Johnson Cook

Atlanta tech investor. Entrepreneur.

Johnson Cook - Atlanta tech investor. Entrepreneur.

Sneaky Catalysts to Reinvention

 

revolutionIt’s interesting what triggers big change. Often, change comes from something we don’t expect.  Often, it sneaks up on us.

I’ve been thinking a lot about mobile lately and how our mobile computing capabilities are forcing change in almost every established software market, whether it’s obvious or not.

Already, you could make the case that mobile completely changed the importance of e-mail in our lives.

Would Twitter be as massive as it is without mobile.

Facebook?

So what else is mobile going to cause to be reinvented? Some examples in my life…

The internet of things… I use my phone to manage my thermostats in my house. Can mobile be the trigger that causes a market shift for mechanical controls and building automation?     I love my FitBit Aria scale… is mobile responsible for a “health technology” revolution?

What about CRM?   We all say that Salesforce.com is ready to be disrupted as the market leader in CRM for SMBs. But how is this going to happen? It doesn’t seem to be coming from Sugar or Zoho offering web-based knock offs. Perhaps a mobile revolution in CRM is what the world needs to disrupt the intense pricing and overly complicated experience with Salesforce.

What about online learning?

What about word processing?   Presentation software?   (Can PowerPoint finally just die already?)

Maybe it will be mobile that sneaks up and disrupts these, or maybe it will be something else.   My point is that often a disruptor isn’t what we expect it to be.    If you’re a startup seeking to disrupt players Clayton Christensen style, be on the lookout for the catalyst that will accelerate your mission.

 

 

What Most Startups Forget When Seeking Product-Market Fit

When startups are hunting for product-market fit, there are a couple of ways to think about the goal of the process. How you approach the goal of Stage 1 (Product-Market fit), can dramatically affect the outcome.

Approach 1 (the most common): We are building a product that is the absolute best product and will win on its own against other products.

Approach 2 (the least common): We are building a product that we can build a customer acquisition machine around and scale like crazy.

I can already hear the objections to #2: if this is your goal, then you lack passion for the product. You are only working towards incremental improvements and you aren’t trying to offer a transformative solution.  They may even say you are a “sell out” and have little character.

Yet, at the same time, once the business is up and running we talk all know and embrace this quote:

Work ON the business not IN the business.

So why wait until you have a product to think about the business as the product?

Your product can be the best thing since sliced-anything, but if nobody knows about it, nobody is using it, then what have you accomplished?

Remember that in the earliest stages of a startup, as you explore product/market fit, that you still have to build a business around that product.  How this happens is not trivial and the plan to scale should be coordinated with the what you are going to scale.

 

If You Don’t Have Anything to Say

 

fireThe awesome Joe Koufman has been great lately about sharing to the Atlanta blogger community some articles and insights on better blogging.   The most recent one was this article    The point that jumped out at me here is “Whatever you write, write it with passion.”

I was glad to hear this, and here’s why.   I often feel guilty for not being the set-your-watch-by-my-posts kind of writer. I just don’t have the rhythm of ideas and creative juices.   My best brain waves come in blasts. Tsunamis, I suppose. You never know when they will come, but when they arrive, I need to be ready using tools like these.

But I admit, I do sometimes feel a little lazy for not writing daily, so sometimes, I will sit down during my morning routine and start to hammer out something from thin air.  It never works.  I don’t post it if I don’t love it.

Seeing this article about writing with passion is exactly in line with my habits. If I’m not dying to say it, then I don’t say it.   If I can actually stand to wait saying it, then it’s not worth saying.

So for those who do follow my tsunami rhythm, I thank you. I promise to write only what I’m passionate about and hopefully there will be some value somewhere for someone.

 

Internalizing What You Read – My Top Four

 

Successful entrepreneurs generally love reading. Reading is a great way to force ourselves into some “deep work” (I love the blog by Cal Newport on this topic).   We move so fast, juggle so many topics, and are constantly shifting gears that putting our heads down into a single topic for a week or several months and plowing through a book is rewarding.   Most of us use books as idea synthesis. We learn and apply.  We are Macgyver for ideas. We put them together and find new ways to create.

One downside of all this reading though is that we move from one book to the next and rarely internalize the teaching enough to unlock the value that lies beneath the surface of the first read.

My friend Boaz helped me realize this by suggesting that everyone read two of his top books at least five to ten times in repeat over 1-2 years. He suggests reading 10 pages in one of these two books every day of the week.   I followed Boaz’s suggestion as much as I can and have found it to be a totally different experience. This method works wonders for your psyche if you select the right books.

As far as my own deep work goes, my top four books are the ones that I aim to internalize. I’ve listed them on my books page and encourage entrepreneurs looking to take it to the next level to spend some quality time with these books.   This is my suggested curriculum for “Life 101.”

 

Zen and the Art of Motorcycle Maintenance – Robert Pirsig
  Jonathan Livingston Seagull  – Richard Bach
  Think and Grow Rich – Napoleon Hill
  How to Win Friends and Influence People – Dale Carnegie

 

It Takes One Year to Develop Personal Capital in a New Network

 

A common topic in community discussions around the startup ecosystem is “What are the best types of businesses to start in Atlanta?” The question is intended to bring up topics like the clusters of FinTech, healthIT, Sensors, SaaS / Marketing Automation etc…

This is a top-down approach that may work for economic development people, but entrepreneurs should be thinking bottom up. The top-down answer always includes stats about Atlanta and the amazing clusters happening here, but the bottom-up answer is much more simple: The best kind of business to start is where the entrepreneur’s personal network is the strongest.

So the natural next question usually goes like this: I know my idea is huge and will change the world, but I don’t have a network in this arena, at all… what do I do?

If you are intentional about it, you can build strong networks from nothing. I believe it takes twelve months of intense networking. Attend events. Build deep relationships and also cast a wide net. Ask for introductions. Pay attention to the super-connectors and be around them. Offer to help them. Volunteer at industry programs. Speak on what you know whenever offered the mic. After that full year, you should have the contacts necessary to launch something with plenty of resources.

Inventing Deal Pipeline Boxes for Atlanta Ventures

 

Zemanta Related Posts ThumbnailGiven that we are relatively new at this quasi-institutional investing with Atlanta Ventures, we have had the opportunity to do the same as most startups and that is learn how to invent our own wheels. How to find deals, how to evaluate them, and how to manage the workflow and tracking.

It may help startups raising money to understand how we’ve setup our pipeline so you can understand the process.  Here’s what our deal pipeline looks like.  (By the way, we are using Stream CRM to manage this right now. A free CRM that is a Gmail Plugin by a YCombinator company that seems to be on a rocket ship.)

  1. Lead – the holding area for every possible lead, no matter the source.  After evaluating tons of tools (including DIY), we have finally determined that F6S is the absolute best tool for startups, investors, funds, accelerators, and incubators.
  2. Want to Pitch – if the startup looks good on paper, the founders have some visible domain expertise and it’s an area not completely foreign to us, they go in the want to pitch. Usually this means Lindsay will start working to schedule a first meeting with myself or one of the team.
  3. Pitch Scheduled – sometimes meetings take a while to schedule so these can be in this bucket for 30-60 days.
  4. Want Second Meeting – After a first meeting, if we like what we see, we typically will assign some homework. We ask startups what they will accomplish if/when we get together in 30-60 days. The second meeting is largely a test to see their ability to follow-up and deliver.
  5. Need Outside Input – Many times, we like the founders and the idea but it’s a little outside of our team’s expertise, so we introduce the entrepreneurs to other investors and entrepreneurs whose opinion we trust for feedback on the idea.
  6. Second Meeting Scheduled –  During this time between first and second meetings, we like to stay in touch with the entrepreneur to get a feel for what it’s like to work together. Communication styles, etc…
  7. Term Sheet – Once a term sheet discussion starts, we move them here.   Surprisingly to me, we have only closed around half of the term sheets we’ve negotiated this year – a lot can happen in the time that it takes to negotiate a deal. Life happens, success happens, failure happens, valuations change, other investors happen. So it’s another reminder to everyone at the table that a term sheet isn’t a closed deal.
  8. Monitor – The 2nd largest end result is this bucket. It’s for teams that we like with pretty good ideas, but the timing isn’t right or there are a few pieces of the puzzle still missing. We want to keep an eye on these and if they request another meeting in 3-12 months, we want to be sure to take it to follow up and see the progress.
  9. Unlikely – I don’t like the terms that are absolute… so internally, we like to be open to amazing things happening down the road. But the bottom line is that we’ve told these teams “We are not a fit.” so we aren’t stringing anyone along.
  10. Worked and Passed – This is where the term sheets go that don’t close.  This is the category I don’t like. It means a lot of energy was spent on something that didn’t happen. My operational goal for us as an organization is to keep this as close to zero as possible.
  11. Signed! – Ahhh, the good stuff.   This is when the fun begins. This is what it’s all about. NOW we get to help Atlanta entrepreneurs build companies.

napoleon-dynamite-kit-yes

Hot Hot Themes in B2B SaaS Startup Opportunities

 

Following up on the post from Sunday about types of businesses I like the best, I’d like to share some more forward looking ideas about startups that I like.   In Atlanta Ventures, we have a solid strength in B2B SaaS, and within this opportunity area, there are some themes that we see and love.   I wouldn’t consider these the same as Foundry Group’s Investment Themes; meaning, we aren’t limiting ourselves to investments in these areas. But these just get me extra fired up.

Automation. Sure marketing automation is hot, but there is so much more automation that can happen now. With tools like Kevy now connecting our data, business processes that are still done manually can no be automated to a level never before possible.

Predictive.  This are of Big Data is definitely bleeding edge of SaaS — but I think it’s about to explode. Given all the data we have now and the simplicity of connecting, evaluating, and leveraging it, making predictions about things we’ve not normally tried to predict is a huge area.

Data ownership.  Big Data is the new awesome wild west. There are now new opportunities in a whole new value chain. The collectors of data. The aggregators of data. The ideas of what to do with data. The services to implement the ideas. Obviously, the person with the most value potential in this chain is the person who owns the data. Whether it’s collection, gathering, generating– the ownership is key.

What an exciting time with all of this. I feel like a B2B SaaS MacGyver could really make a ton of money right now.

macgyver

 

Deal Evaluation Tool: The 3 Traits of My Next Startup

 

Recently I was taking a look back to evaluate some of the best startup business ideas I’ve seen.  I was hoping to find a checklist that could be used to gauge “what makes a good idea?”   Not surprisingly, there are so many moving parts around the team, timing, market, strategy that creating this checklist is a next-to-impossible task.

So I took a different approach. I looked at our database of startups and said “Which of these would I personally want to launch today… given my personal style, experience, and resources?”    That list is much smaller than the “good idea” list. So then I was easily able to pull out three top traits of the businesses that I would launch today if I were looking for something to do.

1. B2B and starting focused on the low end.

In some respects, selling to SMB’s is like the B2C of the B2B world. That means lower price points. Lower touch required for selling. Automation tools play a key role in lead gen, nurturing, closing, and customer engagement. It means you have more customers using the product earlier so you learn and iterate faster. But unlike B2C businesses, these customers are usually paying you, so you have more customers but also faster to cash-flow positive.   As you learn and grow you likely will go up market and sell to more enterprise customers, and this usually makes sense for businesses that start out selling to SMBs. If you have enough customers and cash flow, then you have the luxury of choosing to go farther up or down market.

2. Massive upside in the solution: ROI can be reasonably argued to be unlimited.

I could never sell something to HR departments. It’s just not my style. I don’t want to sell a risk management solution where the absolute best case scenario of my tool helps their risk go to 0%. The problem with that is that ROI can be calculated and it has an upper limit.  I love selling tools that help companies dream bigger. I want them to see that the “closing one more deal” is just to cover the cost of my offering, but what they are buying is not the ability to close that one more deal, but to close hundreds more deals! And then to grow that monthly!  I want to sell something that is inspiring and looks more like a Larry Page’s 10x idea to the customers buying it.

3. Constant, heavy use.

The most beautiful example of this is Salesloft Job Change Alerts. Although it’s a free product, I use and depend on it every single day.   Without heavy utilization, value can disappear or be forgotten. Being front of mind of the customers is key to building a high growth company.

Again, these are just the top characteristics based on my personal style. It’s a good exercise if you are evaluating ideas for yourself. Build a checklist.   If you are already in your business, it would be good exercise to define why you love your business. Understand the reasons you think it’s going to change the world and be able to articulate that to anyone you meet.

ps. If you happen to have a startup that meets my 3 traits above, I want to hear about it…  johnson.cook@atlantaventures.com

 

 

 

Intentional Mentor Relationships – Acknowledge Growth and Chapters In Your Journey

 

One of the secrets of the most successful entrepreneurs is their ability to leverage mentor relationships along their journey.  An interesting observation here that few people talk about is that mentors for one chapter in your journey may not be the most effective for future chapters.  Of course there are different kinds of mentors: personal mentors, family mentors, industry mentors, and general entrepreneurial mentors.

From my own experience, I have a ton of love and respect for my mentors along the way. But I admit, and they will tell you, that what I needed to get my very first business off the ground at the age of 20 is different than the mentoring that I needed to grow it and different again for what I need now. Many of my early mentors I now consider my closest friends (more than mentors) and will appreciate them forever.

You too will find that you will outgrow your mentors, and there’s no shame in this, as long as you show respect and remember to pay it forward and help others, just as those early mentors helped you.

A great book on this topic and others is listed on my books page: Necessary Endings. It is a super encouraging book around how we grow, how we prune our lives and move forward when it’s time to move forward.

I encourage entrepreneurs to constantly be evaluating your mentor relationships. Be intentional about them. If you aren’t being challenged and fed loads of helpful value, it’s ok to look around and add mentor horsepower to your calendar.

 

An Opportunity for More Media in Atlanta Tech Scene – Dare I Propose More @Urvaksh?

 

Lately I’ve been thinking a lot about the value of media players in an ecosystem. We (Atlanta) are finding our stride when it comes to events.   We are getting the “community centers,” or “clusters” or whatever you want to call them in high gear.   We also are tracking the right things to measure our progress.   One key part that I think we need to focus on is the importance of the media.

People need to know what is going on.   Knowing about the events. Knowing about the progress: exits, fundraises, product updates, big hires, new markets…. getting the word out is important.

We do a fairly good job of what I’ll call “internal” knowledge. This mainly comes from a handful of active bloggers and now a healthy Twitterverse conversation.   But what strong media companies can do is so much more powerful. It’s about bringing new people into the community that aren’t already participating.

One example.
When I was on the Atlanta Tech Edge TV show in August, a local Atlantan saw the show and learned for the first time about the Atlanta Tech Village.   This guy happened to be Joe Gebbia Sr., whose son, Joe Jr. is the co-founder of AirBnB  A San Francisco based startup recently valued at $2.5 BILLION (!?) and has 650+ employees, now in only it’s 6th year.     Joe Sr. called the Village to say that his son will be in town and he’d like to bring him by to see the place and maybe even speak to the community. He did, we hosted him at a Startup Chowdown, and his stories about AirBnB and his personal journey from $200/week existence to riding one of the hottest rocket ships around inspired a ton of Atlanta entrepreneurs. I still hear today from folks how that little chat fired them up.

This is a great example of how broad reach can bring meaningful traction to a community. I think Atlanta Tech Edge and the Atlanta Business Chronicle are doing a great job, but I think there is much more opportunity to tell the story of the Atlanta tech community than just these two organizations can deliver.

Mark my words, there’s an opportunity here somewhere and Urvaksh can’t be everywhere… nor do we really want to clone him. :)

#JustSayin.

 

 

Ingredients and Indicators of a Startup Chances of Success

 

Today I will share what I believe are the top indicators of a startup chance of success for very early stage companies.  Some folks may disagree with this breakdown, and there are of course cases that prove otherwise. That’s cool. This is from my own experience. I specifically want to focus on the top variables that are in an entrepreneur’s control in Stage 1 and Stage 2 of a startup.

Here’s the high level breakdown:

  • 20% of startup success is your Idea
  • 30% of startup success is You
  • 50% of startup success your Team

startup success

20% Your Idea – Painkiller Index

  • Is your target market big enough, do you know it well enough, are they ready for your solution or do you have to convince them that their pain hurts so you can sell the pain killer?
  • Your execution – Is your solution is clunky, have too much friction to use or acquire? Can you create an easy to use solution that buyers need, and can you deliver to the level they expect?
  • Your Timing – believe it or not, timing is a discussion in the idea of startups. I don’t mean trying to time the market in the traditional way the term is used (often associated with the stock market and is something that is next to impossible to do)… instead, as far as a painkiller goes.   I may have a pain of needing a more efficient route algorithm, or colder cocktails to enjoy in  my driverless car, but the timing of these painkillers isn’t right.
  • Focus – Is the idea small enough that you can accomplish it as a startup, with the world against you?

30% Yourself

  • Your intentional life balance – Starting a company is brutal. If you aren’t geared up to handle it in your life, things can go sideways quickly. Are you healthy?  Are you intentional about where your time goes? Do you have a bigger picture view of the world, spiritual or otherwise? Are you giving back to those around you in order to better learn?   Do you have your priorities and your s**t together?
  • Your confidence – Confidence is often the biggest difference between a kickass entrepreneur and one who is mediocre and spinning his wheels.   Finding the thin line between extremely confident and overly arrogant is a tricky challenge, but one that can make or break you.
  • Your discipline – Back to the intentionality: can you hold the line?  Can you keep going even when you’re exhausted?
  • Your abilities – Do you have the knowledge and experience in your market?

50% Your Team

  • YES, I propose that the team you assemble is the largest variable in your control over your chance of success.  So this means if you score low and put the wrong team in place, your odds of success are painfully slim.  This is the top takeaway, I hope you’ll see from this post. The team is the biggest chance you have for success.  It doesn’t just mean the co-founders, it means everyone around you. Your Investors, Directors, Advisors, Employees, Managers, even Vendors.    Get the first two right, but even if you screw up a little on the Idea or Yourself, having an amazing team can carry you through these.

 

 

Atlanta Traffic – This Post is Not What You Think It Is

 

Every day, I drive myself 37 miles from Peachtree City to the Atlanta Tech Village in Buckhead (and 37 miles home).     Funny thing is: I love the commute.  People typically give me the “oh that must suck” and “poor you” comment, but I’m not kidding you. It’s a healthy time for me.

Here are some reasons why and perhaps tips for you if you have a commute.

Appreciating WHY there is traffic.
There are a lot of people in Atlanta. That means a lot of cars.  If there weren’t a lot of people in Atlanta, could you do the things you do?  What if you lived in Algona, Iowa… you would have fewer cars, less traffic, but would you have the same opportunities for connection and success that you have now?

Appreciate the buffer.
I don’t know about your house, but at my house there are 3 wild people under the age of 7 at home. At the north end of my commute there are 300 wild people under the age of 30. It’s wild on both ends. The downtime in the middle is quiet. Other than my shower and my run, it’s pretty much the only quiet time I have all day.

Productive, if I choose.
I love Audible.com. It’s my audio book listening app. I’ve got 3-5 books at any one time queued up on my iPhone and can play them through the Bluetooth connection to the car and it’s a great way to focus on deep study while still multitasking.   Also, the 40 minutes in the morning and afternoon are typically the only chance I have to sit in one place and return phone calls.  I try not to schedule calls during the commute but many days this ends up happening as well.

You know your city.
Every single day, I have the pleasure of passing the Atlanta Airport, Turner Field, the State Capital, Atlanta City Hall, Grady Hospital, Georgia Tech, Midtown, and Buckhead. I love how well I’ve come to know the city. I see the new tower cranes as soon as they pop up. I see Billy Cory’s crazy ass digital smokestack in the works in downtown. I see the Auburn Avenue revitalization coming together each day.   It’s exciting to me to see physical progress of the city. Otherwise I spend most of my time in the digital progress of the city via Twitter, blogs, emails, AngelList.  There’s just something about the tangible stuff around you.

Traffic is one of those things that people love to hate about any city. But I refuse to be a hater. I’m happy to have the freedom and opportunity to participate in Atlanta, with all it’s big city challenges and opportunities.

Oh, one more tip… I’ve written about this before. Even when you’re sitting in your car alone, try smiling at yourself even in the worst gridlock on the downtown connector. Its a very simple exercise you will find to provide immense and immediate stress relief.  Just relax, dude.