I've recently started a company. No, I didn't learn from my previous attempts not to try again, although I'll admit it's a plausible lesson for me to have learned. My first foray, selling bomber jackets to dogs, was a lot more successful, in retrospect, than it had any right to be and did give me lots of experience.

Experience, you'll recall, is what you get when you didn't get what you wanted. You've probably also heard the old pilot's saying: Good judgment comes from experience, which comes from bad judgment. So lessons learned: Don't do it if you can't protect it, and exponentially exploding sales yield exponentially exploding cash deficits. (It's a lead-time effect; just do the math.)

But valuable as those lessons were and still are, they pale in comparison to a simple lesson in honesty. No, not the Sunday school/seminary/yeshiva/catechism/Honest Abe/chopped-down-the-cherry-tree variety, not quite. I slipped the exponentially exploding shortfall noose with a licensing deal I did, the details of which aren't all that interesting, but basically there was a mass-market, low-margin rate and a higher specialty-market, high-margin rate. Being, for better or worse, a highly trained mathematician, I noticed in the contract language a logical gap: that the possibility of, for example, mass-market, high-margin wasn't addressed. I also noticed that a simple change from "and" to "or" would resolve the matter. In my favor. I proposed that small and fundamentally fair change, but I didn't point out the implications of that change. I thought at the time that I was being smart, when in fact I was being incredibly dumb; the damage to the relationship when my partner, a few years later, came abruptly to realize the meaning of what he had agreed to, was more significant than the substantial monetary difference that one word made. It was that he was taken by surprise that was so damaging; the provision was not, itself, unreasonable.

Which brings me to rebates.

Not so long ago, I saw a can't-pass-this-up rebate deal at the Fry's electronics store. Books for free! I have known worse book junkies than I am, but only a few. I bit, I bought, I sent in the rebate receipts to the only address it gave, and I set off for a month in Asia, where I learned all about outsourcing and my partner karma caught up with me. (But that's a story for another day.) When I got back, my rebate forms had been returned to me, with additional forms, which I guess were supposed to have been given me at the point of sale, and with a new address to send them to—all to be done by, well, a week ago Thursday. Gotcha! So I went to Fry's to straighten it out, several times in fact, thus far (a year and a half later) to no avail. I still occasionally shop at Fry's (I mean, come on), but I have made purchases amounting to several thousand dollars elsewhere.

Having learned my lesson, once bitten twice shy, first time the dog bites, and so on, and being a highly trained technical sort of person, when I recently had the chance to get a peachy piece of accounting software (free after rebates), I didn't give it a moment's thought. I bought it. I mean, it was free. This time the rebate could be filled out online, which I did. The online rebate form asked me for a serial number, so I looked on the package, found the number that was not a UPC, and submitted it. Gotcha! The site wouldn't accept my submission, and the thank-you-for-playing-loser card didn't say how to resolve matters. Heh heh. Back to the Staples rebate Web site, where, after fruitless resubmission attempts and a ludicrous amount of poking around, I found a phone number. After bouncing through the usual dozen decision-tree choices, I got a recording suggesting I wait six weeks. Of course, the deadline for submission was four weeks. Hmm. How stupid do they think I am? Oh, wait, never mind, they already know.... A bit more clever prodding, and I reached a live person, who told me that the problem had been fixed. I breathed a sigh of relief and headed off on business for a couple of weeks, arriving home today to find a postcard telling me—you guessed it—thanks for playing, loser. I'm starting to see a pattern here, and I'm also starting to wonder how great an idea it really is to entrust my accounting to a software company that doesn't see ethical lines.

The stakes are far higher than a few hundred bucks of sucker bait. A key technological advance is being lost: the Quaker business ethic. Yeah, I had never heard of it before either, but it turns out that there was a time in England when thugs with badges threatened violence against Quakers if they became lawyers or physicians. Note that I did not say everybody who carries a badge is a thug. Not even in Chicago. Los Angeles, on the other hand... Ouch! I was just kidding! Owww.

But "thug" is perhaps the kindest label to attach to someone who threatens violence over religion. So the Quakers, who still wanted to make big bucks so they could get hot babes like everybody else (except, of course, the Shakers), all became engineers and programmers. Oh wait. No. Actually they went into business. But business in a really strange way. They applied an unprecedented standard of honesty, and—surprise!—it made them a ton of money, because mistrust is expensive. Everybody wanted to be their partners, and the ticket for admission was that same standard. Costs plummeted. Business boomed. John Wanamaker was crazy enough to take the radical, revolutionary step of inventing...the price tag. No more haggling, no more wondering if you've been suckered. It made him rich. It makes us all rich. It could, all in all, be the most valuable technology we have.

Except for rebates.

Andrew Winkler, PhD., the former Columbia University Professor, has been creating IT and data storage architectures for the last 30 years, notably at Columbia University and Bell Labs. His first real job was with the IBM Thomas J. Watson Research Lab. Since then, he has launched several successful businesses and is currently chairman of Data Risk Management Inc., which brings to market his new technologies for solving the business problems created by the risks of data loss. In his spare time, he invented a novel system that makes learning to read dramatically easier at www.soundplayground.org. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

Dr. Andrew Winkler is the founder of Data Risk Management, Inc. and the creator of the technologies that power its solutions. For more information, go to www.DataRiskMgmt.com. Contact Dr. Winkler at This email address is being protected from spambots. You need JavaScript enabled to view it..

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