New Jersey rocks! And startups are not just for techies. Don’t you believe it? Listen to “The Blues of Humanities” by “The Bruce Springsteen of Startups”.

IMG_1642

That was the gran finale of a terrific panel discussion at Montclair University, NJ, on April 16: the author of the song and performer (in the photo above) is the scientist & artist Guy Story, CTO and Chief scientist at Audible.com.

IMG_1609

The event was organized by Teresa Fiore, associate professor and Inserra chair in Italian and Italian American Studies, and by Dennis Bone, the director of the Feliciano Center for Entrepreneurship. Alessandro and I were among the panel discussants together with Guy and Claudio Vaccarella, CEO of HyperTV. The Italian General Consul in New York, Natalia Quintavalle, opened the evening stressing the importance of Italian-Americans’ and Italians’ contribution to the economy of New Jersey. More than 100 students, teachers, pros were in the audience.

IMG_1626

The theme of the discussion: “Humanities and language studies can also be the spark for a startup, especially in New Jersey and New York City”. So we explored the intersection of languages, technology and entrepreneurship.

Professors Fiore and Bone (in the photo below) are experimenting multidisciplinary initiatives, building relationships and collaboration among different department within the campus and with other organizations out of the university (which is the second largest university in NJ, with almost 20,000 students). “We are trying to create an ecosystem for young entrepreneurs in New Jersey”, explained professor Bone, who last fall launched new experiential courses at the Feliciano Center: teams of students with different backgrounds are challenged to solve thorny problems, assisted by mentors from the industry. The first teams will pitch their business ideas on May 13th.

IMG_1625

A big player on the NJ tech scene is Audible.com, which is based in Newark, NJ. Guy pointed out how Audible.com is a good example of the intersection of languages, technology and entrepreneurship: its business are words and to delivery them in the audio format it invented a new device, the first portable player to play sounds downloaded from the Internet (the Smithsonian Museum in Washington, DC, still displays it as an important piece of new media history). Audible.com show also that you can succeed even if you are not based in a “cool” city like NYC. Actually, to its founder and CEO, Don Katz, NYC is not so cool, as he told us in the interview for “Tech and the City”:

   I chose New Jersey also because a lot of tech talent was out in this Jersey corridor, arguably more than there was at that point (1995, ndr) in New York City. Our CTO Guy Story, for instance, comes from Bell Labs and many other engineers also came from Bell Labs. To me New York is not hipster heaven. All the dinosaurs that we are changing are in New York. It is a bunch of old Lunchtime O’Booze publishing executives who arrogate to be the industry when they have never invented or done anything. All innovations in the book business—the paperback book, the book club, the superstore, the discounters, Amazon, Audible— were all created outside the industry: it was never organic. A process similar to that which occurred in music and cinema. In short, content guys are not very progressive.”  

   Staying a few miles away from Silicon Alley, Katz grew Audible until in 2008 Amazon.com acquired it for $300 million, leaving it independent under his leadership.

IMG_1634

Guy said that Audible.com is trying to build a tech community in Newark too, but it’s not that easy and it takes time: “You need a critical mass of creative people with ideas and tech skills getting together”.  Events like the one at Montclair are certainly the right way to get people together and spark a conversation that may lead to a new startups’ hub.

(article first published on StartupItalia!) If you are an innovative new manufacturing company, hurry up: you have time until March 31 to enter the Global Industry Challenge. It’s a program organized by the New York City Economic Development Corporation (NYCEDC) “geared towards companies with a customer-ready product/service, an established market in their home country/region, the financial capability to seriously enter the US market, and is already generating revenue”.

The “challenge” is open to startups from around the world: only the best 15 will win a three day full immersion into NYC’s manufacturing-tech ecosystem; they’ll “connect with large and small stakeholders in the new manufacturing area”, with a chance “to build partnerships with local and national firms”. Be aware that “preference will be given to applicants that clearly display an interest in and a readiness to expand their operation into NYC”.

The Big Apple is indeed emerging as leader in new manufacturing thanks to 3D printing. Many successful NYC startups are kind of a “cult” for the maker movement, such as the creator of low-cost 3D printer Makerbot, which was bought last year by Stratasys for $604 million; Quirky, the platform for inventors of consumer electronics; Adafruit Industries, the maker of DIY electronics kits founded by founded by Limor “Ladyada” Fried; and Shapeways, which in October 2012 opened the “Factory of the Future,” a new 3D Printing manufacturing facility in Long Island City, Queens.

The latter is a great example of a startup that was born in Europe and then moved its headquarters to NYC in order to expand, getting funds and developing new markets. Peter Weijmarshausen, co-founder and CEO, is a Dutch entrepreneur who in 2007 got the chance to work in the Philips Lifestyle Incubator (PLI) in Eindhoven on a 3D printer project. A year later, Shapeways was created and in 2010 it left the incubator and moved to NYC. Shapeways “helps make and sell things,” from really small items as a ring, to much larger ones as a chair with more than 30 material options, from plastic to ceramics, from steel to silver, from nylon to glass. The company offers 3D software to design them, the hardware needed to make them, and a virtual store to sell them from. It currently employs 80 people, it has printed more than 1,000,000 products to date, it serves 10,000 independently run shops and these shop owners earned $500,000 income in 2013. Last year Shapeways got a $30 million Series C round of financing, led by Andreessen Horowitz, which brought total funding to $47.3; other investors are Union Square Ventures, Index Ventures, and Lux Capital. Two facts made Weijmarshausen decide to move to NYC: realizing that many of his customers and designers were in the U.S., and finding very difficult to get new funds in Europe after the economic crisis of 2008. Moreover, in NYC Weijmarshausen found the right “mindset” for a startup to thrive: “It’s easy to meet interesting people who understand the business, design and high-tech. And everyone works together with an open spirit” (from Tech and the City, pag. 125).

Besides the Global Industry Challenge, NYCEDC offers other programs to international entrepreneurs. One is the annual competition NYC Next Idea: applicants have to develop business plans that can be launched in NYC. Finalist teams win an all-expense paid trip to New York City to present their idea to a prestigious panel of judges who will decide the prize winners. Prizes include a cash pool of $35,000, free workspace in NYC, pro bono legal advice, and mentorship from the New York City venture capital and startup community. The 2014 edition got over 240 ideas submitted from 51 countries. Out of the six finalist teams, two were from Germany, one from UK-USA, and three were American.

The most prestigious and selective program is NYC Venture Fellows, a year-long fellowship program that “provides successful entrepreneurs with opportunities to grow their ventures by connecting them with mentors from leading companies and providing exclusive CEO-level networking and educational opportunities”. The 2014 Class of NYC Venture Fellows includes 28 entrepreneurs from five different countries, and from a diverse cross-section of industries such as media, enterprise software, biotech, education, financial services, and real estate.

None is from Italy. Why can’t you try and get into the next edition?

 

I read three interesting articles this weekend around new tech communities.

The first one was a very well written article in The New York Times Magazine by Yiren Lu, a Silicon Valley-raised, East Coast (Harvard and Columbia) educated Computer Scientist, titled “Silicon Valley’s Youth Problem,” in which she tackles the differences between “older” generation engineers and the current crop of “restless” engineers and computer scientists who want to change the world and build the next great technology company. The two don’t seem to mix.

She attributes this fact to cultural aspects of older generation companies (Cisco, HP) vs. newer ones (Dropbox, AirBnB): an older engineer would probably not fit well in a Gen-Y-founded company mostly because of lifestyle reasons and partially because some have failed to keep their programming skills up to date (her arguments are more refined than my exposition and I recommend you read the article). I partially agree with her logic, but I think it boils down to the “cool” factor (which she also mentions): some companies have been able to stay cool and are attractive for both generations of engineers (i.e. Apple, Google) and some have lost it and are trying to regain the cool factor (Cisco, Microsoft), and are not very attractive to the younger generation, at least right now.

But she also talks about another point, which I fully agree with: starting new companies today is dramatically different from 15-20 years ago, and skills that were needed then are not needed now. When I used to invest in Silicon Valley companies in the 1990s (typically early growth companies, “Series B” rounds and beyond) I would visit an outfit in the midst of Silicon Valley, with 30+ employees in a relatively large office space that could host a computer/data room with the technicians and admins to maintain that and other facilities like the internal data network and infrastructure; a hardware prototyping lab (if the company was involved in hardware); a large programming team with experts in many aspects of system software development, because you had to build everything from scratch; a storage and “manufacturing” room (for software companies as well) where you would package your CD-ROMs, insert your manuals, shrink-wrap the box, ship (many of these companies required a loading dock). In addition, if the company was involved in developing sophisticated hardware products you had to pick your locations well. Did you have to be close to a prototyping lab or a fab? Did you have your own factory?

Today, this way of doing business has largely disappeared. It has been a while, of course, that we have moved away from the need to write software onto CD-ROM, package it and ship it: the Internet has optimized that process and now we download software every time there is an update, which is incredibly more efficient compared to the past. We don’t need the large computer rooms, the internal network infrastructure and personnel to go with it, because you are likely to use outsourced services like Amazon Web Services (AWS) as your server cluster, and all you need to think about is making sure that your office is well served by broadband service providers and wifi. By the same token, you don’t need large development teams anymore: you just need the domain experts that are important to what you are building. The rest (the database administrators, the developers of all the standard functionality in your system) are gone: AWS gives you a set of services for your use, open-source software is available for free, and there are enough APIs (Application Programming Interfaces) out there that you can connect to, in order to “mash in” the functionality required, from login scripts to credit card protocols, to integration of “nice to have” functionality like search, maps, weather etc.

Even if you are in the hardware business you can get so much more done and get to the prototype level much faster than in the past: off the shelf motherboards (Arduino, Rasperry Pi), a variety of inexpensive sensors, 3D printing, prototyping labs that you can access inexpensively (TechShop). You can do all of this inexpensively while creating final designs that conform easily to volume manufacturing facilities elsewhere in the world. Standardization creates important economies in hardware and software.

The bottom line is that in order to start a company today you don’t need the large office space and large development teams anymore: a small team with laptops in a shared space can accomplish all of this. You have to develop your core technology and mash in, plug in, borrow and rent the rest. It takes less than 5% of the investment that was required in the 1990s to develop a comparable software product. And to loop back to Lu’s article, if you are starting a company with a bunch of Gen-Ys and no one else, it is likely that the culture of the company will be very much modeled around that generation. Hence the difficulty to insert older generation engineers until the company is more mature.

All of this brings me, in somewhat lengthy fashion, to the other subject of this post: the new urbanization. In fact, the technology shift is also having an effect on where people are starting companies. If I don’t need to look for large office space and resources, which would typically be in large suburban office parks, I might as well focus on working in a location that I enjoy. Young people like to live in cities, where they can find social life and culture, as we discussed in our book, Tech and the City. Hence there is no reason not to live in cities: all I need is a desk, laptops and my team.

Fred Wilson touches on that in his blog post of today: Revitalizing Urban Cores, a must read like most of Fred’s posts. In it he makes the point, which I fully agree with, that to build new ecosystems you need to start with “lifestyle,” not tax incentives or government driven programs. Ecosystems start with entrepreneurs, as Brad Feld often states, and then the rest follows. You can accelerate the development of an ecosystem by offering incentives, but you still have to build a place young entrepreneurs are willing to move to and settle. Fred also discusses the development of the Downtown Project in Las Vegas by Tony Hsieh, founder of Zappo.

The third article I recommend is about Silicon Beach, the area around Santa Monica and Venice Beach where most of the LA tech community seems to have moved to. Titled “Network? Let’s party! Santa Monica as the new Silicon Valley,” it appears, perhaps aptly, in the Fashion and Style insert of today’s New York Times. And it is indeed a stylish article that mostly discusses the social life of LA’s entrepreneurs, not giving enough credit, in my opinion, to the technical chops of the community. LA too is growing as a tech hub and they deserve to be recognized. The article is nevertheless a good read about the culture of this community as compared to Silicon Valley or Silicon Alley.

The decrease in the cost of starting a company has another important effect: how companies are being funded. Seed/angel investments (and eventually crowd-funding) are replacing the early stage VCs: not much capital is needed to get to major milestones, and you can get there with seed funding. There is still a difference between building a product and building a company, and in today’s competitive environment you still need to spend a lot of money on marketing and sales, so large capital is still needed. It’s just that it is needed a little later and it is spent differently than in the past.

The entrepreneurial and VC landscape is changing and I think we can expect change to continue for the next few years. Which will give us a lot more to discuss.

 

 

swissnex is an initiative of the Swiss government and is basically a “network with nodes in the world’s most innovative hubs” with the objective of bringing knowledge back to Switzerland’s entrepreneurs, scientists and innovators. It is an interesting organization, whose main objectives are (cut and pasted from their web site):

·       Connect scientists, researchers, entrepreneurs, policy-makers, and thought leaders with inspiring peers and new ideas on either side of the globe

·       Facilitate academic programs, global innovation strategies, and knowledge exchange

·       Create and present trans-disciplinary projects in imaginative ways

·       Support internationalization efforts of Swiss academic institutions and companies, with a special focus on R&D based start-ups

·       Inform on developments in science, technology, education and innovation policies

They run a number of interesting initiatives, such as bringing groups of entrepreneurs to visit New York, Boston and Silicon Valley (areas where swissnex has presence), organize events and webinars.

In fact, my friend Pierre Dorsaz, who runs swissnex in NY, invited me last Wednesday to do a webinar for Swiss entrepreneurs and discuss both the New York ecosystem and the financing sources that exist in New York. The video was made available on YouTube, and if you are interested it is embedded below.

Start-up Webinar: Venture Investors landscape in New York (VCs, Angels) in New York (A. Piol) – YouTube.

Bill de Blasio’s approval rate has already plummeted to 39%. What is he doing for the city’s tech industry? Here is what I wrote on StartupItalia!
 

Will the new Mayor Bill de Blasio make it easier or more difficult to create a successful startup in New York City? That’s the $1 billion question. And probably it’s too early to answer, after only two months under the new administration.

For sure, many in the New York tech community are concerned about the future of the city, because Michael Bloomberg was unique and nobody could have a similar profile. In fact he was himself a tech entrepreneur, the founder of a very innovative startup in a very risky business (finance) and in a very bad economic moment (the 1981 recession). So he applied his “animal spirit” to the city’s management and innovated the government in many ways.

New York was the first city in the US to have a Chief Digital Officer (CDO), Rachel Haot taking care of the city’s presence on the web, on mobile platforms and on social media, and leading NYC Digital, an ambitious program to “realize New York City’s potential as the world’s leading digital city”. NYC was also the first city to get its own Internet top level domain (TLD) – .nyc – that  can be used by city residents, businesses and organizations.

Now Ms Haot is gone: last December, while the Bloomberg administration was ending, she was hired by Governor Andrew M. Cuomo as the CDO of New York State. De Blasio has not replaced her yet. And although the approval of the TLD .nyc was approved last July, nobody knows when and how the new web address will be really available. «We’ll have more (news) to share in the upcoming months», Nicole Nolte told StartupItalia! on behalf of Neustar, the private firm appointed by the City «to support all marketing efforts and operate the technical infrastructure of the .nyc domain».

One important decision made by Mr de Blasio is keeping Kyle Kimball, the president of the city’s Economic Development Corporation (NYCEDC) and a veteran of Bloomberg-era governance. The move has been quite controversial, because Mr Kimball is a Goldman Sachs alum and GS is the epitome of Wall Street’s greed for the “99%” represented by the new progressive mayor. Besides, NYCEDC played a big role with Bloomberg as instrumental in many major real estate projects that Mr. de Blasio criticized during his campaign.

But NYCEDC played also a crucial role in bringing the Cornell NY Tech campus to Roosevelt Island and – through its Center for Economic Transformation (CET) division – encouraging the creation of a dozen of incubators from the Bronx to Brooklyn, which in three years (2010-2012) gave birth to over 40 companies. That’s the part that the new Mayor likes. He said he expected Mr. Kimball to spearhead job growth in the emerging tech sector and in the outer boroughs, adding that he «needed someone who understood how to get the work done, who had the values and an ability to put those values into action». However NYCEDC will not be the same: it will take a «different tact» that would «look at every single development deal as an opportunity to right some wrongs», said the Mayor.

Whatever that means, the tech community should not be concerned according to venture capitalist Fred Wilson (Union Square Ventures), one of the most authoritative voices of “Silicon Alley.” «The Bloomberg administration was very friendly to the city’s tech community – said Wilson at a recent conference organized by the Columbia Engineering School. – But the tech boom in NYC was happening already before him and it would have happened anyway. The government is not where the action is. Business is the driver. If we rely on government to create businesses then we’ll turn out like the Soviet Union!».

Last week (February 28th) I had the pleasure of presenting at the 2014 NYC Pipeline Fellowship conference. The Pipeline Fellowship is an “angel investing bootcamp for women,” that since 2011 has trained women to become angel investors. In 2012, only 22% of US angel investors were women, and 5% minorities. Pipeline is one of the programs that want to change that. The very dynamic Natalia Oberti Noguera leads the organization and does a great job at putting together these programs.

I was on a panel with Ellie Wheeler of Greycroft, Tamara Gubins, an attorney with Goodwin Procter (sponsor of the event), and Shaherose Charania, CEO of Women 2.0, to discuss terms and conditions of angel/venture capital investments. While we were talking I could not avoid looking at some of the frightened and puzzled faces in front of me, wondering about some of the abstruse terms we were discussing. At the end I recalled my own experience when I started in venture capital 22 years ago.

I too was puzzled by the obscure clauses typical of term sheets and I had the mistaken notion that the “art of the deal” resided in those documents. As I told the audience, there is nothing further from the truth. At the time I had my friend and attorney Marty Levenglick, of O’Sullivan Graev and Karabell (then one of the very few, if not the only, venture law firm in New York City), sit down with me with their “chinese menu”– a pro-forma document that showed all the possible alternatives that could be used for each term. It was a very useful exercise that helped me understand and demystify the terms of a deal. It also made me understand that what counts on a term sheet are only a very few items, which you need to understand and focus on, and most of the rest is meaningless boilerplate that is almost irrelevant to an early stage investor (some of it becomes more important later on).

As with most endeavors, you learn your craft as you acquire experience, and learning about term sheets is the easy part of angel investing and venture capital. Learning how to drive was a big deal at the beginning, but after a while it becomes second nature and you don’t any longer pay attention to the dynamics of driving per se: you pay attention to traffic signals, driving conditions and those who drive around you. The same is true with angel and VC investing: terms are just a small, albeit important, mechanic. But you have a lot bigger fish to fry: checking out the founders and assessing the market opportunity, just to name a couple.

Which brings me to my other topic. I just finished reading a pre-release version of David S. Rose’s new book, Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups, a “how to” guide that explains the whole process of angel investing.

So many times people don’t ask questions because they happen to be very basic or “stupid” (there are no stupid questions, btw). When it comes to making investments in a small, private company, and you are new to it, it’s hard to know where to start. That’s where David’s book comes in. It takes you step by step, in great detail, through all you need to know regarding angel investing, starting with the basic stuff, in simple, non-intimidating language. The book is coming out in April and I highly recommend it. It would also be a great add-on, or reading material for the Pipeline Fellowship program.

Originally posted on StartupItalia!

 

IMG_0586

 «You want to push the limits—to reimagine the technology at the core of how we live, work, play and connect. You want to change the world we’re living in. You are not afraid of the unpredictable and the unformed; you see newness as an exciting challenge to be conquered».

Do you feel you fit in that profile? If so, you can apply to one of the programs at Cornell NYC Tech, the new post-grad school that is being built on Roosevelt Island and that aims to train a new generation of scientists with the animal spirit of entrepreneurs. Right now admissions are open – also to international students – for the Johnson MBA, a three-semester program that combines a summer (the first semester) in Ithaca (upstate New York, where the Cornell University is based) and a New York City experience for the remaining two semesters.

While the new campus is under construction (the opening is planned for 2017), the courses are hosted by Google in its humongous building in Chelsea, Manhattan. I visited the temporary “campus” – a loft on the third floor – and talked with the Dean Daniel Huttenlocher to understand what’s special about this new initiative.

His pitch is that Cornell NYC Tech is the first university founded with the mentality, rhythms and structure of a startup, which wants to break down the barriers between research and business and between scientific disciplines to stimulate innovation and create jobs.

TEch

 Actually it’s quite a wealthy startup: the whole project will cost $2 billion in the end, all funded by private individuals. Former Mayor of New York Michael Bloomberg had the idea in 2009, in the midst of the Great Recession, in order to diversify the city’s economy until then too dependent on Wall Street. The city administration gave the land and $100 million in infrastructure improvements, and selected the winning project: a joint venture between the Ivy League university Cornell and Technion, the Israel Institute of Technology that is famous for being the breeding ground of hundreds of startups listed on NASDAQ.

The “campus” looks like a startup indeed: it’s a single open space and its culture is “open” as well. «We do not have separate faculties, but three multidisciplinary research centers linked to three leading industries in New York: media, health business and real estate», explains Huttenlocher. Every Friday in the open space students attend a practicum: a workshop where they are engaged in some challenge of writing software or meet NYC startup entrepreneurs. The organizer of these events is Greg Pass, a Cornell alumnus and former Chief technology officer at Twitter, now Chief entrepreneurial officer of Cornell NYC Tech. «Greg is the first teacher we recruited with the task of making alive the entrepreneurial spirit on campus – recalls Huttenlocher. – He’s the living proof that professionals and academic researchers have the same weight here». Moreover, all Cornell NYC Tech teachers have had some experience in applying their research to business and some have also founded or worked in startups.

Students are selected not only according to their academic qualifications, but also with an interview that verifies their desire to do business. Part of the curriculum is a sort of apprenticeship in collaboration with companies operating in New York. Each semester Cornell NYC Tech receives proposals from companies for research projects aimed to solve practical problems: teachers select those deemed suitable to the campus and submit them to the students, who “vote” their favorites. The most popular projects then become the “homework” of teams of students, each with a mentor and the means provided by the sponsor company. For example one recent project was commissioned by Qualcomm and involved technologies that help drive more safely, “feeling” the presence of other moving vehicles.

«They are assignments regarding real products and put students immediately into the world of business – stresses Huttenlocher. – From the beginning the companies disclaim if they or the students will keep the intellectual property of the product or if it will be open source. We’d like to redefine the system of technology transfer from university to business: the current one works well for certain industries such as pharmaceuticals, but it is unsuitable to information technology». However this does not mean losing academic freedom, according to the Dean.

«Also in the traditional model, money for academic research comes not only from the government but mainly from private individuals – points out Huttenlocher. - Besides, some of our projects will be very long term, not immediately marketable. The important thing is to understand that today high-tech innovation is accelerated by bringing products to market as quickly as possible and involving clients from the earliest stages of a new idea».

Could Cornell NYC Tech be a model for innovation in Italian universities too?

Originally published on StartupItalia!

Time to move to New York?

While in Italy we are busy talking about “Jobs Act”, New York Council will create 10 thousand jobs per year by eliminating tax for startups for the next 10 years. Is it possible to do the same in Italy?

New York is taking care of business”. That’s the catch phrase of an adverting campaign that has been broadcasted on TV during the last few weeks. It’s about the new START-UP NY program launched by the New York State Governor Andrew Cuomo: the creation of tax-free zones across the state for new and expanding businesses. The approved businesses will operate 100% tax-free for ten years: «No business, corporate, state or local taxes, sales and property taxes, or franchise fees», stresses the publicity.

NYStartup

No wonder that hundreds of companies have already showed interest in the initiative that became effective at the beginning of January. Also non-US companies can apply, and in fact the website that explains how the program works has several non English editions: in Bengali, Chinese, French, German, Hebrew, Hindi, and Spanish. No, not in Italian, but Italian startups are welcomed too, explained Leslie Whatley, the executive vice president of START-UP NY, during an event at the Italian cultural institute in New York.

«Global competition is fierce and even New York state needs to offer incentives to attract talents and jobs if it doesn’t want companies to go to Mumbai or… Texas!», added Whatley.

Texas has indeed very low or zero state taxes and a very friendly treatment of businesses, that’s why it’s one of the states of the Union with the highest jobs’ growth rate. Maybe the Italian public administrators could look at this kind of policies if they really want to “restart” their economy.

The START-UP NY program’s goal is to create up to 10 thousand jobs per year, especially in the state’s areas less developed, north of New York City. It will cost New York taxpayers about $323 million.

The tax free zones will be on or near college campuses of public schools – like the State University of New York (SUNY) and City University of New York (CUNY) – and private not-for-profit educational institutions. There are 64 SUNY campuses, 29 CUNY campuses and 112 private colleges in NY state.

In order to be accepted to the program, «businesses need to support the academic mission of the college or university with which they hope to work – explains the website -. In New York City, Long Island and Westchester County, businesses must be startups or one of a number of broadly defined ‘high technology’ businesses. Eligible businesses must also: be a new company in New York State, or a company from out-of-state that is relocating to New York State, or an expansion of a company that already has employees in New York State. Expanding businesses applying for START-UP NY will have to demonstrate that they are creating new jobs and not moving existing jobs from elsewhere in the State».  Some types of businesses, including retailers, law firms, hotels, and medical offices, are not eligible.

The virtuous collaboration between business and academic research is apparently one of the features of the program. Each participating school will have a START-UP NY point person who will be able to help the companies interested in collaborating.

Empire State Development (ESD), the NY state’s leading economic development agency, is still selecting the locations for the tax free zones. But some of them have already been identified. In NYC there are three properties of the Downstate Medical Center, which are available right now for offices, labs or research facilities: BioBAT at the Brooklyn Army Terminal (85,000 sq. ft.), Synthetic Chemistry Facility (13,000 sq. ft.), and Biotechnology Incubator (26,000 sq. ft.).

There are much more opportunities out of the Big Apple. Of course the trade off is that you’ll miss being immersed in the vibrant tech startup community of the city, but overall costs will be lower. Besides, there are many interesting institutions out of NYC, from the College of Nanoscale Science and Engineering in Albany to the Ivy League Cornell University in Ithaca.

Congrats to Josh Miller for his deal with Facebook. According to the Verge, his startup was bought at a $15 million value. In his words:

<<After two years building Branch and Potluck, I am thrilled to announce that we will be continuing our mission at Facebook! We will be forming Facebook’s Conversations group, based in New York City, with the goal of helping people connect with others around their interests. Their pitch to us was: “Build Branch at Facebook scale!” Although the products we build will be reminiscent of Branch and Potluck, those services will live on outside of Facebook. A more thoughtful note and details to come soon but I am writing this haphazardly from a mountain in Japan (I was tipped that the story was going to leak while on vacation). In the meantime, a huge “thank you” to our investors. Especially, Jason Goldman, Evan Williams, Biz Stone, Ryan Freitas, John Borthwick, and Jonah Peretti, who all spent an extraordinary amount of time with us.>>

Josh was one of the young entrepreneurs we interviewed for “Tech and the City”. Here is his profile in the chapter “The Meatpacking District and Chelsea”:

“The extraordinary thing is that nerds are cool today, and working at a startup is sexy,” confirms Josh Miller, 22 years old. He is co-founder of Branch, a “platform for chatting online as if you were sitting around the table after dinner.” Miller works at Betaworks, a hybrid company encapsulating a co-working space, an incubator and a venture capital fund, headquartered on 13th Street in the heart of the Meatpacking District. This kid in T- shirt and Bermuda shorts, and a potential star of the 2.0 version of Sex and the City, is super-excited by his new life as a digital neo-entrepreneur. He dropped out of Princeton in the summer of 2011 a year before getting his degree—heresy for the almost 30,000 students who annually apply to the prestigious Ivy League school in the hope of being among the 9% of applicants accepted. What made him decide to take such a big step? An internship in the summer of 2011 at Meetup, the community site for those who organize meetings in the flesh for like-minded people. His leader, Scott Heiferman, took him to one of the monthly meetings of New York Tech Meetup and it was there that Miller saw the light. “It was the coolest thing that ever happened to me,” he remembers. “All those people with such incredible energy. It was nothing like the sheltered atmosphere of Princeton.” The next step was to take part in a seminar on startups where the idea for Branch came to him. He found two partners –students at NYU who could design a website. Heartened by having won a contest for Internet projects, Miller dropped out of Princeton. “My parents told me I was crazy but I think they understood because they had also made unconventional choices when they were kids,” says Miller. “My father, who is now a lawyer, played drums when he was at college, and he and my mother, who left home at 16, traveled around Europe for a year. I want to be a part of the new creative class that is pushing the boundaries farther. I want to contribute to making online discussion important again. Today there is nothing but the soliloquy of bloggers or rude anonymous comments.”

The idea, something like a public group email exchange where one can contribute by invitation only, interested Twitter cofounder Biz Stone and other California investors who invited Miller and his team to move to San Francisco, financing them with a two million dollar investment. After only four months in California, Branch returned to New York, where it now employs a dozen or so people. “San Francisco was beautiful and I learned a lot from Biz and my other mentors, but there’s much more adrenaline here,” explains Miller, who is from California, born and raised in Santa Monica. “Life is more varied here and creating a technological startup is something new, unlike in San Francisco or Silicon Valley where everyone’s doing it: it grabs you like a drug. Besides New York is the media capital and we’re an online publishing organization so it’s only right to be here.”

That’s why even after being bought by Facebook Josh will stay in NYC.

Relax: the end of the Bloomberg administration won’t be the end of the NYC startup ecosystem! That’s the message from Fred Wilson, one of the panelist at the discussion “Tech and the City” organized by the Columbia Engineering School, last night. The other two panelists were Alessandro Piol and Jon Oringer, founder and CEO of Shutterstock; the moderator was Mary Cunningham Boyce, the new Dean of the Fu Foundation School of Engineering and Applied Science at Columbia.

IMG_0629

The Dean praised the book “Tech and the City” as a great introduction to the NYC startup ecosystem and asked what will happen with the new mayor. “The Bloomberg administration was very friendly to the city’s tech community – replied Wilson -. But the tech boom in NYC was happening already before him and it would have happened anyway. The government is not where the action is. It’s business the driver. If we rely on government to create businesses then we’ll turn out like the Soviet Union!”. The audience burst out in applause and laughter.

It was a full house, made of current students and of alumni of the Columbia Engineering School, for a night that was also a celebration of their entrepreneurial spirit: at the end several startups created by students did their demos.

IMG_0627

How can NYC attract and keep tech talent? “Talents come if they get opportunities and the city’s tech community is offering a lot of them – said Piol -, but also people come and stay if they love living here. And actually today New York is a nice – clean, safe and friendly – place to live in, contrary to stereotypes”.  “New York offers many advantages to startups that want to grow globally like mine – said Oringer -. Here it’s very easy to hire people who are bi-lingual or tri-lingual for example. Not to mention how good is mobility in the city via the subway or cabs”.

Wilson doesn’t see a manufacturing/hardware booming coming to New York, because the city’s culture is different from Silicon Valley’s and China’s. And talking about cultures, Wilson said that one of his criticisms to NYC is about its trade mentality: people here  tend to buy and sell, because of the city’s merchant roots. “That was not Steve Jobs’s mentality, he wanted to build a legacy – added Wilson -. We must change that and create big, independent, sustainable, durable tech companies in New York!”

Is the tech industry  in a Bubble, asked a student, mentioning the $3 billion plus valuation of Snapchat? “Nothing good is built without Bubbles – replied Wilson -. It’s the irrational exuberance that gives startups money to create new things”. “Nobody can tell – said Oringer -. When Google bought YouTube for $1.65 billion people thought it was crazy, today YouTube is one of the most valuable assets of Google, maybe it’s worth $20 billion”. “We really don’t know if it’s a Bubble – added Piol -. We just try to do our job, which is to find good companies at their early stages, at fair valuations”.

Who knows, maybe some of them will be founded by the Columbia Engineering School’s students and alumni.