Shotput Ventures 2010

We’re excited to start talking about Shotput Ventures 2010. After reviewing last year we decided to make a few tweaks for our next class of companies. Here are some of the changes:

  • Investing $6,000 per co-founder (like TechStars) instead of $5,000 per team and $5,000 per co-founder (like Y Combinator) due to our great low cost of living
  • Having the max number of co-founders per team be three instead of four as we found the four person teams weren’t as productive
  • Smaller program with 5 – 6 companies so that we can devote more attention to each team
  • Formal partnership with the ATDC (more info to come soon)
  • Published company ideas and markets we’re interested in

Take a look at our program timeline, FAQ, and apply online once we open up applications.

Atlanta $100k Startup Challenge

After reflecting on Startup Riot this morning, and discussing it at lunch with a friend today, I realized there was an attribute most startups were seriously lacking: revenue. I don’t mean revenue like a few hundred or a few thousand per month, but rather, at least $100,000 in revenue. Yes, this isn’t a goal of Sanjay’s when putting on the event, since it is designed to be inclusive of all startups that meet the requirements.

After going through the list of 50 startups again, my educated guess has a total of four, possibly five, of the 50 startups yesterday having trailing twelve months revenue of at least $100k. Why $100k? $100k isn’t enough to be profitable in most cases, but it does provide a foundation and paint a picture for how to build a much larger business.

Here’s my challenge for Atlanta: let’s double the number of startups that present at next year’s Startup Riot that have $100k in revenue.

Can we do it?

Startup Riot 2010 – Another Success

Today I had the opportunity to attend the third annual Startup Riot at the Fabulous Fox Theatre in Atlanta. Shotput Ventures partner Sanjay Parekh puts on the annual event which drew over 400 attendees and provided a platform for 50 startups (yes, 50 startups!) to give a three minute pitch with four slides.

To learn more about the startups that presented, please take a look some of the blog posts:

I’d highly recommend the event and I’m looking forward to attending again next year.

Competitive Differentiation

One of the more exciting, and challenging, aspects of being an entrepreneur in a new, fast-growth market is the constant stream of changing competitors. New markets are very different from established markets in that they typically innovate faster and have lower barriers to entry (the technology doesn’t have to be as fully baked to be competitive). My advice is to pick a competitive strategy and don’t try to be all things to all people — a recipe for failure (trust me, I’ve tried it!). Of course, the strategy should be fluid and adaptable, but it is better to have a solidified one down on paper rather than none at all. Here are some competitive differentiation categories to consider:

  • Target company sizes
  • Target company verticals
  • Product price points
  • Product functionality (be opinionated!)
  • Geographic targets
  • Support policies (phone, email, 24/7, etc)
  • Sales tactics (aggressive, nice guy, etc)

Again, I recommend putting a competitive differentiation plan together, aligning the team, and using it to make decisions quickly.

Doing vs Talking

One of the most striking features of an entrepreneur is that he/she is the doer type instead of the talker type. You know what I mean — the person who is always getting things done and loves diving in and taking on projects. I think there’s a tendency, and this is partly driven by society, to build consensus and ask lots of questions before working on a project. For entrepreneurs, the strategy is more likely to be get something done, and then ask for forgiveness.

Want some great examples? Take a look at Mark Suster’s post as part of his series on what makes an entrepreneur.

Part-Time Entrepreneurs

I’ve heard the same question many times asking “can I start a venture part-time, on the side?” My advice is always the same: you can, but of the hundreds of entrepreneurs I’ve talked to, only one was successful (defined as built a multi-million dollar revenue company) doing the business part-time for the first few years. Now, this is different from a scenario like that of Marc Benioff, CEO of, that started working on the business part-time while he was still at Oracle, but he also invested $6 million of his own money and had a full-time team working on the company.

Here are some reasons why being a part-time entrepreneur might not result in success:

  • Challenge of making enough progress with the opportunity relative to how fast the market is moving
  • Lack of belief in the idea and/or market, resulting in a wait and see approach
  • Difficulty in juggling a day job and doing a startup on nights and weekends
  • Inability to get other team members or co-founders to join because of the perceived lack of seriousness

My belief is that the first issue (not making enough progress) is the real killer of part-time startups because they are such roller coasters whereby you need high highs to balance the low lows. I do believe working on a startup part-time is worth the effort but I would stress that that is more of a learning experience and less of a recipe for success. Good luck!

Internal vs Outsourced Software Development

One of the core challenges with building a web-based company is developing the software. Naturally, there are many debates between developing the software with an internal engineering team vs outsourcing the development to a firm, onshore or offshore. Let’s look at a few issues to consider:

  • Is the product central to the company’s success or is good enough OK?
  • Do the founders or CTO have experience managing an internal or outsourced development team? An outsourced team is generally considered more difficult to manage and management intensive.
  • What type of financial resources are available in the near term and longer term? One-time projects might be more cost effective when outsourced if scope is sufficiently defined and the platform is a known technology (e.g. writing a simple iPhone app).
  • How fast and iterative are the product changes? I’ve generally found internal teams faster at iterating when compared to an outsourced firm that is juggling multiple projects.
  • How accessible is local software development talent? The size of the city and quality of nearby engineering schools can be a factor in finding good internal software engineers.

In my experience, I’ve had the most luck with internal software development teams as our product is our core competency. I have heard stories of software companies having success with completely outsourced software development, even offshore work, but the number of failures I’ve heard about significantly outweighs the wins. My advice is to seriously consider an internal team, even if on the surface it appears more expensive.