Remember the Georgia Tech strategic plan? You should… it has “innovation” (EI2′s middle name!) all through it. Under Goal 3, “Innovation,” it says “Establish world-class initiatives to serve Georgia Tech, the state, and other strategic national and international partners.” Over a year ago, Steve Cross convened an innovation task force which met for several months; I was the EI2 representative. Several new programs and procedures have emerged from that task force, including GT:IPS and industry.gatech.edu. The most visible is Flashpoint.

Under the leadership of Merrick Furst (Distinguished Professor in the College of Computing), a team drawn from all across campus opened applications last summer, and accepted the first class (or “cohort”) of seventeen teams. Each team was between two and five people; at least one member of each team had to be a strong technologist. Four of the teams were based on GT research licenses, but over half had some sort of relationship to Georgia Tech (current faculty or students on teams, or active alumni, etcetera).

And we recruited nearly 40 mentors, from young entrepreneurs to experienced corporate executives to seasoned venture capitalists.

And some friends in the local venture capital community organized a small investment fund to invest in the Flashpoint teams.

And Georgia Tech rehabbed some empty space for us on the third floor of the 828 West Peachtree building (conveniently across from the Technology Square Starbucks).

And then we got started in mid-August 2011.

The Process

In my November 1 column, I wrote this about Flashpoint:

The last thought I’ll leave you with is that, as the nation’s largest engineering school, we think we’re pioneering a new discipline that Merrick has named: “startup engineering…”

It’s a long way from perfect, but it’s very different than the process of just 10 years ago. It’s an exciting time to be in this business.

That was only halfway through the process, but now that we’ve finished the first cohort, we’ve learned some things. Merrick is now using this as the definition of Startup Engineering:

Unlike for-profit accelerators, Flashpoint is primarily an educational program. The “textbooks” for the educational portion of Flashpoint were:

• The Four Steps to the Epiphany
• The Lean Startup
• Business Model Generation

These books emphasize the importance of understanding your customers, distinguishing facts from opinions, and being able to rapidly iterate your business model based on market feedback. They have led to something of a “Lean Startup” cult in Silicon Valley, but they’re not only applicable to startups — they’re good roadmaps for anyone trying to create something new, including innovators inside large corporations or government agencies (or, dare I say, universities!). Well worth reading. (I suspect that Tim Israel and half the folks in MEP will say “Duh! We’ve been preaching this for years!”)

In the first book above, Steve Blank famously states that “In a startup, no facts exist inside the building, only opinions.” So we’d insist that each team spend a significant portion of each week “outside of the building” talking to potential customers. Every Tuesday, the teams and mentors would assemble for pizza around 6:00 pm, and spend the next four or five hours thrashing through what they had learned from these customers that week, and how that would affect their plans for the next week.

Then, the next Tuesday, they’d do that again. And again.

In between, there were weekly seminars and frequent one-on-one mentoring meetings. Teams spent the first several weeks trying to optimize their business models before concentrating on writing code. And the business-model work continued all the way through the end of the program during the holiday break. From mid-August through mid-December, an extraordinary amount of work got accomplished. Sometimes you’ll hear us say “Flashpoint isn’t an incubator, it’s an accelerator.” Acceleration happened.

The Result

On January 10th, the fifteen surviving teams presented their results to a standing-room-only crowd at the GTRI conference center. They did it again at Union Square Ventures in New York on January 18th. And they finished up to a crowd of over 100 Silicon Valley angels and VCs on January 26th, hosted by Andreesen Horowitz in Menlo Park. You can read some of the press coverage here. The short answer is: it worked! At least three of the teams already have term sheets, several more are in detailed negotiation with investors, and every single team attracted at least one follow-up meeting in each of the three cities.

I like to highlight the story of Pindrop Security (one of the ones with a term sheet) as an example of how “it takes a village” to create a university spinout. Pindrop:

• started with a professor in one of GT’s research centers, and
• a graduate student in the College of Computing.
• Once it appeared they would be creating intellectual property would be worth protecting, they worked with GTRC to secure patent coverage.
• They received an NSF grant with the help of our SBIR Assistance Center, then
• received Georgia Research Alliance funding
• managed through our VentureLab program.
• They licensed their GT intellectual property through GTRC.
• They won the TAG Business Launch Competition, which brought them additional funding and heightened visibility from
• the local entrepreneurial community. Paul Judge joined as chairman.
• They joined ATDC and moved into the Centergy building, then
• were selected for the first Flashpoint cohort
• and began talking to major corporate clients.
• At the end of Flashpoint, they attracted investment from local angels and
• from a highly-respected Silicon Valley venture capital firm.

Some of you will remember that, when I interviewed for this job three years ago, I presented a slide based on Jan Youtie’s work explaining how universities are becoming “knowledge hubs,” and my vision that EI2 would be the focus of that hub for Georgia Tech.

Mission accomplished. Now let’s do it again. And again.

What’s Next?

Merrick and the team are taking a deep breath to analyze what we learned in the first cohort. Applications for the second cohort will be accepted in February at the Flashpoint web site, and the teams will assemble on campus in early June for another four-month sprint. The Flashpoint curriculum should be applicable to startups in any field, not just software. We’re actively trying to expand the focus, and would appreciate any suggestions — or nominations for the expanded mentor field.

And, for our next cohort, we are planning to add to the mix by including a small number of teams sponsored by corporations that are looking to use Flashpoint as a new way to manage disruptive innovations. If one of your clients is a corporation trying to figure out how to disrupt their existing business model (before their competition does it to them!), let me know. Flashpoint should have something new and valuable to offer. We suspect that Georgia Tech will eventually offer continuing education in “startup engineering” to companies of all sizes.

(Incidentally, Flashpoint costs money to operate. Our first premier sponsor was SAIC, and we just added United Technologies Corporation at that level, along with some lower-level sponsors listed on the Flashpoint site. We also have many corporate supporters. Let me or Christina know if you have a client who might want to be involved.)

And, internally, we’re applying the Flashpoint lessons to our EI2 startup services. Flashpoint isn’t going to replace ATDC or VentureLab. But the “lean startup” concepts and our new field of “startup engineering” will start to be used as foundations for many of the services that Nina Sawczuk’s team offers.

Launching Flashpoint was chaotic, stressful, exhausting, and occasionally contentious… just like a startup! We’ve learned a lot, and we’ve established Georgia Tech as a national player in this new field of building lean startups on a firm academic foundation. I’m proud of all the EI2 people who played a part, and look forward to getting more of you involved in the future.

As always, keep up the good work.

Stephen

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They spent one week on-site working with ECE’s Dr. Kim, Dr. Al-Regib, and Dr. Hayes preparing a commercialization plan for the proposal.  The concept was to develop the next generation in-home media convergence device.  Its design and functionality reaches beyond AppleTV, GoogleTV, Boxee, and many other recent Internet-based television solutions.

After further work back in Atlanta, the team submitted the proposal to the Korean government for consideration.  With help from Carl Rust and Dr. McLaughlin, our $9 million proposal was selected as first out of 109 submissions — a major accomplishment.  Since March of 2009 the “KORUS” (Korea US) research team, along with research and corporate partners in Korea have been developing the device.  David, Carl, and James have been supporting the team through gathering competitive intelligence, preparing market forecasts, and coordinating partner integration.  This effort led to the visitation and temporary assignment of many Korean faculty, government officials, and government laboratory researchers to our campus.

Signing ceremony at Centergy with Dr. Yeongcheol Seok, Vice President, Korea Institute for Advancement of Technology; Dr. Steve McLaughlin, Vice President of International Initiatives, Georgia Tech;
and Carl Rust, GT EI2; 3 May 2011

Building on this relationship with the Korean government, in 2009, Dr. McLaughlin began developing a MKE/KIAT (Ministry of Knowledge Economy /Korea Institute for Advancement of Technology) activity called Global Industry-Academia Cooperation or R&BD Hub (Research & Business Development Hub).

Under this effort, MKE/KIAT are sponsoring  Georgia Tech to perform research and commercialization collaboration with small- and medium-sized companies from Korea.  The goal is to jointly perform pioneering research leading to new products for US markets.  Successful projects are expected to have a local economic impact by growing their operation in Georgia to support the new business which may include some combination of sales, marketing, support, distribution, and manufacturing functions.

Georgia Tech’s reputation as a prominent research university combined with ATDC (Advanced Technology Development Center), our highly-recognized startup company incubator, uniquely qualified us for this program.  MKE and KIAT have committed $2.5 million so far, with more expected in future years.  Carl Rust and his organization within EI2 are involved in assisting with the management of this effort.

In late 2009, David Bridges and Carl Rust began developing a concept named “Global Startup Business Program in US” with the Korean government agency SBC (Small and Medium Business Corporation). The program has both entrepreneur and incubator elements.  This $1.8 million proposal is intended to provide young Korean entrepreneurs an international education and hands-on training experience so they have a higher probability of success in launching their technology based new business targeting US markets.  Those that are successful are expected to form a startup company and become part of ATDC.  A unique part of the proposal is the notion of bringing over entrepreneurs in a cohort of 10 to 15 companies.  To our knowledge, this international cohort landing concept has never been attempted.    Our success with KORUS and the MKE/KIAT hub has led to this opportunity with SBC. The Korean government is scheduled to make a decision in January 2012.

Dr. McLaughlin, Georgia Tech’s vice provost for international initiatives, has on at least two occasions described this long-term relationship with the Korean government as an archetype for GT’s future collaborations with other countries.  The initiatives bring foreign governments, enterprises, and economic development opportunities to Georgia.  As of now, Centergy is home to the KORUS team, the R&BD Hub teams, and hopefully the new cohort SBC teams.

So if you think you’re seeing more Korean faces in the Centergy courtyard, now you know why! Make them feel welcome.

Stephen

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I prepared the following document as my testimony to the State Science and Technology Strategic Plan Joint Study Commission, meeting in Columbus on 30 November 2011. It’s going to be available on their website, but I decided to replicate it here.

Supporting Technology Entrepreneurs in Georgia

Stephen Fleming
Vice President, Enterprise Innovation Institute
Georgia Institute of Technology

http://innovate.gatech.edu

I.               Background/Company Overview

The Georgia Institute of Technology is one of the nation’s top research universities, distinguished by its commitment to improving the human condition through advanced science and technology. Georgia Tech’s campus occupies 400 acres in the heart of Atlanta, where 20,000 undergraduate and graduate students receive a focused, technologically based education. Georgia Tech is consistently ranked in U.S. News & World Report’s top ten public universities in the United States and has been ranked as #4 among all engineering schools (public and private) for the last six years.

The Enterprise Innovation Institute is Georgia Tech’s primary business outreach organization, and provides a comprehensive program of assistance to business, industry, entrepreneurs, and economic developers. Our goal is to help enterprises of all kinds apply science, technology, and innovation to improve their bottom lines. Specifically for entrepreneurs, our programs include:

• ATDC: The Advanced Technology Development Center is the oldest, largest, and most successful university-based business incubator in the country. Since 1980, ATDC has helped hundreds of Georgia entrepreneurs create great technology companies, and currently has over 500 member companies. Recently, it was honored as one of the ten best incubators in the world by Forbes magazine.
• VentureLab: In cooperation with the Georgia Research Alliance, Georgia Tech’s VentureLab helps launch over a dozen startup companies a year based on Georgia Tech research.
• Flashpoint: An innovative new entrepreneurial accelerator, combining shared learning, mentorship, and cutting-edge approaches to business model generation and startup creation.
• GCMI: The Global Center for Medical Innovation helps physicians and other medical professionals commercialize their inventions with a process based on the successful VentureLab model and a dedicated medical device prototyping facility.

The Enterprise Innovation Institute manages the Georgia Seed Capital Fund, which leverages private-sector investments into technology startups. This fund has not received any state appropriations in several years. EI2 also houses the Georgia SBIR Assistance Program, which has been drastically downsized due to the economic recession and the resulting reductions in the Board of Regents “B” budget in recent years.

II.              Please address the following points:

a.   What policies are currently in place that are barriers to your company/organization’s success?

The prohibition against investing state pension assets into venture capital firms has had a negative impact on local venture funds’ ability to raise capital. Although relaxing this prohibition will not have an immediate “silver bullet” effect, it should be done both for fiduciary and for economic development reasons.

b.   What policies have aided in your company/organization’s success?

The state’s annual appropriation to the Enterprise Innovation Institute (through the Board of Regents “B” budget) is the basis for all of our entrepreneurial assistance programs as well as our other business-support services in 25 locations throughout the state. Due to the economic recession and the resulting reductions in the “B” budget, our appropriations have been cut approximately 30% over the last four years. We have maintained our focus and continue to be recognized as one of the best entrepreneurial programs in the country and as the hub of much of the technology entrepreneurship in Georgia. As tax revenues recover, it’s important to bring the “B” budget back in line with previous funding levels.

In addition, the state’s support of the Georgia Research Alliance has brought dozens of superb scholars to our state, and many of them have launched entrepreneurial startups. Georgia Tech averages over a dozen spinout companies per year; most of these have benefited greatly from the GRA commercialization grant program.

Finally, the recent angel tax credit appears to be stimulating private-sector investment by individuals into Georgia technology startups. This should be monitored and, if justified, extended in future years.

c.   Where do you want to see your company/organization in ten years?

Currently, American business leaders think of Silicon Valley, Boston, Seattle, and Austin as the centers of technology entrepreneurship in this country. In ten years, I want Atlanta to be on that list.

d.   How can the state of Georgia help your company/organization realize this goal?

Please see policy recommendations below.

III.         Please include a short bio and your company/organization’s background.

Stephen Fleming has over 15 years of private equity experience at the General Partner level. Prior to his venture capital career, he spent 15 years in operations roles at AT&T Bell Laboratories, Nortel Networks, and LICOM (a venture-funded startup).

An Atlanta native and summa cum laude graduate of Georgia Tech, Stephen returned to his alma mater in mid-2005 as Chief Commercialization Officer. In 2009, he was promoted to Vice President, Economic Development and Technology Ventures, and Executive Director of the Enterprise Innovation Institute at Georgia Tech.

In addition to his roles at Georgia Tech, he is also a member of the Investment Committee of the Seraph Group, an early-stage venture capital firm. Stephen is active in the “alternative space” industry; he is an investor in three private aerospace companies and is a founding member of the Space Angels Network. Mr. Fleming also serves on the boards of the Technology Association of Georgia, the Spiritual Living Center of Atlanta, and Tech High School, a charter high school emphasizing science, math, and technology in urban Atlanta.

Georgia Tech’s Enterprise Innovation Institute (EI2) helps enterprises of all kinds improve their competitiveness through the application of science, technology, and innovation. During fiscal year 2010, the Enterprise Innovation Institute:

• Helped Georgia manufacturing companies reduce operating costs by $35 million, increase sales by $243 million, and create or save 1,350 jobs. EI2 served 710 manufacturers during the year.
• Evaluated 125 Georgia Tech research innovations and formed 16 new companies based on this intellectual property. Startups based on Georgia Tech innovations attracted $60.5 million in investment.
• Worked with 235 companies interested in collaborations with Georgia Tech, including 17 projects involving state economic development agencies. Projects resulting from those interactions generated 3,693 new jobs and produced $547 million in capital investment.
• Helped Georgia companies win $560 million in government contracts, creating an estimated 11,505 jobs.
• Assisted 71 minority entrepreneurs, who received $31.5 million worth of new contracts, sales increases, and financing.
• Served more than 250 technology startup companies that together generated capital activity (venture capital investment and mergers/acquisitions) of more than $157 million. Companies affiliated with the ATDC program reported revenues totaling more than $1 billion and nearly 3,500 jobs.
• Helped Georgia companies prepare 58 applications for Small Business Innovation Research (SBIR) grants. Companies assisted won nearly $7 million in awards.

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The existing bike racks down by Moe’s are going to be moved up to the area surrounding the TSRB doorway. Total bike parking will expand from 28 to 42 spaces (hooray!). Construction started on Friday.

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Last Tuesday, September 20th, the Telecommunications Industry Association (TIA) and Numerex invited me to address the Second International M2M Standardization Meeting as the keynote speaker for their dinner at the Carter Center. I didn’t know anything about M2M, but that’s never stopped me from speaking before! So I started doing a little research, and this was the result.

Thanks for having me here tonight. I was asked to come speak about M2M communications. My first reaction was “what’s M2M”? I hadn’t heard the acronym before…

But once Alain educated me, I realized I’d actually been working on M2M for a long time.

I’ve had a few careers, but I started out in the telecommunications business… originally at Bell Laboratories, back when that meant something, and then at Nortel, back when that was a great company. In about 1985, I was teaching classes to Illinois Bell in something called “TBOS”. Anybody here ever heard of it?

Nope.

TBOS: Telemetry Byte Oriented Serial. It was a primitive method for taking contact closure alarms — relays — and remoting them to a centralized monitoring center. It was invented by the old Bell System, and Nortel implemented it in our optical fiber systems. So here I was, 23 years old, in a classroom in Chicago, teaching a class to a bunch of old phone company guys.

And here I am teaching them about TBOS. This is Illinois, so they were heavily unionized. And they’re not looking too excited.

I finally asked one of them what the problem was. He replied: “You’re saying how amazing this technology is, and how you’re able to centralize alarm monitoring at one location, and how we won’t need to have individual technicians at each office to monitor alarms. Well, that’s MY job, and you’re saying they won’t need me anymore.”

Ouch.

So way back in the dawn of time, I not only tripped over M2M, I tripped over some of the business and financial and personal impacts of M2M.

So then I went off and joined a startup company that turned out to be in the M2M space, even though we didn’t call it that… We were building something called SCADA… Supervisory Control And Data Acquisition. We sold that into the electrical power utilities, giving them telemetry and telecomm capabilities over optical fibers strung along the power cables. That replaced a fault-monitoring system which consisted of guys driving around with radios and, literally, dropping quarters into pay phones. Wound up selling that to Westinghouse, and the basic technology is still being used today.

I kicked around the telecomm business for a while, then got into the venture capital business. One of the companies I funded was an operational system layer for fiber optic networks… allowing the optical equipment to negotiate in realtime without human intervention. The idea was that the machines themselves would identify optimum routes as traffic requirements changed as well as routing around failures from cable breaks or other equipment problems. Combination of sensors, telemetry, and some centralized intelligence: that was M2M.

Good idea. We got a beta test with a well-funded startup telecom operator called… Global Crossing. In 2001. Ouch.

So we said no more messing around with these fly-by-night telecom operators. We pulled out all the stops and got a beta test with the second-biggest network in the country. A company named… Worldcom.

Yep, Bernie Ebbers company. We were in their lab when everything fell apart in early 2002. Double ouch.

So we were a bit early with that particular implementation of M2M. Companies like Cisco and Ciena do it today, so the basic idea was a good one, just ahead of its time.

Now, ten years later, I’m running the economic development group at Georgia Tech, and I’m seeing M2M wherever I go. It’s a subset of what Kevin Ashton labelled “The Internet of Things”… what happens when every physical device has sensing capability and telemetry connections to the wider world?

At Georgia Tech, we have an amazing technical depth in sensors of all types. A lot of that started with our work for the military, but a lot of it is now moving into the commercial sector. We have sensors for just about everything. Optical, microwave, acoustical, chemical, mechanical… you name it, if you can detect it or measure it, Georgia Tech probably has worked a sensor for it.

One of the most practical sounds silly, but it’s important. We have a startup company that’s putting ammonia sensors in big industrial chicken coops to control their ventilation fans. It turns out that ammonia buildup is a huge problem, and they currently solve it by having guys drive around in pickup trucks and sniff the air. If they smell ammonia, they flip on a fan for a while. Some sensor work done out of GTRI will let chicken producers do that from a central location.

I’m detecting an echo here.. here I am, putting middle-aged guys out of work again…

Then we have our work with energy harvesting. If you start planning on scattering wireless sensors hither and yon, you quickly run into the problem of powering them.

Batteries are cheap, but changing batteries isn’t.

So we have G.K. Chang working on using flexible nanomaterials to create a tiny amount of electric current, just from flexing. Which means they could be powered by wind, or HVAC airflow, or even blood circulation. That means you could instrument an entire building for temperature, or an entire oil refinery for pressure, without miles of wiring or thousands of batteries.

And I mentioned blood circulation… It turns out that putting sensors inside the human body is a huge opportunity. One of our startup companies is named CardioMEMS. You might have heard of them; they did a deal with St. Judes that values the company at about $450 million. It’s an interesting story.

Mark Allen, a professor in electrical engineering at Georgia Tech, was funded by the Air Force to invent pressure sensors that could work inside a jet engine. That turns out to be a really hard problem, since you can’t exactly run wires to them, since the wires would melt. So Mark got that working… but, at the same time, a physician at the Cleveland Clinic was looking for ways to measure blood pressure inside the heart and the major cardiac arteries.

There are a whole class of situations where arteries can rupture and cause immense damage. For patients at risk, it’d be great to have constant monitoring of their pressure and detect trouble before it starts. You can’t expect them to trot into the clinic for a CT scan every day. And if you implant a traditional sensor, you’d have the problem of changing batteries. Do you know anyone with a pacemaker? Changing that battery costs $10,000.

But Jay and Mark together were able to invent a sensor that can be remotely powered by low levels of microwave energy, so you can fit the whole thing into a little chip that gets implanted through a cardiac catheter, without surgery. So you have an outpatient procedure, then you can go home, measure your pressure daily when you brush your teeth, then have it sent over phone lines to your doctor’s office. It turns out to reduce emergency hospitalizations by 38% per year.

That’s a big deal. And that’s M2M.

At the other extreme, I met with a company last week that’s automating those huge sprinkler pivot systems you see in South Georgia. Each one of them put out about a million gallons of water per day. If you’ve been following the news in Georgia, we’ve had recent years of drought conditions, and we’re in the midst of a water war with a couple of neighboring states, because we’ve grown so fast and don’t have enough reservoir capacity.

It turns out that 80% of the water consumed in Georgia goes to agriculture, and about half of that is wasted. By building a network of moisture sensors and targeting which spots need moisture versus which ones don’t, you can greatly reduce the amount of water you need for irrigation. And one of their examples is a farmer who is farming 20,000 acres across six counties. He’ll be able to manage all those irrigation systems from one computer. That’s M2M.

One more example: vehicle-to-vehicle communication. This is something we’re working with in the Georgia Tech Research Institute, again as a spin-out of military technologies. Civilian applications mean that your car will talk to every other car on the road. If there’s a slowdown up ahead, your car will adjust your speed by applying the brakes just a bit in advance. So you’re saving gas, reducing the chance of accidents, and smoothing out the flow of traffic, all at the same time. And if you’ve ever encountered Atlanta traffic, every bit of smoothing can help.

Take it a little further, and every car on the road will start negotiating with every other, so your GPS will start giving you alternate routes based on realtime events and traffic situations. And, eventually, the cars will just drive themselves, so you can read the paper or catch up on email during your commute. That sounds pretty good to me. And that’s M2M.

So… healthcare, water usage, and traffic. That’s three of the biggest challenges facing Georgia. And M2M is going to play a key role in solving all of them. Like I said, at Georgia Tech, we’re seeing M2M technology wherever we turn. It’s a great time for the industry, and I hope you’ve had a productive day talking about it.

With that… thanks very much for having me here tonight, and back to dinner!

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There is actually green space at the center of Georgia Tech’s campus! This is taken from the rooftop garden of the Clough building.

More green space. The roads don’t go here, so you can’t see it from your car.

A great view of Midtown Atlanta from the roof of the Clough. We’re very lucky to have a residential campus for an urban university… that’s rare.

experiment

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The Grand Staircase

Skiles Walkway

Connected to the Library

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Once again, I’m honored to have been asked to speak in the Space and Science tracks at Dragon*Con.

Dragon takes over downtown Atlanta during Labor Day weekend. It’s enormous. All the public reports of attendance are wrong… they admit to “40,000+” but that’s low-balled to avoid fire code problems.

But for those of you who don’t know, there is a wing of the Hilton reserved for the few hundred attendees who are too geeky for DragonCon… and that’s where the Space and Science tracks are. (Plus a couple of others, like Skeptics, EFF, and Podcasting.) Yes, when most normal humans would be going in search of Princess Leia bikini models, we’re learning about astrophysics and nuclear power plants…

Anyhow, I’m on three times this year:

What’s in the Labs at Georgia Tech?
Friday, 2:30 pm, Science track

Enter the Commercial Space Age
Sunday, 7:00 pm, Space track
with Michael Mealling

NASA Goes Commercial
Monday, 11:30 am, Space track
with Michael Mealling, John Bradford, A.C. Charania

I hope those of you attending can drag yourself away from the (admittedly incredible) entertainment programming and cross the pedestrian bridge from the Marriott to join us in the Hilton. My sessions are during family-friendly hours (i.e., not Saturday night), so bring your kids. Have a great con!

PS, for those who asked: My incredibly popular and thought-provoking talk on alternative energy (“Hydrogen Cars, Ethanol, Wind Farms, and other Silly Ideas“) was apparently vetoed by Science track management this year as being insufficiently respectful to prevailing opinions, even though I filled the room last year, and there are empty slots on the schedule. C’est la guerre.

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There is an old Vulcan proverb: Only Nixon could go to China.
–Spock, Star Trek VI

When I took over EI2 two years ago, one of the first things I did was merge ATDC and VentureLab. It was the right thing to do at the time… but times have changed. Nina Sawczuk has been director of Startup Services for almost a year and has ambitious growth strategies for btoh ATDC and VentureLab… but the strategies are different. It’s time for ATDC and VentureLab to be separated again. Let me explain.

Both ATDC and VentureLab deal with encouraging entrepreneurial startups, but their focus is different. ATDC is open to any technology entrepreneur in Georgia, while VentureLab is focused purely on opportunities coming from the Georgia Tech campus. Due to attrition over the years, both staffs had shrunk to the point where I decided the best way to maintain critical mass was to combine them. This has worked, to a point — but attrition has continued (most recently with the departure of Lance Weatherby for a local startup) while the demand for ATDC services has grown tenfold (from 40 to 400 member companies). Simply spreading the remaining staff across a wider and wider range of constitutents isn’t going to work any more. So… we have to do something else.

What we’re going to do is to learn from Tom Sawyer.

Remember the story of Tom Sawyer’s fence? Aunt Polly had ordered Tom to whitewash a fence on a hot Missouri day. Tom had other activities in mind, but a quick slap from Aunt Polly’s slipper got him to working… and to thinking. Ben Rogers came by on the way to the swimming hole:

“Say — I’m going in a-swimming, I am. Don’t you wish you could? But of course you’d druther work — wouldn’t you? Course you would!”

Tom contemplated the boy a bit, and said:

“What do you call work?”

“Why, ain’t that work?”

Tom resumed his whitewashing, and answered carelessly:

“Well, maybe it is, and maybe it ain’t. All I know, is, it suits Tom Sawyer.”

“Oh come, now, you don’t mean to let on that you like it?”

The brush continued to move.

“Like it? Well, I don’t see why I oughtn’t to like it. Does a boy get a chance to whitewash a fence every day?”

You know the rest of the story… soon, Ben trades him an apple to take over the work of painting the fence. When he wore out, “Tom had traded the next chance to Billy Fisher for a kite, in good repair; and when he played out, Johnny Miller bought in for a dead rat and a string to swing it with.” (I don’t know the market value of a dead rat in Tom’s world, but it’s apparently more than a kite.)

By the end of the day, Tom hadn’t touched the paintbrush since handing it to Ben; he was too busy orchestrating the horde of boys wanting to paint the fence.

He had had a nice, good, idle time all the while — plenty of company — and the fence had three coats of whitewash on it! If he hadn’t run out of whitewash he would have bankrupted every boy in the village.

That’s our new model for ATDC… except, I hope, without dead rats on strings.

Atlanta’s technology startup ecosystem is in a period of vibrant growth. ATDC has played a key role in the center of that ecosystem since 1980, and that’s not going to change. What’s changing is that now we’re counting on that ecosystem to provide resources as well as consume them. We’ve always had great volunteers at all levels; now we’re kicking it up a notch. We’re going to expand our dependence on volunteer mentors who will each help one or two companies. We’re going to re-establish positions for paid part-time startup catalysts (“entrepreneurs in residence”) who’ll assist more companies as well as sharing the load for classes, workshops, and other educational services. And based on our 2011 success with sponsorship, we’re opening up new opportunities for individual and corporate contributions to help pay the bills.

ATDC will provide more, and more varied, services to Georgia’s technology entrepreneurs than ever before. The difference is, most of those services will no longer be delivered by full-time ATDC staff. Mentors will come and go as they find interesting companies to work with. The new catalysts will be hired as part-time temporary employees, with the understanding that they’re not on a path to a full-time position… after a year or so, we expect them to either take a company out as CEO or senior manager, or to find something else to do. In the meantime, they can provide current, relevant, and targeted advice to less-experienced entrepreneurs, and in more areas than we can afford to bring onto the payroll.

What about VentureLab? The challenges there are different. VentureLab — including its affiliations with the Georgia Research Alliance, the Georgia Seed Capital Fund, the Georgia Tech Edison Fund, and the new GT:IPS program — offers what I think is the most comprehensive set of support services at any research university in the United States. We’ve had great successes, and expect more. But these successes take dedicated, focused effort over a period of years. In fact, the VentureLab catalysts typically act as uncompensated company co-founders more than coaches.

I don’t think those functions can be handed off to the community, at least not in the early stages of company formation. (Later on, successful VentureLab startups will join ATDC, and share in the same service mix available to outside entrepreneurs.) So VentureLab will continue to have full-time catalysts on the EI2 payroll. They’ll continue to focus on those faculty and student inventions that appear to have significant potential to become startup companies. And they’ll increasingly align their work with the new trandisciplinary research clusters that Steve Cross and I have discussed at the last few quarterly meetings.

But that leads to an immediate conundrum: Georgia Tech plans to have around twelve of these new clusters, but we only have five catalysts. How do you spread five people across twelve clusters? I can guarantee, the answer isn’t “Ask Steve Cross for money to hire seven more people”!

More fence to whitewash!

We’re already in discussions with some of the research clusters as well as academic departments and GTRI on how we can borrow some talent into VentureLab. They’ll work for us part-time, but with their salaries carried on their home organization’s books. We get talented, well-connected individuals to act as a force multiplier for VentureLab. They get great experience in helping to form entrepreneurial startups, overseen by our veteran catalysts. Everyone wins.

There are a lot of operational details to work out, but those are the broad brushstrokes. Nina Sawczuk will keep wearing two hats as EI2′s director of Startup Services and general manager of ATDC. She has promoted Keith McGreggor to director, and Roberto Casas to associate director, to run VentureLab as part of Startup Services. And Flashpoint fits in there, too. (I haven’t written about Flashpoint yet? Maybe I should do columns more than once a month!)

This is all just Startup Services; there’s lots going on in every department. No summer slowdown for EI2!

Photo Credit: Sheila Scarborough

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