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Category: Silicon Alley

How to Defy the Laws of Time and Physics – And (Sometimes) Common Sense

How to Defy the Laws of Time and Physics – And (Sometimes) Common Sense

We were recently asked to give a brief history of the early days of tech in New York. Given the speed of tech, it’s not all that easy to condense even a relatively short cycle into a brief presentation, especially considering internet time: a lot happened quickly, and all at once.

It did, however, strike us that many of the ideas that have made for successful – and not so successful – Silicon Valley companies today were first developed in New York in those early days. We had social networks – Six Degrees, theglobe.com, iVillage – two of which were acquired, while the third (theglobe.com) not only went public, but posted the largest first day gain of any IPO in history up to that date – then crashed spectacularly when the dot com bubble burst.  What also struck us was the on-demand economy. We did have that back then, too, so nothing new and again, what man cannot remember he is doomed to repeat.

In the days of Web 1.0, there was a company called kozmo.com, an on-demand delivery service that promised free one-hour delivery of “videos, games, dvds, music, magazines, books, food, et al, and they would even deliver a pack of chewing gum at 2 am, if there was a call for it – literally. They raised money and lots of it: $250 million, according to Wikipedia, and they burned through lots of it as well: According to documents filed with the Securities and Exchange Commission, in 1999 the company had revenue of $3.5 million, with a resulting net loss of $26.3 million. They, too, spectacularly dot bombed. Read More...

Where Are All the Women Investors?

Where Are All the Women Investors?

Following the Ellen Pao gender discrimination trial, quite a few articles came out about the lack of women investors in technology. We attend many events and panels, and it struck us that we know quite a few women tech investors, so we sat down and made a list of the ones we know in New York alone – and quickly came up with well over a hundred names. So, they’re out there. In New York, anyway.

Not long after having compiled this list (170+ VCs, angels, Corporates and Family Offices), we attended the Demo Day of one of the leading accelerators and noticed something odd: after the presentations, the male investors gathered in small groups to discuss the various companies, while the women dispersed to different stations where the entrepreneurs were answering questions and it struck us that there was something of a disconnect/chokepoint: the proverbial Old Boy networks have been around forever and while the names and faces may change, they’re still very much alive and well, while there’s no such long-standing network/pipeline among women: the women investors don’t necessarily all know each other.

Which gave birth to Ladies Who Lead, an event we plan on hosting quarterly (our 2nd one will be held this Thursday evening) so that the women investors of New York can get better acquainted with each other, in order to facilitate deal flow. Read More...

The Founder’s Guide to the 2017 Investing Landscape

The Founder’s Guide to the 2017 Investing Landscape

Esther Dyson hit it spot on when she said that there are too many entrepreneurs out there, and way too many who don’t know the fundamentals of how to work and/or build businesses properly. Many young entrepreneurs have never worked for a company, or may have worked briefly for a startup that may or may not have gotten traction/funding, and that’s not the same as working for a company that is not dependent on funding – nor are you likely to learn the fundamentals of building a true, sustainable business that way.

We talk to investors all the time and count some as being among our closest friends/longest-standing acquaintances, and they tell us things – provided that they’re shared anonymously – that they would not ordinarily share with entrepreneurs. We’re going to share some of that information with you here and, for the record, with the prior consent of those investors, and a special thanks to Veronica Guzman of WAM Ventures, who did give us permission to mention her name, for her comments and insights.

Many founders – especially first-timers – believe that pitching to investors is a panacea. Note to self: we do attend many accelerator demo days and one investor recently told us that he was writing checks to companies he had met through the accelerator, which is why he goes to demo days: to suss out good companies. Mind you, he was writing those checks to companies he had met through the accelerator three years prior, and not that day. He had been keeping a watchful eye on them, and now that they were ready (meaning, had traction/customers/sales), he was all in. A company that has nominal revenues and has only been in business a few months is asking for major disappointments, if getting funded is their goal at that point, another investor recently noted. “Advisors are telling them to pitch angels this way,” Veronica noted. Read More...

The Top 10 Whines of 2016

The Top 10 Whines of 2016

2016 was not an easy year. It was one in which emotions ran high – to put it mildly. This considered, we decided to pay homage to some of those emotions and one thing is certain: it was definitely a vintage year for whines. While there might be a preponderance of Silicon Valley people, places and companies on the list, remember – California is known for its whines. Without further ado and in no particular order:

Elizabeth Holmes/Tim Draper: It was decidedly not a good year for tech’s first female unicorn, whose fortunes went from $4+ billion to zero. The company also left a trail of unhappy investors, but not Tim Draper, who whined about the unfair press that brought the company down. “Instead of those negative reports, he argued in ArsTechnica, people should focus on what Theranos is doing for consumers. They “love” the company, he added, despite the fact that thousands of consumers have had their blood test results—results that may have led to incorrect treatments—corrected or voided. And several consumers have filed lawsuits seeking class-action status against Theranos.” We know that Holmes idolizes Steve Jobs – who is also gone, but not forgotten.

Jack Dorsey: the CEO of Twitter and Square had a mixed year. Square is doing well, from all reports, but Twitter – not so much, with the stock price pretty much in la toilette and not a buyer in sight. One of the Golden Boys of Silicon Valley lost nearly 20% of his net worth recently, with his Twitter stock tanking, but as we always say, just because you can start a company, doesn’t necessarily mean that you can run one. Or two, at the same time, for that matter. For those unhappy shareholders who believed that wunderkind Dorsey was the exception, well, it might be just that you don’t know Jack. Read More...

The Technology Sniff Test

The Technology Sniff Test

As we were riding the Citibike down 9th Avenue early one morning, the exhaust fumes from the buses heading into the Lincoln Tunnel conjured up memories of London and the early morning smell of the traffic exhaust there. Funny how certain smells can almost fool the senses and transport one to a different time and place. It also got us to thinking about New York and San Francisco/Silicon Valley, which will never cultivate certain big city smells of either New York or London.

Technology recently saw two multi-billion dollar exits: Dollar Shave Club and Jet.com – both of which were acquired by large corporations – Unilever and WalMart, respectively. This does give one pause to consider the types of businesses that gestate best in Silicon Valley – the Ubers and Airbnbs and yes, even Theranos’s of the world: companies that do tend to run into regulatory issues and even tax issues, given the European Commission’s recent ruling against Apple, and Amazon and Google are also in their sights; companies with a certain amount of hubris, if not a shoot-first-ask-questions-later attitude. These are companies that aim high and go big, although in the case of Theranos, well, it doesn’t always work out as planned, and the company crashed hard.

The Grand Central Tech piece that we cited last week notes that “The gulf between the corporate world and the startup world is shrinking from both sides… Much was made of a “funding slow down in 2016”, but from our view, more than any slow down, the rules changed. For startups, successfully raising a Series A now increasingly requires not just growth statistics (i.e. users), but revenue growth and the existence of large, scaled customers.” Which, in case no one ever mentioned it, is the basic foundation for building a business. Read More...

And the Silver Goes To…

And the Silver Goes To…

It’s August. The Olympics are on. Why not?

Americans – and tech entrepreneurs, in particular – are conditioned to always go for the gold in the winner-take-all world of tech, but there were two exits lately – both on the East Coast – where tech companies were acquired by corporates for $1 billion or more: Unilever’s acquisition of Dollar Shave Club, and Wal-Mart’s picking up Jet.com for $3.3 billion to challenge/defend itself against Amazon.

For the record, Unilever was also the fourth non-tech acquirer to buy a venture-backed U.S. company for $1 billion or more in the year, according to CB Insights data.  CB Insights goes on to say that “that’s compared to 2014 when tech giants including Facebook, Google, and Oracle made up five of the six acquirers of U.S. venture-backed companies for $1B or more.” Read More...

The Just Because You’re Paranoid Edition, aka, They’re Heeere…

The Just Because You’re Paranoid Edition, aka, They’re Heeere…

In case you haven’t yet noticed, Google is now on street corners all over New York City, which is not only home to millions of New Yorkers, but is also one of the most international of cities, hosting tourists and business people from all over the world, what to speak of UN delegates and their families and UN Missions and consulates and visiting politicos. Pay attention.

Not too long ago, a consortium called CityBridge started wiring New York with wi-fi kiosks, many of which are replacing public phones. Everyone loves ubiquitous free wi-fi, but if there’s one thing that we’ve learned about the tech industry, it’s that free is never free: that if you’re not the (paying) customer, you’re the product. “If all goes according to the plan, the kiosks will be as commonplace as pay phones once were,” says The New York Times (New Yorkers Greet the Arrival of Wi-Fi Kiosks With Panic, Skepticism and Relief), “…Once a smartphone is registered, it will automatically connect to the Wi-Fi signals that radiate from the kiosks and extend 100 feet or more.”

Which means that you’ll be tracked all over town. Read More...

The Payback is a Bitch Edition

The Payback is a Bitch Edition

First, a must-read: Tech’s Enduring Great-Man Myth.

As promised, no editorial this week due to the holidays, but rust and tech – and hubris, it seems – never rests, and given the increasing amount of connectedness/surveillance/ control of which tech is capable, and with governments at the table and in the code, fyi:

Google My Activity shows everything that company knows about its users ­ and there’s a lot Read More...

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