THE VISION

:
“For two years, we [Knoxville Overground (KO)] were searching, wondering if it was possible to create a community space and a startup process specifically for the professional and self-employed digital workforce community of Knoxville and the surrounding area. We then came across successful case studies of micro-enterprise development centers (MeDCs) and seed accelerators and asked ourselves, ‘why couldn’t we just do that here?’”

THE REALITY:
“We quickly learned that success is 3% having a good idea, 5% planning, 6% hard work and persistence, 7% having keen improvisational leadership, 4% putting the right team together, and, well, the rest is financing.”

THE HISTORY.
The 100% volunteer-powered, grassroots organization Knoxville Overground (KO) – after launching successfully its entrepreneur community center and coworking workspace in Sequoyah Hills in 2008 – attempted to launch a seed accelerator and coworking location at 35 Market Square.1 Inspired by efforts such as Y Combinator2 to the San Francisco Renaissance Entrepreneurship Center3 et al, we decided to spend several months researching best practices – not with the intent to duplicate, but for inspiration in the effort to implement a customized vision.
Since 2006, Alex Lavidge has been traveling the world studying best practices for seed accelerators. Here he is pictured at the Central Incubator Accelerator In Cyberjaya, Malaysia.

Then, unfortunately, a week before we were to sign the lease for 35 Market Square, we lost the space due to a firm agreeing to lease the 5,000 sq. ft. space for five years. KO was not in a capital position to submit a competing bid. Therefore, we moved on to other efforts to build credibility that could aid in fundraising efforts; additionally, we have continued to advocate through several organizations and political channels that the effort should be picked up as a public-private partnership in the future with a seed capital boost from the onset next time. Jump forward to 2011: Gov. Haslam announced a couple months ago as a part of his $50M INCITE Initiative a plan to support nine regional business accelerators across the State, a key component of his Jobs4TN plan. A $250,000 grant could be available as long as there are matching funds to help create a successful seed accelerator program. 4 All of us in the digital workforce (e.g., web programmers, software developers, writers, artists, filmmakers, and others in the creative class profession with entrepreneurial inclinations) have been waiting for the time when we could reboot our efforts, building on the momentum we’ve been generating and the conversations we’ve been having for years. Now is the time both to dream and build it.
1 2 3 4 http://www.metropulse.com/news/2009/apr/01/micro-enterprise-hatchery-market-square/ http://ycombinator.com/ http://www.rencenter.org/ http://www.tn.gov/ecd/pdf/Jobs4TN_PowerPoint_07222011.pdf

Since 2008, Alex and others from Knoxville Overground have gone around TN and the US sharing their findings, their work, and their vision for the future. Here Lavidge is presenting at Barcamp Nashville, October 2008.

In March 2009, volunteers from Knoxville Overground organized a social mixer at 35 Market Square to rally support behind a proposal to launch a seed accelerator downtown for the digital workforce.

THE CALL TO COLLABORATE!
“Over the past three years, we’ve all witnessed several Web-based startups and digital media projects across the region either struggle for survival or go under. This is not because they were bad ideas or because digital startups just inherently are bad business models. Meanwhile, several service-oriented agencies and firms keep searching for ways they can invest in applications that over time can earn their firms residual income in uncertain times. We have world-class talent, we’re surrounded by a lot of capital, and now with the Web we have access to everything we could possibly ever need. So what’s missing?”

SAVE THE DATE >>>
What Who When Where Why How Digital Knoxville Envisioning Summit Digital workforce and entrepreneurs September 15th, 2011 from 6p-8:30p Technology 2020 To draft collectively a blueprint document for the ideal seed accelerator program. We’ll be collecting poll data via twitter.

WHAT FEATURES ADD VALUE?
While I can’t speak for everyone, I can say that as someone who has consulted several Web-based startups across Innovation Valley and as someone who has networked with dozens of small business in the digital sector here across in East Tennessee, these are features that keep coming up as missing from our digital community. These are just a few of the talking points and areas we’ll be addressing and polling on September 15th, 2011 at Technology 2020.
1. MARKET RESEARCH HUBS If you’re researching a market segment before building a Web application, you’ve probably heard of Forrester Research, Gartner, et al. If you’re trying to launch an online TV show, you’re probably been looking at Nielsen. Having a comprehensive environmental scan is often one of the most important components to making prudent decisions when moving forward in any production process; the problem is either collecting or buying this information can be expensive and difficult to justify at the pre-revenue phase. Q: Is there a way to collectively provide market research information at a fraction of the cost it would be for us to purchase reports individually? 2. STREAMLINING A PUBLIC RELATIONS STRATEGY The media typically isn’t familiar with technology jargon; what resonates with reporters is credibility. They want to see large amounts of money invested, a strong track record from the management, and for lots of buzz in the blogosphere before they decide to give a startup more than its fair share of attention [usually]. And even with all of the pieces in place, so much of it is also about having the right personal connections. Q: If we all combined our credibility and experience into a seed accelerator community, could this help overcome the credibility hurdles that startups face? Additionally, could we create a database of blogs, media contacts, and other news venues that would find our digital startup projects of interest? Would this help each project save money in PR expenses?

3. CASE STUDY ARCHIVES There are case studies out there still to be compiled of Web-based startups and digital startups in our region and across the southeast. Additionally, there are several books and reports that have been conducted. Entrepreneurs with whom I have worked over the years keep telling me that they learn best from other people’s experiences, their own experiences, and through self-learning. Q: Would aggregating case studies across the region be helpful to the digital community? What kind of information would need to be included? 4. NICHED CONNECTIVITY Even with attempts like http://knoxvillewebdesigndirectory.co m et al, as a community organizer, the most frequent compliant I keep hearing from several members of the technology community is that they aren’t as connected as they would like to be. Ruby on Rails developers don’t know where to connect with each other; likewise, the same goes for several iPhone application developers I know. The list goes on. Q: Could it make sense to have an exclusive database of screened members who are developers and software experts in certain fields all on one site? What would that look like?

5. ADVOCACY FOR STARTUPS The economic impact that the emerging digital workforce brings to the region is an area I haven’t seen covered enough in a variety of economic development reports. Additionally, as organizations like http://www.freelancersunion.org explain, there are also numerous political issues that the independent digital workforce continues to face. Q: How connected are we to our political representatives? How well do we feel as though they understand the needs and challenges of the digital workforce? 6. AGGREGATING EVENTS & RSS Already, we launched InnovateKnoxville.com that primarily is focused on aggregating events from up to 60 organizations of interest to the entrepreneurial community. In the near future, we intend to aggregate relevant RSS feeds as well. Q: Should we be doing this specifically for the digital community? Is there a need to be aggregating conferences, events, and RSS feeds from at least a 150-mile radius? 7. CONTRACT POSTINGS There are continually job opportunities available in the Knoxville region for local Web developers, video producers, and creatives.

Q: Is this a need already being met well – or could we be doing it better? 8. SEED CAPITAL & MICROFINANCING If Digital Knoxville were also an investment pool as well as a digital community, then a substantial portion of membership fees could be allocated into a private investment fund, potentially managed by a regional venture capital or angel investment firm. This fund could allocate seed capital for startups in the amount of $2,500 to $10,000 to jumpstart up to 20 startups in the portfolio of Digital Knoxville by 2014. Similar to the Y Combinator model, we’d be beating the odds if we could get more than one or two out of that portfolio of twenty companies through an exit strategy for $500K or more. However, based on this scenario, that would still be a hypothetical 150% ROI in less than 5 years. In one scenario, if we partnered with the right private equity partners in the region, over time we can develop ways to improve the efficiency of the due diligence process for revenuegenerating startups seeking expansion capital. Additionally, we’ve all seen startup projects raise thousands of dollars online through micro-financing websites. Encouraging this approach could also potentially mitigate some of the risk and hassle typically faced by startups seeking investment capital. Q: Would you pay a monthly fee (e.g., $150-$500 a month) to join a digital community that also allocated a portion of your membership dues

towards a seed capital investment fund? What concerns or stipulations would you have? What kind of due diligence process would you want to see? 9. COWORKING & DIGITAL VISITOR CENTER Just as we have a Knoxville Tourism & Sports Corporation, I’ve argued for years that we need a visible space downtown in a high-traffic area where we attract new transplants and can help welcome them to the “digital community” already in place here. I’ve also been saddened to meet with potential technology angel investors that, despite Knoxville being their hometown, decided not to move their talent and potential investment capital here because they said “they couldn’t find an easy way to get plugged into the digital ‘startup scene’ the same way they could in Seattle, the SF Bay Area, etc.” Likewise, when we have talent and digital entrepreneurs passing through Knoxville from across the US, they often tell me, “it’d be nice if there was just a place to visit and check-in so that we can plugged in with the scene before moving on.” And Panera Bread is still the closest thing we have to a coworking facility in Knoxville ever since Knoxville Overground closed its location in Sequoyah Hills at the end of 2009. Q: If a part of this seed accelerator proposal is going to be a real estate investment, what would that real estate need to look like? Where would it logistically make sense? Or does it

make sense to already utilize preexisting excess space? 10. EVENTS & PODCASTS During our first year at Knoxville Overground (KO), as an organization we helped launch or facilitate over 144 different types of events and conferences for our membership of startups, social entrepreneurs, selfemployed professionals, and the creative class. Several members told us, “I don’t have the time to help organize these types of events that bring creative people together to learn, create, and network together, but I’m always happy to show up or even pay to attend.” One of those event series for instance was called “Lunch 2.0,” a weekly podcast over lunch at 4 Market Square where we interviewed what were usually digital startups that have raised $100K or more. Q: What kinds of podcast formats would be of value to the digital community here? What kinds of events do we need to bring? How do we go about crowdsourcing these requests? 11. SOFTWARE + APP DISCOUNTS & RATINGS I don’t know about you, but I love services like AppSumo.com to the Microsoft BizSpark program (aka digital startups get access for free to all Microsoft software for a trial period). Additionally, as a consultant, I spend a lot of time recommending to clients the types of productivity apps and software

or “cloud” solutions they should be using in their startup. Q: What kinds of bundle packages could be offered to each startup at a discount? What kinds of recommendations could we streamline to digital startups so that they avoid the time, cost, and hassle with determining the best applications to fit their needs? Is this a way to add value to each membership in a digital community program that can help justify the cost? 12. CROWDSOURCED EDUCATION One of the best examples I’ve ever seen of a public-private initiative supporting entrepreneurship is what is known as the Entrepreneur Center in San Jose, CA. The center receives both funds from the City as well as corporate sponsors; one of its key features is that throughout the week, it provides ongoing seminars, workshops, and classes for those interested in learning practical subject matter – presented in a concise format – that can later be applied. It’s a great opportunity as well for local consultants and vendors to pitch to others their value proposition. Q: Is there value in coming together to learn about new market opportunities, design principles, SEO strategies, and resources for sales et al topics? How would this look? How about classes on how to code and design? Or are there already online resources you find helpful that you recommend to others?

SUCCESS BY DESIGN.
Inspiring examples of startups that either merged or were acquired successfully after entering the Y Combinator program:

Name Reddit Firecrawl Wufoo YouOS Parakey Heysan Auctomatic Zenter Zecter Anywhere.fm Appjet Clickpass SocialPicks Heroku 280 North Omnisio Backtype Divvyshot Cloudkick Flightcaster GraffitiGeo Etacts datamarketplace Movity Indinero AdGrok TalkBin

Months 75 75 68 68 56 56 56 56 51 51 51 51 51 44 44 44 39 32 32 27 27 20 20 20 15 15 8

Website address

Exit Price

http://reddit.com $15,000,000 http://textpayme.com $3,000,000 http://wufoo.com $35,000,000 http://youos.com $4,000,000 http://parakey.com $5,000,000 http://heysan.com $4,000,000 http://auctomatic.com $5,000,000 http://zenter.com $4,000,000 http://zecter.com $25,000,000 http://anywhere.fm $2,000,000 http://appjet.com $9,000,000 http://clickpass.com $1,000,000 http://socialpicks.com $8,000,000 http://heroku.com $212,000,000 http://280north.com $20,000,000 http://omnisio.com $15,000,000 http://backtype.com $50,000,000 http://divvyshot.com $5,000,000 http://cloudkick.com $50,000,000 http://flightcaster.com $15,000,000 http://graffitiGeo.com $1,500,000 http://etacts.com $5,000,000 http://datamarketplace.com $600,000 http://movity.com $9,000,000 http://indinero.com/ $8,000,000 http://adgrok.com $8,000,000 http://talkbin.com $5,000,000

WHAT’S NEXT?
Before we all get together on September 15 at Technology 2020, there are a few things you can read and look over to generate some ideas and feedback in addition to some twitter accounts (listed to the right) that I recommend you start following unless you’re already doing so! • Read Jed Christiansen’s work on “Copying Y Combinator” online:
http://blog.jedchristiansen.com/2009/09/21/copying-y-combinator-why-andhow/
th
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • @RootLevelLabs - The Root Level Team @MeydanJo - Meydan Jordan @ChrisRedlitz - Chris Redlitz (Transmedia Capital) @LionLaunchPad - Lion Launch Pad @ PSU @Chinaccelerator - China Accelerator @on_lab - Open Network Lab @HackFwd - HackFwd @LaunchpadLA - Launchpad LA @BoomStartup - BoomStartup @BeUnreasonable - Unreasonable Institute @YCombinator - Y Combinator @SeedCapital - Seed Capital PT @MSU - Montreal Start-Up @hfarmventures - H-Farm @founding - Founder Institute @HouTechCenter - Hou Tech Center @ImpactOrg - Impact Entrepreneur @thestartproject - The Start Project @portlandten - PortlandTen @gangplank - GangPlank @FirstGrowthVN - First Growth Venture Network @SBootCamp - Startup BootCamp @bizdom - Bizdom @ExtremeVP - Sundeep Mandra @GreenHouseL - Greenhouse @awesome_inc - Awesome Inc. @sparkcapital - Spark Capital @BootupLabs - Bootup Labs @springboardnews - Springboard @sproutbox - sproutbox @SeedAccelerator - Seed Accelerator @iventures10 - iVENTURES10 Team @techwildcatters - Tech Wildcatters @seedrocket - SeedRocket @DifferenceEngin TheDifferenceEngine @tetuanvalley - Tetuan Valley @NYCSeed - NYCSeed @alphalab - alphalab @io - io ventures @iA_india - iAccelerator @techranch - techranch @capitalfactory - Capital Factory @openfund - openfund @shotputventures - shotputventures @fom_morpheus - Friends of Morpheus @betaspring - Betaspring @launchboxdig - LaunchBox Digital @DreaminVentures - DreamitVentures @GoodCoVentures - GoodCompany Ventures @bolidea - Bolidea @jfdiasia - JFDI.asia @seedcamp - seedcamp @techstars - techstars

• Also read “The Startup Factories” report by NESTA (published June 2011):
http://www.nesta.org.uk/areas_of_work/economic_growth/economic_program mes/assets/features/the_startup_factories_report_feature

• And just because a few years later, I still think it was one of the best speeches ever, check out Paul Graham’s “How to Be Silicon Valley.”
http://www.paulgraham.com/siliconvalley.html

ABOUT THE HOST
Alex Lavidge founded the 100% volunteeredpowered nonprofit organization Knoxville Overground (KO) upon returning to his hometown of Knoxville, TN in 2008 from the San Francisco Bay Area. During its first year of operation, KO either launched or helped organize over 144 different various endeavors and events as well as spearheaded Knoxville’s first entrepreneur community center and coworking workspace for startups, the self-employed, social entrepreneurs and the surrounding creative class community. Recently Lavidge was named by Fast Company in May 2011 as one of ”51 bold ideas and brilliant urbanites helping to build the cities of America’s future” for the “United States of Innovation” survey. In 2009, he was named a “40 under 40″ by the Greater Knoxville Business Journal. His community relations and business development firm, Lavidge Unlimited, is headquartered at Technology 2020 where he works primarily with web-based, technology transfer, and cleantech startups in the East Tennessee region.
Twitter: @alexlavidge E-mail: a.lavidge@gmail.com Facebook: facebook.com/alexlavidge Phone: 917.477.7732

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