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.