Category: Community

Earlier this week I was having dinner with a successful technology founder/CEO in town. After talking about what local activities he’s involved in it became clear that he’s much more involved with the community than I am. That’s when I asked, “Do you spend more time working with non-profits in the community than in your company?” Without missing a beat he said “yes” and outlined how he allocated his time.

As a startup CEO, the more success you have the more requests there will be for your time, especially from the community. Here are a couple questions to think through:

• How do I want to balance my time between industry activities, community activities, and company activities?
• Do I want to be the face of the company like Steve Jobs of Apple or more behind-the-scenes like Jim Goodnight of SAS?

My recommendation is to consider how your spend your time and balance community requests.

What else? What other questions should CEOs consider regarding time allocation?

Earlier this week my friend sent me a quick email saying he had just finished Michael Lewis’ 2004 book Moneyball and that I should read it. Right away I replied saying that was one of my favorite books and that all startup founders should read it.

The short gist of the book is that professional baseball players were historically measured against traditional stats like batting average, on base percentage, etc. The Oakland A’s didn’t have the resources of teams like the New York Yankees but perennially did well in their division despite a significantly lower cost structure. They were able to do this by being scrappier with their players, farm system, and trades looking at long tail statistics and really focusing on past performance as the best predictor of the future.

Atlanta startups should be like the Oakland A’s in the book Moneyball.

Here’s how Atlanta startups can do just that:

• Focus on areas that other companies aren’t paying attention to, especially small, fast growing markets
• Be scrappier than the next startup by taking using of all the cost advantages Atlanta has over other major technology hubs
• Take advantage of the farm system of young professionals, of which Atlanta has had the most growth of any city in the country

My recommendation is for Atlanta startups to be like the Oakland A’s in the book Moneyball and focus on long tail areas of strength to succeed.

What else? What other ways should Atlanta startups be like Moneyball’s Oakland A’s?

One of the more underrated questions that entrepreneurs need to ask angel investors is “why do you do angel investing?” It seems like such a simple question but you’d be surprised at how rarely it comes up. Many people assume the answer is to make money. Based on my limited angel investing experience (nine companies), there are many better ways to make money if that’s the primary goal. Let’s look at some other angles common with angel investors:

• Desire to help the local community
• Want to “stay in the game” while retired
• Joy of mentoring younger entrepreneurs
• Ability to brag about it with their friends
• Use domain expertise in new ways

My recommendation is to clarify this with angel investors early on so that expectations are properly aligned.

What else? What are some other angles for angel investors?

Shotput Ventures is excited to announce that our most recent portfolio company PlacePunch has launched. TechCrunch covered PlacePunch today saying:

PlacePunch, which received seed funding from Shotput Ventures, allows businesses both big and small to run their own location-based marketing campaigns that integrate with Foursquare, Facebook Places, Twitter, Gowalla and other location-based social networks.

The general idea is that companies can offer loyalty programs on top of existing check-in programs. As an example, a coffee shop can use PlacePunch so that for every five times a customer checks in at the store, the customer gets $2 off their next purchase. The name PlacePunch, as you might imagine, comes from physical places combined with the traditional punch cards restaurants use for loyalty programs.

If you know any restaurant or store owners, please send them over to the PlacePunch site.

If you’ve read some of my previous posts you’ll know that I’m a big proponent of Atlanta, especially the low housing costs. At lunch today with two successful entrepreneurs I threw out an idea that I could tell neither one agreed with: one of Atlanta’s startup community challenges is that you can have a great lifestyle for common technology positions (e.g. programmer, sales rep, etc). Paul Graham wrote about similar idea a while back. The theory goes like this:

• Smart programmer or sales rep gets a job out of college in technology making $60,000 per year.
• He/she is good at what they do and progress quickly making $70k – $90k/year by their mid-to-late twenties.
• Now, with minimal expenses (e.g. no spouse and kids), they live like a king in a great, low cost city by buying a new, fancy high-rise condo for $200k, a nice sports car for $30k, and doing whatever else they please.

Why leave the nice lifestyle for more risk a low/no pay in a startup when you’re already doing something you love?

In Silicon Valley, rent is 2x – 2.5x more expensive for a comparable place in Atlanta, but part of that is made up in the higher salaries. The major difference actually comes when you get married and want to buy a house. Right, that nice little three bedroom, three bath ranch house in Palo Alto in the good school district. Wait, that simple house costs $2 million. In Atlanta, in a good school district, you’re looking at $500k ITP and in the $350k range OTP. That’s quite the difference isn’t it? Combine the outrageous housing costs (to buy, not rent) with the technology eco-system (e.g. everyone else is doing it and tons of success stories) and you have strong reasons why they are so successful.

Thinking through this, I don’t want Atlanta to be Silicon Valley. I do want a vibrant startup community in Atlanta and I want people to start thinking through how to get entrepreneurial people involved in startups when they already have such a great lifestyle, partly because Atlanta has such a low cost of living.

Recently I spent some time with a local seed stage Atlanta startup that has the makings of a successful business. The anatomy and DNA of this company are a great example of the type of team that can build a thiriving business. Let’s take a look at some of their characteristics:

• Two passionate co-founders in their late 20s who met as grad students at Georgia Tech
• Raised a low six figure angel round from local investors after building a working prototype
• Built a B2B product using Python deployed on Google App Engine
• Have a small number of paying customers and are slowing growing their client list
• Seek advice from a good group of mentors and advisers that are actively helping the entrepreneurs
• Members of ATDC
• Participate in the local technology community by attending events

Now, I believe this company will be successful but by no means are the above characteristics requirements. Atlanta is a great city to build a startup and this company is well on its way.

What else? What are some of characteristics of seed stage companies that you believe will be successful?

The 2010 Inc. 500 awards just came out and there were eight Atlanta-area businesses on the list. Now, I’m personally disappointed there weren’t more but I know of several local companies that are doing great and will likely make it next year. Let’s take a look at the businesses:

• #25 – Vendormate – supplier management software
• #127 – Signature Foods – specialty and private-label foods
• #222 – The Elf of the Shelf – elf-themed toys and books
• #254 – Vocalocity – VoIP phone services for small business
• #356 – Service Foods – delivery of prepared healthy foods
• #411 – ShelfGenie – custom cabinet franchisor
• #474 – Commdex Consulting – telecom consulting
• #477 – The Intersect Group – IT staffing

Congratulations to all the companies that made the list!

A very obvious piece of advice: the time to start building relationships is now. Yes, relationships. Relationships for a variety of reasons take time to develop and it’s best to seek out people to get to know them well in advance of needing their help. Here are some types of people you should consider:

• Other entrepreneurs (see Entrepreneurs’ Organization)
• Startup catalysts (see ATDC)
• Investors (see AngelLounge and ATA)
• Community leaders (see Metro Atlanta Chamber)

Relationships are likely to take longer than you expect to develop. My recommendation is to start building your network now.

What else? Do you agree/disagree? What are some other types of people you should consider?