The short version: This new Florida Growth Fund will not only provide capital to venture capital firms (in the form of Florida being an LP - Limited Partner), it will also co-invest (follow, not lead) directly in technology and growth companies.  The fund will be managed by a private equity firm on behalf of the Florida Retirement Pension Fund.

Georgia is the last state in the Union that does not allow private equity investments out of the state’s pension funds.  “Last.”  Wow.  Now there’s a word that simply emanates innovation.  Nothing says “cutting edge” like being listed as “last”.

“Last.”  That means that North Dakota is ahead of us in terms of allowing private equity investments from state pension funds.  WTF? Pinch me.

For all the hemming and hawing we hear from the state government about how great Georgia is for innovation, we’re really doing a pretty lame job of walking the walk, and leading by example.  We can pass a bill that invites the 2009 Georgia Peach Queen to appear before the House of Representatives, and slash the budget of the ATDC, but we can’t drive through a key piece of legislation to propel the Georgia economy into the 21st century.

“Last”.   You may also recall that Georgia is also “last” (or at least close to being “last”) in another category as well - public education for our children.  It is no coincidence.  We clearly have a remarkably uneducated group of people keeping us from joining the rest of the country in diversifying the state’s investments in the private sector.  Guess that lack of education has already caught up to us.

Does our state government really take these issues seriously?  Certainly there are some - many of whom I’ve met and had great conversations with.  But as a whole, no.  There are those that are hell bent on laying down in the middle of the street and preventing progress.

The most common arguments that I hear from opponents of such legislation is that it is “too risky” and “wouldn’t provide much in the way of economic development for anyone but Altanta.”  Humor me for a moment.

The Georgia Public Policy Foundation, which is a non-profit, independent, public policy think tank, recently published a very interesting article.  In the article, they cite the “lack of diversity” within the investments of the state’s pension funds.   Every investment has risk, but obviously the only defense against market risk is diversification of investments.  “Diversify or die”, as I like to say.  Not diversifying is even riskier. They lay out a pretty compelling case across the board. Read the article - it’s short and worth it.

With respect to the whole notion that Atlanta would be the sole beneficiary of such investments - that is simply ludicrous.  What these pundits fail to realize is that this is an ecosystem, not a one-way street.  All boats rise with the rising tide.  Would those dollars necessarily create direct jobs in rural areas?  Probably not, or certainly not that many.  Companies that attract venture capital and private equity investment tend to be fast-growth and/or high-tech companies, and those require infrastructure and a large labor force.  And those things exist in abundance in Atlanta, but few other places within the state.  But, what those investment dollars would do is create an economic return for the state.  And those additional dollars eventually make their way into port projects in Savannah, highways, schools, agricultural programs, and other projects around the state. Viewing this issue through any other prism is negligent in my view.

Normally, I would tell everyone reading this to contact your local state representative or senator, and tell them why you think passing legislation to allow the state to invest in private equity funds would be a good thing.  But we’ve all done that already.  Several times (SB80, HR249, etc).  I tire of the whole thing.

The only thing that can save us now is the passing of time, and the hope that at some point, enough rational people are voted into office to get us back on the right track.

“Last”.  I hate being last, don’t you?

Cheers.

We are bringing ideas to the table, and we want to hear yours.  And more importantly, we want to recruit you to help in the effort.  The only way we’re going to get there is if we execute together.  Gee, kinda like a startup team.

Click here for full details. Schink does a great job of laying it all out there.

If you currently play a current role in the Atlanta startup scene, want to play a role in it, or give a crap about it at all, you need to be there.  We are going to try and record the session for a slidecast/podcast for those that can’t make it - but no guarantees.

If you have ideas, bring ‘em on.  But don’t forget to bring your spirit of volunteerism with you as well.  Because you are quite likely going to be put to work.  Sitting in the crowd like a knot on a log is going to add zero value.  Throwing out ideas and not stepping in to help bring them to fruition adds only marginal value.  We want those people who are ready to step up and play their part as a software developer, web developer, mentor/advisor, educator, marketer, public relations guru, etc.

Let’s get it on.

Caveat: my wife and I are expecting our 2nd daughter to arrive at any point in the next week or so.  There is a possibility that either Unblakeable will have to go it alone, or that the event gets moved to another time.  Or, that I will run screaming from the building in a panic to get to the hospital right in the middle of something important 

Cheers.

We get a TON of applications every time we put together a CapitalLounge event. While most of the applications have some degree of merit, and eventually get accepted, there are many that don’t.  Historically, we have a non-invitation rate of anywhere from 20-30%.   Despite the enormous level of detail that we’ve published as to our selection criteria and process, invariably, we get a flood of emails the week or so leading up to the event with people appealing and arguing with us (or trying to) about why their deal was rejected.

Here is a tongue-in-cheek look at some reasons why the event applications for some entrepreneurs and investors get rejected.  If you don’t find any of this at all funny, then you most likely fall into one of these categories.

JorgeDubyaBoosh@wytehowse.guv

We can’t bloody well deliver a confirmation (or rejection) email to you if you can’t even type in your own email address properly.  Please be sure to double-check your email address before submitting a company profile or application!  There have been some really interesting looking startups that have excluded themselves because we just couldn’t reach them.

The Gettysburg Haiku Tapes

Your “pitch” comes across as a rather arcane series of mutterings that is reminiscent of an amalgam of Haiku, the Gettysburg Address, and the WaterGate Tapes.

Four score and seven
I was not a criminal
You must invest now

Seriously - here are a few gems that were rejected (no, I’m not kidding):

COMPANY works closely with our clients to ensure they are dealing with only the best.

We innovate technologies to creation for selected markets within the U.S. and abroad.

We are a leading consumer products company that is seeking angel funding.

Our firm is about MAJOR ROI while innovating the solutions that are needed.

We need angel funding to get our first customers that will be Microsoft and possibly Oracle.

We are a subscription based SaaS company that is vertically focused for maximum ROI.

We are passionate about the overall benefits of our product.

COMPANY is the innovator that will bring many industries to the next level.

Apologies to those who actually submitted these pitches - I was careful not to reveal your company name.  If you recognize any of these pitches, well … now you know at least one reason why you were rejected.  That’s progress in and of itself!

The good news is, these types of pitches are outliers - our educational efforts with PitchCamp (for example) seem to be of value to the broader community, which is cool.

The Great Zorba says you are a SaaS company, no?

If you decide that providing a “short pitch” is not worth your time and leave it blank, or you completely half-ass it, well, you aren’t likely going to get approved.  We aren’t mind readers, and we don’t have time to chase you all over the internet to try and figure out what it is you do.  Luckily for us, The Great Zorba doesn’t approve CapitalLounge applications; we do.

Meaningless Wall of Text Syndrome

We ask all entrepreneurs who have attended CapitalLounge before to provide a brief “progress report” when they apply to the CapitalLounge event.  The idea is simple.  Deals that seem to making tangible progress in between events are going to score higher and move ahead on the list.  Those that are stale, or just flopping around waiting for someone to write them a check, are going to get rejected. If your “progress report” on the application is a copy/paste text version of your business plan, or doesn’t actually mention any recent milestones for your venture, you turn our vetting process (at least in terms of looking at your deal) into a very simple one.  Fail.

According to GoDaddy, my Venture is Coming Soon!

If you have no web site, and you are using an email address of bizguy@hotmail.com, you have relegated the status of your deal to a split second, one-way decision on our part.  Sorry, but in this day and age, there is no excuse.  Even a simple teaser web site goes a long way.  And get your own domain for email, for the love of Pete.

Stealth Company That Will Change the World!
If you are in stealth mode, we understand.  Sometimes you don’t want to reveal what you’re doing until you are ready.  We get it.  But if you apply as a “stealth mode” company, you have to give us something better than these for your pitch:

Early stage stealth startup.

Changing the way we work.

Early idea still.

Mulling my next trick.

While we “get” the importance of stealth mode at times, we also “get” our need to figure out what it is that you do.  Otherwise, we’ll just assume you’re a job seeker, consultant, service-provider, etc., and you get a quick trip to File 13.  And no, we aren’t going to sign an NDA in order to learn about what you do (yes, we get asked that from time to time).

Everyone Will Want to Buy a Thin Llama Wearing Raybans!

If your startup focuses on establishing a chain of weight loss clinics, Llama ranches, or Sunglass Huts, the closest you’re going to get to our event will be the coffee shop across the street.  Come on, already.  Have you not read the event details?  The blog posts?  The rants and raves on our podcast about the criteria for getting in?  If you use the words franchise, consulting, clients, strip mall (”mall” in general), or  importer, that is almost a guaranteed rejection.  Nothing wrong with those businesses, mind you.  Just not a fit for CapitalLounge.  Talk to the SBA or your bank.  They are probably going to turn you down, because that is what banks are supposed to do.  But that should be your first stop.

And for the love of Pete - don’t send an email telling us how “we just don’t get it” because we didn’t put your REI or franchise opportunity on a pedestal.  Trust me.  We do.  That is why you aren’t allowed to come.

Have you been injured on the job? Suffered a car accident?

If you are an attorney, accountant, consultant, etc. , wow … you must be completely incapable of comprehending simple English.   We realize that lots of entrepreneurs (would-be or otherwise) work for service providers.  We really do.  But when you apply to attend our event as an “entrepreneur”, and then we research you online, only to find out that you really work for a marketing consulting company, a financial services advisory firm, etc., we have to stick true to our vision and reject your application.

Additionally, we have to be respectful of our small stalwart band of sponsors who pay us money to offset our costs.  We give them exclusivity in terms of attending the event (e.g. we have a legal sponsor, and they are the only law firm in the room).  Works out well for everyone, except you.

Um.  Jimmy works for our startup.  Yeah, that’s the ticket.

If we reject someone’s application to attend, and then you apply and list that person as your “guest” - not so good.  There is a reason we try and vet the attendees for this event.  If you can’t be respectful of this, then you can’t come and play.

Confucious say “man who have bad reputation, doesn’t get to attend CapitalLounge”

If you are known around town as a slimeball, predator, shyster, trickster, slickster, spinmeister, or just someone who “loves me some me”, you can sit outside and pat yourself on the back all night long - because, well, this is America, and you can do that if you so desire. But if you’ve ever taken advantage of an entrepreneur or investor, asked people to pay to pitch, have a reputation for taking but not giving, provide introductions for a “fee”, or  served hard time because you got caught up in one of Mike Blake’s “schemes”, you aren’t getting in.

You don’t know me, but I was the guy who invested first in Google.

If you claim to be an investor of any level, but:

• no one has heard of you
• no one can vouch for you
• you can’t cite or refer to any past deals that you’ve done
• you don’t have a web site (in the case of VCs)
• trying to find you is like trying to infiltrate the Witness Protection Program
• you wear a seersucker suit, put three gallons of Vitalis on your hair every morning, and live out of a 1974 Chevy Vega

… you can sit outside and invest in the guy who is patting himself on the back, while he tries to take advantage of the entrepreneur peddling the Llama ranch PPM.  I will admit, VCs are pretty easy to vet.  If you are a VC, you have a web site, and have raised money from LPs.  If you are a “corporate venture” type - we’ve heard of your company.  If you claim to be an angel investor, well, you better come strong with your pitch and application, or be referred to us by someone - because out of the box, we just assume angels are service providers, consultants, etc.  It’s much quicker than playing the Google game for 30 minutes trying to figure you out.

Oh man, I’m so messed up.

Any combination of one or more of the above is going to be an insta-fail.  We’re happy to be proven wrong …. we just haven’t been yet.

Cheers.

I normally would not engage in a dialog over these types of comments, but today I am going to make an exception.  I just received this comment from Captain Anonymous:

any successful startups in Atlanta?  Seems like alot of “talk” and no meat.  When was the last exit?

Wow, where do I begin?

For starters, we don’t claim to be on the same playing field as Silicon Valley.  Everyone here in Atlanta realizes that Silicon Valley is an outlier when it comes to startup ecosystems.  As has been pointed out by many (including me), the Valley is a second (some would say third) generation capital market.  Atlanta is still a first-generation market.  You had the semi-conductor revolution and built a cool ecosystem around it.  Great.  We get it.  We also realize that Atlanta, and every other metro area in the country, will likely never reach the level of innovation and high-tech capital investment that occurs in the Valley.  And no one here is saying that we can, should, or will, ever achieve that.  In fact, if we did achieve that, I would leave - because along the way, we would most likely lose focus of the things that do make Atlanta such as a great place to be.  But we do know that given the amount of innovation that does occur here, we can be a better Atlanta, and that is an admirable goal.

Much effort has been put into the startup scene in Atlanta over the past couple of years.  I sold my last venture in 2005.  When I came up for air, I realized that the ecosystem here for startups was practically non-existent.  So a small group of us got to work to try and improve things. Since that time, countless initiatives, groups, funds, and other vehicles have surfaced - all of which have provided the foundation of a real startup community here in Atlanta.  Consider this really profound slide (see the animated version) that Stephen Fleming at Georgia Tech’s VentureLab put together, which illustrates just how many components of our startup infrastructure were not even around just a few years ago.

All of these new funds, events, groups, communities, and educational opportunities have been funneled through social media, which has effectively resulted in a completely new startup ecosystem here.

So, Captain Anonymous, I’d rather talk about what is happening, rather than what you think isn’t happening.  You aren’t even here.

Curious as to exactly what part of the world Captain Anonymous hails from, I looked up his known IP addresses from his various “contributions” to my blog.   While I have no way to verify this, it would appear that the posts were made from IP addresses belonging to Yahoo!’s corporate campus.  Hmm.  They are a pretty big company the last time I checked.  Yahoo! hasn’t been a “startup” in years.  If you are such a startup guru, Captain Anonymous, quit your job at the 600 pound gorilla, venture out on your own, and take some risk.  Then let’s talk again.  For all I know, you are a serial entrepreneur with 10 exits under your belt.  You see, that’s the downside of hiding behind an anonymous moniker - I’m just going to assume that you are an uninitiated troll.

Captain Anonymous wanted to know what exits have occured here in Atlanta.  Well, off the top of my head, here are some that come to mind (a definitive list would be longer, I’m sure - these are just people that I know or deals that everyone knows about - except for Captain Anonymous):

• Scientific-Atlanta: acquired by Cisco for almost $7B
• ISS: sold to IBM for $1.3B
• Jungledisk: acquired by Rackspace
• AirDefense: acquired by Motorola
• CoreHarbor: acquired by USI/AT&T
• Harbor Payments: acquired by American Express
• Digital Insight: acquired by Intuit for $1.33B
• CipherTrust: soldto Secure Computing Corporation for $295M
• Witness Systems: sold to Verint for nearly $1B in cash
• Firethorn (Tripp Rackley, one of our board members at StarPound) sold to Qualcomm for $210M
• APEX Analytix (1/3 of Fortune 100 companies as customers, Noro company, sold to PNC Equity Partners)
• Engineous Software (sold to Dassault Systèmes)
• Gametap: founded by my friend Blake Lewin, acquired by Turner, then sold to Metaboli
• JBOSS: snapped up by Redhat for $350M
• N2 Broadband: Acquired by Tandberg for north of $100M
• Firearms Training Systems (FATS): Sold to Meggitt, a U.K. based defense contractor for $144M
• Weather Channel: acquired by Bain Capital ($3.5B)
• Sciele Pharma acquired for $1.3B
• Procuri: acquired by Ariba for $425M

More importantly, let’s take a look at a list of successful (current) Atlanta startups that have been funded AND are growing (again, off the top of my head - there are plenty of others):

• MFG.com: Completely changed the global manufacturing landscape - invested in heavily by Jeff Bezos and the Samwer Brothers.
• Suniva: seriously revolutionary photovoltaic technology out of Georgia Tech - recently secured a half billion dollar order from their first major customer)
• Vocalocity: A fellow Atlanta VOIP player (to what we’re doing at StarPound), a large customer base, and recently pulled in another round of growth capital
• CCP Games: Developers and operators of EVE Online, one of the most popular (and profitable) MMO’s in existence
• PureWire: Security in the cloud (already snatching up plenty of award hardware, including the coveted DEMOgod award at DEMO 09)
• Everyone at the ATDC - including recent graduates (Global Crypto, Emcien, VendorMate, Synthis, ClearLeap, Biofisica, CogentWare, Damballa, Izenda, Invistics, Sentrinsic, Qualtre, etc.)

It is only a matter of time before we start seeing successful exits from these companies as well.    Considering we’re a first-generation capital market, and still a city that is still shedding it’s industrial legacy, it  isn’t bad at all.  These deals above all happened here in Atlanta, and are all technology companies. Many were acquired by companies located in California, by the way.  If we add the non-technology startups to the mix, the list would obviously get a lot longer.  If you expand the grid to include our closest startup ecosystem neighbor in Research Triangle Park/North Carolina, the list gets even longer.

EDIT: I could have taken an easy shortcut in my original posting here by simply linking to the excellent AtlLogos.com site (maintained by Paul Freet down at VentureLab).  Right now there are 157 early-stage technology companies in Atlanta per Paul’s research.  Obviously, there are plenty more that are in embryonic and/or stealth mode.  One look at the AtlLogos home page pretty much tells you everything you need to know about the Atlanta startup scene.

Is this on par with what is happening in the Valley?  Common wisdom would say it isn’t. But keep reading.

Out of curiosity, I asked Mike Blake, my StartupLounge co-founder (and valuation guru over at HA&W)  to pull some data from S&P (Standard & Poor’s).  I wanted to know how many successful acquisitions or public offerings there were in both the Atlanta and San Francisco bay areas.  We ran the report to cover transactions across all industries (after all, a startup is a startup), and excluded bankruptcies, spinoffs, etc. The timeframe used was from January, 2007 through today (6/3/2009), or just about two and a half years.

There were 754 such transactions in the Atlanta metro area during that time frame.  There were 700 such transactions in the San Francisco bay area.  Expanding the search southward into Silicon Valley reveals an additional 317 such transactions.  So, Atlanta has more than either one of those areas.  Even when you combine the two areas to form the broader bay area, Atlanta has still performed pretty well (754 in Atlanta, and 1,017 in the bay area, or almost 75% in a straight comparison).

Caveat: There are two categories where San Jose had no exits at all.  Since you can’t technically calculate a percentage against a zero value, I cheated a bit, and in the formula gave them a value of “1″.

Here is a breakdown of valuation metrics of these exits:

And finally, a breakdown of the deal sizes:

Some quick observations:

• Atlanta has over twice the number of exits of the San Jose/Silicon Valley region, and slightly more than San Francisco proper.
• Atlanta holds its own even against the aggregate of the larger combined bay area
• Atlanta generated more $1B+ exits than both valley regions, and only slightly less than the larger combined area
• Atlanta generated more total deal value than San Jose/Valley, but less than San Francisco and the larger combined area
• The only sectors where the Valley is clearly far beyond Atlanta in terms of exits is in Healthcare and Information Technology - no surprises there
  
• Atlanta has a commanding lead in several other sectors, though, including Materials, Financials, Industrials, and Consumer
• Atlanta has more sector diversity, which in my view, is healthier in the long-run
• Atlanta has a slightly lower average valuation than the San Jose/Valley region, but less than San Francisco proper and the larger combined bay area

Now, we all know that numbers are like clay in an artist’s hands — they can be molded to represent practically anything you want.  But I think it is safe to say that there is exit activity here in Georgia.  Yes, the $1B+ exits were not all startups a few years ago - most, if not all, were older companies. But the same can be said of the Valley.  Every company is a startup at some point.  And when companies are acquired, some portion of those dollars ultimately factor into regional economic development.

As a point of reference, the bay area in California has a total population of around 7M people, whereas the Atlanta metro area has around 5M.  Also consider this side-by-side comparison of the two geographies from the air at night.  Notice something?  As I’ve pointed out in some of my presentations, Atlanta is effectively an “island”.  We don’t have the benefit of large, adjacent metro areas in our ecosystem.  Not that I’m complaining mind you - the traffic here is bad enough as it is.  It’s just an observation, but an important one.  An angel investor from Cupertino is not going to have a problem doing a deal up in San Francisco (and vice-versa).  We have to make do with the limited resources we have available - there are no other substantive angel investors around us.

Click on the image below and you’ll see what I’m talking about.  In California, it is one big light from San Francisco all the way down to Los Angeles.  Same for Boston and the Northeast corridor.

We have a number of growth sectors here - and they probably aren’t the sectors that would typically come to mind (e.g. enterprise software) when one thinks of Atlanta.  The stretch from Atlanta up to RTP in  North Carolina has more biotech wet labs than most anywhere else in the world.  Digital Entertainment/Gaming is really coming on strong here - Atlanta is home to four MMOs (that I know of), and has an incredibly vibrant community around interactive content, game development, etc.  We have a lot of stuff popping up around nanotech and cleantech as well.

With all of that said, is Silicon Valley a great place to start a company?  Sure.  But so is Atlanta - for lots of reasons.  Are they evenly comparable?  Of course not.  But there are plenty of things happening here in the startup scene.

In my view, the comments from Mr. Anonymous belittle the hard work that has gone on here in Atlanta to improve the ecosystem for startups. Stop hiding behind an “anonymous” moniker - be a part of the solution, not a sideshow distraction.  I invite you to join in the conversation and play a constructive/productive role.  What can we learn from you?  What can you share with us that can help us evolve? All boats rise with the rising tide, as they say.  Doing anything less just makes you look like an asshat.

Cheers.

CapitalLounge

Being a co-founder of StartupLounge, I’m naturally biased.  But hey, at least I’m being honest about it. :)  Our next CapitalLounge gathering is coming up next week, Wednesday, June 10th.  Should be another awesome party for entrepreneurs and investors in Atlanta.  Our old friends J-Cap and DJ from Southern Capitol Ventures (yes, an “o”, not an “a”) are making the trek down from Raleigh, NC, as will the folks from Intersouth (also in NC).  Local investors will be out in full force as well, including Noro-Moseley, Fulcrum Ventures, Kinetic Ventures, Croft & Bender Capital, Arcapita, Grey Ghost Ventures, CEO Ventures, TechOperators, and even the Weather Channel’s venture arm.  And of course, a nice smattering of local angel investors.

If you are interested, you can check it out here.   Cost is free, but there is a vetting process.

Calling All Entrepreneurs: Atlanta!

Speaking of J-Cap and DJ from SCV … they will be in town on the 10th and the 11th.  In addition to hanging out at CapitalLounge on the night of the 10th, they are holding their “Calling All Entrepreneurs” sessions here in Atlanta.  Awesome.  I wish more VCs would do this.  No pressures, no pitching.  Just getting a chance to pick the brain of an investor over coffee.  Very cool.    From Jason:

David and I will be down in Atlanta next week on June 10 and 11. We were an original sponsor of CapitalLounge and will be at that the night of June 10th.

On June 11, we will have Calling All Entrepreneurs in Atlanta from 7-10am. We will find a place close to the ATDC. Again, any entrepreneur or aspiring entrepreneur is welcome to set up a time to come meet with us for 10 minutes. We will try and pack in as many meetings as possible and the coffee is on us! Read my prior post on this so you understand the structure and background. We did  this down in Atlanta a while back and filled it up quickly.

Just email me jason AT southerncapitolventures.com to schedule a time.

CapVenture

Also, don’t forget that the ATDC’s deadline for applications for their annual CapVenture program is on June 16th (the actual sessions are later in the year).  If you aren’t familiar with CapVenture, you should be.  It is an awesome program that aims to educate and equip early-stage entrepreneurs (primarily those seeking their first round of funding).  I have personally talked to several startup CEOs that have gone through the program and they rave about it.  Definitely check it out.

Of course, there are a ton of other events going on, some formal, some informal.   Feel free to drop a note here if you know of another great startup event happening here in Atlanta in June, or tune into the Twitterverse to get plugged in.

Cheers.

What is it?

If you aren’t familiar with StarPound CORE, it is a software development platform that allows you to visually “model” a business process, web service, voice service, or web application.  That visual model is then deployed onto StarPound Application Server running in the cloud where it becomes a live web or voice service.  If you want to make a change to the application, you change the business process model behind it, not necessarily the actual code.  We’ve built the StarPound platform primarily around the BPMN standard, although we’ve extended it to better support web services and VOIP/SIP call control.  The whole platform is built with Java/J2EE, and is over 1.2 million lines of code and counting …

StarPound Studio, our visual application modeling tool, is built on top of the Eclipse open-source project (another amazing innovation in and of itself). We’ve added a number of really cool features in this release.  Besides updating our build to support the Ganymede edition of Eclipse, we’ve also added support for using Java Beans as BDDs (Business Data Documents).

Another really nifty feature in the latest release of StarPound Studio is our “visual expression builder” for decision gates.  In past releases, if you wanted to create a complex set of decision criteria in a business process flow, you had to stub in custom Java code.  Functional, yes; but a pain in the rear end. Our new expression builder simplifies this process, and tightly couples the decision criteria to the business data in the model.

On the server side, I am really excited about announcing our initial support for FreeSwitch.  FreeSwitch is a free open-source alternative to commercial telephony switching environments (as well as Asterisk, another very popular open-source platform).   We have done extensive testing with FreeSwitch, and are quite pleased with the performance and scalability. Providing support for FreeSwitch extends our vision to be platform agnostic as it pertains to the underlying switching mechanism.

We’ve also made a ton of other enhancements in this latest release, mostly around call handling, work item/work flow, and usability.  A number of improvements have also gone into our open source call center and PBX applications, which we’re also excited about, as these tools provide very scalable open solutions as alternatives to more expensive offerings from players such as Avaya, Cisco, etc.

Another huge step for us this past quarter was our announcement of our successful deployments of StarPound within the Amazon Elastic Compute Cloud (EC2).  What do you get when you combine StarPound with the EC2?  How about full-featured call center capabilities for a tiny fraction of the cost per month of a typical commercial solution?  How about an incredibly affordable realtime cloud of active business processes that govern all of your warehouse and inventory activities?  The possibilities (as we’re now finding) are endless.

However, the thing I am most excited about is the traction we’re getting with enterprise customers.  While I desperately wish I could talk about them openly here, I can’t.  Needless to say we are in knee deep with some pretty big customer engagements.  And if that weren’t enough, we’re also hard at work on our next-generation unified communications portal (codenamed “Hannibal”), a really sexy browser-based softphone, a metric-based framework for analyzing business processes and web services in the cloud, an extended developer API, developer network web site (DevNet), extending StarPound Studio with downloadable “palette packs”, and a series of how-to video tutorials.

So, as you can see, it has been pretty quiet lately around our office …

More soon …

Cheers.

We had a great candid chat about how my personal military experience translated into the business world, specifically the world of fast-growth startups.  We covered a variety of different aspects of startups, ranging from team building, cross-pollination, culture, problem-solving, hiring employees, risk taking, leadership, and the applicability of small unit tactics. I shared some stories not only from my Army days, but also anecdotes from my day job as well as other tidbits from throughout my professional career.

Thanks to Jason for the opportunity to hang out and share my perspectives on a subject that is near and dear to my heart.

It was great fun, and hopefully some folks will find some value in my ramblings. I will admit, having now done nearly 40 podcasts for StartupLounge.com, it felt very different being on the other side of the microphone - good fun, though …

You can listen to the podcast here on their site, or locally using the embedded flash player below.

Cheers.

Urvaksh did a cool writeup on it as well.  He brought along an Atlanta Business Chronicle photographer as well … hoping to see some cool shots soon!  We should have the pics from our own photographer up on the site by next week …

Thanks to Allen Ulbricht from PeachPods And Anna McCullough from Adams Capital for jumping in and helping out at the badge table.  Man, that was a mess!  Lesson: Don’t let me and Blake manage the badges - that’s just a goat rodeo waiting to happen.

The next event will be in late May or early June, most likely.  We’ve also posted the date of the next PitchCamp session … if you are interested in attending, sign up now, it will fill up fast with only 12 slots available.

Cheers.

Birth of a Kitten

Several weeks ago, I was down at the ATDC doing something or another - can’t remember exactly what.  Whenever I’m down there, I try and stop by and say hi to some of my fellow entrepreneurs located in Tech Square who are working hard getting their ventures off the ground.  Of course, I usually end up making the trip down the hall to visit with the rowdy crew over at Georgia Tech’s VentureLab (Stephen Fleming, Paul Freet, and Keith Mcgreggor).  On my drive down I had exchanged some text messages with Paul and we committed to hooking up for a quick lunch to get caught up, as I hadn’t seen him in a while.

At any rate, I walked in and Paul was giggling like a two year old in his office. He said something to the effect of “man, you’ve gotta see this.”  The rest is history.  I think.

Apparently, the VentureLab crew decided to play a joke on Sanjay Parekh, chief organizer of Startup Riot (among other things) and one of the co-founders of Shotput Ventures.  If you don’t know what Startup Riot is, it is basically a really cool all-day fast-pitch event, where 50 companies get their 4 slides and 3 minutes of fame in front of Atlanta’s startup crowd.  Each presenting company is screened and vetted, and offered an opportunity to receive some free pitch coaching.

The joke was pretty simple - create a fictitious company with a completely over the top pitch, and submit it to Sanjay for screening.  Keith and Paul came up with the original concept of “Wifi Cat” - apparently smoking god knows what.  When they showed me the 3 slides that they were submitting to Sanjay for consideration to present at Startup Riot, I literally fell on the floor laughing.

The slides depicted what was obviously a very strange idea - a Wifi repeater connected to a cat collar - the concept being that it would provide roaming WiFi hotspots in your house, AND help you track your pets on the web.  What was even funnier was the overall approach and feel of the pitch - it appeared to be an attempt at a serious pitch, but purposefully made some mistakes often seen with novice or inexperienced entrepreneurs.  That, coupled with such a whacky idea/subject, just made it even funnier.

So, those slides were submitted to Sanjay for consideration (under the fake name of Barry Jarrell) - and eventually we all had a good laugh at it (including Sanjay himself).  Oh, but that wasn’t the end - merely the beginning.

The Kitty Grows Up

At some point after we all shared that initial laugh, someone (I think either Keith or Paul, but possibly Sanjay) said “Hey, someone should actually pitch that at Startup Riot - that would be, well, a riot!”  Paul was already set to pitch one of his new startup projects at the event, and Sanjay, being the organizer and moderator of the event, recused himself.  Keith was simply smart enough not to volunteer to do it - lol.  So, I basically said “sure, what the hell - I’ll pitch it!” Sanjay agreed to give us a slot, provided he had enough room in the event schedule.

After a few days (maybe a week), Paul (I think), made the first loose allusion to Wifi Cat on a random tweet of his.  Keith McGreggor, Sanjay, and I all “corroborated” this new company with tweets of our own. This wasn’t really planned, as much as it was just an inside joke being played out on Twitter.  Nevertheless, we all just sort of gently pushed it along.  Other than a few “who is Wifi Cat?” type of replies, nothing much happened initially - but the seed was planted in the Twitterverse.

Of course, soon thereafter, the tweet stream started to pick up, with more and more people asking questions about this new company.  All we would say is “stealth mode” - “unbelievable technology” - “gotta wait until StartupRiot to see it - that’s the coming out party for Wifi Cat”.  The mystery meter started going up …

In looking back, there were basically four things that played a key role in Wifi Cat going from loose references on Twitter to “hot startup.” NOTE: This wasn’t a “plan” by any stretch of the imagination, but in retrospect, it is easy to see the cause and effect of things, and illustrates the viral nature of social media outlets.

1) The New Chairman

One day I was sitting in my office working on some stuff for my day job.  After a while, for no apparent reason, Wifi Cat popped into my thought stream.  I dropped a tweet announcing my acceptance of the role of Wifi Cat’s Chairman of the Board, and the company’s request that I pitch the deal at Startup Riot myself.  I fired up my blog editor and wrote this post, announcing the deal to the blogosphere.  I’ve no idea why I did it - sleep deprivation?  Who knows?  But one thing was for sure - that post cranked the hype meter up a notch or two.

2) The Media Lockout

After I posted, I got inundated with emails and Twitter DMs from people inquiring about Wifi Cat.  What do they do? Are the funded?  Is Sig in on the deal? It was classic.  One of the people that called me a few times was Urvaksh Karkaria from the Atlanta Business Chronicle.  Can’t blame the guy - it seemed like a pretty hot story.  I decided not to call him back right away - because if asked what Wifi Cat was, I would have been hard pressed to (A) keep a straight face and (B) lie to him.

Urvaksh, being a methodical reporter, called several other people - some who were in on the joke, some who weren’t.  Thankfully, those who were in the know kept quiet.  Those that didn’t know about the joke took Urvaksh’s call and inquired to other people about Wifi Cat.  Next thing you know, everyone around town is digging for info on this “hot stealth startup” in Atlanta that is apparently going to change the world.

Note: I’ve since apologized to Urvaksh, and explained why I had to keep him in the dark initially.  He was a good sport about it … thankfully!

3) The Coaching Session

One of the things that Sanjay offered to the companies presenting at Startup Riot was a free coaching session.  Sanjay asked Atlanta angel Jeff McConnell and me if we would help him out at the session,and we agreed.  Right after we broke for lunch, we were sharing some laughs about Wifi Cat.  We then dropped a few tweets about how “amazing” the Wifi Cat presentation was, and how revolutionary the idea was.  A few joke comments were made about me having too many slides (presenting companies were limited to only 4 slides - counting the title).  All in all, it reinforced the growing myth of “the Cat.”

4) The Yates Effect

After the pitch coaching session concluded, Jeff McConnell and I were tossing around ideas.  We thought it might be a funny thing to have someone else within the Atlanta community drop a tease tweet as well.  This person would have to be respected, and not one who would be suspected of being involved in the prank.  A few days before the actual Startup Riot event, Paul Freet reached out to John Yates of Morris Manning & Martin.  John is a very well known attorney in Atlanta who focuses on tech companies.  If Yates is involved in a deal, it most certainly has to be real.

At the time, John was overseas in India.  So he dropped a nifty tweet claiming to have just toured the “WiFi Cat production plant” in India.  Brilliant.  This pushed the hype meter to the limit.

More Random WiFi Cat Anecdotes

After the whole thing went down, I began to hear a ton of backnoise about how WiFi Cat had apparently completely taken on a life of its own.

In fact, one of my own sales guys dropped the Wifi Cat name in a meeting during a random tangent about startups who seem to get a lot of buzz.  It took everything I could do not to completely lose it.

Sig Mosley, the biggest angel investor in Atlanta, told me that one of his portfolio companies (in the WiFi space) reached out to him asking him if he’d heard of WiFi Cat - not knowing if they were a threat or a possible partner.  Sig had no idea at the time, but told them he’d look into it.

The Pitch

As the date for Startup Riot approached, I knew I needed to get the Wifi Cat presentation ready to roll.  I spent a night or two with the original slides and jazzed them up a bit.  We needed to create a logo, a fake product image, some filler material, and of course, some more things to illustrate the pitch mistakes made by many entrepreneurs.

The night before Startup Riot, I spent about an hour or so making some notes for each slide - not a speech, just a few talking points and humorous bits that I wanted to work into the pitch.  I printed them out about 2:00am, and went to bed.  Five hours later, I woke up, took a shower, got dressed, and headed downtown to the event.  Wouldn’t you know it - I left my notes on the printer at home.  Yay!

Of course, I didn’t realize this until I was well over halfway into my drive down to Midtown - so, I had to wing the whole thing.  I must admit, it was hard for me to keep a straight face when I started, as you’ll see in the beginning of the video.  Keep in mind, that I had never actually rehearsed the presentation.

At the time of this writing, Sanjay and crew were still editing the professional video production - but here is a bootleg, courtesy of someone in the audience with a video recorder.

I’ll update this post when Sanjay and crew publish the final videos - but this one will suffice for now, especially since everyone has already seen it.

Update: Replaced the bootleg video with the final one from Flashpoint, the company that Sanjay brought on to produce the event and record each pitch.

Here are the slides that Paul posted on Slideshare. You can browse them while watching the video below it (there are only 4 slides, so it’s pretty short).

Slides:

Video:

The Real Message Here

I tried to end the whole spoof with a positive message for the community - hopefully, the end result was at least adequate.  I truly believe that social media was one of the missing links in the Atlanta startup ecosystem.  WiFi Cat went viral through Twitter and blogs - and took on a life of its own in just a few weeks time.  That is a great indicator that we actually have a startup community in Atlanta now.  It’s all good.

As Paul Freet and I have written about and evangelized before, over the past 25 years, Atlanta has morphed into a “dumbell” of sorts.  We have a lot of innovation centered around Midtown and Georgia Tech, but the vast majority of the personal wealth distribution has migrated northward (10-to-2, northern arc) above the perimeter).  This 20-30 mile distance has long been a thorn in the side of the startup community.  The good news is, social media has created a realtime “bridge” of sorts.  You don’t need to get up at 5:00am just to get downtown for an event anymore.  There is a very real conversation happening on Twitter and in regional blogs, and people can plug themselves into this conversation very easily.

If you are an entrepreneur, and you aren’t plugged into the Twitterverse with other like-minded thinkers, you are already down two strikes.

This is awesome.  We needed social media.  It has, in effect, provided the vehicle we’ve needed to bring the community together in ways that we could have only imagined in the past.

What is interesting about the whole thing is our abuse of “trust” in social networks.  No question, we pulled the wool over more than a few eyes with WiFi Cat.  Granted, we could have just gone around town and spread rumors about WiFi Cat, but technology made it a hell of a lot easier to do, and reached a broader audience.

“I read it on the Internet, so it must be true”, right?

It was great fun, and I hope WiFi Cat lives forever … we have more “special” WiFi Cat announcements coming soon - stay tuned!

Off to get ready for CapitalLounge tonight … hope to see many of you there.  WiFi Cat will be there, in spirit, possibly raising money, maybe not.  I can never truly ascertain their strategy

Cheers.

E.g. “Hi, how are you?”  “Great!”  “So who are you, and what the hell does your company do?  And please don’t cling to me for 20 minutes trying to explain it.”

The only stipulation is that you must already be accepted for attendance at CapitalLounge that night.

For more information, or to RSVP check it out:

http://www.startupgauntlet.com

Cheers.