New Economy Pitches to Old Economy

I read a blog post yesterday on the Atlanta Business Chronicle website regarding the open session of Startup Gauntlet, entitled “Startup Gauntlet: Helping build tomorrow's entrepreneurs.”  The post covered a special public session of Startup Gauntlet, which was unique in that it was judged by members of the TAG Top 40 judging panel, was open to the public, and the winner moved on to a spot in the TAG Top 40.

There was a powerful story at that meeting, and the post missed it completely.

The post may be summarized as saying that the entrepreneurs were unprepared for the market, unprepared for investment, and that most of their businesses have little chance for success, but with the help of the feedback from the panel they might stand a chance.  

I would suggest that the real story in that meeting was the gap between the investment community as represented by the panel, and internet companies in this state.  That is to say, the ‘New Economy’ was pitching to the ‘Old Economy,’ and the old economy doesn’t get it. Independent of the merits of the internet businesses presenting, the panel indicated repeatedly, from the questions it asked, that they had little understanding of the internet as it pertains to business.  Again and again, questions from the panel showed a complete lack of knowledge of existing revenue models on the internet responsible for billions of dollars of transactions driving profits for pillars of the new economy like Amazon, Google and eBay.  It was therefore difficult for many members of the panel to understand the value proposition of products which enhance those revenues, or exist on top of those business models.  Many of the questions posed were valid criticisms of the business models of companies like Amazon, had they been posed nearly 15 years ago before hundreds of billions of dollars of revenue had proven them.

Internet companies are not exempt from demonstrating the value of their products, but these questions highlighted the key challenge for tech startups in the state of Georgia, and indeed throughout the southeast: how do you teach those that control venture investment from the ‘Old Economy’ how the ‘New Economy’ works if they lack a basic understanding of the development of the internet as it pertains to business over the last 15 years?  The gap is wide, and yet it must be bridged if we are to grow the Georgia technology economy.

Good coverage of that event would have seen that divide, and would have reported it, rather than simply voicing the opinion of the ‘Old Economy.’  Adequate coverage of the technology industry of this state requires some knowledge of technology, and of business. I would ask that you devote the resources to covering these events that are required to make adequate coverage possible.

Thank you for your time,

Russell Jurney