Startup Guide New York: how this city is a hub for fintech, media, and design entrepreneurs
The Startup Guide series of books, launched in 2014 by Copenhagen-based publisher Sissel Hansen, covers over 20 cities such as London, Paris, Stockholm, Lisbon, and Miami. See our reviews of the guidebooks for Berlin, Munich, Zurich, Johannesburg, and Singapore.
Startup Guide New York is spread across 265 pages and makes for an informative and entertaining read, with profiles of founders, co-working spaces, investors, educational programmes, and other ecosystem players.
“New York has long been known as one of the most diverse and creative cities in the world,” begins Sissel. It has strengths not just in technology but fashion, media, real estate, art and finance.
“This means there’s more cross-pollination of ideas from different realms, which creates startups of all stripe,” Sissel explains. Notable New York startups include Etsy, Kickstarter, Jet, Moat, MongoDB, Plated, Trello, Zola, Yext, Flatiron Health, General Assembly, and AppNexus.
“No city has a greater diversity of talent, of industries, and of collisions that fuel great ideas and companies,” writes Bill de Blasio, Mayor of New York City, pointing to the NYC Tech Talent Pipeline partnership and Computer Science for All initiatives as notable tech programmes. “New York City is where innovation meets the real world,” he adds.
New York has also been ranked as the No.1 city for women entrepreneurs. “No other city has more female-founded firms; a quarter of our city’s tech founders are women,” according to Deputy Mayor Alicia Glen.
The NYC startup ecosystem attracted more than $11.5 billion in funding in 2017, up from $2.6 billion in 2012, according to Julie Samuels, Executive Director, Tech:NYC. The city is regarded as the second-biggest locus of new venture creation in the US.
Successes in funding and acquisition have been reported by Flatiron Health, AppNexus, Moat, Trello, Meetup and General Assembly. Companies like MongoDB and Yext have also gone public.
The book begins with an overview of New York facts and necessities such as rents (expensive), groceries and beer (affordable), people (extroverted, unconventional), cuisine (‘passionate foodies’), subway system (extensive, but with a ‘love-hate relationship’), and language (‘everyone is okay with your accent’).
New York is referred to as The City That Never Sleeps, Gotham, and the Big Apple. While Manhattan with its iconic skyline and artist lofts might boast the city’s tallest skyscrapers, fanciest restaurants, and most halal carts per capita, Brooklyn is regarded as the “Borough of Homes and Churches”.
The city’s startup ecosystem is estimated to have more than 7,000 startups, 100 incubators and accelerators, 200 co-working spaces and 120 universities. New York’s unicorn startups include WeWork, Infor, Oscar, Compass, Zocdoc, Sprinklr, SquareSpace, Warby Parker, Dataminr and Peloton.
In the 2018 Global Startup Ecosystem Report, New York was dubbed the world’s second highest performing startup ecosystem, with its 7,000 startups worth over $71 billion in value.
There are more than 200,000 businesses with 20 or fewer workers each, and 410,000 women-owned businesses, more than double any other US city. The urban population is 8.6 million, with over 20 million in the greater metropolitan area. Immigrants make up almost half of the city’s workforce.
I. Startup profiles
One section of the book profiles nine startups based in New York. They include ConsenSys (driving Ethereum blockchain adoption), Ellevest (financial services company that focuses on women), Farmshelf (automated, hydroponic growing systems), Justworks (HR and payroll tools), and X.ai (meeting scheduling via an AI agent).
Lemonade provides insurance services based on behavioral economics and artificial intelligence. It has a mission of social good by targeting those who are neglected by the “huge, unchanged and unloved” incumbent players.
Propel has built a financial app for people on food stamps. It helps them check their balance, download coupons, and apply for work.
Handy is platform that provides access to service professionals whose backgrounds are carefully screened. It has partnership deals with brands like Walmart and Wayfair. Managed by Q offers facilities management services such as cleaning, maintenance, security, and administrative staffing. It regards itself as “Amazon Web Services for the office space”.
II. Startup ecosystem
Two sections of the book profile the support system for startups, ranging from co-working spaces to programmes at incubators and accelerators. For example, Per Scholas, founded in the South Bronx in 1995, helps bridge the digital skills divide through technology training and professional development.
Blue Ridge Labs, an initiative of the Robin Hood Foundation, runs a six-month incubator called Catalyst for entrepreneurs working on social change. “Be adaptable and receptive to feedback. Starting a company is an exercise in constantly being told that you’re wrong. View that as opportunity for learning and growth,” advises Hannah Calhoon, Managing Director.
Entrepreneurs Roundtable Accelerator (ERA) boasts of more than 150 alumni, 400 mentors, 50 corporate partners, $300 million raised, and $2 billion in market cap. Its initial investment in a startup is $100,000.
Founder Institute, launched in 2009 in Silicon Valley, has a New York programme as well, with 175 portfolio companies such as SimpleReach (cloud platform for content marketing optimisation) and Easy Aerial (smart security system run by drones). It hosts a monthly public meetup, and also has a personality test for entrepreneurial abilities.
Fullstack Academy, founded by David Yang and Nimit Maru, is a three-month coding bootcamp. It encourages coders to learn by teaching as well. General Assembly, started as a co-working space in 2011, and now offers training in web development, data science, and digital marketing.
Grand Central Tech, adjacent to Grand Central Station, is a startup accelerator that looks for capable as well as “decent” people committed to diversity. NY Tech Alliance runs the NY Tech Meetup (NYTM), and is a go-to resource for people interested in the tech world in New York.
NYC Media Lab is supported by a consortium of universities and companies. Its startups span AI and ML (Vidrovr), a media platform for meditation (Aduri), and a brain–computer interface for self-driving cars (Braiq). In addition to its Combine accelerator programme, it runs events and demo days such as Machine + Media, and Exploring Future Reality.
NYC Open Data was formed in 2011 through a collaboration between the Mayor’s Office of Data Analytics (MODA) and the Department of IT and Telecoms (DoITT). More than 60 city agencies make their data available, and run the annual Open Data Week.
NYU Tandon Future Labs, founded in 2009, has been responsible for a range of startups such as CB Insights, Clarifai, Honest Buildings and Bounce X. It also offers tax-based incentives through the START-UP NY programme.
She Innovates Global Programme offers grant funding and mentoring for women-led solutions that address the specific needs of women and girls; and a mentoring programme. It was developed by the Global Innovation Coalition for Change (GICC), a partnership with UN Women.
New York city has a wide range of co-working spaces as well, such as WeWork, The Assemblage, The Yard, Urban Tech Hub, and Bond Collective.
Civic Hall has a focus on tech for the public good. It was home to VoteRunLead (a platform that trains women to run for political office) and Heat Seek (ensuring that landlords provide enough heat in the winter time for impoverished tenants).
New Lab offers prototyping equipment, including 3D printing, CNC shops, and electronics benches, and positions itself as a “a signifier of optimism in technology”. PencilWorks, in Brooklyn, is located inside the former factory of the Eberhard Faber Pencil Company.
SAP Next-Gen connects startups to SAP’s enterprise technology and customer networks, especially if they are aligned with UN Global Goals for Sustainable Development. It advocates a combination of science-fiction thinking, purposeful orientation, and exponential technologies.
III. Expert insights
One section of the book provides expert tips from accelerators and startup consultancies in the city. The advice covers product-market fit, customer engagement, marketing, sustainability, and talent.
Startups must create a good first impression when dealing with the media, advises Dan Levitan, SVP of PR firm BerlinRosen. “Relationships are key in the media business,” he adds.
“Take the time to craft a story around the product, highlight its benefits and build the overall brand,” advises Adrien Colombié, Founder and Creative Director of Flying Saucer Studio. A brand is defined by a company’s story, voice, personality, visual elements, and content.
“Try things, test them, improve them, and then scale,” he adds. “Failure is going to happen – it’s simply part of the process,” Adrien cautions. In an environment of constant change, founders should never get too comfortable.
“Tell a compelling narrative about you and your project to spark interest and connect with your audience on a deeper level,” advises Heather Corcoran, Design and Technology Outreach Lead at Kickstarter. The crowdfunding programme has helped artists, musicians, filmmakers, designers, and creators of products like Pebble smartwatch and Oculus Rift headset.
Crowdfunding invites customers to get involved and have a front-row seat in the creation process. It gives people a sense of confidence about the creator while also addressing challenges faced and ways to overcome them.
“Now more than ever, startups and entrepreneurs need to think about how their business will benefit society at large,” urges Ann Rosenberg, Senior Vice President and Global Head of SAP Next-Gen. Vision should be linked with the United Nations’ seventeen Global Goals. “New York is not only a city but an international stage that inspires the world,” she adds.
IV. Founder advice
One section of the book interviews founders of eight startups and support firms, tracing their entrepreneurial journeys, advice received, lessons learnt, and tips for the next wave of aspiring entrepreneurs.
“You have to have supreme self-confidence as you come up with an idea that most people will not understand or get behind until it has proven out,” advises Harry Kargman, Founder of mobile ad firm Kargo. “The best creative minds in the world are in New York: art, fashion, media, finance and design,” he says.
Entrepreneurs must maintain personal and business relationships across their journeys, advises Kevin Ryan, Co-founder of AlleyCorp. He was earlier CEO of DoubleClick, and Founder of Business Insider and GILT. He hosts reunion parties to maintain these relationships.
The startup journey can be full of bad ideas, mistakes and poor decisions, but the key is to learn and move on. “People will strike out two out of three times,” he observes.
“The tech industry here isn’t so full of itself, because unlike San Francisco we’re just one of many industries here. In a one-industry town, it ends up being too much, and a level of arrogance creeps in,” Kevin explains. “Also, we’re number two to San Francisco, which makes us more humble and more collaborative,” he adds.
Liz Wessel worked at Google in Mountain View and in India, which gave her the idea for her startup WayUp. It improves job search for college grads and employers via ML, and helps find quality in the midst of quantity.
Liz says the most valuable piece of advice she has been given is: Make sure you find a career that you love, because you’ll probably spend more time with your career than with your spouse.
Mina Salib is Founder of media startup Usspire and Programme Manager of the Future Labs incubators at NYU Tandon. “Self-awareness is the most important quality a founder can possess,” he advises. This gives insights into strengths, weaknesses, team skills, and impacts.
“Plan but don’t plan. Have goals and a vision for your life, career and business, but realise it’s okay if things change,” he adds. Even in the face of prior competition, execution can win out. One of his other initiatives is the city’s first AI accelerator, AI NexusLab.
“Recruit for culture. The culture of the company is what you have to protect through thick and thin,” advises Ragy Thomas, Founder and CEO, Sprinklr. On the technical front, founders should ensure they have a well-architected codebase.
“New York is a special place where you have a lot of different industries. It’s very balanced. It’s not all technology,” Ragy adds. He says the most valuable piece of advice he has been given is: Effort doesn’t matter, results do.
VentureOut helps post-seed companies via short-term accelerator programmes, and also offers a foothold into the US for international companies. CEO Brian Frumberg says the most valuable piece of advice he received is: Be unbelievably passionate about whatever it is you’re trying to do.
Silicon Harlem is a social enterprise intent on building a tech ecosystem in Harlem. It runs STEM camps, hackathons for seniors, and the annual Next Gen Tech Conference. “When you look at technology and innovation centres, a large part has been centred on the West Coast where there’s not as much diversity as in New York City,” observes Co-founder Clayton Banks.
Shan-Lyn Ma is Co-founder and CEO of Zola, an online wedding registry and planning company. She was born in Singapore and grew up in Australia before moving to the US. “Be very fiscally responsible. We want to make sure that we’re not burning capital unnecessarily,” she advises.
“Before you commit your most valuable resource, which is your own time, be really sure that the idea and the business model is absolutely the thing that you want to commit to 24/7 for at least a decade of your life,” Shan-Lyn emphasises.
One section of the book describes educational and skilling support for entrepreneurs in New York. For example, all 17 schools of Columbia University have a focus on innovation and entrepreneurship, such as the Brown Institute for Media Innovation and Tamer Center for Social Enterprise. It also runs co-working space Columbia Startup Lab, and looks out for students with demonstrated leadership.
Cooper Union was founded by Peter Cooper, who designed the first American-built steam locomotive. It is known for its culture of creativity and making, and offers classes like Engineering and Entrepreneurship and Principles of Design, as well as programmes like the Invention Factory. It looks out for students who are “curious, competent, and eager to collaborate with others to better the world”.
Cornell Tech, launched in 2010, houses the Tata Innovation Center. It looks for students with an entrepreneurial or independent spirit, who want to apply their learnings and make an impact.
Fordham University has a range of initiatives, including $20,000 in prize money, at the Fordham Foundry Pitch Challenge. It looks for students who show commitment to a specific problem rather than having 10 different activities. It has eye on those who “demonstrate curiosity” and ask questions about the world’s greatest problems.
The New School and Parsons School of Design are known for a range of hybrid and creative programmes. This includes the Impact Entrepreneurship Venture Lab and Elab design incubator.
New York is a city where “design seeps into every industry, from journalism to fashion”, observes dean Joel Towers. The school looks for students who are self-directed, engaged with the world, and willing to collaborate.
The final section of the book profiles active investors and their startup portfolios, along with tips for entrepreneurs.
“Combine conviction and adaptability. Be able to think three steps ahead, but also be willing to accept feedback," advises Susan Lyne, Founding Partner of BBG Ventures and former CEO of Gilt.com, a fashion and lifestyle website startup. Its portfolio includes GlamSquad (on-demand beauty services), goTenna (communication devices that can work offline), and The Wing (a co-working space and social club for women).
“New York City is a great place for female founders,” Susan says. “It’s a much more heterogeneous business environment than Silicon Valley, the VC ecosystem is younger and more fluid, and there’s a growing community of women who want to see you succeed,” she adds.
“Do your research. Make sure you do a thorough job talking to everyone in your field. I’m looking for founders who are not going to be taken by surprise,” advises Charlie O’Donnell, Founder of Brooklyn Bridge Ventures. His earlier investments include The Wing, Canary (home-security company) and Industrial Organic (waste processing).
Expa is “company builder” startup studio with features of an accelerator and investor. Launched in 2014, its founders have impressive pedigrees: Naveen Selvadurai (Foursquare), Garrett Camp (Uber, StumbleUpon), Hooman Radfar (AddThis), and Milun Tesovic (Metrolyrics).
It invests from $250,000 to $2 million in early-stage companies. Its portfolio includes Sleeperbot (messaging app for sports fans) and Haus (platform for buying and selling homes). It has offices in New York, San Francisco, and Vancouver.
Human Ventures, founded in 2015, has invested in 17 companies, with the average investment ranging between $500,000 and $1 million. The portfolio spans Current.com (smart debit card for teens) and GirlBoss Media (women’s media company).
It also hosts networking events such as Happy Human Hours. “The next generation of investment really happens around an ecosystem,” explains Heather Hartnett, CEO and Founding Partner. “Fortune favours the connected,” she adds.
The company looks out for serial entrepreneurs and aspiring entrepreneurs from corporates or earlier startups. They should demonstrate values such as growth, guts, resilience, openness, collaboration, and gratitude.
Early-stage venture fund Lerer Hippeau has invested in over 250 startups such as Warby Parker, Everlane, Group Nine Media, Buzzfeed, Namely, Casper, Glossier, Doctor on Demand, Refinery29, and Giphy. Typical investment ranges from $1 million to $1.5 million. The core team includes Ken Lerer (who co-founded The Huffington Post) and Eric Hippeau (former managing partner at Softbank Capital).
“Angel investing is a contact sport,” says Brian Cohen, Chairman at New York Angels, which has 130 members who individually invest anywhere from $25,000 to $1.5 million in early-stage startups.
They have invested more than $150 million in over 200 companies, including Pinterest and JUMP Bikes. The angels look for entrepreneurs who are capable of scaling their business and are willing to be coached.
RRE Ventures invests at seed stage ($300,000) and Series A and B ($1 million to $7 million), with success stories such as Business Insider, Venmo, and The Huffington Post. It looks for startups with offerings 10 times better than what currently exist.
Union Square Ventures has an active portfolio of over 75 companies, with earlier successes such as Twitter, Etsy and Twilio as well as Duolingo, Stash and Clue. Founded in 2003 by Brad Burnham and Fred Wilson, it invests from $1 million in early stage companies to $15 million in growth companies.
URBAN-X invests in tech firms and provides accelerator programmes in urban-tech solutions. It has invested in 30 companies, with solutions such as AI to monitor and manage roadways (Roadbotics) and responsive, intelligent bike helmets (Brooklyness). Targeted startups are those with global markets.
The book ends with a directory of useful resources for startups, such as conferences and meetup sites for entrepreneurs. These include AlleyWatch, Built In NYC, Civic Hall, Cornell Tech at Bloomberg, Digital.NYC, Startup Grind New York, and Tech Day New York.
Other incubators and accelerators to check out include AngelPad, Betaworks, Blueprint Health, Capital One Labs, CUNY Startup Accelerator, Dreamit Ventures, Fashion Tech Consortium, MetaBronx, New York Fashion Tech Lab, Prehype, Quake Capital, Starters, Techstars NYC, Work-Bench, and Zahn Innovation Centre.
“The future of New York City is to really be the fairest big city in America,” wraps up Jeremy Goldberg, Deputy at the Mayor’s Office of the CTO.
In sum, the book provides informative and entertaining insights into New York’s startup ecosystem, as well as a useful framework for other cities to reflect on and improve their own startup ecosystems.
(Edited by Teja Lele Desai)