The Spread of Start-Up America and the Rise of the High-Tech South | Hacker News Reader

The Spread of Start-Up America and the Rise of the High-Tech South

theatlantic.com

49 pointsSato25 comments

This is all great until you actually try to raise money in one of these towns. Atlanta is a great example of that. There are a lot of ideas, and very few people that can actually execute on them. Also, even if you have a viable product you will still play hell getting a decent round of funding in Atlanta which is why a lot of startups and talent have left for the Valley.

Memphis also has had some trouble funding start-ups, but we've at least got some start-up support organizations trying to fix that.

http://www.launchmemphis.com/ http://www.emergememphis.org/

The Atlantic offers a couple of opportunities.

"First, if you're an entrepreneur with a company in the South, we'd like to invite you to record your "Creation Story" as an audio clip"

"Second, if you represent a region, say the Greater Bossier Economic Development Foundation, and you want to make a pitch for your area, whether or not it's on our route, you can write us 300 words"

http://www.theatlantic.com/technology/archive/2011/10/in-sea...

Great startups can and do raise money in Atlanta. It's only harder for the stupid ideas to raise money. Have to got to the Valley for that. :-)

I'm sure that was the reason why Appcelerator went out to the Valley....it was a pretty stupid idea.

http://blog.jeffhaynie.us/whats-wrong-with-the-atlanta-start... Yes this is a couple of years old, but sadly not a lot has changed.

If you have a product that is low risk and already earning revenue you will get funding in Atlanta.....with terms requiring you to give up a lot more of your company, a lot of extra overhead with financials etc..

I would like to see this change, but this is the state of things today and if it is going to get fixed people need to be honest about how bad the problem is. The first step to recovery is admitting that you have a problem.

That was three years ago. One company. Can you name any others?

Meanwhile a hundred technology companies have received VC money and remained in Atlanta.

Memphian here. Bootstrapping (mostly) a startup here in town and working through the funding struggles. I think pg alluded to a lot of this in a recent post:

Here, if you're trying to start a company--and especially a tech company--the general feedback is the quintessentially southern "Oh, that's really nice. So are you going to put it on "Shark Tank" or something?" In other words, the support is minimal from everyday citizens. This is not a town filled with early adopters. There's very little chance of meeting another founder at the local coffee house.

I think Memphis is trying to change this, and they're doing a fine job, but these things take time. There's Emerge Memphis, which right now is just a building. But that building is our little coffee house in the valley. Every time I walk in, without fail, I have an engaging conversation with someone who's completely interested in what I'm doing. It's on a smaller scale, but it's there.

And I think the key is that the building, and its support organization Launch Memphis, are themselves run like a startup. They try something and if it doesn't work out they scrap it and try something else. Minimal bureaucracy, and minimal bs.

And for what it's worth, I don't completely agree that squelchers make that much of a difference. What's missing are champions, all the way up the chain. Champions at the grassroots supporting education and entrepreneurship, champions who commit to funding home grown companies, and champions who support those companies with guidance and advice. I'll take one of those folks for every 100 squelchers. Luckily, Memphis has a few. Not enough though. Not yet.

North Carolinian here. I wrote a study on entrepreneurial opportunities in the area.

tl;dr: The startup scene is definitely booming, most especially in Durham. Due to cost of living, there aren't many places that are better to bootstrap than here. But local investors are far behind. Starting a funded startup is still extremely difficult here.

I think it's hard to raise money anywhere - the key to raising money in Durham is to make sure you aren't just talking to people in Durham. We raised money from NYC, SF, and Seattle (with less than 10% coming from locals).

The article talks about $9.1 bn invested in SV in 2010 vs $1.2 bn in the South and then goes on to say that approximately 1 out of 10 raises are in the South.

Unfortunately this overlooks the power of having 4x as much money concentrated in a drivable radius vs multiple neighboring states. It's not linear. Same thing can be said of the expertise of the investors themselves. In the Valley you can actually find an entire firm that focuses on B2B SaaS because the volume makes it possible. In other cities, investors can't be as focused because the volume simply isn't there. This makes a big difference when you are pitching. If your startup fits their niche, it's going to click much easier.

Stormpulse is a startup that the South should invest in (yes, I'm completely biased), but when we started to pitch aggressively we found ourselves getting the most traction in Austin and the Valley.

A journalist from The Atlantic is on a startup tour of the south: http://www.theatlantic.com/technology/archive/2011/10/a-road...

Here's a chance to visit in Atlanta: http://www.atlsuds.com/2011/10/19/special-event-the-atlantic...

I have mixed emotions about this. On one hand it is great to see the press. On the other hand as soon as they started talking about agencies and SCAD in their post that was all that I needed to see.

Sadly, the Atlanta startup scene has way too many Wordpress designers doing basic websites, MBA/Marketers looking for technical co-founders and MBA/Marketers who are looking for funding to hire a inexpensive team in (select your favorite low cost development country). Atlanta has a lot of Agencies etc., but if the Atlantic is mentioning SCAD as a highpoint of their visit that says it all right there.

I am hopeful that will change, but the first step to solving this is getting over the Stockholm syndrome, admitting to how bad the problem is and not just accepting the status quo. Saying that at least we have some organizations forming is great, but not enough.

As one of the commenters asked, I wonder what startup(s) they're visiting in Greensboro, AL?

Could be the Bubba Gump Shrimp Company. But they're in Greenbow, AL, not Greensboro.

Maybe they got Greensboro AL (population 3000) confused with Greensboro NC (population 300,000)?

I'll second the article's contention that Athens, GA is a pleasant place to be if you work in tech. We even have some folks trying to nurture a startup scene - http://www.fourathens.com/

Bootstrapping is awesome in the South. For example in Melbourne, Florida you can live at the beach for $500/mo. Internet is goodly fast, and the Orlando airport is an hour away. There's enough high-tech activity from KSC and the defense industry to provide services you might need (office space, tech-savvy lawyers).

But besides access to funding and influence, there's another overlooked drawback to living in certain small towns: You'd be advised to bring your own boyfriend/girlfriend/spouse.

Bootstrapping is great in the south......until you need funding.

I live in the rural south. How rural? I was on the phone last week with Verizon begging them for some kind of internet access besides the crappy satellite I use now.

It took over an hour just to get to the correct department. What? A regular person wanting internet way out there? But I finally got an answer -- about 400 bucks a month for a 1.5MB T-1 line.

So it's not all attitude, but that's a huge part of it. There's also a lot of infrastructure problems out here that are, frankly, shameful. I know my state has had money for a long time that was supposed to bring broadband to the masses. But so far that's just a dream. [insert long, emotional rant here]

On the flip side, the net, what little I have of it, has helped out a great deal. On here I get to hang out with famous and not-so-famous startup folks, learn marketing, watch videos and read blogs on how to form and run a startup.

I see a great future for a lot of the South, but there's going to be a lot of bootstrapping going on. Startup growth is going to happen here in a much different way than Silicon Valley. The culture isn't going to be all in one spot, it's going to be spread out widely, with little "islands" like Austin, Raleigh or the DC beltway. Founders are also more likely to be individualistic and older. The crazy thing is how much is going on under the radar. I have no doubt that within a 20-mile radius there are a couple of hundred or more folks working on profitable startups, but heck if I know who they are. I seriously doubt the local Chamber of Commerce or government startup efforts have any idea either. Makes me wonder how trustworthy many of the statistics we see about entrepreneurship really are.

Surely that's a function of "rural" rather than "South"? You can get great internet in some parts of the South, and crappy internet if you move to remote parts of California.

Or so I would assume, having never tried to get internet in the South or in remote parts of California.

Yes. I forgot to qualify that. By being along the Southeast U.S. seaboard, we're physically located close to some of the highest-bandwidth backbones in the world. I live about 30 miles from the Mid-Atlantic Broadband fiber backbone, one of the most advanced fiber backbones on the planet. So it's not like we're lost somewhere in the middle of Utah; there's plenty of bandwidth nearby. This is a local political problem -- no doubt we needed a big pipe, but to take all that time and money and build a pipe that doesn't even help those close-by? My opinion is that when these planners thought "economic growth" they thought about bringing in a new factory or large business. Therefore they spent the money in that manner. But the economy is growing in a different manner entirely. As the article mentions, we have an impedance mismatch between the way the old structures and institutions think things are supposed to work and the way they are actually working.

> "it's not like we're lost somewhere in the middle of Utah"

Actually, rural Utah is remarkably well connected.

A lot of major backbones run through Salt Lake City, and many communities in the middle of Utah have fiber to the home (via the Utah Telecommunication Open Infrastructure Agency, or UTOPIA). Right now, I live in a town of under 20,000 people and get both download and upload speeds in the 20 megabit range with pretty low latency.

As you said in a few posts up, it's a local problem. This community decided broadband was important, so we voted for it and got it. Other communities and governments don't really recognize the importance, so you can be just a few miles from major backbone and yet be stuck with dialup or weak satellite.

Yes, definitely a function of rural. I live in the South, with a few million suburbanites surrounding me just outside a major city, and I pay Comcast about $50/mo for 24Mbps down. Heck, they offer 100Mbps (and possibly more).

So...did you get it? $400/month for a T-1 is a lot more than the $55 I pay for fios, but certainly within reach for someone who needs it for work, and you probably break even if it lets you stop commuting and/or cancel regular phone service, etc.

My hometown is Tampa, FL. In 2005 I decided I wanted to start a tech company. I couldn't even get more than 4 people together for a programming meetup, let alone something related to startups, so I moved to SF. I'm back for a couple of months and was delighted to find out that there is a startup incubator (Tampa Bay WaVE) that no only exists, but has put 80 startups through its program!

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