I hope everyone had a great holiday!
One Conversation Changed This Engineer’s Life
Today I caught up with an aspiring founder. He’s been working as an engineer for a growth-stage start-up for the last four years. He’s fully vested and thinking about starting his own company. I always like to understand people’s journey, so I asked about his—specifically, about choosing to get his master’s in computer engineering from Carnegie Mellon.
He told me he didn’t even know what Carnegie Mellon was and ended up at the school by chance. He joined the National Society of Black Engineers (NSBE) as an undergrad and attended their conference. During the conference, he got what he thought was a spam email about Carnegie Mellon and its master’s program. Having never heard of the school, he asked an advisor about it. He learned it was one of the top engineering schools in the country. He decided to stop by the Carnegie Mellon booth to learn more. Talking with the admissions staff, he learned that he perfectly matched the profile they were looking for and that the master’s program was a perfect match for what he was looking for. He was basically admitted on the spot. He accepted and excelled in that program . . . and the rest is history.
Matching is critical at the earliest stages of entrepreneurship and your career. The right conversation can literally change your life trajectory. You must be in the right networks for matching with the right people and resources to occur. This engineer was under-networked and didn’t know what he didn’t know. He didn’t even know that Carnegie Mellon existed, let alone that he should apply. Carnegie Mellon didn’t know he existed, so it couldn’t recruit him. The NSBE was the conduit that allowed him to be matched to Carnegie Mellon. The NSBE played the critical role of finding this engineer by meeting him in his existing network/community. It then connected him with people, companies, and schools in other networks he wasn’t aware of.
This engineer is smart and scrappy, and he has a chip on his shoulder. He’s what I call a high-potential, nonobvious founder (or he will be, when he starts his company). These are the kind of founders I like to bet on. Nothing was handed to them. They earned everything they have by climbing mountains. They’re a little different, so people can’t relate to them, but they’re going to win because they want to prove everyone wrong.
These nonobvious, talented people will drive the next wave of entrepreneurship. Sadly, the current seed-stage venture capital model isn’t set up to find and support these types of founders. I think there’s a massive opportunity to support more nonobvious founders outside the traditional venture capital network, and it’s an area I’d like to focus on.
I hope everyone had a safe and healthy holiday!
Sporting Events and Unrelated Networks
Yesterday I went to the Atlanta Hawks vs. New Orleans Pelicans basketball game. It was a great game that went to overtime. Congrats to the Hawks for pulling out the win. I don’t watch sports on TV often, but I enjoy attending sporting events. The atmosphere and energy at a game are amazing, and you don’t get that at home, but that’s not what I enjoy most.
Sports teams create commonalities. People who otherwise may not have much in common share a love for their team. Sporting events bring them together. Serendipity becomes possible. People can build connections with each other as they cheer for their team. After the sporting event is over, with those connections intact, people have conduits into networks they otherwise might not have been able to penetrate.
I think of each sports team as the center of a network that attracts people from various other networks. The thing that amazes me is the number of unrelated networks sports pulls people from, bringing them together. That’s powerful, and I’m not sure if people have thought about this or comprehend it.
The conversations I had at the game yesterday reinforced this to me and crystallized why I love sporting events. I enjoy getting to know and learning from people in different networks, and sporting events are amazing for this.
Last week I attended Venture Atlanta and a variety of other events throughout the week. I hadn’t been to Venture Atlanta in person in over two years, so I wasn’t sure what to expect. The events were all great, and I met some amazing people. One of the things that jumped out at me was the number of people who didn’t know each other. Said differently, last week’s events highlighted how little certain networks interact with each other.
Once I realized how many people didn’t know each other, I made a point of trying to connect people who should know each other or could help each other. Hopefully, those connections will be helpful and allow those folks to expand their networks.
I think there’s a big opportunity in early-stage entrepreneurship to connect more networks that don’t interact—locally and nationally. I’m going to spend more time thinking about how to do it.
How Can We Connect Atlanta’s Mini Communities?
Over the past few years, I’ve connected with lots of investors outside Atlanta interested in learning more about the city’s start-up ecosystem. It isn’t easy to understand, I’ve often heard, and they want to know why. I explain that Atlanta’s ecosystem is composed of mini communities built around similarities. Universities (Georgia Tech, Atlanta University Center, and others), neighborhoods, and coworking spaces all have their own communities. These types of mini communities are a normal part of a healthy start-up ecosystem. The challenge in Atlanta is that they don’t overlap enough. In my explanations, I say that people don’t like to leave their neighborhoods. That’s half joke, half truth. More accurately, people are less inclined to leave their preferred mini community.
Venture Atlanta is this week, and many events are taking place. Yesterday I attended two evening events given by different mini communities. An investor and a founder were tagging along with me. Both were from out of town and interested in learning about the Atlanta start-up ecosystem. As we left the first event and entered the second, one of them commented that the events felt like two different worlds. Both were attending by amazing people from mini communities who want Atlanta to win—people who were noticeably different and only minimally overlapping. As we left the last event, my two guests shared that attending the two events (which were two miles apart) and seeing the mini communities helped them understand the Atlanta ecosystem.
Legendary companies are built when high-potential entrepreneurs are matched with capital, scaling knowledge, and relationships. Atlanta’s mini-community dynamic creates network distance, which fosters inefficient matching.
I see an opportunity to supercharge early-stage entrepreneurship in Atlanta. If the number of conduits between these mini communities were to grow, the free flow of information and relationships in the city would do likewise, thus reducing network distance and increasing matching efficiency.
Atlanta’s Transition to Tier-One Major Metro Is Happening
I’ve been telling friends, family, and founders for years that Atlanta is special and near a tipping point. Side note: My pitch helped convince a close friend and family members to move here this year. It’s a major metropolitan city, but it’s built differently. It’s a place that people don’t want to just pass through to experience. They want to call it home because it offers the opportunity to pursue professional excellence in various industries and an amazing quality of life. Lots of big cities offer one of those benefits, but few offer both. Atlanta does, plus other good qualities, which makes it unique.
I’ve been a believer for many years that Atlanta is where the puck is headed. Most people don’t realize how great the city is. I’ve long believed that when word got out about the city’s greatness, it would go from being a metro city to what I call a tier-one major metro. That transition would put the city in a different stratosphere and able to compete as a destination with other tier-one major metros. I think of tier-one major metros as cities that are known outside the US as the undisputed capitals of their regions. Think New York City for the Northeast, Chicago for the Midwest, Los Angeles for the West. The Southeast has a few great cities, but not an undisputed capital, especially when you ask people outside the country.
The word is starting to get out now. Money magazine just ranked Atlanta as the best place to live in the U.S. My favorite lines from the article:
“No matter what kind of person you are, Atlanta is a place where you can feel at home. And, just as important, it’s also a place where you can find a job.”
Atlanta is a great (not perfect) city. It’s had a huge influence on culture in so many ways over so many years. I’m happy the city is getting the credit it deserves and thankful Money magazine took the time to really get to know what the city has to offer. I’m proud to live here. I look forward to helping the city move forward and can’t wait to see what’s in store!
Asking for Help: Part of Effective Networking
I had a chat with a professor who has researched organization theory. We had a great conversation about social networks and their impact on venture capital and entrepreneurship. To demonstrate the power of networks, he does an exercise with his MBA students: He has them write out a professional goal, why it’s important, and what they need help with. They then present it to the rest of the class. The results always blow the students away. They’re able to make significant progress toward their goal by clearly articulating what they want to do, why they want to do it, and what they need help with. Once classmates heard what was needed, they happily helped.
The professor said that many MBA students see asking for help as a weakness. This exercise helps them understand that asking for help is a great use of one’s network. Of course, you can’t just take. The best relationships are bidirectional—you must add value and help when asked.
I love this professor’s exercise and totally agree. People want to support people and things they believe in, but they don’t always know how. By laying it out clearly, you fill that gap and make it easier for them to help. Instead of hearing “Oh, that’s nice; I hope it works out for you,” you may get the intro that changes your trajectory. Never be afraid to ask for help. The downside to not asking someone for help can be orders of magnitude greater than the downside of asking someone for help!
Top Start-up Cities Spawn Market Leaders
I listened to an investor share his views on what it takes to become a top city for start-ups. He believes the most important characteristic is the ability to create companies that lead in their markets. Cities creating market-leading companies are the best cities for start-ups and start-up ecosystems. His reasoning is that a market-leading company captures most of the value created in its market (70% or more). Cities that create companies that lead markets will see torrential trickle-down effects from having them.
I agree with this investor. You can have a lot of great companies in your city that do well and even exit. That’s a great city and ecosystem to be a founder in. Such success leads to more success, but likely at the pace of a dribble. But if a city creates a market leader, the effect isn’t a dribble. A tsunami of capital, knowledge, relationships, and energy hits the city’s founders. And it doesn’t lead just to more garden-variety success but also to people wanting to recreate and support what they just saw—a market leader enjoying massive success. The rate of change in such a start-up ecosystem is accelerated, the resources and network available to founders are amazing, and people are thinking big.
Markets matter a lot, and founders should take time to think about the market early in their journey. Fast-growing markets with massive potential are the best (even if they’re small now). Cities that want to be top start-up destinations should think about how to create an environment that creates market-leading companies.
Migration’s Impact on Start-up Cultures?
The most important part of a city’s start-up ecosystem is the people in the ecosystem: founders, investors, university personnel, service providers, community builders, etc. How they think and the lens they view things through. How freely they share information and relationships with early founders. This all creates the culture of the ecosystem.
How people think and act is heavily influenced by the start-up history of a city. Changing that culture can be a slow process, but it can happen faster with big events (positive or negative). If a company has a big exit, people start to think a little bigger about what’s possible. The reverse can be true if a company creates a massive crater.
Remote work will stick around (in some form or fashion) for the foreseeable future. I suspect that a material number of people left cities where dreaming and thinking big was part of the start-up culture. They’ve seen the impossible happen and witnessed outsize outcomes from those efforts. As they settle into new cities and get acclimated to the start-up ecosystem there, I suspect they’ll add diversity of thought. I’m curious how this will affect the start-up cultures (for better or worse) of cities like Atlanta. Will the mass migration be a big event that has a lasting impact on start-up cultures?