But given the possibility of suits like these down the line, why would a startup even risk it at the outset by using mashup data obtained through scraping, etc? Isn't it asking for trouble? Although geeks prefer the algorithmic approach, building business partnerships from the start and stating one's intention about sharing data seems to be the only viable starting point for a mashup startup (from a long-term view).
Lot of startup successes happened on the backs of copyright infringement. The goal is to just get traction and then deal with it. It works somewhat often, and it's actually fairly rare a startup is unable to license some sort of deal and survive.
But no, I probably wouldn't do it personally. There's a tradeoff there, in that on one hand you're increasing your odds of success (potentially) by building on the backs of services that you know people want. On the other hand, there's some chance that if you're successful there will be a lawsuit.
When you say: "it's actually fairly rare a startup is unable to license some sort of deal and survive", I assume you mean "it's actually fairly rare a startup is able to survive without licensing sort of deal" rather than: "it's actually fairly rare a startup is unable to survive by licensing some sort of deal"
Whoa, my head is spinning.
In other words, usually a startup will be able to make a deal with the content owners which will allow the startup to survive. But I agree it's a risky ballpark to play in. One potentially big advantage, though, is if you're an unknown, this can raise your profile. So, even if this venture is unprofitable because of the legal costs and eventual revenue sharing with the content owners, by working on something that gains traction, you can leverage this reputation and experience on a future venture, which may put you in a more advantageous position than someone starting out from zero.
Or the energy sucked out of you from the lawsuit might make you want to leave the field entirely.
