
The California State of Mind (As a Cancer on Atlanta) - rjurney
http://techdrawl.com/the-california-state-of-mind
======
pg
This seems like bad advice. The next-big-thing model is not in fact the
default model in the Valley. And the kind of startups it works for, like
Facebook and Twitter, it would work for outside the Valley.

It's certainly true that trying to force a startup into the next-big-thing
model will generally destroy you. But the way it destroys you is by failing to
get users, and that is not a function of your location.

My advice would be simply to use the right model for the kind of startup you
have, regardless of where you are. Make something people want. If you manage
to make something people want so much that it grows explosively, go for it.
But don't assume you will.

~~~
access_denied
> But the way it destroys you is by failing to get users, and that is not a
> function of your location.

Well, it is easier to meet Joe Influencer at the evening at build up some buzz
if the flight to the 'party where this guy got an invitation to doesn't take
too long.

~~~
rjurney
Its also easier to build something people want in the consumer space if you
are in a pool of two million early adopters.

------
MicahWedemeyer
As an aspiring (Atlanta) entrepreneur, I have given up on fundraising, and
plan to go completely with bootstrapping off of revenue.

Does Atlanta have capital for investing? I have no clue. I've never met one VC
or Angel, and wouldn't know the first thing about trying to. Once I finally
realized that fact, it made the decision pretty easy. Stop going to local
meetups looking for unicorns, and just stay home and get to work.

~~~
rjurney
You really need to join the community and attend some events. While there
isn't much early stage angel investment going on right now, there is a rich
network available to support you in your endeavor. You can learn a lot from
others, so please connect with the community. Its no replacement for hard
work, but attending events can really help you benefit from the experience of
others.

<http://academicvc.com/2009/05/entrepreneurial-atlanta-2/>

Angels are more valuable for the experience and contacts they will share with
you than money they might invest.

~~~
MicahWedemeyer
I've found that I don't really need "support" except in some very specific
areas. And, while there are things I need to learn, there are a lot more
things I need to "do". Time spent talking is time spent not working.

Note: I've attended several community events over the past few years, and even
presented a couple times at BarCamp. I've just found that it really hasn't
helped me grow my business. The people I need to spend more time with are my
customers, not fellow hackers.

~~~
mikeschinkel
It's not only other hackers that are beneficial to meet. It's potential
employees and potential customers. For example, there were many non-hackers at
ProductCamp (which I was unfortunately too sick to attend.) Did you go to
that?

BTW, what type of business are you running and how do you define your target
customers?

~~~
MicahWedemeyer
I run 2 businesses at the moment, at opposite ends of the spectrum:

One is a campaign management website for Dungeons and Dragons and other
tabletop roleplaying games. Think "Basecamp for D&D" It's at
<http://www.obsidianportal.com> Customers here are tabletop RPG folks. I'm
very active in that community and have made all sorts of connections. Again,
my most valuable contacts are not other startup people, but in fact just
members of the RPG community.

My second startup that I'm spinning up right now is an online marketplace
where people can find and buy plants from specialty nurseries. This one is
called DoLeaf, and we're currently in closed beta. We'll jump to public beta
as soon as we can recruit some initial sellers. So, to that end, I need to
network with small nursery owners. You can be guaranteed they're not coming to
things like AWE or Barcamp.

Don't get me wrong: I like hanging out with fellow hackers and entrepreneurs.
We understand each other and speak the same language. Talking with nursery
owners is a very eye-opening experience at how little I actually know about
their world. However, my fellow hackers aren't going to come to DoLeaf and
sell plants, so the time I spend with them isn't the most productive in terms
of furthering my business. Since I've only got a few hours of free time after
my day job is done, I need to spend it as wisely as possible. It's a pretty
simple calculation.

~~~
rjurney
If you're well plugged in to your markets and interact with them constantly -
its hard to argue with you about how to best spend your time :) Thats
definitely a productive use of it.

Do you realize how unusual you are? Most people never talk to real customers
in their development. You're way ahead of the average Atlanta startup.

------
danbmil99
Having started a successful startup in NYC, and trying for 5+ years now in the
valley, I think the situation is not so black/white.

A lot depends on business cycles, trends, timing, luck, who you know (which
you can have some effect on of course) etc. There are many factors.

I think the real difference is partly one of social expectation. Out here,
you're expected to quit your job every 2 or 3 years and try another startup. I
suspect that in other places, that kind of behavior makes it hard to get jobs,
and possibly even puts you in a strange group of social outcasts. Here, if you
hold onto a job for 10 years and seem to have no appetite for risk, it's a bit
weird. So yes, you feel supported by your friends and relatives, whereas
elsewhere you might feel extreme pressure to conform.

But that doesn't make starting a successful company easier than falling off a
log, as the OP seems to suggest. There are still at least 10 serious efforts
for every success. And right now, the VC's are hurting. I haven't heard about
anyone getting funded since October.

~~~
unlikelyguy
There have been a few multi-million-dollar VC deals in NYC - I'm working with
3 companies that have gotten funded since last fall. They're the exception,
though, and I think the OP's point remains valid - whether it's the norm for
your environment or the result of the economic downturn, most of us aren't in
the Valley bubble and need to focus on short time-to-market and organic,
revenue-driven growth.

------
Kestrelhunter
I could not agree more, I've been prompted to move to the West Coast by
several Angel friends, really considering it now. It will all depend on how
the venture I'm in now goes. It's GreenTech and getting funding in the Atlanta
area is like trying to find hen's teeth. We had to go to the west coast Angels
and VCs to find it.

~~~
rjurney
I didn't write this to encourage people to leave - but the fact is that if you
are unable to change the type of startup you launch, or shrink the scope of
your initial product vision to fit our landscape - you may have no choice but
to leave if you want to succeed.

I would encourage you to take advantage of what our city has to offer, instead
of leaving. Learn customer development. Build something our local economy
wants to buy. I'll talk more about that in the next article. The fact is that
the improvement in our startup business environment in the last four years has
been overwhelming. Things have improved, they are improving, and they will
continue to improve. Please, get connected with the community, and help us
grow it to be even better.

That being said, if you do leave - come back! Atlanta is an overwhelmingly
great place to start your second company, no matter what it does.

~~~
Kestrelhunter
The only problem I have with one of the start-ups I'm working on is the fact
that it's a complete first mover advantage play. We would have to go big fast
to capture and hold the market before other "larger" market players get
involved. I've been told two polar opposite things to do by two seasoned
entrepreneurs, one says, bootstrap and go a year, the VC's will treat you very
well after 50 contracts (should be very easy to get, I have two lined up with
only concept and Accenture is interested). The other says, go west young man,
the idea is a market changer and it will go big fast but will needed to be
well funded to keep from hitting the cash wall. That's were I'm torn at the
moment. PS: As you can guess by my previous tweet, I can't sleep tonight)

~~~
rkischuk
You're essentially saying that the market is too big to take on without big
funding.

In the vein of what rjurney said, is it possible the niche you're filling
isn't small enough? If you try and capture the whole market with big funding
and the big guys come in and take your lunch, you still fail. If you learn how
to meet the needs of a niche, even if the big guy comes in and chases the
whole market, you'll still meet the needs of your niche better than anyone,
and can grow into an adjacent niche.

------
wehriam
As an Atlanta resident who's livelihood is generally in San Francisco, I'd
like to note this article is nonsense.

"Nobody wants to openly admit it, but the number of early stage ventures
funded in Atlanta this year is very near to ZERO."

Atlanta is a leader in new business creation -
[http://www.ajc.com/business/content/business/stories/2009/05...](http://www.ajc.com/business/content/business/stories/2009/05/18/entrepreneurs_atlanta_georgia.html)
\- There are companies that find working capital.

And after the author's proclamation that we "drop the bullshit and deal with
it" he moves on to arbitrary advice like "read Steve Blank" and "we need an
open forum."

I'm all for measured comparisons of cities, particularly in the context of
technology and startups. But profanity and superlatives aren't interesting or
helpful. (I won't get into the childish concepts of "the jackpot handle" or
"the theme park of startups.")

I suppose what rubs me the wrong way is the profound misunderstanding of how
difficult it is to be successful in a startup context no matter where you are.
California isn't the promised land - people there work hard to succeed, just
like they do in Georgia.

~~~
rjurney
I feel like you read a different article than I wrote.

For one, Atlanta has the highest rate of entrepreneurism in the nation - true.
Unfortunately, almost all of those new businesses are not startups - they are
under paid consultants and mom and pop shops. Anyone who has ever attended a
Technology Association of Georgia event knows this to be indisputable fact.
Corporate downsizing in our big-company town has driven this rate up. A former
executive selling management consulting, or a former factory worker selling
bait does not a startup make.

As I said, the number of early stage deals in new ventures this year is very
close to zero. If you're connected with the angel community, you know this is
true. I didn't simply make it up.

As to customer-driven development, what I am suggesting is that we embrace a
model that involves customers at the stage where new entrepreneurs tend to
look for investment capital. It is unfortunate that you didn't care for the
article's tone, but I would encourage you to take a look into the customer
development model - it has applicability in Atlanta, and elsewhere.

As to a profound misunderstanding - I'm not sure you read the article that I
wrote. Nowhere did I say that entrepreneurism is easy anywhere. Its hard
everywhere. What I said was that Silicon Valley does support exceptional
individuals with resources in every area to aid them in their success. Think
about the definition of exceptional: way, way above average. People work hard
in California, and they follow the California game plan and if they are
exceptional, it often works. That game plan simply does not work anywhere near
as well in Georgia, because it is a fundamentally different business
environment. If you drew your livelihood from a startup in this area, you
would probably understand that.

No offense, sir, but you seem to have been rubbed the wrong way by someone
else, and you are taking it out on me.

------
ojbyrne
I've said it before (and got moderated down). Silicon Valley now == Detroit
1975. The phrase "a theme park" pretty well sums it up. As in - this is the
peak, and it will take 30 years of decline before you realize it.

~~~
pg
What evidence do you have for believing that this is the peak? Or more
precisely, for believing that things will decline from this point?

~~~
ynniv
Just a feeling, but I see a lot of weak companies being over-funded. The more
often this happens, and the less often that VC's get their 4x return, the
harder it will be to get funding. I remember a chart from a recent VC internal
presentation showing the net return on industry investment from the last year
going in the red.

Detroit was king, but in their success was greedy and stopped caring about the
quality of the product. Other cultures sprang up that cared about the product,
and the tides turned. People asked why their neighbors didn't "buy American"
(instead of asking why Detroit didn't make good cars), but even grassroots
protectionism won't save a rotten company.

Those who think the Valley is following detroit see that personal computing is
tired and products are in a race to the bottom. I remember when a PC cost as
much as a car, and people bought them as business capital. Now we complain if
a laptop costs more than a car payment, and expect web content and software to
be "ad based" (aka free to those of us who ignore ads). There are still
opportunities here, but not at the VC magnitude (unless you believe Facebook's
valuation).

The Valley needs to learn something new, maybe "green tech", pharmaceuticals,
or robotics, if is going to continue its reign. It isn't guaranteed, and there
are other cities that are familiar with these industries. The Internet
currently has an English bias to give us a competitive advantage, but if Japan
engineers better solar panels and makes them in China, it will be hard
competition.

~~~
nostrademons
Robotics, mobile, and "green tech" are all pretty hot in the Valley. And I
don't really see people who've stopped caring about the quality of the product
and say "Buy Silicon Valley." So far, the Valley's proved itself fairly adept
at reinventing itself with each wave of technology, much like Boston.

That doesn't mean it won't decline like Detroit - a lot of random events can
happen in the future. I just don't see a reason to believe it'll go either
way...

------
quizbiz
"We need an open forum where young founders can learn about problems that our
large enterprises are facing"

=> Where do I pledge my support and sign up?

My personal response, not limited to the contents of the written piece:

It's a nice dream to be the next big thing, I convince myself that I will
launch the next big thing just to motivate myself. I don't see how that has
anything to do with geography.

I heard some where that if Atlanta were a country it would be of the highest
carbon emitters per capita. Atlanta is completely suburbanized, tons and tons
of trees with roads and homes in between but everything is very spread out
without any real geographic barriers to induce compression. Perhaps that does
some damage to the startup community.

I haven't personally entered the startup community, in fact I procrastinated
this interest of mine by choosing Emory over GT. But I really like the city,
despite its imperfections, and I do hope it can be a base for my own
international business one day because if anything Atlanta is very good at
being an international hub (UPS, Cocacola, etc.) And with all of these giant
companies here in Atlanta, not that I have tried asking, but is it true that
there is no cash flow? And why limit yourself to VCs in Atlanta, when I do get
more practical about my radical ideas, I plan to email and call as many people
as possible, despite their geography.

In Israel, where I am from, the local demographic is microscopic. In Israel,
almost in exact opposite to the american tradition, successful business men
and entrepreneurs are sometimes viewed as frauds/scammers. It's not a good
thing to be a business man there like it is here but despite that, look at all
the startups, the big tech innovations, the brilliant products that have their
roots in Israel because in Israel people don't let their geography, the fact
that they are surrounded by enemies limit them. They are driven by ideas for
products and solutions to problems.

~~~
ATLien
From my experience, there is plenty of cash flow. I've found Atlanta to be a
superb base for my start up, but there is no doubt that the recent economic
turmoil has made it more challenging to find investors. I also think that the
Atlanta investment community is more receptive to businesses in established
sectors, so you may want to see if your start up is aligned with those
expectations.

------
rjurney
The general idea is that many entrepreneurs outside of the valley act as
though they are in the valley, and the same strategies don't work. You have to
dream big, but think small by having your eyes firmly connected to the first
check from a real customer.

------
startuplounge
As Russell pointed out, we are about to launch something called
EnterpriseLounge here in Atlanta. It will be an effort to bring hot startups
to the table in front of Atlanta's Fortune 1000 buyers. We'll likely do it
quarterly, like our CapitalLounge events.

We already have commitments from 4 of the largest companies in Atlanta, and
we'll get that number up to a dozen or so in the next few weeks. My guess is
that we'll do the first one this summer.

More soon....

Cheers. Scott Burkett

------
paul9290
As start-upper in MD I can not agree more.

Any venture I start-up down the road will be customer driven. East coast
VCs/investors want to see customers, revenue and growth. It's a much tougher
environment then the west coast. There was a reason YC killed it's Boston
location!

------
DannoHung
As someone who has even tangentially dealt with corporate lawyers (crosses
himself and spits) I would be hesitant as a young entrepreneur to even think
about working with them without my own legal nuclear device.

Imagine that I should develop something for them that was truly revolutionary,
or even something for them that was somewhat related to something I
subsequently developed that was truly revolutionary. I shudder sir. I shudder.

Of course... I'm not an entrepreneur. So what do I know?

~~~
jhancock
I began my first two companies in Atlanta in the early 90s. Both began as
contracts for Big Blue. I had no legal counsel of my own. It was not in my
client's interest to hamstring me with complex paperwork that allowed them to
own my IP. They had paying clients that needed my software solutions. Large
companies know they can't fill every piece of a large solution to their
customers. Most are happy to allow little guys to "fill the cracks".

~~~
rjurney
My god sir, we NEED you. We need you to tell this story. We need to learn from
you. Please contact me. I want you in front of a room full of people telling
this story.

russell.jurney at gmail.com

------
hypermatt
Coming from Atlanta and being in some failed startups I have to see this is
spot on.

