Editor’s note: Executive Q&As have been a regular feature in Local Tech Wire since LTW was launched one year ago. Today and tomorrow, LTW presents a candid, insightful conversation with one of the technology leaders in the Southeast — John Yates.If Atlanta’s technology community has a figure head, it’s most likely John Yates, head of the Technology Group at Morris, Manning & Martin.

Aside from being quoted on a regular basis in most of the local business publications, Yates sits on the advisory boards of Air2Web, Seagull Software, Stonesoft, and MindIQ.

Yates also is a director of the Metro Atlanta Chamber of Commerce, president of the Technology Executives Roundtable and the first recipient of the Technology Association of Georgia’s “Leader of Influence Award.”

Last year, The United Way of Metropolitan Atlanta created the “John Yates Award for Community Leadership”, recognizing Yates’ efforts on behalf of the community as co-chair of the United Way’s Atlanta Technology Initiative. Yates also is finding time to co-author a book, “The Art of Business Friendship,” due this fall from Longstreet Press.

Local Tech Wire recently convinced Yates to take some time from his tremendously busy schedule to talk not only about the state of technology and venture financing but also about himself and his family.

What were the biggest mistakes made during Atlanta’s technology boom?

Capital flowed to many inexperienced and young entrepreneurs who could not execute their business plans. There was a frenzy of investing in anything Internet-related. Some businesses that should not have been funded, were funded. As a result, the technology industry as a whole has been coming off of an inflated high, making the downturn feel that much more painful.

What were the most surprising things about the companies that made it?

Some really great ideas never made it, but some simple ideas did. The ones that made it were often those that could execute their business plans and position themselves in the market.

What was the most surprising thing about the companies that didn’t?

A number of companies that failed had strong management teams, smart investors, and innovative products. That just proves how hard it is to build a successful company from the ground up.

What do you know now that you wished you knew then?

Just how deep the market would fall.

Is there anything about Atlanta’s tech community that didn’t get told that you think deserves to?

The rest of the nation, especially Silicon Valley and New York, often looks down on Atlanta and the Southeast, even though we’ve had a number of successes by very smart entrepreneurs. Many of our success stories have not received as much attention as the failures that were heavily hyped.

How has the deal flow changed? Business plans per week now vs. Feb. 2000?

It’s definitely slowed. New opportunities are arising in companies that have been around for a while. There are fewer new startups; however, these new companies are of a higher quality.

What types of companies are you hearing about now as opposed to in early 2000?

Companies that are proving the value of their products through sales to real customers.

What technologies are getting funding?

Those technology companies that are selling their products to referenceable customers and are generating real revenue and cash flow. Most “pure” technologies are not being funded. However, hot areas of technology include data integration, security and infrastructure.

Who has the advantage right now, the companies who need money or the venture capitalists who need to invest to show return to their investors?

Tricky question. If you are a small company that has no revenue or customers, your chances of receiving funding are limited — unless you have an experienced management team. However, if your company has strong sales prospects, customers, and seasoned executives, you have more options for your capital needs. In many cases, the company has the upper hand since the pool of “fundable” companies is small. Thus, more investors might compete to invest in the same company. In fact, we have seen investors cold calling these already successful companies attempting to “sell” their investment.

What’s the state of tech in Atlanta, Georgia and the SE from your perspective?

In this downturn, most tech companies are building big pipelines but not closing sales. However, we are optimistic for some positive growth for 2003.

When will the tight VC markets loosen up?

There continues to be plenty of capital on the sidelines looking for the right deals. These deals tend to be growth capital opportunities in already successful companies.

What do you tell clients and entrepreneurs looking for cash?

  • Assemble a strong team
  • Have a sound, complete product that solves a problem
  • Have a strong sales strategy
  • Have technology that has proprietary elements
  • Have existing, paying, referenceable customers

.You mentioned that some great ideas never made it, what were some of those great ideas?

There were all sorts of great ideas that didn’t make it. Ricochet (that allowed wireless Internet access nationwide!) was the best. It was a great idea that never made it — and I was one of the most avid users. I’m still crying.

The companies with strong leaders and good backing that didn’t make it, why do you think they didn’t succeed?

There are hundreds of reasons. However, some common themes included slow market adoption, poor product positioning and messaging, and the inability to raise another round of capital to stay alive.

You said the deal flow has slowed but that there are still start-ups, they’re just higher quality. What are some of the start-ups that intrigue you?

enLeague, nuBridges, Lancope and Flamenco.

Wednesday: Yates talks about his personal side and the book he’s writing.