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High-Tech's Hot New Outpost
Friday, November 21, 2008
It is late on a Wednesday evening. Jay Chaudhry is still in his office, trying to clear his desk. It is close to eight, and the phone hasn’t stopped ringing. He ducks a call but takes another, and draws comfort from the fact that he is not alone. Many of his staff is still there, too. Home is still a couple of hours away and as Chaudhry thinks of the drive back, his biggest fear is being caught in a traffic snarl, even at this late hour.
“You need to do this, everybody is doing this, time to market is critical,” says Chaudhry, echoing views that were until recently held only in technology outposts such as Silicon Valley.

Welcome to Atlanta, the new Atlanta, gateway to the south.

One of the hottest growth regions in the nation, Atlanta is playing catch-up with the world of high technology, and simultaneously transforming the lifestyles of its citizens. And it is doing it on Internet time, if the pace of growth and the pace of life are any indication.

Most people trace the torrid growth in the city back to the early 1990s when Atlanta won the bid to stage the 1996 Summer Olympics. The world’s biggest sporting event, whose cost now runs into billions of dollars, was a big spur to growth. Buildings rose almost overnight, and businesses grew likewise. Coincidentally, when about the same time the Internet became a big buzz, Atlanta just kept growing, beyond recognition now.

Sea Change

“Want evidence of the staggering amounts being invested in technology companies here?” asked the Atlanta Journal-Constitution in a recent article reporting that the city attracted a record half a billion dollars in venture capital in the last quarter of 1999. “Watch television. Pick up a newspaper. Read a billboard. Look at ads on the Zamboni at a Thrashers game, or check the side of a downtown bus.”

“The last four years has seen a sea change,” says Ravi Kalakota, a distinguished professor who has thrown himself into the dizzying world of Internet entrepreneurship. He thinks “Mindspring (Internet service provider) and Scientific Atlanta (a telecommunications firm) finally brought the Internet wave” to Atlanta.

In a short span of time, Atlanta has built up an impressive array of high-tech companies to add to its rock-solid businesses such as Coca-Cola, UPS, Delta Airlines and Home Depot. The new-age companies that signify a remarkable transition in Atlanta’s economics are online brokers E-Trade, WebMD (which since merged with Healtheon) and ISS, the Internet security company, among others.

It’s still not like the Valley, say its most successful Indian entrepreneurs. Not yet, but as the click-and-brick deals gain momentum, Atlanta will stand to gain considerably, because of its “domain expertise” in traditional businesses, according to Palaniswamy Rajan, a three-time entrepreneur.

As Atlanta experiences life in the fast lane, Indian professionals are right there, if not at the head of it. Being in the services and software industries, Indians have benefited easily, and by a lot, say Atlanta entrepreneurs. The local chapter of The Indus Entrepreneurs, started last year, estimates the number of Indian professionals in Atlanta at about 5,000. TiE-Atlanta though has only a fraction of that number as members. About 250 have signed on as members of the renowned entrepreneurship organization in the U.S. and about 100 show up for its monthly meetings, said Chaudhry, who is TiE-Atlanta’s current president.

Even then, there is a lot of excitement and urgency among the Indians to engage profitably in the technology revolution sweeping the city.

History of Entrepreneurship

“If you look at our monthly meeting, you would know what it’s like,” said Chaudhry, also a co-founder of TiE-Atlanta. It may not seem like the San Francisco Bay Area, but deep in Dunwoody, home to most technology companies, Indians are a “visible” lot.

If you wander into the inner offices of large corporations, too, there are many Indians, some of whom now hold key positions.

“At the senior VP (vice president) level, there are many, many Indians,” said Chaudhry. What’s missing though is the visibility that comes with being the CEO of a big public company, he added.

In entrepreneurial efforts, too, Indian professionals are, more and more, reaching out for a larger share of the venture capital entering Atlanta. Among the earliest successful entrepreneurs was Subramanian Shankar, who runs American Megatrends, a maker of BIOS (basic input output systems) and other systems for computers. Started in 1985, American Megatrends is among the largest privately held companies in Atlanta. It was ranked 39th among privately held companies in Georgia in last year’s survey by the Journal-Constitution, with revenues in the range of $150 million and $249 million.

Many budding entrepreneurs see Subramanion as a role model, as they also look up to the wise counsel of the experienced Chaudhry and Rajan. If results from the starting of local TiE chapters are any indication, Atlanta is set for a spurt in entrepreneurship. As one entrepreneur remarked, “It’s all coming together now.”

Lack of serious venture capital used to be a serious problem a few years ago, according to Sanjoy Malik, the CEO of Air2Web. “It is changing…slowly,” he added. But Atlanta counts almost everything else as advantages, not least the presence of Georgia Institute of Technology, or GeorgiaTech.

Incubators Fueling Growth

The institution has played no small role in the rapid development of Atlanta. A lot of the research that comes out of GeorgiaTech is “spinning out a lot of entrepreneurs,” says Kalakota. What has further fueled the growth of companies is the number of incubators that have sprung up. “There are at least 20 incubators,” exclaims Malik. “It’s unprecedented…no other city in the country has so many.”

Chaudhry has special affection for one incubator, the Advanced Technology Development Center. Located close to GeorgiaTech, it brings students together and it has no vested interests because it is not run by venture-capital firms, he says. Additionally, his latest venture, Air2Web, was nurtured here.

With such infrastructure in place, Atlanta gets high points from entrepreneurs because it is easier and quicker to set up a company here, compared with almost any other place.

“I was able to put together a team of about 20, all with great experience too, very quickly,” says Chaudhry. He is not alone in the boast. Rajan said he set up Vertical One, a content-personalization company he later sold to Security First Technologies for $166 million, in 10 months. “I executed (the project) faster than most Silicon Valley companies,” he exclaimed, adding, “We can compete against Silicon Valley companies…in talent, management and execution.”

But overall, neither Rajan nor anybody else believes Atlanta is anywhere there. “We are not going to claim the leadership sometime soon,” says Rajan. And as far as Indian success goes, Atlanta is still waiting for the next big thing.

Even though Atlanta has been the scene of several startups by Indians, even the most successful entrepreneurs concede these do not match those by their countrymen in Silicon Valley. Chaudhry says, “We need something like Exodus,” a Santa Clara startup by K.B. Chandrashekar and B.V. Jagadeesh that has, in less than five years, grown to become the country’s largest web-hosting company. Kalakota echoes similar sentiments.

Kalakota echoes similar views. “What we need is one major Indian victory…it will shift the landscape.”

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