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Atlanta Can Compete

Oct 11, 07 in Startups   17 Comments

Dave Coustan sent me a note today suggesting that he was expecting to see an opposing view to Paul Graham's recent post on Why to Move to A Startup Hub.

This led me to a write up that he did on a speech at FOWA where he claimed that "Atlanta is hosed." 

I beg to disagree with Mr. Graham. For that matter so does Brian Oberkirch, (one of the organizers of FOWA) who unlike Paul or I has no vested interest, in his great write up with loads of links, "Where is Your Startup? Why Does It Matter?"

Here are seven reasons why Atlanta is a startup hub and not hosed.

1.  All the ingredients

A while back Paul noted how to be Silicon Valley.  Great post.   Atlanta has all the pieces to make this happen.  My post on the subject at the time.

2.  Formal support organizations

VentureLab commercializes intellectual property created at Georgia Tech and ATDC is a technology incubator that helps Georgia entrepreneurs launch and build successful companies.  Both are nationally recognized as best in class.

3.  World class universities

I am amazed that both Georgia Tech and Emory are a mere five miles apart.  Part of Stephen Fleming's pitch is that Tech is the number 4, which ain't so bad when those ahead of you are MIT, Cal Tech, and Stanford.  We have the smarts it takes.  And Tech's College of Computing is at the forefront of the changes needed to create students that can start their own companies.

4.  Local seed funding

The Atlanta Technology Angels and Seraph Group are strong angel organizations.  On top of those groups there are too many individuals to count.  While this is moaning from time to time from the entrepreneurial community, I have seen evidence of those that have been successful investing in new companies.

4.  Quality Venture Capitalists that are willing to travel and invest here

$1,000,000,000 in ATDC companies alone since 1999.  And every month a VC firm from either Boston or SV gets on a plane to come look at what ATDC and VentureLab companies are working on.  NEA just invested $5 million on a concept.

5.  Y-Combinator can be cloned

Look at TechStars.

6.  Quality of life

I have seriously considered moving to SV.  Not going to happen.  Cost of living is too high to do so in startup mode.  It is much more capital efficient to startup in an area that has all the important resources that you need to move your company forward with a low cost of living and good quality of like.  Atlanta fits that bill.

7.  World view

While there are many advantages to being in SV.  I can think of one big disadvantage.  People in the valley have a distorted world view.  The valley's reality is very, very different than the vast majority people in the USA or the world.  They tend to forgot that from time to time.  This is not a good thing when you are building software.  Twitter and Facebook are all the rage in the valley.  Most of my relatives, spread across the country, have heard of neither.

Atlanta may not be the Antwerp of the diamond cutting world, but the diamond district in NYC gets along pretty well.  And so will Atlanta in the world of startups.

Comments

I was in Indiana a few weeks ago meeting with a new angel group. They were jealous of Boston.
I was in Portland a few weeks before that. They were jealous of Silicon Valley. Griping and complaining are universal. Entrepreneurs, put yer nose to the grindstone and create something wonderful that makes Boston and Silicon Valley come to YOU!
(Heck, they're already here....)

Knox Massey  |  Oct 11, 07 at 08:44 PM

While Stanford is nothing to sneeze at, SV also has a state school that you may have heard of, namely Berkeley, aka Cal.

Andy Freeman  |  Oct 11, 07 at 09:02 PM

I complete agree with #7--solving real problems for real people is key.

(The idea that GATech is the #4 school for graduating startup-types doesn't seem at all right, however. As someone who recruits a lot of engineers, off the top of my head, Berkeley, CMU, Harvard, Cornell, Rice, Brown, Dartmouth, and UIUC are better for CS. All IMHO, of course. I'd just say "GATech is an excellent school.")

Dan  |  Oct 12, 07 at 02:13 AM

Andy:

According to Stephen, Tech is ranked as the 4th best engineering school in the country. I did not make up the "fact" I just reported it. Then again, Kelley, where I went to b-shcool was just ranked ahead of Harvard by the Princeton Review. Go figure.

My point is that there is a boatload of smart techical types floating around Atlanta, many who will listen to PG and accept that "Atlanta is hosed" as a fact. It is not.

Lance  |  Oct 12, 07 at 06:34 AM

Andy didn't comment on the relative quality of GA Tech and Berkeley, he just pointed out that SV has more than Stanford.

GA Tech is a fine school, but it's absurd to claim that it's significantly better than Berkeley and hiding behind "that's what a survey said" makes things worse.

BTW - Stanford and Cal both have reasonably good biz and law schools. Both have some effect on startups.

Andy Freeman  |  Oct 12, 07 at 10:45 AM

More than 1/3 of Atlanta's "since 1999" venture funding happened in one year, 2000. The typical year is less than $150M.

$150M/year is a lot of money but there are floors on Sand Hill Road buildings that do more than that. (Sand Hill road has a fair number of buildings and most SV VCs aren't on Sand Hill Road.)

Andy Freeman  |  Oct 12, 07 at 10:50 AM

Just so the crowd doesn't focus on a detail while ignoring the major points of Lance's (excellent) post...

The #4 ranking that I list is from US News and World Reports 2007 survey, and Georgia Tech is listed as the #4 engineering graduate school behind MIT, Stanford, and Cal-Berkeley (not CalTech). Look it up on usnews.com...

I do not have numbers (but would be interested!) in number of startups created by GT graduates. If you look at the subset of companies that are based on university intellectual property, GT is usually somewhere in the Top Ten.

Stephen Fleming  |  Oct 12, 07 at 10:51 AM

Andy:

I think you did comment on the relative quality. To quote "The idea that GATech is the #4 school for graduating startup-types doesn't seem at all right." Which BTW is not what I said. I said it was the 4th ranked engineering school in the country. I believe the source of this is US News & World Report. One of the leading counters of such things. I never compared GT to Cal. I actually never mentioned Cal until you did. I have nothing against that fine school, go Bears!

My point about the $1 billion is that it is possible to raise money in Atlanta. As long as I have been tracking the numbers SV has been getting a pretty constant 1/3 of all VC invested. Two thirds is being invested elsewhere. The Southeast, lead by GA and NC is typically the 5th or 6th largest region.

Lance  |  Oct 12, 07 at 11:02 AM

Andy:

I stand corrected. Cal is indeed number 3 in the US News survey. Go Bears again.

Lance  |  Oct 12, 07 at 11:07 AM

Thanks for your rebuttal, Lance.

#6 is particularly important to me. As Brian observed today( http://www.brianoberkirch.com/2007/10/12/location-location-location-doesnt-matter-as-much/ ), we're still tied to bodies. There are few other cities like Atlanta where someone on one reasonable income can live in the heart of the city, have a shot at owning a home with a yard, and be a part of a real neighborhood. Although I'd like even more of those options to open up here, it's one of the things that makes Atlanta interesting. Does that make it hosed or not hosed? No, but in considering the idea of moving onesself elsewhere for the sake of being in the "right" place for startup development to happen, it's a significant factor. This is a great place to be if you want to be engaged in running a small business of any kind.


Dave C.  |  Oct 12, 07 at 11:52 AM

We're bigger, better, smarter, faster, whatever... so don't even try. You'll never succeed. Resistance is futile. Give up now.

Since when did the geeks become bullies?

David Jones  |  Oct 12, 07 at 12:57 PM

> I think you did comment on the relative quality. To quote "The idea that GATech is the #4 school for graduating startup-types doesn't seem at all right."

No, I didn't. Dan did. The name of the commenter is under the comment, not on top.

I also didn't say anything about us news - my only comment about surveys was that using one to argue that Cal is significantly worse than GA Tech is absurd.

Yes, I know that the original message didn't mention Cal. However, it did mention two Atlanta universities and suggest similarity because one of them is comparable to SV's Stanford. Since SV has two such universities....

Andy Freeman  |  Oct 12, 07 at 01:11 PM

There's a suggestion that Atlanta is "just as good as SV". If we're measuring by SV standards, that's simply not true.

What is true is that Atlanta is/can be much better at things that SV doesn't do well.

The relevant question is then, what are you looking for?

Note that "beat the leader at his own game" is rarely the right strategy for a startup.

Andy Freeman  |  Oct 12, 07 at 01:21 PM

Andy:

I apologize for attributing Dan's comment to you.

I was not suggesting that Tech and Emory were better than Stanford and Cal. I was merely pointing out that we have good schools and smart people in Atlanta. Smart enough to generate concepts and companies.

I also did not say nor mean to suggest or imply that Atlanta is just as good at SV at creating startup opportunities for entrepreneurs. SV is far and away the leader when it comes to creating technology startups and will be fore the foreseeable future.

The whole point of this post is explicit. I disagree with PG. There are a good number of reasons why Atlanta is a startup hub. Atlanta is not hosed.

Namaste.

Lance  |  Oct 12, 07 at 04:12 PM

David:

Perhaps they became bullies when they started investing and thus had an interest in attracting entrepreneurs to their own programs.

Lance  |  Oct 12, 07 at 04:14 PM

Paul Graham is right, but there are things you can do locally and internally to help create a competitive advantage. My post: http://www.loopfuse.org/blog/?p=19

Roy Russo  |  Oct 13, 07 at 02:55 PM

I've been lucky enough to live in Atlanta (graduated from Tech) and Silicon Valley. I run a small tech business, so I can't speak for much on the VC world.

I can say that the difference between Atlanta and the Bay Area is extreme when it comes to startups, and not just those seeking venture funding. It has nothing to do with talent (there are more than enough smart people in Atlanta) or cost of living.

The pressure to succeed in SV is extreme. In SV, you're considered a bit weird if you are a smart, well-spoken techie employeed at a Fortune 500 company. You should be starting something on your own. Atlanta, IMO, is quite the opposite.

Peer pressure and competition can't be discounted.

Derek Haynes  |  Oct 15, 07 at 01:16 AM

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