Update: Most Interesting Atlanta Startups of 2010

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Yesterday Micheal Tavani started a conversation on Twitter about this list of 20 most interesting Atlanta startups. The list is over three years old. I thought it would be interesting to go in and provide an update. Here it is.

BLiNQ Media
Sold to Gannett. Depending on your source it was either $40 million or $92 million. I know the number. Take the average and you are close enough. 

BrightWhistle
Raised a total of $3.2 million, graduated from ATDC, and moving into their own digs off Piedmont Park.

Clearleap
Most recently raised a $20 million Series C and seem to have found traction delivering their TV everywhere platform.

ClipZone
Out of business (OOB).

Cloud Sherpas
Continues to grow revenues like Kudzu. Added Salesforce and ServiceNow capabilities. Spun off technology into BetterCloud. This is going to be a big winner.

CRESecure
Have not heard much from this hosted PCI solution since their $3 million raise in 2010. Appears to be dead.

Endgame Systems
Endgame raised a $29 million Series A and $27 million Series B from folks like Bessemer and Kleiner Perkins. The company is now headquartered in DC and the founders have all moved on. I am fairly confident they consider the venture to be successful and are on to bigger and better things.  

MailChimp
According to their ads on NPR they have more than 5 million customers. Moving to fancy new digs in Ponce City Market. A privately held tech anchor.

RentWiki
Another company that has been pretty quiet since raising $2.4 million in 2010. Seems to have changed name to RentAdvisor which was acquired by Apartment List.

PlacePunch
Acquired by Silverpop. 

PlayOn
Raised a $7.2 million Series C in 2011 and a $26 million Series D in 2013. PlayOn has teamed up with the National Federation of State High School Associations to launch the NFSH Network. It literally is the high school sports network. Their tagline says it all. High school lives here.

Preparis
The company has been a little quiet since graduating from ATDC in 2012.

Regator
The site remains active. It seems the team has moved on to new ventures.

ScoutMob
While everyone loves the app and the brand ScoutMob is successfully managing a pivot to a curated ecommerce experience.

Solidfire
Dave Wright has raised $68 million for his solid state storage system. He also moved it to Boulder to gain access to more domain knowledge. Win for Dave. Loss for Atlanta.

SoloHealth
SoloHealth has raised $24 million. While they seem to have a solid retail presence a recent boardroom shake up and change of strategy to focus on wellness plans for major employers raises some questions.

Twitpay
From all appearances the company is OOB.

Vertical Acuity
Raised $5 million than sold to Outbrain.

Vitrue
Acquired by Oracle for a sum north of $300 million.

Wavee
OOB.

The way I see it that adds up to five companies with successful founder exits, three that had "meh" exits, seven that are too soon to tell, and five that went out of business. I am pretty sure that four of the too soon to tells are going to be winners. That would put my successful startup identification rate in the 45% range. 

Maybe I should be a VC. 

Before I do that I am going to make a new top 20 Atlanta startup list.

Who should be on it?

March 13, 2014  |  Comments  |  Tweet  |  Posted in Startups

More Is Good

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If you have been reading FoG for a while you know that I firmly believe that density matters. Denisty is extremely important for startup communities. And with all its sprawl Atlanta has a startup density issue.

The reason I bring this up is that Urvaksh Karkaria set off an Atlanta startup firestorm on Twitter last Friday with his article on how the downtown Flatiron Building could be redeveloped into an entrepreneurship hub. Urvaksh followed up on that article today. Evidently real estate in the technology section creates page views.

My initial take, inspired by a NPR interview with Neil deGrasse Tyson on the new Cosmos series and the gravitational forces acting on Europa, was this. Potential energy is decreased by the distance between gravitational masses. It's just a scientific fact.

Having startup hubs located in Downtown, Midtown, and Buckhead is not optimal. They are too far away from each other to create the kind of density Atlanta technology startups need now. I say this from a somewhat unique viewpoint.

These days I spend about a third of my time in Tech Square working out of the offices of BLH Ventures/KontrolFreek. I took Kyle Porter up on his offer and also spend about a third of my time working out of the SaleLoft space in Atlanta Tech Village. I don't mix Tech Square and Village days. At six miles they are just too far apart. But there are great things going on in both places. It is interesting to see a startup start out in one location and then end up in another. It happens quite often. But once a startup gets settled in one of these places it is seldom that I see it at another. The Atlanta startup hubs are fairly distinct in population.

While on a micro level Downtown, Midtown, and Buckhead are too far apart, on a macro level something very different is happening. A stronger gravitational mass across the city of Atlanta has the ability to increase the pull of other startup resources in the direction of the city when taken as a whole. Resources from other industries. Resources from other parts of the country. The Atlanta technology community is becoming more interesting to those that are currently not involved in it. It is creating more gravitational pull.

Sometimes more is more. In this case more is good. 

March 6, 2014  |  Comments  |  Tweet  |  Posted in Accelerators, Current Affairs

Takeaways From Georgia Angels Meeting

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Yesterday I walked down the hall at Tech Square to sit in on a few sessions of the Georgia Angels Meetup. I had a particular interest in the deal flow panel that included Stephen Fleming, Jennifer Sherer, Jennifer Bonnett, Michael Blake, Sanjay Parekh, Katie Elizabeth, and Allyson Eman. Quite the group. And so were the folks in the audience and on the other panels. 

Here are my takeaways.

1. There are a lot of startups in Georiga. The Atlanta Technology Angels (ATA) had 413 companies apply for funding in 2013 and there are currently 470 ATDC member companies. Add in the 175 or so that are members at Atlanta Tech Village and that is a lot of startups!

2. According to Stephen Fleming Georgia Tech alone is producing over 100 startups a year.

3. Due to the tremendous growth of the Atlanta startup community the original mission of StartupLounge has been acheived. Michael Blake, one of the StartupLounge founders, declared mission accomplished. To quote, "there is plenty of Series A funding to go around." I agree. Michael seems to think the issue now is getting a Series B. He also thinks it is a much more complex problem to solve.

4. The ATA funnel looks like this. 413 startups applied for funding. Of those that applied 79 were screened. About 20% made it to the screening. Twelve investments were made. Approximately 3% of the companies that applied to ATA were funded. 

5. Due diligence matters. The rate of investor return increases dramtically when they invest more than 40 hours in due diligence.

The meetup was a good one with more capital in the room than I care to count. Hundreds of millions of dollars looking to find a home in Atlanta startups. Good stuff.

February 26, 2014  |  Comments  |  Tweet  |  Posted in Angels, Venture Capital

Time For A Facelift

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Force of Good has been an active blog going on eight years. It started off using a standard Typepad template. In 2008 Paul Stamatiou moved the design from three to two columns and Blake Perdue created the custom design template that is currently being used. With the exception of the move to Disqus commenting in 2011 the look and feel has been pretty much unchanged in six years. 

It's time for a facelift.

While I still love the relatively clean design of the blog I have managed to clutter it up over the years. Moreover the site is not optimized for mobile and visitors that are accessing FoG via mobile is growing rapidly. I intend to move to a single column design to address this change in audience behavior.

I can provide pretty good creative input and design direction. Wireframes even. I lack technical design skills and need some help with that work. Blake is a bit too busy at the moment to lend a hand. If you are a reader of FoG, have design skills, and are looking for a fun quick project I would love to hear from you.

February 25, 2014  |  Comments  |  Tweet  |  Posted in Networking, Web/Tech

Do Your Own PR

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So I am spending more and more time these days advising concept stage and seed stage startups. And I had an interesting conversation with a pair of entrepreneurs the other day about press releases and marketing. They had reached a significant milestone and put a release on the wire. They were waiting for coverage.

I hate to break the news that you don’t really get coverage from putting a press release on the wire. You have to work it like this.

Somewhere along the way it came up that they had dropped a low four figure amount on a PR agency to help them with their release and to create a list of potential writers to contact. I love using an agency at the appropriate time but for companies without funding or revenues getting attention is a core competency that someone on the team needs to develop. It will both save you some money and people that write about startups prefer to talk with founders over flacks.

While we were having this discussion one of the founders started having a bit of a text exchange with a writer for a national news website focused on information technology companies from startups to Fortune 1000 firms. Seems he had networked his way to the writer. Hot space. Got same day feature coverage.

Do your own PR.

February 21, 2014  |  Comments  |  Tweet  |  Posted in Marketing, Startups

Sources of Startup Ideas

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I have been reading and thinking a bit these days about the sources of startup ideas. How ideas that are worth turning into technology startups come to life. The best work I have found on this is by Daniel Gulati who actually conducted some primary research on the matter and wrote it up for the Havard Business Review. Good stuff but I don't think he has it totally right. As I have thought about this it seems there are two primary categories that serve as sources of startup ideas; those that occur naturally and those that are manufactured.

Natural or organic startup ideas just happen in the course of your life. It is almost by accident. The aha moment when you experience some pain, could not find something to fix it, and have a sudden realization that you should go out and solve the problem yourself. This is how Charles Brewer came up with the concept for MindSpring and David Cummings created Pardot (Pardot was a pivot). I believe this the best source of startup ideas. It's just kinda hard to plan an accident.

Another natural situation that occurs is when you are working at a company and discover a customer need  that no one is addressing and for whatever reason your employer does not wish to address that particular market. The most obvious of these in Atlanta was ChoicePoint, which was spun out of Equifax. Endgame came out of ISS in the same fashion. ScoutMob actually got their start when EarthLink shut down its municipal WiFi network and some of the laid off employees founded SkyBlox.

The second large category of startup idea sources are those that are manufactured. The most prevalent manufactured startup idea is created of necessity. It is also known as a pivot. The original startup concept is not as successful as desired so the team has to figure out some other model. Examples abound. The aforementioned SkyBlox pivoting into ScoutMob. The Sunday Paper becoming Half Off Depot. Viture moving from a walled user generated video service to a social platform. CipherTrust was a pure message transfer agent before becoming an email security company. I could go on.

Finally there are purposely generated startup ideas. While I have an ongoing list of startup ideas that I think about, just sitting down and coming up with good startup ideas is incredibly hard. It's so hard that I am extremely hard pressed to give examples. I agree with Paul Graham (and his Ideas for Startups and How to Get Startup Ideas are most reads). The best way to get startup ideas is to look for problems. Problems where you have some domain knowledge. Problems where you know other people that might be able to validate them. Problems that you could potentially solve. While problems to solve abound not many of them meet the criteria for evaluating startup ideas.

The catch-22 around startup ideas is that in some ways purposefully generating them seems more challenging then stumbling upon one. Startup ideas are best generated if you are working on something else than trying to generate startup ideas.

February 13, 2014  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Startups

Lens For Evaluating Startup Ideas

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One of the things that I have been pondering lately is how I can evaluate startups and startup ideas more systemically. There is good reason for this; I am looking for my next venture. And as I was contemplating how to go about this a thought popped into my head. Evaluate them in the same manner that investors do. Which took me back to a lesson I learned from Merrick Furst, the founder of FlashPoint.

Merrick taught an undergrad entrepreneurship class at Georgia Tech. I sat through some of them. During one Merrick explained a venture risk framework that most investors used even though they generally don't talk about it. The framework included management risk, market risk, product risk, and funding risk.

From an early stage investors perspective all startup milestones should be focused on reducing management, market, technology, and funding risk. And if you are going to be investing the most precious commodity in the world, your time, it is not a bad lens for an entrepreneur to use as well.

Looking at startups and startup ideas through this lens leads to a host of questions to ask to evaluate the risk inherent in the opportunity. You need to get to a point where you can decide if the idea is something that could become a real company. Below are some of the questions to ask. 

Market Risk

  • Is there extreme need/pain being felt by an individual or group?
  • Do they have money to spend?
  • Are there enough people feeling the pain, or put another way is the market intuitively large enough to create a meaningful company?
  • Is there any potential potential impact of government action?
  • Is management team passionate about the market?

Management

  • Can a team of A players be attracted to the startup (many of which are asking the same type of questions listed here)?
  • Doe the team have experience in the space with deep domain knowledge.
  • Does the team have the ability to leverage personal networks to build the business.
  • Does the team have strong past professional relationships built on mutual respect and trust.
  • Does the team have shared values and work ethic.

Product

  • Can a product be created to address the market need with the team that can be assembled?
  • Can a compelling step function improvement unique selling proposition be created? 
  • How can long-term sustainable differentiation be created?

Funding

  • Is the business model capital efficient?
  • Can it get to revenue within one year and a repeatable sales process within two years.
  • Can the team fund it to cash flow positive or further investment?

You also need to ask yourself if the startup is one where you can have an impact. You have to look at it through the lens of your own personal experience and the value you can bring. For example when I personally evaluate startups or startup concepts I look for a business to business SaaS or SaaS like Internet company with a consumer element where sales and marketing are key drivers to business success. I know I can have a significant impact on these type of businesses.

Your lens is likely to be much different. Know what it is and focus on it.

Look at startup concepts and startups through the lens of investors and your personal experience. If you do you are more likely to find a winner.

February 4, 2014  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Startups

Startup Naming

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Tonight I am giving a presentation on naming and positioning at Founders Institute Atlanta. In prepping for it I uncovered an old draft article on the subject of naming. It was part of a series of posts on startup marketing that I published back in the summer of 2009.

While a number of articles have been written on startup naming by the likes of Guy Kawasaki, Jason Calacanis, and Dharmesh Shah, I but together my own simple five point framework for startup name characteristics. I hesitate to call them requirements because in today’s day and age if you are going to meet all the requirements it would take a pretty good chunk of change that concept and seed stage companies can not afford.

I will also say this, I am not sure if the company name really matters. If might give you an edge but it may not be a big issue. It is an subject that deserves some serious cycles but if you take a peek at the winners in the Atlanta tech space it is hard to discern if the name matters at all on ultimate company success.

1. Memorable

This is the most element to me. A startup name needs to be memorable. To be memorable it needs to be brief. Four syllables or less. Less is good. Think eBay, Google, Netflix, Twitter, and Yahoo!. All two syllables. Two syllable names also seem to have the best verb potential. Dropbox it to me.

Part of the reason is that you don’t want the name to become too long is that people will have a tendency to cheat on your name. A great example of this is Internet Security Systems. Great descriptive name, but so long people just called it ISS.

A bigger part of the reason is that you want the brand and word of mouth effects that a memorable name provides. Having a memorable name greatly increases word of mouth marketing potential.

The name needs to be memorable not only to people but to machines. Machines such as search engine crawlers. You want to be sure it is unique enough that you can own it via SEO.

2. Easy to spell and pronounce.

You want someone to be able to spell and say your company name correctly unprompted after hearing it one time. This, along with shortness, are the two most important elements in my book. If it is not obvious know to spell you will spend the rest of your time with the company dictating the letters over the phone every time you talk to someone for the first time or they ask for your email address.

If it is not obvious how to say the name you are going to have a much harder time building a brand. And this may sound a little out there but people have to like the way it makes them feel when they say the name. Xobni does not exactly roll off the tongue with pleasure. You want your name to make people smile.

No hipster buy a vowel names allowed.

3. Reflect product capabilities or be evocative.

Some of biggest brands on the Internet today have names that do not reflect their product capabilities but are evocative. Amazon, Google, eBay, Yahoo.

Some of the biggest brands on the Internet today have product capability names. Facebook, LinkedIn, NetFlix, The Weather Channel.

While I prefer product capability names I will also say this. If you go down the road of your company name reflecting product capabilities it can create issues if you have to pivot. More likely than not you will pivot.

4. Trademark clear.

This might seem obvious but you have to ensure that you can get rights to use the name for the purpose you want. Simple United States Patent and Trademark Office searches are a good place to start but are not definitive. If you have the money a CompuMark search can be undertaken.

The key to the mark being clear is if it has the potential to create confusion in the marketplace. You find a trademark clear name you should start the process of registering it as soon as you use it in commerce.

5. Able to secure web properties.

You want to be able to obtain the .com domain and the company name on the big three social networks (Facebook, LinkedIn, Twitter) if appropriate for your market. The .com has to be available or available for a price that you are willing to pay, now or at some time in the future. Successful companies cheat on this all the time. Twitter was Twittr. Delicious was Del.ocio.us. Do what you have to do to grow the company and then getting the right web property in the future seems to be a enough common practice that you can pursue it if you have to do so.

January 28, 2014  |  Comments  |  Tweet  |  Posted in Marketing, Startups

Road Trip Musings

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On Tuesday night I made my way to Athens to the Four Athens open house at the invite of Jacqui Chew. Mark Dewey came along for the ride.

It was a fun night. First and foremost Jim Flannery is doing a bang up job of building a startup community in Athens. It was interesting to see what is happening there and will be even more interesting to see how the community evolves.

While we were not technically road tripping, you put a few people in a car for three hours they are going to talk about stuff. Jacqui told me I had to write about my musings during the trip. Here they are.

Growth Hacking Is A Joke
It is just another way to say customer acquisition marketing. And don’t even get me started on viral marketing. The transmission of viruses does not typically happen through choice.

So Is Customer Discovery
I love The Fours Steps to the Epiphany but I have to tell you that customer discovery is simply the first step in marketing. Marketing defined by the man who literally wrote the book on it:

Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market.

Philp Kotler

The science and art of exploring. Exploring and discovery are such closely related words they are almost synonyms. Customer discovery is just another way to say market research that is a little less intimidating to geeks. The term customer discovery makes marketing research approachable by non-marketers and that does have significant value.

My personal definition of marketing is a bit more straight forward. Figure out what people want and create it. The figuring out what people want is pretty hard.

And a big by the way, the problem with marketing is that most marketers stray from the purpose of the discipline.

Do Things That Don’t Scale
Somehow or the other we got on the subject of the recent purchase of Jim Beam by Suntory.

A long time ago Jim Bean was one of my customers. So was Maker’s Mark (which should be the preferred bourbon of the maker’s movement). Maker’s Mark in beautiful Loretto, Kentucky. Maker’s Mark that sells over a million cases of bourbon a year. Maker’s Mark with demand is so high they considered reducing the alcohol strength of the whiskey (it takes a long time to build supply) so that they could keep up with demand. Maker’s Mark with the trademarked wax seal.

You know how they apply that wax seal? The bottles are hand dipped by people at the end of the production line. I am sure they could automate the wax application if they wanted to do so. But having those people hand dip is part of the heritage. Part of what makes Maker’s special. Part of why I am talking about it now when I observed it more than half a life ago.

Delight does not scale. Sometimes it is better to do things that don’t scale. While I have developed my own thinking on this over the years Paul Graham has an excellent essay on the subject.

Atlanta Has Management Talent
Someone made the comment that Atlanta has no management talent. I called BS. I could name at least 20 people that are capable of scaling and running a technology business in Atlanta. What Atlanta lacks is viable startup concepts. The city needs better ideas.

Atlanta Has Money
If you have a viable concept and a decent entrepreneur or two you can get funded here. I bet we talked about 20 companies that are in the process of raising funds. To be quite frank I seeing things funded here at a stage and valuation that were never seen five years ago. If you want to raise money in Atlanta and can not do so you have to look no further than the mirror to understand the reason why.

January 23, 2014  |  Comments  |  Tweet  |  Posted in Accelerators, Entrepreneurship, Fun, Marketing

Options

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So the number one question that I seem to be getting these days is "what are you going to do next?" My three word answer, and I really like three or four words, is "I don't know." What I am really most likely to do is do what I do best, and a better four words, I build Internet companies.

Something that most folks that have not worked with me do not understand from reading FoG is that I am much more analytical in my work than what and how I write here. I am analytically anal.

So the first thing I did when I decided to leave nCrowd was to make a list of the things that I could do next. The final document runs eight pages with career options, the short-term opportunity, upside opportunity, potential obstacles, and how to overcome them. Here's the list of the options that I came up with (in no particular order than how they initially came to me.

  • CEO/President/COO position at a early stage Internet where I come in and get it ready for the next stage of investment and run the business.
  • Start a company.
  • Head of business development/marketing at venture backed technology company.
  • Independent consulting on funding/marketing/business development issues facing small early stage Internet companies.
  • Consulting on digital strategies at a consulting company or digital agency.
  • Marketing position at a mid size company.
  • Division President position at a mid size company.
  • Buy a small company.

Options are good.

The most interesting thing about this list is that I asked my wife, Abby, to review the document and my thought process. She had four words for me. The same four words I have said to entrepreneurs time and time again. Hundreds of times.

"You need to focus." 

Touché.

January 21, 2014  |  Comments  |  Tweet  |  Posted in Entrepreneurship, Personal