A Great Place To Build And Scale A Startup

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Alan Dabbiere wrote a most excellent article on the WSJ blog The Accelerators. A lot of folks (David Cummings and Stephen Fleming to name two) have been writing about why Atlanta is a great place to build and scale a startup recently but Alan really hits the nail on the head. This is from a guy that started and built two billion dollar market capitalization companies in the ATL. The money quote:

Here you can start and build a great business, meet your first customer, access to a deep bench of talented individuals and the innovation produced by our great universities. At its core, Atlanta is also a great place to live.

Atlanta has the ingredients to start companies. Being a great place to live is just the cherry on the cake. That's why I'm still here.

October 24, 2013  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Quotes, Startups

Tech Dress Code In The South

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So last Thursday I made my way to Villa Christina for the Silicon Valley Bank client appreciation party. Kyle pretty much nailed it.


Somewhere along the line I ran into Alan Taetle. Pretty soon the conversation turned to dress.

“What is it with the Atlanta technology scene dress code. I just got back from Austin and everyone gave me grief about how I was dressed in khakis, a button down, and a sport coat. Everyone told me I was overdressed. What is it with Atlanta that makes everyone think they need to put on a suit? It’s ridiculous!”

Standing there in my open collar grey suit I had to agree. Even more so as I wore jeans and a nice t to work and took a suit to change into to attend the SVB event. I felt pretty ridiculous at that point. It’s because it’s the South I said. It’s because people call on other businesses and need to be dressed up. It’s because entrepreneurs get coached to dress up. It’s because investors wear suits.

Alan was not buying any of it and after a little debate either am I. No more hauling suits to the office for me.  It’s just a waste of energy to dress for the approval of others without any reason for doing so.

October 21, 2013  |  Comments  |  Tweet  |  Posted in Networking, Startups

Angel Investment Rounds Q2 2013

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It's kinda odd some of the discussions that I have recently had with early stage entrepreneurs about angel rounds. Folks wanting to raise $800k at a valuation more than $5 million. Seems a little rich to me and I said as much.

Well Silicon Valley Bank is out with their Q2 Halo Report. And sure enough the median angel investment was $590k with median pre money valuations at $2.5 million.

SVB Halo Report q2 2013

You can download the full SVB Halo Report Q2 2013 if you want to see the details.

October 16, 2013  |  Comments  |  Tweet  |  Posted in Angels, Entrepreneurship

Splitting Equity

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The subject of startup equity distribution is one that seems to generate a lot of interest. Mine was piqued again by James Altucher's brilliant article on The Ultimate Cheat Sheet for Starting and Running a Business. I wish I had have written this one line, "The rules are: I'm going to give no explanations. Just listen to me." It's a masterpiece. If you want to start and run a business and don't have the time to read this article just stop right now. It's that good.

My suite neighbor John ripped on the post and one of his favs was also mine. Number seven.

How much equity should you give a partner? Divide things up into these categories: manage the company, raise the  money, had the idea, brings in the revenues, built the product (or  performs the services). Divide up in equal portions.

It is a little unfortunate that James used the word equal portions. Just listen to me. Equal is bad. But I am going to use a hypothetical to highlight what I believe James was saying.

Imagine it is early 2015. Both Accelereyes and nCrowd are setup for exits. Gonna happen. John and I are hanging out on the yet to be built roof top of Atlanta Tech Village for Friday night happy hour and start talking about what is next. We get in this quite intense discussion about how we can leverage the GPU and camera functions in computers to determine what consumer offers on a web page are most enticing in real time and sell this to local advertisers to create more efficient online marketing campaigns (I made this up on the fly, just accept it.) 

It is our idea. The two of us. We each get a share and start working on seeing if this is real. It is.

Several Friday night happy hours go by and somehow or the other I am able to convince John that I am a better business guy than him. That I should focus on running the business. One share for me.

John agreed to let me run the business because he knows that he is much better than me at all things technical. He is going to build the product. He gets a share.

John and I are each going to stroke a check from our anticipated exits, but this is a big idea and we are going to need more. He is going to be deep in product development. It is my job to go get the coin. I get a share.

About the same time as all this is going on some BLiNQ Media sales friend decides to get out of Gannett and join our new venture. One share for her.

So at this point there are six portions. I have three. John has two. And the sales lady has one (and she gets paid nice commissions). 50%, 33%, 17%. Not a bad starting point for a more serious discussion about equity split.

Not equal but equal portions based on the division of labor.

September 10, 2013  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Startups

The Communications Courtesy Stack

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Recently Jeff Hilimire wrote an article on mobile manners. The money sentence was this:

And if you’re having a conversation with someone you really shouldn’t be checking your phone or device constantly.

Yep.

When I first started managing people back in the day I reached a point where I could not deal with all the stuff coming at me. People, phone calls, emails. I was a little overwhelmed and had a conversation with my manager about the best way to deal with it all. His advice. Focus your attention on the person that put in the most effort to communicate with you. It works, and it also keeps a certain level of communication courtesy in what you are doing. The communications priority stack looks like this.

  1. People that have physically moved their bodies to communicate face to face.
  2. Telephone calls.
  3. Emails.
  4. IM/texts.

Don't think this is right? Let me ask you this. What is your preferred method of communication? Most people like to communicate from the bottom of the stack to the top with a certain nuance for the closeness of the relationship thrown in. They like this because it takes less effort to communicate at the bottom of the stack.

Still don't think this is right? Imagine this scenario. I get up and walk over to talk to a co-worker. We are mid-conversation. Her phone rings and she answers it or gets a text and starts typing out a reply. How would you feel? The message being sent is that whomever is calling/texting is more important. Not the type of message you want to send (and BTW my standard reaction to this rude behavior is to leave).

Try the communications courtesy stack. Focus your attention on the person that put in the most effort to communicate with you. 

September 5, 2013  |  Comments  |  Tweet  |  Posted in Personal

Doing It Wrong

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There has been a little talk about the growth of Atlanta startup blogs. It is fantastic, here are my current favs. The not so fantastic is that a number of people that are blogging about startups in Atlanta are just flat out doing it wrong.

Consider me a savior.

Here are ten ways you get people to read your junk.

1. Sell your bootstrapped company for $95 million, buy a building to turn into a tech hub, and then start an accelerator with $120k in funding guaranteed to accepted startups. Not going to happen for most of you. Does not count as one of the ten. Proceed to number 2.

2. Say smart opinionated things. If you can’t do this one thing you should not proceed to number 3.

3. Lurk on other blogs until you understand the community. If there is no community help start it. The site owner will be forever in your debt. Comment. It builds links and
drives traffic back to your own blog.

4. Take a stance. Tell people they are wrong. Stop the rah rah. Focus on what matters. Don’t ask for
discussion, provoke discussion.

5. Seed Hacker News. They will let you know when you go too far. Trust me on this one. The stuff you write is not worthy of Hacker News? Return to number 2 above.

6. Find SEO voids and exploit them. What the heck am I talking about? Google what is a technology startup. That FoG SERP has been sitting there for about four years now. I have a few dozen others that send me consistent traffic regardless of my recent activity. Always fill a void. Good general rule.

7. Give link love. You will get it back.

8. Time. It takes years to build traffic to a blog. Unless it is not really a blog but an online media outlet. Or you sell your bootstrapped company for $95 million, buy a building to turn into a tech hub, and then start an accelerator with $120k in funding guaranteed to accepted startups. Money changes everything.

9. Be consistent. Set a schedule and try to stick to it. Keep your posts on topic(s). It helps
your community know what to expect.

10. Back to the comment thing. Allow comments. If you don’t allow comments it is not a blog. It is just a CMS. If someone in your organization is too stupid to understand that a blog without comments is not a blog and just a CMS you should leave and find someplace to work where management has a clue. Either that or go into the wading pool with moderated comments then jump in the deep end when the parents go to the snack bar to get a beer.

11. Be a person. Blog posts are written by people.

That is kinda it. It is great to see all of the startup blog activity in Atlanta. Outside of the tactical errors the only thing that is missing is someone writing from a full-time investor point of view. It will be interesting to see who picks up that rock.

Last tip. Keep your posts short, this
one is too long. Later.

September 3, 2013  |  Comments  |  Tweet  |  Posted in Startups, Weblogs

Favorite Atlanta Tech Blogs

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A long time ago in David Cumming's blogging time line (and not so long ago in mine) he wrote an article about the rise of the Atlanta startup bloggers and was kind enough to include FoG. You go there and you will see a long list of Atlanta startup bloggers and a few not so startup folks as well.

I took my blogroll down quite some time ago but in no particular order these are the Atlanta area technology oriented startup blogs that I read on a regular or semi regular basis.

David Cummings on Startups. My landlord and Atlanta startup poster child. Becuase I am hanging out at Atlanta Tech Village these days I also read their blog and Johnson Cook's. 

Academic VC - Stephen Fleming. He used to be my boss and says really smart things from time to time.

Begin the Begin - Jeff Hillimire. Great writing style. 

Rob's Blog - Rob Kischuk. A catchy name and ability to articulate the entrepreneurial mind set. He needs to write more.

Not Only Luck - John Melonakos. My office neighbor, have to play nice.

JohhnyBird. He actually goaded me into picking up my blog pace.

TechFlash - Urvaksh Karkaria. All the Atlanta tech news you want without a paywall. 

Hypepotamus Startup News - Michael Flanigan & Scott Henderson. Good writing style and great way to quickly catch up on Atlanta startup news. Kudos on their emails. They do a great job of sucking you in.

The ATDC blog. I started the thing.

Venture Atlanta blog. Another quick news catch up site. 

MailChimp Email Marketing Blog – Numerous. If you ask Ben he will say MailChimp is not a startup. He is right. MailChimp is an established mid-sized company. If you aspire to create such a thing sooner (hopefully) or later you are going to want a blog. Like many things MailChimp does it right. Something to emulate.

This is just my personal list and nothing more then that. I am sure that lots of these folks don't read my stuff and a lot of the folks that I did not mention may or may not visit here. It doesn't really matter, it is just a personal preference.

I would be interested in knowing your personal favorites. Not only the blogs themselves but more importantly the why.

August 29, 2013  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Startups, Weblogs

Prepping For Board Meetings

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Everybody wants to raise money and talk about it. One of the things that does not get talked about quite so much is the overhead of taking someone else's money. More often than not one of your investors joins your newly created board and you start having board meetings. And every time I have been advising an entrepreneur on such a thing and the first board meeting comes up panic generally sets in. "How do I prep for the meeting?"

It's a fair question for a first time entrepreneur and it goes something like this.

1. Ask the board members what they would like to see at the meeting. They typically will share with you some board meeting materials from their more advanced stage companies that you will find completely overwhelming. "They want to see what?" you and your team will exclaim. The panic will deepen. Don't fret.

2. Ask the CEOs of the investors other portfolio companies what they provide to the board for their meetings. If you were smart and did your investor diligence before you accepted that term sheet you will already have established a relationship with these folks and they will be more than happy to help. What you will find is that what they are providing to their boards is a little bit less than what the board gives to you as examples.

3. Plan ahead. The first time you prep for a board meeting it will consume quite a bit of time. It's well over a two week planning process. This process shrinks over time. I prepare the board materials for nCrowd and I can literally get them together in less then 48 hours after a few years of doing so.

4. Set a schedule. Our board meetings are the third Tuesday of every even numbered month at 2:00pm and last for 90 to 120 minutes.

5. Get the board the materials out early. At least 48 hours before the meeting. With our Tuesday board meetings my aim is to get them the materials on Friday and if I lapse they go out on Saturday morning. While the materials may change in scope and size they generally include the following.

  • An agenda
  • Board meeting minutes
  • A cap table
  • Financial statements
  • KPIs and operational overview
  • An organzational chart including planned hires (if you have enough folks to warrant one)
  • Special departmental or strategic presentations

6. No surprises. Each board member should know what is going to be discussed at the meeting and the CEO needs to understand each board member's point of view on important topics of discussion.

My number one rule on board meetings is to get in and get out quick and nobody gets hurt. Proper preparation will ensure this happens for you.

August 27, 2013  |  Comments  |  Tweet  |  Posted in Angels, Entrepreneurship, Management, Venture Capital

Controlling My Schedule

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So I did something really bad today. I cancelled a meeting with a prominent entrepreneur/investor at the last minute. 

For the second time.

Without going deep into the details my issue was legit. I had an urgent employee oriented operational task that I needed to complete. It was an non-optional business demand. And I had to do the same thing tomorrow morning with an aspiring entreprenuer that asked for 10 minutes of my time.

I hate not having control over my own schedule. If anyone has any tips on how they balance immediate business needs with the desire to be a part of building a great Atlanta tech cluster and pay it forward I would love to hear them. Currently I am trying to do all of the above and failing at the last two.

August 22, 2013  |  Comments  |  Tweet  |  Posted in Networking, Personal

Where You End

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So after my somewhat gushing Groupon earnings call summary, here's the other side of the coin. One of the things that CEO Eric Lefkofsky said during the call, and it has become a major talking point since, is that Groupon wants to become the first place shoppers turn to when they "want to buy anything, anywhere, any time."

They have a long way to go. 

The first place I turn is Amazon. The second place is eBay. The third is a speciality store such as Apple, B&H, Nike, Tennis Express and the like. Groupon not so much. The fulfillment experience is lacking.

But this is perhaps more interesting. The place that I check last is Google. And what I do is search on the product name and the word coupon. My daughter told me to do so about three years ago when she was twelve. Seems that all the kids are doing it. An ingrained habit.

And more often than not I end up on RetailMeNot. Nearly every time I buy something on the Internet. Because of this behavior RetailMeNot is hot. They went public about a month ago (SALE) and the stock is up about 20% since then.

Where you end might be more important than where you start. And both of those behaviors seem a little cemented to me.

Disclosure: nCrowd, Inc. has an affiliate relationship with RetailMeNot, Inc.

August 13, 2013  |  Comments  |  Tweet  |  Posted in Deals, E-Commerce, Stocks