Thursday, July 3, 2008

Atlanta’s Top 50 Tech

I was somewhat suprised and candidly disappointed that the Atlanta’s Business Chronicle’s recent list (subscription required) of the 100 Most Influential Atlantans did not include anyone from the local business technology community. Yes, Governor Sonny Perdue was there along with Hank Aaron, President Carter, Mayor Shirley Franklin, the heads of Georgia Tech and Cox Commmunications and 94 others, but there was nobody on the list who is trying to put Atlanta on the map as a technology hub.

So in the interest of recognizing achievement and raising awareness, I propose we create Atlanta’s Top 50 Tech that would feature Atlanta’s most influential technology leaders. Now other organizations like the Technology Association of Georgia recognize individuals, companies and Hall of Famers, but I am hoping to put together a snapshot in time. Here are some names to consider:

Scott Burkett – Serial Entrepreneur and a Founder of the Startup Lounge

Dolan Falconer – Founder and CEO at ScanTech

David Harnett – Vice President Technology Industry Expansion at the Metro Atlanta Chamber of Commerce

Christopher Klaus – President and CEO of Kaneva and founder of Internet Security Systems

Benn Konsynski - George S Craft Professor of Business Administration at Emory University

Tino Mantella – President, Technology Association of Georgia

Sig Mosley – President Imlay Investments

Sanjay ParekhFounder and Organizer for Startup Riot

Paul StamatiouGeorgia Tech student, widely read blogger, Founder of Skribit

Marie Thursby – Hal and John Smith Chair in Entrepreneurship, Professor Executive Director, TI:GER®

Lance Weatherby - Venture Catalyst with the Advanced Technology Development Center at Georgia Tech

John YatesPartner, Morris, Manning & Martin, LLP

Please don’t ding me for forgetting the obvious (or stating the obvious for that matter). The list covers some important names in the entrepreneurial space, but I want to include individuals from startups to large corporations. Candidates can be established veterans or up and comers. They can be in the entertainment or content business. They can be at non-profits or in business education and government. They don’t necessarily have to live in Atlanta. The goal is to highlight leaders who are promoting technology or harnessing its power to grow a business or impact how we live our lives here in Atlanta.

Why 50? 100 seemed too many and 25 too few. I am looking to compile a list by Labor Day.

In the the spirit of collaboration, I am soliciting names. Personally, I am most interested in individuals who are using Web 2.0 or social media as a business model or a principal marketing strategy. But send comments with recommendations along with your reasons why. I am also open to getting feedback on the selection process itself.

I look forward to hearing from you.

Let me get back to you.

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Wednesday, July 2, 2008

Making Atlanta Home

Switching out Seoul’s background for Atlanta’s skyline

For anybody who didn’t notice, I skipped my regular posting on Monday. I was moving to a new house in Atlanta, consolidating and throwing out years of clutter – both mental and physical. Hauling boxes is no activity for a man safely into middle age.

Speaking of moving, this posting is a little more personal. When I left EarthLink last October, I had my heart set on San Francisco. I love San Francisco – the city, the climate, the culture. I have close friends out there and try to get out there as often as I can. Nothing beats its light, topography, and its vibe. And when it comes to social media adoption, few places can rival the Bay area.

So I had a decision to make. In San Francisco, companies “get” social media, but my barrier to entry is extremely high given the concentration of social media experts. (No one can rival Jeremiah’s output.) In Atlanta, fewer companies embrace social media, but there are fewer social media professionals as well. I saw an opportunity.

Over the past several months, I reached the decision to stay put. Accordingly, I have been meeting and writing about companies and individuals here in Atlanta that are focusing on technology in general and social media in particular. I have also launched my media consulting practice. In short, I am connecting to my adoptive city like never before.

I don’t generally follow astrology, but I was amused to read a recent horoscope in Creative Loafing – Atlanta’s alternative weekly newspaper. It read weirdly enough:

Now that we’re halfway through 2008, let’s take inventory. You’re getting better connected to your community than you ever have before, right? You’ve become far more purposeful and crafty about forging alliances you need to be effective, right? You’re developing smart strategies for  upgrading your unique gifts and giving them to the right people, right? You’re working hard to create niches for yourself that suit your temperament and needs, and you’re no longer leaving it to other people to shape those riches for your, right?

Never mind that the horoscopes for several signs were interchangeable that week. My horoscope hit home and seemed to validate what I was doing.

And accordingly last weekend, I took a break from moving boxes to get a new picture for my blog. Out with the picture from Seoul, South Korea and the centuries old Royal Palace background. In with Atlanta’s ever changing, brand spanking new skyline. A picture says a thousand words, and so does this one. Halfway around the globe, Seoul embodied my desire to map the brave new world of social media, but there is still no place like home.

Now I made this change with some reservations. The Internet knows no physical boundaries. And neither does social media. While I have decided to remain here and will continue to post on Atlanta’s social media scene, I don’t view myself as a regional blogger. I will continue to highlight issues that impact PR and marketing professionals. And I ask of you to view me as a PR professional who appreciates the power of community (real and virtual). To me, Atlanta is interesting in its own right, but it also exemplifies the challenges and opportunities that social media presents most business communities outside San Francisco.

Let me get back to you.

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Friday, June 27, 2008

Search Marketing: Finding the Value Beyond Conversions

Wednesday night, approximately 150 attendees were on hand at the monthly meeting of AiMA (Atlanta interactive Marketing Association). The topic was Search Marketing: Finding the Value Beyond the Online Click to Conversion. According to AiMA’s current vice president and president-elect Joe Koufman, AiMA is one of the most active marketing associations of its kind in the country.

The event was listed in this week’s Bernaise Source Buzz — my ongoing calendar of keys events in Atlanta (with a nod to the South and national conferences) to build awareness and adoption of social media. I felt there was a need for a centralized site to track social media events around the city.

Jason Fisher, Roku Coryne, Ron Belanger

Moderated by John Cattarulla, Director, Strategic Accounts, Yahoo, the panel included:

Ron Belanger – VP of Agency Development, Yahoo!
Roku Coryne – East Coast Manager, Search & Analytics, Google
Jason Fisher – Group Director, 360i

During the 90-minute discussion, I was struck most by what Ron Belanger had to say. He confirmed what PR professionals are now realizing: the boundaries between marketing, PR and advertising are collapsing. Social media is clearly an opportunity for PR to play a broader role in marketing decisions.

A recent SEMPO survey indicated that direct sales and branding are the top objectives of paid placement programs. There is value even if users don’t click through and buy. Sounds like PR to me.

Belanger also reminded the audience of the importance of search in the post purchase experience. Customers often go to the Web when they have questions or problems with a purchase. Those searches are great opportunities to strengthen the brand experience and deflect expensive calls away from support centers.

By way of example he cited Hellmann’s Real Mayonnaise campaign. For the health conscious, mayonnaise is bad thing. I often use the imitation stuff if I am going to use mayonnaise at all. Working with Yahoo, Hellmann’s took the ingredients issue head on and focused on the real in real mayonnaise as opposed to chemical laden alternatives. Belanger showed an ad they ran, which included a link for consumers to get information, share stories, and learn more about Hellmann’s, mayonnaise, real food, and engage in conversation.

With hundreds of consumers participating in the campaign, Belanger stressed how the ad campaign and search effort highlighted the importance of engagement.

But what about measurement?

As important as brand building is, measurement is never too far away from any marketer’s heart, and conversion is still very important.

With heaps of praise for Avinash Kaushik, Roku Koryne talked about some of the fine points of web analysis including “Bounce Rate.” That’s the percentage of traffic that enters and leaves on same page. It’s a powerful metric and directly tied to conversion. Obviously a high bounce rate means the site generated very little interest. It’s an indication of how much scent (“consumers are like bloodhounds looking for their prey”) or stickiness. The higher the bounce rate, the greater the likelihood that consumers are using the wrong key words.

Koryne cited two numbers of note: 4 and 25. Four is the average number of key words in a phrase that consumers use when search and 25 represents the percentage of new terms that appear on Google Search each day.

She also talked about “conversion funnels” as a way to examine how, when, and why consumers leave a site. What caused them to abandon a site is as important as what caused them to stay.

In addition, she showed how data can drive marketing decisions rather than preconceived notions or HIPPO (the highest paid person’s opinion). She cited how Skype designed three landing pages to test customer response. They chose the page with the highest conversion rate.

Finally as many of us know, measurement is fragmented across the brand and the company – with different stakeholders focusing on different metrics and priorities. Koryne stressed the importance of seeing the big picture and how offline marketing can have a big online impact.

And so while marketers are adapting PR practices, it doesn’t let us off the hook. To be effective, PR professionals need to remain vigilant in finding ways to effectively measure our results, work closely with advertisers and tie efforts back to business objectives.

Let me get back to you.

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Monday, June 23, 2008

Bringing Social Media to the Atlanta Music Scene

Antone Street, Atlanta

This unassuming street in midtown Atlanta houses the productions studios of some of the biggest names in the music industry, including OutKast’s Stankonia Studios, Music Mogul Group and Zac Recording. And nearby are the offices and studio of Dallas Austin.

It’s also the headquarters of Maestro (blog). Replete with a giant aluminum can collection of locally brewed Diet Coke, Maestro is a social media company that hopes to transform how we listen to and share music.

Co-founders Clarkson Logan and Greg Shrader with Aaron Rosen

Two of the co-founders CEO Clarkson Logan and COO Greg Shrader met in business school at the University of Georgia. The other co-founder, Daniel Escobar is also from the South — Colombia, South America.

Conceived three and half years ago and launched in March, Maestro is, in their words, “attempting to build a web-based social music platform where users can remotely access their entire music library from any browser, interact with their music and their friends’ music, find out information about the music they are listening to, stream their playlists to MySpace or Facebook, send playlists to their friends or anyone else they want to…and purchase MP3s of the songs you hear as they discover new music.”

From Thomas Edison to Napster, technology has long played a major role in the way music is distributed. Social media is the next step, shifting the balance of power along with it.

Perhaps that’s why (as fellow blogger James Andrews pointed out to me) Atlanta’s Jermaine Dupri recently declared the DJ is dead.

Whether he is overstating his case is open to debate, but users are exerting their influence by bypassing traditional distribution channels. They are also using social media to create content and, through playlists, influence how music is packaged, promoted and sold. Conversely, artists can create customized playlists (add audio clips, songs from other artists that influenced, etc) that strengthens ties to their fans. Creativity is to be found in both the songs themselves and in the playlists that contain them.

As Aaron Rosen who heads Maestro’s business development and social media product development wrote me:

Playlists become a new form of promotional tool, yet can wield as much power as any other. Paralleling the industry as a whole is the fact that with the outbreak of digital music comes new business models, and new figures and tools within these markets. The average music fan now has the capacity to become the DJ of old.

Looking for other examples of social media’s influence? Consider:

Radiohead album’s Rainbow. Radiohead made news last year when they announced that they were going to let their fans determine what they wanted to pay for their music.

Or look at Soulja Boy who rivaled more established musicians by using YouTube to distribute Crank Dat or Colbie Caillat who achieved fame through MySpace.

Curtis James Jackson III aka 50 Cent aka Fiddy declared “What is important for the music industry to understand is that this [file sharing] really doesn`t hurt the artists!”

Making Atlanta Home

It’s not surprising that Logan and Shrader would make Atlanta home. University of Georgia is in nearby Athens, another music mecca and the home to REM and B-52s – bands I “grooved” to in my pre-Web college days.

Yet with all this musical heritage, you’d think Atlanta would be a natural place to wed Web 2.0 and music. Not yet, according to Maestro’s founders. From the investment community, web 2.0 is still a hard sell, and user adoption still lags behind San Francisco.

Clarkson often gets the “same feedback.” Investors grapple with the model and want to see “massive growth or revenue first.”

They too thought of moving to the Valley, where the technology community gets this marriage of music and technology, but as Clarkson said they want to “put a stake in the ground.” They firmly believe Atlanta’s music community is the ideal place to launch a music distribution company. And they see social media as they way to get there.

Challenging the Competition

Maestro faces the same hurdles that any startup faces – attracting capital, establishing connections and educating investors and customers about the market. But Maestro feels they have technology on their side.

Stressing they are about music first, community second, they understand how the Internet is subverting traditional distribution channels and business models.

That’s of course not news. What will be news is a new platform where artists who want to make money and consumers who want to pay less (or not at all) are both happy.

In this pursuit, Maestro faces competition from companies like imeem, ilike and As new technology and new business models emerge, how are companies like Maestro going to differentiate themselves?

To Clarkson, the secret sauce is combining remote access to music and social discovery as well the mobile platform they are developing. They believe their technology and backend capabilities will provide a competitive advantage. They contend they are the only company that combines remote access and social discovery.

Unlike imeem, Maestro is only focused on music. With 50 percent of all Internet users listening to music online (Arbitron), and music enjoyment being the #1 use of technology during consumer downtime (Center for Media Research), Clarkson wrote me that “Maestro’s new music platform is set to influence how music will be used in the future and how the music industry can generate revenues from their creative assets.”

Mindful of legal challenges that have beset previous efforts, Maestro is very focused on a business model that address royalty and compensation issues.

For now, their goals are to generate buzz, increase their position in the marketplace, drive traffic, and provide a better experience. Achieving these goals will go a long way towards helping strengthen Atlanta’s position as a market for both cutting edge music and music technology.

Let me get back to you.

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Monday, June 16, 2008

Building a Social Network for Collectibles

WorthPoint CEO Will Seippel (left) and members of WorthPoint team

As a self-proclaimed “old guy” who prefers Atlanta to Silicon Valley and a father of 5, including quadruplets (age 11), Will Seippel is not your typical social media CEO.

With around $5 million in the bank from his own pocket and from friends, WorthPoint is not your typical startup.

Worthpoint is an online database and networking site for collectors. Think PBS Antiques Roadshow Meets Wikipedia, Wisdom of Crowds and Long Tail. (There is value all the way down the supply chain because what is somebody’s garbage is another’s treasure.)

In fact, Seippel doesn’t see WorthPoint as “the premier Website for collectibles and antiques.” Instead, Worthpoint is a “data company,” and social media is a way to monetize and manage information.

To Seippel with a 25-year track record of successfully turning around more traditional companies (he came in and helped AirGate PCS boost its stock price from $0.64 to $36), the world of collectibles represents a “data conundrum.” He is working to create more efficiency in the marketplace so that a buyer can find a desired object more directly. He is building a giant taxonomy to organize the vast amount of stuff that humans have created and stored over time.

He hopes to create a legacy to improve the world of collecting – and that world is a $150 billion a year industry. He rejects the idea that the antique business is a dying business.

WorthPoint’s motto: “We are here to help people make money.” It’s particularly ironic that in an age of bits over atoms and the “everything will be free” model that physical objects are commanding record prices.

$103,000 Painting Found in a Trash Can

There are stories like the one where WorthPoint helped a woman sell a painting she found in the trash for $103,000 at a Sotheby’s auction. But Seippel also understands how a lack of knowledge can cost someone dearly.

Seippel tells the heartbreaking story of a woman he knew who regularly struggled to make ends meet. After her mother died, she rented a giant dumpster to cart away the bulk of her mother’s belongings and sadly the means to help her live comfortably for the rest of her life. Among the objects thrown away were highly valuable copies of Ebony Magazine with Martin Luther King on the cover.

Unassuming and grounded, Seippel married his high school sweetheart. He admits he is avid collector, an interest that began in college. He sees WorthPoint as a huge opportunity to attract dissatisfied users who want an alternative to EBay and to auction house giant Sotheby’s that according to Will has no plans to leverage the Web to drive growth.

EBay proved there is a market. The long tail showed there is money to be had in the seemingly obscure; and Wikipedia demonstrated that knowledge can be collective and expertise need not be hierarchical.

And who drives this growth engine – a community of users – growing at a rate of 300 to 400 members a day. It’s a giant data undertaking. With 2 million page views a month and 2 million pages of data, WorthPoint is by Will’s estimate the largest implementer of Drupal, an open source application for building online social networks.

WorthPoint is a global community where registered members can post questions about their collectibles and antiques. According to Seippel, many can pay as much as $500 to $700 for this information on other sites.

It is also a paid service where registered members can get unbiased expert opinion from individuals known as “Worthologists” (ages 11 to 80 plus) that have passed background checks and yearly conflict of interest assessments. It’s a site where there are plans for individuals to earn “WorthPoints” (based on how much people like their answers) and suggest changes to the WorthPoint’s taxonomy on a “semi-wiki.”

WorthPoint’s business model is based on premium subscriptions, advertising, appraisals, and transaction fees. He hopes to be profitable next year.

In addition to making money for collectors and investors, Will wants WorthPoint to help Atlanta tell its technology story. He understands the fear that surrounds many Web based models. He for one turned down California incubators that wanted to fully fund the company. He rejected recommendations to change the name and partner with a younger guy to give the company a more youthful image. He has an East Coast sensibility and wanted to keep his kids in school here in Atlanta.

The idea for WorthPoint came to Will 4 or 5 years ago, but the company was actually started last year at George Mason University in Virginia where he was vice chair of the business school. He could have kept the business there near the Dulles-Reston high tech corrider, but he was drawn to the Advanced Technology Development Center (ATDC) in midtown Atlanta. He was attracted to the feeling of community of entrepreneurs it fosters and the spirit of giving back.

In chronicling Atlanta’s social media efforts, I have talked to some really talented individuals who have been drawn to Silicon Valley. They are smart, young and ambitious. At 51, Will is at least two of those things.

Candidly, I was drawn to his vision that sees a world of dusty objects in closets, garages, attics and prized possessions on living room mantels through the prism of web 2.0. Hopefully, his track record and ability to embrace a fresh way of thinking will spark executives of all ages to reassess antiquated ways of doing business.

Let me get back to you.

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Friday, June 6, 2008

Mobilizing Social Media

Streamverse CEO Mikael Vinding

On Monday, I wrote about a company that left Atlanta for the allure of Silicon Valley. Today I look at a social media company that decided to stay.

Mikael Vinding likes things simple – simple for him and simple for his customers. He wants to eliminate needless barriers when it comes to venture funding, and he wants an uncomplicated mobile experience for users.

A Danish native, Mikael is also CEO of Streamverse, an Atlanta-based software development company that is trying to bring the power of social media to mobile devices. Streamverse is focused on producing revenue-generating content solutions for wireless carriers.

Vinding is also Chief Jygynaut.

JYGY is the brand name of Streamverse’s flagship product. Its a play on jiggy – meaning fun / cool. (“Think Will Smith’s hit ‘Getting Jiggy With It.’”) It allows mobile subscribers to develop and distribute content they have created via their mobile units and other digitally connected peripheral devices.

The JYGY software platform easily and inexpensively integrates into a carrier’s existing messaging architecture. Using JYGY mobile subscribers can easily create and share applications such as blogs, polls, chat, image sharing, and IM, as well as search and organize messages. By integrating web 2.0 networking features as a part of the carrier mobile social network feature, Vinding believes they will experience faster adoption of new services, increase SMS and MMS revenues and attract new subscribers.

A Chance Meeting at Web 2.0 Expo

Ironically, it took a trip to San Francisco for me to meet this Atlanta transplant. At the Web 2.0 Expo in April, I bumped into Vinding on the Expo floor when asking him where he found the ice cream bar he was eating. I never did get the ice cream, but I did learn that his goal was to be “the number one way to add cool mobile content to whatever social network you are in.”

Their subscriber numbers are still in the thousands, but the market for mobile social networking services is promising.

Based on a recent report by Nielsen Mobile, “the U.K. leads Europe in mobile social networking on a percentage basis — with the U.S. boasting comparable numbers.” And according to the estimates of Strategy Analytics, worldwide revenue from mobile data services is predicted to jump from an estimated $61 billion this year to $189 billion in 2009.

Streamverse believes that one primary influence driving the rise in revenues will be user generated content. UGC gives the end-user the ability to develop as well as distribute content that they have created via their mobile phones and other digitally connected peripheral devices.

Demographically, Streamverse is well suited to be headquartered here in Atlanta.

David Harnett, vice president of technology industry expansion at the Atlanta Chamber of Commerce told me that Atlanta has more cellular users than any large city in the country. That makes sense given that Atlanta is home to ATT Wireless, and Alltel and T-Mobile have a significant presence here as well. Atlanta also leads the nation in attracting highly educated 25-34 year olds – a prime demographic for mobile carriers.

So with all these factors in Atlanta’s favor, what allure did Silicon Valley have for Vinding?

Putting aside the pollen, it comes down to funding and the steps necessary to get it.

There is a lot of pressure from the venture community to relocate out West. More than once, Vinding has been asked “Why Atlanta?” According to Mikael, the vast majority of funding in the mobile social apps is west coast based.

And back to Vinding’s quest for simplicity, the introduction and approval process is easier out there as well.

In Atlanta, the investment community is still very risk averse. Many don’t understand a business model based on a teenager’s passion for texting, mobile devices and virtual communities.

Vinding recounts the time when he needed seven introductions to arrange one meeting and then had to fill out two pages of single spaced questions about his business strategy. In Silicon Valley, a key introduction was made by Linkedin and took four minutes for the venture fund on Sand Hill Road to understand his model.

Nevertheless, Vinding still plans to stay here in Atlanta. While Vinding maintains a presence in Palo Alto, he is currently in the process of relocating from suburban Atlanta to Midtown.

Now in his thirties, Vinding moved to Atlanta to work in the telecommunications space. It is home for him and his family.

While you still can’t show up to VC offices in shorts and T-shirts, he sees that the Atlanta business culture is beginning to change.

Let me get back to you.

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Thursday, June 5, 2008

Spreading Tech News…Locally

Roundtable discussion at monthly TAG Enterprise 2.0 society meeting

Where do you get your news and information about local tech companies? Conversely, if you are a company, how do you get the word out about your company to the local community? Local newspapers, websites, blogs, local networking events? Or do you rely on Internet sources like CNET, Techcrunch, Mashable?

In San Francisco, finding local tech news is less of a problem. Local papers like the San Francisco Chronicle and San Jose Mercury News make technology news a priority. They have to; technology drives the economic engine out there.

But in many cities that is not the case. Often times, local tech news is ignored unless you are a dominant employer. There is not the space or resources to cover the tech industry in depth. In Atlanta, for example, the name of the game is real estate. Facing increased economic pressures, papers like the Atlanta Business Chronicle must play to their strength. They have not replaced their local tech reporter as Scott Burkett recently lamented.

That is why I am intrigued by what I learned yesterday while attending the monthly Technology Association of Georgia Enterprise 2.0 meeting here in Atlanta. In a discussion about wikis and collaborative tools, I learned about a local initiative called TechPedia Atlanta.

TechPedia is a wiki devoted to the local tech community here in Atlanta. Still in development, TechPedia is a non-profit entity that follows the highly successful Wikipedia model. It’s the brainchild of several members of Atlanta’s tech community including John Yates and is being developed by Atlanta based entrepreneur Jeff Haynie.

But where Wikipedia has very strict policies about corporate content contributions, Justin Rubner former technology reporter at the Atlanta Business Chronicle and the TechPedia co-founder and editor says he will edit entries with a “light touch.” Now at the Content Factor, he will flag defamatory or libelous comments but by and large contributors will drive the content.

It is Justin’s hope that TechPedia will help establish Atlanta as a center for technology. The first step is chronicling what is happening.

Besides there being a “dearth” of local technology news coverage, John Yates is motivated by a sense of history. He believes TechPedia is a good idea because:

- There is no written history or online source that is chronicling the history of Atlanta’s tech community;

- TechPedia can serve as a resource for investors, corporate executives, and members of the tech community that eliminates the piece meal approach to tracking down information;

- TechPedia will record the lives of a generation of tech pioneers who are getting older or passing away.

Justin believes you can’t ignore powerful trends. Technology will increasingly play a large role in the economy, and social media will increasingly play a large role in helping to tell its story.

If successful, Justin can see the day when other cities leverage the TechPedia format as a source for local tech information.

Let me get back to you.

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Monday, June 2, 2008

A Tale of Two Companies

Suleman Ali – Co-Founder of Esgut

This is a tale of two companies — one that decided to stay and one that got away.

Their stories are unique. And like the issues I discussed in my profile on Paul Stamatiou, their success points to the opportunities and challenges of being a technology company in Atlanta.

Today, I look at the one that got away.

For weeks I tried to track down the names of the founders of Esgut, an Atlanta based company responsible for some of the most popular applications on Facebook. It was part of my quest to chronicle social media success stories here in Atlanta. Their web site said little, and Google searches yielded no clues.

And then in April I got a tip from a local entrepreneur. Esgut had been bought by northern California based Social Gaming Network. A quick search on Google led to an Inside Facebook entry, and there I had it — a name of its co-founder, Suleman Ali, Suli for short, a 26 year old graduate of Georgia Tech.

I sent an email and within an hour or so, a response – “You found me,” Suli wrote jokingly.

Mystery solved, but not exactly. The bigger mystery was why another promising young entrepreneur had left Atlanta for the lure of Silicon Valley.

Suli’s career path began with a BA in Computer Science from Georgia Tech in 2003. Ironically, he didn’t think much of computer science geeks while in high school. But the riches of the Dot Com era proved alluring and reading a bunch of books on the subject was “intellectually interesting.”

While working as a developer and program manager at Microsoft in Redmond, he discovered a passion for creating products. After a Microsoft product launch at the Computer Electronics Show, he sold everything, intent on moving to Palo Alto and doing it on his own. But before he made the move, FaceBook launched its open platform to developers, and Suli saw an opportunity.

He teamed up with Jamal Ashraf, moved back to Atlanta, and together they formed Esgut. (That’s German for it’s “all good.” Apparently, Jamal took German in college.) Of course, as Suli confided, he now had two difficult names to pronounce – his company’s and his own.

Superlatives was their first success – a Facebook application that let’s “you tell friends what you think of them” as in who is most likely to…

The goal was to attract a couple hundred to a few thousand total users. At its peak, Superlatives was growing by 150,000 users per day. And it eventually grew to nine million total users. Revenue was ad generated.

They turned down funding, worked under the media radar, hired a band of young and ambitious coders from Argentina and found a really talented intern from Georgia Tech.

With the success of Superlatives, they created other applications including Text Twirl and Entourage, which enabled Facebook users to create a collage of their friends on their profile. The more friends, the cooler it looked which is what viral is all about.

After initial success, however, they noticed some trends that made them reconsider their next move.

From Suli’s perspective, the Silicon Valley investment community he spoke with was more aggressive and on board with Facebook fever than the folks he met in Atlanta. They definitely could have raised money. And given their market position, he felt there was opportunity to take the business to the next level.

However, as Suli wrote me, he realized that there were several inherent risks in getting there–the Facebook platform was changing. As Facebook “dialed down virality on channels,” Fortune 500 and VC backed companies were entering the space and driving up development times and costs, and Esgut’s success on Facebook would not necessarily translate into success on Myspace, Hi-5, and other social networks.

Of course Atlanta was a nice place and offered cheap rent. Along the way they developed good relationships with folks like Dave Williams co-founder of 360i, who was very helpful. But in the end, they agreed to be acquired by Creative Gaming Network. They liked its commitment to high production values and immersive experience.

And so Suli is now in Silicon Valley where he had intended to be all along with the greater opportunities he thinks it presents for him. His goal is to start another company. It appears to be in his DNA.

His advice for would be entrepreneurs:

  • Hire really smart people
  • Pick opportunities based on your assessments of the upper limits within a marketplace dynamic
  • Live in Silicon Valley

From his perspective, Silicon Valley is more conducive to partnership building and multiple investments. The investment community has deeper contacts to promote relationships. From an educational perspective, Suli felt Georgia Tech encourages students to join large companies. Stanford on the other hand encourages students to be more entrepreneurial and join startups.

While we lost a promising entrepreneur, his experience is encouraging for fellow Georgia Tech grads. It demonstrates that in the age of social media, it does not really matter where you start your company. Talent, drive and vision know no boundaries. What is far more challenging is how to keep that talent, drive and vision here.

Later this week, I will look at a company that stayed.

Let me get back to you.

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Thursday, May 29, 2008

Valuing a Startup Culture

Fuzzwich Co-Founder Rob Fitzpatrick

What does it take to get a promising social media startup or any startup for that matter off the ground? In the absence of capital, you need technical expertise along with knowledge of how to make a product scalable, how to market it and how to pitch your idea to investors. And you need a supportive environment that values a startup culture.

Startups have been on my mind after recently attending Startup Riot and Startup Lounge here in Atlanta. I had gone to both events in an effort to identify companies that were using social media in their business models or as their principal marketing strategy.

As of late, I am on a mission to profile companies that have embraced social media. My goal is to help build awareness and ultimately foster widespread adoption of social media here in Atlanta. Our jobs as PR professionals are so much easier when we can point to local companies that are using it effectively.

At Startup Lounge, one of the interesting companies I came across was Fuzzwich (blog). Fuzzwich lets users create and publish animated shorts. More than a tool for those with a casual interest in animation, the real potential is how Fuzzwich helps companies extend the user experience. From a social media perspective, customers can use animation to creatively interact with their favorite brands and virally spread their creations online.

Fuzzwich is based in San Francisco. It was until recently an Atlanta based company. Now, this is not going to be posting about a company that got away, though it could be. Its co-founder Rob Fitzpatrick is a 2006 Georgia Tech graduate who realized that there was more opportunity in San Francisco.

Rather Fuzzwich is a story about a company that discovered the power of social media to make a business model scalable. It’s also a story of how they made their discovery and what startups need to do to get the ball rolling.

Fuzzwich is succeeding in part because of a program known as Y Combinator.

Y Cominbator is a venture fund, which focuses on seed investments to 2-4 person startup companies. It offers financing as well as business advice and other opportunities.

Twice a year (once in Boston and once in Mountain View, CA) Y Combinator selects a group of companies to help finance and advise. In exchange for a small ownership stake, participating companies are given a modest stipend. Somewhat like a bootcamp for startups, the three-month program is intense. As participants work developing their business models, they receive technical and legal advice and learn how to pitch ideas and make products marketable.

Beyond providing important skills, the program builds an esprit de corps and the confidence needed to excel in the world of entrepreneurs.

It is at Y Combinator that Rob and his 3 co-founders chucked their original business model and came up with the idea of a social application that lets others make their own animation. Initially, their idea was to create games as a way to promote music, “but the idea was not scalable.” As Rob confided, they “never could have done it without Y Combinator.”

After Boston, Rob and his partners returned to Atlanta. Besides the Georgia Tech connection, Rob and Devin Hunt (one of the co-founders) shared a Turner connection. Rob had worked at GameTap and Devon at Cartoon network. But their momentum stalled, and they made a decision to move. Rob went first and “grabbed a one-way ticket to San Francisco.” The others soon followed. In a very short time, they had “financial stability” in a supportive culture.

As Rob said, “Walking down University Avenue in Palo Alto, there is no getting away from the startup culture…In Atlanta, everything is distracting you away from doing a startup. In Silicon Valley, everything is distracting you toward one.”

Today they are building a client base and trying to achieve the startup dream.

I am not sure if a Y Combinator in Atlanta would have kept Rob and Devin from moving. But it would certainly provide skills and mentoring to help give startups the confidence they need to launch new ideas. Equally important, it would help create a stronger sense of community.

I suspect most advocates of social media would benefit from a similar supportive environment in learning how to pitch initiatives to a reluctant management.

There is, however, a broader lesson from Fuzzwich and Y Combinator. Ideas don’t exist in a vacuum. In pitching social media to companies, I am realizing more and more that what exists outside the corporate walls influences what happens within. A strong community supportive of new ideas and entrepreneurialism will go a long way in helping larger companies embrace new ideas and entrepreneurialism.

Let me get back to you.

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Thursday, May 22, 2008

Kaneva: Turning a Virtual Community into Reality

Kaneva CEO Christopher Klaus

Last week Georgia Governor Sonny Perdue signed legislation that will give entertainment industry production studios up to 30 percent tax breaks for business conducted in the state of Georgia. Georgia is the first state to pass this type of incentive for the gaming industry.

This new law (the 2008 Entertainment Industry Investment Act) is a big win for those wishing to make Georgia a video gaming and entertainment capital. It is also a personal victory for Christopher W. Klaus, founder and Chief Executive Officer of Kaneva, an online social entertainment world. A strong advocate of video gaming, he was instrumental in helping make this law a reality.

Klaus is one of Atlanta’s best-known success stories. His company Internet Security Systems was sold to IBM in 2006 for more than a billion dollars. He is also part of a contingent of Atlanta-based CEOs who are embracing social media as a promising business model.

Kaneva is Latin for “canvas.” Like the better-known Second Life, Kaneva combines elements of social networks and virtual worlds.

And like Second Life, Kaneva members create digital versions of themselves — avatars — and then meet up in a modern day 3D world. Every Kaneva member gets a Kaneva City Loft — their own 3D space – where they can decorate and furnish in their unique style. They can bring their favorite videos, photos, music, and games, and watch them on their 3D televisions. Friends interact in a loft or public and can chat in real-time.

But while Second Life shies away from the word “game,” Kaneva does not. Kaneva is very much about entertainment and is steeped in a gaming culture. In fact its co-founder Greg Frame is also its Chief Gaming Officer.

To be sure, virtual worlds are still in their infancy. Awareness is very limited, and adoption is not widespread.

But Klaus sees opportunity. Online gaming is a multi-billion dollar industry. The research firm Gartner predicted last year that 80 percent of active Internet users will engage in a virtual world by 2011. That translates to approximately 250 million people.

Second Life has enjoyed the lion’s share of media attention, but pardon the pun, it is not the only game in town. Kaneva also hopes to be a driving force in this space.

Kaneva Is Self-Funded

So how did get Klaus attract investment dollars for this venture? He didn’t. Kaneva is self-funded. Now very few investors have those kinds of resources at their disposal. Even fewer would invest their own money.

But Klaus has a vision of “embracing the new era of content creation and harnessing the power of the Internet – to democratize entertainment and provide opportunities for everyone from artists to consumers to share and interact with entertainment online in an entirely new way.”

Even at ISS, he never abandoned his interest in video games that began growing up in Sarasota, Florida. While ISS was formed to protect consumers from the Internet, Kaneva is intended to make the Internet fun and interactive.

At an MIT Enterprise Forum on virtual worlds in Atlanta earlier this year, Claus likened Kaneva to social networking sites like Facebook and MySpace. These networks are about communicating and connecting.

“I think virtual worlds have historically served the purpose of fantasy games. What we are seeing now is a new form of communication that is more emotional than anything we have seen on the Internet.”

Klaus makes a distinction between what he calls Video Game 1.0 and Video Game 2.0. The 1.0 world is a top down publisher model. It is not social. The 2.0 world is. Klaus sees Wikipedia and YouTube as models – ones that are more collaborative and emergent, where individuals have the power to create and post content.

Klaus recognizes that social media is not a core business for most companies, and blogs let alone virtual worlds are still outside the realm of possibility for most companies. But he strongly believes in its power to transform online interaction and change the way business is done.

Doing Business in Atlanta

As for doing business in Atlanta, Klaus is a staunch supporter of GA Tech. He feels that VentureLabs and the Advanced Technology Development Center are breeding grounds for growth. He also believes that the new legislation will attract investment and talent. He sees students at both GA Tech and Savannah College Art and Design as “hidden gems” to attract top notch engineering and design talent. They provide a valuable resource pool for a fledging industry to grow.

Especially in Atlanta, nothing breeds success like success. With ISS, Klaus was able to generate awareness and talent in the Internet security space. He is hopeful that with Kaneva, he will do the same for social media and virtual worlds.

Let me get back to you.

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