https://www.entrepreneur.com/article/288996

This article discusses specific considerations that entrepreneurs should take into account when starting a new business, including what type of business entity to create, equity decisions, and labor law considerations. The article seems to advocate for hiring an attorney in these early stages, for an “ounce of prevention”.

I was most intrigued by the specific example of Snapchat. The recent IPO documents show us that Snapchat “agreed to pay [an] individual a total of $157.5 million.” (IPO document at page F-28). Further research reveals that this individual was actually one of the original co-founders of Snapchat, one who allegedly came up with the idea for the disappearing images. He then sued for a large sum of money, as he claimed that Snapchat was infringing upon his IP. Because Snapchat apparently did not plan for this type of lawsuit, it ended up settling for such a large sum.

Examples such as these can help entrepreneurs learn the value of taking some proactive legal steps at the beginning of their startup, rather than having to untangle a mess after the fact.

https://www.entrepreneur.com/article/289416

This is a one-sided article, but it does raise interesting points regarding the impact of net neutrality laws (or lack thereof) on entrepreneurs and/or small businesses. I think of this from two different angles:

First, if paying for data prioritization is allowed, and the entrepreneur/small business is one whose business model heavily depends upon customers being able to access their website, the small business may not be able to afford to outbid larger competitors. The website may therefore be slow, and customers may become upset with the wait and switch to a different provider (e.g., Amazon.com).

Second, small businesses may experience a negative effect generally from the data prioritization. For example, if a small business needs to purchase a specialty product, it may experience difficulty in reaching the company that sells this specialty product if it cannot afford to pay for priority data transmission. This leads to a kind of cascading effect.

There are interesting arguments on both sides of the issue: Pure capitalism v. net neutrality. This article presents one point of view on the debate.

http://abovethelaw.com/2017/02/are-you-a-solo-do-you-think-you-are-an-entrepreneur-think-again/

This is an interesting essay regarding a topic we covered in class a few weeks ago: entrepreneurship versus self employment. This essay asserts that not everyone who opens a solo or small firm would qualify as an entrepreneur. Rather, these people are self employed. The author of the essay seems to define entrepreneurship in the law as: “re-imagin[ing] and reshap[ing] the delivery of legal services…[and] build[ing] that better mouse trap within the profession.”  Essentially, the author defines legal entrepreneurship as a legal startup that delivers legal services in a different way.

Last semester, I did research on how legal technology companies such as LegalZoom track Christensen’s The Innovator’s Dilemma model for disruptive innovation, subject to some important and significant barriers. I will briefly summarize my findings here, but will note that all of my findings and assertions are researched and supported in my final paper for Professor Dolin’s class last semester.

I took as my baseline the chart from The Innovator’s Dilemma of the steel minimills’ progress over time. (Page 90 of The Innovator’s Dilemma, figure 4.3). To briefly summarize for those who have not read the book: The minimills, which are small steel mills, at first could only produce rebar, the lowest quality kind of steel. The big steel companies were more than happy to get rid of this part of their business, since it did not do much for them. Eventually, the minimills learned how to make better and better steel. At each of these junctures, the big steel companies were not worried, because they were focused on what their customers wanted (namely, sheet steel). However, the minimills were eventually able to make this type of steel as well, and basically drove all of the big mills out of business.

In my paper, I found that LegalZoom’s capability can roughly track that of the minimills. The company started with simple documents, such as wills. BigLaw and even mid- and small- law was not too concerned with ceding this market, presumably because those who were using LegalZoom for wills at the time were not going to pay attorneys to draft one anyway.

LegalZoom quickly increased its capability, eventually being able to file patent applications, bankruptcy documents, etc. And, in the UK, LegalZoom now has an Alternative Business Structure license, allowing it to do the most complex type of legal work, as it can partner with (and own part of) a law firm.

However, unlike the steel minimills, LegalZoom faces serious governmental obstacles to performing increasingly complex legal work in the US. Specifically, this includes the ban on fee-splitting, and the Unauthorized Practice of Law regulations. I found that as LegalZoom begins to compete with more complex work–and thus bigger and bigger law firms–the firms, through the organized bars of each state, will begin to seek enforcement of these regulations. Since the “practice of law” is typically not defined well, LegalZoom faces litigation risk, and perhaps operational risk, from these enforcement proceedings.

Thus, LegalZoom’s trajectory is subject to an artificial ceiling from the government, whereas the steel minimills were subject to no such ceiling.

This is only a brief summary of a much longer paper, but I would be happy to discuss any of the foregoing with any of you!

On Thursday, March 2, the CDO is hosting a video conference with Colin Tooze, who is an NDLS grad as well as the Director of Public Policy of Uber.

Here is the link to more information: http://law.nd.edu/events/2017/03/02/cdo-and-blf-present-colin-tooze-director-of-public-policy-of-uber/

Interestingly, there has been discussion in the news about how many Uber employees formerly worked in politics on Capitol Hill.  In that respect, it is interesting to see that there may be some overlap between law and entrepreneurship.

Uber has found itself as the subject of entrepreneurial controversy. On the one hand, it creates jobs and fills a niche gap in the market. On the other hand, it may not be the safest travel option for riders and for drivers and may create negative externalities such as “clogging the streets.” It’s also been cited as having a “broken company culture.”

Actually, it seems to me that, at least at the surface, characteristics of Uber drivers actually parallel traits of entrepreneurs. For example, Uber drivers can create their own hours, use their own resources (their cars), and accept as many or as few clients as they see fit. Still, they are not truly “working for themselves,” even though their ability to choose their own hours creates that illusion of flexibility and independence. Additionally, we may see caps on how many hours Uber drivers can work in the future, which is again rebuffs the idea that Uber drivers are similar to entrepreneurs, despite the parallels that exist on the surface. Moreover, Uber drivers are “classified as independent contractors, rather than employees, which could protect Uber from liability.”

Perhaps Colin Tooze will speak on these issues at the video conference on Thursday.

Young entrepreneurship is a really cool thing to witness. Indeed the kid who invented SnapChat went to my high school, and I always marveled at the fact that he not only had a great idea, but that he worked tirelessly to bring that idea to fruition. Theses kids are doing the same.

http://www.tribdem.com/news/vision-young-entrepreneurs-find-answers-at-meet-ups/article_80c244e4-f9f7-11e6-9008-4b08daac76a4.html

Should social entrepreneurs place greater emphasis on measurable outcomes? This writer thinks so…

“The majority of individuals and families [investing in social entrepreneurs] can still be satisfied with basic impact premises and themes, much as they’re satisfied with generalized results from gifts to charities. For now, the democratization of impact investing is being led by values and principles more than measurable outcomes.”

https://www.forbes.com/sites/devinthorpe/2017/02/26/how-social-entrepreneurs-begin-to-measure-impact/#74fca1285787

Survey of Social Entrepreneurship Community Reveals Emerging Trends

This article discusses the emerging trends of social entrepreneurs and attempts to inform the readers about the perception and actual effects of social entrepreneurship. What I thought was very interesting was the author’s point on technology as a solution to address a variety of problems in society. We as a society tend to point to technology as a clear solution to everything. However, as the author mentions, with the integration of technology in these communities, there needs to be an equal understanding of the technology from the users as well. He states, “In particular, the abundance of “big data” and its potential to offer important insights is tempered by a lack of data literacy among both the public and policymakers.” Thus, it is important to note that technology is not always the answer for curing all or most societal problems in different communities.

This is an interesting article on how Singapore is responding to the push-pull tension between governments allowing new business model to thrive while needing to develop regulatory policies to ensure the public interests are served.

http://www.reuters.com/article/us-singapore-sharingeconomy-idUSKBN1620EI

I think that this article points out something that is really important. Companies risk creating products for which there is no demand if they do not look into the market and what the “value drivers” are for consumers.

Using Design Thinking to make your employees ready for the Internet-of-Things