Polygraph Media Blog

Gary Hoover

One of the best (and only I might add) books I read in business school was Hoover's Vision, a book that provides a framework for entrepreneurial thinking across a variety of areas.  I'm actually re-reading it again -- quite a bit of content in the book is timeless and the lessons are just as valuable today as they were when the book was published almost a decade ago.

Aside from working as an Entrepreneur in Residence at the McCombs School of Business, Gary is blogging at Hoover's World.  Some of the content there is reposted from the book, while other content has been updated.  I particularly enjoyed his thoughts on pattern recognition, business models, and Austin's growth.  Although I've never actually met him in person, I've internalized more than just a few lessons from his book and put them to use at Notice Technologies.  Enjoy!

Optimism

In my last blog post, I shared with you my 2010 resolution to point out more of the positive things that I see.  What better way to do that than to share some optimistic thoughts I have about the future.  Maybe the contrarian in me just can't accept conventional wisdom that everything is awful.  Everywhere I look, I see reasons to be optimistic about the future.  Here are a few places where I see some positives going into 2010:

• U.S. Economy -- Amidst the financial crisis and high unemployment is a relatively affluent and inventive nation -- we are a people who does not stay down for long. We embrace ideas and we're tolerant of each other for the most part. We fix problems and we make life better in the end. Sure, we have some trouble as a nation right now. And we're spending money like we have it for reasons that still escape me. But people get creative when they're pressed. We've faced a rough patch in the economy, and now people are dusting themselves off and reinventing themselves to be more competitive. We'll start to see the benefits of this in 2010.
• Austin -- Look around, Austinites. This city has not even remotely faced the same economic problems of other cities in the United States. There are a lot of reasons for this -- some economic, some political. So we've been pretty fortunate in this turn. What's the impact for entrepreneurs? More people than ever want to live here. As such, there has been a much needed influx of talent from the West Coast (California & the Pacific Northwest). Add that to the fact that Austin is flush with talented developers, and you have a city that is ripe for further technology entrepreneurship. It's all looking great for Austin in 2010.
• Entrepreneurship -- The revolution brought about by eal-time and social media technologies are creating a ton of opportunities for tech startups.  Advances in clean energy and bioscience are fueled today by big government investments and increased M&A activity respectively.  Other types of startups can rest assured that building a business today in lean times is great -- rising tides raise all boats, so if you can compete in 2010 you'll be even better positioned for beyond as the economy picks up again.
• Old Media -- Yes, the newspaper business is in serious trouble.  But it isn't over for big media companies who still have a significant local presence.  Many large local media companies have had a brutal 2009 -- cutting staff and getting more efficient as they figure out how to modernize their business in 2010.  But this is exactly what is needed.  It's a first step amongst many that will convert local newspapers that survive into tech-savvy 21st century publications that fully embrace the fact that distribution is now a digital, and not a physical problem.

Let's see how all of this plays out!

TechDrawl

Some of you may know that I occasionally interview a fellow entrepreneur or someone in the startup community for TechDrawl, a blog that covers the startup scene in the South.  It doesn't take much to record a 10-15 minute interview before or after I sit down with someone to talk tech entrepreneurship -- and it's good exposure for the companies and entrepreneurs who agree to an interview.

If you're bored this holiday season, here are a few of my favorites:

Matt Chasen of uShip
Paul May of Buzzstream
Steve Odom of Gelato
Kristen Carney of Cubit Planning
Demystifying the Austin Technology Incubator

The folks at TechDrawl have also submitted a proposal for Knight Foundation grant money.  Check it out here.

TechDrawl

Howdy everyone!  I just wanted to take a quick moment to let you know that I am working with the great folks at TechDrawl to profile Austin startups now and then.

Check out the first post on the Austin Technology Incubator, where our company Notice Technologies currently resides.  Enjoy!

Describing Austin's Startup Community to a Noob

I had a nice chat this morning with a guy who is moving his company to Austin soon.  He's in a similar situation to mine about 9 months ago -- he's making a conscious choice to leave a hotbed of tech startup activity to start his business in Austin.  The reasons are always the same:  Austin has a good, cost of living and doing business is relatively low relative to the Valley, NYC, or Seattle, good tech talent is available, great university in town, etc.

How would you describe Austin to someone starting a business here for the first time?  I felt obligated to share both the good and the bad -- as much as I like it here and want people to come to Austin, I think we should be transparent about our community's strengths and weaknesses.  Here's roughly what I told him:

• Good talent is available but there is also a lot of "variety" so you really always have to hunt for good people,
• Some VC attention here, but many VCs aren't qualified to look at Web deals even in 2009,
• Great place to start a company, but a bad place to lose one's job with the relative lack of Fortune 500 companies in town,
• Supportive community but one with very definitive "tribes" that sometimes don't play well with one another,
• Lots of successful business people looking to mentor entrepreneurs, but that also includes some who may not be qualified to be a truly top-notch advisor,
• Wonderful weather most of the year, but there are a lot of distractions that can keep you away from your work.

and so on

Was this a particularly fair assessment?  And are these issues common across other tech startup hubs?  Would love to know what you think.

Making sense of controversial City of Austin Web Project, Government 2.0, OpenAustin

Stepping back from industry developments for a moment, I thought I'd try to make some sense of recent developments in Austin following a recent award of a major web development contract to a company from California.

First, some context.  I'm still a relative outsider in the Austin community, having moved back to town 8 months ago after spending almost 4 years in Seattle.  I am just now getting to meet folks and establish myself and my business here in Austin.  Additionally, I have met a few of the folks involved in government contracting from the private sector *and* our company Notice Technologies recently won a small contract with the city to help the SBDP (Small Business Development Program) market local businesses through its ExploreLocalAustin.com web site.  I am not going to make any value judgments here as much as I am going to summarize what happened (as far as I can tell) and suggest solutions to the systemic problems behind the story.

So what happened?  In shorthand, the City put out an RFP for a major overhaul of its web sites, citing that the sites are built using 12 year-old Web technology.  Makes sense, the world is *a lot* different today than 12 years ago.

Three companies bid on the project, two from the Austin area and one from California.  The Austin companies bid a little more than $1.3 million while the California company came in at a significantly cheaper rate of just over $700k.  Who won?  The California company, of course -- I'll bet the cost difference was eye-opening.

All of this created quite a stink within the local Austin Web community.  Why?

1. Three companies bidding -- The first many folks heard of this large project was the uproar around its award.  The City of Austin says that over 200 companies were notified.  While I'm sure that is based in truth, I wonder exactly what notification really means in this sense.  Clearly the tactics used to communicate with the community at-large didn't work very well.  It doesn't make any sense that a contract this large would only attract the interest of two local companies, especially in the recession we're in.
2. Loss of business to California -- In the tech industry, folks here in Austin hear about how things are in some way more legitimate or more sophisticated on the West Coast.  In my experience, this is certainly true in some areas.  But there is certainly enough talent in town to build a Web publishing system for the City and its various departments.  There is enough social media talent here to figure out how to use new technologies to make communication more efficient.  Folks around town know this, which makes losing a contract to a company in another part of the country particularly painful.
3. Lack of community feedback? -- In part because of the small # of companies bidding on the project, I think a lot of folks jumped to the conclusion that the City hasn't been seeking help to put together the best plan to fix its Web Sites.  Well, the City has apparently been thinking about this for awhile... try 18 months plus.  The City first solicited the Public for feedback in November 2007.  If you scan the City's AustinGo web site, you'll find detailed information on the process, a supporting blog (that was updated minimally), Town Hall meetings, etc. As a taxpaying citizen, I am not entirely sure I want the City to take longer than 18 months to go through feedback, evaluation, planning, scoping, and vendor selection.  But the data suggests that the City did a really good job of documenting the entire process here.
4. Concern over evaluation criteria & qualifications of evaluators -- I've heard this mostly from folks in the private sector.  People are concerned that the City may not have the right people to make an informed evaluation of the proposals they see.  I can't & won't comment on this -- I don't know the people involved, their backgrounds, etc.  What I can say is that very few people have 1) done business with the City, and 2) seen all the proposals to make a qualitative judgment.  Similarly, there is no governance from the private sector (as far as I can tell) to ensure that the City personnel are indeed making the right decision.  I think this is where private sector folks get concerned.

Meanwhile, in this case folks in the private sector have responded with the OpenAustin initiative -- it's a collection of crowdsourced ideas of how to improve Austin & City operations.

Overall, this is a very interesting case for Government 2.0 broadly.  As Government institutions get more and more resources and as they modernize, there is more at stake for the private sector.  Ergo, I expect more private sector involvement and scrutiny of Government decisions.  Remember, folks in Government agencies are already limited by issues of fairness, equality, internal policy, limited budget, etc.  Public sector scrutiny may just make it that much more difficult for Government decision-makers to move quickly and be bold. 

So how can this be fixed to the satisfaction of all involved?  A few thoughts:

1. Official local government policy re: supporting local business/employment -- This can be an explicit policy or one enforced in proposal scorecards. (i.e. Is the proposer doing most work locally?  Yes -- high weight)  I think this works well in communities that have the existing talent to get the job done.  Going too aggressive would create negative outcomes as well, so there is a happy medium here.  In any event, I think each local government should have a policy regarding the use of local companies vs. companies that don't contribute meaningfully to the tax base.
2. Public/Private Partnerships -- Government personnel are not always going to be the most qualified people to assess private sector proposals.  Get people from the private sector to help with these assessments.  Note I did not say "get them to make the decision for you".  A private-sector board that is available to answer questions surrounding a proposal or Government 2.0 decision is a very valuable thing to have at your disposal.
3. Government Transparency in terms the private sector can understand -- Government language and process is very difficult for private sector people to understand.  Often times, folks in Government positions don't understand that this can be very difficult for businesspeople to navigate and plan around.
4. Patience in terms Government can understand -- Entrepreneurs and businesspeople are often used to making quick decisions and doing things in ways that help advance their business.  Agility & execution are keys to winning.  The same is true for Government, but within the confines of what is possible.  Government personnel are often under a microscope that entrepreneurs are never, ever under with respect to public outcry and overreaction.  So when dealing with Government, harken back to the most bureaucratic corporate job you've ever held... and empathize.

Government 2.0 is going to be a major league adjustment for all sides of the equation.  We're just getting started.  Buckle up. ;-)

Notice Technologies is joining the Austin Technology Incubator!

Another milestone that I thought I'd share... we have been accepted into the Austin Technology Incubator!  This is very exciting for us on a few levels.

First, ATI is a cornerstone of Austin's entrepreneurial heritage, having helped companies get off the ground for over 20 years now.  A lot of companies and a lot of people have moved to Austin or stayed in Austin as a result of ATI.  In fact, when we researched places to relocate Stratfor in 1996, ATI was one of the factors that helped us select Austin over other cities.  So we're proud to be part of that history.

Second, ATI has some very talented people on staff and in its extended network who we are excited to interact with.  We've had nothing but great experiences with ATI Director Isaac Barchas, Wireless/IT Director Bart Bohn, and Director of Operations Aruni Gunasegaram.  All three of them have given us great feedback on our business as early as June of last year.  We expect that we'll continue to have a great relationship as we grow.

Third, this represents a new phase for us.  Phase I was when my CTO and I worked 2500 miles apart for the first six months.  Then in Phase II after my wife and I moved to Austin last October, we worked from the dining room table for a few months then moved to a cramped 10x12 office here in MCC.  Now we're grappling with issues of growth and scale, so ATI is in many ways a perfect partner for us.

So we're excited about the development.

Finally a few notes about our experience in Austin to date.  It's unreal how many entrepreneur resources there are in Austin now.  Think about it:

1. ATI -- collaboration between City of Austin, University of Texas, and local entrepreneurs,
2. Techranch -- early-stage incubator & collaboration hub designed to help people get new ventures started,
3. Capital Factory -- seed-stage mentoring program that offers assistance from many of Austin's best/most successful entrepreneurs,
4. Triggerbox -- advisory services focused on market alignment, business model optimization, strategic partnering and capital fundraising.  Also recently began angel investing in Austin startups.
5. Conjunctured -- co-working facility, ideally suited for skilled contractors and one/two person companies,
6. EDCO Ventures -- facilitates the creation of new business activity in economically distressed areas, especially along the U.S.-Mexico border,
7. TechBA -- helps Mexican technology companies accelerate their business in the United States and other markets.

Of these, only ATI was around just 5 years ago.  Austin sure has come a long way!

Government + Marketing = We Win!

Great news for Notice Technologies.  We were recently awarded our first Government 2.0 contract with Austin's SBDP (Small Business Development Program).  For those of you who don't know much about the Austin SBDP, it's a government organization sponsored by the City of Austin that helps promote ~250 unique Austin businesses in 8 popular "Small Biz districts".  Our task with this project is to conduct better internet marketing for the ExploreLocalAustin.com web site, which is a portal designed to give consumers more information about these businesses and their offerings.  It fits our core strengths in internet marketing, internet advertising, social marketing, and local online advertising.

This project is very similar in some ways to New York City's attempt to help promote local businesses.  NYCGo has actually already launched and its Twitter account has over 500 followers already.

We're really excited about this project because we're going to get a chance to learn more about local online advertising, albeit from a different angle... the Government angle.  We have spoken with a number of different companies who do a great job with local advertising -- directory services, telecommunications companies, newspapers large & small, and perhaps most importantly small business owners themselves.  Government similarly has a role and we're starting to see experiments here in Austin, NYC, and a handful of other cities.  Lots of stakeholders are involved, yet nobody has yet solved the business issues surrounding modernized local advertising.

This project will be great for us.  We'll help the City of Austin solve its immediate needs to better market its ExploreLocalAustin.com web site.  We'll also be a lot smarter about how government fits into the local advertising game.

Onward!

Symbiotes and Parasites

Maybe the hardest thing for any entrepreneur is figuring out the difference between symbiotes and parasites.  i.e. people who can legitimately help your startup and people who can't.

As your company makes more progress, stunningly people get a lot more interested in you and your venture.  If you detect irony, you're on the right track.  People tend to come out of the woodwork telling you how much they can help you.  And let's face it... there are *a lot* of "helpers" here in Austin.  Maybe some can advance your business.  But if you aren't careful, you can wind up in a business relationship with someone that you regret.  I have seen it several times in past startups -- whether it's hiring the wrong executive, getting the wrong consultant to work with you, or attracting the wrong partners.  I'm probably a lot more callous about these relationships than most as a result.

So how does an entrepreneur combat attracting parasites?  Here are a few tips that we use:

1. See what people offer *before* entering a business relationship.  Have no patience or regard for folks who promise but can't give you a taste of what they offer.
2. When you do sign on the dotted line, be sure you try before you buy.  What does that mean?  Enter a shorter-term contract based on solid deliverables that can't be disputed.  If you like the relationship, extend it.
3. Never play all your cards.  Reveal enough information to tease, but guard truly important details as best you can.  Good news spreads fast and often times to your competitors.
4. Question people.  If someone says they've done great things for other companies, get the details.  Talk to the people they've helped.  Make sure the stories wash.  Don't just accept what you're told. 
5. Finally, ask around.  Learn about peoples' reputations.  Read what they've written, be it a book or a blog or whatever.  Do your research.  It's easy these days.

Follow these guidelines and you'll be better for it.  You won't necessarily eliminate your life of hangers on, but you'll have a better sense of the positives and negatives of working with people in your community.

Observations from MBA Career Fair

I went back to McCombs (University of Texas) tonight for the sixth annual "Entrepreneurial Connections" event.  The event connects local Austin entrepreneurs to McCombs MBA students eager to work in a startup environment.  It holds a special place in my heart because I created the first annual event in 2004 because I didn't think there were enough opportunities for entrepreneurs and students to meet.

Anyway, it was a great event -- there were about 20 companies and perhaps up to 100 students in attendance.  I was originally a little irritated by the fact that under my company name/description was the apocalyptic:  Looking for: Interns (unpaid) ... but then I realized that even though our situation continues to improve, I still just want to talk to people who are interested in the type of work that we do.  And I want to talk with people who aren't afraid to read something like that... people who understand that early stage companies have ups and downs and perhaps they're worth speaking with anyway.

I did talk with 15-18 people at the event.  Some rapid fire observations/suggestions for MBAs hitting career fairs:

• 2 out of 12 resumes were printed on nice resume paper.  I'm sure some of the 10 who printed on standard copy paper had extenuating circumstances that required copy paper.  But the 2 who took the time and effort to print on real resume paper stood out.  My impression is that the rest didn't take the event seriously.  Or perhaps they don't have great attention to detail.  I don't know, but I got 2 great professional resumes tonight.
• I saw a lot of people standing in line for several companies.  That's a lot of competition.  Sure those companies do great work, but as an entrepreneur I've always been drawn to places where people *aren't* necessarily hanging out.
• I don't remember what anyone was wearing, but I do remember the 3 people who approached me confidently and with a smile.
• Brush your teeth.  Or at least carry mints.
• I also remember the one guy who challenged me on my value prop.  I appreciate someone who is willing to question what he/she is hearing.

All told, it was a few hours well-spent.  It was a great experience that I hope to do again next year.