Reflecting on StartupWeekend’s Strengths/Weaknesses
5 May 2008
Having just completed our second run-thru of the Business Development Weekend for our Birmingham Startup ‘start a startup weekend’ project, I thought it’d would be interesting to compare and contrast how we do things compared to the *official* startup weekends (using comments captured by the good folks in Bloomington, Indiana)…
- Legal issues — We are still trying to understand our options in structuring this company. Every state and every group (due to the variance in sizes) may face different challenges that contradict or stretch the default Startup Weekend model about forming a business. The consensus by the end of our weekend was that it would have been helpful to understand these things well in advance of that first pitch session on Friday. Lawyers are best used before they are needed, rather than after. Our group decided to by hyper-cautious because we value what we might have a month from now.
Oh yes… this was a BIG issue for us early on. It’s one reason EVERY PARTICIPANT (organizers, founders, and even presentors) in our program signs the same Non-Disclosure Agreement, Code of Conduct, and a model release form when they arrive at the event. Every founder receives an engagement letter from our sponsoring law firm (to get a free LLC formed) and each founder is *required* to form a legal entity by the following Friday before any work is done by a developer. They can avail themselves of the free offer’s constraints or do it on their own. When everyone arrives the following Friday (for instance, this coming Friday as I write this), each person will sign an Intellectual Property assignment which will apply to the work they do on behalf of the legal entity for the team they join. I never understood why others waited until they’ve spent the weekend of effort and then decide to ponder these issues. Knock them out in advance!!
- Who owns an idea? — A few people came with ideas, read the simple founders agreement, and didn’t present their idea due to uncertainty about who owned the pitch. The transparency probably gave the world some ideas, as well, offering another disincentive. More clarity and protections are needed so it is clear that presenting an idea isn’t tantamount to giving it to Startup Weekend.
Oh my! So, we’re not the only ones who saw this issue. We actually had people write statements buried in their idea submission that they’d be very angry if the organizers ‘stole their idea’ (as if we were running the weekend as a ruse to get their wonderful ideas). One of this most recent event’s founders was hesitant to show up for this reason but was convinced by an organizer to come and trust that it would be OK. He’s now one of our biggest advocates for recruiting developers for our Implementation Weekend.
- Technology should be known at the start — The group needs to decide, based on their expertise and the needs of the project, what kinds of platforms are going to be needed.
We thought so last time too and planned in advance for it. But, our opinion was that this backfired. Any predetermined decision avoids battles, but also excludes participation. We do, however, agree that boundaries need to be set to avoid bickering and side-runs mid-project.
- Establish a not-for-profit first — Along the same lines, everything gets easier if the organizing entity is a non-profit. Donations are easier to get and might bypass problematic legal situtaitons by giving everyone a formal starting organization to which they can belong, before beginning any work.
This is true, but for other reasons. Because the organizers are working to put the event together, they are a de facto partnership. Our lawyers suggested (strongly) that this opened us up to a significant exposure in liability. So, we actually incorporated (much as Andrew did quietly before his first event). It would take too much effort to go create a brand new non-profit just for running an event like this, so if that’s the path you’d like to go then (IMHO) it would be better just to align your team of organizers with an *existing* non-profit (or even association or user group) to assume the responsibility for liability and “membership” as Bloomington suggested.
The vision was realized — Organizers had plenty of nightmares about how wrong this event could go (lack of attendance, lots of fighting, boring project), but in the end everything came out better than expected. In some areas, our group knocked the ball out of the park.
This is one of the most satisfying aspects of this type of project… faith has a LOT to do with it. Setting expectations is important too. Our community has a history of waiting until the last minute to register, so the final week before our event is a nail biter. We’re also a blend of professors, cheerleaders, and VCs when we review pitches, so we were a bit worried that we’d run every company off during the first weekend and not have any to build the next weekend. We did, in fact, reduce our 8 teams to 5 for next Friday… more about that it a later post.