Consumer Startups & Atlanta

The thesis of Switchyards

Coke, Cox, Turner, MindSpring, Spanx, The Weather Channel

All well-known B2C companies (business to consumer) founded in Atlanta. Most founded (waaay) more than 10 years ago.

Kanga, Yik Yak, Myavana, Pretty in My Pocket, PeachDish

All consumer startups founded in Atlanta in the last 5 years. And all mostly unknown outside of the city. That’s not a knock. These are actually a few of the most promising consumer startups in Atlanta right now. And I hope they become monster companies. But right now, they’re not.

In comparison, look at New York consumer startups founded over the same last 5 years (and this is the condensed list):

Warby Parker, Kickstarter, Etsy, BuzzFeed, Foursquare, Makerbot, Codecademy, Upworthy, Harry’s, Bonobos, Tumblr

For well-branded and designed consumer startups, New York is on fire. Ahead of SF in my opinion.

The point?

While Atlanta is buzzing with start-up talk and energy, we’ve got a ways to go. If we took any two on NY’s list and put them on Atlanta’s list, we’re practically on the map.

Why should we care?

“Consumer startup success and the natural public engagement that it stimulates captures the attention of a city’s current and future citizenry. All of which helps to drive the overall (startup) popularity of a city, further driving economic development.”

Basically, consumer startup success = economic development. Or something like that.

“Atlanta won’t be in the top five, not even in the top 10, startup cities in the country until we have some companies on the list that are recognized”

Galvanize the creatives

Despite our history as a B2B startup town, the foundation, demand and talent are here. Since last month, over 1,000 people have signed up on our nothing-to-it landing page (that doesn’t even say what we’re doing). At the moment though, most of these people aren’t engaged in the consumer startup scene — they’re stuck in agencies or big companies or non-consumer startups or even considering moving to other, better startup cities.

It’s a special time in Atlanta startups. If you’ve been paying attention, the Atlanta startup scene has grown a lot in the last year. Atlanta Tech Village has arrived on the scene and done a great job of attracting a broad audience to the startup lifestyle (with a growing waiting list). Credit should also be given to the others that play a vital part in the local scene — Strongbox West, ATDC and Hypepotamus. And I’m super excited about what Paul and Allen recently launched with TechSquare Labs. The more hubs around town focused on different problems, the better.

The most dangerous phrase in the English language is, ‘We’ve always done it this way. —Grace Hopper

The golden generation

In sport, a golden generation is an exceptionally gifted group of players of similar age, whose achievements reach or are expected to reach a level of success beyond that which their team had previously achieved.

The players come together and capture the imagination of a city or nation. In startup terms, SF has had theirs and NYC (and mainly Brooklyn) is having theirs. There is currently no culture locally that puts design and brand first. We need a very visible and cohesive movement and some consumer brand wins to kick this off. That’s exactly what we intend to be. If we can pull that off, people will be talking about this period in Atlanta startup history for years to come. Why not?

Design used to be the sauce you’d reach for in the cupboard; now it’s the flour you need at the start of the recipe. — John Maeda

Meet Switchyards

A consumer brand incubator. Based in Atlanta. Focused on design.

Sounds nice, right? But what does that mean?

Simply, we want to build great things at the intersection of the nascent design/creative community and the startup scenes in Atlanta.

A whole lot of possibilities, of course. Nowadays, lines are blurring between all of the above. See Expa, Fictive Kin, Betaworks and Science Inc.

What are we? We’re a hybrid of a few things; we’ll be incubating our own ideas and we’ll launch those products ourselves. It’s part incubator, design lab, co-working space, creative community hub and event series.

Don’t ask yourself what the world needs; ask yourself what makes you come alive. And then go and do that. Because what the world needs is people who are alive. — Harold Whitman

Our thesis

  1. Build companies with soul.
  2. Design and brand decisions will come first. Brands are about making hundreds of small decisions with the end goal to delight. We’ll build complete brands — not just logos.
  3. Products need to be 10x better than what exists currently. We’re focusing on product delight in the UI and UX. Design, not technology, is the differentiator in consumer products. Consumer brands have a higher bar than B2B.
  4. Find a way to cultivate the best founders. Good entrepreneurs are the key. The best find a way to make it happen in the tough moments.
  5. Designers make the best founders. My favorite products of the last few years are all founded by designers: Jawbone, Nest, Airbnb, Pinterest, Twitter, Square and Slack. And I won’t even use the Jobs/Apple cliche but we all know he was really a designer. SF and NYC already have that figured out. 2-3 years from from now, a lot of people here will be singing that tune too.
  6. We can assemble the best design-focused product teams in the country right here in Atlanta. Four design schools are based in the city. That’s insane. Most of these grads leave, and the ones that stay usually end up working for agencies. They can be attracted to sexy brands.
  7. Be opportunistic with talent, ideas and timing. Pursue ideas when all those resources come together.
  8. Be the best place in the city to start a consumer company. Being near others working on like-minded projects is a big benefit.
  9. We’re focusing on brand first, financing second. We will fund our own projects by building products that generate immediate revenue and using the cash to pay for future growth/companies. Historically, you needed $50-75k to launch a consumer company. Our goal is to get to launch by developing small, like-minded and self-contained teams that can grow in a sustainable way without large financing rounds.
  10. The perfect Atlanta consumer company should aim for $5-10m in yearly revenue. Building a sustainable, quality brand and large financing rounds (especially from Atlanta) are often at odds with each other. By some, these are considered lifestyle brands and looked down upon by the greater startup community (mainly VC’s) but Atlanta can be great at these style of companies. “Some of the happiest, most fulfilled people I know run these types of businesses and wouldn’t trade them for anything. There’s something very empowering about being able to explore an idea you love on your own terms.” — Chris Poole
  11. We’ll take a portfolio approach. Having flexibility is key — the best projects often spring out of other ideas or as side projects. It is easier and cheaper than ever to start design-focused consumer companies, but harder to predict what will take off.
  12. We like any type of consumer product. They don’t all need to be the next big tech exit like an Airwatch ($1.5B; but I’d argue they didn’t contribute as much to Atlanta as everyone thinks). We’re just as excited by non-tech brands like King of Pops. They enhance the fabric of the city. And lots to be learned from them plus big verticals for disruption.
  13. We’ll never work in commodities.
  14. Provide the fundamentals to give ideas a shot at success: solid team, long enough runway (money), advice/mentorship/high-level conversations and inspiring space.
  15. Leverage learnings — Technology, know-how, and infrastructure — across companies. Systematize the art of consumer brands the way David Cummings brilliantly systematizes SaaS businesses. The challenge? Consumer = art; B2B = science.
  16. Use the aggregate buzz and user base of the Switchyards network to gain traction for new products faster.
  17. Do more of what you like. My personal biggest value to Atlanta is starting strong consumer brands. I’m most comfortable in the role of building early-stage companies — back of the napkin to 20 people.
  18. We want to build great things. And we’ll be judged, ultimately, by what comes out on the other side. Every few years, we need to create 2-3 bad-ass brands (at $5-10m in revenue or well known) to be considered a success.
“I’m not a driven businessman, but a driven artist. I never think about money. Beautiful things make money.” —Lord Acton

Next Steps

This is certainly a community effort. We need everyone involved and engaged. We’re aligning ourselves with the best founders, designers and brand-focused engineers. If you’re doing anything creative, please reach out.

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We’re quietly pulling in a few like-minded startups. Email me if interested

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@switchyards - it’s only the best handle in Atlanta

So much more to come. It’s a great time to be an entrepreneur. Let’s build something amazing together, Atlanta.

“People want to live where creativity happens” — NY Times re: Brooklyn