Category: Community

Allen Nance tossed out some new ideas for the Atlanta startup community yesterday and John Melonakos followed it up with his thoughts on each of Allen’s ideas. Combine that with the Twitterverse commentary and comments on each of the posts and there’s been some healthy dialogue.

To complement Allen’s post, I’d like to offer up some big numerical goals for the Atlanta startup community:

• $1,000,000,000 of annual VC investment in the state
  According to the NVCA, VCs invested $383 million in GA in 2011 leaving tremendous room for increased investment and involvement in Georgia.
• 1,000,000 square feet of startup-friendly office space
  Between the Atlanta Tech Village, ATDC, Hypepotamus, and others, Atlanta has about 150,000 square feet of startup-friendly office space. With a goal of one million square feet, the idea isn’t to have a big number for bragging rights, rather it’s to have much greater density of startups for serendipitous interactions.
• 10 growth-stage startups on the annual Inc. 500
  In a good year Atlanta will have two tech startups on the annual Inc. 500 list of the fastest 500 growing private companies in the U.S. There’s no reason 10 isn’t achievable on a regular basis once the Atlanta startup community matures.
• 1 eight or nine figure exit per month
  Currently, there’s about one eight or nine figure exit per quarter reported, so there’s probably one or two more that happen but aren’t reported. With a much larger, stronger community, one solid exit per month is attainable.

Of course, this is in addition to Atlanta having 1,000 active startups at any given time. Atlanta has tremendous opportunities ahead and I’m excited to be involved.

What else? What are some other big numerical goals for the Atlanta startup community?

After yesterday’s post on the Number of Startups for Atlanta to be a Top 10 Startup City, I received the ideal response back from the community: let’s track them. Startup Atlanta is working on putting a program together to do just that. Startups, unlike something more common (e.g. restaurants), are more difficult to track. So, how do we measure the number of active startups in Atlanta?

Here are a few ideas to measure active startups in Atlanta:

• Provide a public, community-editable Wiki powered by Google Sites or SquareSpace
• Track specific metrics like founders, number of employees in LinkedIn, amount of money raised (if applicable), names of investors, names of advisors, etc (or link back to CrunchBase and make sure CrunchBase is kept current)
• Decide on a common definition of a startup e.g. a business with a proprietary product focused on growth
• Create standards for what’s an active vs inactive startup e.g. at least one, full-time person is dedicated to the business
• Coordinate with local events in town like meetups, networking groups, etc to get the names of startups that attended to cross reference
• Use the list of companies from startup community centers like ATDC and the Atlanta Tech Village

Measuring both the number of active startups and their progress helps us understand how we’re doing as a city as well as how we’re tracking against our goals.

What else? What are your thoughts on measuring the number of active startups in Atlanta?

Thinking about Atlanta over the next 10 years, we’ve talked about the goal of making it a top 10 startup city in the U.S. When thinking about the context of a top 10 city, it’s naturally derived by stack ranking it against other cities in terms of money raised, dollar amount of exits, etc. Of course, we don’t know where other cities will be in 10 years, so it’s also a moving target.

As an exercise for today, let’s guess regarding the number of startups for Atlanta to be a top 10 startup city.

Number of Startups

With ATDC having 300+ member companies and the Atlanta Tech Village having 100+, there’s likely 2-3x that number of startups in the rest of the city. So, if we take 400 startups and multiply it by 2.5x we get 1,000 startups in Atlanta. Adding the requirement that the startup has to have at least one full-time person actively working on the venture to qualify, that number is probably cut in half to 500. To be a top 10 startup city in 10 years, it’s likely that Atlanta needs 1,000 living startups.

Net of churn, we need to add 50 active startups per year. Is that doable? Absolutely. With the thousands of startup employees in Atlanta between the main clusters alone like internet security, marketing software, mobile device management, logistics, health IT, etc, we’ll easily have 100+ new ventures per year (assume 10% die each year, so the number of new ventures required will also grow each year).

From a talent perspective, we already have tons of amazing people in Atlanta and many more are moving to the city on a daily basis. At Pardot, the vast majority of our 100+ people had never been involved in a startup before, meaning that the right talent is already here that can shift from being in the non startup workforce to being in the startup workforce.

There’s no right number of startups to shoot for but I believe 1,000 active startups is a noble goal that we can work backward from and start tracking against.

What else? What are your thoughts on the number of active startups needed to be a top 10 startup city?

There have been a number of solid advancements in the Atlanta startup community over the past few years. Highlights include more success stories, more facilities, and more local founders offering their perspective through regular blog posts. Blogging is great because it provides an individual vantage point on startups, the city, and brings more transparency to other founders.

Here are some of the regular Atlanta startup bloggers:

• Johnson Cook – Atlanta Tech Village / Atlanta Ventures
• Kyle Porter – SalesLoft
• Jeff Hilimire – Engauge
• John Melonakos – AccelerEyes
• Lance Weatherby – nCrowd
• Allen Nance – WhatCounts
• Blake Patton – ATDC
• Rob Kischuk – Badgy
• Jon Birdsong – Rivalry
• Bob Cramer
• Jason Swenk
• Stephen Fleming
• Ben Dyer
• Greg Benoit
• Urvaksh Karkaria
• Rick Hancock

It’s awesome to see so many people contributing to the community and the greater startup eco-system through regular blogging. Keep up the great work!

What else? What are some other blogs that I missed?

A few months ago I heard that somewhere in the neighborhood of 55% GA Tech graduates stay and work in Atlanta within five years of graduation. Now, that might sound like a solid number, but that leaves a tremendous amount of talent that moves out of Atlanta and adds to the talent pool of other cities. Combine the talent from GA Tech with the desire to get more GA Tech students involved in startups, and there’s a big opportunity for Atlanta.

Here’s a modest proposal: provide $100,000 salary job offers to the top 100 engineering and computer science majors each year to work for a startup in Atlanta. Call it the Tech100.

Of course, it’s more complicated than that. Let’s look at a few of the potential details:

• The top 100 undergraduate students would be defined by GPA (e.g. if there are 20 different majors, it would be for the top five students in each major). Yes, there are other things to look at besides GPA, but that’s an easy place to start.
• Many of the top students will go on to grad school or professional school, and aren’t interested in working, significantly reducing the number of students to which this applies
• Current entry-level technical people make $55,000 – $70,000 in Atlanta as software engineers, sales engineers, technical project managers, etc, so there’s a $35k gap between $65k and $100k
• Something like the excellent Orr Entrepreneurial Fellowship found in Indiana would have to be created to subsidize the salary difference for startups between market-rate salaries and the $100k salary along with a management training-like program where the Tech100 meet regularly, listen to guest speakers, and gain exposure to everything Atlanta has to offer.
• Timing wise, it would be a two year program with a celebration at the end and the goal that these talented engineers would stay in the entrepreneurial community and make a lasting impact on Atlanta
• As for costs, assume there’s room for 20 people per year, so $700,000 in direct salary cost plus a few hundred grand to run the program, for a total of $1 million per year. Add it a second cohort since there would be two running at any given time and you’d need an annual budget of $1.7 million

The Tech100 would add 20 new talented people to the Atlanta startup community each year, who would then become many of Atlanta’s future technical and entrepreneurial leaders.

What else? What are your thoughts on the Tech100?

Within the past month, three different local Atlanta groups brought up the question, “What does the Atlanta startup community need most?” Now, I don’t have the answer, but I’ve heard a number of suggestions.

Here are a few ideas that were brought up for the Atlanta startup community:

• More Risk Capital – Additional idea and seed stage capital to address the earliest and riskiest startup stages
• More Growth Capital – Additional growth capital for local startups that have already de-risked most of the equation, have north of $5 million in recurring revenue, and have a shot at being a home run (growth capital is already readily available since it is so mobile, but the challenge now is that most of the value created from big wins goes to investors in other parts of the country)
• More Modern Entrepreneur Training – Too many programs are geared towards traditional ways of thinking about entrepreneurship including business plan writing and getting ready to raise money without having customer proof points — there’s a need for lean startup, customer discovery, and business model canvas training
• Major Annual Tech Startup Conference – Similar to SXSW in Austin, the idea is to bring together a number of events into a packed week and draw attendees from around the country
• More Community Coordination – With all the organizations and events in town, there’s overlap and competing agendas, which is to be expected, leading to some desire to more centrally coordinate things

If I had to pick one, I’d choose more modern entrepreneur training. With more modern entrepreneur training, there will be more lean startups, which will result in more compelling startups, which will result in more success stories. More successful startups is what Atlanta needs most.

What else? What are your thoughts on these ideas for the Atlanta startup community as well as other ideas?

With the launch of the Atlanta Ventures Accelerator, one of the questions I’ve received is what did we learn from Shotput Ventures that we’re going to do differently this time. As a quick back story, Shotput Ventures was launched at the beginning of 2009 as a Y Combinator clone in Atlanta. We invested in nine companies, had one great exit, and learned a ton.

Here are a few takeaways from Shotput Ventures:

• Startups with strong technical co-founders made the most progress during the three month program (as expected)
• Non-technical co-founders that were relentlessly resourceful made much stronger contributions to their company (some business co-founders didn’t feel they could contribute since they didn’t code, which is patently false)
• Most teams didn’t launch a minimum viable product soon enough and had little to show come demo day
• Lack of a shared office hurt the camaraderie aspect of the program (most people worked out of their apartments and came in for Wednesday night dinners)
• Mentoring and coaching from the community was great and exceeded expectations

Overall, Shotput Ventures was a good learning experience but didn’t have the desired impact on Atlanta. Now, with the Atlanta Ventures Accelerator, we’re going to use what we learned and make a serious impact on Atlanta.

What else? What were some other observations or lessons learned from Shotput Ventures?

Today, we launched the new Atlanta Ventures Accelerator for prototype-stage startups (great ABC coverage). As part of the program, startups receive a $20,000 investment from Atlanta Ventures and a $100,000 convertible note from the BIP Early Stage Fund. Our goal is to help coach and mentor the startups to then raise a $500,000 seed round after the program.

Here are a few details on the Atlanta Ventures Accelerator:

• Two or more co-founders are required with an in-house technical person or a technical person identified that will join at the start of the program
• Rolling admission and not cohort based (we don’t do cohorts since we want to be flexible to the timing needs of startups and we have the Atlanta Tech Village education programs, mentors, and speakers)
• Focus is on helping startups find product / market fit and complete stage 1 of the startup process, followed by raising a seed round of financing
• Instant community comes from the Village and the 100+ other startups
• Office space during the program is included at the Village

With the new Atlanta Ventures Accelerator, we’re working hard to help grow and nurture more successful tech startups in Atlanta. Please apply today.

What else? What are your thoughts on the new Atlanta Ventures Accelerator?

Earlier today I was at a meeting with two dozen of Atlanta’s startup community leaders. After talking for an hour, the topic of anchor technology companies came up and how as a community they are tremendously influential (Atlanta has several including AutoTrader.com and AirWatch). One of the things that wasn’t mentioned, but struck me on the drive home, is how the culture of the anchor technology companies influences future startups that come from employees of the anchor company.

Back in the 1970s, Atlanta had the largest software company in the world — MSA. MSA provided accounting and ERP software for mainframes, and was known for having an extremely sales-oriented and competitive culture. Fast forward to the 1990s and several of MSA’s past employees, including some of their sales professionals, had started very successful tech companies in Atlanta. Being immersed in a sales-oriented culture influenced how the MSA alumni ran their startups.

Some companies are sales-oriented, others are focused on engineering or customer service. It’s not that one focus is better or worse than another but that the culture of the anchor technology companies influences future startups as people take cues from their previous employer.

What else? What are your thoughts on how the culture of anchor technology companies influence future startups?

Today I had the opportunity to speak for a few minutes to 300+ members of the downtown Rotary Club of Atlanta. The goal of my talk was to help get Atlanta’s city leaders excited about tech startups and the great opportunity we have as a community. Initially, I shared the Pardot story and set the stage for starting, growing, and selling a tech startup. Finally, I talked about the vision for the Atlanta Tech Village.

Here are a few thoughts on getting city leaders excited about tech startups:

• Seismic shifts in technology that will both destroy and create billions of dollars of value are taking place right now due to cloud computing, smart phones, and more
• Over the next 10 years, the majority of jobs created will be from companies that aren’t in existence today
• Startup density is a big driver of community due to the desire for learning, sharing, and collaborating
• All the natural resources are present including technical talent, creative professionals, infrastructure, and can-do attitudes

I’m looking forward to future conversations with city leaders and spreading the tech startup message outside the standard business community.

What else? What are some other ways to get city leaders excited about tech startups?