Atlanta, Badgy, startups, Technology

Full-time startup: Badgy

Today is my first day working full-time on my startup, Badgy, and I’m excited to fully apply the lessons learned from building social games to the digital marketing world.

Badgy started about a year ago when I tried a simple experiment – I gave digital badges on Twitter to 100 people who mentioned the word “Badge”, and asked them to retweet me for another badge. I ran this experiment many times over a weekend, and when 20-25% of people did retweet me each time, I knew I had something, but I didn’t know what it was yet. In more recent months, as Badgy’s market became more clear, a few really talented Atlanta entrepreneurs joined the Badgy team to help build and sell our products.

We’ve discovered that Badgy is tremendously effective at helping consumer brands and the marketing agencies that often manage their social presence grow their audience of engaged users. We worked with a major toilet paper brand and boosted their Twitter followers by 700% over 10 weeks, while also improving the quality of interaction from their fans. More recently, we’ve added features that bring similar power to Facebook using the most effective tools popularized by social games like Zynga’s Farmville and Cityville, and are signing on 2 more customers. If you’re serious about building up the digital marketing program of a product people love, drop me an email at rob at bad dot gy and we’ll put together a plan for how Badgy can amplify your digital marketing efforts.

For me and a several other sharp people, our time making social games at Menue Americas wrapped up a bit sooner than expected. If you need an excellent creative director or 2D artists, let me know and I’ll get you connected. Some very good developers are now available. They’re taking their time finding their next great career move, but if you have some project work that needs to get done properly, especially Facebook development, PHP, Java, or Ruby on Rails web apps, drop me an email and I’ll pass it along if it’s a fit.

Does this mean I’m not going to “Join a Startup“? I’ve done that several times before, and will almost certainly do so again when a good opportunity arrives and makes sense, but that’s not something to rush into. Right now, I’ve got a great startup that has shipped product, shown traction, and generated revenue. That’s 3 steps further than many companies ever get. We’re in a great market – digital marketing has room to grow at least another $50 billion per year in spending. Here’s to the ride.

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Atlanta, startups, Technology

Exits not Exoduses

Notable members of Atlanta’s startup community are steadily draining away to greener pastures. We are in the midst of massive technology innovation, particularly in mobile and social applications, and the injection of games and game mechanics into most aspects of our lives. Sadly, Atlanta has been mostly a spectator in this wave of innovation, with little signs of change. We talk about the “clusters” we have, and what we are and are not good at.

Clusters sound magical and mythical, but I believe they can be quite simple for most purposes. You have a company with a highly successful exit. This makes the founders and some early employees wealthy enough that they don’t need to work ever again, and can spend some of their time investing in companies within their area of expertise and mentoring them. Many more employees make enough money from the exit that they will need to work eventually, but can afford to spend several months or years starting a new company without needing a paycheck. They happen to know the founders who invest in stuff, so they have a relationship with possible investors. Less sophisticated investors in the area invest in the people and sector because even if they don’t understand it, they know it was successful. Many more employees work at the exited company, forming a fertile labor pool to hire from. I think this mental model of clusters works for the purposes of most startup discussions.

The unfortunate message we have been sending in Atlanta is that if you aren’t in one of our favorite clusters, you’re doomed. And maybe you are doomed right now, but that needs to stop. Here’s why:

And that’s just in the past 2 weeks. We are talking about proven, successful entrepreneurial people leaving town. This is after losing:

  • Paul Stamatiou – entrepreneurial hacker type, stuck around for a while working on Skribit, now co-founder of YCombinator company Notifo
  • Jeff Haynie – Appcelerator founder, was a strong leader and advocate in the Atlanta startup community, moved to Mountain View, just acquired Aptana, which was a pretty killer move.
  • Courtenay Bird – social media rockstar
  • Suleman Ali – former Shotput Ventures partner, started and sold a Facebook app company Ezgut in the early days of Facebook apps. Just raised $18 million out west to make mobile games.
  • Jay Chaudry – Started and sold 4 significant startups in Atlanta in the early 2000s. I worked for Air2Web, which probably had the worst outcome of the companies he started, and they’re still around and seem to be growing.
  • Russ Jurney – super smart entrepreneur and hacker. Doing some really cool work with big data for LinkedIn. Expect him to do something even cooler in the future.
  • Nate Clark – another smart guy. Started a social networking company, Wamily, in Atlanta. Works for Pivotal Labs in SF.
  • Dave Williams – founder of BLiNQ Media and 360i, and another Shotput Ventures partner, seems to have moved off to New York. BLiNQ is still here, but I suspect Dave is gone for a while.

It’s not an exhaustive list, but it’s significant and probably represents a whole lot more brain drain that I don’t know or forgot to mention. We’re losing successful founders, funders, and builders, and for some reason, our state’s highest priority is often recruiting low-growth Fortune 500 companies.

Other data points and observations:

  • We are losing BIG when smart startup people leave. This tells us that our startup ecosystem is so far behind that it is worth them uprooting their family and abandoning their network to pursue opportunities elsewhere.
  • We are EXPOSED when outside money funds Atlanta companies. Most startup investors like to invest close to home. When outside money comes in, it means that the company is worth their investment and the inconvenience of long-distance investing. It means that there are other startups not being funded because local money does not see the opportunity.
  • Much of our best talent in business and software development is being wasted in mega-corps. The non-entrepreneurial types can still be invaluable to a growing startup, and are ripe for the taking when the startups are here.
  • Some of Atlanta’s currently most successful startups are bootstrapped and aren’t giving equity to employees, and have some of our best talent. So if the companies are home runs, these smart folks will have… jobs. No runway to build a cool startup.
  • It’s pretty easy for the smart sorts of developers you want building a startup to get into $100k annual salary territory here. Most of them already take a 10-20% discount vs market rates to work at funded startups in the area, if that’s their cup of tea. Asking them to work full-time and for free for a year if they really believe in a startup is a great idea is crazy unless they’re coasting on house money from a prior exit.
  • Most of the people I’ve seen go all-in on their startup have crashed and burned. Savings gone, massive debt, and they land in a big corporate job, probably never to return again. In Atlanta, it can be a dead end. Wonder why those developers won’t work for free?
  • I’ve had the privilege of knowing some great investors and advisors in Atlanta. I’ve also seen a lot of investors who want to invest in social web startups, but don’t even understand what Twitter and Foursquare are. It doesn’t take a “valley” pedigree to be smart money in this space. Open your eyes and do some research. You can become a pretty smart investor in this area by doing some research and some back-and-forth with other smart investors.
  • Some of the funded companies I have known have been funded by doing an excellent job convincing investors who don’t understand the startup’s business. Follower investors aren’t all bad, we just need more of them to do the homework to understand the business and lead.
  • Some of Atlanta’s smartest money doesn’t have a lot of money. Yet.

I may sound a bit down on Atlanta, but I’m also stubborn. I’m still here because I believe we can do better, and I want to be a part of it. Many other people have done much more to advance the case of startups in Atlanta, but I think we can and should do better.

We need to think bigger. We need to look at markets that are emerging and growing and figure out ways to target very big markets. Even many of Atlanta’s largest recent startup exits have been in somewhat small markets. Very few companies have been big enough ideas that could stand on their own rather than be acquired. There are very big markets out there, ripe for the taking. New markets are not beholden to “clusters”, they are the foundation of clusters.

In targeting big markets, we need real investors to step in at EVERY funding stage. Large markets will be pursued by many companies all over the world. Although the initial entry points and strategies will be different and may not need as much initial money, startups chasing big markets will need real early-stage money to grow faster than revenues and real venture money to chase the full extend of the market. I have been in under-funded Atlanta startups in very big markets. It’s painful. You can say the companies should execute smarter, but that implies the opponent isn’t smart too. That’s a bad bet.

We need entrepreneurs with visions to pursue big markets and visionary investors to enable that pursuit. We need exits that create positive feedback loops. I can’t blame anyone who has left, but we need people with the courage to stay after they have succeeded and perpetuate a cycle of big vision and success. We need exits, not exoduses.

Atlanta, ruby, startups, Technology

Why I created Badgy

Saturday afternoon, I announced the creation of Badgy at http://bad.gy/.  Simply put, Badgy is intended to be a social game for Twitter (@BadgyApp) that fits naturally with how people already use Twitter.  I’ve referred to it as a “native” app, which means that it’s written around the capabilities of Twitter, not copied from some other game that worked on Facebook.

If you haven’t used Badgy yet, just mention “badgy” on Twitter to get started and get some context for the rest of this post.

Initial feedback has been somewhat mixed but overall encouraging.  Some users disagreed with the retweet required to earn the second badge.  Some people just don’t get it.

It seems helpful at this moment to reflect on why I created Badgy, and why it’s built the way it is:

  • Fred Wilson wants gamesin a recent blog post, New York VC and Twitter investor Fred Wilson reflected on the state of the Twitter platform and what sort of apps might succeed on Twitter.  Many of these areas, such as enterprise, discovery, and analytics represent areas where Twitter could either create or acquire a single company to cover the gap, but he also mentioned social games.  The problem with social games on Twitter is that…
  • Current Twitter Games Suck – “popular” games like Spymaster motivate you to follow people you aren’t friends with and tweet things your friends don’t care about.  In essence, they are Mafia Wars clones that are too invasive and render your Twitter account useless.  Fun!  A proper Twitter game should be compatible with how people already use Twitter.  (FourSquare doesn’t count as a Twitter game – it is a mobile app game that uses Twitter as a promo channel.)  Although ever so slightly intrusive, asking users to mention “badgy” on Twitter to begin playing is totally native and much less awkward than going to a web site to join a Twitter game.
  • People Love Badges – Look at FourSquare badges, Facebook game bragging opportunities, or achievement systems in console games and you’ll see that people LOVE to feel like they’ve earned something and can brag about it.  Using badges as the basis of a Twitter game seemed totally natural.  Someone I follow on Twitter once said that they wished Twitter would give them some recognition for tweeting exactly 140 characters.  I’ve often felt the same way.  Something like Badgy can do that, and recognize many other interesting Twitter actions that are totally natural to Twitter but still fun to recognize.
  • Twitter Integration – I wanted to learn how to integrate with Twitter.  The combination of the tweetstream and twitter Ruby gems made this easy.  The ease and power of Twittter’s APIs gives me new respect for Twitter’s platform team.  It takes literally 3 lines of Ruby code to receive near real-time notification of every Tweet matching a set of keywords, leading to a fast…
  • Fast Minimum Viable Product – it was relatively easy to find people who mentioned “badgy” and reply to them, giving them a badge.  It was not easy to check the Tweets of a bunch of individual users and see what else they said, which is why the Square One badge is given when you retweet the message giving you the Badgy badge.  Sure, the retweet promotes badgy, but it was also easy to search for that unique phrase, retweeted, rather than starting to follow individual users.  The badge requiring a retweet is a bit intrusive, and will not be a key pattern for future Badgy badges.
  • To learn – Game mechanics and basic motivation tactics aren’t just part of games, they are a useful ingredient for almost any software.  Badgy itself may become a vibrant game, or it may serve to teach lessons that make other games and applications I write better.  If nothing else, Badgy provides an avenue to rapidly test and measure theories about what does and does not work in social games on Twitter.
  • Fun – It’s fun to make games and watch people react to them
  • Potential Business – on top of all of the other reasons, there are actually some interesting applications of the technology that would be needed to fully build out Badgy.  Time will tell.

A couple of obvious questions have been asked:

  • Why nag people to retweet their first badge? – This decision was part technical compromise, part promotional decision, and part social experiment.  It’s difficult to rapidly scale following individual users.  It’s easy to track keywords.  This decision helped launch Badgy sooner.  I was also curious what types of Twitter user would be willing to retweet our Tweets to their audience to get a virtual badge.
  • Why only 2 badges? – It’s enough to prove the idea.  Get people to “sign up” by mentioning the fairly unique keyword “Badgy” on Twitter, and see how many people would respond to a request to retweet to earn another badge.  Some people are willing to incorporate Badgy into their Twitter behavior.  Badge #3 will be less obtrusive.

I hope that you will give Badgy a try and give feedback and suggestions on what you’d like to see next.  I hope we see more Twitter games that don’t suck.

Atlanta, startups, Technology

Is the Twitpay acquisition good for Atlanta?

Twitpay was founded about 15 months ago at Atlanta Startup Weekend 2, and was recently acquired for $100k (and an additional $1 million committed to move Twitpay forward as a non-profit fundraising tool).  The acquisition was widely hailed with congratulations to the founders and touted as a success story and evidence of the strength of a “payment cluster” of startups in Atlanta.  Now I think very highly of Twitpay’s founders, know they had some great buzz, great advisors, and that everyone congratulating them was genuine in recognizing this as the payoff for hard work by everyone involved.

All of the positives aside, it appears to me that the facts are that several talented Atlanta/Southeast regional entrepreneurs worked full-time for over a year on a disruptive technology that was developing good partnerships and good press and got bought out for small change.  Lance Weatherby put it well, “There are three types of successful exits for startup founders.  You get a new car, you get a new house, or you get a new life.”  It looks like the Twitpay deal sits in “new car” territory, with “new job” thrown in since I imagine they’ll get to draw a salary as they work with investors including Acculynk CEO Ashish Bahl to refocus the technology.  I’m not privy to any details, but I maintain some hope that the Twitpay team has enough of a stake in the new entity to push up into “new house” or “new life” territory.

There are a number of issues with the whole deal that I think put a bit of a damper on Atlanta’s startup ecosystem:

  • What Cluster? – There is indeed a solid bench of payment processing technology companies in Atlanta, but it’s hard to see much benefits from this in Twitpay’s story.  With the acquirers in the payments space, the best I can say is that participating in this cluster may have meant the difference between “new car” and “no car”.  It’s small wonder entrepreneurs often ignore our local clusters.  Many local entrepreneurs who are fully dedicated to their startup just end up in “new 2nd mortgage” territory.
  • The Series A acquisition – Atlanta is not “The Valley”, and this deal rubs that fact in.  A “success story” version of this situation would have seen the $1 million invested in Twitpay and used to give the company strategic investors and a couple more iterations to “get it right”.  Buying startups after their initial model is “busted” and funding their additional experiments after the fact is not an appealing outcome for entrepreneurs.
  • The compensation sucks – If our version of a success story is that a founding team of entrepreneurs goes without salary for a year and a “good” outcome is that they get to split $100k 3 ways, and THEN get to draw a real salary as an employee, we have a real problem.  New Georgia Tech CS grads can make twice that much, fresh out of school, guaranteed.  This sends a message to talented potential technical co-founders to just go get a J.O.B.
  • Few Lasting Benefits – these guys have “new car” money.  They’re not going to be the next partners in Shotput Ventures, they’re not going to be a part of the next big angel deal or have large amounts of time on their hands to re-invest into other startups and entrepreneurs.  Furthermore, they’re now employees, which means they’re not spending much time starting their NEXT company.  They do have some domain knowledge and credibility to bring into their next startup.  Who knows?  They may even co-found something awesome that does benefit from Atlanta’s strength in payment processing.

Let me be very clear that I may have a number of facts wrong about compensation, deal terms, etc.  I’m a total outsider to this deal so I know little more than the publicly stated facts (the rest are educated guesses), but that also means that the way the deal looks to me may very well be the way it appears to other outsiders in the Atlanta startup ecosystem.  I also have the utmost respect for everyone involved in this situation.  The Twitpay team rocks.  I am sure their acquirers have great intentions and solid potential to do great things with Twitpay.

If I’ve got something wrong, let me know.

An ongoing message and lesson I take with me is that Atlanta is for bootstrappers unless you are fundable on reputation and track record alone, or you are one heck of a fundraiser.  Don’t quit your day job.  Let customers fund your growth.

Atlanta, ruby, Sports, startups, Technology

Touchdown Nation finds a rhythm – Atlanta Startup Weekend 3, day 2

Touchdown Nation was formed yesterday (the name was updated from Football Nation so we could secure a web domain, twitter account and be unique on Facebook).  As a part of Atlanta Startup Weekend 3, we’re building an engaging social game for Facebook in less than 3 days.

The first 24 hours of Startup Weekend are a volatile time.  During ASW1, a huge swath of business and marketing types ran away after we chose to work on Skribit, and more attrition followed during early and mid Saturday afternoon as the team lurched into action.  During ASW2, many, MANY teams flamed out when they realized that the person who pitched the idea was trying to find free development & sales labor to build their idea in the coming months.  This year, at least 2 of the 8 teams totally cratered in the first 24 hours.

It happens.  Teams realize they can’t agree on what to build, that they can’t build what they want to, or that someone else already built the whole thing.  It’s not always a reflection on the people involved.  In some cases, I think it IS a reflection of the idea pitched.  Vague pitches about ill-defined products that will take a year to build are recipes for team implosion.

The first 24 hours of Startup Weekend are kind of insane.  You have teams of 5 to 20 people trying to get on the same page to figure out exactly what their project is, how to make money, and how to work effectively with a dozen strangers.

Touchdown Nation was no exception.  We had a great working session on Friday night deciding many of the things the game was and was not.  It changed a decent bit from my original pitch, or at least what I had in my head, which is a good thing and a great reflection on the team.  We came into this morning with a list of things to get done by noon, and we basically hit all of them, but there was still this sense of urgency.  We had a loose plan, a new name, and the technology infrastructure was in place, but hadn’t had any time to actually build the technology, the business, or the marketing.  It’s an uneasy feeling, which makes people on a team want to spend more time generating certainty instead of building something.

In the afternoon, we started to do less planning and more doing.  There are amazing times in startups where I believe the core team is in a rhythm.  In a rhythm, people on different teams understand the common needs enough that problems are worked out in conference calls, not huge meetings, and I believe Touchdown Nation hit that stride today.  When everyone is running toward the same goal, you need less meetings to reach that goal.  Course corrections happen through natural conversations, not huge meetings.

We hit that moment today.  Code started flying, blog posts started getting posted, you name it), but we got everyone technically ready to do their job.

That’s enough for now.  We”re very exicted and having a blast.  Check out @TouchdownNation for the latest news.

Game On!

-Rob

Atlanta, Sports, startups, Technology

Football Nation – Atlanta Startup Weekend 3, Day 1

It’s been 2 years since the first Atlanta Startup Weekend, which I view as a landmark moment in the growth of Atlanta’s technology startup community, and certainly a pivotal moment for me personally.  It grew both my ambition of what startups could accomplish in Atlanta, and my network of like-minded startupy people.

We launched Skribit in 3 days, and it remains one of the most successful Startup Weekend companies anywhere.  Last year, I spent time on the Seed Stage Records and Giving Time teams.  I left Seed Stage after Friday night, before it proceeded to implode on Saturday, and spent the rest of the time on Giving Time, which may be viable but hasn’t launched yet.

I pitched an idea at Startup Weekend, didn’t last year, and decided to pitch an idea this year.  Whether or not my idea was picked, my main goal was to launch whatever app I did work on by Sunday night.

Imagine my surprise when I presented an idea to build a social game for Facebook centered around Football, which I initially called Football Nation (the actual name is TBD), and I ended up with a team to build it!  The idea is that football is super popular, and Facebook apps are super popular, but nobody has effectively combined the two – instead, people are busy building farms, restaurants, and mafias on Facebook.  Not only could a football app be successful as a standalone app, it could provide a foundation to build a niche in social sports games and eventually a way to dethrone EA as the king of sports games.  (Frustration with NCAA Football 10 was actually the pain point that generated this idea.)

Our team is pretty enthusiastic about football.  We’ll be streaming Georgia Tech v. Duke on a projector tomorrow, and probably some other games.  Our team was not as well versed in Facebook social games.  In perhaps an odd move, we spent the first 30 minutes or so of our team meeting playing  the currently popular Facebook games in teams of two.  Mafia Wars, Restaurant City, Farmville, YoVille, and I even assigned Sorority Life to a guy I knew could take it. Hopefully they can detach from these new-found addictions enough to work on our app tomorrow. 🙂

I think we’ve got a good concept, and great thoughts from the team helped solidify answers to some key product decisions.  I am immensely grateful to have a strong development team which I can trust implicitly because I have worked with most of them.  I’m excited about the non-developer elements of our team too because they had great input and we need strong design, marketing, biz dev, etc. to make this thing work, and we have all of those skills.

If you’re a creative type and interested in helping, please find us.  We have a great start, but I believe that with this app, we have  a nearly unlimited need for UI input and asset production to make this game really rock.

If you’re planning to come to a startup weekend, prepare an idea to pitch.  The process of running  a team that has chosen your idea is amazingly different from being a part of a tea built around someone else’s idea.

Tomorrow is going to rock.

Atlanta, startups, Technology

Atlanta Startup Weekend 3 – Launch Something!

Atlanta Startup Weekend 3 is coming November 13th-15th.  Based on my experience at the first 2 Atlanta startup weekends, I want to challenge anyone who is planning to attend to come with the intent of launching some version of their company & product by Sunday night.

The first Atlanta startup weekend created Skribit, which launched VERY late Sunday night of that weekend, and was one of the first Startup Weekend projects to take on a life of its own beyond the weekend.  With every ASW1 attendee united on 1 project, we had an amazingly balanced and capable team, but we lost a lot of people after day 1 when they decided the idea wasn’t for them.  Skribit received funding from Georgia Tech’s Edison Fund, and is actively being worked on by Paul Stamatiou and others.

The second Atlanta startup weekend took on a new format.  Instead of having 60+ people create one company, we split into multiple groups to launch multiple companies – this was a good thing, although it led to a skewed distribution of resources (Reepli may have had 1/3 of the total developer pool, possibly with zero non-developers.)  I’m not convinced that the multiple projects led to any less attrition on day 2 than the ASW1 format.

The other big change was that teams were no longer encouraged to launch their company by Sunday night.  I think this was a VERY bad thing.  Businessy types who had been hunting for a technical co-founder for months pitched their huge-scope ideas.  Developers don’t show up at Startup Weekend to get another job, especially on ideas that several other developers have already declined to work on.  Friday night, I decided to join the Seed Stage Records team.  Late that night, when SSR’s goal for the weekend was set as launching a static web page by Friday night and doing more in the months ahead, I bailed.  The team imploded on Saturday over vision & direction issues that wouldn’t have been a problem if they had been focused on launching a minimum viable product by Sunday night.  Saturday morning, I joined the GivingTi.me team.  I rolled up my sleeves and put a lot of work into building a launchable site over the next 2 days.  It didn’t launch, mostly, I think, because there was NO pressure to launch.  Nobody cared if Giving Time launched by Sunday night, so there was no pressure to work until 1 AM at night, no pressure to cut scope, etc, etc.  It STILL hasn’t launched 9 months later.  As best I can tell, none of the code our team wrote will be used when it does launch.  Almost sounds like a wasted weekend, but I still had a blast.

I believe the first Atlanta Startup Weekend did a better job of building community and launching product.  ASW2 did launch TwitPay, but it germinated from the core Merb team, and I’m not sure the weekend did more than give those guys a kick in the pants to launch a rocking idea (to their credit, they DID launch something).  ASW1 did a LOT more to build Atlanta’s entrepreneurial community.  Part of that is because ASW1 was a part of Atlanta’s Great Awakening.  In many cases, it was the first time many of Atlanta’s startup-oriented minds met and had a chance to size each other up.  I think that’s too flippant, though.  The process of fighting over the concept, scope, and design of Skribit to successfully launch it in 3 days led to a better product and a better community.  At the end of ASW1, I knew who I wanted to work with again, and who I did not (AND I currently work with 2 of my Skribit co-founders).

So my call for Atlanta Startup Weekend 3 is to LAUNCH SOMETHING.  Don’t pitch an idea that can’t be launched by Sunday night.  Don’t join a concept that needs 6 months of work to launch – this isn’t startup speed-dating.  Don’t let your first team meeting degenerate into 1 year planning meetings and a goal to launch a landing page.  Find a great idea with other smart Atlanta / SouthEast regional people to work with to LAUNCH some version of that product in 3 days.

And if you’re working on a startup either full-time or on the side, the same challenge is out there.  Launch Something so you can begin getting customer feedback, iterating on your idea, and learning, instead of thrashing on an unlaunched app.