Startup Community Growth
Goals drive performance – if you don’t know where you are going, it is pretty difficult to get there. While that may seem obvious, I deal with people every day that either (a) do not have explicit goals for their startups, (b) have very vague, general goals that make failure impossible or (c) appear to be focusing on the wrong things (such as “vanity” metrics). The thing about goals is that they can be whatever you want them to be as long as you clearly define your reasoning. As long as they are explicit, goals aren’t “wrong”. It is possible that they are too easy, but that is a subjective judgement.
We get asked frequently at Four Athens how we measure success. The inquiries range from criteria for being accepted into our co-working space, to graduation requirements, to internal milestones for companies housed in our space. While all of these are valid measurements, they are not what we currently use to gauge success. As outlined in Brad Feld’s Boulder Thesis, we are taking a 20 year view of building the entrepreneurial community in Athens. We believe that the first 3-5 years of this process must be focused on sparking a critical mass of entrepreneurs, rather than pushing for 1 or 2 success stories that, while politically expedient, do nothing to promote a long-term sustainable community.
How do we help spark that critical mass? We believe by focusing on three criteria: how many startups are launching in the community, how many people are involved in helping the community and, finally, how much funding is flowing into the community. In this vein, we set our Y1 goals to focus on 10 companies housed in Four Athens space, 40 mentors helping these companies grow and the launch of an angel fund. In Y2, we are focused on bringing 30 companies into our space, an additional 40 mentors helping these companies and the successful funding of local companies from the angel fund.
Why are these metrics important?
First, we believe that the number of startups in the community will correlate to the success of the community. We need a critical mass of startups launching every year in order to replenish failures, challenge existing companies and provide job opportunities, additional growth and success. Very few companies ever succeed. By trying to only pick the winners in a community (to the exclusion of all other companies), we would inevitably limit our talent pool, raise our risk of failure and most likely harm the long term growth of the community. Also, as an organization, Four Athens, never wants to act as an arbiter of what’s acceptable in the startup community. We believe we need hundreds of leaders and our goal is to simply act a connection node to test, develop and grow ideas. Our long term goal is to have 50 software based companies working out of space in downtown. We believe this long term goal would mean hundreds of well-paying jobs, consistent turnover as companies grow, fail or generally change, and hundreds of tech companies in the broader ecosystem (only a fraction of startups would end up using space at Four Athens).
Second, the broader community support of startups is critical to the success of the community. Most people are not entrepreneurial and shouldn’t start a company, but this doesn’t mean they should be excluded from helping build a meaning economic sector. People with highly specific skill sets are always in demand and in the process of building a community, we need to focus on welcoming their skills into the community. We don’t collect mentors for the sake of having mentors – we are attempting to identify skill sets, leaders, entrepreneurs and connections that can help businesses grow bigger, better and faster. In doing so, we are hoping to raise the profile and success rate of companies in Athens. As an individual, it is difficult to identify which people in a community can most accelerate your success. As a community, we can build off of those that have come before us to help our chances of success. Adding active mentors annually is crucial to the long term success of Athens as a startup hub. Over time, we’d like to see over 100 active mentors in the community that connect at least monthly with startups in the space. This will more broadly translate into active advisors, service providers and skilled operators being involved in the community.
Finally, we have highlighted funding as an indicator of success in the early stages of community building. Why? Many people argue that customers are the most important thing for a company and this is true. However, many software products take a minimum amount of time to build even an MVP before they are ready for testing. We want to help the community move away from service based entrepreneurship (ie doing contract work to pay the bills while working on a startup part-time) and into product based entrepreneurship as quickly as possible. For many, if not most, software companies this is only possible with a small amount of seed funding (under $200,000). To get to this level, Four Athens needs to focus attention on connecting the existing investors with startups in the community, educating potential angels about the risks & rewards of this type of investing and educate startups on how, when and why to approach investors. Over time, we would like to see 10 companies funded annually with at least $100,000 each ($1m total funding) for very early stage companies (pre-revenue). This probably can’t (and shouldn’t) come from a sole source, but from a groundswell of high-net worth individuals in the community assisting with funding.
Over time, our metrics of what makes a successful startup community will change as we evolve, mature and grow. However, at least in the initial stages of community building, we think our three most important metrics revolve around the size and strength of the underlying community rather than on one or two successes. The bigger we can grow, the more likely we can focus on generating millions in revenue, employee counts and successful exits.
Want to help the Athens startup community grow? Get involved!