Image by johnnybelmont via Flickr
Last week I was talking to an entrepreneur at Venture Atlanta and I asked the casual question “What does your startup do?” With that simple question I received a three minute response that was confusing and forced me to ask simple, clarifying questions in an attempt to get a basic understanding of the business.
Entrepreneurs should craft a 100 word response, much like an elevator pitch, so that everyone in the company can provide a consistent answer to the question “what does your startup do?” Here are some items to keep in mind:
- Different audiences, like ones that are more technical, do want more information, but let them ask for it after you’ve provided the one minute answer to the question
- Specifically include if you offer a product or service as well as the most common buyers and industries
- Provide a memorable hook or anecdote, if possible
- Incorporate social proof into the message (e.g. we have 100 paying customers)
The next time you hear the question “What does your startup do?” I hope you provide a concise, memorable answer that sticks with the listener.
What else? What other tips do you have when explaining what a startup does?
At last week’s Venture Atlanta event I was talking with a number of venture capitalists from outside of Atlanta. After the first day, in which several early stage startups did a great job presenting, one venture capitalist made an observation I agree with:
Atlanta startups are funded by customers much more so than investors.
Immediately I concurred and cited examples of local successful technology companies that took little or no outside funding and grew substantially by way of paying customers.
Can everyone build their business via customers only without outside funding? No. Startups that can do so, especially in towns like Atlanta that have the right ingredients but little risk capital, are at a significant advantage compared to those that are not capital-light.
What else? Do you agree that Atlanta startups are funded by customers much more so than investors?
In early 2010 I wrote a post titled Atlanta’s Online Marketing Software Cluster to bring awareness to the numerous startups in town. Well, I wanted to revisit the companies listed in that original post and add employee counts based on LinkedIn as of late October 2011. Here we go:
Total number of employees: 1,008.
Now, these are total employees listed online, and not all are in Atlanta. All of these companies are headquartered in Atlanta with the majority of their employees here. With 1,008 employees in these 15 companies, marketing software is one of the largest technology clusters in Atlanta.
Image via Wikipedia
During the second day of the Venture Atlanta conference this week I was talking to a very successful VC who, like me, had attended Austin’s Capital Factory Demo Day a couple months ago. We were comparing Capital Factory Demo Day and Venture Atlanta, which to be fair, are pretty different events but involve a number of startups and investors.
Here are my personal observations comparing the two events:
- The speakers for both events were good but the Capital Factory speakers were more startup-specific and amazing (Bob Metcalfe’s talk and Brian Sharples talk)
- Capital Factory cost $99 to attend and had 300 attendees while Venture Atlanta cost $495 to attend and had 650 attendees (Venture Atlanta is a non-profit)
- The Venture Atlanta startups were significantly further along, on average, when compared to the Capital Factory ones (Capital Factory had the five accelerator startups which were only a few months old and then 20 other startups from the community)
- Capital Factory had a much more laid back atmosphere with jeans and t-shirt most common as compared to Venture Atlanta where slacks and coat was most common
- The Georgia Aquarium venue and the University of Texas Executive Education center were equally great with the aquarium getting the edge
- The mix of B2B vs B2C startups was consistent at both events with B2B being much more prevalent
Overall, both events were great and represented their respective communities well.
What else? Did you attend either event? What were your thoughts?
At the Venture Atlanta 2011 conference this week I had the opportunity to talk with a number of investors. One of the things I asked several attendees was “which startup was your favorite and why” in order to look for trends, and more importantly what excited people. This led to some observations and lessons.
Here are 10 quick startup lessons from Venture Atlanta 2011:
- Presentation coaching works (most pitches were great)
- Comedy during a pitch works well, but needs to be performed at a high level
- Slides shouldn’t have more than 20 words, especially with 650 people in the audience
- If you’re pitching in place of the CEO don’t waste 20% of the time explaining why
- Props, including nine-year-old daughters, really get the audience’s attention
- Presentations from founders are more passionate than hired-gun CEOs
- Make it easy for investors to follow up (e.g. give a short email address in your last slide)
- Surprises, like a custom event app already approved in the AppStore, make an impact
- There’s a fine line between confidence and cockiness (be cognizant of the two)
- Pre-recorded video, including product demos and animations, are effective, but should only be a small part of the pitch
This was easily the best Venture Atlanta to date based on the quality of the startups and the number of attendees. I’m excited about the future of the event.
What else? What were some lessons learned from Venture Atlanta 2011?
The second day of Venture Atlanta was as exciting as the first. As expected, the startups were more mature and many had already raised institutional money. Here’s a quick run-down of the companies (I didn’t get to hear the second half so there aren’t as many details).
- In-room multi media display
- Content delivered by SaaS app
- Helps elderly live their lives at home
- $183B/year spent on dementia services
- No cure for dementia
- Currently have 10 operators and 20 communities
- Raised $3M
- Raising $2.8M
- 200 paying customers
- Integrates with SFDC, MS Dynamics, SugarCRM, Sage, Saleslogix
- $9B market by 2015 (Forrester)
- 2-3% of market is penetrated
- $1M in rev in 2011
- $1.3M run rate
- $15,000 in new MRR each month
- 60 new clients since July
- 40% of revenue derived from channel partners outside the U.S.
- Raising $2M for sales
- Goal of $40M by 2015
- Goal to use existing virtualized server images and migrate them into the cloud
- Moving a complex app to the cloud can take 12 months
- Sold direct and indirect
- 1200% growth this year
- Raising $7M for sales and marketing expansion as well as product dev to connect the top 50 clouds globally
- 95 employees
- Approx $15M in revenue in 2011
- Management software for agile software development
- 900 customers
- 25 of Fortune 100
- Salesforce.com for Software Organizations
- Raising $10M – $12M for expansion, including international
Mobile Active Defense
- Data confidentiality, integrity, and assurance for the enterprise
- Security software for the smartphone and tablet enterprise
- Solution is a cloud-based proxy server that monitors data going to and from the smartphones and tablets
- ASP of $70 – $100 per device / year
- Expected to do $3M in 2012
- Raising $4M to expand R&D, sales, and marketing
- Intersection of smartphone and fitness market
- App-enabled accessory that connects wirelessly to smartphone
- Connect smartphones to fitness sensors
- Previous challenge was getting data from the disparate sources
- Platform for the fitness industry
- $3.2M in revenue in 2011
- Raising $1M
Velocity Medical Solutions
- Cancer imaging software
- $2.8M in revenue in 2011
- FDA cleared
- Helps improve patient care, reduce cost of therapy
- Started with radiation oncology and will expand to other oncologies eventually
- Raising $2M
Contact At Once
- Industry specific SaaS chat software
- $6.3M in revenues in 2011
- Currently work with top online advertisers in car vertical
- Goal is to expand to the 9,000 car dealers
- Other vertical is apartment rentals
- General idea is that live chat converts better than phone numbers and forms on websites
- Raised $1.6M
- Raising $5M
- Work with telephone company to provide paid TV service to their current subscribers
- 10 year agreements
- Provide equipment and service to the customer
- 10 employees
- Charge $45/month to consumers for the service
- Raising $4M
- (Un) Googling the web
- 55 cents of every dollar online goes to Google/Facebook/Twitter/Yahoo
- Companies can’t produce enough content to satisfy consumer demands
- Content logistics platform
- Combination of digital curation and partner management
- 100 publishers currently
- 500M pages viewed in network
- Raised $4M
- Raising $5M
- SecureHealthPay is the one location where you can pay, manage, and track your family’s healthcare expenses online for free
My Dealer Lot
- RFID for retail automotive
- Virtualization management software
- Flexible lightweight video screens
- Wealth management software for financial advisors
- Energy data provider to better manage energy use for large companies with multiple locations
- Digital marketing platform for healthcare providers to attract customers
Global Take Off
- Provider of live and video on demand solutions
- Online food ordering platform
The two day Venture Atlanta event finished as strong as it started.
Venture Atlanta had a great event today showcasing a number of promising startups in the area. Here are my notes on the companies:
- Avg F500 spends $500M/yr on legal expenses
- Document decisioning suite
- Categorize, search, and cluster data
- Predictive coding of documents using machine learning
- Predictive analytics of unstructured data
- Raising $5M for sales, marketing, and additional development
- Changing the landscape of retail
- Drive revenue for retailers by allowing consumers to bring their closets into every purchase decision
- 150,000 US retailers with $200B in revenue
- $60B to be purchased online in the next few years
- Less than 3% of visitors to an ecommerce site results in a sale
- FashionAde.com – live lab launched 9/2010
- Three customers are embedding the product this quarter
- Raising $1M to build out sales team
- Platform for change and learning in education and corporate training environments
- 44M students will move to online classes by 2015
- Education is $853.6B market
- Corporate training is $72.7B market
- Virtual classroom solution
- Raising $900k
- Safeguards data regardless of where it resides
- Features: At-rest encryption and behavioral monitoring
- Enterprises are more reliant on cloud services and mobile devices
- Raising money to scale sales, operations, and engineering
- Raised money from ISS founder
- Mobile proximity-based advertising
- Example walking into a casino and getting a text message offering a coupon
- Raised $2.25M in mid-2011
- Small device that plugs in and then talks to SaaS app via 3g for campaign rules
- Future integration with third parties like FourSquare and Facebook
- No app to download — based on phone WiFi or Bluetooth connection plus text messaging
- Raising $3M
- Laser Fit Hearing
- In-ear scanning for hearing aids
- 60,000 clinicians with 15M impressions/year
- Capture a digital 3d representation of ear
- Much better patient experience
- Raised $1.25M
- Raising $1M for productization
- Build meters that give real-time feedback on water usage
- Measure water footprint like carbon footprint
- 22 million unmetered apartments
- Device that clamps around existing pipes
- Full solution including consumer and enterprise monitoring solution
- Focus on multi-family residential real estate market
- Product enabled service company
- Raising $650k
- Social media marketing for local business
- 70% of revenue for restaurants come from returning customers
- 86% of SMB have a website
- Single place for local businesses to manage content and push it to places like Yelp, OpenTable, FourSquare, Facebook, etc
- Raised $460k
- Raising $500k
- Harness the thinking power of groups and help companies manage, socialize, and evaluate that information
- Average F1000 company spends over $100M/yr capturing ideas
- SaaS product for idea generation with enterprise tools to facilitate break-through thinking
- Raising money for sales and marketing as well as product development
- Aggregate corporate purchases to get cash back for customers and deliver more business to restaurants, airlines, and hotels
- Negotiates discount with restaurants and get’s a piece of the discount as business model
- Goal is to get as many of corporate customers to use the partner restaurants
- Opportunities: data mining, proprietary market analytics, mobile apps, social media integration
- Raised $2.9M
- Raising $3M
- Better, cheaper, faster, and less power
- Force sensitive instead of capacitive sensitive
- Provisional patent
- Raised $250k
- Launched 1st product using the technology
- Raising $1M
- Web-based app that generates iPhone app
- Live apps on the AppStore from the app
- $4500/year per customer
- Connects many of the smart phone functions
- Raising $500k
- Breakthrough caller ID solution that gives each call a fingerprint
- Core product is anti-fraud call analyzer deployed via cloud or appliance
- Stop phone fraud
- Focused on big banks
- Raising seed round
- Data explosion from electrical meters – checked 12 times/year to 35,000/year
- Data visualization, analytics, and applications platform for utilities
- Huge explosion of data that needs to be analyzed
- Raised $800k from ATA
- Raising $2M
- Foreign language learning is a $1B market
- Trends in cultural travel and smartphone penetration
- Increase in laziness in travelers
- Customized phrase list for travelers
- Slang slider shows different ways to say something
- Currently offer 12 languages
- $10 per language per country
- 36,000 downloads already
- Vision of a personalized retail experience
- Live on 120 check-out counters
- Has recommended 800k items with 40k upsells
- 3% increase in same store sales
- Loyalty programs on check-out
- Approx $300/mo per store
- Raising $1M
- 82% struggle to make mental jump from instructions to physical object in front of them
- Augmented reality to help with learning and instructions (think yellow overlays during football games)
- Targeting chief learning and information officers as well as elearning companies
- Raising $1M
- Website backup service for small businesses
- Time machine for the site
- Alerts whenever your site changes
- Shared hosting market growing from $4.2B to $5.8B
The startups today set the bar high and I’m looking forward to the event tomorrow.
Read about Day 2 of the event.
Image by Jonathan Herbert via Flickr
Last week I was talking to a successful entrepreneur who was lamenting that she had this previously strong employee that had been with her for over two years. Unfortunately, this quality startup employee, who got along great with others and was a corporate culture fit, was no longer effective as the organization tripled in size. These are the toughest situations.
Here’s my advice when a previously strong employee is no longer effective:
This situation needs to be handled thoughtfully and directly. Everyone knows when a team member is no longer effective but they also want to see the person treated fairly and professionally.
What else? What other items should be considered when a previously strong startup employee is no longer effective?
Image via Wikipedia
Venture Atlanta has its annual event October 25th and 26th this week at the world’s largest aquarium. The great event has been expanded from one day to two days so as to showcase more startups, especially early stage and seed stage ones (boat analogies for startups). This year, 40 startups based in the state of Georgia will present with several of them having already raised venture capital and looking for another round.
Here are a few questions to ask when hearing the companies pitch or from reading their website:
- Do I understand what they do?
- Do I understand how they make money?
- Do I believe there’s a large or growing market for what they do?
- Do I believe they’ll be successful?
- Would I invest in the business?
The goal for startups presenting at a conference like this isn’t to raise money on the spot but rather to gather enough interest to get a meeting with investors. Startups need to create a hook in the mind of the investor and desire for the investor to want to learn more.
What else? What other questions do you ask yourself when you listen to a startup pitch?
Image via Wikipedia
Yesterday I had the opportunity to be a panelist for the Georgetown Baker Scholars event on entrepreneurship in Atlanta. Baker Scholars is a prestigious program for undergraduates interested in business. The event was attended by 25 junior and senior undergraduates that traveled down from Washington D.C. for two days of programs in the Capital of the South.
Four entrepreneurs including myself shared their career paths and stories of entrepreneurship. Here are a few notes from the event:
- Of the four entrepreneurs, two started companies during college and have never worked for anyone
- One entrepreneur knew they wanted to start a company but waited until they had eight years of real world experience
- One entrepreneur started making a product just to learn how to do it, enjoyed it, and built a great business from it
- Three of the entrepreneurs didn’t have co-founders
- Three of the entrepreneurs had immediate success within a year of starting while one required four years
- The common theme among the entrepreneurs was a desire to be their own boss
The event was a great way to expose some bright students in their early twenties to the entrepreneurship path and I was happy to be a part of it.