Atlanta Consumer Startups
| Jul 31, 08 in Startups |  1 Comments |
Quite some time ago someone anonymously suggested via Skribit that I write about the reasons for the lack of consumer oriented startups in Atlanta. The suggester used the word "dearth" which seemed a little harsh to me.
The reality is that there is a pretty vibrant group of consumer startups in Atlanta. I saw founders of these companies at BarCamp and StartupWeekend. I got to know quite a few of them better via the GRA/TAG Business Launch Competition, Startup Riot, and CapVenture. Just amassing the list of these startups in one place to demonstrate the point was going to be a massive undertaking.
That task has all been made quite easy by ATLlogos put together by Paul Freet. ATLlogos is a nice place to visit that lists all the startups in Atlanta that have come to Paul's attention. There is an RSS feed to stay up to date on startup company news. They are tagged by industry. If you click on the consumer tag you will find 28 consumer oriented startups. That about 25% of the total. These companies range from more well established startups such as Kaneva, to up and comers such as JungleDisk, to just cool ideas such as Tag6, to Esgut which just sold for a nice quick exit. So there is a group of companies out there playing in the consumer space.
But to many this does not seem to be the case. Perhaps because not many of them make it big. Why is this?
I'll try to answer that question next week.
I agree that there is a growing number of early stage consumers-oriented sites.
But what seems to be missing is an appetite among angel and institution investors in the Atlanta community to invest in such sites. If you were to take a look at funded companies, the numbers may not look as good. For instance, look at the portfolio of companies that funded by the ATA. Not many consumer oriented technologies listed there.
I have been told by quite a few folks in Atlanta including Sig Mosley and Dave Gould that the Atlanta tech community is an enterprise-centered and that getting funding for consumer oriented businesses is very difficult. As these folks will point out, investors will invest in the types of businesses they know. If the investor has made money in the past in enterprise oriented-business, that’s were they are likely to place future bets.
25% ain’t a bad share of Atlanta startups, consumers spending accounts for about 70% the US economy. There have been some big Atlanta successes for consumer-oriented technology: Autotrader.com, WebMD, Howstuffworks come to mind. Recently, the Weather Channel sold to NBC for 3.5B. Analysts were suggesting that 70% of the value was from weather.com.