Thursday, August 23, 2012

New York Tech Scene: Thriving

Technology Review: Fred Wilson
his first big deal was an investment in the Web community GeoCities, which Yahoo bought for about $3 billion in 1999. He went on to back startups including Twitter, Zynga, and Foursquare .... because VCs often shy away from technologies that take a very long time to bear fruit, such as many in energy or biomedicine, some critics contend that VCs flood the world with too much money for ideas that don't solve big problems. ..... the returns haven't been very good in the venture capital industry for a long time ..... There are a lot more places to go for money, which I think is a good thing for venture capital, because it allows more entrepreneurs to get going. We see more projects. There are more quality opportunities for us to invest in. At first blush, you might think that more capital means more competition. But I think what more capital really means is more entrepreneurs. ..... I don't think there's too much money sitting around. I think there's too much money in too few hands. So when six white guys in suits control two and a half billion dollars, that's not a good thing. Instead of being allocated just to one firm, it would be better if that two and a half billion dollars was allocated to 25 firms at $100 million each. It would lead to more diversity or people trying more things: data sciences, urban sciences, transportation, energy, materials science, and many others. ..... people who invest in venture capital like to go into deals together, and they like to invest in firms that have brand names and have long track records. That's what leads to a concentration of money in a few big-name firms
If You Don’t Know Your Co-Workers, Mix Up the Chairs
I learned early on not to feel badly about reaching out for help, and not to feel embarrassed about saying that you’re in over your head. We have a fantastic group of investors, and I’ve always felt comfortable asking for guidance. Early on, everyone in the organization became really comfortable with the idea that if there’s something you can’t do, just talk to someone about it or find someone to help you........ The importance of overcommunicating .. it’s taken me a while to realize that just because I understand things doesn’t mean that everyone else understands them. In our company meetings, I’ll say things that sound repetitive, but you have to do that. ...... As the company has grown, I can sometimes start to feel disconnected, and I’ll decide to randomly meet with one person a day, and we’ll go out for a half-hour coffee. You do that for six weeks or so, and then all the channels of communication are open again. ...... I always ask them for feedback, too. “Is there anything that I can do better to make your job easier? Is there anything I can do to make the company better?” ..... creates a really healthy environment so that people aren’t running off to a conference room and saying, “I can’t believe we’re doing this.” If you want to talk about that, talk about it in public. That’s one of the things that have made it easier for us to be 120 people and still feel relatively small. ..... I keep a notebook in my pocket and I write down all the stuff we could ever do with Foursquare. ..... I’ve learned when to bite my tongue about things I’m excited about. ..... We mix the seats up occasionally so that everyone gets to sit next to other people. And I’ll move my seat around so I’m sitting next to different people. They can ask me questions, and I get to know everyone better. ...... I started to feel a bit disconnected from our San Francisco office, so we got two big screens with cameras there and here in New York. They’re on all day long, so you just walk by and say: “Hey, Pete, what’s up? Can you get Ben?” It works so well. ....... this idea of weekly snippets. Every Monday, you send in a bullet list of the stuff you’ve been working on, and the software compiles a list and mails it out to the entire company. So you can quickly scan them to find out the status of a project or what somebody is working on. It gives you a nice general overview of the company. So you follow the people you want to get updates from, but we make sure that everyone automatically gets them from me and our C.O.O. and our head of engineering and our head of product. ....... When I send out mine, the first heading is, “Things I’m Psyched About,” and the next is, “Things That I’m Not So Psyched About” or “Things I’m Stressed About.” The next thing is usually a quote of the week — something I heard from one of our investors or maybe overheard from an employee — and then I have my snippets below that. ...... I get a lot of feedback from employees. It only takes them a minute or two to read, and it’s like a bird’s-eye view of what I think is going well at the company and areas where I think we could improve. It’s also a good way to start a conversation. ...... We always talk about when the company feels broken — let’s say you have 10 employees, and suddenly you have five more, and the stuff that worked at 10 doesn’t work at 15. So we’ll say, O.K., the company is broken — let’s step back and figure out how to fix it, and it might happen again from 20 to 50, from 50 to 70, whatever the numbers are. ...... The teams might be too big. Maybe there are too many reviews. There are all these little levers that we can tweak, and that’s how you take something that’s feeling a little bit broken, or not as efficient as it could be, and right it.
The Rise of the New York Startup Scene
"We never even had a conversation about, 'the only way to make it succeed is to go to California—should we pack up our stuff?' " ...... a pool of engineers who have come to or stayed in the city as companies like Facebook and Twitter built offices in New York ..... the amount of New York City-based startups that received venture funding rose 34 percent between 2007 and 2011, while deals in Silicon Valley declined 7 percent and those for the country overall dropped 8 percent. Last year, venture investors plowed $2.75 billion into 390 startups in the New York City area—the most money and investments since 2001 ..... So far this year, $942 million has been invested in 182 startups in New York. .... the Silicon Valley scene is still many times larger (1,202 companies grabbed $12 billion last year), and is nowhere near being eclipsed. Still, New York's startup growth is palpable ..... Like Crowley, Zach Sims decided to set up shop in New York when he cofounded Codecademy, a startup that teaches people how to write software code—even though his company's early days were spent in Silicon Valley as a participant last summer in Y Combinator ..... Sims and cofounder Ryan Bubinski had attended Columbia University in Manhattan, building up a network of people they wanted to hire, and their main investor, Union Square Ventures, is based in the city. Sims also thinks working in New York is a good way to be in touch with the kinds of people who would use Codecademy, since the startup's offerings are geared toward people who aren't entrenched in the tech scene—and those people are easier to find in New York than in Silicon Valley. ..... there's New York's always-on atmosphere: she'd worked previously in Silicon Valley and "felt like a weird person" leaving the office at 2 or 3 a.m.—but New York is always buzzing. "You can get food here any time of night," she says. "You can get anything."

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