The Founders Fund slogan says, “We wanted flying cars, instead we got 140 characters.”

Why do we have Twitter, but not flying cars? One big reason is liability.

A typical software End User License Agreement (EULA) states the software can fail in any possible way and its creators aren’t liable.

For example, an Apple EULA reads:

TO THE EXTENT NOT PROHIBITED BY LAW, IN NO EVENT SHALL APPLICATION PROVIDER BE LIABLE FOR PERSONAL INJURY, OR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, LOSS OF DATA, BUSINESS INTERRUPTION OR ANY OTHER COMMERCIAL DAMAGES OR LOSSES, ARISING OUT OF OR RELATED TO YOUR USE OR INABILITY TO USE THE LICENSED APPLICATION, HOWEVER CAUSED, REGARDLESS OF THE THEORY OF LIABILITY (CONTRACT, TORT OR OTHERWISE) AND EVEN IF APPLICATION PROVIDER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

According to the EULA, the application’s authors can know that it will potentially delete your entire hard drive, do absolutely nothing to fix the problem, and still not be liable for damages.

Compare this to planes and cars. If the product fails the user has a right to bring a case to court in order to show negligence on the part of the manufacturer.

Notice I wrote “if the product fails” and not “if the product fails because of manufacturer negligence.” It’s much harder to find the root cause of an aircraft crash than an automobile crash – partly because an aircraft can make a bigger boom.

The first high profile accident would be the end of the company. There’s something intrinsically frightening about flying. No one would buy a flying car without a spotless safety record.

The inevitable timeline of a flying car company is:

  1. Put years of R&D into a flying car
  2. Battle the government for even more years to get it approved
  3. Release the flying car
  4. Make lots of money or no money (for a while)
  5. The first crash occurs. Highly publicized court case.
  6. Make few or no sales during trial (safety dubious in public opinion)
  7. Go out of business since you’re not making any sales

You don’t have to take my word for it. See this video interview with Boeing CTO John Tracy. He’s asked a question about flying cars towards the end. He says we have the technology to make flying cards but the problem is the pilots. Interpret that as you will. By the way, it’s a really neat interview. I recommend watching the whole thing.