Mr. Politis

This is a guest post from David Politis, the founder and CEO of BetterCloud, the makers of FlashPanel, an admin tool for Google Apps that has acquired 10,000 customers and 3 million users since launching this July. You can follow him on Twitter @DavePolitis.

New York City has long been the promised land for investment bankers, hedge funders, media moguls and advertising agencies. More recently, it has become a center of innovation for technology startups. There is no shortage of launches and funding announcements for consumer-facing tech startups and service providers for digital advertisers.

However, exceptions side, one thing is certain: New York City is not known as a home for startups developing for enterprise.

Conventional wisdom has it that enterprise innovation takes place in the Bay Area, Seattle and other cities that have traditionally attracted enterprise venture capital investment and engineering talent. But faced with a number of options for where to build BetterCloud, the enterprise startup that I launched last year, I chose New York City. Here’s why:

Easier to Standout

For starters, the local venture capital climate is ripe for evaluating truly disruptive technologies that can demonstrate a path to monetization.  To date, most observers would agree that a majority of seed, angel or Series A-funded NYC-based startups fit into two camps: consumer web or digital media. This has created a cluttered, hyper-competitive ecosystem of NYC startups, many making very similar claims about what their products can do (respective to their product categories). While one might argue that this gives both investors and target audiences greater choice, I would argue this homogeneity makes it far easier for startups operating in the enterprise sector to standout.

Making a sector bet in NYC isn’t a new strategy. Mike Lazerow has called his 2007 founding of NYC-based Buddy Media a ‘sector bet’ rooted in Facebook’s then emerging ecosystem of third-party services providers. Buddy Media was one of the earliest providers of B2B social media services in NYC, paving the way for the massive influx of social media startups operating in the city today.  Earlier this year, of course, Buddy Media sold for $745M to enterprise company Salesforce.com, one of many early signals that the enterprise sector is regaining much of the ground it ceded to consumer and digital media over the last decade.

Talent Pool from the Finance Industry

We’ve received several job inquiries from investment bankers, all of whom have been searching for business development jobs. For these candidates, making the switch from banking to enterprise technology is far easier to grasp than a move to consumer tech, where products are seldom monetized and the buyer is hard to categorize.

Staying Grounded

In San Francisco there are so many startups it’s easy to forget that not all Americans actually work in the technology sector. The last time I was in the Valley, a city bus passed with an ad for a company I had never heard of. After expressing confusion, my friend, who had moved to San Francisco a year earlier to start his own tech company, informed me that this was the coolest new startup--how could I have possibly not heard of it?

In New York, you’re surrounded by more Fortune 500 companies than in any other city and brush by celebrities and Wall Street’s wealthiest on a daily basis. It’s pretty easy to stay humble here (though the rest of the world would tell you otherwise). And although the “techlebrities” featured in Bravo’s Startups: Silicon Valley have received significant backlash from Valley insiders, the very premise of the show would be hard to pull off in New York. (I don’t see the real housewives of New York facing any competition soon).

Unmatched Loyalty

In Silicon Alley, choices are limited if you want to work in tech, as opposed to larger industries like finance and media, which breeds a sense of loyalty. If you’ve ever spent a summer morning commute on a jam-packed subway car without air conditioning, you understand the “we’re all in this together” mindset. New Yorkers can reach a point of defensiveness when it comes to their city, and I’ve found the same to be true in New York’s burgeoning startup scene.

People here seem to work with a greater sense of urgency because of this loyalty and because of the pace of life attributed to the city. I’ll often hear of people leaving New York because of the city’s breakneck speed, so those remaining here have self-selected themselves as the kind of people who thrive in this fast-paced environment.

Resilience 

It’s only been a year since I moved back to New York to launch BetterCloud, but as expected, the city hasn’t let me down yet. We’re excited to be a part of this nascent community and are confident more enterprise focused startups will make their way to the Big Apple. And I’ve never been more proud to be a New York startup founder than over the last week week. Hurricane Sandy, as horrible as the effects have been, has validated every reason why founding a startup in New York is the right move. Since the power went out on Monday night, we’ve seen the incredible kindness and resilience of this city. Whether it was the VC who offered us workspace, our employee who trekked on foot from West 99th Street downtown to our office on Tuesday when the rest of us were unable to get in touch, or the willingness of our employees to get to our temporary workspace on the Upper West Side by any means possible--bus, taxi and by foot. Our makeshift office has enabled us to work normal hours and the team has welcomed visits from employees’ loved ones (dogs included).

New York is a resilient city and this week has proven it. As the city is slowly restored and power is returned to our office, I’m certain that BetterCloud and the thousands of other companies impacted by Sandy, will come out stronger on the other side.

The Lazerows (michaellazerow.com)

In a bizarre missive with a linkbaity headline, Buddy Media CEO Michael Lazerow declared "I Have Sex With My Co-Founder. And I Like It." Okay, thanks for sharing?

Mr. Lazerow, whose business partner is his wife Kass, claims that many cofounder relationships resemble marriages, and therefore you should vet cofounders much the way you would a potential mate. So basically, don't found a company with someone who is emotionally unavailable or unhealthily obsessed with his mother? Good to know.

In his post, Mr. Lazerow quotes Y Combinator founder Paul Graham's widely-read story about cofounder relationships resembling marriages:

My relationship with my cofounder went from just being friends to seeing each other all the time, fretting over the finances and cleaning up shit. And the startup was our baby. I summed it up once like this: "It's like we're married, but we're not fucking."

Except that for in Mr. Lazerow's case, he is fucking his cofounder, and apparently wants everyone to know about it.

Mr. Lazerow points out that when he was originally looking for funding for his startups, many investors told him that they didn't invest in husband and wife teams. That's an understandable rule of thumb, as cofounder relationships are notoriously messy, and in truth, not all husband-wife duos fare as well as the Lazerows.

Six Apart founders Ben and Mena Trott are still going strong, as are Babble Media founder Rufus Griscom and his wife Alisa Volkman, who is Babble's VP of sales and strategy. But Flickr cofounders Caterina Fake and Stewart Butterfield lasted nine years before filing for divorce in 2010.

And as one female entrepreneur named Grace Ng pointed out last year, the "cofounder relationships are like marriages" comparison is very convenient for men, but not necessarily so for women. "This [comparison] creates a rather challenging situation for female entrepreneurs seeking a technical cofounder, most of who are male," wrote Ms. Ng. She then went on to describe a horror story where a technical cofounder she hired admitted he was in love with her; when Ms. Ng answered that the feeling wasn't mutual, he refused to do any work unless she entered into a relationship with him. Classy.

We agree with Mr. Lazerow that you should "start your business with someone you truly love," but though many cofounder relationships are like marriages, actually being married to your cofounder isn't always in your startup's best interest.

We appreciate the candor, Mr. Lazerow, though you may want to take the advice of one Business Insider commenter and "get a room."

The question that was the title of Mr. Lazerow's presentation--"I have a page, now what the fuck should I be doing?"--never gets old. We can easily imagine a room full of graying Mad Men, trying to get their heads around the Facebook, copying down those words and "engagement rates." As Mr. Lazerow wrote in a recent blog post, "If I were paid $936 for every time someone said in a meeting that brand X or Y didn’t “get” digital or social, I’d be a very rich man."

But Facebook engagement numbers are music to the ears of marketing execs, as are sentences like "increased engagement means increased visibility, more visibility means more opportunity for engagement," which Mr. Lazerow calls "the virtuous Facebook cycle."

Buddy Media, a platform for businesses to control and measure their social media presence, had 175 employees in its New York office back in May; in August after a $54 million cash infusion, it announced plans to hire 200. Now it has offices in San Francisco, Singapore and London and is still hiring. The company also recently announced a partnership with comScore.

Buddy Media CEO Michael Lazerow

"The days of, 'Do we publish on Facebook? Do we tweet?' are over," Buddy Media CEO Michael Lazerow told Betabeat. "Either you do it, or you're crushed. Do it or go out of business." Hearst Magazines must have got the memo, because its Digital Media unit just announced a partnership today to use Buddy Media's platform to enhance its presence on Facebook. From its Midtown headquarters, Buddy Media will create "sapplets" (short for social applets) that overlay on the Facebook pages for titles like Cosmopolitan, Seventeen, and Marie Claire.

Sapplets like Buddy Media's  Interactive "Personality" Boutique, which recommends products based on answers to a personality quiz,  introduce a game-like aspect into the Facebook page and encourage interaction. They also offer a handy new advertising vehicle for Hearst, which is probably why Kristine Welker, Hearst Digital Media's chief revenue officer, was the point person on the deal. Hearst is further removing friction for potential advertisers by launching multiple brands (13 titles and websites will eventually be involved) at once. That way, if an advertiser wants to reach a certain demographic, they don't have to negotiate with each magazine individually.

"Instead of doing one-off siloed programs, they're almost selling it as part of a cable network that lives on top of Facebook," Mr. Lazerow explained. But why "sapplet"? Did the world really need another word for a widget? "I can't speak for the world, " he said sharply.

Although both Ms. Walker and Mr. Lazerow say this partnership is unrelated to the recent launch of Hearst's well-funded App Lab for emerging technologies, it's hard not to notice the similarities between the two. After all, in addition to creating tablet versions of Hearst magazines, the App Lab is also branding game-like apps, like  House Beautiful's paint colors app and Esquire's iPad puzzle app, in an effort to attract advertisers that's not exactly editorial.

Mr. Lazerow sees the Hearst deal as an example of pay-off from a gamble he made back in 2007. "With Google, it was paid clicks. Everything was search-based. Facebook reoriented the world around people and sharing. When you can no longer scale by buying more clicks, you have to get people to share. That was a bet we made."

It didn't hurt, added Mr. Lazerow, that Buddy Media is in close physical proximity with Hearst and Conde Nast, another publishing client. "We decided to stay in New York as the technology moves away from hardware--stuff we don't do incredibly well--and moves towards content, storytelling, and media," Mr. Lazerow told Betabeat. "We pay a little more to be in New York for people and real estate, but the upside is so much bigger than if we were in Atlanta or Chicago, or even the Valley. It helps that we're right down the street."