ATDC is the host sponsor of BarCamp Atlanta 2, which essentially means I am spending the better part of the weekend with about 95 geeks and 5 geekettes.
Those that follow me on Twitter know that I used the service to crowdsource my presentation. I got the concept from a presentation that Chris Winfield created for SES Toronto back in June. I had a few requests to distribute the presentation and you will find it below. While the presentation was fine in the room you may need to view in full screen on SlideShare.
Thanks again for all those that participated in the making of a fun presentation.
Last week I delved a bit into the concept of business clusters and made a promise to address the subject of how a stronger consumer technology cluster may emerge in Atlanta. In the post last week I spent a lot of time focusing on one of Michael Porter's key findings in cluster development, that anchor companies play a disproportionate role in seeding cluster development. This week I want to pull another key finding that is not only important to cluster development but also to entrepreneurial opportunities into the discussion.
New firm and cluster opportunities arise at the intersection of existing clusters.
This is really an important concept and leads of course to the question of what types of clusters currently exist in Atlanta. As pointed out in the Porter report financial services,transportation/logistics are strong broad clusters and the technology cluster draws its roots on telecommunications and media. Beyond that I personally believe that we have strong technology clusters in logistics, Internet security, and payment processing. Maybe Internet services as well if you include the likes of Cbeyond, Cox, EarthLink, and Knology in that mix.
But roots in telecom and media. That is interesting. Real interesting. Particularly when one starts thinking about "new" media. I kinda hate the term. Nobody really knows what it means. Even Wikipedia, a new media form in and of itself fails. Webopedia has the best definition I could find:
New Media is a generic term for the many different forms of electronic communication that are made possible through the use of computer technology. The term is in relation to old media forms, such as print newspapers and magazines, that are static representations of text and graphics.
New media includes: Web sites, streaming audio and video, chat rooms, e-mail, online communities, Web advertising, virtual reality environments, integration of digital data with the telephone, such as Internet telephony, digital cameras, and mobile computing.
In other words it includes a lot, including the fine content you can find on FoG. But it is much more than that and it just so happens that Atlanta has a pretty strong foundation in new media.
Atlanta has a strong foundation in new media? Here I go, being all crazy once again. But I typically like to back up my crazy statements with specific facts, so here goes.
According to Comscore Media Metrix (part of a long forgotten Atlanta win), three of the top 50 Web properties in the U.S. are based in Atlanta and have a combined reach of just over 50% of the Internet audience (in a given month half of the Internet user in the U.S. visit these properties). The properties are Turner at #12, Weather at #16, and Cox at #44.
Yeah folks, Turner's Web properties are the 12th largest in the country in and of themselves reaching 23% of all Internet users. This includes not only Cartoon Network but NASCAR.com, PGA.com, and PGATour.com among their smaller properties like TNT and TBS. Turner is a new media powerhouse. Larger then Facebook. By about 15%. Can you say anchor? And remember:
Anchor companies play a disproportionate role in seeding cluster development...producing numerous spin-out companies, which strengthen key elements of the cluster.
But that's not all. I wish I had full access to Comscore's numbers so that I could get a bit more granular, but I don't. Regardless, both Careerbuilder and Time Warner with CNN have significant presence in Atlanta. Significant like buildings full of people working on core new media services. In you include Careerbuilder and TW in the Internet reach numbers that I outlined above the total reach jumps to 78%. You can discard this if you want and my argument still holds. There is a strong new media cluster in Atlanta. Why no one talks about this is beyond me, but its there. I know it's there. And I am not alone. That gives me hope.
The 250 or so people packed into Turner last fall that sat and listened to 60 companies pitch their wares at the New Media Business Exchange gives me hope.
Noro Moseley Partners hiring Greg Foster to head up a new media practice gives me hope.
A very prominent new media entrepreneur/executive working behind the scenes to put together, for lack of a better term, a MediaLab (think a VentureLab that extends beyond the boundaries of Georgia Tech) focused on new media startups gives me hope.
Having 60 people come together over a weekend to create Skribit gives me hope.
The Boostphase effort, a seed stage investment company for capital efficient startups gives me hope.
Seeing two very interesting companies emerge from Turner in the past two months give me hope.
GVU's Journalism 3G gives me hope.
Sitting down with Georgia Tech students and watching their excitement as they explain their startup concept gives me hope.
AngelLounge gives me hope.
More Atlanta startups in the new media space then I can mention gives me hope.
I could go on. And I hear it in the comments already. Hope is not a strategy. And it's not.
But to paraphrase a certain senator from Illinois, that's not the type of hope I am talking about. It's much larger than that. It's the same hope that makes you want to go out and start a company. Or grow a company. It's the hope of a much larger opportunity. The hope of being part of something larger. A larger opportunity that we need to seize.
For me, it's more than hope. It's a belief. A belief that in the next ten years Atlanta can establish itself as strong in the new media space as we have in the Internet security space.
But hope and belief is not a strategy. Where does that leave us?
Let's go back to Porter's key finding, new firm and cluster opportunities arise at the intersection of existing clusters. Is he right? Yep. The most recent example. Firethorn. Financial services meets telecommunications. Acquired by Qualcomm for $210. Cha-ching!
Look at opportunities at the intersection of existing clusters. They are big. That really gives me hope.
But what would really, really give me hope is if everybody stops comparing here versus there. There wins. End of discussion. So let's talk about something interesting. What do you do to seize the opportunity?
What gives you hope?
Last week I posted an article highlighting consumer technology startups in Atlanta with a promise to explain why not many of them make it big. Here is that explanation.
It stems from the work of Michael Porter. Porter is the preeminent scholar of our time on the subject of business strategy and competitiveness. If you have any formal business training you know of his work. In 1990 Porter wrote The Competitive Advantage of Nations where he introduced the theoretical framework (not only software development uses frameworks) of business clusters.
A cluster is simply the geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Clusters come in all ages, shapes, and sizes. Film production in Hollywood, technology in Silicon Valley, and thoroughbred horses in Kentucky, all are examples of clusters. Heck even the NYC diamond district which mostly comprises one block on one street is a cluster. Clusters are everywhere and one can easily surmise given the title of the book that clusters create competitive advantage. And they do.
Well if they do I want some where I live and this of course leads to the question of how clusters are formed. In a report entitled "Clusters of Innovation Initiative: Regional Foundations of U.S. Competitiveness" funded by the Council on Competitiveness and authored by Porter the following was explained as ways to enhance the development of clusters:
• Clusters can be strengthened by increasing awareness of the cluster among local firms and organizations: Not only must firms be aware of the presence of a local cluster, they must also get together and coordinate activities to improve the cluster’s business environment. Acceptance of new companies is important if the cluster is to grow quickly and reach a critical mass.
• New firm and cluster opportunities arise at the intersection of existing clusters: Economic development strategies can leverage these opportunities to diversify a regional economy.
• Anchor companies play a disproportionate role in seeding cluster development: Anchor companies support cluster development by acting as magnets for other major companies; organizing other companies in the cluster for collective action; supporting projects that improve the local quality of life; and producing numerous spin-out companies, which strengthen key elements of the cluster (emphasis mine).
• Institutions for collaboration can significantly increase the success rate of start-up companies: Cluster development depends in large part on generating new companies from within a region. Successful regions almost always have a hospitable environment for start-ups.
Another important finding of this study was the outcome of The Cluster Mapping Project. The Cluster Mapping Project identified 41 types of clusters in the U.S. economy. While any given region will have some employment in the vast majority of these clusters, regional economies are typically very strong in only a handful. So what clusters are present in the broad Atlanta regional economy?
It just so happens that Porter also wrote yet another report entitled "Clusters of Innovation Initiative: Atlanta-Columbus" which answers that question. Running 168 pages it actually answers that question, though aging a bit, in great detail. The report identifies financial services, transportation/logistics, and information technology, as strong Atlanta regional clusters. Yes technology.
The Atlanta technology cluster was the ninth largest in the United States (population appropriate if you will) and the second fastest growing in the country. The report further identifies what it calls communications services (think telco and Internet), and software development as strong within the tech cluster. And believe it or not it even mentions Web development as a well established cluster.
The report lays out the development of Atlanta's technology cluster as such:
Atlanta’s information technology cluster draws its roots from Atlanta’s historical strengths in telecommunications and more recent strength in media companies. In the 1960s and 1970s, telecom companies like AT&T , GTE, and WorldCom expanded operations as the region grew and telecom expanded throughout the country. Turner Broadcasting, CNN, and Cox Communications were established in the 1980s to offer both cable service and new television content. These companies found Atlanta to be fertile ground because of its skilled technical workforce that remained in the area after World War II and the strong flow of new talent provided by Georgia Tech’s industrial and electrical engineering programs.
In the late 1970s and early 1980s two software companies, Management Science America and Peachtree Software, enjoyed strong growth, and when sold to larger companies, made their leadership teams wealthy. The success of these firms and their founders did not result in an immediate boom in software or info tech firms, as was the case in other smaller regions. Instead, the impact of these firms’ success was somewhat “lost” in the economy of a major metro area where big companies, major banks, and real estate developers were the primary job providers and held public “mindshare.”
It was not until 1997-98, with the success of MindSpring, one of the first large national Internet service providers, that a widely recognized anchor firm developed. MindSpring’s success and a growing national market encouraged other Internet-based entrepreneurs to expand businesses based in Atlanta including iXL, a web developer, and Internet Security Services, an Internet security firm. The business community, universities, media, and existing venture capital firms lined up to support the development of Internet firms in the wake of these successes and the growing recognition that the “new” economy was real.
And goes on to conclude:
Atlanta’s information technology cluster has thrived over the last five years. Building from regional strength in software, communications, and financial services, entrepreneurs have established Atlanta as a broad-based IT region. Through state-led investments in research, education and infrastructure, an innovative technology business incubator, and the efforts {of} multiple private sector entrepreneurs, Atlanta has developed a broad-based cluster. Seeing significant growth only over the past three years, Atlanta got a “late” start in the e-commerce and Internet area of this cluster, but is now home to a number of nationally recognized firms like WebMD, ISS, and MindSpring. The entrepreneurs who started these firms have been critical in the development of the cluster, both through the success of their firms and through the personal and corporate investments they have made in other regional firms.
Now there are some obvious factual errors in the report but really only one that bears correcting for my purpose. Unlike the folks at MSA and ISS, the entrepreneurs that started iXL, MindSpring, and WebMD have not made broad investments that produced numerous spin-outs within the Internet cluster (for a variety of reasons that are either obvious or best discussed over a beer). iXL, MindSpring, and WebMD did not act as anchors. And that is the root cause for the lack of a strong consumer Internet cluster producing large and successful companies in Atlanta.
But there is a new hope, which I will discuss next week.
Big day for Purewire. Today they announced $2 million in funding, Tom Noonan joined their Board of Directors, and the general availability of the Purewire Web Security Service.
The Purewire team quietly formed about nine months ago and began working on their concept. They announced the formation of the company in May. And now today.
The company was founded by my former partners in crime from CipherTrust, which was acquired by Secure Computing in 2006 for around $300 million. The founding team included Mike Van Bruinisse, President & COO; Dr. Paul Judge, CTO; and Mark Caldwell, Vice President of Sales. Since then they have recruited Steve Raber to join as CEO, Brad McArthur as Vice President of Operations, and Mary Catherine Peterman as Vice President of Marketing.
The $2 million raise was a "friends & family" round led by Imlay Investments. Those guys have some really great friends (one of them is me) to pull together that much coin. They can do so at this stage because the story is compelling, they have done it before together, the team has the passion that it takes to succeed, and MVB and company are thinking big.
Essentailly Purewire is offering a cloud computing security service. The product platform is strong. The four core technologies are Sandbox which protects browsers from script-based attacks; Reputation, a real-time URL classification engine; Trust that correlates user reputation, Web reputation and other heuristics; and Webcelerator an acceleration technology that maintains speed and responsiveness while all the other activity is going on in the background.
If you are looking to join an early stage company that intends to make a big splash Purewire is hiring developers and engineers.
Tell them I sent you. I don't think they will hold that against you.
I love Piedmont Park. It truly is the gem of Atlanta. Pre kids spent lots of time there. Not so much in the last eight years. But that is changing.
Not too long ago I met with Jim Moore and Norman McKay of the Piedmont Park Conservancy. The Conservancy is the nonprofit organization, working with the City of Atlanta to maintain and enhance Piedmont Park as a vital urban green space in the city. They asked me to join the park's Technology Committee. I accepted.
You may be wondering why a park needs technology. Well let me tell you what's going on.
Piedmont Park is undergoing a huge expansion. The park currently contains about 187 acres. They are opening up 53 new acres in the northwest portion of the park, a 40% increase in parkland. The first phase one of the northern expansion will lay the infrastructure and foundation for future amenities. I am particularly excited about this as it will create a new entrance to the park about 300 yards from my home versus the three quarter mile trek that I now have.
Future amenities planned currently include such
things as an interactive water fountain similar to Centennial Park,
lots of wooded trials, athletic fields, basketball courts, bocce
courts, a children's carousal (think Central Park, NYC), and a
skatepark that Jack is going to love. In addition to the expansion area features planned for phase two and beyond, the Conservancy has broken ground on a LEED-certified renovation to the historic bathhouse and pools. It is currently scheduled to reopen in the summer of 2009. I have seen the plans for all this. It is
going to be way cool.
So all these new places and things in the park need to be connected. What's the best way to connect them? The Internet of course. Or more specifically through fiber and wireless technologies that utilize Internet protocol to communicate. So I am helping the Piedmont Park Convservancy evaluate and select the appropriate technologies needed as the park expands. This not only includes the basic infrastructure but appropriate services that ride on the network once it is in place. This is going to be lots of fun.
And I am going to spending a lot more time enjoying Piedmont Park.
ATM Direct, led by Nandan Sheth, the co-founder and COO of Harbor Payments, is the winner of the 2008 GRA/TAG Business Launch Competition. ATM Direct seeks to become the leading alternative payments provider
with a platform technology that enables PIN debit payments on the
Internet.
$100,000 in cash. $200,000 in services. Cha-Ching!
ATM was selected by a group of judges that included Adam Coyle of Advent Group, Tom Crotty of Battery Ventures, Cynthia Glassman of the U.S. Department of Commerce , Mark Johnson, formerly of CheckFree, Chris Klaus of Kaneva, Ann Lamont of Oaks Investment Partners, and Fred Sturgis of H.I.G. Why did this stellar team chose ATM? The company has great management with a unique solution that is addressing a large and growing market. They present well. What more do you want?
This was a great year for the competition. Seventy five companies, the most ever, initially applied. Thirty one mentors helped the companies refine their businesses and presentations. Forty five companies completed the second stage of the competition. And ATDC played a larger role then ever. Leading a kickoff luncheon, evaluating the initial applicants as well as the full business plans and recommending the semifinalists.
Most importantly I am proud of the fact that I, (along with my partners in crime Scott Burkett, Nelson Chu, Alan Graber, Melanie Leeth, Sig Mosley, and the whole ATDC gang) helped to move these companies along and make them stronger startups. How did we do this? With pitch coaching for the semifinalists and finalists. With one on one coaching with companies that requested it. By providing feedback to companies when they missed a cut.
How do I know we helped them? Because they told me and GRA the value they were getting. It took a lot of time and effort to support this effort from the time it launched in January. It was time well spent.
Congratulations to Sid Elliot of GRA and Tino Mantella of TAG for putting together the best competition yet. It is a great program. One that deserves continued support from GRA and from the community at large.
And congratulations to ATM Direct and all the companies that utilized the competition to make their startups stronger.
I got a request to write up a article on SoCon via the Skribit app in my sidebar. It was quickly voted up so you folks must want to know what went on.
Truth be told, I did not spend a lot of time at SoCon. I went to the networking dinner on Friday night and made it a point to network. Met some folks I did not meet before. Saw a lot of old friends. Then left at about 9:30 to go to my first ever tweetup that Tessa put together at Octane. I used to hang out at Octane as an office when I was working on a startup awhile back. Never had been there at night. Somewhat bizarre bar scene with everyone in the place playing with their mobile device be it a laptop, MID, or smartphone. I found the real life conversation somewhat like twitter itself. Interesting, with spurts of chatter and spurts of silence. Hung for about two hours drinking a beer that had been aged in bourbon casks. Tasty!
I only was able to make it to the opening general session on Saturday morning this year. Unlike last year, I actually said something. Something about how one of the big changes that I have seen in the last year is traditional media's rush to embrace the social aspects of the web and predicting what the next big thing is extremely hard to do, and that is part of the wonder of the Internet. The joy of discovery and the unknown.
Afterward I found out there was a live blogging back channel going with all the kewl kids that I wish I could have been a part of. I do think that as Simon would say, things got a little pitchy at times. Amani Channel has a nice video that captures the essence of the event. Checking out these links will tell more of the story than I am capturing.
The SoCon gang once again pulled off a great unconference and I will be there in 09. Once again I ripped the picture on this post from Josh.
"Web services don't get better under the ownership of big companies. They get worse."
Fred Wilson
Lots of folks have asked what Tony leaving ATDC means for me. Not much really. I suppose I get to do more interesting activities. One of those is taking Tony's place on the GRA/TAG Business Launch Competition Task Force.
In this role Tino Mantellla has asked me to recruit a number of mentors to help the applicants. Mentors are successful high tech entrepreneurs who are interested in giving back to the community by helping other entrepreneurs
be successful. Mentors essentially help entrants refine their
business plans and presentations before the final application is submitted. The specific role of the mentor is
determined between the mentor and entrant.
So if you are a successful entrepreneur that knows what a business plan and presentation needs to convey, understands the Internet space, and has a little time to devote between mid February and mid April to help other entrepreneurs, I would love to hear from you.
You can reach me at lance at weatherby.net.
“Social networking inventory is not monetizing as well as expected.”
George Reyes
"While Google management insisted on the call that the company beat its
internal growth estimates, that's like your kid getting a C grade
versus your B+ expectation, and then attempting to explain it away by
saying that he/she had thought they were going to do worse."
Paul Kedrosky
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