Silicon Alley Redux

Fever Pitch! New Yorkers Go Starry-Eyed for Start-Ups

The latest must-have for trendy New Yorkers: a start-up of one's own.

nytm illo Fever Pitch! New Yorkers Go Starry Eyed for Start Ups

“I can’t tell you the whole idea.” The Internet entrepreneur on the other end of the phone sounded panicky. “It’s going to sound ludicrous and ambitious, more ludicrous and ambitious than most.”

The voice belonged to a 27-year-old Stanford law student—“just about the oldest you can be where I cannot remember not having a computer”—who was in New York last week to talk to people about his new concept for a website.

He gave a few vague descriptors that could apply to half the start-ups in New York.

“I definitely don’t want it in the newspaper,” he said. “I’m worried that even little sign posts toward what I want to build are dangerous.”

When he had the idea in April, he talked about it to anyone who would listen. “I definitely went manic–which has never happened before–when it came into my head, for about 10 days, which were incredibly productive and I wound up talking to a senior engineer at Google and some very well respected people at Stanford,” he said. “I would not sleep. I’d get to bed at like 3:30 and wake up at 6:30 and the entire time I’m just thinking about how to build this thing that was in my head that I think would make the world a better place… I was pacing and talking to everyone I could about it.”

The mania lasted about ten days, followed by four days of crippling depression. His girlfriend seemed to be the only one who noticed. “The fact that I seemed to be taking along some very, very smart people with me was both exciting and in retrospect, a little bit disconcerting,” he said.

“But it is a big idea, and that’s the language of start-ups,” he continued. “The language of start-ups is a sort of manic language, it’s, ‘I’m going to change the world,’ which for normal people is like, ‘Whoa, that sounds grandiose,’ and you sound a little bit crazy. In start-up world, it’s like, ‘Can I give you some money for that?’”

We hung up. He emailed immediately to scrub the record. “I know this is going to sound a little paranoid, but I’d appreciate it if you would not include the quote about ———– being ———– and wanting to develop a platform for ———-. Paranoia is also a symptom of start-up fever.”

Bankers Pull a Pivot – Read the Diaries of a Fledgling Founder

Start-up fever! Whether it’s due to The Social Network or the new wave of billion-dollar tech I.P.O.’s, lately it seems like everyone has a start-up. Betabeat first noticed it in our own neighborhood, the tech-tending East Village, home of Foursquare. On a recent weekend, we overheard an entrepreneur talking about pitching investors over brunch on St. Marks and glimpsed another demonstrating his website’s Twitter integration to a friend at Ninth Street Espresso. We tried to eavesdrop on a bearded, 40-ish fellow ranting about his start-up to a friend in Tompkins Square Park around 9 p.m. on a Wednesday and caught the words “convertible note.” The trend has invaded our building as well. The Goldman Sachs engineer on the second floor wants to join a start-up. He asked us about tech events.

The start-up mythology—build fast, get cash, save the world—and the low barrier to entry make it tough to resist. “An all-consuming start-up can be very difficult for a mom of young kids,” New York-based mommy blog mogul Philippa Smith said in an email, but “the lure of creating something that was potentially such a benefit to both local moms and the local business community was too great.” Her start-up, Juice in the City or “the Groupon for moms,” recently announced a $6 million round of funding.

“It’s Foursquare, it’s Etsy, it’s Tumblr,” said Zeb Dropkin, a digital media consultant-turned-start-up entrepreneur currently working on, a website where New Yorkers admit how much rent they’re really paying. “New York City has real investment now, real cycles. This is the real leagues.”

Roger Wu, who organizes the Stamford Tech Meetup, recently raised money for one of his start-ups. The investors remembered him because of his red New Balances, he told Betabeat. “It’s like Hollywood, where everyone’s an actor,” he said. “Everyone with a little idea they had when they were drinking is going to start a company and be the next Facebook.”

(Betabeat got an email recently from a friend seeking cycling routes: “Is there a HopStop for bicycles? Because if there isn’t let’s start one and get riiiiichhh!”)

Cheryl Yeoh was working as a management consultant for KPMG, an 8:30 a.m. to 8:30 p.m. gig that kept her in Scotch tastings and Michelin stars, when she realized sometime in the middle of April that she needed to do an Internet start-up for something. Anything. The idea was secondary. What mattered was making something amazing that could reach not just hundreds of people or thousands, but millions. “I knew I could do something greater,” she told Betabeat. “Every time I met someone who told me, ‘Oh, I’m a founder of so-and-so,’ or whatever, I don’t care what company it was, every time they said that I thought, oh my gosh, why am I not doing this, I know I can start something, I know I can do something.

“I was obsessed. You can use the word ‘obsession.’”

Ms. Yeoh had a programmer friend. She took him out to lunch and pitched him a few ideas. He picked CityPockets, a website that imports a user’s coupons from daily deal sites like Groupon and sends friendly reminders when they’re about to expire. “We’d come home at 8:30 at night and right away from 9 p.m. I was writing, researching until like 2 a.m.,” she said. “Or I would spend time going to tech events. Some days I would go until 3 or 4 a.m. because I was talking to my mentor in San Francisco. Even though I was physically tired, I was mentally awake. Every morning I would jump out of bed because I was like, I wonder what new features I can think of next… Even my friends were like, ‘Wow, you’re sleeping so little but you look so much more alive!’” She left her job in August, two months after her 27th birthday. “I told my manager, I have to leave,” she said. “I have to do this thing because it’s consuming me.”

She went on. “I had a one-bedroom in Gramercy, lived the high life, had designer coats and bags, traveled multiple times a year. I quit all that. Moved into an apartment in the East Village—Alphabet City, actually—and slept in a living room on a futon kind of separated by curtains Velcroed up to the ceiling. For five months I did that… I wanted to prove that I can live just bare bones, live the life of a scrappy entrepreneur so that I can just fully focus on the product without any distractions whatever.

“I have enough savings in my bank, actually, to continue living in my Gramercy apartment,” she added. “It was more like I made an active choice to go with that lifestyle.” The day she put the curtains up, she recalled, she giggled until her eyes teared.

“In the Bay Area you have more superstars and guys who have done a bunch of start-ups,” said Shai Goldman, a director at Silicon Valley Bank who moved to New York from the Bay Area in January. “The majority of entrepreneurs here, a lot of them are first-time entrepreneurs. It’s almost like a cohort. They’re kind of all learning at the same time, they’re going through the same missteps. It makes it a little more interesting here.

“Every entrepreneur has the opportunity to make a big mark in New York right now.”

The anonymous entrepreneur we spoke to by phone wants to drop out of Stanford and raise money in New York. “I think New York is kind of the Wild West frontier of investing right now. It’s a little bit unstable and it’s a little bit dirty,” he said. Silicon Valley is “this weird system that’s dominated by these monsters” like Facebook and Google, which are buying “crap companies to get the people.”

“The mythology is a little tarnished out there,” he said. “The people I know in New York are really excited about the things that happen here in a way that people at Stanford and the Valley certainly aren’t. You know, it’s big business.”

Evidence of the city’s start-up fever can be seen on—the New York-based, dot-com-era start-up that became a hub for local techsters—where the number of recurring tech events has wildly accelerated: Startup Lunch, 104 members; Dumbo Tech Breakfast, 641 members; UWS Startup Meetup, 164 members; the NYC Startup Garage, 208 members; NYC Startup Weekend, 337 members; the NYC Lean Startup Machine, 1,553 members; the New York Technology Bathhouse Meetup, 25 members.

On a recent muggy evening, about 70 mostly 20-something, mostly male guests gathered in clusters on a rooftop in Chelsea for the summer’s first “Find a Cofounder” party, squinting at one another’s name tags as the sun set. Red name tags were for programmers; blue meant you were more of a business guy. The blue name tags ran out by the time Betabeat got a drink.

“So three years ago, there was the New York Tech Meetup, right?” Gary Sharma said, referring to the 18,545-member organization that draws about 800 attendees to its monthly demo nights. Mr. Sharma was a mild-mannered Wall Street marketing consultant before he became “The Guy with the Red Tie,” per his business card and neckwear. He has been attending tech start-up events and cataloguing them in his weekly newsletter, GarysGuide, for the better part of four years. “That was the start-up meetup, pretty much. I like to call it the mothership. As that gets bigger, I started seeing satellite meetups coming out of it. Video 2.0, Web 2.0. Then you started seeing even smaller ones. Travel 2.0, Fashion 2.0. Then more niche ones. Some people started the Hoboken Tech Meetup. You know where Hoboken is?” We did; we’ve been. The Hoboken Tech Meetup has 901 members. Its monthly Monday night meetings always have a wait list.

“I want to start a social-local-mobile meetup called SoLoMo!” Mr. Sharma said. “No, I’m just kidding,” he added quickly.

“I knew nothing about Internet start-ups,” Ben Wolff, a smiley personal stylist who lives in Corona, Queens, admitted to Betabeat as we sat cross-legged on a futon in a corner of the patio. “I knew I needed to make an electronic version of myself. That’s why I started.”

Last year, Mr. Wolff, whose business consists of going through client’s closets and refreshing their wardrobes, wrote out a set of “if this, then that” instructions in a spreadsheet to formalize his process. A few encouraging conversations with friends inspired him to turn it into a start-up. His dream is to make the “Faster Pants algorithm” part of every man’s shopping experience, he said, as soon as he can find someone to code for equity. “I equate this with a high school dance where there’s more girls than boys,” he said, mock-twiddling his thumbs. “I feel like I’m sitting on the wall going, ‘Oh, please dance with me!’”

“You’re a reporter? Reporters did a lot for me!” said Ray Schmitz. A former real-estate broker who made a small name for himself by passing out business cards at the revolving door of Bear Stearns the day the investment bank announced its sale to JPMorgan, he was also seeking dance partners. He had the idea for a website that lets brokers refer business to each other in 2009. “I remember reading a book by Clay Shirky,” he said. “He makes a wonderful point that the Internet may be the biggest change in society since the printing press. It may be even bigger. The start-ups in New York are forging the life of the future for everyone right now. The way we’ll live, work and play tomorrow is being created here today.”

On our way out, Betabeat ran into Aaron Price, the fastidious organizer of the Hoboken Tech Meetup, who was standing in the bathroom line. Things were going well, he said. He was recently named to the nebulous position of “entrepreneur at large” for the early-stage venture capital fund DFJ Gotham, opened a co-working space, and was working on his start-up, makeMania, a website where crafty people show off their D.I.Y. projects.

He exhorted us, as always, to come to the next Hoboken meetup. We promised to try.

Bankers Pull a Pivot – Read the Diaries of a Fledgling Founder

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  1. Steve says:

    That rooftop event (“Startup One Stop”) was utterly vile and depressing — the whole red-tag / blue-tag thing was a bust, since there was nobody with a red tag but me, and I wasn’t there to be recruited. (Also: no shade, no ice, and the drinks had been left in the sun — a trifecta of incompetence).

    There’s a lot to like about the NYC startup scene, including the chance to make some serious money coming out of the recession, but cheap exploiters like that are not a part of it.  There’s plenty of honest, sincere folks trying to connect startups and talent, it’s one of the ways NYC is preferable to Silicon Valley; so if the scammers can be counted on to execute as badly as that Chelsea event, we should be OK.

  2. Anonymous says:

    nice article

  3. Sceptic says:

    Someone say bubble?

  4. Howie says:

    This guy sounds like every other former business/law student wannabe tech entrepreneur I’ve ever met. Good luck finding engineers who will sign on to your scheme that you won’t tell them anything about until they sign an NDA.

    1. SeamlessWeb was created by a lawyer (Jason Finger) who did pretty well…

      1. Betabeat says:

        I don’t understand why SeamlessWeb didn’t IPO. And it’s just plain Seamless now. Seamless. $SMLS.

  5. langer says:

    This is super good! Except for the whole part where LawyerBro says he’s 27 and “the oldest you can be where [you] cannot remember not having a computer” because, I mean, (not hatin’! just sayin’!) I’m 31 and I can’t remember ever not having a computer, because, you know, I was writing BASIC on a Commodore64 in like 1985, but whatever! Nice blue name tag bro! Now get out there and find yourself a technical co-founder!

    1. Anonymous says:

      langer’s comments on betabeat posts are my favorite comments.

      1. We want him to write for us but he’s too cool.

      2. Anonymous says:

        technical co-writer!

      3. Anonymous says:

        technical co-writer!

    2. LawyerDude says:

      You’re right, but that’s not what I actually said – though I may still be wrong. I said that I think 1986-88 was when home computers became the norm in a lot of communities (with households with enough money to afford them back in those days). Home computers obviously existed before then.
      The rest of the article makes me sound a bit crazier than I am. I was trying to compare the law firm route (which is high earning and extremely predictable as long as you keep your head down) to the emotional and unpredictable world of startups where you want to keep pushing yourself into uncomfortable territory. And I’ll talk to anyone who will listen about what I want to build (because I’m passionate about it and I think it addresses a real need – it would for me) but I don’t necessarily want it in an article. I don’t think that’s unreasonable.
      I understand people being frustrated with the sound of lawyers and b-schoolers jumping into the start-up world, but try to not to paint with a broad brush. This reminds me of those NYT articles about how everyone is making their own kombucha now or describing some other fad. There is some truth to it – but I can tell you that there are maybe only a couple other Stanford students exploring a similar path. I’ve done tech and start-ups before, though in different contexts. I know what I’m getting into. And I know what I’d be willing to walk away from to do this – a $175k/yr job. That’s passion and interest, not greed.

      1. langer says:

        “Trend pieces” were the words you were looking for there, I think, and you know I’d almost consider pitching one to the Observer on “aspiring entrepreneurs quitting cushy six-figure jobs to start businesses that are going to change the world and have huge positive exits and make their founders multi-millionaires but they want to make it absolutely clear that they’re only doing it out of passion and in no way are they motivated by greed,” but I’m pretty sure if that were written the Earth would be knocked off its axis by the gravitational pull of so many people rolling their eyes at once.

      2. LawyerDude says:

        I wasn’t trying to pick a fight and I apologize for coming off a bit more combative that I would have liked. I get your point. And I won’t argue that there are a lot self-important outside-of-tech people out there with half-thought out ideas (like mashing two different existing products together) who just see dollar signs and want a programmer monkey to do their bidding while they “network.” And maybe that’s what I am – but you don’t really know me well enough to judge. In any case, there are a lot of good people out there too, who are smart and passionate and there is a place for people with business and legal analytic skills in the start-up world.
        I’d like to point out that there’s a big difference between people who make the leap straight out of school (with six figures of debt) and those who do it after spending several years in their cushy jobs (with six figures in the bank). At least from where I’m standing, it’s much much scarier to do the former. And I’m doing this not to “change the world” but to solve a need for myself and I find designing the solution interesting and challenging.
        I wasn’t trying to totally discount the article as a “trend piece.” (though that is the term) Just saying, take it with a grain of salt. There are probably more people from all walks of like interested in the game right now – especially in New York – but it’s not a stampede. And I guess don’t go to co-founder meetups. But what engineer would go to one of those? They sound terrible.

      3. Betabeat says:

        I got several emails in response to this piece from entrepreneurs, technical and non-technical, who are much further along in their start-ups and said they had basically/exactly LawyerDude’s experience with mania in the beginning. I was like, hey! You should leave a comment! But people are lazy and weird.


      4. LawyerDude says:

        Well, if you aren’t in the practice of commenting, it’s a bit strange. I don’t usually comment on blogs and it’s a different little world down here at the bottom of the page. Langer is clearly an established commenter here and I certainly didn’t intend to get provoke any ill will from him or anyone else. I just felt a bit defensive from all the negative comments (not from Langer, but in general) about the phenomena.

        I’m fully aware of the cliche of what I’m doing – which doesn’t exactly feel good. But I’ve also been in that uncomfortable boat before. I hope that I’m more than just a law student hypnotized by the start-up scene. I hope I’m trying to build something that feels important to me. I also think it’s unfair to paint all these new entrants (as some commenters have) as greedy idiots that just want in on the game to get rich quick. A lot of good start-ups have come out of law schools and business schools, and for those of us looking to pivot before we’ve made any money, the risks are real and substantial.

        As to the mania – yeah. That was weird. Productive but I don’t want to go through that ever again. But it was also a consequence of finding something that felt urgent and important.

  6. Jimoh A says:

    Sigh. When will people learn? Ideas are ten a penny — all that matters is execution. Speed of execution, and quality of execution. So while the manic “I can’t tell you the whole idea” dude in the first few paragraphs of this article is busy claiming  paranoia is a symptom of startup fever, two or three NYU kids unbeknownst to him are already building out his idea, and it will probably turn out to be better than his.

    Like the man said in GLENGARRY GLEN ROSS, “Coffee is for closers.” Stop looking to be in BetaBeat, can your paranoia, and go and build your prototype already.