legislation would change the dollar threshold for exempt offerings to $50 million.  The Administration is touting this as a way to assist small companies in raising capital at a crucial stage in their growth.
  A
  Kauffman study
  
  revealed that new companies are responsible for
  all
  the job growth in the US since 1977, so it makes sense to make it easier for startups to raise funds early on to go public – the point in a company’s life span during which Case says 90% of new jobs are added.  There are those in the tech community that say
  government regulation and the startup community are always going to be at odds
  
  but given that this provision simply updates the existing regulation, it seems the least controversial way of moving the needle on this issue.

• Crowdfunding:
  The most controversial of the Partnership’s provisions is the bill to legalize Crowdfunding –
  small-dollar investments that use online fundraising and social media platforms to solicit investors.  The point of giving startups access to crowdfunding as a fundraising tool is to provide them with more opportunities to raise capital and thus create jobs.  This one comes with its own set of regulations to protect investors, including limits on contributions and
  measures against fraudulent companies
  
  soliciting capital.  Crowdfunding sites for startups, like
  IndieGoGo
  
  and
  Kickstarter
  
  , already exist, but until this bill is signed into law, companies that raise funds from investors that are not registered broker dealers are
  at risk of being in violation of federal and state securities laws
  
  .

• Investment in an Innovation Economy:
  Obama’s Early Stage Innovation Fund, coupled with the Startup America Partnership’s commitments from private-sector companies, are both steps on the road to an economy that is predicated on entrepreneurship and production rather than consumption.  
  The provisions basically make it easier for individual investors to fund startups and to offer more capital.  While this arguably increases inherent risk for investors, no one is forcing any individual to invest.  It’s an individual decision, and one that happens to have the added bonus of growing our economy and job market. It’s not just monetary investment, though.  The Department of Education, as part of Obama’s commitment to the innovation economy, will launch a
  National Education Startup Challenge
  
  , for which students will create a business plan for a new company - encouraging entrepreneurship by getting them in at the ground floor, so to speak.

Critics on Capitol Hill
dismiss
the announcement as little more than a White House PR stunt

, and while the immediate and tangible impact for startups is not completely apparent, it is at least a nod of support from the government and a commitment to the promotion of innovation and entrepreneurship.  Bottom line?  It’s more than a nice gesture, it could be a significant resource for startups. To truly create an economy based on innovation, education and growing government support are key.  These measures are, if nothing else, a positive indication of a turning tide of governmental support for entrepreneurship and the creation of a solid production based economy.

Don't Cut the Power to Innovation in America

Congress: Don't Cut the Power to Innovation in America.

SOPA Markup on Hold. Now What?

In an unexpected move this morning, the House Judiciary Committee voted to suspend the markup of the hotly-contested Stop Online Piracy Act until the "next reasonable business day." To the 10,180 of you who (as of this writing) have made phone calls to your respective legislators, consider the beginning of this post a hearty, well-deserved congratulatory pat on the back.

The good news is that we now have more time to sway more hearts and minds on the committee and in the Congress and educate them as to why SOPA is such bad legislation in its current form.

The bad news is, the next meeting could be as early as Tuesday.

Let's keep the pressure on. Your voice is working. We heard that loud and clear in the halls of Congress this week. Now is the time to double down, make another phone call and let Congress know that as it stands right now, we stand united against SOPA and for finding a new way forward.

You can make a call right now at engineadvocacy.org/voice and now is the perfect time to let Congress know you won't stand for an internet that is easily censored and made insecure.

Thank you for your work so far, and for the work we all will do over the next weeks and months. The tide is turning in our favor, so stand up, keep fighting, and together we can protect the this essential resource in our lives.

UPDATE: Chairman Smith has scheduled the next round of markup for next Wednesday, December 21st according to multiple sources.

9,788

9,788. That’s how many calls you’ve made against SOPA through our Click-to-Call tool. Can you find some friends to push us over 10,000 calls?

Internet Censorship in Malaysia

We’ve heard through third parties that there have been a number of inquiries from both the Malaysian government and in-country press expressing disapproval for our having included their nation in our ad on Wednesday. They object to being listed along with China and Iran as example governments who have been known to censor Internet traffic within their borders.

We included Malaysia in this list because it recently ordered various sites to be blocked for copyright reasons without meaningful due process for the affected sites -- just as the current versions of SOPA and PIPA in the United States would propose to do.

The Malaysian government's desire to stop large-scale, commercial piracy is an admirable goal, and one that we agree with, but site blocking is not the right way to do it -- it censors legal content unnecessarily (like the legitimate artists who use sites Megaupload to distribute their works); it is ineffective; and it threatens the security and integrity of the Internet.

By putting Malaysia in between China and Iran in that sentence, we did not mean to imply that its level of censorship and repression of free expression is akin to theirs. That would be a false comparison. To our knowledge, Malaysia's action in this particular instance of copyright is a break from their history of fostering ICT development.

It is our hope that Malaysia will take steps to ensure it has no place on this list.

Stand with Tech Entrepreneurs; Call Congress now to Stop SOPA

Today, 17 Web luminaries sent a letter to Congress opposing SOPA - the Internet censoring, innovation killing copyright legislation.

Will you stand with them and call Congress now.

Please spread the word to friends too - SOPA is heading for a committee vote tomorrow, so time is of the essence. The founders' letter will run as print ads, full page in today's New York Times, Wall Street Journal, Washington Post, Washington Times, Roll Call, The Hill, Politico, and CQ. You will not be able to pick up a paper in the DC area (or, really, many other places) without reading this letter. There will also be an online ad on CNET, TechCrunch, Gigaom, and Mashable, and Politico already has a story up. The ads point to a call Congress alert run by Engine Advocacy: http://stopthewall.us/

Tumblr Staff: SOPA Update

staff:

This weekend, we hosted a meeting at Tumblr HQ with top technology companies, politicians and advocacy groups to coordinate our effort to reform or prevent the well-intentioned but deeply flawed Stop Online Piracy Act from becoming law. You guys have already made a huge impact in Washington, but...