Should I locate my business in an incubator or accelerator?
What’s the difference between an incubator and an accelerator? Should I locate my business in an incubator? What are the factors I should consider? On this episode of “Decision Vision,” Host Michael Blake speaks with Sanjay Parekh, co-founder of Prototype Prime, on these questions and more.
Sanjay Parekh, Prototype Prime
Sanjay Parekh is a co-founder of Prototype Prime. Prototype Prime is a 501(c)3 non-profit hardware & software startup incubator. Their mission is to provide startup companies with the support they need to launch and scale. Funded by the City of Peachtree Corners. Prototype Prime is a regional affiliate of the Advanced Technology Development Center (ATDC) at Georgia Tech, and is located just 30 minutes north of Atlanta.
Sanjay Sanjay a co-founder of Prototype Prime, a non-profit incubator and a serial technology entrepreneur. In addition to co-founding Prototype Prime, Sanjay is a co-founder of MailMosh, a startup focused on making email a better experience. He is also the co-host of Tech Talk Y’all, a self-proclaimed tech comedy podcast.
Previously Sanjay launched Startup Riot, a conference for startups which pioneered the three minute, four slide presentation format. Prior to founding Startup Riot, Sanjay was the founding CEO of Digital Envoy and the inventor of the company’s patented NetAcuity IP intelligence technology. At Digital Envoy, Sanjay led the company to raise $12 million in angel and venture funding. Digital Envoy was acquired by Landmark Communications in June 2007.
Sanjay holds an electrical engineering degree from the Georgia Institute of Technology and an MBA from Emory University’s Goizueta Business School.
Michael Blake, Brady Ware & Company
Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by Business RadioX®.
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Show Transcript
Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service, accounting and advisory firm that helps businesses and entrepreneurs make vision a reality.
Michael Blake: [00:00:20] And welcome back to another episode of Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.
Michael Blake: [00:00:37] My name is Mike Blake, and I am your host for today’s program. I am a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator, and please also consider leaving a review of the podcast as well.
Michael Blake: [00:01:03] So, today’s topic is about co-working spaces, accelerators, incubators, and there are probably three or four other names for these kinds of places that I’m not even familiar with yet. I can’t speak for the rest of the country, but they have popped up like dandelions all over Atlanta in the last five years. And even in my hometown of Chamblee that has, I think, a population of about 30,000 people, we have, at least, two co-working spaces, accelerators, of which I’m aware. And I happen to be a member of one of them. It’s a nice place to kind of hang out. It’s at the airport, and a place we’re allowed to have meetings. They do a good job.
Michael Blake: [00:01:42] But for the most, it’s very likely that if you can listen to this podcast, there is a co-working space, an accelerator, an incubator near you. And you might be kind of wondering, does it make sense for me to be in one of these places? What’s it all about? Why are they generating the interest and the buzz they are? Why are some of my competitors there? Why are a lot of startups there? And is it right for me, whether I’m a startup or a more mature company?8
Michael Blake: [00:02:11] And today, we are joined by my pal, Sanjay Parekh, who is one of the true OGs of the startup community here in the Atlanta area. Unlike me, who’s basically been one of the world’s ugliest cheerleaders for about 12 years or so, he has actually started companies, had exits, ran a very important organization called Startup Riot about the same time as we were doing Startup Lounge. And I’m proudly wearing one of the Startup Riot T-shirts here today. And Sanjay has been about as active as anybody for as long as anybody in the startup community.
Michael Blake: [00:02:50] And one of the hats that he is wearing at this point is he is co-founder of Prototype Prime. He is a serial technology entrepreneur. He’s currently founder of MailMosh, a startup focused on making e-mail a better experience. And maybe we’ll get some information about that. As I mentioned before, he’s co-founder of the startup — not really so much a startup anymore, but an accelerator – I guess. Sanjay will probably correct me – called Prototype Prime that is in the northern Atlanta Metro area, about three miles north of where I live.
Michael Blake: [00:03:21] He’s also the co-host of his own podcast called Tech Talk Y’all, a podcast covering technology with a Southern flair. And if you haven’t, I listened to a couple of episodes. If you’re into technology, and you want to understand the local, sort of, southern, the Southeastern startup scene, because it is different from other places in the country, you really ought to give it a listen.
Michael Blake: [00:03:41] Previously, Sanjay launched Startup Riot, a conference for startups, which pioneered the three-minute, four-slide presentation format. And that was an extremely important event. I think they got up to hundreds of attendees and was eventually holding these things downtown. And the thing I loved about it was that Sanjay was not afraid to use the vaudeville hook either. If you went 301, you are done. And think about pitches that if they drag, man, they are tedious. And Sanjay made sure that didn’t happen.
Michael Blake: [00:04:12] Prior to founding Startup Riot, he founded Founder Fables, an off-the-record conference for founders. He was also the founding CEO of a company called Digital Envoy, and the inventor of the company’s patented NetAcuity IP intelligence technology. At Digital Envoy, Sanjay led the company to raise $12 million in angel and venture funding. Digital Envoy was acquired by Landmark Communications in June 2007.
Michael Blake: [00:04:36] He holds an Electrical Engineering degree from Georgia Tech and an MBA from Emory University’s Goizueta Business School. And weren’t you on also one of those special European study grants? Was it called the MacArthur grant? I’m trying to remember.
Sanjay Parekh: [00:04:50] No. It was actually the Marshall Memorial Fellowship.
Michael Blake: [00:04:52] That’s what it is, okay.
Sanjay Parekh: [00:04:53] Yeah, yeah. So, that was in ’04, and it was a month-long trip. It’s a fantastic trip. They take Americans to Europe for a month, and Europeans come to the US for a month. And, really, it’s about building better transatlantic relations between. It’s really, kind of, a gift back to us. It’s from the German Marshall Fund of the United States. It’s a gift back to us from the people and government of Germany for the help that we gave them during the Marshall Plan post-World War 2.
Michael Blake: [00:05:17] I wonder if that program’s still going on today?
Sanjay Parekh: [00:05:20] It is, yeah.
Michael Blake: [00:05:21] Okay.
Sanjay Parekh: [00:05:21] And it’s still a pretty strong program because it’s an important thing. I think between Europeans and Americans, we need to understand each other better.
Michael Blake: [00:05:28] More than ever today, right?
Sanjay Parekh: [00:05:30] Yeah. And you realize as you travel that Europeans are different, right? You’ve got the Eastern European, versus Western, versus Southern. It’s all very different in their mentality. I had a very different experience based on the places I went to.
Michael Blake: [00:05:44] Yeah. As you know, I lived in Eastern Europe for a number of years.
Sanjay Parekh: [00:05:47] Yeah.
Michael Blake: [00:05:47] And that kind of experience does change you, I think.
Sanjay Parekh: [00:05:51] Yeah, absolutely.
Michael Blake: [00:05:52] And for me, that kind of experience led me to look at kind of what is the other person thinking.
Sanjay Parekh: [00:05:59] Right.
Michael Blake: [00:05:59] Not just sort of have my mouth open, which is what I normally would have done before I went over there. But instead, what is the other person’s viewpoint. And the best way to do that is to actually kind of be in that room, right.
Sanjay Parekh: [00:06:10] Right, exactly. And be receptive to the feedback and their perspective of what you’re doing. Like, we got railed on. I mean, if you can imagine 2004, and the things that we were doing, and what was going on in the world, we got kind of blamed for a bunch of stuff that we didn’t necessarily agree with, and because our country and our government was doing those things. And so, it was hard.
Michael Blake: [00:06:30] Yeah.
Sanjay Parekh: [00:06:30] I will say when we went to Poland, that was a nice respite from all of that because those Poles, they love us.
Michael Blake: [00:06:37] They do. They do. I’ve been to Poland a little bit. And you’re absolutely right. They roll out the red carpet.
Sanjay Parekh: [00:06:42] That is a great country for Americans. I really love my time there.
Michael Blake: [00:06:47] So, let’s jump in. So, we were talking, and I was talking in the intro about this advent of co-working, and accelerators, and incubators. And so, Prototype Prime was not the first in by any stretch of the imagination.
Sanjay Parekh: [00:07:05] Absolutely not, yeah.
Michael Blake: [00:07:05] So, you saw all these other co-working spaces, all these other — I’m just going to call them spaces because it just takes too long to go slash, slash, slash.
Sanjay Parekh: [00:07:15] Right.
Michael Blake: [00:07:16] Right. All these spaces, what made you think that we needed frankly another one? What’s the differentiator? What was the market need?
Sanjay Parekh: [00:07:23] Yeah. Well, so, for me, I definitely saw a need on the northern arc of Atlanta. There’s a lot of stuff going on inside the city, inside the perimeter, but not as much around the kind of northern arc. But honestly, I was not really looking to start one of these. I was on a panel that ATDC was doing probably about three years ago now.
Michael Blake: [00:07:43] That’s the Advanced Technology Development Center at Georgia Tech.
Sanjay Parekh: [00:07:46] Right. And our mutual friend, Jen Bennett, was running it then. She was GM. And they’d been asked by the City of Peachtree Corners to come up and do a panel to, kind of, figure out the appetite of doing an incubator there. And Jen was like, “I know you live up that way. Would you mind doing this?” And as most things, when somebody asks me to come and speak, I’m always happy to do it, with the caveat that they should know that, look, I’m going to tell you things that you’re probably not going to agree with or be happy about me saying, but it’s because that’s what I believe. You don’t have to listen to what I say. You don’t have to do what I have to say. It’s just that’s what I believe.
Sanjay Parekh: [00:08:21] And so, I did exactly that on this panel. And then, afterwards — and I laid it out. I told them like, “These are the things that are wrong here, and these are the things that you need to fix to make this all work.” The mayor’s wife, Debbie Mason, came up to me and said, “I love what you had to say. Let me introduce you to the Mayor.” Introduced to Mike Mason, who is still currently the mayor of Peachtree Corners. And we started this series of breakfast, and it was really just me unloading on him all the ideas that I had that he should go do.
Michael Blake: [00:08:48] That sounds like your dream conversation.
Sanjay Parekh: [00:08:50] Absolutely. Like, “Let me tell you everything you should do, and I’m not going to do any of it. You execute it, and I’m going to just cheer from the sidelines.” But by the end of that, he was basically going, he’s like, “Well, obviously, I want you.” And it wasn’t obvious to me. “Obviously, I want you to come in, and help with this thing, and help start it up.” And so, I actually have never told him yes. I told him no a bunch. I even went to his house and told him no because I was busy at Georgia Tech at that point. And somehow, still, I ended up managing to be involved with this thing and helping found it.
Sanjay Parekh: [00:09:21] So, that’s how that whole thing happened. And I’ll tell you, it’s been a great experience. The city — it’s a non-profit. Prototype Prime is a nonprofit, standalone. The city funds it. So, funds the budget every year. And they let me do a lot of crazy things. I believe a few things strongly about Atlanta that we’ve got great art, great music, great film, great startups, great corporates, great non-profits, but these things don’t talk to one another.
Sanjay Parekh: [00:09:44] And I think that’s a challenge in almost every city out there where you have got these great silos of stuff, but they don’t cross-pollinate. And so, if anybody is out there in another city, if you’re thinking about what you can do better for your city, it’s trying to figure out ways for that to happen, that cross-pollination happen.
Sanjay Parekh: [00:10:00] So, one of the things that I did is I engaged with Atlanta artist to come and do artwork on the walls, right. So, when we started, it was a depressing building. It was white walls everywhere, very echoey, nobody was there. And now, there’s a lot of artwork. People walk in and they feel the energy. They feel the vibe of the place. And it’s been great for us. That’s not the right answer for every place, but it was the right answer for us.
Michael Blake: [00:10:23] So, when you were telling the mayor of Prototype Prime and-
Sanjay Parekh: [00:10:28] Peachtree Corners.
Michael Blake: [00:10:30] Sorry, Peachtree Corners, what they needed to fix what, were some of the top three or four things you thought needed to be fixed and done differently?
Sanjay Parekh: [00:10:39] Yeah. One of my top things was, and still is, is transportation. So, we’re in Gwinnett County. We have MARTA. The closest MARTA stop is Doraville, which is maybe a 10 or 12-minute ride.
Michael Blake: [00:10:52] It’s closer to me in Chamblee than it is to you in Peachtree Corners.
Sanjay Parekh: [00:10:55] Right, exactly. Now here’s the thing. So, there is a Gwinnett County bus, that is in Tech Park, that will take you to Marta. So, I said it’s a 10 to 12-minute ride by car. It will take you over an hour on that bus.
Michael Blake: [00:11:07] And you just had a referendum, unfortunately, on joining MARTA. And it was surprisingly strongly defeated actually.
Sanjay Parekh: [00:11:15] Yeah. There’s a lot of discussion about that, and why that happened, and the timing of it, and all these kinds of things but-
Michael Blake: [00:11:20] Read the editorials in ajc.com for that.
Sanjay Parekh: [00:11:23] Right, exactly. But I think that will eventually change down the line because the makeup of Gwinnett County is changing. And it’s the largest county in the Metro area, and there’s so many jobs, there’s so many people commuting in and out of that county that if we’re going to actually fix and address the transportation issues across Metro Atlanta, it’s got to involve Gwinnett County and be a part of that puzzle.
Sanjay Parekh: [00:11:42] So, that was one of the major things that I told them that needs to be it. But the other parts were we’re really kind of being engaged with the startups and really helping out in a lot of stuff. So, one of the things that I asked them to do is something that passed in the City of Atlanta where we did this thing, or the City of Atlanta did this thing where the business licenses for early stage startups are waived for the first couple of years. And so, that’s an ordinance in the City of Atlanta.
Sanjay Parekh: [00:12:11] I think it’s absolutely great. I think all of the cities and municipalities in Metro Atlanta should pass the same exact thing. I asked the Mayor and the City Council of Peachtree Corners to pass that. They basically took the text of the City of Atlanta ordinance and passed it as well.
Sanjay Parekh: [00:12:24] So, that was one of those things like, okay, I understand you’re going to do this, and you’re going to put money behind it, but you’ve got to show more of that support than just, “Hey, we set up this thing, start companies, and have them be here,” right. It’s got to be that whole messaging. And a couple hundred dollars a year is really not going to change the calculus of a startup failing or succeeding, but it sends the message.
Sanjay Parekh: [00:12:46] And so, right along with that, having City Council folks and the Mayor in the space, around the space, just around, even if they’re not meeting with teams, it’s important because it sends that message that this is something that they care about, and this is something that they support.
Michael Blake: [00:13:01] Now, you mentioned the geography. And geography is important everywhere. But Atlanta has a strange geography. There’s this emotional barrier of our Ring Road 285.
Sanjay Parekh: [00:13:11] Right.
Michael Blake: [00:13:11] You feel like you need a passport to kind of cross over. I sold my company and joined a firm that’s up in Alpharetta. So, I live inside the perimeter now. I occasionally commute outside the perimeter. And the thing you don’t realize until you do it, and you probably do know this, I’m sure you know this, is that it’s actually very different communities. Like if I go to startup events in Buckhead, Midtown, the usual suspects, you know most of the people in the room.
Sanjay Parekh: [00:13:39] Yeah.
Michael Blake: [00:13:39] Alpharetta, I know two people in a room full of a hundred. And until you do that, you don’t realize how different those communities are, and how important that geographic segmentation is.
Sanjay Parekh: [00:13:51] Yeah. And that kind of goes back to that same idea of we need these things to cross-pollinate, right. As a metro city, we’re not going to continue to improve our startup community unless those communities are cross-pollinating, right. I mean, we should be able to go into an event in Alpharetta or wherever and know more than two people. That’s not good.
Michael Blake: [00:14:12] Yeah. And yeah, that’s right. So, you’re trying to fix this a little bit now with Prototype Prime. Other than the geographic location and the message you’re trying to send, what are some of the other differentiating features in your mind?
Sanjay Parekh: [00:14:26] Yeah. So, number one, it’s a nonprofit. So, my view on this was this is not something that is associated with me as a name. This is something that I’m building to be a long-term asset in the community. So, I often talk about as of this year, the 81-year plan. How do we get to the year 2100 with what we’re doing right now? I don’t really care about the next couple of years. I really care about Prototype Prime being around at the turn of the next century and still helping people.
Sanjay Parekh: [00:14:57] So, that is my focus. I have a concern about other facilities in and around town, and even across the US that are these for-profit places. I don’t really know that they’re going to be around at the turn of the next century. Is Prototype Prime going to be? I don’t know. I hope so. That’s what we’ve been building for. And that’s the message that I keep sending that we’re focused on the year 2100. So, we’re trying to make decisions that are based on the long-term, not on the short-term with the space.
Michael Blake: [00:15:25] And how do those kinds of decisions differ? How would a decision maybe you’re faced with, if you’re thinking of a five-year horizon versus a 2100 horizon, what’s the difference?
Sanjay Parekh: [00:15:38] Yeah. So, I think part of it is being a nonprofit. That builds in that idea that this is going to pass from hand to hand. It’s not going to start with a founder. And then, when they’re tired of it, it’s going to shut down. This is definitely going to live on.
Sanjay Parekh: [00:15:51] The other part of it is some of the moves that we’ve made. So, recently, we got granted $1.8 million by the Federal Government to buy the building that we’re in. We were leasing it from a landlord, which was not the city. We, now, own that building completely. So, 25,000 square feet owned by the organization. So, it has a home. It’s not going to go away from that home, or maybe down the road, it well when it sells that building and moves into another building.
Sanjay Parekh: [00:16:15] Alongside of that, we’ve been forging these partnerships. So, we’re building this advanced autonomous test track. So, a vehicle test track, 1.4-mile loop inside of Tech Park, where vehicle companies can come and test out their vehicles on this dedicated track that is dedicated, but it still interacts with the public. So, there’s that interaction. Alongside of that, Sprint is coming in and doing a 5G deployment inside of Tech Park, starting from our building. So, it’s called Curiosity Lab. And that’s an opportunity for this next stage of startups to be able to use next-generation communication technologies.
Sanjay Parekh: [00:16:50] So, it’s trying to build in all of these things that really create an excitement. And the fact that we’re in Tech Park, which used to be the hotbed of telecom, kind of, innovation in Atlanta that’s kind of gone away, but we’re trying to bring it all back. So, it’s not just telecom. It’s a bunch of other things. It’s vehicles, it’s software startups, it’s all of these things. And hopefully, they’ll graduate from our place, and then move close by, and so we can still be involved with them.
Michael Blake: [00:17:15] So, a common theme that I can hear from, at least, the Sprint and the car track exercise is that those are prototyping resources.
Sanjay Parekh: [00:17:23] Yeah. Essentially, yeah.
Michael Blake: [00:17:24] What do you know, Prototype Prime, prototyping resource.
Sanjay Parekh: [00:17:27] Right, Prime being the first place that you do your prototype, right. That’s your call.
Michael Blake: [00:17:30] Is that deliberate? Are there other prototyping resources as well, maker spaces, things of that nature?
Sanjay Parekh: [00:17:35] Yeah, exactly. So, we’re one of only two spaces – the other one being a TDC in Atlanta – that has a design and development lab. So, we’ve got a lab. We’ve got a handful of teams that use that lab. One of them has grown tremendously with us. Trellis started with two people. They’re now, I think, 16. And they build all their products in our lab. So, we’ve got 3D printers. We’ve got soldering stations. I mean, you name it, we’ve got it.
Michael Blake: [00:18:01] So, I want to come back to this 2100 description because I think that’s fascinating. So, I’m going off script a little bit. The typical space model is you help a company for some period of time.
Sanjay Parekh: [00:18:19] Yeah.
Michael Blake: [00:18:20] And then they “graduate”, right?
Sanjay Parekh: [00:18:22] Right.
Michael Blake: [00:18:22] You slash encourage them to leave, kick them out, whatever.
Sanjay Parekh: [00:18:25] Yeah, yeah.
Michael Blake: [00:18:27] Is the fact that you’re, kind of, designed for longevity from day one, does that mean that that part of the model changes too, or maybe you’d love it if a company stayed there for 10 years?
Sanjay Parekh: [00:18:37] Yeah. So, no. We don’t want companies to stay there for long term.
Michael Blake: [00:18:41] Okay.
Sanjay Parekh: [00:18:41] Really, the goal is to help them early, early stage when they’re just fledgling companies, get them to the point where they’re starting to scale. So, our three tag lines are dream it, build it, scale it. That’s what we help entrepreneurs do. So, dream it when they’re just starting out, figuring out what to do. Build it when they’re starting to build their company, and then when they’re starting to scale. But as they start to scale, that’s the time for them to get pushed out.
Michael Blake: [00:19:01] Okay.
Sanjay Parekh: [00:19:02] So, we actually had one team, that was our second team in. So, Trellis was our first team in, grew from two people to 16 now. Our second team in site grew from a single founder to, now, I think, it’s about 18 or 20 people. And they were actually getting to the size where I was starting to talk to them about it’s going to be time to leave soon. And the founder said, “Yeah, we’re not going to leave.” And I said, “”No, no. I’m not kidding. I’m serious that you guys are just getting too big.” And this was only when we had the downstairs. And so, they said, “No. We like it here too much. We don’t want to leave.”
Sanjay Parekh: [00:19:35] And so, with the upstairs, City Hall used to upstairs, and they left, that opened up the possibility for us to take over the upstairs. So, we ended up taking a third of the space upstairs dedicating it to them. And so, we have a different relationship with them now. But I think that was a one-off. I don’t think we’re going to do that again. When they leave in a couple of years, that space is probably going to get reclaimed and be just regular startup space that people are coming in, there for a little while.
Sanjay Parekh: [00:20:01] My plan has always been three to four years, at the most, that we would hold onto a team. We want teams to graduate from us, and then move on to the Atlanta Tech Village, Switch Yard, Flat Iron, Strongbox, Atlanta Tech Park — Park Tech — Tech Park Atlanta. Tech Park Atlanta.
Michael Blake: [00:20:20] Yeah.
Sanjay Parekh: [00:20:20] Yeah. I always get that confused, 22TechPark. Like any of those places. The Alpharetta. Any of those places. We really view ourselves as the early, early stage. And we’re going to help the companies get their feet under them and get going, so that they can graduate to these other places. And the other places don’t have to worry about the viability of those teams. They know that they’re going to come in. They know what they’re doing. They’re going to continue to grow. And they’ll probably, at some point, outgrow those spaces as well. But I think that’s good.
Sanjay Parekh: [00:20:49] And the reason why we view ourselves that way is that, again, to that 2100 view, this was an area that I saw was lacking, and all of those places that I mentioned are run by friends of mine. And I didn’t ever want to compete with friends of mine because we have so many challenges and every city has challenges. Like why try to compete over the same things over and over again. Figure out something new and something different. And that’s what we decided to do with Prototype Prime.
Michael Blake: [00:21:16] In that respect, it’s like Startup Riot and Startup Lounge all over again, right?
Sanjay Parekh: [00:21:19] Yeah. No, exactly.
Michael Blake: [00:21:19] We need to be careful that we weren’t marginalizing somebody else inadvertently.
Sanjay Parekh: [00:21:24] Right.
Michael Blake: [00:21:24] Because the goal for both of our organizations was put ourselves out of business-
Sanjay Parekh: [00:21:28] Yeah.
Michael Blake: [00:21:28] … which, thankfully, we did.
Sanjay Parekh: [00:21:29] Yeah. Exactly, yeah.
Michael Blake: [00:21:30] So-
Sanjay Parekh: [00:21:30] Although everybody still keeps telling me that they wish that Startup Riot would come back. And I tell them that that boat has sailed at this point.
Michael Blake: [00:21:37] I have to say the same thing about Startup Lounge.
Sanjay Parekh: [00:21:39] Yeah.
Michael Blake: [00:21:39] But everybody wishes it would come back, but they also wished that I would do it. And that’s not happening.
Sanjay Parekh: [00:21:44] Yeah. I say the same thing. I’m like, “Yeah, if you want to do it, I’m happy to give you all the stuff. I got stickers still. I would cheer you on.”
Michael Blake: [00:21:52] We’ll give you the nuclear launch codes to the website, everything.
Sanjay Parekh: [00:21:55] Exactly.
Michael Blake: [00:21:55] No, man, I got too much stuff going on.
Sanjay Parekh: [00:21:56] No, no, no, I’m too busy. I e-mailed 3000 people saying, “Who wants take it over?”
Michael Blake: [00:22:01] I remember that.
Sanjay Parekh: [00:22:01] Crickets.
Michael Blake: [00:22:03] I remember that. And that’s the evolution of the market.
Sanjay Parekh: [00:22:08] It is. And truth to be told, like you know this as well, events are hard to do. And I don’t blame anybody for not taking it up because it’s a painful exercise, and I don’t wish that on anybody.
Michael Blake: [00:22:19] Yeah. I mean, you got to love it. And neither of us got paid for it either.
Sanjay Parekh: [00:22:24] No, exactly. Yeah. Labor of love for both of them.
Michael Blake: [00:22:26] Definitely. So, where does Prototype Prime fit, in your mind? It doesn’t sound like it’s really co-working space. Is it an accelerator? Is it an incubator? Is it a hybrid? Is it something else? Maybe the distinction is not meaningful. What bucket would you put it into?
Sanjay Parekh: [00:22:45] So, we call ourselves an incubator. So, to me, an incubator is a place that helps companies like this but doesn’t put money in. To me, an accelerator is a place where you have a structured program, as well as money that’s going in as an investment.
Michael Blake: [00:22:59] Okay. So, GT Flashpoint, for example, was an accelerator.
Sanjay Parekh: [00:23:03] That’s an accelerator.
Michael Blake: [00:23:04] Because they had money in the wings kind of for-
Sanjay Parekh: [00:23:05] Absolutely, absolutely.
Michael Blake: [00:23:06] Okay.
Sanjay Parekh: [00:23:06] Yeah. And it might not be money that’s directly from the program, but it might be a side fund, which is what Flashpoint was. And I don’t know if that’s changed now. But Atlanta Tech Village, to me, is more of a co-working space than it is an incubator-
Michael Blake: [00:23:21] I agree.
Sanjay Parekh: [00:23:22] … or an accelerator. So, for us, an incubator is that we’re still pretty heavily involved with teams. So, we’re around, we’re meeting with teams. I was just there yesterday chitchatting with a handful of teams, talking about their problems, giving them ideas, things like that; whereas, in a co-working space you don’t necessarily have that.
Sanjay Parekh: [00:23:39] And all of these though, you do have the serendipity, the casual kind of interaction that ends up happening. You’re running into folks and you might find the aha solution to whatever problem you’ve been struggling with. So, that’s, I think, the benefit of doing any one of these. But as an incubator, I think we’re a little bit different. We don’t have a deadline that says, “You’ve got to get out by then.”
Michael Blake: [00:24:00] Right, okay. So, what kinds of companies do you think incubator — I’ll focus on incubator and accelerators. What kinds of companies you think do best in those kinds of environments?
Sanjay Parekh: [00:24:13] Yeah. So, for an accelerator, they usually have a target kind of market niche that they can help with. So, I would focus on that. Incubators are, often, the same way as well. So, we are a hardware and software incubator. We are not a lifestyle business incubator or anything else like that. So, if you’re starting up dry cleaning stores or barbershop, you should not come to Prototype Prime. We are not going to be able to help you. And it’s not that we don’t love you, it’s just that we don’t have the skills to help in that environment.
Michael Blake: [00:24:38] That’s not your thing.
Sanjay Parekh: [00:24:39] Yeah.
Michael Blake: [00:24:39] You don’t know anything about running a dry cleaning business.
Sanjay Parekh: [00:24:40] No, not at all. I have no idea. I don’t know the issues you’re going to face or anything else like that. Your best to go to a place where you’re served and helped by people that understand your space. So, that’s, I think, number one that you should think about.
Sanjay Parekh: [00:24:55] The other thing is that somebody that’s actually willing to be coachable and listen to feedback. All the feedback is not going to be dead-on accurate. You’ve got to figure out for yourself what’s right and wrong, but you’ve got to be, at least, open and willing to listen to it.
Sanjay Parekh: [00:25:10] And I’ll give you an example. I was interviewing an entrepreneur just not too long ago. So, we screen all the companies coming into Prototype Prime to make sure that, first of all, we’re a good fit for them, that we can help them with the things that they’re working on, but that they are also a good fit for us, that they’re going to be somebody that we want to have in the space, that makes sense, that we’re going to actually be able to help because they’re listening.
Sanjay Parekh: [00:25:31] This particular entrepreneur, I said something, they only had a handful of customers. and I said, “You know what? I think what you need to do is probably go out, and get some more customers first, and drive revenue before you start deciding to build custom products because I don’t know that you necessarily know what your customers want.” Well, this ticked off the entrepreneur, stood up halfway through the meeting. At that point, shook my hand, and said, “Well, thank you very much.” And stormed out of the meeting.
Sanjay Parekh: [00:25:56] That’s not the right personality. Even generally, if you’re gonna be an entrepreneur, you’ve got to have a thick skin. People are going to call your baby ugly. That’s just what it is. And so, you’ve got to have that conviction. You’ve got to have that understanding and that drive to be able to take it, and take that criticism, prove them wrong, but do it in a way that doesn’t burn bridges either. Like that entrepreneur, if he ever asked me for help, I’m going to be like, “Yeah, no.” Because I’m not going to introduce somebody like that to somebody I know and burn the bridge that I might have with them.
Michael Blake: [00:26:26] All right. I got to share this story with you.
Sanjay Parekh: [00:26:30] Yeah.
Michael Blake: [00:26:30] So, as you know, I’ve done office hours for a decade or so.
Sanjay Parekh: [00:26:34] Yeah, absolutely.
Michael Blake: [00:26:34] And years ago, a guy came and wanted my opinion on his business. In fact, I didn’t say it was even a baby, it’s more of like a wombat. I mean, they’re just so far off in left field. And he was upset, got up, left, and didn’t even paid his check. I wanted him to cover his check.
Sanjay Parekh: [00:26:54] Okay.
Michael Blake: [00:26:54] And then, about six months later, I got a handwritten note. And basically, he shut down his business. And he wrote me a note apologizing, had a $20 bill in it, cash, and said, “I’m so sorry. You were the one person who was honest with me. All my friends and family were cheerleading because they thought I was the supportive thing to do. They would have helped me more had they said my baby was really a wombat. And I wouldn’t waste all this time and money.” So, sometimes, you get that sort of delayed gratification, but for people that invest so much, it’s so hard for them to hear that.
Sanjay Parekh: [00:27:33] It is.
Michael Blake: [00:27:35] And maybe the first time somebody has ever said that to them.
Sanjay Parekh: [00:27:37] Right, absolutely. And I always try to be honest with entrepreneurs, and probably just like you, in a nice way.
Michael Blake: [00:27:43] Yeah.
Sanjay Parekh: [00:27:43] Right. We’re not going to do it ruthlessly, but-
Michael Blake: [00:27:46] We don’t go Simon Cowell on them.
Sanjay Parekh: [00:27:47] Exactly. But we try to do it in a way that is helpful to the entrepreneur because I agree with you. And this is why I always ask people when I do presentations or anything else, I want you to tell me what I did wrong. That’s all I care about. I don’t want to know how I did right because, obviously, I tried my best. I wouldn’t have come here and done anything if I wasn’t trying my best. So, I want you to tell me all the wrong things.
Sanjay Parekh: [00:28:10] And I think a lot of times, people need that permission from you to be able to tell you what you did wrong. But that’s generally what I do. That’s did on that panel for Peachtree Corners. I’m going to tell you what I think is wrong, like what you’re going to mess up on, and what you’re messing up on right now because that’s the only way to get better.
Michael Blake: [00:28:28] So, you’ve had a long entrepreneurial journey.
Sanjay Parekh: [00:28:32] I think you just called me old.
Michael Blake: [00:28:34] Nope. You called yourself old. You’ve had a long and storied entrepreneurial journey. And a lot of these places just did not exist back in ’07, ’08, and the ATL
Sanjay Parekh: [00:28:45] Yeah, yeah/
Michael Blake: [00:28:47] How would your journey have been different? Wouldn’t it have been different if there had been things like this available back when you were a pup?
Sanjay Parekh: [00:28:54] Yeah, I think it absolutely would’ve been different. I remember starting my first company. So, I came up with the idea for Digital Envoy in ’99, went full time in 2000. There, basically, was nobody as a mentor for me. There was nobody to learn from. Went to a few events that were technology-oriented around town, but they were basically wall-to-wall service providers just trying to sell me stuff. There was nobody trying to actually help.
Sanjay Parekh: [00:29:19] And so, I think, from kind of the capital of perspective, if there had been places like this, my costs would have been a lot less. I probably could have raised a lot less money, and been a lot more effective. But on the other side of it, I think I could have gotten to a point of solving things and getting the right answers quicker.
Sanjay Parekh: [00:29:39] I’ll give you an example. It’s kind of a minor example, but when we had our first office, me and my two co-founders, we’d never started a company before. This is the first -time starting a company. I was, at this point, 20 — having our first office, 25 years old, 26 years old, something like that. And a guy from the Better Business Bureau came in to sign us to operate. We’re like, “Oh, yeah. We’ll sign.” It was free. So, we’re like, “Yeah, sure. We can do that.” And so, he’s filling out the paperwork right there, and then he asked us – and we’d been in this office for a couple months at this point – “So, yeah. So, where’s your business license?” We’re like, “It must be in the mail. We haven’t got any yet. It’s in the mail. We’ll let you know that once we get it.”
Michael Blake: [00:30:19] Of course, you have business license
Sanjay Parekh: [00:30:21] Yeah. So, that very same day, our CFO ran to the City of Duluth and got our first business license because we didn’t know we needed one. Nobody tells you that. And look, it was a minor issue, even if we’d gotten caught and fined, it probably wouldn’t have been that outrageous. But, still, it’s those little things that just helped you along that process and speed you up in terms of making things happen that had we been in a space like that, we would have just not had to worry about some of those things. We wouldn’t have to worry about which accounting firm are we’re going to go with, or which law firm are we going to go with, or who do we use for X, Y, and Z, or how do we do benefits. Like all of that stuff would’ve been solved, and all that stuff is just the cruft garbage stuff that you have to do in starting a company, but it adds no value. It’s not the thing that you’re around for.
Michael Blake: [00:31:08] It’s like stock options valuations.
Sanjay Parekh: [00:31:09] Yeah. You’ve got to do it, but it doesn’t add any value.
Michael Blake: [00:31:15] No, it does not. I mean, it’s a distraction.
Sanjay Parekh: [00:31:17] It is, absolutely.
Michael Blake: [00:31:19] So, one last question. I know we got to get you out of here. I know you got some other stuff you got to do today, as you always do. But I want to ask you one other question, as a new — I don’t know that it’s a new concept but a new term called a colliding space. Have you heard that term before?
Sanjay Parekh: [00:31:33] I’ve heard that term people talk about. Yeah. Serendipity, collisions, and things like that. I don’t know exactly what a colliding space is and how that’s different from a co-working space, but I think all of us are essentially built for that.
Michael Blake: [00:31:47] Yeah.
Sanjay Parekh: [00:31:47] I was at Prototype Prime yesterday and randomly happened to see – you might know – CBQ, Charles Brian Quinn, with Greenzie, the robotic lawnmowing company.
Michael Blake: [00:31:56] I know of them, but don’t know him.
Sanjay Parekh: [00:31:58] Okay. So, CBQ has been around Atlanta for quite some time, and I was surprised to see him there. He was like, “Oh, yeah, we’re going to be doing some,” because we’ve got the autonomous advanced vehicle stuff. It’s like, “We’re going to be doing some autonomous lawn mowing alongside of all that.” I was like, “That’s kind of cool,” right.
Sanjay Parekh: [00:32:17] And having those random collisions. And then, I saw he was meeting with the Trellis team, which is monitoring water usage for farmers in their crop fields. And so, having those kind of serendipity, kind of collisions happening, I think, that’s a great thing. That’s a great thing for Atlanta. It’s a great thing for any city. And so, if governments are listening to this, anybody that’s in a municipality, if there’s one thing that you want to try to help do is create those collisions between people that are doing innovative stuff because you never know how they might be able to help one another.
Michael Blake: [00:32:49] So, we’re just about out of time, but we, obviously, can have a three-hour conversation on this, and then some. But if somebody wants to ask you a question, maybe follow up, can they reach out to you? And if so, how best can they contact you?
Sanjay Parekh: [00:33:02] Yeah. The best place always, for me, is on Twitter. So, I’m @Sanjay, that’s S-A-N-J-A-Y. I’m pretty responsive on Twitter. You can @ me, and my DMs are open, so you can private message me if it’s something you don’t want to plaster publicly on Twitter.
Michael Blake: [00:33:17] Okay. Well, very good. That’s going to wrap it up for today’s program. I’d like to thank Sanjay so much for joining us and sharing his expertise with us.
Michael Blake: [00:33:25] We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next business decision, you have clear decision when making it. If you enjoyed this podcast, please consider leaving a review through your favorite podcast aggregator. That helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor’s Brady Ware & Company. And this has been the Decision Vision podcast.
