Category: Community

Today I had the honor of attending the first day of Venture Atlanta. The keynote kicked off with Steve Case, the founder of America Online, who did a good job extolling the benefits of entrepreneurs and the goals around Startup America. After the mayor of Atlanta talked for a few minutes it was time to hear the entrepreneurs give their six minute pitches.

SynkUp

• 17 minutes spent to plan an activity
• Scheduling to facilitate mobile commerce
• Group scheduling
• Rank friends in priority list
• No new social network
• Value from data, advertising, and context

Aptidata

• Ask simple, natural language questions of data
• SMBs are drowning in data
• Example: what were sales of wings last month at windward store vs last year?
• Gartner: Analytics is #1 issue for retailers

CollectorDash

• $2.3 million spent on a single postage stamp
• Collectors are great fans
• Hundreds of collector categories
• Software platform that takes holistic approach to what collectors do
• Revenue: advertising, consumer data, and platform licensing
• Raised $600k

SwiftPay MD

• Mobile payment capture for physicians
• $6 billion problem due to lost billing cards
• Up to 30 days to get the info from the paper insurance card to the back-end then 60 days to get paid
• Mobile solution where info is spoken into an app and transferred to the back-end

eCommHub

• Automates the commerce supply chain for SMB companies
• Movement to drop shipping by etailers
• Virtual fulfillment where inventory isn’t actually held
• 1,500,000 online retailers
• Raising $750k

LiquidText

• Touch interface to interact with text
• Make text more flexible and interactive
• Problem with comprehending and understanding long documents
• Visualization, awareness, relationships, aggregation
• Raising $800k

ThundrLizard

• Go from cold lead to qualified prospect
• Cold calling effective rate is 2-6%
• 99% of cold leads suck
• Help know more about your cold leads
• Raising $500k

Mobilewalla

• Big data co in the mobile app analytics
• Compute analytics and sell to ad publishers and ad networks
• Like the Nielsen/Comscore for mobile apps
• Audience measurement

Lumense

• Biological and chemical sensors
• The 21st century will be the sensor century
• Useful in gases or liquids
• Competition from large lab manufacturers
• Raised $1m
• Raising $2m

Badgy

• Mark Cuban invested $600k
• SEO for social
• Dallas Mavericks and Landmark Theatres are customers
• Helps fan promote things socially to increase traffic
• Raising $1.5m Series A in 2013

Mowgli

• Mobile and web games to make songs
• People love music
• 72% of people play video games
• Enables creation of music through games
• Songster is the first game
• Raising $3m Series A

Clearleap

• Content licensing has been resolved but the technology isn’t ready yet
• Software platform that manages complexity around delivering content to consumer
• Transforms video on the fly based on the receiving device
• HBO GO powered by Clearleap
• Raised $9m Series A
• Raising Series B

Half Off Depot

• $2m angel round in 2010
• $7m Series A in 2011
• Daily deals platform
• Industry growing 20% CAGR with expected $4.8B market in 2014
• Market consolidator

HireIQ

• Predictive analytics and hiring software for call centers
• 2.2 million hired per year in call centers via screening 20 million
• Virtual interviews, tests, and assessments
• Raised $1.5m series A

Bridgevine

• Focused on life events, like moving
• Lead generation platform for the home services space
• Match online contextual audiences with inventory (lead gen)
• Six time Inc. 500 winner
• Cost per action marketing
• $50m+ revenue

Acculynk

• Platform for debit card transactions
• Two sided market
• Huge growth opportunity in India
• Powers debit card transactions during the shopping cart checkout process

Cirracore

• Wholesale enterprise infrastructure as a service
• Floor at 56 Marietta St
• Whitelabel IaaS for other hosting providers to resell
• Double digit revenue growth since 2009
• Major reseller providers

QGenda

• Automated physician scheduling for all specialties
• Putting the right physician in the right place at the right time
• Sometime hundreds, if not thousands, of business rules
• Productivity, utilization, and other types of reports
• 800 customers today
• Doctors and hospitals pay for the web application
• Under 7% market adoption of this type of technology
• Activation fees, recurring revenue, professional services fees

Springbot

• Ecommerce marketing for SMBs
• $1M in seed funding
• Part of Flashpoint program at GA Tech
• Ecommerce is huge with 10 companies representing half of all online sales
• 500k+ ecommerce SMBs in the U.S.
• Integrate data from disparate tools
• Automatically recommended marketing actions via predictive analytics
• Focused on the Magento community

Pindrop Security

• Phone identification technology
• Unique fingerprint for each type of phone
• Caller ID is easily spoofed
• Phone fraud is faster growing than internet fraud
• 30% of bank fraud involves a phone
• $10 billion wasted per year asking phone questions
• $3.2 billion addressable market

Endgame Systems

• Repositioning the company to target commercial markets
• Government primary customer over the past few years
• Nation states sponsored cyber attacks against U.S. financial institutions
• Endgame provides a cyber warfare security and attack system
• Raised $29M Series A from Kleiner Perkins two years ago
• Raising a Series B round

Day one was a big success and I’m looking forward to day two tomorrow.

Over the past 45 days I’ve been working hard on a special deal, codenamed Project Duke, and I’m thrilled to reveal it today: Atlanta’s Pardot Acquired by ExactTarget for Almost $100M. Seeing the headline is still surreal to me, as is the whole experience and journey.

The Pardot team has the most amazing people and I’ve been honored, blessed, and humbled by the opportunity to work with them, especially my co-founder Adam Blitzer. Corporate culture comes first and Pardot lives it everyday. Walking around the halls I see people who are positive, self-starting, and supportive — exactly our goal. We believe that in providing the best place to work and the best place to be a customer everything else takes care of itself. It really is that simple.

ExactTarget, of which I’ve written about many times (Notes from the ExactTarget S-1 Filing, A Theory on the Amazing ExactTarget Success Story, etc) is unlike any 1,000+ person company I’ve ever worked with. The Orange Culture is as pervasive and strong as any culture I’ve seen. And, with 1,400 employees, they’ve scaled it to a massive level. ExactTarget is the only company I’ve ever read about that listed their corporate culture as a competitive advantage in their filings with the SEC — it’s an unbelievably good company.

Most acquisitions fail for one simple reason: lack of corporate culture alignment. With ExactTarget and Pardot, the corporate cultures couldn’t be more aligned and the growth opportunities more dramatic. People like to talk about complementary technologies, gaps in product portfolios, etc when it really comes down to the simplest thing — people.

The future is bright and I couldn’t be more thrilled that ExactTarget and Pardot have joined forces.

Last night I finished reading a pre-release copy of Brad Feld’s new book Startup Communities: Building an Entrepreneurial Ecosystem in Your City. Brad does a great job of covering a wide range of topics and presenting a number of tactical ideas for community building, startup or otherwise. The book is closer to a how to manual with anecdotes than it is a strategy business book like you might find from Jim Collins. If you’re a hands-on, doer type, then it’s for you.

Here is Feld’s Boulder Thesis for startup communities:

1. Entrepreneurs must lead the startup community;
2. The leaders must have a long-term commitment;
3. The startup community must be inclusive of anyone who wants to participate in it; and
4. The startup community must have continual activities that engage the entire entrepreneurial stack.

Now, let’s take these items and go through them in an Atlanta context:

1. Entrepreneur lead community (grade: B) – Many events, like Startup Lounge, Hypepotamus meetups, Startup Riot, and B2B Camp are entrepreneur lead. Several programs like Flashpoint, Venture Atlanta, ATDC events, High Tech CEO Council, and others have entrepreneurs within the leadership group, but aren’t purely entrepreneur lead as there is heavy government, university, and service provider involvement.
2. Long-term commitment (grade: A) – Most of the core group of entrepreneur leaders in the city have lived in Atlanta 10+ years and show all the signs of a long-term commitment.
3. Inclusiveness (grade: A-) – With ATDC opening up to everyone a couple years ago and the rise of massive events like Startup Riot, the inclusiveness of the community has gone up tremendously. There are still some invite-only events, but they are waning.
4. Activities to engage the entrepreneurial lifecycle (grade: B) – The seed stage through the first part of the early stage is pretty well covered with opportunities to improve via more frequent pitch events (see the Atlanta Startup Village pitch night idea). The later part of the early stage as well as the growth stage and beyond don’t have much activity outside of Venture Atlanta (partly because there aren’t that many companies at those stages and partly because the companies at those stages aren’t as collaborative as you would hope).

So, overall, I’d give Atlanta startup community a grade of a B+ when applied to Feld’s Boulder Thesis. I see an A- as readily achievable with an A on the long term horizon. Just in the past 12 months there have been several new entrepreneur-lead initiatives and the quality of the community continues to improve.

What else? What are your thoughts on the Boulder Thesis applied to Atlanta for startup communities?

Today was Demo Day 2012 for the second Flashpoint cohort of startups and everything went well. Most of the teams did great and a couple were such recent pivots that it probably didn’t make sense to present. This class of startups was a bit different from the first cohort in that the teams were closer to idea stage at the start of the program compared to the previous set of teams that were further along when the program began. Regardless, both cohorts are excellent and some very successful companies will emerge.

Techturized

• Talk and shop for African American hair
• Focused on hair care retail
• African American hair care market is $3 billion per year
• Life change = hair change
• Moods: freedom, new reality, new person
• Cycle of style
• Working with Carol’s Daughter store
• Raising money

Pickoff Sports

• Background in rivals.com and scout.com
• Fantasy sports and March Madness
• Pick teams that you think will win and earn virtual currency
• Played right within Facebook
• Habit loop that emails you how your picks did
• Raising $500k

CourseShark

• Course registration is a big hassle
• Solution is a modern frontend on legacy data
• Students will share their course info with recruiters and companies
• Help students get jobs
• Georgia Tech students love it
• FERPA blocks schools from sharing student courses

Soccermetrics

• Like Money Ball for soccer
• Soccer data is not as developed as other sports data
• Sourcing, analytics, decisions are separate companies
• Key is making valuable information available fast
• Have several sources of data
• Product is an analytics engine

Buzztastic

• Help businesses market together
• Cross promotions like sweepstakes or contest
• Together marketing is a new category of marketing
• Product is inherently viral
• Raising $1MM round

Deliverable

• Freelancer verification to top employers
• Huge number of people are now freelancers
• Free-agent economy
• Growing from 28% to 40% of work force

SeeMove

• Simple solution to track movement of moving boxes
• 15% of population moves each year
• $11,000 per interstate move
• Logistics experience

BeSmart Ventures

• Maximize value of gift cards
• $100 billion market
• Growing 30% over next few years
• Loyalty programs moving to phone
• Breakage is unredeemed value – $7 billion in 2011

The OR Standard

• Inefficiencies in OR are wasting money
• Delayed cases cost serious money and bad experiences
• Solution is an intelligent communicator scheduler with checklists
• Mobile app for doctors, nurses, patients, and patient family members

Springbot

• Marketing automation for ecommerce
• Amazon.com functionality for SMB ecommerce sites
• Ecommerce sites don’t know where to spend the next marketing dollar
• Solution helps track ROI and provide marketing tools
• Value in integrating disparate tools and tracking data
• Business model of monthly fee with data fees
• Already closed a $1MM angel round

ScheduleLogicMD

• Healthcare in US wastes $750 billing per year
• Intelligent scheduling is in its infancy
• Scheduler – receives calls all day
• Different insurance companies have different payment terms and patients should be scheduled with that in mind

Dwellio

• Increase renter retention for apartment owners
• 54% annual apartment turnover
• Renter 50% more likely to renew if friend in building
• Mobile app to help property managers interact with tenants
• Raising $1.5MM

We & Co

• Talent management for service economy
• 2 million service businesses in US
• 70% turnover
• $5,500 replacement costs
• 30 million service professionals in US
• Like LinkedIn for service professionals
• Acquired 10,000 service professionals in last 90 days

Vehcon

• Smart vehicle connections
• Usage-based insurance
• Accurate odometer reading in vehicles is super hard
• Odo-foot app takes pictures of odometer plus metadata
• Deliver authenticated data with a fingerprint based on the car
• $55 per driver per year

I enjoyed the second cohort’s Demo Day today and I’m excited to see the startups grow and be successful.

What else? What are some other thoughts on Flashpoint cohort 2 Demo Day 2012?

Flashpoint, the startup engineering accelerator associated with Georgia Tech, has its second Demo Day on Tuesday, September 11, 2012 at 2:30pm in Tech Square at the Flashpoint offices. With this being the second cohort of startups, Flashpoint is still in its early days but off to a great start under the leadership of Merrick Furst.

Here are four reasons to attend Flashpoint Demo Day:

1. Get a chance to hear from 14 of the most promising seed stage startups in Atlanta
2. Learn more about lean startups, customer development, and startup engineering
3. Meet investors, entrepreneurs, and executives in the Atlanta community
4. Stretch your mind with some of the coolest and most interesting startup ideas

If you can’t make the Atlanta Demo Day, Flashpoint will be in NYC and San Francisco later this month. I’m looking forward to Tuesday’s Demo Day.

What else? What are some other reasons to attend Flashpoint Demo Day 2012?

Internet Security Systems, easily the most famous and successful B2B Atlanta tech startup of the past 15 years, filed to go public in late 1997 with a target IPO date of January 20, 1998 (SEC filing for ISS Group, Inc. IPO). After a successful run as a public company, IBM bought ISS in late 2006 for $1.3 billion in cash (source: IBM.com). Being a connoisseur of the Atlanta startup and technology community, I wanted to learn more about ISS. SEC documents, like an S-1 filing, are some of the most honest and transparent business documents you’ll ever read.

Here are notes from the 1997 ISS Group, Inc. IPO filing:

• Proposed raising $31.6M (pg. 1)
• Over 1,500 customers (pg. 3)
• First product was distributed as shareware in 1992 and the business wasn’t incorporated until 1994 (pg. 4)
• Selling 2,500,000 shares out of 15,878,428 shares total (pg. 4)
• Revenues and employees (pg. 8)
  1995: $257,000 / 7
  1997: $13,467,000 / 141
• 80% of revenue from the Internet Scanner product (pg. 9)
• VCs bought 3,650,000 Series A shares (pg. 18) representing 23% of the business
• VCs bought 2,086,957 Series B shares (pg. 18) representing 13.1% of the business
• Channel partners receive discounts ranging from 35% – 50% off list price (pg. 21)
• Accumulated deficit of $5.2M (pg. 21)
• Gross margins (pg. 22)
  1995 – 98.4%
  1996 – 99.6%
  1997 – 95.0%
• Strategy (pg. 29)
  – Continue leadership position in security technology
  – Expand domestic sales channels
  – Promote professional services capabilities
  – Expand international operations
  – Create category awareness
• Field sales reps focus on opportunities that have at least $200,000 in deal value (pg. 36)
• Management age at time of IPO (pg. 41)
  Tom Noonan – 37
  Christopher Klaus – 24
• Christopher Klaus founded ISS in April 1994 and Tom Noonan joined in August 1995 (pg. 41)
• VCs owned 31.1% of the equity after the offering (pg. 50)

The ISS S-1 is fascinating to read as it is an example of a company that went public with a small amount of venture capital raised in a short period of time, something that’s no longer possible due to the much larger revenue requirements to be public along with costs related to Sarbanes-Oxley. Entrepreneurs interested in the history of the Atlanta technology community should read the ISS S-1.

What else? What are some other thoughts on Internet Security Systems and their IPO?

One of the key tenants of a healthy startup community is successful entrepreneurs investing some of their capital gains from an exit into more startups. The idea is that capital needs to be recycled in the community to help the community grow and prosper.

As for Atlanta, here are the exits I know of  2/3rds of the way through 2012:

• Servigistics ($220M exit)
• Vitrue ($300M exit)
• Blinq Media ($40M+ exit)
• Interactive Advisory Software (undisclosed exit)

At a rate of one tech startup exit every two months in Atlanta, there isn’t much volume. Without much exit volume, it’s tough to attract more outside capital and recycle more local capital. The long term solution is to devote more resources and community support to the early stage ($1M – $4M in revenue) and growth stage ($5M+ in revenue) startups in the area, which will result in more exits.

What else? What are some other startup exits this year in Atlanta? What are some other ideas to grow the community?

Atlanta has an amazing resource in Tech Square, on the outer edge of Georgia Tech’s campus in Midtown. Tech Square has all the amenities wanted in a startup hub: highly ranked engineering school, great walkability for serendipitous interactions, easy proximity to public transportation including a subway station, many restaurants, tons of creative-class jobs, Starbucks, Barnes and Noble, the ATDC incubator, and the co-working space Hypepotamus (more Midtown benefits from @rkischuk).

ATDC, the Advanced Technology Development Center (not the Atlanta Technology Development Center as many people think), has great office space that’s subsidized by the university and month-to-month leases — perfect for startups. In addition, the Tech Square area is an empowerment zone meaning it qualifies for a $2,500 tax credit for each new employee hired with a salary ~30% higher than the county average (a salary of approximately $65,000 or higher qualifies). With all this said, there’s a high quality problem in that there’s no office space left, a waiting list for future space, and you can’t get on the waiting list unless you’re an ATDC Select company (based on company progress and likelihood of building a sustainable business). Also, the space isn’t designed for startups that have broken through and are starting to scale (e.g. once you hit reached a certain employee size or have been there three years, whichever comes first, you usually have to leave).

The solution is to buy the large, empty lot next to the parking deck that serves Tech Square and turn it into a physical Atlanta Startup Village. Much like an Olympic Village, this would be custom designed to help foster the goal of building a larger, more vibrant startup community.

Here are some ideas for the physical Atlanta Startup Village:

• Large multi-story complex like the American Tobacco Campus in Durham, NC
• Loft-style space with tall ceilings and exposed bricks and beams
• Communal outdoor space with a park-like setting
• Several multi-purpose event facilities
• Roof top balcony for tenants and events
• Octane coffee shop
• Mellow Mushroom restaurant
• General Assembly-like education and co-working space
• A mix of seed stage, early stage, and growth stage companies
• Affordable gigabit fiber internet access and WiFi

The physical Atlanta Startup Village is a complement to Tech Square and sets the stage for an even stronger and more vibrant tech startup community.

What else? What would you add or change about the physical Atlanta Startup Village idea?

Today the 2012 Inc. 500 was announced. Impressively, 16 Georgia companies made the 2012 Inc. 500 list representing a variety of industries. There are several technology companies on there as well as many other types of businesses.

• #3 – Edge Solutions 21,036%
• #6 – Capital Payments 11,676%
• #29 – Valuation Management Group 6,267%
• #170 – Flip Flop Shops 2,008%
• #172 – Pardot 2,001%
• #201 – PalmerHouse Properties 1,807%
• #239 – Careers In Transition 1,500%
• #243 – Capitol Media Solutions 1,493%
• #245 – VDart 1,467%
• #255 – EndoChoice 1,396%
• #288 – Sovereign Systems 1,274%
• #312 – NRG Vision 1,198%
• #330 – REPAY 1,147%
• #428 – OmniPoint 873%
• #467 – AirWatch 821%
• #474 – The Pedowitz Group 811%

I always enjoy reading about the fastest growing companies and learning as much as I can about them.

What else? What are your thoughts on the Inc. 500 companies in Metro Atlanta?