There's a saying...
"There's nothing worse than rich white people living in luxury housing in a park than the rich white people living in luxury housing protesting against them."
Ok, well, there wasn't a saying, but there should be.
Maybe you've heard about "The Battle of Brooklyn Bridge Park." It's a long and winding tale that basically amounts to this:
There once were some unused commercial piers. Someone decided they should become a waterfront park. Parks are expensive to build, so it was decided to cleave off a little bit of the park for waterfront housing to pay for the park. The plan worked and now the park is beautiful and extremely popular. Like, ridiculously popular.
Everyday, tens of thousands of people visit the park's many amenities--beach volleyball, picnic grills, a pop-up pool, kayaking, standup paddleboarding, roller skating, and sure, hills, trees, grass, and spectacular waterfront views.
This pisses people off.
Actually, there is a small but vocal group of folks who never liked this version of the park--who wanted something more akin to a lawn for their Brooklyn waterfront property. They want quiet people to tiptoe silently past their brownstones on the way to the park, and only during daytime hours.
These local folks are suing the park itself because of plans to build luxury housing in the park.
At first glance, you'd think with everything I just said, I'd be on their side. Doesn't the idea of luxury housing go against all this cool park activity?
No. Actually, we wouldn't have any of that stuff if it wasn't for the housing plan.
You see, building a park is a very expensive proposition--especially a waterfront park. The piers, vacant for years, had to be repaired. The cost for the park totals in the hundreds of millions of dollars. The city doesn't have the taxpayer dollars laying around to pay for such a thing, so it was decided to leverage the value of waterfront NYC real estate to create a self-sustaining economic plan. Housing on the ends of the park will be created in order to pay for the park in the middle.
The result, as you can see if you've ever been in the park, has been a tremendous success. People use the park and people love it.
Well, most people.
Some of the people who live near the park who believe they're owed a quiet street in New York City aren't so thrilled.
Who are these people?
Mostly rich white people in Brooklyn Heights. As of the 2010 census, it checked in at 77% white, as opposed to the rest of the city, which comes in around 45%. The average household income is about $115,000, compared to $44,000 for Brooklyn as a whole. The streets are tree-lined and the neighborhood was a bucolic sea of tranquility for long before anyone ever wanted to come to Brooklyn.
And here's where it kind of gets ugly. The underlying sentiment here isn't simply about luxury housing.
It's really about their issues with what kind of a park it is and who visits it. The park as it is currently designed is serving the wider community of Brooklyn, not necessarily the people who live right next door who may have, at one time, thought of it as "theirs".
Take a stroll through Brooklyn Bridge Park on a weekend. It is teeming with activity and people. What's really obvious is that this isn't a just quiet, trees, and grass kinda park...
...or as I think about it, a boring white people park.
The vibe feels a lot more like Riverside Park in the North 100's--a cross between a non-stop 8 year old Dominican girl's family birthday picnic slash Dyckman streetball tourney with a little Crown Heights block party mixed in. It has a diversity way more reflective of the borough of Brooklyn as a whole than it's immediately adjacent neighborhood overlooking from the promenade.
I run the free kayaking program in the park--and it's the most ethnically and socioeconomically diverse thing in my life.
That's why I love it.
As an investor in tech startup companies, I wind up in a lot of situations with well off white dudes. While I'm not necessarily at the same income level as my colleagues (my dad was FDNY and my mom was a para in the public school system) it remains a pretty vanilla professional existence.
Spending time with the 5,000-6,000 paddlers we put on the water each summer is a breath of fresh air, to be honest. I'd guess that a full 50% of the people who partake of our paddling program come from minority backgrounds, maybe more--and our volunteer base reflects a lot of that diversity as well. It makes me feel like I'm actually in a park in New York City--versus a gated oasis for local rich people like Grammercy Park.
So what does all this have to do with the Pier 6 housing controversy?
The complaints about the housing reek of a kind of protectionism. "I found this spot and now it's for me and people like me." Many of the protestors actually live in One Brooklyn Bridge Park--an old warehouse in the park that was converted to housing.
So, now that they're in, they don't want anyone else to partake--especially if the new housing blocks their view.
The bigger issue and they don't want to be so obvious about it, is that some of the new housing is earmarked to go to "workforce housing", which, for a four-person household, means available to those with income of $67,100 to $138,440.
This is where it gets ugly.
Locals started complaining that affordable housing would bring down property values and that the park economic plan shouldn't have to pay for "the ills of the city".
How would you like it if your neighbor called you "the ills of the city"?
The lead plantiff in the lawsuit is a local resident whose private equity fund manager boyfriend bought a $7+ million apartment near the park. They want their waterfront view preserved--at the expense of the park's main funding source. They don't want to live near moderately priced housing. They only want to live near other rich people.
Rich white people who live near a park frequented by a great socioeconomic and ethnic diversity of people want to block the main funding sources of said park, which include moderate income housing that won't go to rich white people, in order to preserve their quiet, isolated, mostly rich white waterfront neighborhood.
You might think I'm grasping at straw, but just listen to some of the people behind the lawsuit:
“There will be those maybe pointing at us, saying, ‘Aha, you don’t want low-income housing,’ ” Mr. Merz said from his sunken living room overlooking a Zen garden.
“That’s an old game because you know very well we do prefer low-income housing,” Mr. Merz continued. “But we don’t want it in the wrong place, meaning there’s a right way to build it.”
This is an actual quote taken from a recent NY Times article on the situation. I wish I was kidding.
"In the wrong place."
What is this? 1958?
Oh, but everyone knows they love low-income housing. This guy Merz defended himself by saying he developed some low income housing in Buffalo, far far away from where they live now.
Kind of sounds like "I'm not racist... look how many black people I know."
Look, we're all prejudiced in some way. Some of us are just more self-aware and aspire to be more open-minded, more tolerant, and more accepting of change.
The way I see it, on one side you have people who expect a tax-payer subsidized backyard lawn for their rich white neighborhood--one that is less likely to attract a diverse population from other neighborhoods--and on the other hand, you've got the diverse population of people who flock to the park day in and day out who depend on an economically sustainable park.
You don't see them complaining that One Brooklyn Bridge Park is housing or that there's a hotel going up. They're just happy they have a place to play and come and enjoy the waterfront.
The good thing is, despite all the protests, the idea of housing as a way to fund the park is a train that left the station a long time ago. In a city facing a huge pension and benefit crunch, there's no other place that the money to fix the piers and build the rest of the park is going to come from.
If these people don't like the park and the people that it welcomes, they're more than welcome to move to Connecticut. I'm sure they'll have no problem affording something nice if they sell, given how high property values near the park have skyrocketed since ground was broken a few years ago.
I wrote this note to a young company that had recently raised some money and moved into a shiny new office after busting at the seams in a makeshift setup. The company was full of super young, vibrant, and incredibly talented people with a huge opportunity ahead of them--and a lot of difficult challenges.
Congrats on moving into your new office.
While I'm there are still a few bugs, bells, whistles, and bandwidth to work out, let me be the first to officially point out...
Shit just got real.
You have a real office. You're all together. You're organized into teams that are basically complete as a unit. Now, through the end of the year, will be a full on sprint like you've never run before. Crush it and this whole thing will take off like a rocket ship--with your work touching the lives of millions and millions of people around the world for years to come.
Make the most of this opportunity to build one of the most creative and inspiring places to work in the whole damn universe.
This is enormously important work. The world really needs this. I don't know if you noticed, but there are a lot of people out there who think of the world as a zero sum game--where anything gotten must be taken away from someone else and where those in power are resistant to sharing.
Creativity inspires people to reexamine the world around you--to challenge, to poke, to question...to ask why.
And that's what you have to ask yourself now.
Fulfilling the potential of this endeavor will be the hardest thing you've ever done in your whole life up to this point. It won't just be about late nights and heated disagreements but also pushing yourself to be better than you thought you could ever be.
Why put in so much effort?
People come up with all sorts of motivations--fear, money, fame...
Let me present what I think is a more fitting motivation for creative professionals on the verge of creating a very different kind of company...
Strive to be the best teammates you can be to each other.
Lift up the mission by lifting each other up. Do your small part so amazingly well so that the person who depends on your piece has a head start on what they need to do.
It could mean delivering an important illustration earlier, playing devil's advocate to your own codebase one extra time--making it cleaner, faster... ...or simply making sure the pens on people's desks are out of their package and in a cup when they start work.
Never leave someone behind in the office that you can help--even if it means just helping to motivate them with some solidarity and running out for slice of pizza when they didn't have a chance to get dinner.
Get hooked on gratitude--on the welcome and somewhat amazed expression of appreciation when you go out of your way for someone else.
Amaze each other everyday on what you do for each other...
...and moreover, what you do for [the founder].
Because no one will ever be more proud of what you've all accomplished together or more disappointed if you miss...
He works harder than any other founder I've ever met. The kind of person you should want to be to someone like that is someone who stepped up.
Everything he has done thus far--from being so careful and discerning about who he surrounds you with to giving you the creative freedom to thrive--it's the greatest gift you can imagine. You are unfettered to inspire, unlike so many of your peers who are weight down by stifling work environments, strict hours and pointless administrative overhead.
Just don't take it for granted that you know the team is good enough to somehow pull things together.
Don't take flexible policies as excuses to make things easier on yourselves.
Work/life balance is meant for you to develop in a more complete, inspired, and holistic way--optimized for creative output.
Not to work less.
Accept them as a challenge--to be a part of something really special.
That extra hour pushing ahead just a few lines more.
That middle of the night idea written down.
That thing you decided to learn and practice so that you could contribute more.
You owe it to everyone else around you to fulfill this company's potential and your own, and leave nothing to regret or missed opportunity.
To be proud of the collective accomplishment, driven by the individual effort, will pay emotional dividends for years to come, because greatness doesn't materialize at scale very often.
Best of luck.
If there's one thing we've basically figured out in the digital world, it's marketing. There's no more well tread aspect of building an online business than marketing. We've got more channels, tools, and analytics to tell you weather or not it's working than you can shake a stick at.
It's table stakes. You spend some dollars to get more dollars out. It's not complicated.
That's why I care much more about engagement--do people like what you built, versus whether or not more people used it today than they did yesterday. Plus, the startup world is littered with companies that grew exponentially without becoming successful--Fab, Turntable, Dailybooth, etc.
If people engage regularly with your product, but you can't get more people to use it, you've got a marketing problem. Marketing problems, for the most part, are solvable by a very distinct set of best practices. You've just got to figure out why the current set of people like it, and find more of them. Now, maybe there just aren't that many people out there, but for the most part I see a lot of low hanging fruit ways that marketing could improve.
On the other hand, if people are coming, but they're not engaging, you've got a product problem. Sometimes, it's easily fixible. Other times, you're just so way off on product/market fit that you've fallen into "bad idea" territory, and there's really no timetable for fixing a bad idea.
On top of that, there's another problem that startups have more trouble figuring out than marketing--scaling. What do you do when you actually start getting people in the door? How does your sales support staff change? Where's the first bottleneck? Does the experience in your marketplace suffer at all because you've got an influx of too many sellers, or buyers?
In a seed round, I think it's safer to prove engagement and the ability to create a scalable process, than to load up on customers. This way, you know that you've got enough in place not to fall apart when you do grow.
That being said, I'm tired of companies saying "And we haven't spent any money on marketing." The fact that marketing is a commodity, to me, means that this is a box you should have already tested in some way. If it's not 100% obvious why someone would use your product or how they could be marketed to, not doing any market testing is like saying "I ran the marathon with one shoe!"
Why would you do that, let alone why would you be proud of it? If anything, it just confuses an investor. Do you not know how to market this company? Are the channels for acquisition unclear? No one says you have to spend tons of money on this, but to spend zero seems bewildering.
You could spend it on Google ads, Facebook, PR, content marketing, referral programs... really, anything. While marketing isn't a secret magic sauce that will turn your startup successful, it's certainly going to tell you a lot about whether your product resonates.
You need some minimum amount of people coming through the door to tell whether you've got something.
So let's recap this meandering Monday morning post:
Early on, engagement is better than growth.
People have figured out how to do marketing--you should go learn what everyone else knows.
It's a basic part of running a business, so don't skip it entirely either.
I'm excited to share that goTenna, a Brooklyn Bridge Ventures portfolio company, has launched the presale of its point to point communications device.
Have you ever texted anyone in the same room and thought about the infrastructure behind it--about where that message travels to, the great distances it gets bounced around, all to travel ten feet, in just milliseconds.
It's pretty magical.
It's also pretty stupid, technically speaking.
When you can literally see someone else's phone, even a three year old would suggest that the message should go from point A to point B on a pretty straight line.
There's a lot of other things about telecommunications that a three year old would probably agree with--that no one should ever be able to read your message, except the person who sent it to you.
And if you go on a remote camping trip and one of you gets lost on your way to the hole in the ground behind a tree, you should be able to contact each other if you both have phones.
These situations--the lack of coverage in emergencies, the need for privacy, and the ability to offload point to point communications--make goTenna a pretty handy device to have around. It is a small piece of hardware that syncs up with your phone, freeing it from the carrier network and enabling point to point communication.
But handy isn't why I backed it. Handy is the first step to gamechanging.
I met Daniela Perdomo over a year ago at SXSW. I was scanning the SXSWSocial network for anyone that had tagged themselves "Brooklyn". Daniela's profile came up and I noticed that she was involved with NYC Resistor, the hardware hackerspace that Makerbot came out of. I tweeted at her in response to a post about cheese.
@danielaperdomo That is serious! BTW... Putting together a little dinner of folks Sun night. Would love to meet a Bklyn maker/Resistor.— Charlie O'Donnell (@ceonyc) March 9, 2013
We agreed to meet up and she told me what she was working on. I had no idea she was a founder with a startup. I just wanted to meet the hardware hackers from Brooklyn. When she told me she was working with her brother Jorge on disconnecting phones from the network, and reconnecting them directly to each other, I was intrigued. We met back in NYC and after another meeting, I agreed to give her terms and lead the seed round.
Fundraising wasn't an easy road. She pounded the pavement for months looking for other investors who also wanted to take a shot at a first time founder team on a towercutting project. To get there on goTenna, you had to believe in the near term usefulness of the device, but also be excited enough about the possibilities around mesh networks. You have to understand how decentralizing the system makes it more resillient. No longer should anyone in a city as dense as NYC should ever go without the ability to communicate with their phones in an emergency--not when the nearest device to you is likely within a mile of you.
Whether she got better at pitching or the tides turned in the hardware space in general, I'm excited that some investors eventually did step up--and when they did, the seed round became oversubscribed, totalling $1.8 million. It's been great to work with Karin at Bloomberg Beta, Alberto at Collaborative Fund, and Brett from MentorTech, and to have supporters like A16Z and NY Angels. I'm really proud of the work of the people behind the company--Daniela, Jorge, John Levy, who has been with them from the very early days, and their whole tech team.
I'm buying a pair of goTennas because the next time I do the Ragnar running relay, and I roll my ankle at 2AM on the side of a deserted highway, I want to be able to text the van down the road to come see if I'm ok.
I'm investing in goTenna because the grand experiment of untethering from the cellphone tower is a worthwhile one.
There's been some writing about how VCs and founders interact with each other and it inspired me to take a step back and reflect on what my role is supposed to be with regards to the investments I make and the founders I deal with.
Here's what I came up with...
First, I have a fiduciary responsibility to my investors who entrusted me with money in the first place. If I don't do right by them, then I have no money, no fund, no career, full stop. They count on me to be a good steward of their capital, and to take reasonable and appropriate risk with the expectation of a certain level of returns.
That also means that I need to act in a way that ensures my ability to get future opportunities to invest their capital in attractive deals. Rather than using my investors as an excuse to be short-sighted and screw over the first entrepreneur that works in the door, I need to balance their need for return with the long term viability and reputation of the fund and the firm. I believe that ethics and opportunity for investors will go hand in hand over the long term--and opportunity drives returns.
It also means I need to be really careful about how I'm spending my time. I want to be helpful to a lot more people than I'm able to spend time with, but I can't distract myself too much from this clear and primary mission.
Second, I am a provider of capital--so my check needs to clear and I need to be transparent about when and if I plan to invest, or if entrepreneurs should look elsewhere.
Third, I try to help my teams be the best company managers they can be--because ultimately, no matter how much help I can be, it's up to them to do most of the heavy lifting. That does not mean telling them how to run the company, but to help them create a management discipline--a framework for thinking about problems and solutions. I am there, along with other investors and board members to audit their thinking--to make sure they were considerate about the plans *they* came up with, not me.
Fourth, I am highly incentivized to provide assistance to my portfolio companies in any way that I can--whether it means connections to talent, PR, other capital, customers, etc.
Fifth, as I intend to be a long term participant in the innovation ecosystem, I have a role to support and champion the community at large. This means that it's important to me to be supportive of everyone's success, not just those I back, since it's not a zero sum game. I, along with my investors and my portfolio, will have the best chance of success when the ecosystems we participate in, especially the geographic ones, fully support high growth entrepreneurship.
Here's what I am not:
I am not necessarily an entrepreneur's friend. Granted, over the course of working together, we can become friends--and sometimes I might actually back a friend--but just because you invest money in someone's company doesn't make you friends. This is a professional relationship and we're here to grow an enterprise.
I am not an expert. Maybe ten years from now, when I've got lots more exits under my own watch, you can call me that, but for now, I consider myself a really ambitious student. I'm learning everyday and I count on founders to be the ones that bring the best insight into the problems they face in their industry. If I can provide helpful context about some of the seed stage startup best practices, great, but they know their company best.
I am not anyone but myself, or the next anyone. I'm not trying to be the next Fred Wilson, Josh Kopelman, Marc Andreeson, etc. I am creating a lifestyle and a firm that works best for my strengths and how I want to spend my time, and who I want to spend it with. I am not trying to build a big firm, employ a lot of people, or manage the most money possible. I just want to do my thing for as long as my investors and the future founders I have the opportunity to back will let me.