Category: Community

Earlier today I had the opportunity to spend a few hours at Flashpoint as part of mentors program. With demo day less than a month away on September 11th, many of the teams were asking questions about what should go in their pitch as well as any ideas or recommendations. Naturally, I asked each one what they wanted to happen 4-6 weeks after demo day so that they could work back from that (Covey: begin with the end in mind). Most referenced raising an angel round of a few hundred thousand dollars as the goal.

Assuming the most common purpose of a demo day / group pitch setting is to raise money, there should be one major goal: generate interest for an investor to want a follow-up meeting.

Many entrepreneurs get to a pitch session and inevitably throw up all the facts and information they know about their startup. A much better approach is to tell a story with anecdotes and social proof such that some investors resonate with the content and want to know more. Delivering a hook for the mind as well as an analog analogy is also great to incorporate.

The next time an entrepreneur is going to give their pitch to a group, remind them that the most important thing is to generate interest for an investor to want a follow-up meeting.

What else? What are your thoughts on the #1 goal in a demo day / group pitch setting?

Brad Feld has a new book called Startup Communities coming out that I haven’t read but I have pre-ordered. I love thinking about what goes into a startup community and how to improve it. With the success of Tech Square at Georgia Tech by way of a high density of startups at the ATDC, Flashpoint, and Hypepotamus, I think that there should be more dialogue about startup neighborhoods (Brad Feld talks about it in a post: I’m in Cambridge, not Boston), with the idea that a neighborhood is an even smaller subset of a community, where a community is generally a city or metro area.

So, assuming a neighborhood has a much smaller geographic footprint, here are some ideas on what the anatomy of an ideal startup neighborhood looks like:

• Great outdoor walkability to promote unplanned interaction with other community members
• Excellent event space options (e.g. simple things like a small room in a coffee shop to larger options like big rooms that can accommodate 100 people)
• High density of startups per capita
• Food, drink, and entertainment options right within the area
• Positive vibe that this a place people creative people want to be (likely a given if it has the above items)

Areas like Tech Square in the Midtown area of Atlanta meet these requirements whereas places like Buckhead in Atlanta are super nice, but don’t meet the walkability component (hopefully the new Buckhead Atlanta development in the old Buckhead Village does with all its outdoor space, restaurants, retail, and office space helps with walkability). Startup communities would do well to start narrowing in on startup neighborhoods and figuring out ways to make more focused areas successful.

What else? What are some other pieces that you’d add to the anatomy of an ideal startup neighborhood?

At tonight’s Flashpoint meeting I had the opportunity to talk with Heath Hyneman (@hhyneman) and hear his ideas around improving the startup community. One idea really stood out to me: get technical talent from local universities involved in the startup community as early as possible through paid internships. Strong technical talent, once in the workforce, will rarely have to update their resume as there is so much demand for their skills, and job opportunities are abundant.

Big companies, especially local Fortune 500 companies, have huge internships programs due to their size. As a college student, the company or experience that’s most familiar becomes the default choice for a full-time position post graduation. Without exposure to the startup community, a college student is much less likely to look into startups as a career path.

As a long term strategy to grow the startup community, interns are a great way to start. Startups need to make a concerted effort to start recruiting on local campuses and build their technical talent pipeline early.

What else? What are your thoughts on getting more interns involved with startups to grow the startup community?

The recent TechCrunch meetup in Atlanta with over 1,200 people was a great catalyst for talking about what’s working, and isn’t working, in the Atlanta startup community. Being an idea guy, I always love brainstorming ways to improve things and getting ideas from other people (R&D – ripoff and duplicate – is a great way to take ideas that are working in other startup communities and implement them in ours).

After talking to entrepreneurs in person, participating in discussions online, and reading about other startup communities, here are three ideas to improve the Atlanta startup community that stand out to me:

• Regular Content-Oriented Meetups that are Startup Generic – We have a number of meetups for specialized topics (like PHP or Ruby), speaker series where entrepreneurs tell their stories, and service providers providing education on their area of expertise, but we don’t have many meetups that are content-oriented and driven by specialists working in startups (e.g. sales, marketing, support, etc — product management and engineering have a critical mass of activities). B2BCamp is an example of a great organization that is starting to fill some of the content-oriented startup education needed.
• Startup-Oriented Event Space to Complement ATDC – ATDC has a couple great rooms for events but they are booked well in advance creating a need in the market for a few go-to event spaces that can accommodate 20 -100 people on a regular basis. This event space shouldn’t be formal event space, easily accessible inside the perimeter, and available at a good rate (free) for startup-related events.
• More Successful Entrepreneur Involvement – We have a number of successful entrepreneurs, as defined as profitable, million dollar plus revenue businesses, that achieved their success without involvement in the startup community, and therefore don’t feel a need to give back or get involved. In the journey to their level of success, they found advisors and peers that fulfill their community-connectedness need, leaving little desire to do startup community events. We need to get them involved.
• Entrepreneur-to-Entrepreneur Exclusive Networking – Entrepreneurs’ Organization (EO) is an outstanding organization for entrepreneurs with at least a million in revenue built around trust, confidentiality, and experience sharing. Most startup entrepreneurs don’t have a million in revenue, but would appreciate the same values and peer networking EO members have in an environment that is entrepreneur-lead and not service provider-lead. One of the goals with this is more serendipitous connections and a stronger startup entrepreneur peer group to achieve a greater level of success individually and as a community.

These four ideas aren’t capital intensive but do require that entrepreneurs lead the charge as volunteer leaders to help make them successful. Atlanta has all the ingredients to be a more prominent and more successful startup community. Let’s do it.

What else? What do you think of these ideas and what are some other startup community ideas that you like?

My Fast Company article titled How Southern Tech Workers Build Booming Businesses and Still Go Home at 5 elicited a number of strong responses, many arguing that it makes startups in the South uninvestable and that you need to work more early on in fast moving markets.

https://twitter.com/rkischuk/status/216558110565867521

True, the article said, “consider that many people in my company, and in companies of friends, leave the office around 5 p.m. or 5:30 p.m.” but that’s more of a focus on work/life balance as opposed to sheer number of hours worked. CNN reported in April that the Facebook COO leaves every day at 5:30pm regardless. Much like it goes on to say that Sandberg checks email and works after the kids go to bed, so do I. Startups and entrepreneurship are very involving, and that’s great, especially because of the passion that exists for it beyond being a job.

I know entrepreneurs that have built successful startups from the ground-up while still being able to attend their kids’ sporting events every night. Even with competitive, fast-moving markets there are enough hours in the day to accomplish a great deal and still spend time with your family. Imagine cutting out TV. How much time will that save? Imagine working 20% smarter instead of 20% longer. How much time will that free up?

Work/life balance and startup success at any stage aren’t mutually exclusive. There are enough hours in the day to be effective and present.

What else? What are your thoughts on ways that work/life balance are or are not mutually exclusive?

Today, two different entrepreneurs asked me for advice about raising an angel round, and both are located in the South, making for its own unique dynamic. Even with the negative press about the Facebook IPO, which was very successful for Facebook, the startup world is buzzing with enthusiasm and opportunity. From a trends perspective, social, mobile, and local show no signs of slowing down.

So, for entrepreneurs raising an angel round anywhere, but especially in the South, here are a few recommendations:

• Build a simple executive summary that is shared as a PDF and no more than two pages.
  Executive summary sections:
  – Team
  – Description
  – Product
  – Market
  – Customer Benefits
  – Competition
  – Company Stage
• Make some very basic financial projections
• Build a working prototype (minimum viable product) and sign a couple paying customers
• Consider the amount of money necessary to achieve a major milestone in the next 12 – 18 months (e.g. it might take $500k to hit $100k in annual recurring revenue in 12 months, so $500k plus some margin of error would be the amount to raise)
• Think through the pre-money valuation, which is typically $1 million plus or minus 50% for most startups, with exceptional startups getting $3M – $4M pre-money valuations
• Network through local technology groups, co-working spaces, lawyers, and accountants for intros to angel investors
• Apply online to local angel networks (e.g. Atlanta Technology Angels)
• Remember that the best time to raise money is when you don’t need it

Raising money is hard. Raising money in the South is even harder. One of the best things you can do is to start developing relationships with people in the startup and technology community well in advance of raising money. There’s no sure way to raise money but the path outlined above works well.

What else? What are some other recommendations for raising an angel round in the South?