Musings of a VC in NYC

Internet School

Let's say you are my age, about to turn 50, and you want to make a career change. You want to get into the Internet business. But you don't know anything about programming, user experince, ad sales, community management, legal issues. What do you do?

For too long there haven't been good answers for people looking to learn this new industry. But that is changing. One of the more ambitious projects is General Assembly, at Broadway and 20th St, in NYC. While most people that know of General Assembly think of it as a coworking space, the founders think of it as a campus environment for all things Internet. I was over there yesterday and got a sampling of some of the courses you can take there. There are courses on HTML & CSS, Android Development, Internet Ad Sales, User Driven Design, The Digital Learning Market, Startup Law, and more. The current class list is here. Class prices differ but for $100 you can generally take one of these classes.

I love this idea. I have friends who find themselves at this place in their career, who are starting Internet based businesses but they don't have the background and experience to make the right choices. Classes like this can help and they don't cost that much.

I've blogged before on the value of coworking spaces. I'm a big fan. Many of them offer classes and meetups and talks from industry leaders in addition to the ability to rent a desk for the day, week, or month. I know that New Work City, the grandaddy of NYC coworking spaces also has classes, including the awesome Girl Develop It program which sometimes takes place there. I believe that the Hive at 55 also hosts classes.

I'm wondering if anyone in the NYC tech community has aggregated all of these classes into a single searchable database. If so, leave a comment and I'll update this post with a link to it. If not, someone really should do that. There's a lot of great learning opportunities out there.

Spring Startup Fever

I said earlier this week that in addition to spring fever in NYC, we have startup fever. There is so much good stuff happening in NYC right now.

I'm not talking about fundings and such. The financial markets come and go. Boom today bust tomorrow.

I'm talking about building a foundation that will allow the tech sector in NYC to survive these booms and busts and thrive for the long term. The foundation comes from great programs like Techstars, InSITE, HackNY, PairUp, Founder Labs, etc, etc.

Today I'd like to talk about a couple more great programs happening in NYC this spring and summer.

Last summer, SeedStart ran an accelerator program in NYC that produced a number of interesting startups. This summer, they are doing another program but it will be focused on emerging media companies. The program is called SeedStart Media and has big media companies like AOL, Hearst, News Corp, MTV, NY Times, Time Warner, and a bunch more involved as corporate partners. Here are some details from their website:

We are inviting technology companies willing to spend the summer in New York City that are concentrating on [the media industry] to apply to SeedStart. The program will give up to 10 companies $20,000, office space, and time in exchange for a small piece of equity (5%). At the end of the 12 weeks, SeedStart features an investor day where companies will have the opportunity to present to seed and early stage investors as well as potential partners and customers.

 

Info session: March 29th at 7pm, 160 Varick St. 12th floor, New York, NY.

All mentors, participating corporations, & SeedStart Media applicants are invited to attend.

Please RSVP at [email protected]

Another big problem we have in NYC tech is funneling top college graduates into the startup sector. Very few tech companies have the size and scale to run proper college recruiting programs. So the sector needs to cooperate and form recruiting efforts together. One such event is happening soon.

The second annual NYC Startup Job Fair is happening at AOL's headquarters on Friday April 8th. It will be engineers only from 1pm to 2:30pm and then everyone from 2:30pm to 5pm. We have encouraged our portfolio companies to attend and I am certain that some of them will. The list of participating companies (as of now) is here. If you are graduating from college or grad school this spring and want to join a startup, you should seriously consider showing up at AOL on Friday April 8th.

These are just two of the many great programs going on in NYC right now. We are building a fantastic ecosystem and I am so excited to see this happening.

Founder Labs NYC

One of the best things to happen to startupland in the past five years is the emergence of the startup accelerator. Programs like Y Combinator, Techstars, and many others have made the difficult phase of going from a founding team and an idea to a real business and funding just a little bit easier. But the period before you get into a startup accelerator is also very hard and there are less support systems.

Two of my favorite pre-accelerator programs are Startup Weekend and Founder Labs. In these programs you can show up with an idea, without a team, a plan, and much of anything else. They help you put a team together, develop the idea, and get going. Startup Weekend does it in a weekend. Their approach is to "share ideas, form teams, build products, and launch startups in 54 hours." Founder Labs does it over 5.5 weeks, nights and weekends. Their approach is "keep your job for now, build a team and launch a prototype." If you have an idea but not much else and need help, these programs are for you.

Startup Weekends happen all the time all over the world. They are doing one in NYC on April 15-17th.

Founder Labs are longer and more of a committment for everyone involed. They are focused on building mobile based businesses and diverse founding teams (men and women). Founder Labs was started by Women 2.0. To date the only Founders Labs have taken place in San Francsico.

I'm excited to say that Founder Labs is coming to NYC this spring. It will happen from May 21st to June 29th. Applications are due by April 20th. You can apply here.

The Gotham Gal and I have been helping the Founder Labs team come to NYC. We've helped to get the sponsors together, get the space nailed down, and get a great group of mentors. But most of the work has been done by Shaherose Charania and Baat Enosh, who are the creators and operators of Founder Labs.

There is a lot coming together in NYC right now. We've got startup fever in addition to spring fever. And Founder Labs is a great addition to the landscape. If you are an entrepreneur with an idea for a mobile application/business and need some help developing it, you should really consider Founder Labs.

Pair Up

Last night I attended a meeting/dinner of many leaders in the NYC tech sector with the folks in city hall who work on economic development. We listened to a bunch of reports. One of the most telling was from Larry Lenihan of Firstmark who is managing an early stage venture fund focused on NYC tech companies. Larry explained that many of the best opportunities that come to them don't get funding because of the lack of a technical co-founder.

NYC has a wealth of business people with domain experience in many important sectors. But they seem to be having a hard time of pairing up with technical talent to form great startup teams.

Enter Pair Up. Pair Up NYC is an effort from InSITE, a group of grad students at NYU and Columbia who help startups. They've noticed the same issue and are doing something about it. Pair Up is a matching program between people who want to do startups.

I've tweeted out the link to Pair Up a few times, but I am writing this post to let everyone know that the deadline to apply for the first Pair Up program is tomorrow, March 18th. If you are looking for a cofounder and want some help, here's where you can apply.

Talent and Bandwidth

When people ask me what the city and state government can do to help the technology driven startup community in NYC, I tell them two things.

First, there is not one tech ecosystem. There is the software, internet, digital media sector which is thriving and on a tremendous growth spurt. And then there are the biotech, bioengineering, materials science, and energy sectors. These sectors are languishing in NYC with very little commercial activity given how much research and science goes on in the city.

I don't work every day in the latter category and I don't have much advice for how to stimulate these sectors commercially, but I do know that much must be done.

I do work every day in the former category and I have some advice for how to continue to stimulate the sectors that are working. I would focus on two areas; talent and bandwidth.

NYC has a tremendous workforce advantage over most any other city in the world. With one exception. There is a dearth of well educated engineers coming into the workforce every year in NYC. We have a large exisiting workforce of engineers, but they are in high demand and there are scarcities in NYC like those that exist in the bay area. Talented engineers are expensive and are always being recruited away from companies.

So the obvious answer is to develop ways to bring engineers right out of school into the local workforce. One way to do that is to develop strong engineering programs here in the city. The Bloomberg administration has announced an initiative to do that. I am very supportive of that effort. But that will not be enough. We also need to support our existing educational institutions, like NYU, Columbia, Fordham, CUNY, etc, etc.

And we need to start recruiting newly minted engineering grads to come to NYC to start their career. If you are a 22 year old man or woman just starting out in life, would you rather live in suburbia and work on a campus or would you rather live in Williamsburg and work in Flatiron? I think the answer to that is obvious. We just aren't making that case to the best and brightest engineering grads. There are emerging programs, like HackNY, that need our support, both financial and emotional, to do this work. It is critical. Charlie O'Donnell has put forth a challenge to bring 250 new software developers this year to NYC. I think that's a good start but I'd like to see a bolder number, like 1000 a year, or even more.

The other area is bandwidth. I mean data bandwidth. I mean fiber to every school, institution, business and home in the five boroughs. Other localities have built community owned fiber networks. A good example is Lafayette Louisiana. NYC needs to do this and it needs to do this now. The fiber plant should be owned by us, the citizens of NYC, not some company that will charge us a fortune for using the network and potentially restrict what we can do on the network.

There is a company I know of that is one of the most exciting new startups in NYC. They are locating their new office in the emerging area in Brooklyn between DUMBO, Fort Greene, and the Brooklyn Navy Yard. This is a cool new neighborhood that could be home to a lot of startups looking for great workspaces at low rents. But there is no commercial grade Internet service in this neighborhood. TIme Warner Cable wants this young startup to guarantee them $80,000 in revenues so they can afford to dig up the street and lay the cables.

That is nuts. We need to wire up this city from Staten Island to the Bronx, from Harlem to Rockaway Beach. And we need to own this fiber plant and we need it to be the best in the world.

These two moves will do it. We have everything else we need. We have the capital to fund startups. We have the real estate to house them. We have the legal, accounting, marketing, and other service providers. We've got it all. We just need talent and bandwidth to keep it going. Bring it on.

No Conflict No Interest

The title of this post comes from a saying I've always attributed to John Doerr, one of the top VCs of the past 25 years and the lead partner at Kleiner Perkins.

In this day and age, having a financial interest in something means you've got a conflict and your opinion is somehow "tainted."

But that wasn't always the case. I'm reading a book called 722 Miles, about the history of the NYC Subway System. It was recommended to me in the comments to the blog post I did about the subway system a few weeks ago.

The original plan for the NYC subway system was drawn up by The Steinway Commission in 1891. It featured the main downtown line from south ferry, up Broadway, to Union Square, then forking off in two branches, one headed up the west side and the other headed up the east side. That plan had to be changed later in order to keep the construction costs below the mandated $50mm (a huge sum in those days) but it was in many ways the blueprint for what got built.

The Steinway Commission was the name attached to the Rapid Transit Commission called for in the Rapid Transit Act of 1891. The commission was charged with laying out the basic plan and assigning a franchise for construction and operation of the subway.

It was called The Steinway Commission because it was chaired by William Steinway, founder and CEO of The Steinway Piano Company, a major manufacturer and real estate developer in Astoria Queens. In addition to Steinway, the commission included John Starin, owner of tugboats and other waterway transit businesses, Samuel Spencer, a railroad executive, Frederick Olcott, a banking executive, and Eugene Bush, a railroad lawyer. All of these men had business interests that would be enhanced or possibly damaged by the development of a subway system.

And yet they largely did the right thing, got the plan approved, and eventually funded and built. None of them ended up with the franchise (that went to August Belmont, who also built Belmont Park, one of the three legs of the Triple Crown in horse racing).

At the turn of the last century in NYC, there was an alignment of business and political interests that got things done that seems lacking in today's political environment. We have a taste of that in NYC with our current Mayor Mike Bloomberg who has brought a business mind to job of governing NYC. But on the national level, we see much less of this kind of thing.

It's really too bad because interest implies knowledge and understanding and leads to good decisions if the people involved have integrity and the ability to put the interests of the community first and their financial interests second. The business leaders of NYC were able to do that in the late 19th century and early 20th century and we have them to thank for our wonderful subway system.

The NYC Subway System

I've been thinking a lot about the NYC subway system. It was built in the latter part of the 19th century and the early part of the 20th century. It's a lesson in the power of private enterprise to do public good.

There were elevated transit lines in NYC dating back to the 1870s, but the first underground line opened in 1904. At that time, the NYC subway system was operated by two privately held companies, the BRT (Brooklyn Rapid Transit) which became the BMT (Brooklyn Manhattan Transit) and the IRT (Interborough Rapid Transit). These privately held companies raised capital to build the subway lines and operated with the city's blessing. Starting in 1913, the city starting building the tunnels and leased them to these privately held companies.

Then in 1932, the city started to compete with these two privately held companies, and in 1940, they were bought and consolidated into the MTA (Metropolitan Transit Authority).

I ride the subways every day and will head to the L train shortly to get to work. Every time I ride on this system, I am amazed at how it got built given the cost and complexity involved.

The fact that it started out as a private enterprise is not surprising. There is something incredibly powerful about entrepreneurs backed by speculative capital. The entrepreneurs laid the first tunnels, operated the first lines, and showed that it was a profitable enterprise.

At some point the city stepped in and turned it into a public utility. Say what you want about government's ability (or inability) to operate effectively, I will tell you that the NYC subway system works pretty damn well.

So all the debates, including the one I waded into yesterday about mobile broadband infrastructure, about private enterprise versus public spending are like most things - fringe debates. There is a third way which is public private partnerships and I think that is the best way.

The Cashless Exercise

 Sorry for the inside baseball title, this post is not about net exercising options or warrants.

It is about an exercise I've been going through since the beginning of the year. I've always walked around with hardly any money on me. It drives the Gotham Gal nuts, but it's who I am. I don't like carrying cash and never have.

But the past few months, I've been walking around with no cash, not a dime. I carry a host of stored value cards and credit cards on me. The picture at the top of this post is my wallet. The black cord is my daughter Emily's hairband. In that stack is a metrocard, my drivers license, a parking pass for my garage, several american express cards for various personal and business entities, a visa card, and several debit cards. That's it.

I've gone without a wallet for years and this stack of cards has been my system for the past decade. But I've always supplemented it with some cash in my pocket as well. Not anymore.

What this exercise has taught me is that cash is almost unnecessary these days. Almost is the operative word. You have to work a little bit to operate without cash. I avoid the $2 or $3 purchase. I've never been much for the $2 or $3 purchase, but it does happen. Earlier this week I stopped at Joe, The Art Of Coffee for an espresso on the way to work. I forgot that Joe is cash only. Fortunately Joe gave me the espresso and took an IOU from me. I felt bad about that and now I have to figure out how to pay him back without breaking my no cash diet.

The thing that was holding me back from going no cash was the time it took to check out with credit or debit. But in the past year or two, most merchants have moved to a no signature required on transactions less than $20. If no signature is required, a credit or debit transaction is faster than a cash transaction.

And then there's cabs. It took me until this year to give up my 25 year habit of paying cabbies in cash. I thought the credit transaction would take too long or be unreliable. My kids told me I was being foolish and to give it a try. And I was sold in the first day. Paying cabbies with a credit card is simply a superior experience. It's fast, there's no waiting for change, and tipping is easier and I find myself being more generous. All in all it is much better.

So I believe we are on the verge of a cashless society, at least in NYC. I may be on the bleeding edge of it, but if I can go cashless, so can others.

The other thing this cashless exercise has taught me is walking around with plastic cards wrapped in a hairband is silly. We need to take the next step which I am sure is the phone. I've always got my mobile phone on me unless I am home. It would be so nice if I could simply enter all those stored value cards, credit and debit cards into my phone and stop with the stack of plastic entirely.

I hope to continue this cashless exercise going, at least when I am in NYC and not traveling. I honestly think I can do that. And as for the stack of cards in my pocket, well I'd like to get rid of them too.

Judging NYC BigApps

NYC is running an app developer contest in partnership with ChallengePost and Rackspace. It is called NYC Big Apps. I blogged about this back in early October when Mayor Bloomberg announced the competition and noted that I am one of the judges in the contest.

The submittal part of the competition is over and 85 different apps have been submitted. They are all listed here. I am slowly working my way through them. It's quite an effort to look at 85 different apps. Some run on the web. Some run on iPhones. Some run on Android. Some run on SMS.

I thought I'd open this up a bit and let all of you have some say in my judging. If you want to weigh in on my voting, please take a look at the apps and highlight any of them you think merit serious consideration by me in the comments to this post.

However, it is critical that you disclose to me if you have any vested interest in this competition. I don't have any problem with someone leaving a comment that says "my app is called ....., and here's why I think you should vote for it". I do have a big problem with a comment promoting your app if you don't disclose that it is yours.

I am judging these apps on multiple criteria, including usefulness, inventiveness, the visual look and feel, how far it has been commercialized to date, and most importantly in my mind, how much government transparency it provides.

I'll end with a screenshot of one app that I spent time on this morning that I like called Playaround which maps playgrounds by neighborhood. Very nicely done.

 

NYC's BigApps Challenge

Mayor Mike Bloomberg announced yesterday that New York City was joining the open government movement with a challenge to developers to build apps using open government data.

The challenge is called BigApps (a take on "Big Apple" in case anyone missed that). It will be run by NYC startup ChallengePost. Here's how it works:

Developers compete to build apps "in keeping with New York City's drive to become more transparent, accessible, and accountable and an easier place to live, work and play"

Prizes:

$ 20,000 in cash prizes.

Plus lunch with Mayor Bloomberg and tons of public appreciation.

Here's the timeline:

Competition Submission Period Begins:
5:00pm EST October 6, 2009

Competition Submission Period Ends:
5:00pm EST December 8, 2009

Public Voting Period Begins:
12:00pm EST December 15, 2009

Public Voting Period Ends:
5:00pm EST January 7, 2010

Judging Period:
December 15, 2009 - January 7, 2010

Awards Ceremony:
TBD date in January 2010

And here is the judging panel:

• Dawn Barber (NY Tech Meetup)
• John Borthwick (Betaworks)
• Jason Calacanis (Mahalo)
• Paul Cosgrave (NYC Department of Information Technology & Telecommunications)
• Esther Dyson (EDVentures)
• Lawrence Lenihan (FirstMark Capital)
• Kevin Ryan (Gilt Groupe)
• Danny Schultz (DFJ Gotham Ventures)
• Fred Wilson (Union Square Ventures)

I'm excited to be part of this. I've written about the opportunity to use the web and open data to redefine and reinvent government, particularly local government. This is just the start of an important movement.

If you are a developer who wants to compete, click here and get started.

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