I can’t believe I’m hunting $1 billion companies in Birmingham, Alabama

Malcolm McDonald
Malcolm McDonald

Today’s guest columnist is Malcolm McDonald.

“If you want a career in tech, you really need to move to the coast.”

The words rang in my head. “He would know.” I thought. Nestled in the sunny hills of San Francisco, my childhood friend was a product leader at Netflix.

He was sharing the story of how he got to Netflix, one of the biggest tech companies ever built. The undisputed path to success in tech he told me, was Silicon Valley, the strip of land in central California made famous by silicon chip companies in the 50’s and 60’s. It’s the birthplace of modern technology, synonymous with hyper-growth, crazy dreams, and a funny little thing called unicorns.

With three princesses ruling our home, my house was covered in unicorns, but not the kind I was hunting for. A “unicorn” in startup land is a company that’s valued at $1 Billion. Which apparently for Birmingham, was about as rare as the mythical creatures they are named after.

While the conversation was a punch to my Birmingham-loving gut, it wasn’t a new perspective.

My unicorn hunting began 5 years earlier on a friend’s living room floor.

Sitting across from me was a Russian tech founder, barefoot and making his way through a plate of steak and veggies. He stretched his hand across the coffee table. “Sell me this pen.”

He smiled at my answer and the one-question interview ended as quickly as it had begun. Taking back the pen, he scratched out my salary and stock option plan on a piece of notebook paper. My education about startups, and subsequent love for all things high-growth, had officially begun.

A week later I was on a plane to California to meet the team and two months later I moved my family to Austin, a thriving tech hub and the company’s secondary headquarters. Always a bit of an adrenaline junkie, I found this breakneck speed of making decisions and building products absolutely magnetic. Don’t have a feature? Build it. Need more equipment? Buy it. There was nothing we couldn’t do and do fast.

It wasn’t long though before things started to unravel. In classic Silicon Valley fashion, we had our heads so far in the clouds, the only way down was a crash landing.

As our 4th CFO disappeared, so did my confidence. I pulled the parachute chord and headed home to Birmingham, brokenhearted to be leaving my startup dreams behind. I would spend the next five years in a “regular” business, but I had been bitten by the startup bug.

I dreamed of the places I would go for my next adventure – I pictured Austin, Denver, and especially Silicon Valley, the startup mecca.

But as my desire to join a startup grew, so did my family. One little girl had turned into three and our Birmingham roots started taking an iron grip on the red clay. Moving back to Austin much less, California, just didn’t hold the same pull anymore. The itch to pursue startups, while ever-present, had shifted from a love of all things new to a more concrete vision. I wanted to build startups and I wanted to do it here.

Plotting my return to Tech in 2020, I gave my friend at Netflix a call. He conceded that while I might uncover opportunities in secondary cities like Atlanta or Chicago, Birmingham? Staying here was a death wish to my unicorn-chasing dreams.

He had a point… Did the Iron City even want unicorns?

Here in Birmingham, “Unicorns” have consistently been shunned as a vanity, the product of big egos and financial engineering from evil venture capitalists. Let the Silicon Valley lemmings chase fantasies we said, here in Birmingham we build responsible, sustainable businesses.

And then it happened…

Birmingham built a tech Unicorn.

In 2021 Shegun Otulana sold Therapy Brands for $1.25 Billion.

Something was different about this unicorn though. It had been forged in the fires of limited capital, hardened by a need for profitable growth. Perfectly magical. Undoubtedly durable. An Iron Unicorn.

While learning about Shegun and his success, I also discovered a community he was supporting. A global community called Endeavor that had been quietly breeding unicorns outside of Silicon Valley for over 25 years.

In 2021 I jumped at the opportunity to lead Endeavor’s work in Birmingham. But the aspiring unicorns we support are a far cry from the dreams I chased in Austin. Instead of ping pong tables and beer taps, these companies sport sound fundamentals, strong revenues, AND hyper-growth. It turns out that something special happens when you rapidly build a massively valuable business like Dave Gray’s Daxko, Bill Smith’s Shipt, and of course, Shegun’s Therapy Brands.

These businesses create the type of exciting, high-paying jobs I’ll use to lure my princesses back to Birmingham when they graduate college. Along with their friends and colleagues, my princesses are the ones who will attend Barons games at Regions Field, see shows at Iron City and start new businesses out of Innovation Depot. Unicorns offer an almost-too-good-to-be-true answer to Birmingham’s leaky talent bucket.

While Silicon Valley may have coined the “Unicorn” moniker, don’t be fooled – hyper growth is woven into Birmingham’s DNA. Even our beloved nickname “The Magic City.” was born from growth so explosive that it appeared supernatural.

We have all the talent, resources, and good genes to crank out amazing companies.

Founders simply need the freedom to focus a little less on making the next dollar, and a little more on building something that can change the world.

Birmingham needs to support crazy ambitious entrepreneurs, building high-growth businesses on strong fundamentals.

Birmingham needs more unicorns.

After all, aren’t we The Magic City?

Malcolm McDonald is leading Endeavor’s efforts in Birmingham Alabama. Malcolm’s goal is to be a catalyst for Birmingham’s most promising startups, helping them accelerate growth and reach their greatest potential with Endeavor’s community. Most recently, Malcolm was a cofounding partner of Vicinity, an investment crowdfunding platform for start-ups, SMBs, and real estate projects in the southeast. Malcolm and wife live in Edgewood with their three daughters and a 1.5 year old son.

David Sher is the founder and publisher of ComebackTown.  He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).

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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@amsher.com.

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7 thoughts on “I can’t believe I’m hunting $1 billion companies in Birmingham, Alabama”

  1. Thank you, Malcolm. I’ve been “preaching” for awhile that the salvation of Birmingham—and Alabama—lies in the tech sector.

    I’ve also been studying the plight of Alabama since 1990, and this may be the most optimistic and hopeful piece I’ve read in all those years! I know Shegun and admire him greatly.

    I would love to know about your perspective and your work. THIS is the real key to the city!

    Thank you!

    1. Thank you, Bill! What an encouragement! I’m a firm believer that Birmingham’s most Magical days are ahead of us. I would love to connect and welcome your perspective, my email is Malcolm.mcdonald @endeavor.org

  2. Brilliant.

    Why should the ‘Magic City’ give its magic away? I wish you complete success, even beyond your hopes. This is exactly the kind of forward thinking creative imagination that is needed.

    I do suggest raising the question, what might the future beyond this be? With the environment of positive thinking you are embracing, I believe the answer can be found. Birmingham did run out of iron ore, and new it would. There is no necessary limit of talents and intelligence though. Birmingham could truly lead. Go for it!

  3. Bravo Malcom! Keep up this much needed and forward way of thinking and causing big things to happen here in our great city of Birmingham. What an endevour!

  4. We moved to Birmingham three years ago for my husband’s promotion. It has been a great professional opportunity, and we discovered a new community and place. Birmingham has a lot of potentials to attract unicorns and talent, but…to be a magnet for young and talented individuals, the local mindset has to evolve. Several times we have been subtly victims of discrimination; instead of feeling sad or rejected, we feel sorry for them. We are in the XXI, and diversity and inclusion are here to stay.

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