Welcome to the “New Tech Cities” series at OSTraining.
In this series we’re talking about cities that were rundown but are re-inventing themselves, as using technology to do so. We’re trying to get to the bottom of the questions, “What does it take to turn around a struggling city?” and “Can technology help?”
Our initial focus is on the city of Chattanooga, Tennessee. Scroll to the bottom of the post to see links to all the articles in this series.
This week we’re talking with Jack Studer, one of the leading figures behind the Lamp Post Group, a venture incubator in Chattanooga.
Hi. Who are you and what do you do?
I’m Jack Studer and I am a founding partner at the Lamp Post Group and the co-founder of a network technology startup.
You are revered within the tech community in Chattanooga – rather like The Godfather of Start-Ups. What path did you take to earn such respect?
Revered? I need to hang out with the folks you’re hanging out with. While I definitely wouldn’t say that I have reached Godfather status yet, over the course of my career I have had the opportunity to work with some amazing people and help guide some really talented entrepreneurs.
I think earnestly listening and helping these startup founders realize their vision is the most important piece of earning their respect. You have to remember, many (if not all) of these founders have decided to launch their own companies in an unsure economy because they are big thinkers and have an idea of how to make things better. It’s our job at Lamp Post to provide them the resources and guidance to help them do it, not to supplant their vision.
Why did you choose Lamp Post as the name of your company?
I actually had very little to do with the name Lamp Post Group. It is a pop-culture reference to Lost that one of the founding partners (Allan Davis) really appreciated, which is in turn a reference to C.S. Lewis’s Chronicles of Narnia.
The Lamp Post is where you meet to start out on your journey. To me, it’s also indicative of a place that provides a light on what could be an obscure path at times. However you want to think of Lamp Post, there’s probably an element of truth there.
Your Facebook page says, “Lamp Post is a venture incubator located in Chattanooga, TN.” What is a venture incubator?
What is really special about Lamp Post Group is the ‘incubator’ piece. We aren’t just offering you a check, a few introductions, and then showing you the door. For us, we are really genuinely bringing decades of business experience and expertise to the table, as well as the mentorship necessary when you’re working with employees and co-founders for the first time. We’ve been there, so most founders find that helpful.
A group of young, passionate entrepreneurs coming to you for advice … and money. Once you get past their enthusiasm, how long does it take you to discern whether they have a viable chance for success?
Actually, I would push back on the money bit. While that is what we are ultimately providing to a lot of entrepreneurs, raising capital is actually a lot easier today than it used to be. There are so many venture capital (VC) firms and angel investors out there that it isn’t unthinkable to raise $2-3 million on your first go-round. That is where the best VC firms have to distinguish themselves, because ultimately we are offering a service like any other company and we have to establish a competitive advantage – and checkbook size isn’t really a differentiator anymore. For us, that’s the incubation model I mentioned.
That said, I think we focus on team dynamics more than most VC firms do. I think most firms have a sort of rubric – Are you capable of scaling rapidly? Do you have an experienced CTO? Are you working with flexible technologies with available developers in an expanding market?
We have the luxury of really getting to know the teams we invest in and seeing if they have what it takes to succeed. For us, it’s less about the idea and more about who is executing it. You can see that pretty quickly.
Have you ever met with two divergent groups who each had half of a great idea … and connected them? That “sum is greater than the parts” concept?
One of the tertiary benefits to the “Group” part of LPG is that we tend to have a fair amount of talent recycle. Plenty of great ideas don’t work. Sometimes great ideas just aren’t great companies. Sometimes competition beats you to the finish line. Sometimes, founders burn out. Sometimes, legal battles drown a company before it gets off the ground. Regardless of why things fail, failing inside of a group can actually be a boon. Absorption of talent is much easier than creating or recruiting talent.
Let’s say several brilliant, industrious individuals come to you with a concept. You love the idea. You believe in them. Do you say, “Wow! Great idea! Here’s a million bucks! Keep in touch! Buh-bye!”
I answered quite a bit of this in the previous question but I will add a couple short thoughts. I think several VC firms in the Valley tend to sit comfortably on their Sand Hill Road perch and never really come off. So, for a lot of startups, there is sort of an impersonal vibe that you get from Silicon Valley.
For us, we grow as close as possible to our portfolio companies without interfering with their vision or stifling their creativity. The personal relationships and bonds formed over starting a business are pretty strong. It also helps that many of our startups are incubated in our building, so we see them every day.
Do you buy their ideas and hire them to “make it happen”?
We aren’t buying ideas. We are funding teams. That’s a world of difference. In most cases (with some special exceptions), Lamp Post will retain a minority stake in most of these startups in the long run. These companies belong to the founders – and, eventually, employees – we just provide the fuel to make the engine go.
Who is NOT ready to make an appointment with you to discuss their ideas and hopes?
I try not to think of things like that. Once you walk through the doors here, I think we try to analyze any potential investment with a clean slate.
That said, folks who really knock it out of the park probably spend a lot of time understanding their own business, challenges and advantages. The teams we want to invest in are passionate about their ideas and products, that shows in prep and breadth of knowledge. Those folks live and breathe this stuff.
Who do you hope will walk into your office one of these days?
We really do not have a template here at Lamp Post. If you’re asking questions like “Am I ready?” then, of course, you’re not ready.
Chattanooga appears to have rebuilt itself from a rather run-down city into one that has the potential to be a significant center for those in technical industries. What changes have you experienced?
The Chattanooga Story is probably one of the most compelling narratives and a huge reason why Lamp Post Group is here. What we’ve managed to accomplish in the last ten years – to say nothing of the last six decades – is nothing short of remarkable. I grew up here and I wasn’t sure that I would come back. Now, I can’t really think of being anywhere else.
Chattanooga is the only city in the Southeast that really is in the running to build the first world-class tech hub in this area. There are a few standouts with great communities in Atlanta, Louisville or Kansas City, but I think the work that Chattanooga has done recently has set it apart from the rest of the region. We truly are a Goldilocks city. Big enough to get stuff done, but not so big that we trip over ourselves.
I think just seeing the tech community grow and having dozens of startups in a city is a huge change from where we were a decade ago. We have a lively downtown with new developments and an active community that is really driving our city forward in a way that has garnered a lot of national attention. That’s new but certainly not an accident.
Tell us about one of your success stories, please.
Lamp Post was literally born out of the success of Access America Transport. With our current portfolio, including:
it’s not really fair to pick favorites.
All of our companies that create healthy cultures and employ smart, energetic individuals count as success for us. Because we don’t have outside investors, we aren’t beholden to exacting definitions of success: rates of return and such nonsense.
We value the community we are part of, so that gets to be part of our measures of success, just as much as financial return.
What’s next for Chattanooga and what would it take hit those goals?
I think we’re on the right track to build a world-class technology hub in Chattanooga. I think we need to invest in the right infrastructure – world-class education at every level, community pipelines from here to New York City and Silicon Valley and a robust talent pool that can support our startups – before we can get there.
The good news is that the work that Lamp Post Group is doing each and every day moves us closer to that goal. I think it’s only a matter of a year or two before we see our first big startup success come out of Chattanooga: something on par with an Instagram or a Dropbox. We have multiple companies that are on that kind of trajectory already.
How do you hope to contribute to that achievement?
I am working with a team of amazing people to launch a technology startup that is really bringing something new to the hardware space. I think that’s exciting and probably something that will come out of left field for a lot of industry analysts and insiders.
For me, I’m focused on building this company and really knocking it out of the park. We built Lamp Post to be the best place in the world to start a company. Taking advantage of those resources should give us a really unfair advantage and I LOVE unfair advantages.