Blue Violin

How do I join the startup community in Atlanta?

Last week I had a discussion with Wayt King over Twitter about startups and networking that culminated in this question from Wayt:

“ prob is there are so many events and meetups - how is the startup newbie gonna know which are a WOMFT? “

First, Wayt’s question is an indication of how much Atlanta’s startup community has grown. 4 years ago there was an email list announcing where the next entrepreneur happy hour was and Atlanta Web Entrepreneurs. It was easy to decide which event to attend – you went to both.

I felt this question deserved more than a 140-character response because, to me at least, the root question is:

“How do I join the startup community in Atlanta?”

There are a couple of ground rules you need to be aware of:

• Be sincere
• Don’t be an asshole
• Be willing to help others
• You get out what you put in

Part of sincerity is continuing to make progress with your startup; don’t be the “big hat, no cattle” person.

Twitter has the pulse of startups in Atlanta and it’s the easiest way to find out about events, what people are doing, and the ferociousness of Georgia Tech students/alumni when it comes to football. Who I follow is a good place to start but it’s by no means complete.

To specifically answer Wayt’s question, here are some events I think are pretty good:

• StartupLounge Atlanta – a great place to meet fellow entrepreneurs and investors
• Michael Blake’s Office Hours – would be remiss if I didn’t plug my partner-in-crime
• Open Coffee – open discussion amongst entrepreneurs; details are broadcast on Twitter by Sanjay Parekh (@sanjay)
• Waffle Wednesday – kudos to Gordon Rogers and the Atlanta Technology Angels for providing help to entrepreneurs
• Atlanta StartupDrinks – exactly what it sounds like
• Atlanta Startup Weekend – slap together a startup in a weekend with a bunch of other crazy people
• TAG/ATDC Entrepreneurs Society – a bit too early for me (starts at 7:30am) and really depends on the speaker but they have a great entrepreneurs-only roundtable following the event
• StartupRiot – held once a year, you get 3 minutes to pitch your startup in front of ~400 entrepreneurs and investors; great networking event
• StartupChicks – organization for female entrepreneurs; meetings held at least once a month

You can find others on Twitter and searching the web. I try to get to 1 – 2 events a month to catch up on what’s going on but there are times when I’m not able to make any of them due to crunch time, family, etc. I’d suggest you try them as your schedule permits, see what works for you, and try other events you think are interesting - just remember there’s a startup (i.e. yours) that needs lovin’ so don’t go overboard.

There are a lot of good blogs you can read. In no particular order:

• Lance Weatherby
• Sanjay Parekh
• Atlanta Technology Angels
• Greg Foster
• TechDrawl – Atlanta’s TechCrunch
• PeachSeedz – ATDC blog
• Stephen Fleming
• Scott Burkett
• Michael Blake
• David Cummings

The discussions on Lance Weatherby’s blog and  TechDrawl are particularly active.

I hope this helps. What advice do you have for those joining the startup community?

SPI Dynamics to be acquired by HP

HP announced that it has signed a definitive agreement to acquire SPI Dynamics. SPI Dynamics is one the leaders in web application security and one of the better known technology companies in Georgia and was #220 on 2006 Inc. 500.  SPI Dynamics sprang from the founders work at ISS who "foresaw the rise in Web Application hacking but couldn't persuade their previous employer to get into the business of helping companies protect themselves."  Congratulations to everybody in the SPI Dynamics family for a job well done.

Cluster----

Will Price , a partner at Hummer Winblad Venture Partners, asked the question "Does Geography Matter?" in reference to Silicon Valley's gravitational pull for technology start-ups. He references Michael Porter's article  "Clusters and the new economics of competition" (Harvard Business Review Nov/Dec 1998) and says

"The most important insight for me is that the modern economy competes on innovation and that operating within a cluster shortens the cycle time to identifying, resourcing, and realizing areas of need and opportunity.

The genesis for this post was a conversation I had with two founders, currently based in Atlanta, about the merits of moving to the Bay Area to start their company. Michael Porter's thoughtful analysis helps me better understand why the Bay Area 'cost premium' is well worth it. Market cap is a function of innovation and growth, and innovation is a function of access to ideas, talent, and supporting resources that eliminate frictions and catalyze connections and progress."

What I found curious is that he mentions two founders from Atlanta that about the merits of moving to the Bay Area to start a company. Atlanta needs those 2 founders to stay here and build their business. I don't have any idea what the company does but I do know that in order for Atlanta's technology community to hit critical mass we need to retain homegrown talent. Those 2 founders staying here helps me, you, and the start-up that is 6 months away from being founded. Atlanta has the ideas and talent. Supporting resources? Maybe not so much.

As Alan Taetle, General Partner at Noro-Moseley,   wrote in a post titled "What is world-class in the Southeast?" on Jeff Haynie's blog:

"Many of you know that we at Noro-Moseley have spent the past year raising our sixth fund. We have had met with at least 70 groups in the U.S. and in Europe. What you’re looking at above was one of the questions most posed to us. After all, we are a regional early-stage and early-growth venture fund focused on the region - who better than us to know?...

...What I wrote above sounds like its a great world class story save for three things. First none of the companies remain public. ISS will not be Cisco. It’s now part of IBM. Ciphertrust is part of Secure Computing. All of the major public Internet security companies are based in the Valley. Second, why is RSA, far and away the largest trade show for Internet Security, in San Francisco? Why isn’t RSA located in Atlanta, the home of Internet Security? Third, what has our region done to market itself as a center of excellence for Internet security? Nothing that I’m aware of.

If we want to really move to the next stage of venture evolution with more capital invested, more start-ups and most importantly, more black swans, we are going to have to market our region more systematically on what we are world-class in. Excellent quality of life alone will not do it."

If Alan really wants to help move to the next level, I'd like to see him and Noro-Moseley get involved with true early-stage companies; the best part - it doesn't even have to cost him or his fund a dime. Show up to the regular YnR gatherings to help mentor entrepreneurs and offer to be on the board of advisors for very early stage companies. Open your network and help "catalyze connections". Start blogging regularly so you're part of the discussion. Market to the start-ups in Atlanta and the Southeast and tell them "Stay here, don't go to the Valley - you have the ideas and talent and we have your back." 

Is the Southeast world-class? You're damn right - we just need to help each other so that everybody else sees it as well.

StartupLounge puts on a party

Props to Scott and Mike at StartupLounge for putting on a fantastic event last night. Capital Connections was a huge success and showed how much activity is buzzing around Atlanta. I had a good time meeting new people, learning more about some fascinating technologies, and talking to some people I haven't seen in a while. Below are some observations:

• Entrepreneurs show up at these events to chase the money and that's important. I like talking to other entrepreneurs about what they're doing. Maybe I can learn something from them, maybe I might be able to help them, you never know. Enjoy the journey.
• Michael Blake has a very wry sense of humor, more so when he has a couple of Newcastles.
• One investor told me some of his criteria for choosing investments and technology wasn't one of them - wow. Important to remember.

Thanks guys.

Kaboom

A while back, spurred on by Jeff Haynie's post, I wrote about Atlanta's perceived problems that make it unfriendly for start-ups don't really exist and that we, the entrepreneurs, are responsible for making this a great place to start a company by starting really great companies.

 

What a difference a month makes - there's a lot of stuff bubbling underneath the surface here in Atlanta (and I take absolutely no credit.)

• I heard about a seed fund (sorry, can't give any more details) that's being raised similar to the Y Combinator model: give aspiring entrepreneurs $25-50K and, more importantly, the knowledge and connections to support starting and growing a company. This is fantastic news and I'm really excited about this. That first nut is the hardest money to raise and I think we'll see some interesting and successful companies that started out of this porgram.
• In case you haven't heard, Jeff and I are putting together HackAtlanta. I'm really looking forward to this; if you're into software or web programming and you live in North Georgia, there's no reason you shouldn't be there. Connect with your fellow gearheads and create some cool shit. Seriously, sign up today. We also need another person to help us organize the conference; right now, we tentatively have a place and a date. If you're interested, drop me an email at josh.watts@blue-violin.com.
• David Ratajczak has started a YnR Entrepreneur Social Hour. I attended the last one last Tuesday (3/13) and met some interesting people. This isn't just for tech start-ups. I met Roger Andresen who started toy company called A Broader View, Joel Nunez who started a service for recovering  lost cell phones and other items of value called ImHONEST, and John Paul Souza (if you ever cross paths with John, take the time to talk to him - he's a ball of energy and could sell a ketchup popsicle to a girl in a white dress) who started a business process outsourcing business called DedicatedRep.com.
• Scott Burkett and Michael Blake recently started a podcast targeted towards entrepreneurs over at Startup Lounge. They originally thought they'd only do one podcast a month and are now doing 2-3 podcasts a month. Do you have some experience or knowledge you'd like to share and be a guest on Startup Lounge? You'll have to wait because they have guests booked through the end of the year.
• The group over at Big Thinkr are helping by organizing the YnR Entrepreneur Social Hour (mentioned above) and tech dinners and posting a list of events around Atlanta. The people I've met from Big Thinkr are all very nice guys and approachable; even if you're not starting a business, they're good people to meet and get to know.

I'm here

Drinkin' my coffee, blogging, snapping pictures, connecting - brilliant!

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.

Gang of 5

It's been a busy last couple of months but a lot of progress has been made. A couple of days ago, I had my first "dry run" of Blue Violin, a milestone 15 months in the making. I may or may not make the demo public because this is really meant to be something to show potential investors.

In other news, I accomplished my goal of getting active in the Atlanta business scene. I joined the MIT Enterprise Forum of Atlanta and have attended a couple of events over the last few months. It's here that I met Gregg Granberg and Scott Burkett, both of whom are in the process of starting their own businesses as well. With the addition of myself and Anne Simons, we started Gang of 5, which is best described as a roundtable for entrepeneurs to help other entrepeneurs - informal, no memberships fees, and amazingly helpful. If you'd like to join or start your own chapter send me an email.