While the ATDC web site plainly states that we do not generally accept consulting-oriented business models and prefers companies that offer products that are not easy to replicate and defensible, we sure do get a good number of inquires from these types of companies.

Now don’t get me wrong, there are lots of good small businesses that are consulting companies, but they are not technology startups the way we look at them. To be a technology startup a company has to be in a product business. With the advent of SaaS and Internet services I use the world product very loosely. By product I do not mean a physical thing. it does need to be a concept that can be sold thing to many people as opposed to custom work. It needs scalability from both a technical and business perspective. To borrow an analogy from Paul Graham, to be a technology startup you need to be the band that sells a million copies of a song, not the band that makes money by playing at a bar.