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Why 25- to 34-year-olds matter in Atlanta

Viewpoint by Alan Taetle

01/22/2010

ATLANTA, GA (Atlanta Business Chronicle) -- 2009 was an incredibly difficult year for early-stage technology companies throughout the country.

In an environment with shrinking IT budgets, adoption rates for new and innovative corporate IT projects remain low.

To sell in this environment, the ROI on new technology must be unusually high.

Specifically, careful focus on a clearly articulated near-term ROI — one year payback or less — has been incredibly important for startups that have been selling into IT departments over the past year.

The contraction of angel and venture capital made it even more difficult for companies based in Atlanta.

Only a handful of angel and venture groups, including Noro-Moseley, remain active in the Atlanta market — down from several dozen a decade ago.

Being a part of the Metro Atlanta Chamber Technology Task Force has offered me an opportunity to look at our city across several dimensions. Where are our resources the strongest, and how well are they being leveraged in this difficult environment?

One of the true bright spots for the city is an incredible resource that we have only begun to tap into.

Consider this: 25- to 34-year-olds view Atlanta as one of the most desirable places to live. The group works together, plays together and generally has a high level of ambition.

Just as importantly, the 25- to 34-year-old group thinks more naturally about leveraging social media in novel ways to acquire and communicate.

They can easily translate their social skills into the business environment — turning social media skills into customer communications skills.

This group matches up perfectly with companies that are pursuing relatively new business models on the Internet, specifically those relating to the small- and midsized business (SMB) market.

Let’s take two Atlanta-based companies, Vocalocity, a provider of voice over Internet protocol (VoIP) communication services for small businesses with fewer than 20 employees, and Pardot, a provider of on-demand interactive marketing solutions. I know both of these companies well and each of them harnesses the power of the 25- to 34-year-olds.

Both tap heavily into Atlanta’s pool of younger, energetic professionals to generate online leads through novel techniques and social media.

These leads are scored and sent over to a sales group — populated generally by a similar profile of talented young people.

Recurring revenue deals are closed on the phone and billed to a credit card. Using this well-educated entry-level workforce to sign up customers for recurring services delivers high value customers and startlingly low customer acquisition costs.

These two companies serve as valuable examples of using the 25- to 34-year-olds demographic strength and area of passion.

This influx of talented, young, energetic workers should continue to reap rewards for our city, given that the keys to success for any business (and particularly a new business) are quality of service, differentiation, and a willingness to explore innovative methods to market new products and win new customers.

In my view, the 25- to 34-year-olds group is poised to help strengthen our local technology landscape.

Taetle joined Noro-Moseley Partners in 1998 and has focused his investment activities on software and information technology companies.