Southern Entrepreneurs Got Somethin’ to Say
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By Muriel Vega/
Hypepotamus
Perception is a funny thing. Silicon Valley has become the place to launch a startup, but it’s really just one of many. Last fall, The New York Times looked at Atlanta-based MailChimp and the “Un-Silicon Valley” way to grow a startup.
In Mailchimp’s case, this alternative startup route was to grow a profitable company deliberately and sustainably — to build, as Times writer Farhad Manjoo called it, “a tech company that runs more like a normal business than a debt-fueled rocket ship careening out of control.“
This is simply more common in the South than in Silicon Valley. The companies that are built in Atlanta and the other startup hubs in the Southeast often see more stability, in the long-term, than those that build a lot of hype early on, only to quickly fizzle out. It often comes down to attitude: the extra push of hustle Southern startups face in comparison to our western or northern counterparts.
The hustle running through the South’s veins is electrifying. Our innovation presents itself in slightly unique ways. It comes in the form of women and minority entrepreneurs who transform their careers and overcome funding obstacles. Georgia, in fact, ranks first in the United States for producing female entrepreneurs and second for black-owned businesses. Contrast that with the nationwide figure that only 10 percent of the startups which raised Series A capital last year were established by female or diverse founders.
The South is making strides as early-stage, minority-led companies find support in initiatives such as Nashville’s Launch Tennessee, which has invested $116 million since 2012, and New Orleans-based PowerMoves, which through its bootcamps and accelerators helped 165+ minority startups through their national network.
Here, female-led incubators such as Kathryn Finney’s digitalundivided, LaunchPad2X, and Microsoft-backed Women’s Entrepreneurship Initiative are elevating startups with platforms to succeed. It is also home to female-led venture-capital firms such as the Jump Fund in Chattanooga, and Valor Ventures in Atlanta, which leverage the experiences of successful female founders as mentors and stakeholders.
“The technology space can often be not inclusive of women, particularly women of color. Women entrepreneurs face unique hurdles, with security being one that can often be diluted when you start to talk about all the other issues,” says Theia Washington Smith, executive director of the City of Atlanta’s Women’s Entrepreneurship Initiative.
While the strides being made for female investments and VCs are notable, the overall Southern investor pool is still not quite there. Many companies have to head outside the region to seek funding, or turn to the (often viable!) bootstrapping option.
However, we’re economically beneficial in other ways. CBInsights reported in 2016 that Atlanta is one of the only U.S. cities to provide a fair shot at a job in the startup industry due to its affordable rent. That advantage takes you further than you think.
“Atlanta is a great place to grow a company. In recent meetings with investors in San Francisco, we said, Atlanta is one of our unfair advantages — especially when you’re talking about investments, great engineering schools, cost of living, cost of hiring, etc,” says Terminus CEO Eric Spett.
These factors are leading to explosive growth in certain technical sectors, one being the financial sector. 70 percent of the country’s payment transactions currently flow through “Transaction Alley,” a corridor that extends across the state of Georgia. The Alley sees more than $208 million in investments and 1,570 jobs created in the FinTech (Financial Technology) sector since 2013.
The Fintech Atlanta Taskforce, an initiative led by the Metro Chamber of Atlanta in alliance with TechSquare Labs, was born out of need as Atlanta becomes established as the premier city to develop relationships and build businesses in FinTech. According to a recent Technology Association of Georgia report, there are more than 100 financial technology firms in the Atlanta area alone.
Charlotte, North Carolina, another fast-growing startup hubs in the South, is quickly shifting its long-established banking expertise to ensure those resources are used to boost local FinTech. The second largest financial center in the country is home to Queen City Fintech, a 12-week accelerator program which provides mentorship from leading banking executives, including its founder, Bank of America executive Dan Roselli.
To see further growth, Southern cities are also encouraging talent growth at the college level.
Schools like Georgia State University and the University of Florida nurture talent by providing mentors and programs to encourage innovation — from Florida’s incubator Starter Space to Georgia State University’s innovation center. Programs like Georgia Tech’s Flashpoint help young startup founders find focus, validate their ideas and find smart ways to engineer their products. Recent alumni include Ionic Security, Pindrop, Converge, and MyLumper.
ATDC at Georgia Tech is one of the oldest accelerator programs in the country, with over 35 years of expertise in helping startups launch, grow, and scale.
“ATDC was founded almost 36 years ago, and we have over 170 graduates through our program and 90 percent of those graduates are deemed successful,” says Jen Bonnet, general manager of the Advanced Technology Development Center. ATDC has had a huge impact in the way startups grow in the South, all through university-funded programs.
The partnership between the University of Tennessee and Oak Ridge National Laboratory has opened access to high-performance computing and nanotechnology to students in the area. The $3 billion in research facilities, equipment, and expertise gives unique resources to enterprises and students to grow their vision into reality.
The rise of privately-funded accelerators, short-term programs aimed at mentoring startups through workshops with the goal of perfecting their vision, is another sign of the region’s growth as an important tech hub. The region continues churning out great startups — Eventbrite, MailChimp, Luma, and Pardot, just to name a few — all currently on the road to profitability.
The Atlanta Tech Village, the fourth-largest tech hub in the nation, has helped many startups grow from two employees to 50 in a matter of months with resources for networking, funding, and growth. Co-founder David Cummings helped six Southern startups reach $1 million in annual recurring revenue before he reached the age of 35.
Birmingham’s burgeoning entrepreneurial scene led to a rise in accelerators, incubators, and organizations to support startup leaders.
"Birmingham is marked by a burgeoning tech startup scene that is anchored by Innovation Depot - a 140,000 sq. ft. startup incubator that is home to the Velocity Accelerator and Depot/U (Covalence and Generation IT) programs - in the heart of the City's Innovation District," says Kathleen Hamrick, Director of Marketing & Education at Innovation Depot.
Corporate innovation also plays a role. Cox Enterprises partnered with global startup accelerator Techstars to open a branch in Atlanta last year. Five out of ten of last year’s cohort companies have remained in Atlanta to continue growing, and the accelerator recently opened applications for their second cohort. The local team is traveling across the country, as well as to Canada, Israel, and Africa, to find their next ten companies.
“We are interested in attracting a good talent pool and offering a good place to live. We want to show that Atlanta is very family-friendly, a livable town that is great for businesses. The startup tempo and entrepreneurial aspects are part of any good city. We want the city be successful,” says Cox Enterprises COO Alex Taylor.
This is just the beginning.
Hypepotamus, the largest tech and startup blog in the Southeast, watches all this activity closely. We profile everyone from the emerging startups seeking seed rounds to Fortune 100 CEOs looking to use their powers for the greater good and get involved in the Southern startup scene. After all, if we don’t cheer our own success, how can we expect others to?
In the end, we are not here to be another Silicon Valley. We shouldn’t be. As in all things, the Southern startup scene in the South should stay true to our region’s roots. We do things with our own style, with a little bit of elbow grease and a lot of grit, and with a necessary dose of self-confidence.
“The South has done lots of amazing things in all fields and endeavors when its various cultures have been allowed to work together instead of at odds with each other,” says Bitter Southerner editor-in-chief Chuck Reece.
Join us as we examine the ways the South is rising above the stereotype that successful startups only incubate on the West Coast. We’ll bring you the stories, the gamechangers, the behind-the-scenes, and the facts you need to take pride in our region’s contribution to the technology and startup scene.
Allow this column to help you serve as a champion for our region’s entrepreneurial spirit, whether that’s through small-business owners, social changemakers, groundbreaking software, or even smart city infrastructure (more to come!). The hustle is here to stay, and we’re here to talk it out with you. Pull up a stool, grab a coffee or a cocktail, and listen to some Southern success stories.
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