Entrepreneurs Threatened By Ironically Named America Invents Act

So you’ve got a great idea for a business? Odds are, you’re not the only one that’s thought of it.

One of the biggest worries–and wastes of time–for new entrepreneurs is “what if someone else steals my idea?” They get very secretive, make people sign NDAs, and start talking to patent lawyers. As if you have the capital to litigate an infringer! What you really should be doing is going out and talking to customers and telling people your idea. You need to validate it in the marketplace!

Big companies couldn’t care less about what patents you hold, especially if you haven’t executed and produced the widget or service your patent describes. In the world we live in, it is usually wiser to act on attractive business opportunities if you have the means to execute on them than to worry about potential infringement. Android is a perfect example of this. Google entered the smartphone market and became a leader in two years. Now there’s a war being waged over smartphone patents, but Android marketshare continues to grow.

President Obama is about to sign a patent reform bill into law that will make it even harder for entrepreneurs to innovate and create jobs. The America Invents Act switches US patent law from a “first to invent” to a “first to file” system. This means that prior art no longer can invalidate a patent–unless it can be proven that the idea was directly stolen from the original inventor. This change will go into effect 18 months after enactment.

This change in the patent system, while more in line with the rest of the world, will simply cause an avalanche of patent filings by major corporations and patent trolls. Big companies who can afford full-time patent lawyers now have an even larger advantage over small entrepreneurs who often times cannot even afford the cost or time of filing a decent provisional patent.

Serious patent reform is necessary if America is to continue in it’s place as the world’s leader in economic power. We need to encourage innovation, and this patent “reform” bill does just the opposite. It places more power in the hands of large corporations, and consequentially places innovative start-ups at an even greater disadvantage.

This bill will make it harder for entrepreneurs to do what they do–innovate, and create jobs. Research by the Kauffman Foundation shows that new companies add 3 million jobs annually, while older companies lose 1 million. With unemployment at 9.1%, we really cannot afford to pass laws that give advantages to companies that, on balance, lose jobs each year.

The Next Big Thing Isn’t Going To Be Obvious

Did you know that Sergey Brin and Larry Page tried selling Google to Excite for $1 million in 1999? Excite turned them down.

From Entrepreneurs talk back: Straight-up feedback and advice for VCs and angels:

A first-time entrepreneur who has raised nearly $5 million for her start-up writes, “My biggest concern for the health of the start-up economy is the avoidance of any kind of original thinking by VC’s. It just isn’t rational to fund the fourth, fifth or seventeenth copycat business. I love what Floodgate’s Mike Maples and Ann Miuro-Ko say about their preference for funding non-conforming ideas because they usually turn out to be the biggest ones. They say if an company is a hot deal it is rarely a home run because it’s not original enough. The real ’10+ baggers’ are the investments no one would touch — the ones they had to defend the first few years.”

I believe that true entrepreneurs can believe in their idea to a fault, and it’s really hard to tell blind optimism from revolutionary insight. Still, the next Google isn’t going to be an un-original idea. It’s going to get laughed at a bunch of times before it finds its path to greatness.

Finalist Investor Pitches At TechWeek Compete

Now that TechWeek Chicago, has come and gone, I wanted to share with everyone the presentations of the top five finalists of the midVenturesLAUNCH COMPETE competition. For those of you who weren’t able to attend, COMPETE is a competition between 35 startups, selected from a pool of applicants, for over $100,000 in cash and prizes. They were judged by an expert panel, including Sam Yagan, Co-founder of OkCupid.

The finalists were:

  • BabbaCo, an online store of great products for busy parents.
  • Chute, a cloud-drive service for backing up, syncing and sharing your photos.
  • Forecast, a new app that lets you and your friends share where you’re going to be!
  • gtrot, a social travel site for people to share travel plans and get advice from their friends on destinations.
  • Safety Book, a web-based home inventory tracker and safety recall monitor.

BabbaCo ended up winning COMPETE, congratulations to them, and to all of the finalists!