18 August 2012
Why do I have to sign a terms and condition waiver?
All participants will have to sign a terms and conditions waiver because the winning team(s) idea and intellectual property (IP) will become property of Teralogix. Only the winner or winning team will assign IP rights to new company. Teralogix reserves the right to select one or more winners.
(Source, available in cache, bolding by me)
I wrote a post regarding the problems with the event, Exploitation by STL Hackathon:
This goes against the entrepreneurial spirit in St. Louis and indicates depravity by Teralogix. Do not be tricked into going to this conference – Teralogix is not attempting to incubate your idea into a company, they are trying to steal your work. There is no incentive to submit a good idea, so go for the free food and the iPad, but go elsewhere to cultivate your idea.
The post received thousands of hits, and went fairly viral. For the last two months, the post has been second only to the conference website on Google searches for "STL Hackathon."
In the name of being constructive, I contacted Teralogix regarding what they could do to improve their event and include the community. Their response was vapid:
We appreciate you taking the time to express your opinion and give suggestions for our event. Our Terms and Conditions, which are being finalized, will be available to participants, as it will need to be signed before the event begins.
Today it has come to light (again thanks to Dylan Hassinger) that Teralogix has canceled the event. I contacted the company requesting the specific reason(s) for the event's cancelation, which I will post pending a response. Interestingly, Teralogix seems to be scrapping the "STL Hackathon" brand. Specifically, they have deleted the @STLHackathon twitter handle, signaling that the event will not return in the future, contrary to the "Please look for our event in the 1st quarter 2013" message on STL Hackathon homepage.
STL Hackathon gives an equivocal reason for the event's cancellation:
We are sorry to announce, that due to unforeseen issues, the 2012 STL Hackathon has been cancelled.
While unverified, I predict that at least one of the following occurred:
- Not enough people signed up for the event
- Teralogix suspected that those who signed up intended to work on a bogus idea in exchange for a free iPad
- Sponsors could not be secured, possibly due to the aformentioned social backlash.
Problem with Event
To recap, here are the problems that I believe caused the failure of STL Hackathon:
- Winners forfeited their intellectual property (IP)
- Specific percentage of the company forfeited for the prize was not specified
- The company could force all participants to forfeit their IP
- "Winners" could not decline the prize - they immediately forfeited all rights to their company
- Teralogix did not respond to community feedback
This brouhaha and the impending failure of the event disappointed the St. Louis startup community. Having a large corporation step in to support local entrepreneurs in this way was unprecedented, and it had the potential to stimulate further cooperation between established and startup companies. However, the combination of this event's flawed setup and its decision to ignore community feedback caused mutual harm in the long-term to both entrepreneurs and Teralogix.
Fixing Future Events
Future hackathons should keep the following in mind:
- Be transparent with terms and conditions. Post them with signup information.
- Contact influential community members for feedback during the planning phases, whether they be meetup groups, group working spaces, or seed funds.
- Make prizes optional if they involve taking partial ownership of an idea.
- Respond to community feedback.
The basis of STL Hackathon was excellent: it targeted developers and gave them the ability to go from from idea to company in 24 hours. No business plan, no long interviews, just a code deliverable. If their idea was chosen as a winner, they won the capital and the support to create a formal business. However, the execution of this idea was flawed, and led to the regrettable though predicable cancelation of the event.