With it being New Year’s Eve, it’s a great time to reflect on life and plan for the new year. Allen Nance sent out a great tweet earlier today that describes an awesome approach to life:
https://twitter.com/AllenNance/status/285748293743550466
The life to do list:
Happy New Year!
Recently I was talking to an entrepreneur that was recounting the challenges he had with his mobile-first consumer startup. Like many ideas, there was a chicken and egg problem whereby there wasn’t much reason to use his app if there weren’t already a good number of people using it, and he didn’t have many users.
With that introduction he then told me that he was trying to figure out how to bribe the chicken. Not having heard that phrase before I probed more: what’s an example? Quickly, he told me the example of Half.com, co-founded by Josh Kopelman. In the story, Half.com was like eBay only for fixed-priced goods (e.g. a used book for half price). Clearly, it’s a chicken and egg problem where users aren’t going to browse the site if there aren’t any books and no one is going to list books if there aren’t any users.
Enter bribe the chicken. The way they bribed the chicken was by going to used book stores and offering $2,000 in cash up-front as pre-payment for the store owner to list the books online. Any books that sold would be deducted from the pre-payment. Used book store owners are reliable types who will list their inventory and ship a book out when it sells. By bribing the chicken, Half.com was able to get thousands of used books listed quickly and solve part of their problem. Once the used books were online, users found the site through search engines and the business was a huge success.
What else? What are some other examples of bribing the chicken?
Core values are an important part of any business. For me personally, I like to approach them slightly differently than other companies by having two simple ideas. For the overarching idea, I like “be the best place to work and the best place to be a customer.” For the people values, which are the most important, I like “positive, self-starting, and supportive.”
Now, with the Atlanta Tech Village being a double bottom line enterprise having goals of helping enhance the Atlanta technology community while also being a for-profit enterprise, I want to have more descriptive core values that cover a wider range of items, while not being so numerous that they are easily forgotten.
Here’s a laundry list of ideas for core values for Atlanta Tech Village that I’d like feedback and input on from the community:
Core values become especially important with large coworking areas where people from different companies are regularly interacting, and a common standard has to be met. We need strong core values to create the best technology and entrepreneurial center possible.
What else? What core values do you like and what values would you add?
The term serial entrepreneur is fairly common in describing an entrepreneur that successively starts one business after the other. There’s another less common term, parallel entrepreneur, that describes an entrepreneur creating multiple businesses at the same time. If making one company successful is difficult, what are the odds of simultaneously making two or more successful?
For many parellel entrepreneurs, the goal is to have a few different things going at the same time such that when one of the projects starts to take off, all energy is focused on that startup and the other startups are phased out or ignored.
Here are a few challenges being a parellel entrepreneur:
One way to make parallel entrepreneurship work is to be less of a parallel entrepreneur and more of an investor/advisor in multiple ideas you come up with whereby someone else is focused 100% on the startup and you help out without any day-to-day responsibilities. Being a parallel entrepreneur is exceedingly difficult and shouldn’t be taken lightly.
What else? What are some other challenges of a parellel entrepreneur?
Earlier today an entrepreneur emailed me asking about the Atlanta Tech Village for his software company. With approximately 10 employees now, and growing to an expected 20 employees in the next two years, he wanted to know how it compared to traditional office space. I explained that the per person per month with internet access and furniture included model was very different from traditional office space due to the ability to scale up and down as needed, rather than paying for everything throughout the life of the lease.
Let’s see how the model compares in a common scenario where a startup raises an angel round, has two co-founders now, and expects to scale to 10 employees at the end of 24 months.
Traditional office space:
Per person per month office space at Atlanta Tech Village or similar facility:
In this model the private room plus shared office model is almost 30% more cost effective ($90,000/$126,200) when compared to the traditional office space format.
Much in the same way a Zipcar created an entirely new category of rental car, the per person per month office space is creating an entirely new category of commercial office space. One of the keys of the model is a company that expects significant growth or volatility whereby locking in a traditional office space that’s the largest they’ll need over a period of time results in significantly higher costs and much less flexibility. For a generic company with a fixed number of employees over an extended period of time, traditional office space is more cost effective and fully customizable. Per person per month office space is a much better model for rapidly changing technology companies.
What else? What are your thoughts on the idea of per person per month flexible office space?
Recently I was talking with a friend that had been a small business owner for eight years before shutting down his company to join a tech startup. It’s been over a year since he entered the tech startup world and he said he’s been knocked down making all the common mistakes like taking too much time building features no one needs, not generating enough traction for the product to be viable, and poor timing.
One of the things he said really stuck with me: being a small business owner for many years and joining a tech startup are very different. Here are three ways he said they differ:
The biggest aha moment for him was that tech startups aren’t about making money in the short term and that it’s usually more about building a large customer base before economies of scale and profitability kick in. Small businesses and tech startups are alike in that it all comes down to people and very different in how the economics work.
What else? What are some other ways small businesses and tech startups are very different?
So, I’m on a mission to help grow the Atlanta startup community into one of the top 10 in the country. Much like Austin and Boulder are mentioned as two up-and-comers, my goal is for Atlanta to be mentioned in the breath. Atlanta has all the natural resources to be a major player, including an awesome engineering school (GA Tech), tons of young professionals, a low cost of living, the world’s busiest airport, low taxes, and a mild climate (if you don’t mind humidity). Some of the knocks on the Atlanta startup community include a risk-averse culture, lack of high-risk capital, geographic dispersion of startups, no anchor billion dollar tech company, and few venture backable entrepreneurs.
On the risk capital and venture backable entrepreneurs front, the debate is around what’s needed first. If we have more high quality entrepreneurs, we’ll attract more capital vs if we have more capital here, more quality entrepreneurs will emerge that will be successful. My personal belief is that capital is portable such that it will find the best opportunities, regardless of geographic location. Even with the theory of the Series A crunch, there’s plenty of money out there to fund the best ventures.
Here are a few ideas to grow a startup community:
At the end of the day, the sure fire way to grow a startup community is through cultivating more successful startups. More successful startups will then breed more successful startups in a virtuous cycle.
What else? What are some other ways to grow a startup community?
At home over the holidays I came across a box of personal stuff that had a large, industrial paper cutter. This paper cutter was part of the many supplies I purchased in high school to manufacture CDs and CD-ROM cases to sell my shareware software in stores. Using the Internet it was easy to purchase everything needed: empty CD jewel cases, writable CDs, CD labels, paper cutter, high gloss paper, shrink wrap plastic, and shrink wrap gun (like a hair dryer).
For the graphic design of the CD label and the CD case, I laid out everything using PageMaker and Photoshop to get it just right. In retrospect, I’d give myself an A for effort and a C+ for the actual quality of the visual design. One aspect of the CD case design was putting together a bar code. I paid a couple hundred dollars to get a UPC number and set to work on a bar code. After looking at bar code generation software, which cost $50+, I decided to hand craft a bar code in Photoshop.
Bar codes work off a strict formula that involves the width of lines and spacing between lines. Everything has to be precise and perfectly laid out otherwise the scanners won’t be able to read them. Imagine zooming in on Photoshop to the maximum level and hand crafting lines to a precise millimeter-level width. Needless to say, it was a tedious and exacting process that was better left to technology.
In the end, when the CDs and CD cases were done and shrink wrapped, I took them to several stores in town that had agreed to sell the product on their shelves. After convincing one of the stores to take several on consignment, I casually asked the manager to scan the bar code to make sure the UPC number was returned successfully. Success! I had hoped I had laid everything out correctly but without a bar code scanner I had no way to test it (iPhones didn’t exist back then).
While it worked out in the end, I realized during the process that my time was better spent on productive tasks that couldn’t be automated with software. Generating bar codes is a perfect task for software and spending a few dollars on a product to take care of it made sense. Now, I repeat to myself the saying “you have to spend money to make money.”
The next time you’re working on something that isn’t the best use of your time, and there’s an affordable substitute, remember the bar codes.
Earlier today I was talking with a friend that’s finishing up his senior year of college this spring. He’s smart, outgoing, hard working, and talented. From a school perspective, he’s a finance major with a good GPA at a large public university. From a career perspective, his current thinking is to get a masters in finance or a masters in management (like a lite MBA) with a goal of getting a job out West.
After talking for 30 minutes I probed further with questions like “what’s the value of a one year masters if you still don’t know what you want to do?” In the end, my recommendation was to join a startup or an entrepreneurial company where he can have a ton of responsibility and get exposed to a variety of areas before spending a year getting a degree he might or might not use.
Here are some benefits of joining a startup or an entrepreneurial company:
The message is simple: if you don’t know what you want to do in your career, join a startup or entrepreneurial company.
What else? What are your thoughts on joining a startup for people that don’t know what they want to do for a career but are interested in business?
With the new Atlanta Tech Village a reality, it’s time to start brainstorming and planning what we need to do to make it a success. The true measure of success, over a 10 year horizon, is the number of startups, tech or otherwise, that grow into real, sustainable businesses creating jobs and wealth for our community. More successful tech companies will also enhance the tech-related service providers in the Village as well as the desirability of larger tech companies to have a remote office in the building (e.g. for engineering or sales). Now that we have the end in mind, let’s backup to the present and start working on how to build community at ATV.
Community isn’t something that can be forced and will come from a number of places including serendipitous interactions (imagine how many great conversations will take place at Chipotle across the street!). Here are a few ideas to help build community at ATV:
Community is one of the most important aspects of the Atlanta Tech Village and it’ll take time to build it.
What else? What are some other ideas for building community at Atlanta Tech Village?
David Cummings on Startups 