Last week I testified on entrepreneurship, for the third year in a row, in front of the NYC Council Technology Committee.  For my testimony, I responded to what some others had said during their testimony and basically said some of this and I’ll add more:

New York City is a *thriving* innovation community right now.  It is unquestionably the best place to build a web technology or digital media company on the east coast.  There are more and more experienced entrepreneurs launching their second and third companies, coming back as angel investors, and mentoring young startups.  Everyday and every night there are opportunities to network, collaborate, and learn from other startups—not just to party but to build lasting connections that drive real business value.  There is also more venture capital activity than their ever has been—and the amount of venture funding this year, in terms of companies funded, will wind up being nearly half that of the Valley.  That is, relatively, the best we have ever been.  Given the size of our startup community, utterly amazing.  In addition, Boston VCs are flocking to NYC in a big way (Polaris hiring Steinberg, Flybridge hiring Westheimer, Beim moving to NYC in March, etc).  There is a growing and tightly knit community—one that is, unlike the Valley, open and encouraging.  No one will ever look down on you for not having worked at Facebook, Google, or PayPal, and if you get venture funding, we don’t raise an eyebrow if it’s not from the right VC. 

What’s even more amazing is that we’ve gotten here largely in the absence of any kind of top-down, institutional support.  There’s no school here pumping out startup professionals en masse (ITP is relatively small).  There’s no city program we all came out of.  We built this ourselves, as a community, organically. 

After testifying, I then tried to put myself in the shoes of the average council member and digest what I heard from others, and what I would think of the NYC tech community if this was my vantage point.  Most of what people talked about was money and desks.  That’s when I realized that the city is getting *horriffically* bad data on what’s really going on with the NYC tech community and what it needs.  By failing to participate in this innovation community, the city and its affiliated entities lack firsthand knowledge of what’s going on, and instead depend on the often random, misguided hearsay of those who aren’t really in the trenches of the Big Apple’s recent success. 

Here’s an example.  Baruch College measured that the average city has about 19% of its population that identify as entrepreneurs.  NYC is down at 15%, so they conclude that we’re 4% behind.* 

This makes no sense whatsoever.  There’s no “steady state” for entrepreneurship—no systematic reason why that number is anything other than randomness—and it doesn’t apply here.  Every city is a unique mix of people and jobs, mostly due to underlying demographics, geography, and maybe even culture.  Is Kansas short on investment bankers because they don’t have 3% like the rest of the country?  Is NYC overweight people in the tourism and hospitality industry?  Guaranteed we have more people in that sector than other cities—simply because we take on more visitors.

Misguided statistical analysis without real world, in person feedback is why folks from the city keep asking “Why are we so behind other cities?”

The feedback they most often get is that we lack startup capital.  Probably 9 out of 10 entrepreneurs in this city say that access to capital is a problem.  Funny enough, 9 out of 10 startups don’t get outside financing at all—and that’s across the board.  Why?  Because most startups just aren’t based on great, well thought-out ideas.  In fact, many entrepreneurs that start out who fail to get access to funding are often forced to iterate on their models—usually revamping the entire idea.  Many folks would agree that their first iterations would not have worked out as equity investments and that they were better off going to market to try and generate revenues when they couldn’t get financing. 

Other startup ideas simply don’t have capable founders.  It’s not that they aren’t dedicated, but they may not have the right skillset or experience to lead a company. 

Think about it this way:  Would you put your own personal savings into any more than 1 out of 10 of all the ideas you’ve ever heard people come up with in your life?   I certainly wouldn’t—and I definitely don’t want the city moving that ratio up significantly either. 

Outside equity capital simply isn’t appropriate for most startups—sometimes because of their model, sometimes because of their expected size, and other times because of the lifestyle priorities of the entrepreneur.  If you don’t have the intention or capability of building at least a $50 million business, then equity capital is probably not for you.

I’ve said before we could use more smart, dedicated capital—and we’re getting that with the addition of a First Round Capital office in NYC.  No doubt other venture funds will follow.  The last thing we want to do is to compete with the city’s capital, raising the price of deals and distracting the market. 

So, if you work for the city, beware any entrepreneur who tells you they can’t raise money in NYC and that funding is a problem.  For every 9 of those people, there’s one who had no problem raising money from experienced investors because they had a big vision, exemplary skills, and a great execution plan—if not a great product already.  Many raise money from relatively unsophisticated investors—because NYC is full of money and it’s really not that hard to find someone with an extra few grand to put to work in what might sound like a promising idea to be the next big thing.

There’s another real downside to an increased percentage of startups getting funded.  There is, in fact, a limited supply of good talent—not just in NYC, but everywhere.  Great people are hard to come by in life, simple as that.  It’s hard here, it’s hard in the Valley and it’s hard in Boise, Idaho.  When ideas get funded that otherwise wouldn’t, those lower potential companies pull talent out of the market and get them working on less promising ideas—ideas less promising than those that already have customer and financing traction.  When less savvy money funds a company, you effectively raise the price of talent and distribute it inefficiently. 

But, if you’re sitting on the New York City Council, how would you know?  All you hear in these testimonies is how hard it is to raise money.  It’s the same with office space and how expensive it is.  Meanwhile, I spent the day last Tuesday going around to Sunshine Suites and TechSpace and found huge communities of growing companies—probably over 2500 people working at startups in total across these places.  We’ll be visting them during the First Round Startup Trek on January 5th.  They’re loving life there and I don’t hear a single complaint that the rent is too high.  I mean, sure, if asked, would I love my rent to be lower?  Of course.  Do I still live here?  Yes.  The fact is, if you have the revenues or the investment capital to pay someone, you undoubtedly have the extra cash to put them in a desk somewhere.  People costs are always much higher than rent in a tech business. 

The problem is that when all these folks come to testify, you have policymakers that use these hearings as their sole source of information.  They have no way to vet the perspective of any of these entrepreneurs either.  I had a guy after me testify from the NY Tech Council.  Sounds pretty impressive, only…  who appointed them New York’s tech council?  Who do they represent?  Anyone can ask a law firm or a big company for a few sponsorship bucks these days, slap a few logos on your site, and make it seem like you speak for a mass audience.  Most of the work in the community these days is being done by people who aren’t asking for money, titles or any kind of recognition.  Not surprisingly, this person’s testimony about how NYC has failed to build an innovation community couldn’t have been further off the mark.  I wondered where he had been for the last five years and nearly fell out of my chair when he said it.

People from the city government and its related entities don’t know that because they simply DO NOT PARTICIPATE in the innovation community.  We’ve been inviting city council members to the NY Tech Meetup for years, same with nextNY.  At the hearing, they asked the NYCEDC who helps entrepreneurs with business and tech questions and got little in the wake of answers.  Meanwhile, Nate and I are smacking our heads in the crowd because we know where those questions are going—to us and the other visible entrepreneurs in the community.  The answers are on Twitter, and blogs, and listservs and events.   

As one attendee to the City Council’s talk put it, listening to all this random testimony—and also to other governmental orgs who couldn’t quite get all the data that was asked for or wasn’t at liberty to share—was like seeing through a cheesecloth.  I wondered if I was living in the same city as everyone else was.  Companies talked of the lack of places to ask about healthcare, compensation, technology issues… apparently they’ve never been on the nextNY listserv before. 

Here’s a sample of just a few recent questions asked about startups on the nextNY listserv:

Pre-Alpha Release Best Practices?

Best Bank for Startup Checking, Finances, etc?

S corp or LLC

Need Web dev shop experienced with Spanish mirror sites

So before the city goes and commits millions of dollars to reinventing the wheel for the startup community, maybe they would be better served pointing to all of the existing resources out there that some of the newbie entrepreneurs they talk to just can’t be bothered to find.

Over the next few years, the city is planning on running events, opening incubators, connecting professionals, and injecting more capital into the system just as the community and private enterprise is doing the exact same thing—and they’re doing so without the basic relationships, experience, and context to do this successfully.  For once, I’d like to see the city support the proven, existing efforts, rather than recreate the wheel:

>> They should give tax breaks and subsidies to Sunshine Suites and TechSpace rather than get into the real estate market themselves. 

>> They should be getting venues and focusing their PR efforts for nextNY and NY Tech Meetup events, rather than competing against us for the mindshare of the community. 

>> They should encourage public participation of key stakeholders in social media (and lead by example), getting local academics on blogs and Twitter, before spending money to build a big research database no one will ever use.

But they won’t do that, because they need to own everything and get credit for it come election time.  One of the city council folks wanted to hear about the next incubator to enter her district—and she didn’t care about the new one opening in Queens.  One NYCEDC rep told me that it was “off topic” when I brought up the EDC’s lack of participation in existing community activities during a small group breakout about their planned slate of events.  That’s so far from the norms of the great NYC innovation community already being built that it will prevent the city from gaining much traction in their efforts. 

In the end, does it really matter?  Regardless of the city’s activities, the startup community will continue to grow.  Dominos are falling and it’s doubtful that anyone can stop the chain reaction now.  Can they help?  Maybe the city can help existing efforts as it does seem to be good at getting PR for itself—but if all it does is listen without participating, reinventing wheels, and duplicating community and private sector efforts, I’m not particularly bullish on what it’s up to.

*I had mistakenly attributed this stat to the Center for Urban Future prior.”

One of the best things anyone can ever do to encourage the dissemination of ideas, collaboration, and innovation is to put all the relevant stakeholders in a room, provide some focus, and just get them talking.

A topical, relevant group discussion is a simple, but enormously effective tool when done right.  It’s something we’ve been doing with nextNY for nearly four years now and I want to ramp it up significantly in 2010.  We have over 2500 up and coming digital media entrepreneurs, designers, business people, investors—a great mix of up and comers that have come together to build a really inclusive and innovative community. 

At the same time, I know firsthand that various big companies, schools, professional organizations, and service providers want to connect with this community and get some mindshare on a lot of these topics.  I was just talking to someone last week about how a lot of big companies have great event spaces that basically go unused most of the time—and yet a lot of community groups struggle to find places to hold their events.

Therefore, I’m holding an “Event Space Drive”.  I’d like to connect to as many companies willing to commit to donating event space for 50-100 people as possible.  My goal is three spaces after work a month, each month for 2010.  This way, if I book the dates ahead of time, I can guarantee the best speakers, the most well thought out topics and the right amount of planning and prep ahead of time.

So if you have space to donate to the NYC innovation community and you’d like to host a discussion or networking event, even if you can just give away a couple of dates, or one every other month, please get in touch with me at charlie.odonnell@gmail.com.

When Josh Kopelman and I first spoke about me joining First Round Capital, we talked a lot about alignment of interests—what First Round Capital was interested in with regards to investing in New York City, and also what my interests were with respect to my own career.  Given that our discussions had only started about a week and a half before my last fulltime day at my startup, I hadn’t really had a lot of time to think about what my next move was going to be.  It didn’t really make sense for either of us to commit to a big four year engagement when I couldn’t say for sure what my goals were.  Josh suggested that I help First Round firm up their footprint in NYC over the next year while I figure it out. 

So, that being said, what am I actually doing with my time?  The Entrepreneur-in-Residence title is a bit of a misnomer.  Traditionally, EIRs are out looking for the next thing to build, and are only peripherally out looking to help on dealflow.  I’ve been quite the opposite.  It took me 7 years to decide I wanted to build something in the career guidance space—I highly doubt I’ll gain enough passion for a new idea anytime soon, so I wouldn’t look for me to start a new company. 

I’m spending about a third of my time looking at deals, another third meeting with folks that see a number of startups to boost our NYC dealflow, like angels, lawyers, etc., and then a third of my time on what I’m calling “community support”—helping to make NYC a better place to build a startup.  A rising tide lifts all ships, so that not only helps the community, but helps First Round, other NYC investors, other local startups, people looking to build tech and digital media careers here—the whole ecosystem. 

Here’s a little more detail on each of those endeavors:

Deals

One thing I realized is that many people in NYC don’t actually realize what First Round does and how it differs from a typical venture capital fund.  Actually, you can think of us more like an angel investor more than anything—one that has the ability to follow on.  We’re one of the few places in NYC, other than from an individual angel, where you can get a check of $100k.  We’re more than happy to lead a $500k angel round by being half of it, and we don’t need to get 20% of the company upfront.  One way I measure my own dealflow is on how many people have a finished Powerpoint deck.  If they do, I’m seeing them much later than I want to.  I want to meet people when they just started hacking or they’re vetting the idea—not when they’re shopping it around to every investor.  I think I can be pretty helpful, having just gone through raising angel capital for my own startup, in helping people think about their financing plans, product viability, business models, etc. 

So if you’re raising an angel round in New York City, thinking about it, or you’re in an angel round, please do make sure you come talk to me.  (charlie@firstround.com) The best thing we can do for you is to be a really value added investor around the table, and the worst thing we can do is just give you a quick no—or tell you what’s missing. 

My role at First Round from a deal perspective is to uncover as many interesting startups as possible, but also as early as possible, and help vet them for the team.  We have a very team focused approach to deals and all of the partners, with the support of the rest of the team, get involved in decision making. I remarked to another VC the other day that the idea of “Partner X’s deal” seemed so foreign to the way things get done at First Round.  (It’s actually quite the well oiled decision making machine, actually…  you should see our meetings.  I was impressed when I first saw it.)

I think a lot of local entrepreneurs feel like they’re too early to talk to us until they’re ready to raise a million bucks.  Please do come see us much earlier than that—even without a deck.  I know one entrepreneur in particular that I’m helping write her deck so she’d be better at pitching us. 

Other Players in the Ecosystem

You’re a lawyer, a school running an incubator program, a designer who has worked with startups—let’s talk.  First off, I have companies that might be able to use your services.  Second, let’s chat about the NYC market in general and what we can mutually do to help make NYC a better place to build a company.  Third, undoubtedly you’re seeing a lot of companies that might be thinking about financing.  Send them my way.  Don’t worry about screening them.  That’s my job.  Screening is what I get paid to do. 

Community Support

Like I said before, the better that New York City is at supporting startups, the better it will be for First Round and for everyone else in the community.  I’m very dedicated to making that happen, and the team at First Round is also committed to participating in that effort.  I want to run a lot more events for nextNY and for First Round in New York City that are relevant, educational, and productive.  Sure, I’ll probably get roped into running another Shake Shack event, but what I really want to do is more events like we did last night at TechSales—where 100 professionals, like sales people, developers, product managers, etc.,  get together in a room on a focused topic and have a great discussion. 

That’s the kind of thing that has brought the community together over the last five years.  Give me a room for 75 people and I’ll push the community forward—or rather set the stage for the community to push itself forward like it’s been doing.  That’s the kind of thing that I think is hard for folks in government, for example, to understand.  When they do surveys and hearings about what the community needs, I tell them the community needs easy access to free event space for 75-100 people and a single person to just run around connecting everyone.  Seems too small, but that’s what innovation is.  It’s a house to house ground war, with conversations taking place just a handful of people at a time.

So if you’re a company with space to host 50, 75, 100+ people, trust me, I’ll fill it with innovative folks from the NY tech community and their ideas, arguments, and accumulated wisdom. 

Does it need to be explicitly branded First Round?  Not really.  We have a great network in New York and I’ll be making sure that network not only mixes with itself, but gets out in front of the community.  So, expect to see a lot of experienced pros from the First Round portfolio on various panels and out at events more often, but don’t expect a lot of in your face banners and schwag. 

This is syndicated from an e-mail list I’ve been sending this out to over the past four weeks to hundreds of people.  If you’d like to receive this on Monday mornings, please sign up here:  http://eepurl.com/e3On

Welcome to Holiday Party Season!

No doubt your inbox is full of places to imbibe with friends, clients, and investors under the guise of holiday merriment.  Just try not to overdue it and stay off your hipster scooter if you've had a few too many.  Here now, we present a list of things to do that won't necessarily lead to yuletide blackouts.

Monday, December 7th

7PM: Boxee Beta Unveiling - If you haven't figured out by now that this is the**EVENT OF THE WEEK** then you need to hangout with cooler friends.  At the event they'll demo the new Beta, launch new applications from partners and start a 4-weeks early-access for users to test the Beta before we release it to the public at CES on Jan 7th.  You know what they say--750 people in Brooklyn can't be wrong.

Music Hall of Williamsburg

66 N 6th St

Brooklyn, NY 11211

RSVP: http://boxeebeta.eventbrite.com

Tuesday, December 8th

6:30PM - 9PM: MatchupCamp II is the reprise of a past successful nextNY event. It is all about startup networking, creating a place for ideas and talent to meet.  MatchupCamp has the sole objective of bringing together people looking to start, expand, or join a startup in New York (and the tri-state area).  If you want to get your hands dirty and build something new, this is the place.

For Your Imagination Studio

22 West 27th ST

RSVP: http://matchupcamp.eventbrite.com/

6pm – 9pm: Launch Party for Hive at 55 – Downtown New York’s newest coworking space.  The Hive at 55 is a workspace for freelancers and small business owners. 

55 Broad Street, 13th FLoor

More Info: http://www.downtownny.com/news?nid=222

RSVP: hiveat55@downtownny.com

Mediaite Launch Party

6:30PM - 8:30PM

Plaza Hotel

RSVP: I wish I knew, because Rachel Sklar is pretty cool, but I didn't get an invite.  Oh well.

Wednesday December 9th

Digital Dumbo: Purple Sangria Digital Festivus

Bringing together the Digital Minds of NYC, Digital Dumbo facilities idea sharing and networking all while drinking purple sangria. This months event is sponsored by Purple Rock Scissors.

Galapagos Art Space

16 Main Street

RSVP: http://digitaldumbo.eventbrite.com/

6PM -8PM: Insider Tips from the Big Apple's Best Tech and Digital Media Sales Professionals - Sales Pros Only!

We've assembled some of the Big Apple's best tech and digital media sales talent for a very interactive discussion that every new and accomplished sales professional in tech should attend.

Deutsch Inc

111 8th Ave

RSVP: http://www.nextNY.org/TechSales

Thursday, December 10th

5PM- 7PM The DEMO New York City Meet-up is one stop on the DEMO Innovation tour where Matt and the DEMO team will travel around the country to connect with the DEMO community in search of  the best innovation to showcase at DEMOspring 2010.

3 Ten Lounge

310 Bowery

RSVP: http://demoinnovationnyc.eventbrite.com/

7PM URDB (http://urdb.org/) Presents: World Record Appreciation Society #10

Following a brief NYC hiatus and two sold-out events on the West Coast, the World Record Appreciation Society is coming back strong with holiday-themed world record blowout extravaganza.

Odd addition to our list?  Perhaps, but I'm showing up purely to see Andrea Rosen set the record for "Fastest Time To Open An Advent Calendar And Eat All The Chocolates In Order".  How awesome is that?

Pianos

158 Ludlow St

RSVP: http://guestlistapp.com/events/6627

Real Time Twitter Booze NYC

If you're building a business around the real time web or just tinkering with a few product ideas, you'll want to get drunk here.  The founders of Stocktwits, fourSquare, Bit.ly, Hootsuite, and Winetwits will be in attendence. 

Swift

34 E 4th Street

RSVP: http://realtimeboozenyc.eventbrite.com/

Friday, December 11th and Saturday, December 12th

Open NY Summit & Codeathon

The Open NY Summit will be the first of many events produced by open government practitioners and volunteers.  Two day conference includes Open NY Co-working, discussions, and a hackathon.  Revolution!

The Open Planning Project

148 Lafayette St

Penthouse (PH)

RSVP: http://opennyforum.org/2009/11/open-ny-summit-09/

Sunday, December 13th

12:45PM: NY Tech Gives Back - Ice Skating is a day for the NY tech community to come together for a good cause through volunteerism and giving. For our inaugural event, we are partnering with CampInteractive, a not-for-profit organization that empowers inner-city youth through the inspiration of the outdoors and the creative power of technology. When asked what event the kids would most like, they chose ice skating. We're making it happen. Your ticket will pay for you + 1 CampInteractive child to go ice skating (+pizza).

RSVP: http://techiesgiveback.eventbrite.com

I can’t tell you how many times I’ve told startups to forget about raising money and instead to just go out and sell something.  To me, if there’s any one area that New York City has a serious advantage in, it’s experienced salespeople.  You can never have enough.  They are the rainmakers—the ones who bring in the lifeblood of your company—cash. 

But selling technology and digital media is a different animal.  These aren’t dental supplies—this industry changes every single day.  Given all the experience we have here locally, I thought it would be useful to put together a bunch of knowledgeable sales professionals to share what they know in a take aimed at full time sales professionals. 

So, if you’re a sales rep, director, or VP selling digital media or technology in NYC, this event is for you, and boy have we assembled a murderers row of sales experience here.

The event will take place next Wednesday night, December 9th at 6PM at 111 8th Avenue at Deutsche Inc. 

You must RSVP here.

They’ll be talking about what they did to get to the next level... ie. was there a turning point in their sales career and  when did things came easier... when did they "get it" and when did they really break through.  They’ll also cover what kind of training and methods worked for them, what didn’t and the things that maybe go against commonly accepted sales wisdom. 

Here’s the lineup:

John Roswech, President, Jingle Networks

Prior to joining Jingle Networks, John Roswech served as vice president of sales for Atlas Solutions (Aquantive), where he managed sales and account management teams for third party ad serving, search, rich media and landing page optimization, with revenue growing $100mm plus under his sales leadership. Before Aquantive, Roswech was senior director of sales with Matchlogic (Excite@Home), where he was part of the management team at Narrative Communications and responsible for rich media and lead generation products.

Jed Savage, Chief Revenue Officer, ScanScout

A twelve+ year Digital Media Sales veteran, Jed was the Director of Business Development for eBay’s Strategic Partnerships unit before joining ScanScout.  He served for 4 years with Microsoft’s MSN division, holding positions including Eastern Sales Director, National Sales Manager and General Manager of MSN Sales. Jed increased revenue 10-fold in his first two years at MSN, and helped make the MSN sales division one of the leading revenue organizations in the industry.  Before working with MSN, Jed created the National Sales Team for CBS Sportsline. As the company’s Vice President of Sales his team drove over $30 million in total revenue during his first 2years at the helm.

Jeff Stewart

Jeff is the founder of Urgent Career, a pioneer in the use of linguistic technology to match sales professionals with compatible employment opportunities.  Jeff has founded over a half-dozen companies, which combined employ over 600 people. Immediately prior to founding Urgent Career, Jeff founded a technology-based financial intelligence firm that provides real-time analysis of semi structured text information for Hedge Funds and other Institutional Investors. The seeds of Urgent Career grew out of the observation that semantic analysis of massive amounts of textual data yields valuable insights.

Emily Twomey, SVP Sales, Oddcast

Emily has over ten years of experience in online media sales & interactive product sales. Prior to her position at Oddcast she held the positions of Director of Sales at Razorfish Networks and Senior Sales Manger at The New York Post.  She started her sales career at the downtown style bible PAPER Magazine.

Mark LaRosa

Mark LaRosa is the CEO of QuotaCrush, a sales consulting company focused on helping start-ups with sales strategy and outsourced sales management.  In its first year, QuotaCrush has brought two start-ups from zero sales to break-even – in a horrible economic climate.   Prior to QuotaCrush, Mark was also the founder of Dynamic Mobile Data, a wireless enterprise software company focused on vehicle location and dispatch software.  Mark sold over $20 million in enterprise software in this startup to companies including Pepsi, SHL, UPS, Purolator Courier and Kraft/Nabisco.

 
Vivek Sharma, Former Area Mgr., North America - Engine Yard 

Vivek is currently working on a stealth startup, but he most recent ran the sales team at Engine Yard that covered the eastern part of North America and EMEA.  He was the second salesperson in the company and best performing regional manager in 2008 and was on track for similar success in 2009.  In 2008, he brought on nearly 40% of Engine Yard's net new revenue and closed the largest deal ever in the company's history. )

Almost overnight, the Ace Hotel lobby has become something of a phenomenon.  On any given day, you’ll run into an actor, a fashion designer, a model and—randomly enough--an tech entrepreneur. 

Just this week, as I was taking meetings in my relatively new role on the First Round Capital investment team, I got to meet Charlie Rose, spotted Tobey Maguire, and most notably, Boxee’s Avner Ronen and Jetsetter’s Drew Patterson.

With a long study hall style table, comfortable couches, and wifi whose codes are the worst kept secret since USV’s Foursquare funding, the Ace had attracted a growing following from the New York City startup world.  The Stumptown Coffee right off the lobby doesn’t hurt the geek pull either—everyone knows high quality caffeine is the fuel that makes code go.

I discovered the Ace Hotel thanks to a coffee invite from Nick Bilton.  As it turns out, Phin Barnes, my colleague at First Round had known about it for a while, and on any given day you’re likely to run into one of us taking meetings with entrepreneurs here. 

The question is whether the Ace Hotel will embrace its newfound friends in the Big Apple’s creative class.  While the waitresses aren’t pushy with getting people to order—yet—little cards have started showing up reminding folks that these seats are “guest only”.  I’ve yet to find a guest among the Ace’s laptop nation yet, but I’m currently sitting within spitting distance of Malcolm Gladwell as I write this.  I’m pretty sure he’s not staying at the hotel either.

There’s certainly an argument that attracting the local tech scene’s “cool kid” crowd, like Zach Klein, who I ran into the other day and passed on an office space tip to, is good for business.  Being community friendly will help the Ace become the go to place for innovators from the creative class.  I mean, wouldn’t you like to be the place where the next Google or Facebook was hatched?  That’s especially the case since many of the young innovators are also the trendsetters in music, food, clothing, etc.  I doubt anyone wants someone to build a router at the study hall table at Ace, but they should certainly extend an open invite for Anthony from Hype Machine to come hack here with his tech team. 

To look at a similar story, you can go back to when the local NYC tech community adopted the Shake Shack in Madison Square Park as its unofficial social hub.  That’s a good example of a business totally embracing the community.  Mentions of the Shake Shack on Fred Wilson’s blog date back to the summer of 2004, when foodie entrepreneur Joshua Schachter and del.icio.us had a little office at 915 Broadway.  Since then, the venue has hosted two of the best tech events in NYC and an epic snowball fight that featured Shake Shack employees participating and free hot chocolate.

The Shake Shack further fostered their relationship with the local tech community by letting a couple of hackers claim and build off of the @shackshack Twitter account.  By powering it with a retweet bot, they created a way for local “insiders” to skirt the line by seeing who they knew was already there.  Now, much of that functionality can be found on Foursquare, but still, the fact that the folks from Danny Meyer’s burger paradise in the park didn’t attempt to block the account speaks well to the kind of relationship they want to have with the community.

So the question is, will the employees from the Ace Hotel be ready for the West 29th Street snowball fight with local entrepreneurs or will we soon get booted for being wifi and table moochers. 

Video from last year’s Shake Shack snowball fight.

UPDATE:  I got this message via the little Plugoo chat window on my blog: 

“ACE NEW YORK LOBBY SIGNS > "Thanks for pointing this out. We want to balance the needs of our guests & the community - both are very important to us. NY lobby signs are down & we hope this flows naturally & organically. – Ace”

That’s really the best response I could have gotten.  It makes me want to go there more and to make sure I’m spending a little money and recommending them, too.

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LET THESE NYC STARTUPS MAKE YOUR HOLIDAY WEEK!

While this will be one of the quieter weeks in the NYC tech scene, no doubt that it's going to be one of the most hectic weeks at home. You're probably hosting, cooking, and shopping (and drinking), so why shouldn't the internet make your life a little bit easier and more entertaining this week. I've picked out a few local companies that might make this the best Thanksgiving week ever.

I did find free jazz on the (covered) rooftop of the Empire Hotel tomorrow night, which looks like a pretty cool thing to do.

First off, you can't host a great party without inviting anyone, so Pingg should be your first stop for party invites. They wrote up a piece for all the T-day hosts out there that you should check out.

Before all the festivities, you should definitely make the traditional trek to the Upper West Side to see the Macy's Thanksgiving Day parade floats get blown up. Who else is going to be there, though? How will you find them and share the experience? Hotpotato, a First Round portfolio company, just got back from launching at Crunchup and should be up and live in the app store by the time the first bit of helium makes its way into Snoopy. Share photos, notes, etc., with others in real time all around this annual event.

Meals are going to be pretty standard--turkey, stuffing, etc.--but make sure your wine selection isn't. Check out Snooth.com for the best recommendations from the most comprehensive wine database in the world.

What on earth are you going to wear? Try out a bunch of outfits and ask your friends to vote on the most appropriate ensemble with Fashism. If you're like me, you can barely dress yourself, so this kind of thing is best left to crowdsourcing.

Men, you will undoubtedly spill wine, gravy, and cranberry sauce on your white shirts, so come this Friday, it's going to be time to go shopping for a new one. Don't just buy one off the rack. Customize and personalize your own unique dress shirt with Propercloth, another cool NYC startup.

You've made way too much food and will undoubtedly be eating turkey between now and 2015. Looking for the best recipe to mashup the leftovers? Look no further than this week's Food52 Turkey Leftovers contest. I feel like that one is going to be a win-win all the way around.

Enjoy your holiday!

Yesterday, I bought an Xbox off of BigDeal.com, one of our First Round Capital portfolio companies. I spent nearly an hour and a half bidding against some guy to try and buy at increments from about $18 all the way to $168.  I tried every strategy I knew…  holding out to the last second to try and lull him into a sense of security and then jump in…  then brute forcing it by counterbidding every second all throughout the $30 and $60 range to try to wear him out.  It was an addictive bidding frenzy—and my downside was just buying it at the Amazon price, so I couldn’t really lose.  (I didn’t win, but I’ll be back!)

TechCrunch did a good job of covering the company yesterday, so I’ll just pull the highlights:

“BigDeal lets users purchase virtual bids $0.75 each which can then be used to bid on goods ranging from video games to high-end televisions. Whenever you bid on an item, its price increases by $0.15 and an extra 30 seconds are tacked on to the duration of the auction. With this model, items end up selling substantially below their market value. But one of the main criticisms of Swoopo was the risk of losing your money spent on bids (regardless of whether you win or not) when the auction concludes. BigDeal takes a couple of steps to mitigate this risk.

With BigDeal’s model, any users who get outbid get a full credit of the money uses for bids to buy the item via a “Buy Item Now” option (which Swoopo also has, called “Swoop-it-now”). So if you spent $10 on bids, your Buy It Now price will be dropped by $10. Of course, the Buy It Now price will frequently be higher than the price of item sold for in the auction but at least users aren’t necessarily losing money all together. And the Buy It Now price is set at the same price that Amazon lists for the same product.

That’s not all. BigDeal provides an added incentive for bids by letting all users trade in the money they spent on bids for gift cards. All users get $1 gift card discount for every $1 spent on bids. So if you buy $25 in bids, BigDeal will give you a $100 gift card for $75…

…It seems that Big Deal has taken the best elements of Swoopo’s model and added several features which make it more of a win-win for consumers. Plus, it adds information, like bidding history, to the process to make the auction more fair.”

I’ll be interested to see how the company works towards providing more and more auction transparency.  Admittedly, when I bought my Xbox, I didn’t realize that I wasn’t getting my bid points back when I took the “buy it now” price.  I thought everyone was seeing the same price, like a loaded gun on the table, and that everyone’s bid lowered it.  I figured everyone else’s lost bids were subsidizing my price, but as it turns out, I didn’t really get “refunded” my points back—they just came off the MSRP.  So, I effectively just paid the MSRP price…  not what I wanted, but not a terrible outcome, since it’s been years since I had a game system and I was kind of itching to get back into it.  Perhaps I’ll bring it to the new First Round offices in Union Square (coming this January) and we’ll have entrepreneur Madden tourneys!

I've been thinking a lot about where entrepreneurs and startup talent come out of in NYC. A lot of folks believe that you can train people coming out of the financial services base to do something entrepreneurial, but honestly, I'm not so sure about that. What I do think, however, is that it takes more than just a visionary leader or a ninja-level hacker to start a business. There are tons of startup companies in New York City, many already making money or well funded, that are looking for top supporting talent--engineers, designers, salespeople, business development pros, product managers, etc. This is where we, as the startup community, can do a better job--mining the installed base of talent in big companies. I'm actively looking for ideas on how to tell the masses of talented, experiences folks slaving away in Cubeworld that there's a thriving innovation community in New York City with lots of great companies looking for talent. How do we pick apart the CondeNasts, JP Morgans, and Time Inc's? Please talk to me about it. If you're a recovering Fortune 500 employee, tell me how you got out. (charlie@firstround.com) One way the nextNY community is trying to help is with Matchup Camp.

MatchupCamp is for skilled professionals to find new opportunities—for developers to find inspiring projects, for salespeople to find interesting products to sell, etc.  It’s not a bunch of unemployed people handing out resumes.  It’s for people looking to explore where they might best fit.  When we did this two years ago, technical talent probably made up 40% of the crowd and we’re working hard to make sure it’s not just people with ideas, but people who can make them happen.

When: December 8th at 6:30

Where: FYI Studio 22 West 27th, 6th Floor

RSVP here

Wow… what a long way we’ve come.  In February 2006, I started nextNY because the only community-wide event in town was the NY Tech Meetup and, at the time, it didn’t have much community about it.  I think I was member #71 and now it’s got over 10,000.  At the same time, the NY tech community has exploded with events, both educational and social.  One look at GarysGuide and you can get quickly overwhelmed.

A number of people asked me at recent nextNY events how they can find out about what’s going on.  Pointing a busy entrepreneur or executive to the nextNY listserv, which buzzes all day with discussion of memory caches, CMS’s, and finding a bookkeeper clearly isn’t the answer. 

Therefore, I’ve decided to take the attendee lists from the last two Shakeshack events and some recent nextNY talks and start a once a week e-mail newsletter as a curated version of what’s going on around town and in the online communities as well.  In the future, I’ll also be highlighting some open job positions, maybe some companies, and maybe just some recommendations on people that you should follow.  If you’d like to sign up for the list, just go here.  It’s going to look pretty texty and unformatted for a bit, but I’ll dress it up soon.

Event of the Week:

The Net Neutrality TechDebate, an Oxford style competitive back and forth on what is probably the most important topic in technology today that few of us have a clue about. 

The debate will be held on Tuesday, November 17th at the IAC Building, 555 W 18th St btw 10th & 11th ave.  Doors open at 7:00 PM.   **RSVP here**

The Debaters

Against

James Assey - Executive Vice President, National Cable and Telecommunications Association
Robert Quinn -  Senior Vice President-Federal Regulatory, AT&T
Christopher Yoo - Professor of Law and Communication; Director, Center for Technology, Innovation, and Competition, UPenn Law

For

Tim Wu - Coined the term "Network Neutrality"; Professor of Law, Columbia Law
Brad Burnham - VC, Union Square Ventures
Nicholas Economides - Professor of Economics, Stern School of
Business, New York University.

Can't make it?

The debate will be streamed live at: http://www.livestream.com/techdebate
A podcast will be available after the event at: http://tech-debate.com

Would rather drink? 

Check out the NYVC Happy Hour instead.

=========================================

This week is O’Reilly’s Web 2.0 Expo at the Javits Center.  By registering for an Expo Pass, you can get in free to see all the keynotes, the sponsored sessions, Web2Open, Launch Pad, and the Birds of a Feather sessions.  

Here’s what you won’t want to miss:

Monday

Ignite NYC – 5 minutes, 20 slides.  Geeks + Slideshows = Awesomeness

7PM at New World Stages: 340 West 50th Street

Tuesday

2PM: A Conversation with Caterina Fake Jennifer Pahlka (Code for America), Caterina Fake (Hunch)

2:25PM: Streams of Content, Limited Attention: The Flow of Information through Social Media danah boyd (Microsoft Research)

Wednesday

2:20pm A Conversation about the Realtime Web Brady Forrest (O'Reilly Media, Inc.), John Borthwick (betaworks)

Thursday

9:15am A Conversation with Beth Noveck Tim O'Reilly (O'Reilly Media, Inc.), Beth Noveck (Executive Office of the President/OSTP)  <—Yes, *the* President

=========================================

It’s also Entrepreneur Week and there are a couple of noteworthy panels.  Unfortunately the event is sold out, but there will be a livestream available on their site soon.

I think the pick of the conference is this panel at 2:15PM on Thursday:

The Revenue Inflection Point: The New Reality of Scaling a Business to $100MM in Revenue

MODERATOR: Bob Tedeschi, New York Times Technology Columnist

PANELISTS:

Stephen Messer, Co-Founder of Linkshare

Omar Amanat, Entrepreneur in Residence, Wharton School of Business

Marc Cenedella, Founder & CEO of TheLadders.com

Nancy Pedot, Former CEO of Gymboree & Party City

Chris McCann, President of 1-800 Flowers.com

Also right up there is this Friday panel at 10:30AM:

A Roadmap for the Entrepreneur Pt. 2: Top Venture Capitalists Reflect

MODERATOR: Murat Aktihanoglu, Founder of Centrl & Entrepreneurs Roundtable

PANELISTS:

Albert Wenger, Partner at Union Square Ventures

Jim Robinson, Co-Founder & Managing Partner of RRE Ventures

Anthony Marino, Managing Partner at Virgin Investments

Howard Morgan, Partner at First Round Capital

=========================================

This weekend is Startup Weekend.  Startup Weekend recruits a highly motivated group of developers, business managers, startup enthusiasts, marketing gurus, graphic artists and more to a 54 hour event that builds communities, companies and projects. 

David Kidder will be speaking Friday night while Nate Westheimer, Sam Lessin, and I will be on the Sunday night panel.

On Tuesday, October 13th, at 6:30PM, 100 Founders and CEO’s of NYC tech companies will gather at Sun Microsystems for nextNY’s “NYC Media: Meet the startups” event.

The idea behind the event was that, on a pretty regular basis, tech and small business reporters find their way to me and want to know about the “comeback” or “birth” or “rebirth” or whatever of the NY tech scene.  Then I have to tell them all about the fact that we’ve been here for years, heads down working.  Half the time, they don’t know about the most successful startups or the most innovative ones. 

It’s not easy, either.  NYC startups blend in pretty easy—squatting in other offices, in coffee shops, in their own apartments.  You never know when the two dudes in the back of your Williamsburgh design showroom are actually a couple of hackers trying to change the world.

Therefore, I thought it would be great to gather a bunch of NYC’s really awesome startups together in  one room—and that’s what we’ll have.  There will be 100 Founders and CEOs of NYC startups all in one room, including:

Brian Adams – AdMeld (Raised $15 mil in two VC rounds since 11/08)	Seth Besmertnik – Conductor (Raised $12 mil, including $10 mil this year from Matrix Partners and Firstmark)	Zephrim Lasker – Pontiflex (Raised $8.75 mil since 4/08)
Anthony Volodkin – Hype Machine (Doesn’t need VC to be cool… Inc Top 30 Entrepreneurs Under 30)	Dave Morgan – Simulmedia (Founder of Tacoda, sold to AOL for $275 million)	Geoff Lewis – Udorse Up and comer from TechCrunch 50 - $500k from Founders Fund, Private Beta

So the big question is… where are all the local tech and small business reporters covering this?  We’re going to have Jenna Wortham from the NY Times and John Abell from Wired, but I expected journalists to be tripping over themselves for this and we haven’t seen it yet. 

Where have all the reporters gone??   If you cover innovation, small business, technology, etc. you absolutely need to be here!  We’re also going to include a short presention called “Your Guide to the NYC Tech Community”.  Reporters, RSVP here!

PS… If you are an entrepreneur, we are sold out (or more like free’d out, since everything at nextNY is always free).  Please do not try to sneak in with a media ticket.  I will find you and hunt you down like the dog that you are.  Grazie.

Last December,  Owen Davis from NYC Seed decided to make my company, Path 101, the fund's first investment.  Given my recent announcement that I'm taking a full time job at First Round Capital and that the Path 101 team is going part time, I have to imagine we've been written off as an investment--from a financial point of view.  God help the next company that has to pitch to the NYC Seed board now.  The board is a room full of about a dozen folks, which is about ten people too many for making early bets on seed stage companies.    Undoubtedly their mindset after the news will shift even further to risk mitigation versus additional risk taking, especially after what our experience might be saying about the funding environment. 

That would be a mistake, however.  Experienced angel investors know that a 50% loss rate is about average--they expect half their portfolio not to return any capital.  That's how the business works.  So, if another NYC Seed company fails soon, that would pretty much be well within normal expectations.  I feel like a group of government folks isn't really going to buy that, but they have to.  The Bloomberg administration trumpeted the fund as a way to spur on innovative technology ideas and fill the funding gap for cutting edge startups.  If it had to only pick from companies that could break even on $200k, you'd see little in the way of large scale market disruption coming from these companies.  In other words, you don't pick the next Google by mandating that the company generate enough funds to cover itself within the next nine months.  You might as well invest in a couple of accounting firms or food stores--very little chance of losing your money on those. 

In fact, one could easily make the argument that a heck of a lot of good could be done while still losing the whole entire fund--laying a big fat goose egg.  People learn a lot from failure, and having a culture that excepts high failure rates is critical to a truly innovative scene.  Also, when companies don't work out, founders and employees often move on to other startups, taking their experience and making themselves more prepared for the next challenge.

Take the investment in Path 101, for example.  By enabling us to continue an extra year, we were able to build better relationships with the innovation community and investors.  I was able to pitch and continue communication with Josh Kopelman from First Round Capital.  In turn, First Round is now opening an office here in NYC.  There's no doubt in my mind that First Round will invest *at least* $2 million more dollars in NYC than they would have anyway now that they have an office here--so this development is actually a net positive for the city.  We all said there wasn't enough early stage capital located in NYC, and now, we have a new top tier VC fund setting up shop right in the Union Square/Shakeshackville area.  Add in the fact that my partner Alex Lines is joining Betaworks.  Who knows, he could hack something up that winds up becoming huge.  In a way, NYC Seed enabled him to find someone to fund his hacking.

Plus, we've now unleashed machine learning PhD/scientist Hilary Mason's data mining expertise on the NYC startup market.  After moving here to NYC, she's now looking for neat data projects to work on, particularly locally.  She has a highly soughtafter expertise and our company attracted her back to NYC in the first place. 

By allowing the Path 101 team more time to be out there in the market, NYC Seed unintentionally deposited some innovative human capital back into the innovation ecology here.  The results are likely to be way better than anything just our one company had a realistic shot at, but I wonder how this fund will be measured...  Net returns or overall economic impact.  I hope the board will take a broader view of the impact of the fund and even extend it's life past the mandate for $2 million.  It certainly can't help the portfolio's risk profile if Owen is making bets thinking he's only got six bullets left in his gun and that's what he's going to be judged by.

When I first heard of Foursquare, I'll admit that I didn't jump on it right away.  I knew the founders, Dennis and Naveen (see photo below), but I'm not really much of a gamer, nor am I much of a bar hopper, so the idea of turning my nightlife into a competition didn't seem so appealing to me (especially when working on Path 101 sucks up so much of my nightlife).  Plus, I don't have an iPhone, so that seemed like it should be the third strike for me.

However, I discovered my own reason for using it.  I was talking with a friend about how I stumbled into a great restaurant (August) walking around Greenwich Village, but couldn't remember the name of it.  I was saying how I wished there was an app that pulled my credit card data to track where I had been.  I was always forgetting the places I had gone.

"Why don't you use Foursquare?"

Aaaaaah.  That made so much sense.  Forget the game.  Forget the bar hopping.  Foursquare would be a dirt simple way to just record the places I had been--and that's all I wanted to do with it.  I signed up and started using it through the mobile site on my Sprint Mogul.  I'll admit, I quickly got hooked.

I definitely started getting sucked into the game, too.  Getting badges and seeing where my friends were was fun.  The other night, I realized that I was about to go to a place that Mike Galpert had been to about an hour or so before me, so I called him to ask what he had.  Indeed, the spinach gnocci at Supper was excellent.

That's when I realized how valuable Foursquare really is from a business perspective.  Mike made a recommendation to me, but Foursquare was the service that actually knew that I went, because I checked in.  Being able to connect web advertising, recommendations, and social media buzz to an actual person walking into your store has long been the holy grail of the advertising world.  We spent lots of money and effort online to drum up our brand, but does it actually drive food traffic?  Foursquare knows.

Think about it from Yelp's perspective.  Yelp helps you figure out where to eat, and gives you recommendations, but it only knows about the people who write reviews.  That represents only a small percentage of the overall Yelp traffic--so while Yelp tries to make the business case for advertising and using it's retail services, it doesn't really know how much real live foot traffic it drives.  Foursquare is the missing link, enabling you to come full circle from a review or recommendation to an in person visit from a real customer.  Best of all, it has figured out a compelling reason to get you to submit that data--in the form of a fun game you play with your friends. 

Additionally valuable is that the game syncs up with Twitter and Facebook, so Foursquare users are telling the world where they are and the places they've visited at any given moment.

What Foursquare does is even more valuable than the Yelp mobile app itself.  It not only records where you've been, but it also encourages others to visit the same place and join you.  If I was a business, and I had the choice of getting all my customers on Yelp or on Foursquare, Foursquare seems much more compelling.  It's not about reviews so much, so I have less downside of a bad rating or review killing my business.  Plus, it encourages others who aren't even on the app to come join their friends and check out my business.  More Foursquare users will check in and promote my store than the number of Yelpers who will rate my store and then publish that rating.  On top of that, Foursquare helps me identify who my best customers are, putting a name to a face.

So if I'm Yelp, Foursquare has valuable data that I need--whether or not my recommendations are actually driving anyone to visit the store--and has a much more compelling social media network effect.  Yelp's current social network isn't well tied to their site.  I can have friends on Yelp, but it's not totally clear how having friends improves my navigation of the site or my ability to get ratings--as opposed to Foursquare which is all about tight networks of friends. 

But Yelp also has stuff that Foursquare really needs--distribution and content.  A deal or some funding from Yelp could put Foursquare on the map as the default "Where am I now?" app and make Yelp's social media offering to a business complete and compelling.  They'd finally be able to figure out exactly how much traffic their site drives in the door.  They'd know which reviewers were the most influential--not just to other reviewers but to actual paying customers.

I think Yelp needs to act fast on this, because if I'm Foursquare, I'd start going straight to retail establishments and striking deals.  I'd get every single Starbucks to start encouraging their customers to use Foursquare and check-in to their favorite Starbucks.  I'd know whether or not that was driving feet in the door from other check-ins and who my best customers were.  Foursquare should built a neat little self serve portal that allows retailers to claim their establishments, and track who's coming in and when. 

Yelp has an "Elite" badge for the best users of Yelp, but how long before Foursquare allows retailers to create their own Elite badges for their best customers--rewarding people who support the store, not just the ratings site.   If I'm Shake Shack, I want to know who the Shake Shack Elite is, not the Yelp Elite--the latter doesn't really directly help me as a business.  The more a site enables me to have a direct relationship with my customers, the more valuable it's going to be for me and overall.  Starbucks, Jamba Juice, NYSC, Dunkin Donuts, etc. should be all over FourSquare right now trying to figure out how to get their customers on it. 

If Yelp doesn't strike up a distribution deal with Foursquare soon, I think they're going to regret it.  The deal is simple.  We'll invest a couple hundred grand in you and promote you to our users.  You give us the data (through a sync to Yelp accounts) of who goes to an establishment based on a Yelp review.  That will help Yelp sell it's service to retailers and restaurants.  Yelp should provide reviews in Foursquare in exchange for promoting Foursquare's "Tips" and "ToDo's" as well. 

Google proved that you needed to be able to tell a retailer exactly how advertising helps their business and help them track ROI.  Foursquare is well positioned to capture that all important retail visit--the hardest piece of data to get short of diving into your credit card statement.  That makes them a serious player in the local ad space--and one that will undoubtedly pass on an early Google exit based on Crowley's past experience. 

Path 101, the company I started with our CTO and Co-Founder, Alex Lines, is looking to hire a developer.

Over and above anything else, here's the kind of person we want:

• Someone with a sense of ownership and pride in their work.  We get that nothing can ever be perfect, but you need to constantly strive to make things better.  This means not only making stuff works, but that it's easy to use and makes sense--and that you try to make it easier to use and more interesting everyday.
• You see the bigger picture--you realize that there are really exciting things to work on and then there's bug fixing--but at the end of the day you're happy we're moving forward as a team, as a company, and as a product. 
• You really hate when stuff breaks or it sucks and it keeps you up at night.
• You're friendly and/or interesting and are just cool to hangout with--not too uptight to break for a snowball fight in the park or to randomly pass funny images to the rest of the team on chat.

As for the tech stuff, an intelligent, curious, ambitious person can learn anything, that's true, but ideally you'd be an intelligent, curious, ambitious person AND be as much of the following as possible:

• experienced web developer
• very strong understanding of python
• extensive experience with django - you know its strengths and
  weaknesses, its ecosystem of libraries and components, participate in
  django community <-- This is ideal, but if you're strong in python, let's chat.
• obsessed with performance
• you can talk for hours about caching <--Alex's criteria, not mine.  Don't talk to me about caching... ever.
• experience with mysql
• know how to properly normalize a data model as well as the costs and
  benefits of denormalization
• strong unix/linux background
• conversant in html/css/javascript
• familiarity with column-oriented / key-value stores is a plus

We'll accept a resume but prefer a link to your blog and linkedin profile.

Here are some things you might what to know about us:

• We're helping people figure out their careers.  While this might not be feeding the poor, helping someone figure out what they want to do that makes them happy can really make a significant impact in someone's life. 
• We're doing it in an innovative way--by crawling the web for resumes and laying on interesting user data, like personality, blogs, tags, anything you want to tell us about yourself--in order to figure out what everyone's really doing with their careers.  This way, we can help you put your career in a context and figure out what "people like me" do for a living.  There are around 10 million resumes out there and we're going to crawl every last one of them.
• We're funded by some seriously smart and successful angels like Roger Ehrenberg, Fred Wilson, Brad Burnham, Scott Heiferman, Jeff Jarvis, Hunter Walk, Jeff Stewart, Peter Hershberg, Joshua Stylman, Brian Harniman, Shripriya Mahesh, and others...
• We were the first company to ever get an investment by the recently launched NYC Seed fund. 
• We're really passionate and dedicated to what we're doing.
• Team:  Charlie (@ceonyc), Alex (@alexlines), and Hilary (@hmason), as well as some super awesome contract folks.

So, tweet @ us, e-mail us, or leave a comment.   But please, no recruiters.  We can't afford a recruiter, so there's really just no point to reaching out.  We're really serious.  Really.  Serious.

New York City based EnergyHub just received it's first round of venture financing, from Physic Ventures and .406 Ventures.   News on the financing from NYC journalists: conspicuously absent.  Wake up, folks!  It was on VentureBeat last night! 

That's exciting to me for a number of reasons.  First of all, what they do is very cool.  The company makes information systems that help you monitor your energy usage.   This way, instead of a bill with just the bottom line of how many Kilowatt hours you used last month, you can get an in-depth view of how you're using energy.  This is key to reducing peak consumption and lowering your costs.  It would certainly be nice to know how much money and power my computer is costing me each day.

What's very cool is that I got the opportunity to work with the founders, Seth and Tom, at ITAC's FastTrac class, where I am the Entrepreneur-in-Residence.  (In this case, EIR is a fancy way of saying that I'm the class instructor and good utility guy to have close by to help startups working with ITAC).  If you're interested in future FastTrac programs given by ITAC, you should contact Veronica Price at vprice@itac.org.  There are a lot of programs, consultants and advisors for startups in NYC--

They come out of Honeybee Robotics, a New York-based company that builds hardware for NASA’s Mars missions and the Department of Defense.  Who said everything in NYC was about finance, advertising and media?  They're really awesome guys and I'm glad to see them get their funding.  I can't wait to be able to buy an EnergyHub system for my apartment.

What's also great is that they got money from .406 Ventures--making this .406's 2nd investment in Brooklyn (they're also in Kaltura).  I had the opportunity to talk to Larry Begley in the fall and he was super smart and extremely approachable.  Hopefully, there will be more NYC-area based investing from .406 in the future. 

BTW...  Good thing Ted Williams choose to play that final day of the season.  .39955 Ventures just doesn't have the same ring to it.

In any given week, I meet with two or three entrepreneurs who want to talk with me about their business--just to get some feedback.  They know that I used to be on the venture capital side and vet business plans and ideas on a regular business.  I'm happy to do it when I take some interest in the idea, mostly when I feel like I can add some value.  Plus, I feel like it's actually useful for my own business--to see what technologies and processes other people are using and to help generate new ideas.  I've been very fortunate to learn from folks like the guys at Union Square Ventures, to see successful companies get launched and grown, and to have the opportunity to run a business on my own, so I do feel like I have something to add.  That's why I'm teaching entrepreneurship at Fordham University.

However, I'd imagine finding me as an up and coming entrepreneur must feel a little bit like finding the A-Team--especially if you weren't in established innovation networks.  You can't even go see Mr. Lee at the Chinese laundry first.  (If you don't get it, you didn't grow up in the 80's.)  I don't put myself out there as an expert for hire or have a fancy nickname for myself like Dr. Startup.  In fact, a lot of really good people in NYC to talk to about your startup idea are totally under the radar--just helping give feedback to whoever just happens to stumble into their network.

On the other hand, a lot of the people most above the radar on this kind of thing aren't exactly people I'd recommend to go see.  I have to assume every city has this, but I like to call them the "Venture Vultures"--various startup strategy folks with murky resumes who will promise to connect you to capital, technology help, strategy help who simply don't have a lot of there there.  In the Web 2.0 boom, tons of people hung up shingles offering to up startup businesses, and I'm hoping the recession will weed out most of these folks, because I think a lot of them do more harm than good.  When entrepreneurs with real potential run into these pseudo-virtual incubator strategy consulting types and get bad advice or no real results, and that's who they see trumpeting themselves in the community, it gives the community a bad name. 

The reason why these folks can self-promote their way to noteriety, however, is because of an educational vacuum for new businesses in NYC.  If you had an idea for a new business, or you had already built a product, service, or technology and you needed business strategy help, where would you go?  What about if you were a student?

If we really wanted to improve NYC's ability to support innovation, more so than money or space, I think putting more effort into educating students about entrepreneurship would be worthwhile.  The bottleneck for creating new companies in NYC isn't desks or angel capital--we have plenty of both--it's the fact that there just aren't enough entrepreneurs with good ideas who know how to execute on a business.  We need more students learning the technologies that allow innovation and more students taught how to turn their passions into ideas--and then into businesses (or just find their passions in the first place).

EDIT: Let's be clear on what I'm saying.  I think NYC is a great place to start a business--I just think that not enough of the best local minds are in the mindset that such an endeavor is possible or worthwhile.  On top of that, those that really want to learn need more access to the experienced people who can teach them best practices.  I actually think the infrastructure for a startup here in NYC is pretty good--we're just not getting enough new entrepreneurs at the top of the funnel.  New York City schools don't exactly pump out lots of students with the business or tech wherewithal (or interest) in starting a new company (athough perhaps that might change now that they can't just assume they'll get hired by big banks anymore).  NYC students are taught how to work for big companies, not to start small ones. 

I'm specificially interested in programs for students.  It's an entirely different thing to take someone who has already established themselves in a career and help them with a new business idea.  They at least have networks.  They know people in their industry and they have a sense of how to create value. 

I want to meet whoever is working with local students.   In fact, Fordham has generously donated space for about 100 people during the day from 9-5 at their Lincoln Center Campus on Tuesday, April 28th to bring everyone educating local students interested in entrepreneurship together.  I'd like to hold a small conference to share ideas, solutions, best practices, and step one is figuring out who is out there.

If you are involved with a university incubator, tech transfer office, entrepreneurship program, degree, or certificate, or if you just teach students in programs and subjects likely to create innovators, please get in touch with me.

I've created a form to gather all the interested parties.  Even if you can't make it on that day, please let me know who you are and what you do.

You can find the form by clicking this link.

1. Be confident and realize that you are pitching at all times.  I can't tell you how many times I'm at a social event and someone tells me about their startup with the pitch equivilent of a "wet noodle" handshake.  Everytime you tell someone what you do, that's a pitch.  Knock it out of the park every time. 

2. Tell me something you learned about the market or your users--shows you are adaptable.  The worst thing an entrepreneur can do is be "strong and wrong".  The best ideas are iterated on constantly--and the last person an investor wants to talk with their company about is someone who can't take feedback.

3. Tell me who you can partner with and why this is a priority for them.  It is so incredibly difficult to build traffic or revenues from scratch.  Partnerships are often the key to your uptake--so help investors understand who else in the market would be willing to work with you.

4. Who currently supports what you're doing with real action?  Has anyone made a bet on you, or does the investor need to be the first one in the pool?  Employees working for sweat equity, customer committments, family and friends willing to break their piggybanks for you--anything to make it so that the person you're talking to doesn't feel like Will Ferrell--naked in the town square with no one running behind him.

5. Show investors that you understand how to get users economically in a way that supports the model.  For example, I can't tell you how many products I've seen that offer $10-50/month subscription fees and the company tells me about going the direct sales route.  That would only work if your salespeople are willing to eat bread and water... and not particularly often. 

6. Convince investors that you are obsessed with the problem you are solving.  This needs no explanation, but is often lacking.

7. What have you learned from your competitors--know them like the back of your hand.  If an investor asks you, "Do you know the folks doing "x"?" and "x" is anything having to do with your business whatsoever, the answer better be yes, and you better know how you're better than them, can learn from them, or can work with them... and preferably you already have spoken with them.

8. Know your realistic, addressable market.  If you're selling potato peelers and only 10 million people in the country eat potatos, don't say you're going to sell 8 million peelers in year one.

9. Appreciate the feedback.  If you tell someone about your business, expect a reaction.  You might not like the reaction, but all feedback is good.  Don't try to debate people--just respond cordially with facts or assumptions that answer their question.  If you don't have those, don't start shovelling and never, ever, dismiss anyone's feedback.

10. Come see David Rose at Fordham this Thursday, March 12, 2009:

On Thursday, New York's most active community participant from the investment side, David Rose, will be at Fordham talking about pitching and raising angel capital.   David is the founder of NY Angels and runs RoseTech Ventures.  RoseTech also operates an incubator on 23rd Street and is a renowned pitch coach as well.

We will also be letting 5 companies give their two minute elevator pitch (and we really mean two minutes) for David to critique.

Date:     Thursday, March 12
Time:     06:00 PM to 08:00 PM
Organizer:      Fordham TEC

Location:
Fordham University Graduate School of Business
   33 West 60th Street 12th Floor
   New York, NY - 10023, USA

RSVP here (req'd):  http://gbadirect.bnet.fordham.edu/vo/fbd1/cal/rsvp0.aspx?ID=3839

nextNY is doing three awesome talks in February.

On Thursday, February 5th, Jason Schwartz is running an event for community managers.  Just what is community management?  Who should be doing it?  What are best practices?  Find out from the folks who do it for startups like Etsy,

Then, on Thursday, February 19th, Jeff Stewart and Mark LaRosa are going to help startups figure out their sales strategies, sales hiring, and incentive programs.

Got an idea for a web startup, but have no idea about the technical implementation?  Some CTO's and technically inclined founders from local startups are making themselves available on February 23rd for an event on technology for business people--helping you cut through the buzzwords and rumors to help you focus and get your idea built.

Here's the key:

All of these events are free.

All of them cost us nothing to provide.  The venues and the time of the participants were donated.

So what does this mean if you're a professional society?  If you're in the business of essentially charging for live content, business connections, and professional development?  How do you compete with a self organized group of professionals who are providing, for free, similar resources that you do using the resources they already have--each other?

We have a free job board and a blog, too.  A paid professional society of young entrepreneurs would really find it hard pressed to compete against free.

So how did it happen and what does it mean for the professional society model?  Sure, we're all tech geeks and it's going to be easier for us to self-organize, but when you can find people on Meetup, LinkedIn, and Twitter, how long before other industries catch up?

About three years ago, I wanted to meet more members of my professional community--that being the emerging members of the NYC technology and innovation scene.  I was working for Union Square Ventures, a local venture capital firm, which enabled me to meet a lot of smart entrepreneurs, developers, and industry folks in my peer group, but nothing really brought us together as a community.  At the time, in February of 2006, we had a growing Meetup, but was basically about showcasing companies.  There was NYSIA, but that was an industry group with an expensive fee that most entrepreneurs and startups couldn't afford.

I decided it would be cool to invite some of the peers I had met out for a drink.  I thought it would be cool if 20 people got together once a month at a bar.

As it turned out, 75 people showed up that first night.  Since I didn't have time to manage these people (not being in the business of community myself), I threw everyone on a Google Groups listserv.  For our website, rather than use a centrally managed platform that I would have the burden of populating, we used an open wiki.

Eventually, the growing group clamored for more than just social events.  They wanted their professional questions answered.  How do I raise money for my startup?  Do I need a patent? 

Out necessity, not having a budget and knowing my hungry entrepreneur audience, I tried to put events together for free.  It was surprisingly easy.  Law firms and real estate firms were more than willing to lend us conference rooms for space, since they wanted to get in front of our community, and experienced entrepreneurs and businesspeople were more than happy to share their knowledge. 

It's really an interesting group.  We have no legal entity.  There are no titles and there is no hierarchy.  A few of us have various passwords to the web stuff, but that's about it.  Our blog has an editorial policy and it aggregates the NYC tech related posts of the members--no central voice.  There is a pretty strict no self-marketing rule on the listserv to prevent spam and to encourage selfless participation.

What's key to the group now is that we've really turned a corner in terms of leadership.  The fact that we're doing three events this month, and that I came up with the idea and am the lead person behind exactly zero of them is an accomplishment--one that groups and organizations should really aim for.  If your platform can't inspire those participating in it to want to take a leadership role, what are the chances anyone's going to want to pay for it?

"Detroit should take a page out of Pittsburgh's playbook. In the 1980s, the state used local universities to pour funds into technology research. What blossomed was a thriving entrepreneurial community. The largest industries? Computer software, biotechnology, education and health care, all of which have held up well of late.

To be sure, Pittsburgh reinvented itself during a run of prosperity. It didn't happen overnight and it didn't happen without a tremendous amount of federal, state and local support and vision. Skilled workers who couldn't make a living in Pittsburgh moved elsewhere, to thriving cities like Phoenix and Vegas."

L A Z E R O W . COM: Will you be Pittsburgh or will you be Detroit?

So I've been chatting with a lot of local city government folks about ensuring that NYC thrives as an innovation center--and I've yet to hear how any of these plans tie into education at all.  All the governmental types are worried about money and space, but if there are no brains to feed with the money and no brains to put in the spaces, what good will it all do?

Pics and clips from an awesome impromptu tech community snowball fight at the Shake Shack at Madison Square Park.  Props to the Shake Shack employees who participated in the fight and also gave us some hot chocolate.

Alex and I and our ill-fated attempt to charge the line.