William Leonard
Founded in 1980, the ATDC is one of the oldest and largest university-based incubators in the country. The state-funded program has seen graduate startups raise $3 billion in investment financing and generate more than $12 billion in revenue in the state of Georgia. Today, I’m joined by the program Director John Avery. John is a serial entrepreneur who brings a plethora of enterprise and startup experience to the entrepreneurs at the ATDC. Throughout the conversation, we’ll do a deep dive into the programs, benefits, mentors, and initiatives that support ATDC founders across the state of Georgia. John, such a pleasure to have you on today.
John Avery
Thank you for having me.
William Leonard
I’m excited to dive into more about the resources, programs, and initiatives that you all are helping founders with not only in the city of Atlanta but really across the state of Georgia through the ATDC. I think it’d be imperative for you to kick it off here and tell us a little bit more about what the ATDC is.
John Avery
Happy to do that. ATDC is one of many outward-facing economic development services at Georgia Tech. We started back in 1980. This is the 42nd year we’ve been doing this work since long before startups were cool. We get about two-thirds of our funding from the state of Georgia and about ⅓ of we add to that on top with corporate sponsorships. Our mission at the top level is to grow the Georgia economy through entrepreneurship and we do that by providing a bunch of services that can help these founders get oriented quickly and grow and reach scale doing what they’re doing. We do focus on technology, product-based businesses, as opposed to service businesses, that’s just because that’s where our strengths are. ATDC has graduated about 200 or about 210 companies in the years that we’ve been in business. We try to cover everything from the original idea up to a sustainable business and we can get into some of those details as we go. We have four layers of the portfolio of the companies that we work with, essentially. Again, we’re trying to cover the original idea, there’s an educate group that’s open to anyone, and anyone in the state of Georgia can sign up for that and learn about how to become a startup. And then we’ve got some additional services for portfolio companies on top of that that we can get into. We have about 22 staff and different focus areas in different industries but again, our goal is to help founders become successful and reach scale for whatever technology businesses that they’re trying to create.
William Leonard
I love that. And as you mentioned, you’ve been around since 1980. 42 years supporting innovation here in the state of Georgia. We’ll kind of dive into a bit more of the inner workings of the ATDC in a few minutes but I think it’s also important to kind of have some additional context on who you are, John, as an individual. I know you are a serial entrepreneur with a few exits under your belt as well. Tell us about your background and how you came to join the ATDC as the director.
John Avery
I’m a Georgia native and a Georgia Tech alum. I have had for startups. The nice thing about the balance here at ATDC is about half of my career has been in large companies, mostly Panasonic and the other half has been in startups. I was working for a company in Norcross called Convergence Corporation. It’s a startup. We had about 10 people and actually was acquired by Amazon in ‘99. We moved out to Seattle and became the first mobile app that Amazon ever launched. Not many people recognize that but the first mobile experience on Amazon came from a startup that was born in Atlanta, Georgia. Worked there for a year and left to do another startup in Seattle that didn’t go well. I joined as a sixth employee of another company in Seattle that grew to become a large, successful company. It was acquired by a company in Japan called Index. We did mobile gaming. Actually, if you voted on your phone for an American Idol contestant when that show first came to the US, that was our technology behind that, enabling that, what was at the time, the largest SMS-based gaming application that had ever launched. And then I moved back to Atlanta about ‘03 or ‘04 and rejoined Panasonic, worked there for 10 years, and for the last five of those years, I ran their Corporate Innovation Center for Automotive located at Georgia Tech. We worked on infotainment, and in-cabin monitoring, basically, to get ready for the autonomous cars that are coming for the car to know more about what the driver was doing so they could work in concert together. A lot of product development went on there. I left there about five years ago and had the great opportunity to spend more time at ATDC as a volunteer mentor, and then this opportunity opened up to come into this role. The balance for me is it’s been really amazing as to the blend of having some of that large corporate experience and then some of the startup experience because our goal is to convert one into the other. Our mission here is to take these initial ideas that are just in one person’s head and turn them into very large businesses that can scale and have a life beyond even the founders’ wildest dreams. That’s been a good match. This has been the most fun thing I’ve ever done in my career, I can tell you without any doubt, working with founders every day is a real blessing.
William Leonard
You’re bringing such a unique and veteran perspective to building: you were an entrepreneur and a serial entrepreneur. As you said, you’ve worked for large companies, equally, you’ve been at the startups with less than 10 people working shoulder to shoulder with your teammates. Certainly, we can appreciate where you’ve been and how you’re adding value to a lot of the companies right now through ATDC’s programs. Definitely want to dive in here a bit more. You mentioned this is a state-funded program, is the ATDC taking equity in the companies that you work with, or is this more so just an economic development resource?
John Avery
That comes up a lot, actually, and the answer is no, we don’t directly take equity in these startups. Companies can get involved with ATC and we’re purely here to help them be successful. It’s a really amazing opportunity that we’ve got here as coaches to work with founders purely for their success. There’s nothing we’re trying to take from them or went off of them, except for them to create very successful businesses in Georgia. But we do connect them with resources. What we have are a series of services to bring the customers, the investment money, employees, everything that they need, and the raw materials that they need to be successful, that’s what we try to connect them with. But as an organization, we’re able to do that because of our funding model without requiring that we take equity from these founders. I’m hoping that at the end of the day, some of these very successful founders come back around and remember that work to help us move it forward. But otherwise, we’re just here for their success.
William Leonard
Exactly. Hoping it’s going to be a continual flywheel of paying it forward. That’s awesome. Some people think that the ATDC is solely focused on startups that come out of Georgia Tech or students that are at Georgia Tech but the fact is, the ATDC has satellite offices all across the state of Georgia. Correct?
John Avery
Exactly correct. The state has sort of made it clear that we’re operating out of Georgia Tech, but the mission is completely statewide. Yes, we’ve got people in Augusta, Athens, Savannah, Macon, Columbus, and Albany. We’re trying to find founders all over the state of Georgia that are working on technology, and product-based businesses, and these are people on the ground, ATDC employees, on the ground working in those locations to help founders there. Having a group of founders that you work with locally that you can get to know personally and do the hard work with is important and having regional outposts where those founders can come and get support is really significant. A lot of that content, especially through COVID, we’re trying to be more able to provide virtually, and turns out that the growth we’ve had in that category to be able to do that we’ve been able to upgrade our equipment and things that we can provide those remote services better and elevate the ability for us to deliver content and value across the state from that. Obviously, a lot of the money and large customers and things like that do exist in Atlanta or even outside of the state, so our mission is to connect those founders across Georgia with those resources. Think of us as a pipeline or a funnel that brings those connections into the state all over the state. With COVID, everybody has come to this revelation, you don’t have to be living in a specific place to connect with that wider ecosystem. That’s something we believe from the beginning but it’s actually easier to do that if you’ve got an internet connection where you live, you can basically connect to this network. We’re really excited to have that outward-facing mission, and you’re correct, a lot of people do think since we operate from here that we have to have some sort of association with Georgia Tech to help the founder but that is not true. Most of our companies have no prior connection with Georgia Tech when they get involved with ATDC.
William Leonard
That’s a good thing to demystify for our listeners who are probably scattered throughout the state of Georgia here. This is interesting. You mentioned in the intro about ATDC that there are certain layers or various levels to ATDC’s programming and resources, can you expound on that a bit more and talk to us about the various layers that exist?
John Avery
Founders at different stages of their company have different needs for different services. What we’re trying to do is optimize the way we’re delivering those services to that class of vendors where those needs are at that time. The most common entry point for most people is called our Educate program. It’s $25 a quarter. Anyone in the state of Georgia can sign up and there’s no gate there. We do focus on, again, technology, product-driven businesses, so not service businesses. But in that group, we’ve got a series of classes in customer discovery, primarily, the first thing that a founder has to do is make sure that this world needs whatever it is they think they’re offering. And in most cases, what you’ll find is that you have a pretty good idea that there’s a need somewhere in that area that you’re focusing on, but the idea you come in with is probably not the best way to address that problem. And so, customer discovery is about helping the founder stop thinking as much about the solution and start loving and understanding and loving the customers who have that problem more deeply because the goal of a successful company is to really not be in love with their solution but to be in love with the people that have the problem that solution addresses. To really change your way of thinking about what you’re doing is to focus on those people that have that problem. That’s customer discovery but we’ve also got classes in financial literacy and investor readiness and some other things that kind of get like the basic get up and running level information about a startup. Again, doing that in a classroom, one-to-many deliveries without assigned resources. It’s like a self-serve model which allows us to serve more entrepreneurs across the state. There are several 100 people in that group, for example, at any given time, and then we’ve got a thing called ScaleUp, which is new this year, which is a curriculum. It is an invitation-based cohort that does have a sort of a beginning and an end. It’s a cohort, very intense program for deep science. In this first version, medical-related startups are across the state. These are people that are working on new therapeutics or molecules or very deep science related to startups that need special services. This is a curriculum designed to help them move more quickly. That’s called ScaleUp, then we have a portfolio of a group called Accelerate, these are founders that are at least one and a half full-time working on the idea of full-time, it’s not a side gig or evening project. That means they’ve got some kind of funding and runway but they don’t necessarily have a product in-market yet but, what they do have is they have done customer discovery. They have a clear story to tell about who are the people they’re trying to serve, what their needs are, and how the solution will address those needs. The goal of that program is to get that product into the market and validate that strangers will pay money for it, not just family members. And then to reach some kind of validation that this is going to work. We move into a group called Signature. The signature portfolio companies, they’ve figured this out, they’ve got product in-market, and it’s all about scale up. They’re growing their team, they’re building out the marketing and sales and all the other parts that go with it, and they’re scaling up their technology development. It’s about that rapid scale-up mode. We target graduation of about a million or 2 million in recurring revenue from strangers, validated that this company is able to actually provide value to the market and it seems to be working. That would be where we start having discussions about graduation. To give you an idea of the shape of the pipeline, it goes from several hundred people, say between 206 people at Educate. We’ve probably got 12 or so companies, maybe up to 20 companies in the ScaleUp portfolio at any given time. And then we’ve got Accelerate, that’s the biggest group of about 100 companies right now. These are real full-time, up-and-running full-time startups. With signature, we have about 40 at any given time and we graduate about 10 a year.
William Leonard
Got it. That’s awesome. You’ve got four tiers, you’ve got Educate where the majority of companies are falling under that tier right now that are taking classes on customer discovery and focusing on building a product from an educated standpoint. And then you’ve got ScaleUp, which is newer, that’s focused on medical-related deep science companies, then you’ve got Accelerate, a full-time commitment to entrepreneurship. You’ve done some customer discovery, maybe not having a product in-market yet, but you’ve got some form of external validation. And then Signature is post-product, post-revenue, you’ve got a product in market customers, things like that. When a company achieves Signature, achieves a lead level of signature, how is the ATDC continuing to support a company that has already almost figured it out? You’ve got customers, what are some of the additional benefits that ATDC can provide a company that’s in the signature stage?
John Avery
I can address that with how we do that for all the different layers for the same time. We have four kinds of services or coaches that we bring to the bear for these different layers. For the Educate group, we’ve got a group of about 100 volunteer mentors. That’s how I came in at ATDC. These are subject matter experts that are helping in various categories that get involved and work with the startups they choose to work with and build the relationships that way. That’s typically where those mentors help, they also help in all the other layers as well, but that’s the place where most of that happens. In Educate we also have, it’s a one-to-many classroom model. We think of in terms of, there’s an idea of learning how to do something, and then the doing of the something. In the classroom, you get ideas about how to do something, but you don’t actually do it. For example, in customer discovery, you can come to a class to learn how to do customer discovery, but you can’t do customer discovery in the class. The point is, you have to be in the world to do that work. We’re pivoting from a sort of early-on one-to-many classroom teaching about how to do stuff as it moves along through the program to be more doing of the stuff, and providing the services that help as they begin to actually do the work of the startup founder as they move along. For Educate that’s mostly the volunteer mentors and the staff, we have to teach those classes. For ScaleUp, it’s still a one-to-many model, it’s invitation based, but it’s a one-to-many model. You’re spending time again with specific mentors who are skilled in that particular deep science area. For Accelerate, we have a group of what we call startup catalysts. These are mostly firsthand startup founders themselves or they’ve been in a startup themselves and they are, think of it like a concierge or consultant-based, relationship-based person that sits on the same side of the table with you to kind of help you along the way. The goal of those startup catalysts is to help the founder always sort to the top the things that matter most to move forward right now.
William Leonard
Quick question, are the catalysts ATDC alumni in most cases?
John Avery
Many of them have been around the loop several times: they’ve been a coach and then they go to a startup and they come back. They enjoy this time doing this kind of work. Not all of them, though, that’s not a requirement to be a startup catalyst. But again, the purpose of that group of that catalyst has to always be working with the founder of all the millions of things that can do on a given day, what’s the thing that’s going to make the most difference for them right now that they need to get help with and then to help them find where that help is at ATDC or otherwise. We bring the expertise to help with that particular problem at that particular time so they can move more quickly. Our goal is to keep the founders moving quickly because time is a resource that everybody has the same amount of in the sense, that you can leverage it and you’re going to get ahead. That’s the startup catalysts’ role, the heavy lift coaches that ATDC that work with the biggest part of the portfolio in Accelerate. These are the younger companies. They need more help and a lot of cases. And then we have the Signature, which is the scale case. We have a second coach type called an EIR, it’s an entrepreneur in residence. These truly are firsthand startup executives who have been with a startup in their own seat from the beginning and all the way through, they’ve had an exit event, they’re back around, and they’re helping to coach startups at ATDC. It’s typically one-year halftime, sort of a contract position because they’re not here forever. They’re here to figure out what they’re gonna go do next in a way but their expertise is really valuable at that stage of a company’s growth because they’ve been through it actually themselves having the rest of the same decisions just like these founders are. That’s a valuable resource there and then finally, we have a collection of what we call Connect Catalysts, helping the entire portfolio in a specific category. For example, we’ve got an Industry Connect Catalyst, that’s a full-time job at ATDC where they spend all their time working with Fortune 500 companies to help connect them with startups in our portfolios as customers. Most of these big companies are looking to work with startups at some level to work on internal problems. This role is about connecting our startups with those needs in a very direct way. We probably do $3-4 million or so these little paid pilots for these companies to build relationships to help them get, hopefully, deepen the relationship and to the point where they can have a long-lasting customer-vendor relationship with those big companies. We have our Investor Connect Catalyst and that’s a full-time role to understand all the sources of venture money in the system in the southeast, whether that’s private equity or venture angel or family funds, or whatever. All the companies that are raising at ATDC and figuring out what the right matches are to make that investment. Again, we’re not directly investing, but we’re actively connecting startups with investors. You can imagine that’s a very popular person at ATDC.
William Leonard
Very much so. Everybody wants to be where the money is, right?
John Avery
That’s right. But the hard part about that job is really the main purpose there is to make sure that we’re doing recommendations when it’s the right time for that company. We spend a lot of time with the companies coming in to get a pitch to try to get in front of an investor. We can know exactly what that investor is going to say before they even have that meeting because we’ve worked with them before. We can do that prior groundwork to help that startup understand whether that’s a good fit or not, and if not, why not, and then figure out how to move the company to be in a position where it would be of more interest for themselves and for the fund. Our companies are raising typically more than $200 million dollars a year through that channel. Again, we’re not in the deal. We’re not on the cap table, but we’re helping make those connections. We’ve got a Campus Connect Catalyst and that’s the full-time position to help our startups connect with resources at Georgia Tech. Again, we are outward facing but we are located at Georgia Tech. We have a person here who helps mostly with hiring. For example, we’ve got standing reservations at all the career fairs on campus for the different majors. We can connect with professors or help with IP transfer, whatever else you need to help grow that link with Georgia Tech on the back end. We do that for any company, even if you don’t have any prior knowledge or work with Georgia Tech. That’s no problem. And then finally, we’ve got an expert in non-dilutive funding sources, like SBIR and CTRR, GRA, and other sources that are built really to support technology, and product-based businesses. We’re a good fit for those types of grant money. And last year, we got over $16 million that was connected between those sources in our portfolio companies. A lot of those are very early to educate level, even companies that are able to access those funds. That’s dramatically impactful because it’s non-dilutive and helps the company move forward across the most difficult growth phase of proving out a very difficult technology. And then they get in a position where they can actually go and raise traditional money based on the fact that the technology has been proven. These are heavy lift companies we’re trying to help, they’re not easily funded anywhere else without these services so we really do feel like there’s a lot of value in what we bring for these particular types of businesses.
William Leonard
I can certainly agree with that. There are a plethora of resources relative to product, people go-to-market strategy, and most importantly, the capital. No matter what stage of your company lifecycle that you’re at within ATDC, it sounds like there’s a resource for everyone, multiple resources for multiple stages.
John Avery
We’ve got to make that be true. Not always, but we worked on it.
William Leonard
I can understand. I think this is one of the reasons why the ATDC is one of the most recognized and long-standing accelerators in the country because of the vast network that you are offering companies that are innovating in the state of Georgia. As an entrepreneur listening to this, I’m excited now because I hear about all the resources that ATDC can offer me as a founder, what’s next? What is the qualification process to get involved with ATDC? Let’s say, I’ve got an MVP, I’ve got an idea, what’s next? How do I get involved?
John Avery
The easiest thing that I can just say right up front is to just join as an Educate level member. It’s on the website, join educators right on the top bar. Anyone can do that. There’s no gate. What that does is it enables you to get into the ecosystem get sort of becoming part of the family. At that point, you can see our calendar of events, you can come to those, you can set appointments with our staff, you can kind of get to know the other founders in the network, you sort of part of the community itself. We don’t put you on a program or regimen. We don’t do anything that sort of impacts you. It’s a completely self-serve model but it enables you if you want to, to take advantage of some of the services. Connect services and all that, are for the portfolio companies. But as an Educate level member, you can set up a meeting and have a conversation, for example, with these coaches, and kind of get building and start building that relationship. If you’re a founder that’s at a stage company like Accelerate where you’re working full time, you’ve got a product, you’ve got an MVP, let’s say something you can learn from it may not be revenue generating yet, but it’s something you can actually put to market to get feedback. Reach out to the coaches that you see through that program and have a conversation. One of the optimizations we’re working on this year at ATDC is to provide more structure around that process. There is a more clearly marked roadmap of steps to take to get through there but today, I can just recommend that you join us at Educate, then reach out to the coaches in the program to start those conversations, and start coming to those customer discovery classes, meet some of the other founders, meet some of the mentors, and leverage the network. One of the things about founders is you have to be self-motivated, in a way. The world doesn’t come and hand you everything as you know. You have to be of a mind to take advantage of the resources that you see there. That’s essentially a program is set up to make those out there, but you have to come to get them in a way to kind of understand that’s the way it works. There are programs you can sign up for out there that do assign you to come to this class, on this day, do this thing, fill out this form, do this thing, that’s not how the Educate program currently works today. There’s stuff there you can do or not do, it’s up to you. But the point is, we want you to get into the ecosystem. The work of a startup is really tough, it almost always ends in failure. In general, it’s just something that is beyond your control, things that you have nothing to do with can completely make, even if it is a great idea, not work well. You need to be in a group of people that are in the trenches doing the same kind of work that feeds off, getting energy from, give the energy to, give encouragement to, and learn from because you know, every decision you make is the first time you’ve made it, but it isn’t the first time that kind of decisions ever been made. If you can learn from others who have been in the same situation and not have to make the same mistake twice, that’s a benefit for everybody.
William Leonard
Peer-to-peer support is so important in the entrepreneurial lifecycle. You can have mentors, and investors who have been there previously, but somebody who’s building alongside you, building another company, there’s no support by having somebody else who’s in the trenches with your building.
John Avery
It’s tough work. It’s emotionally draining work. It’s lonely work. As I said, I’m only 28 years old. You can see it takes a toll. It is something that I think I would highly recommend anyone who’s a founder early stage to be in a community somewhere if it’s ATDC or otherwise, you’ll just find so much benefit and being around other founders who are in the same sort of emotional state, doing the same kind of work as you to do that. In ATDC, we don’t have a starting/ending point cohort model, it’s anytime you come, you can stay. We typically have a three to five-year involvement period with the companies we work with. It’s a long-term incubation model. We commonly send our startups to other accelerators when they’re at the right time, it’s maybe a six-week or a six-month program or whatever, and then they come back and they continue on their journey. There are times when that high-hit, very intense, focused accelerators make a lot of sense. When that’s the right time we can make sure that those startups are aware of those opportunities. When they’re done, they have to keep coming back and maturing somewhere. That’s where they can come and work with us. A lot had the benefit of a very collaborative environment, there are different services at different stages. I can just tell you from being on the inside that that is a network of highly collaborative people that are actively trying to work with each other, not compete with each other. We’re feeling really privileged to be a part of that network. We do that as much as we can to support all across the network, all the services that we see, to make sure that everybody’s doing the best we can to help these founders be successful.
William Leonard
I love that. As you and I wrap up this conversation here, John, I want to grasp your vision for the ATDC over the next few years or so and look more short-term, what are some things that you are excited about that’ll be happening within ATDC coming up?
John Avery
I don’t think it’s been any better time to be a founder right now. I think the world has recognized this is where a lot of value can exist and that you can do it. I feel like if you ever thought about becoming a founder, there are a lot of resources out there that you can take advantage of that didn’t exist 10 years ago. The language about how to do it is better, the ecosystem partners are better, and the connections are better. It’s just a good time to be doing that. In ATDC, our model is to sort of leverage the state funds that we have to do the core work, but then also work with corporate sponsors to provide specific services within a certain industry. For example, we’ve had a FinTech category. Visa is a current sponsor for that. When you’ve got a corporate sponsor backing a vertical focus on a certain area, it opens up a lot of doors for things you can’t do otherwise. I think that’s going to become the model that’s going to continue to expand at ATDC. Currently, we’ve got Visa there for FinTech, we’ve got Home Depot for the supply chain vertical, we’ve got NASSCO for health tech, and we’ve got T-Mobile for 5G vertical out of Peachtree corners just north of Atlanta. There’ll be three or four new announcements from ATDC coming soon with additional vertical categories. I think that model is really powerful because the core services can be shared across those industries. Those gifts that we get from the corporates enable us to provide additional flex sort of industry-specific knowledge about how that business works. The goal here is to connect founders in these categories with business. When you’ve got a person who’s leading a group, who’s very knowledgeable from that space, working with partners in that space, it really opens the door for rapid growth for the new technologies and helps everybody.
William Leonard
I think with being here in the state of Georgia, the opportunity for collaboration with corporate partners is probably one of the richest experiences in the country. You have so many Fortune 500 tier, so many corporates here that are establishing offices headquarters, and putting leaders here in the state of Georgia. I’m excited about some of the announcements that are going to come out of the ATDC in the next few weeks or months or so. But this was a truly informative educational and exciting conversation, John. I appreciate you joining me today.
John Avery
Happy to do it. If anybody is interested in ATDC, again, go to the website, sign up for the Educate program and we’d be happy to work with you.
William Leonard
Awesome. Thanks, John. Take care.
Lisa
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