Wednesday, February 13, 2013

News from the eIncubator

Editor’s Note: the following is the first of what, hopefully, will be a series of reports from the front lines of Chico State’s first-ever eIncubator, one of our most ambitious entrepreneurship projects. But before I get carried away, let me turn it over to the professor behind the eIncubator: David Rahn. PS

Practicum e-Blast #1 – February 12th, 2013        

by David Rahn

The Practicum in Entrepreneurship and Small Business Management, MGMT 489B (eIncubator), recently got off to a great start! The energy is very high, and participants are eagerly digging in. The first thing I noticed about this fantastic group of students is the camaraderie. There is a genuine respect for all ideas and students are providing excellent feedback to each other.  One thing we decided early on is that we are interested in helping each other get up and running and we will let the market decide how it will respond to the various entrepreneurial ventures. 

This is important because many businesses shift their focus a little or a lot once they start getting in front of real customers. So nixing an idea before the market gives its feedback can prevent the venture from finding its real market. The focus on being positive and providing helpful and constructive feedback has had an immediate, beneficial effect on the culture of the class.  

On day one we discussed the course and its goals and opened the floor for input from the participants. A few key themes emerged and it became clear we needed to address balancing the class to achieve a class-wide collaborative environment, as well as safeguard student ideas. One concern is confidentiality. Another key theme was the students desire to have students support each other in their respective endeavors. The last question was over intellectual property rights. If we are in a class sharing ideas with each other and providing feedback, how can we also protect these ideas?  The approach we took is to have students agree to not discuss projects outside of class, treat all information as confidential, and acknowledge that providing feedback on a project does not constitute any form of partnership.  

Key Concept. For aspiring entrepreneurs there is an important idea to pay attention to here, and many are not aware it. In the absence of an agreement that states otherwise, if you collaborate with someone on a project or idea, and bring that to some tangible form (like a document or a website) you have formed a legal partnership. Because in many cases this partnership was not intended, this is sometimes referred to as an “inadvertent partnership.” So while it is often very helpful to discuss your business ideas with friends and others, you should be aware that you may unintentionally be creating this situation. A common method used for protecting ideas is the Non-Disclosure Agreement, or NDA. Many entrepreneurs use these. Forms for this agreement are available on the web from a variety of sources. Some entrepreneurs use a template and attempt to craft their own. Others use an attorney. In a recent opinion I received from a local attorney, I was told that many NDA’s may not hold up if challenged in court because there is simply not enough “disclosure” in the non-disclosure. What that means in practice is that in order to be protected, you cannot skirt around what you are disclosing – you need to do it fully and clearly.  

Resource: There are many very good sites available to help entrepreneurs. One interesting resource is This site has numerous forms and information written by attorneys, and available to entrepreneurs and small business builders. You can, for example, get a Non-Disclosure Agreement form from this site. While do-it-yourself forms never take the place of real attorneys, many entrepreneurs decide to use them for a variety of reasons. 

In the next post I will discuss our use in class of the Business Model Canvas. This is the first assignment for students and we had, and are having, some very noteworthy results. We expect to wrap this up in another day or so and I will describe several interesting and surprising results soon. 

Feel free to respond with comments. If you have questions don’t hesitate to ask David Rahn,

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