Five Years Too Late

November 18, 2009

Dear Betaworks,

Filed under: Uncategorized — fiveyearstoolate @ 10:20 am

Stuart Ellman

Thank you, it has been a long wait.

About two years ago two of my old friends from college, John Borthwick and Andy Weissman, came to my office. They wanted to start a company (or fund?) called Betaworks. The concept was fuzzy. It was alternately described as an incubator, a business accelerator or a seed fund based around real-time data. Bringing an incubator concept to my partners for investment would be like strangling myself slowly…visions of Idealab were still fresh. But John and Andy are just so damn smart. I’ve known them for 25 years (yes, really) and they are that good. So I went to my partnership and said, “just trust me. At worst, we will get an early look at NYC companies, at best they’ll build Betaworks into something really important”. Fortunately, they agreed.

Two years later, they have been very successful at starting and investing in young companies (many of them in New York) with business models that take advantage of the capabilities of the real-time web. I think that on this basis alone Betaworks is a money maker. But that’s not their real magic (at least for purposes of this post). For the first time that I’ve seen in fifteen years, the Betaworks guys have brought together the New York technology community. For the last 15 years, the Silicon Alley (or NYC) community has been disorganized. Compared to our compatriots in Silicon Valley or Boston, NYC companies lacked an ecosystem of high-quality events and people who brought the city’s best tech players together. Perhaps because people in NYC (which, by the way, includes Brooklyn) are so damned independent. Organized events have typically been haphazard. While I have to give a shout out to Nate Westheimer, Dawn Barber and NY Tech meetup, in a sense the NYTM is a victim of its own success – it’s so big that the number of people at the meetups is almost unmanageable. There has never been a place where just the right number of players have come who both run and fund the most interesting companies in this area. Somehow, Betaworks has created that community.

I write this post from Betaday 2009, their full day annual meeting. The people here include VCs like Alan Patricof, Josh Kopelman, Brad Burnham, Alex Ferrara, Bijan Sabet, Howard Morgan, Owen Davis; CEO’s like Eric Hippeau, Amol Sarva, Justin Shaffer and Mark Josephson; and just general big shots such as Kenny Lerer, Howard Lindzon, Henry Blodget, Jon Miller, Kevin Conroy, Roger Ehrenberg, and Scott Kurnit. Perhaps it is the sheer brainpower of John and Andy, maybe it’s because they had the foresight to see the power of real time data companies before most others. But, they have done the impossible and finally pulled together the community. It is my pleasure to be involved and sit on their board. John and Andy – I am truly impressed. This is a great thing for the future of the NYC technology and entrpreneurial community.

November 11, 2009

Office Hours Recap

Filed under: Uncategorized — fiveyearstoolate @ 9:49 am
Eric Wiesen

Eric Wiesen

Earlier this week, Stuart Ellman, Jim Robinson, Will Porteous and I held the first RRE Office Hours. For two hours we met with sixteen entrepreneurs to hear short-form pitches, offer advice or answer questions. I hope it was helpful to those who came in, and we’ve had some early productive follow-up conversations with some of the folks who came in.

I noticed a few themes that emerged out of the companies with whom I met, themes that provoked my thinking along a few different axes.

First, a lot of people are going after the online collaboration space. Even within the small subset of presentations I saw, there were multiple startups in this area. It occurred to me to wonder why this space continues to be so popular. There are relatively few examples of startups having great success creating collaboration apps (to wit, see Albert’s post on “groupware” and my comments thereto). My instinct is that this is an example of trying to be your own customer. Entrepreneurs routinely engage with a half dozen or more web apps and services, and are constantly looking for a meta-service to tie their activities together. Hence collaboration. But my issue is that entrepreneurs are, by and large, among the most agile users out there, and far more likely to accept the behavior changes required by new applications or work metaphors than the average user, and I think that sometimes gets lost.

Second, a lot of entrepreneurs are trying to solve media problems. Distribution in particular verticals, creation and enablement of content, etc… These are big problems, often worth solving, but I think one of the ways office hours (and other mentoring opportunities) can be valuable is for those who have scars dealing with these areas to share the benefit our experience.

Third, and I say this not to be critical of any particular company, but I was surprised that a number of companies coming in to present their ideas hadn’t really taken the time to understand who else might be chasing the same vision. In a few cases there were other startups doing the exact same thing, and the entrepreneurs we met hadn’t heard of their competition. In general (not just for venture presentations), it’s absolutely critical to understand the competitive environment around a new idea.

Ultimately, I’m glad we did this and hope to do it again. A “come one, come all” approach invites some pitches that are rougher around the edges than what we normally get to see. That’s what we hoped to get and that’s what we got. As always, we think the quality of company formation in New York is getting better all the time, and if we’re able to offer even helpful encouragement, we hope it’s helpful.

Thanks to everyone who came out, and to Will Peng for organizing.

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