Through Atlanta's Looking Glass

As an entrepreneur nibbling on the edges of Atlanta's high-tech business community, it seems that there's a collective feeling that Atlanta isn't a friendly place for start-ups. Any number of topics come up - lack of active angel investors, lack of venture capital funding in the area, poor infrastructure, absence of a start-up community and on and on and on. To be honest, I think the collective wisdom is wrong. I think we, the entrepreneurs, aren't being very honest with ourselves. The angel investors, infrastructure, & venture capital aren't leading indicators of entrepreneurial activity; they are lagging indicators. They are concentrated in other cities in America because a lot of entrepreneurial activity forced them to be there.

Jeff Haynie makes a couple of comments I've heard (and admits these are lame excuses):

There’s just no venture capital money in this area.

There is a little truth to this statement but overall this is a terrible excuse. Scott Burkett does raise a legitimate point that raising money is a numbers game and in that respect Atlanta falls a bit short. However, the last time I checked venture capitalists are in the business of making a lot of money for their investors. If Atlanta was overflowing with great start-ups, I think the venture capital community wouldn't have a problem ensuring there was enough capital to fund those great ideas. At the Atlanta MIT Enterprise Forum event last week that focused on investing, I asked the local panel why there isn't more high-tech and start-up activity in the Southeast and Atlanta in particular; they weren't sure but I got the feeling that lack of venture capital wasn't a reason. There's probably 10-20x more venture capital floating around in Silicon Valley but there's at least 20x more companies chasing after the same dollars. Don't fool yourself into thinking that if you only lived in Seattle|Boston|Pasadena you'd be funded.

With Atlanta being so spread out, it makes it hard to bring companies and people
together.

Quite frankly, this is a load of crap. Have you ever been to the San Francisco/Silicon Valley area? It is a very large metro area and I've yet to hear that it negatively impacts start-ups. This is one of the biggest failures of Atlanta's entrepreneurial community. We need a group solely focused on the entrepreneur and start-ups and conveniently, there exists such a group - the Gang of 5  . We started this group for the very reason that we needed a place to discuss our venture and help others with theirs. I've found it very helpful and would like to grow the group around Atlanta because as I state above, I think it's sorely needed.

Here are a couple I've said myself:

Investors around here just don't get it

I tell myself this when I don't see the light bulb go off when I'm talking about Blue Violin. As much as I'd like to put the blame on the investor across the table from me, this is proof that (and there's really no good way to say this) my pitch sucks - I don't get people giddy with excitement. I think investors around Atlanta would get it if I painted them a better picture.

Atlanta is too much of a corporate town

Atlanta is a corporate town, of course, but that isn't hindering start-ups. In fact, this should help entrepreneurs because you get seasoned management (which can be a mixed blessing - some seasoned corporate managers don't belong in start-ups), personal wealth for investments, and opportunities to sell into the Fortune 1000 companies.

Here are some areas where Atlanta really shines:

A wealth of knowledge

The Atlanta metro area has 3 major state universities (U. of Georgia, Georgia St., and Georgia Tech) along with Emory, Moorehouse, and Clark-Atlanta; there are a lot of bright, young people in the workforce around here. There is also a tremendous amount of IT workers in Atlanta that would love to work for a start-up instead of working on a boring widget production report. That workforce combined with Atlanta's relatively low cost of living, and resulting lower salaries than the West Coast, makes Atlanta a great place to get started.

Smaller business community

This may sound strange to say but Atlanta's tech community is fairly small. If you meet 2-3 well-connected people, you're 3 phone calls away from getting a meeting with anybody in Atlanta. (I realize this may be true of other places but I can only speak to Atlanta).

Recent successes

Internet Security Systems, CypherTrust, and JBoss were all recently acquired for very substantial amounts of money. Hopefully some of that money filters down to the start-up ecosystem.

Up and comers

In a previous job as a recruiter, I found that there's a lot of start-up activity in Atlanta you may not have heard about. Oversight Technologies, Clearwave, Hakano, and Kaneva  are a just a couple of examples of activity that's under the radar (here is a list of more companies.)   

Go forth and conquer.

Comments

[Mike Schinkel]

Hi Josh. Ignoring the debate of whether Atlanta is or is not entrepreneur friendly, I say (like you) go out and do something about it and make a difference! As you are probably already aware, that's one key reason I had for starting the Atlanta Web Entrepreneurs group, to create a forum for entrepreneurs in Atlanta to learn from and help one another.

For anyone interested, check out [www.atlanta-web.org] to come and share your knowledge and experience with others and vice versa. We welcome anyone that has something of value to offer the group from a peer-to-peer mentoring perspective.