First, a bit of context. An interesting dichotomy has emerged in the startup world. On the one hand, the start-up narrative continues to emphasize that entrepreneurship is often a solitary activity akin to the loneliness of the long distance runner, as the entrepreneur seeks to pursue his dream against push-back from all directions. On the other hand, talk and action about start-ups have come increasingly to focus on the centrality of the start-up endeavour as a community, itself part of a larger ecosystem. Perhaps the most notable example is the rise of the accelerator. Since 2005, when the first accelerator was established (Y Combinator, here), the focus has been on trying to create a setting more effective than the incubator for fostering start-up activity. The rap on the incubator was that while it did provide founders with a common roof over their head as well as certain services, it did not create an edgy enough innovative environment for its tenants, who could presumably stay for as long as the paid their rent.
Come the accelerator, which in various forms seeks to create a better training environment for would-be founders to obtain the skill set necessary to create a successful start-up. Each program is for a fixed period of time (usually three months), at the end of which the participants (from extremely selective to less so, depending upon the status of the accelerator) are called up to take part in “demo day” to sell their start-ups. The extent to which the program seems like a “real school” varies. Taking TechStars, here, as an example, as described by The Economist, here,
“it feels more like a real school than does Y Combinator: founders toil together in classes of dozen people, and they have teachers-cum-mentors who serve as a sounding board.”Whatever the structure of the particular accelerator, the emphasis is on enabling founders to benefit from these communal resources whereby ideas can be shared, criticized and refashioned. As summarized—
“[n]ot only do they bring start-ups up to speed, provide access to a network of contacts and give them a stamp of approval. They also perform a crucial function in the start-up supply chain: picking the teams and ideas that are most likely to succeed and serving them to investors.”
The upshot is that the mentor’s access to the confidential information of the founder within the context of the accelerator might distort both the mentor’s consulting function and later investment activities. Thinking more broadly for a Kat moment, the community aspect of the accelerator milieu might have the effect of making it more difficult for a founder more generally to maintain its confidential information. The founder may be completely willing to absorb this risk to his confidential information as the price for being able to take part in a well-run accelerator of high reputation. That said, it still leaves open the question of how to view the role of confidential information and trade secrets in an age where start-ups and the accelerator-training environment have increasingly taken on a community aspect.