On Tuesday I had the pleasure of having Sam Yagan come speak in my Patterns of Entrepreneurship class. For those of you who are not familiar with Yagan, he is the founder of such websites as, Sparknotes.com, Edonkey.com, and Okcupid.com. As you would imagine, based on the popularity of these websites he is extremely successful, and it was very interesting to hear him speak. But more importantly his startups, Sparknotes, and Edonkey are heavily influenced and affected by copyright law. Sparknotes was his first startup, which he founded with two of his classmates in their senior year at Harvard. It was originally called TheSpark.com, and started out providing humorous content. When the three friends and classmates were about to graduate, they had a website that was receiving millions of hits per month, an exceptionally high amount of traffic for that time period. At that point they wondered what they could do with the site to turn it into a viable business model. Ultimately, they decided that they could offer study guides similar to Cliffnotes, and commission literature students at Harvard to create study guides to post on the web. They immediately received positive feedback from the users of the sight and began to commission additional study guides. Yagan said that this was only possible because him and his partners were 100% positive that they would not be sued for copyright infringement of the works of literature that they were offering the study guides for, because Cliffnotes already offered the same exact service, only in print. If it weren’t for the pre-existing business for them to model themselves after, they would never have been able to take the risk assuming fair use, which would just be too too unsure, and expensive if they had to go to court. Yagan and his partners eventually sol d sparknotes.com to Barnes and Noble. Yagan went on to co-found Edonkey.com with one other partner, who designed the digital platform, while he handled the business side. He said that they decided to target the European market, and avoid doing business in the United States to avoid coming under fire from the RIAA. He claims that within a couple of years of launching the site that the traffic on Edonkey.com was taking up 30% of the total bandwidth in Europe. He confirmed many of the ideas about file sharing that we have been discussing in class and reading about, such as when he said, “We didn’t make music free, but we reinvented the single…people loved getting the three songs they want, not the 15.” He also went on to talk about how he ended up becoming a public voice in the fight against copyright law, because of his leadership role in edonkey.com, despite his desire to keep a low profile. He said most of his colleagues were there to promote the free culture movement, while he was merely in it for the monetary gains. Finally, he argued that with the rise of file sharing websites and programs, including his, that, “A revolution occurred in young people’s perception of the value of music.” I believe that this perceptual revolution is the reason for the troubles of the record industry today, and a revolution that they will have to address in order to become as successful as they have been in the past with the old format of doing business. All in all it was a very interesting speech, and I recommend that everybody look Sam Yagan and Edonkey.com up if you haven’t already heard of it.

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