How Does a VC Pick a Winner? doubleTwist Got Funded?
by
on March 01, 2008,
I will never understand how VCs make their decisions. Some companies that get funding seem doomed to fail, and falling under that very confusing category is last week's news that doubleTwist was funded by Index Ventures.
In theory, doubleTwist has all the Web 2.0 buzzwords that should lead to success. It's tagline is “liberate your media” and the only text other than news on their entry page is “doubleTwist desktop enables you to easily share media with friends and sync with popular devices. ” They've launched a Facebook widget called Twist Me, reference the ubiquitous iTunes in nearly every press opportunity, and even have a founder with a cool handle (he's known as DVD Jon).
The problem with doubleTwist, however, is that it's a big, well-publicized version of what the music and film industries hate the most: programs that remove DRM from media files. doubleTwist claims that they are all about the cross-platform compatibility that DRM prevents, but the minute you use the word “share” when it comes to your media files, the big dogs are going to prick up their ears and come running.
Regardless of your personal ethics regarding DRM, the reality is that the removal of DRM is still against the law in the U.S. as well as most European countries. In addition, when you purchase DRM-protected media, you are entering into a contract with the seller and agree to the terms of the contract as detailed in the EULA. Generally, you aren't allowed out of a contract later on because of an ethical objection to the terms.
Apple has already proven that they are willing to go after developers of any tool that removes DRM, as evidenced by the Cease and Desist letter that was delivered to the Hymn Project last week right around the launch of doubleTwist's funding. If Apple is willing to go after a little Open Source project, what will happen to a company getting tons of press and a bundle of money?
Interestingly enough, the doubleTwist FAQ has no reference to the legality of their application, nor its use. But I hope most of that funding is earmarked for legal fees, because something tells me they are going to need it.
