Andy Sack in the KIRO-FM studios

Joining us for our latest GeekWire Podcast was Andy Sack of TechStars Seattle, Founders Co-op and Revenue Loan — the hard-charging startup guru whose clarion call for the Seattle tech community is to “Get F—ing Aggressive,” commonly abbreviated “GFA” in polite company (and on G-rated podcasts).

We had a great discussion about what’s happening, what’s working and what needs to be fixed in the Seattle tech startup scene, along with a little debate about the relative merits of one particularly high-profile local startup. If you missed the show, or just prefer text, continue reading for edited excerpts from our conversation.

How he got involved in TechStars: It started in Boulder four years ago, and very quickly they had immediate success. In the first year of the program in a local city, I think seven companies out of their first class got funded, they were all angel funded companies. And since then, four year later, you look at what’s going on in Boulder today, the enterpreneurial community is thriving, the angel community is thriving. When TechStars is done, seven, eight of ten companies are getting funded, and they’re not just getting funded by angels, they’re getting funded by institutions. So institutions have  started to move downstream.

How that led to TechStars in Seattle: I actually was a mentor to the Boulder classes in the early years, I saw what was going on in Boulder, and I was like, I want that for Seattle. Seattle needs a kick in the rear end, and so I stepped up and spoke to them, and we decided to partner together to bring TechStars here. And I did that in collaboration with the entire venture capital community, and really that’s what TechStars is about. It’s about community-driven, community-supported, and so there’s a whole group of mentors involved, as well — 70 of them — and so we work to support the next generation of entrepreneurs in Seattle.

The trends he’s seeing at TechStars: A number of companies are certainly looking towards the mobile web. We had a couple of companies in TechStars that were more game-oriented, so gameification is a trend. Social is a trend. Pretty much what you see in the broad technology landscape you’re seeing in the applications coming in to TechStars.

Todd Bishop, GeekWire: What about traditional software? Does anybody build a startup around a .NET program at the core?

Andy Sack: You have to remember I’m a reformed entrepreneur, so I had four startups myself. Since turning into a professional investor and supporter of entrepreneurs, I can’t think of one. I’m sure I have (seen one) but I can’t think of one. I can tell you I see them, actually, at RevenueLoan, where we focus on areas that are specifically not sexy, areas that are not trendy but are really core businesses that have revenues and profits.

John Cook, GeekWire: What’s it going to take to see a new, large technology company coming out of Seattle?

Andy: I agree that we want one, and would the community benefit? Absolutely. That’s really at the root of TechStars — we plant ten seeds, the community gets behind them, you get behind them, we help them. In the Bay, that community exists almost despite itself, it’s thriving so much. It now exists in other cities, it exists in Boulder, it exists in New York. I firmly believe you’re going to have me on the show next year and the year after, and we’re going to look back and be, like, wow, that was an important moment in the development of the tech scene in Seattle. … I would say today there are a small handful of companies — Cheezburger comes to mind as an interesting company to watch over the next few years. Because actually I think it has possible potential to be a bigger company.

John: Doesn’t that surprise you that a company that’s based around FailBlog, and comedy and cat pictures can be kind of our emblematic company in Seattle?

Andy: No, it’s no different — if you had said that about Twitter, what the founders of Twitter described as the ice cream of Internet, it was a messaging platform, we’re going to to compete with email. It never would have thought it would have caught fire the way it did.

Todd: Yeah, but Twitter really changed how people operate, day in and day out. Cheezburger, it’s a collection of web sites. It’s a content company.

Andy: Yeah, but you’re underestimating that it’s changed the way a bunch of people operate day-to-day. It has a loyal following that are going directly to them, not to Google, and consuming content on a daily basis. It’s affected a huge number of people’s daily usage. So we look for those companies at their most nascent stage at TechStars. We’re planting those seeds and hoping they follow in those footsteps.

John: What’s missing in Seattle? I pointed out that we’re missing that real, big consumer Internet company. Is there something else that’s missing that’s maybe not feeding that? What you’re doing at TechStars is trying to help, but it’s a new program, you’re not going to see the results of that for maybe three to five years. What else is missing.

Andy: Well, anything that we’re talking about now isn’t going to get fixed for two to four years anyway. So I actually think TechStars is well on its way toward making that impact. I have this conversation a lot. I spend a lot of time. I’m on a personal mission to invigorate, revitalize, you choose the word, the Seattle tech scene and make it more successful, more on the map than it is. … What the city needs is great entrepreneurial talent. We need to recruit better entrepreneurs from large companies but also from other areas. I think we need more exits. It starts and ends with great entrepreneurs. People point at the lack of access to capital, the lack of access to institutional capital, those are important elements, but not mission-critical.

To hear Andy’s comments on those and many other topics — plus our news roundup and the answer to our latest Name that Tech Tune contest — listen to the full audio of the show below.

Subscribe in iTunes or Zune. Here’s the MP3 file. Check back this weekend for a new episode.

Comments

  • http://www.nosnivelling.com daveschappell

    First — no one has done more to help get the Seattle entrepreneur scene move forward than Andy and Chris (except maybe Marcelo, with Seattle 2.0)

    With that said, I personally think that Andy’s not doing enough. None of us are. For instance, look at the blogger/news/VC representation at TechStars NY, vs. what we pulled off for TechStars Seattle — the TechStars Seattle team should be personally embarrassed, IMO). And, I think the ‘bar’ for the companies in TechStars and FoundersCoop (and the overall scene) needs to be raised as well.

    We’re still too much of a closed/quiet “what’s in it for me/my investment/my company” community, vs. one that helps raise the overall tide for all of the companies and entrepreneurs. I’m on a personal mission to do a much better job of that — and I look forward to working with Andy and others to make that happen.

    But the next time I hear Andy tell people that we need to ‘up our game’ I’m going to pull a full-body Terry Tate moment out of my backpack. Because Andy’s got to ramp up his personal and organizational efforts in a big way, or he’s going to be passed by, by someone/group that’s looking to raise the overall scene in a much bigger way (bringing NON-Seattle investors to the table, wrecking the weak-ass term sheets that Seattle angels and angel groups (like Founders Coop and Seattle VCs) are putting in front of startups, and overall, taking much bigger risks on passionate entrepreneurs with big ideas. If they don’t, we’ll just have Bay Area, New York and Boston VCs FORCE them to do so, by taking all of the best deals off their hands.

    Time to raise the game, folks (and, that goes for you too, John / Geekwire)

    Onward,

    Dave

    • Anonymous

      THANK YOU, Dave. I completely agree.

      Andy is doing a ton to help the community, but I agree, we’re ALL not doing as much as we should be. How does this help my company? Guess what, a rising tide floats all boats. Mentor, volunteer, show up at meetings – every little bit counts. Make “being an advisor to a successful startup” part of your job description.

      Hark is my first priority, but Seattle is a very close second. With that, I’ll put myself out there – if you’re a startup, or someone thinking about a startup, or someone looking to start thinking about a startup (ad infinitum), contact me – aronchick (at) hark.com. Nobody is too small to help.

    • http://blog.daryn.net daryn

      I agree with you 100%, Dave – don’t hear that often from me, do you? :)

      Andy and TechStars Seattle are in the perfect position to draw attention to the Seattle startup scene, both for TechStars companies and their own benefit, as well as for the community as a whole, and I look forward to helping make that happen.

      The game does need to be upped, but not just by startups and entrepreneurs. VCs, angels, bloggers, media, and everyone else need to realize that they are part of the problem and can be part of the solution if we all step up.

    • johnhcook

      We’ll join you on that mission Dave. After all, we think it is extremely important to have a “media voice” that helps tell the stories (both the ups and downs) of the community. One of the reasons why we founded GeekWire (and partnered with Seattle developers, attorneys and a local investor) is because we wanted to push the envelope.

      We look at GeekWire as an open platform, and we invite the community to help shape it and influence it. (We’ve got some cool ideas in the works on this, but we are certainly open to others too).

      Our mission is to create a new kind of technology news source and online community, rooted right here in Seattle. We think there’s a big opportunity ahead, but I agree there’s so much more that needs to be done. We welcome your thoughts/ideas/feedback, etc.

      • http://twitter.com/chrisamccoy Chris McCoy

        few ideas:
        * praise companies going after / owning / mapping data, not apps.
        * keep pushing guest authors / viewpoints. leverage your distribution to create broader voice / educate the masses on what is and isn’t a world-changing startup.
        * get authors from outside of valley to cross-post to your audience. enlighten them.
        * raise profile of other angel investors. it’s nice to hear about the andy sack’s and geoff entress’s of the world, but there are others. tell their stories.
        * cover entrepreneurship going on at the UW. curate talent with media coverage early on in the process. will incent more b-school and cs-school to start or join early-stage companies.

        • johnhcook

          These are awesome suggestions for Team GeekWire. So, when do you want to start? :)

          We are looking into doing a lot of these things, but some are new ideas which we had not thought of. Thanks!!

          • http://twitter.com/chrisamccoy Chris McCoy

            idea: recruit 2-3 interns from the UW journalism program. Manage their work (deliverables) on Pivotal Tracker (agile, project based, modern day conveyer belt for managing anything in the cloud, not just code).

            I have no idea what your goals are for Geekwire. Love what YOU do personally for the Seattle startup community. In my opinion, you’re it’s chief ambassador. Main problem is lack of money flowing through it. Even though plenty of money exists to invest in early-stage as an alternate, high-risk class of investment.

            I tend to see things in trends and patterns, so focusing on the money will actually bring out money IMO.

          • johnhcook

            Already ahead of you on that one. We are working on that front in terms of interns.

          • http://twitter.com/chrisamccoy Chris McCoy

            Ping me if you want some insights on best practices for optimizing the experience on both ends. In building my first company, I think we interned ~10-15 students that got actual school credit from the UW. Then continued this for early YourSports. Cool to see what some of these ‘interns’ are doing now.

          • http://twitter.com/chrisamccoy Chris McCoy

            Now would be a good time to recruit for summer internships. Advertise in The Daily, maybe even give a “talk” on campus to journalism/english/etc. students interested in digital journalism. There are A LOT of them.

        • http://twitter.com/billnordwall Bill Nordwall

          Bill here – Foundry Interactive co-founder and GeekWire developer.

          Facebook’s commenting feature has a long way to go before it reaches parity with other 3rd-party commenting tools like Disqus, IntenseDebate or LiveFyre.

          Sure, it does a great job of silencing the trolls (especially on TechCrunch). But that’s just one pro against a some major cons:

          – Comments are injected via Javascript onto the site instead of embedded in the HTML on the page. That means no SEO benefit, and no fallback in the event that Facebook’s service has an outage – something that happens more than they’d like to admit.

          – No Twitter/Google authentication or share options. Lots of GW commenters end up retweeting their comments, driving qualified traffic back to the site. With Facebook comments, that engagement disappears.

          • http://twitter.com/chrisamccoy Chris McCoy

            Thanks for the insights, Bill. Cool to learn how you think about these issues. Helpful for me as an entrepreneur :).

            Problems/Opportunities with existing solution:
            1) Real identity (name + headline) is tied to Twitter, which is poor platform for real identity. Facebook on the other hand tells me you’re name and where you currently are working. That is killer for connecting a community around content (comments in this case). Communities are connected around real identities, as evidenced by the huge demand for offline gatherings on Quora. Huge opportunity for Geekwire here that Diqus and it’s 1/2 baked approach to real identity limits: offline community around online comments.

            2) Facebook is very early in product cycle. Their interest is in the implicit network people have around content outside of Friends’ Status Updates. So it’s a huge interest. They’ll get this product right. Data is too valuable for them not to.

            3) What’s more valuable to the numbers that matter for your business: a share on Facebook, or a share on Twitter? This is fascinating question for anyone in the content business. I do know that media brands are increasingly seeing more referral traffic from Twitter/Facebook than from Google. My bet is on Facebook, btw. Comments is their killer app to tap into the implicit interest graph (post Friends Facebook).

          • http://twitter.com/billnordwall Bill Nordwall

            Chris – responses below:

            1) Totally disagree that real identities are a requisite for a successful, vibrant community (see Reddit, Hacker News, Metafilter, etc).

            2) Maybe, maybe not. The biggest hurdles Facebook faces are not business-related – not technical: http://techcrunch.com/2011/03/01/facebook-comments-twitter-google/

            3) I can’t go into specifics, but I can confidently say that Twitter traffic is much more valuable for GeekWire based on the metrics that we track.

          • http://twitter.com/chrisamccoy Chris McCoy

            1) usernames vs. realnames: using the term geeks liberally (not intentionally trying to insult the geek race, I’m a geek myself): usernames are for geeks, invented by geeks, and work for geeks/gamers. Not for people trying to engage both offline and online. That’s where this thing (the interent and commerce on the internet) is headed. Twitter’s finally doing something about it (placing real names next to usernames). Those 3 communities you just mentioned are all for geeks. Real names, real identities (with the option to be anonymous) are the future.

            2) Yes, it’s a major interest area for Facebook.

            3) Makes sense. But your data is partially blind since pushing to Facebook is a poor UX on Disqus. Facebook’s ability to build an implicit hybrid social and interest graph around comments is fascinating.

            A few more thoughts:
            There’s an unmet opportunity for communities of people to get together in the real world around the articles and comments created through Geekwire. Disqus fails are facilitating true real identity. There’s a fundamental disconnect I have when reading Disqus comments vs. Quora or Facebook. And it’s real identity.

            Plus the “Like” feature isn’t social. It doesn’t bring people together.

            Whereas if people “like” your posts on Facebook comments, they show up on your Facebook profile, thus exposing your “friends list” to an entirely new social graph of people around your thoughts/commentary. So the retained and potential audience value of the Facebook Like is greater than that on Disqus. Disqus tries to be social, but it’s not. It’s essentially a baseball card of your comments.

            I’d place my bet on what Facebook is doing with Comments. Especially as it relates to the audience value in sharing content. They’ll interoperate with other services. They’re trying to index the web in a way that delivers advertisers better signals that what Google offers. So they’ll do whatever it takes to get there. Their comments product lets users build an implicit social graph around things they are interested in / know about. Then get further social proof with their “friends” if they choose to share it back into Facebook. It’s really quite brilliant.

            Giving Facebook Comments a test run is worth a shot, especially if deep in your gut you don’t see TechCrunch moving back because the post-party comments they are getting on their original content is sometimes better than the original post itself.

    • http://twitter.com/webwright Tony Wright

      Totally disagree that investors need to up their game in the form of term sheets. Term sheets are market-driven, not a function of generosity or desire to put a city on the map. I’d agree if Seattle investors were constantly losing deals to their valley counterparts. But can you name any Seattle-based (or founded) companies that moved south because Seattle investors were out-gunned on the term sheet? There are certainly young entrepreneurs who are moving south for incubator/accelerator stuff like 500Startups, but that’s a different thing.

      Term sheets are becoming a less regional game. A great startup in Seattle can hop on AngelList and get a great term sheet. Our entrepreneurs (generally!) just aren’t producing the right recipe of team/product for Seattle investors to *need* to up their term sheet game. We don’t have hot teams coming out of hot companies like FB/Google/Twitter, and we tend to aim at more niche efforts in commerce and leadgen (where there’s a lot of money to be made, but doesn’t capture the imagination).

      All that said, I’m here for a reason and want to help fight the good fight. The best hope for us is that one of our motley underdog companies blows up big, hires/nurtures some epic talent, and starts pushing that talent out of the nest to invest/build the new round of great companies.

      • http://www.nosnivelling.com daveschappell

        I don’t think I said that they need to up their game in the form of term sheets. Just that if we bring in more external investors, that we’ll help to wreck weak-ass term sheets (by making the process more competitive).

        And, yeah, I think Twilio was turned off by a weak term sheet. Internmatch may have been as well. So there are two possibilities. I’m sure there are others (not that they MOVED because of a term sheet, but were underwhelmed what they saw, and thus they upped their game and found more risk-tolerant investors).

        • http://blog.calbucci.com/ Marcelo Calbucci

          Rumor: I don’t know if it’s true or not, but I heard LinkedIn could not get a term-sheet here in Seattle and they moved to the Bay Area.

          • Anonymous

            Doesn’t seem likely after reading how Reid got his LinkedIn start in his own words: http://money.cnn.com/2009/08/24/technology/linkedin_reid_hoffman.fortune/index.htm

          • http://www.internmatch.com/blog Nathan Parcells

            Tony, while some more veteran entrepreneurs can raise money from the bay area while still living in Seattle, this is not the norm.

            Most seed/angel investors still have a strong preference for local startups and early-stage entrepreneurs don’t have the time or money to make extended trips to the Bay area. Even on Angelist you need a strong lead investor who sets terms and is likely going to be local.

            Before moving south we talked with another former Seattle company that said they too really wanted to stay in Seattle, but realized that keeping a lot more of their company meant better chances for success which meant everything to them. Just today I have heard from two more Seattle companies thinking of moving south on the hunt for better term sheets.

            I love Seattle, the tech community and people are incredible and there are some domain experts in Seattle that beat the snot out of any of their counterparts in the valley. But I regularly hear from entrepreneurs who feel moving is the only option (same is true with Boston, Colorado and european founders). As an added note the difference in term sheets is also matched by a difference in process — not having to spend time making 3-5 year financial projections, and not having to apply/pay to pitch angel forums.

      • http://twitter.com/chrisamccoy Chris McCoy

        well said, Tony.

      • http://www.daniellemorrill.com Danielle Morrill

        I’m not seeing very many Seattle startups on Angel List… if you are on there please follow me, I am a advisor/scout and I am happy to make intros. I am almost out of bandwidth for advising companies (I’m formally advising 4 right now), but happy to have one-off sessions with anyone who wants to learn about marketing, grass-roots product evangelism, branding, and other stuff in my wheelhouse. That’s probably the best way I can help. I’m particularly interested in you if you are NOT sexy.

        • http://500startups.com/ Dave McClure

          … perfect Danielle… just send all the SEXY startups to me, mmmkay?

          rrowr. ahem. ;)

          • http://www.daniellemorrill.com Danielle Morrill

            ha! will do

    • http://twitter.com/fijiaaron Aaron Evans

      I think a big problem is that the “money” in Seattle is in a few big (particularly one) potential competitors to startups. That’s not the case in NY or SF (plus, they have two word city names that are more easily abbreviated.)

      Microsoft has it’s own startup incubation environment that, like the company, is a culture unto itself. And we’ve seen great companies come out of that: Expedia, Zillow, etc.

      Then you have the ex-Microsofties which are another group, usually experience people with options or bootstrapping from their day job. Picnik comes to mind as a good example.

      And then there’s everyone else. Real & Amazon are big early internet success stories which have their own spin offs, but like Microsoft they’re liable to look at new startups as competitors.

      McCaw started Clear(Wire), Paul Allen has Vulcan, there’s Madrona, and then we’ve got some satellite offices from the Bay. Other than that, there’s not a lot of money in the area.

      Unlike New York, where there’s a lot of finance & media money that can be spent on ventures that are not seen as competitive, or the Bay Area which not only has Sand Hill Row but a more diversified economy.

    • Asack

      I love you dave. I don’t know what a teetotaler is or WRF you’re talking about but the gauntlet has been thrown. Game on and game up!

      • http://sawickipedia.com/ todd sawicki

        To back up Dave’s point – NYC TechStars set a whole new standard of openness, quality and most importantly publicity. They tried to involve everyone – hell I was never once invited to a techstars seattle event yet was invited again and again to NYC techstars events despite being 3000 miles away. It speaks to Dave Tisch’s ability to build a huge network both in NYC and nationally around the event that benefitted both TechStars and NYC equally.

        I think the world of Andy and Chris and look forward to seeing them top NYC w/ Seattle’s second TechStars class/program.

  • Anonymous

    I like hearing Andy sound off “GFA”. It’s a bit counter-to typical Seattle culture and I at least find it inspiring. I hope he keeps it up.

    • http://www.nosnivelling.com daveschappell

      I agree — I hope he sees this as Getting F A :-) Time for all of us to up it…

  • http://twitter.com/nickhuzar Nick

    I love Seattle and I love seeing programs like TechStars here. It’s critical. But we need to throw more darts more often. We need to take bigger risks, think bigger and not just play it safe with base its. Entrepreneurs + advisers + capital. We just need more of it.

    At my last venture we raised more $$ from New York and the Valley then we did in Seattle. We just couldn’t find enough support here. Unfortunately with my new venture, Deal Springer I am exploring elsewhere as well. We’ve got traction, a killer product, a unique value prop that is highly scalable and more demand than we can handle.

    Help me. let’s do coffee!

  • http://blog.calbucci.com/ Marcelo Calbucci

    Way too many things to be say in a short comment, but here are a few points.

    #1: Cheezburger and BuddyTV are .NET

    #2: TechStars Seattle failed to get the attention to the startups they needed to accelerate/facilitate fund-raising.

    #3: Better term-sheets won’t move the needle here (create more startups or better startups), however, investment in riskier teams/ideas will. We can’t keep talking about the next Twitter, Zynga or Facebook if all the investors bet on are evolutionary ideas where they understand the clear path to revenue.

    #4: Seattle Entrepreneurs & Investors have to be less shy about using PR and Marketing. Listen to the founder of Tagged, Greg Tseng at Mixergy talk about how he thought PR was just fluff and later realize that it affect recruiting, partnerships and a lot more:
    http://mixergy.com/greg-tseng-tagged-interview/
    Yes, I’m labeled as the guy that overdoes in self-promotion and PR, but that’s just because the people I’m measure against is rank pretty low on the marketing metric.

    #5: John/Todd, I told you guys before (at least once a year for the last 3 years). GeekWire will not make a material difference to Seattle startups unless you guys get readers outside of Seattle. And to get readers outside of Seattle you’ll have to start covering news from other cities. You can have your feet in Seattle (like Business Insider is in NY), but you have to expand coverage and probably recruit bloggers from other cities.

    #6: We need more angels! There are hundreds of existing and former Microsoft and Amazon executives who have the financial means to make significant amounts of angel investing, but they are not. Most likely because they are not educated or have the time to do it. Someone needs to bring this people above the fold.

    • http://twitter.com/chrisamccoy Chris McCoy

      Agree with most things you said Marcelo. Here’s a few suggestions I have for Geekwire that match up with yours (more listed in reply to John):

      * Get authors from outside of Seattle to cross-post to your audience. Enlighten them. (lets John focus on Seattle, brings in other influences who get access to a an entrepreneurial ecosystem brimming with talent, but held back by non-tolerance of failure).
      * Raise profile of other angel investors. It’s helpful to hear about the Andy Sack’s and Geoff Entress’s of the world, but there are others. Tell their stories.

      • http://twitter.com/chrisamccoy Chris McCoy

        Arrington did a damn good job of this, deserves as much credit as anyone for getting money to move in Silicon Valley. I see no reason why Geekwire can’t play a similar role for the Seattle community.

    • http://twitter.com/scottporad Scott Porad

      Marcelo, agreed with you on #5…and this is why #4 is so important. PR and marketing is the only way to get attention outside of Seattle.

      • johnhcook

        Yep, this is good stuff, and you’ll certainly see this evolve over time where we expand the audience beyond Seattle. In many ways, we already have. We are just over four weeks old, and GeekWire is the #18 site on TechMeme’s leaderboard.

        http://www.techmeme.com/lb

        That means the stories we write are getting national exposure, but there’s certainly more to do. We’ll need the community’s help in tossing fuel on the fire.

        But, as I said before, there’s no reason why a national tech news site can’t be rooted in Seattle. After all, NYC has Alley Insider and SF has TechCrunch, VentureBeat, GigaOm, etc.

        We’re hoping that GeekWire can be that flagship media property that arises from our corner of the country, helping to do its part to put the region on the map.

        After all, almost every major tech story has some connection back to Seattle.

        Onward!!

  • Bill

    To be a broken record…on angels, Seattle lacks a large, broad core of successful, younger startups to create a large pool to select from. It does not have the recent Googlers, PayPal, etc. creating 30-45 year old rich people interested in putting their money in new companies. Microsoft hasn’t made anyone money in 10+ years. A heavy chunk of angels/super-angels/microvcs in other markets are sub-45 years old and relatively new to the money they are investing–take Chris Sacca as an example. There have been few hits in Seattle in the past 10 years that generate large numbers of people to choose from.The expectation of finding successful, rich startup founders is too limiting for the pool.

    There is money though and Seattle needs to work harder to get people interested in angel investing and think more creatively. I find the investing community remarkably passive about trying to get new people interested in deals. There seems to be little recruitment of new people to try to get them interested, many of the angel groups are small and draw divisive opinions, etc. I’d agree with Marcelo’s point that we need to find a way to draw people in.

    Given where people made their money here, it may be that there will always be less capital available for consumerish businesses. It simply is not something many of the people with investable cash know really well, as many of them made their money on infrastructure plays but it is the consumer web plays that lend themselves best to the rapid start angel investment model in other markets.

    Some of this is also on the entreprenuer community. Many of the ideas that come up, particularly consumer facing deals, seem to be me too clones of ideas from Silicon Valley. We need bigger, more original ideas and then the capital to fund them.

  • Bill Bryant

    The fact that we’re even having this vigorous discussion is evidence that, on balance, we’ve “arrived” as a startup community. We are talking about how to improve, how to expand, how to get bigger/better/faster — we’re focused on “hows” and not “whys” or “whats”.

    This discussion couldn’t have occurred 10-12 years ago, and didn’t occur at all until ~ 2007 with the arrival of Seattle Tech Startups, Seattle 2.0 and later TechStars, Founders Institute, Founders Coop and others who were focused on seed stage projects. In the span of things, that isn’t all that long ago, and I’d expect that we’ll begin to see the fruits of these efforts in the coming year/two/three. Certainly the sheer number of startups (as documented on the Seattle 2.0 index) is an encouraging sign; for every 1000 flowers that bloom, perhaps one decides that it wants to grow up to be a big oak tree instead.

    That said, we can and should do more. There are a couple of structural initiatives that we do not have here in Seattle, but should. We need at least 1 and preferably 2-3 “micro VC” funds dedicated to early stage seed projects, comparable to SV Angel, Floodgate, Felicusm OATV, First Round. IA, Founders Collective and the many other early pools of capital available to Bay Area/NYC startups. We have venture investors with local presence (Madrona, Ignition, DFJ, Accel) who will and have done super early seed investing but that isn’t the focus of these funds like it is for somone like the aforementioned.

    The second factor we lack is an ability for local angels to easily connect on a given deal with one another – a Seattle version of Angel List. Its a challenge for entrepreneurs to get distribution and deal momentum when they have to engage prospective angels one at a time. And while there are Seattle deals that get syndicated on Angel List, I wonder how effective they are in closing rounds as 90%+ of angels prefer to invest in projects that are geographically proximate and where the principals are known/can be engaged.

    • http://www.nosnivelling.com daveschappell

      Yes, yes and yes. Next action step for you/us, Bill, is to mobilize the local angel community (email list for them? private group), and have each of those bring in 2-3 others who have invested, but who probably aren’t as engages as they could/would be, if they were aware of everything that’s going on. For ever Geoff Entress and Andy Liu out there, we could/should see another 2-3 of them a year from now). I look forward to helping make that happen.

      • johnhcook

        Chris McCoy and I have been talking about profiling some of these “under-the-radar” angels in Seattle. Do you think that will help? I know most angels like to keep a low profile, so not sure how successful we would be in getting say 10-15 profiles. Let me know what you think about that as an ongoing series, and we could try to get it rolling.

        • http://www.nosnivelling.com daveschappell

          I think it could help, especially if you talk about a number of their investments, and also if you help to highlight their AngelList activity (to raise awareness of Angel List for Seattle Angels) — there are remarkably few Seattle investors active on AngelList. So, maybe a feature of Nivi and/or Naval, by GeekWire, with a number of active Seattle Angels contributing, would be a great way to raise visibility for Angel investing.

          Also, would be great to cross-publish that in the business section of the Seattle physical-world newspaper (Seattle Times now, right?) for maximum exposure and awareness-building with potential Seattle investors, who aren’t as aware of GeekWire (yet).

          • Anonymous

            NO!!!!!!!!! on AngelList ideas.

            YESSSSSSS!!!!!!!! on highlighting under the radar folks.

            Kinda obvious…

        • Anonymous

          Yes. Every time there is an awards thing…which you highlight HUGELY, it’s the SAME OLD people…including many posters here. The most recent Seattle 2.0 awards finalists are a good example. Same old people.

          That said, money will flow to GOOD ideas. Angels, super angels, VCs, whoever will invest i good ideas. That’s the secret.

  • Dprokop

    Some cleaver angel/vc group(s) need to team up with local big business (ie msft) and get them to fund more start-ups. msft has internal start-ups but that model is broken, they have to compete for resources with windows team (see Dick Brass’ oped piece). Msft went all the way to England to buy Rare to launch kinect. msft is sitting on a tonne of cash for M&A, they need to feed the local environment and grow their own. Someone who has sbalmer’s ear needs to convince him it’s good for his business and seattle.

    • Anonymous

      Have you ever seen this model truly succeed?

  • http://www.daniellemorrill.com Danielle Morrill

    No love for .NET? My husband and I often joke that when we move back to Seattle someday we’ll steal all the best developers from Microsoft and build a startup on .NET technologies they already know. More for us I guess!

  • http://www.facebook.com/people/Jonathan-Sposato/786250122 Jonathan Sposato

    wow. this has to go on record as the most prolific thread on geekwire so far. almost too much content to respond to so i won’t even try. the topline here is this itself is an indication that the seattle tech community has reached critical mass and arrived as per bill bryant’s comment. and it is this point which is most heartening to me personally. my audacious dream is to someday have seattle eclipse the valley as the tech capital. am i crazy? i’d posit that we have the same fundamental factors here that would make that possible. we’re just probably another 5 years later in the cycle…

    relating to seattle’s ability to produce startups of greatest scale, those of you who know me know my perspective on this which can be summed up with; ‘don’t do startups like we’re all middle age guys from msft, amazon, real, etc. ‘ [myself included] we have to take greater risks and innovate with even greater imagination like the younger guys in the valley.

    as a regular commuter to the bay area (every week), its pretty clear that there’s a marked cultural diff between the 2 communities. one way to look at it is via the cheskin trend adoption model for how successful businesses/trends take off. generalizing grossly, its like the bay area startups are the young fervent ‘explorers’ who are maniacal about trying new things and ‘screwing up fast’, and seattle startups are the ‘status quo’s who pick their startups the way they decide on which model of lexus they want (super thoughtfully and with an assumption that almost all risk can be minimized). they tend to be run like product units within the big companies. thing is, internet mindshare being most fractured plus switching costs between apps/services so low for users that its increasingly hard to predict what new ideas will stick and which won’t. therefore the more successful startup community is the one that indexes towards a higher number of highly diverse startups (with even multiple variants of the same basic idea. for example path vs. color vs. instagram vs. camera+) born from people who are themselves early adopters in those trends. i think bill and some others mentioned it is not until we can successfully cultivate that younger group (or i’d posit that we learn to self index to become more ‘explorer’ like) that we’ll have some notable breakouts. i also think this is a function of numbers as well…

    btw all of this is not entirely fair to some of you on this thread, who have in fact innovated with imagination. i wish you all amazing successes that will move us all another rung up on the ladder. dave schappell in particular strikes me as one of the canonical startup guys in the community. a humble but energetic trouble maker (in the good way that i like) who is not afraid to put himsefl out there.

    techstars. i’ve never myself seen a termsheet from andy, but i see andy and techstars as the ‘power foward’ of the seattle tech team. we need them in our corner. personally i’ve leveraged andy’s GFA schpiel to inspire my own teams to step up their game. its one of the many reasons picnik became a bonafide profitable startup at scale. and while i can’t disclose our confidential numbers, i’m happy to report that picnik’s current traffic is off the charts without material help from google and we would safely be at the very top of the seattle 2.0 index if we were still independent. i feel its important to note this in this discussion of seattle’s ability to produce startups of international scale. we CAN do this guys!!

    geekwire. lastly i want to absolutely acknowledge dave (and others’) challenge for geekwire to step up its game. absolutely agree! we should do this. as mainly a product/UX guy, one of the things that gives me heartburn is the current consumption experience of online news. i KNOW we can do better here and bill nordwall and team have given us a wonderful platform in the weekend that the site was built. but over time it will be important to get GFA about how we extend our reach, innovate in UX, and achieve true scale.

    good stuff all. love it!

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