In my last two blogs, I discussed how in developing online community, that strategy and process, AND technology, together are necessary conditions for vibrant, online community—and that none of these alone are sufficient. In particular, I discussed my definition of online community and that it is my opinion that the best online communities transcend the online and offline world. In my next blog, I will discuss how online community impacts entrepreneurial business models.

In this blog, I will continue this discussion of online community, and discuss more about how the process of coalescing community through the setting of community norms and codifying the responsibilities of formal and informal community members helps ensure successful online community.

Common Community Roles

As I have discussed, there are a very wide array of types of online communities. Each community will have its own optimal profile of they type of roles and duties that the membership needs to perform to make it successful. It studying the more successful of these communities, I have come up with a broad list of these roles and their responsibilities. Depending on the mission of the specific online community, communities may want to pick and choose the roles and responsibilities that are most relevant for their organization.

These roles include:

• Sponsorship: Depending on the mission of the community, they may need some sort of top-level organizational recognition for the community to ensure its exposure, support, and strategic importance within an organization. 
• Facilitator: Sponsorship is different from a facilitator. The facilitator is the public-facing moderator, similar to a talk show host. The facilitator is a critical role in that this person implicitly sets editorial direction via their choices of content to discuss and their tone of voice.  
• Content manager: Depending on the community, the content manager can be the same as the facilitator. The content manager is simply an editor of content and keeps the content-related housekeeping in order.  
• Events coordinator: Similar to content manager, in a small community, the events coordinator could be the same as the facilitator. This person is in charge of keeping the events calendar full with relevant online AND offline activities. In addition, this person may moderate the calendar to ensure that the registration information is accurate and complete for the smooth operation of the event.  
• Communications: The communications manager is responsible for compilation of communications, such as online newsletter and news and calendar alerts. This is a critical role since it ensures participation of the overall community.  
• Education and skills development: Depending on the purpose of the community, this can be a critical role. This person is not only responsible for evaluating the content and skills development needs of the community, this person is responsible for aligning the content with the fulfillment pf the education and skills development needs of the community. This is helpful in technical communities of practice.

Now that we have reviewed some of the overall basics of forming online communities, next week, we will discuss how online community integrates with successful entrepreneurial business models.

Last week there were a couple of high profile patent cases decided with potentially large implications to two growing technology staples – VOIP and MP3s.  Verizon obtained a judgment of infringement against Vonage, a judgment that if enforced will at the best case cause Vonage to pay royalties to Verizon. And, at worst, put Vonage out of business.  Meanwhile, another judge determined that Microsoft was infringing upon certain patents relating to MP3 creation and distribution. The judgment? A whopping $1.5 billion.

I am reminded whenever I see these news items of a conference panel I attended a number of years ago, when a group of VCs stated clearly that “patents don’t matter” to a software business.  That might have had some currency when most software businesses didn’t pursue patents aggressively.  However, that’s just not the case now.  Quite simply, players both large and small, and the lawyers that serve them, are aggressively pursuing intellectual property protection and assertion as a business tool, if not a profit opportunity.  This is a distinct turn of events – inventors have always used intellectual property rights as a way to get compensated for their efforts, and inventors have often sought to use patents as a way to stifle competition against their businesses.  The Wright Brothers for example spent years asserting that they patented the airplane….. But, for most market participants patents were a means to an end – a successful business – rather than an end in themselves.

What we are seeing now, more and more frequently is that patents are being pursued as a business tool in their own right.  This has resulted in an explosion in the number of patent filings handed by the US Patent Office.  The largest technology companies are in many cases pursuing ever more expansive intellectual property programs, not only seeking to protect their current businesses, but to also “protect” future businesses.  It has also resulted in venture capital fund like organizations, and lawyers, seeking to acquire key patents from failed businesses solely for the purpose of future enforcement.  To capture an old cliché “it’s a jungle out there”, or more succinctly, it’s a gold rush.

What is an emerging entrepreneur to do?

The most important thing is to understand the distinctiveness that surrounds your business.  By this I mean, if your business is one that depends upon technology, what makes it unique – an idea? A process?  A combination of existing ideas?  How will you keep and capitalize on your business’ uniqueness?  A value proposition of quality of service? Or, perhaps a product that is faster, better and cheaper than prevailing solutions. The universe of possibility is very broad, but on a case-by-case basis each successful business has unique attributes that should be protected from misappropriation by others (i.e., free use).  Notice that I did not recommend that your first step is to go to a lawyer – figure out what is distinctive about your business first, and how it relates to your business strategy.  Only then is a conversation with a lawyer useful – a good lawyer will know what type of intellectual property protection to seek for your distinctiveness (if any), but he is not the best person to determine what is distinctive and relevant – you are.

As a practical matter, you will be much more likely to successfully protect intellectual property if you seek to protect it before it is widely known or sold commercially. This can create a conundrum for an entrepreneur, since paying a lawyer is less painful when you have business income to pay them.  However, in the current intellectual property environment, you might not have a choice.  The good news is that there are a number of excellent IP lawyers in DC that are used to working with entrepreneurs and managing their legal costs.

Recently, I was reminded of this when I saw a large company practicing an idea that an entrepreneur I know had developed five years ago. At the time, he didn't have the money to pursue a patent and sold his product without protection.  His business failed, but his business idea was a good one, and it is now being employed by others.  Did they develop it independently?  Would he have gotten a valid patent if he filed?  Who knows. But, I bet you that every time he sees his business idea on TV he must wonder.....

As an investor in technology companies, I would never invest in a company which does not have a clear IP position and strategy for protection and assertion. The level of development that I expect varies by the stage of enterprise – I would expect a growing business to have its IP rights in place and protected, and an ongoing strategy to protect future rights. For the earlier stage business I would expect at the minimum a baseline IP strategy, and if not some initial filings, at least near term plans and some comfort on the likelihood of consummation of the initial strategy.  Of course, implicit in all this is that I wouldn’t invest in a business that wasn’t distinctive or didn’t have the ability to protect its distinctiveness.

The net, net to this discussion is pretty simple.  Intellectual property rights are a primary way for a business to create a legally enforceable monopoly around a business.  If you don’t act to make this happen early and often, you should assume that somewhere else a competitor is doing exactly that.  It is pretty rare that any idea is so unique that no one else in the world is thinking the very same thing.  Often, the person who gets to assert an intellectual property right is the one that protects it the best.  If it is a jungle out there it clearly is better to be preditor than prey. 

I saw this video about entrepreneurship the other day and felt it was a very compelling topic. As I have been writing my blog on entrepreneurship over the past few months, I sometimes find it tempting to blur the lines between entrepreneurship and small business. But to be clear on my opinion, I agree with the from the Kauffman Foundation that entrepreneurship is NOT the same thing as small business. In addition, managing an entrepreneurial startup like a small business can have damaging effects that will significantly impact the entrepreneurs’ probability for success. Therefore, I thought that the topic was worth some real estate in this blog.

So to give this topic some attention, I went back to my last few blogs and thought I would quickly analyze the difference between entrepreneurship and small business.

Employees

When hiring employees for an entrepreneurial startup, there is both a unique opportunity and a certain type of person that has a higher likelihood of success. Employees that will succeed in an entrepreneurial environment are very different than those that will succeed within a small or large business.

As I mentioned in my earlier blog on hiring top performers, those employees that will succeed in an entrepreneurial business may have more ambition than experience. It is my experience that within an entrepreneurial environment, employees with enough ambition and energy can compensate for lack of hands-on experience.

To succeed in an entrepreneurial environment, employees need BOTH intelligence and a strong work ethic. A strong work ethic without intelligence can run a business into the ground. And intelligence with out work ethic can land great ideas that aren’t executed upon. 

Finally, employees that will succeed in an entrepreneurial environment have to value long-term reward over short term financial reward. This helps to ensure that it is NOT ABOUT THE MONEY. It is about making a difference with paradigm-shifting strategy, process, and technology.

Funding Partners

A topic that I haven’t touched upon yet in previous blogs is funding partners. For a small business, a bank makes an ideal funding partner. There is a low-risk business case that a bank can understand and the loan can get repaid. There are even lending programs through the SBA for small business start-ups (as is mentioned in the above video).

But if the entrepreneurial start-up is doing their job right, a bank will not “get it”. Entrepreneurs are in the business of fundamentally changing the market. As a result, the business concept that they are pitching will, by definition, not be easily understood by the general business community. This is what makes the risk profile of an entrepreneurial business different from a small business. Therefore, the right funding partner for an entrepreneurial startup is 1) self funding through bootstrapping, 2) angel funding, and 3) early stage venture capital firms.

Commercializing Web 2.0

Now that we are well into the Web 2.0 cycle (and arguable toward its end), the concept of commercializing Web 2.0 is not inherently paradigm shifting. The ability to add comments to a New York Times article is nothing new, adding tags to photos on flickr is no longer revolutionary, nor is posting a video making a fool of yourself on youtube groundbreaking.

Arguably, copycat businesses pitching these types of ideas to a venture capital firm are pitching a small business – not an entrepreneurial business. They are small, single-product, product companies, and me too product companies that are very difficult to monetize. Their best option for monetization is expanding their product lines while selling to vertical markets and/or offering a consumer suite; or selling their business to the big guys, as did flicker and youtube, to yahoo and google. But if the company is a “me too”, it’s a game of musical chairs and it is likely that there are no suitors left.

Nonetheless, there are countless examples of the differences between small and entrepreneurial businesses. In addition, getting them confused during the start-up and management of each has dramatic implications on each model’s probability for success.