If you can make it to Fred Wilson’s ear, can you make it anywhere?

By Dennis Clemente

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If you can make it to Fred Wilson’s ear, you can make it anywhere.

That’s what people like to think when they see the Union Square Venture principal, the man who has helped build, if not backed up startups like Foursquare, Kickstarter, Twitter, Tumblr and Zynga.

Observing how people swarm to him like bees after each talk cues you into how he has become a rock star in the New York tech startup scene. It was like this at the Columbia Engineering’s demo night last December 13 at Time Warner Center. Columbia Engineering dean Mary C. Boyce moderated the discussion.

One attendee followed Wilson’s every move, dragging me along with him. I met Fred Wilson before, so I was not as excited as he was. But I understand. I just feel bad for other guests when he’s around; this time, Tech and the City author Alessandro Piol and Shutterstock founder Jon Oringer.

Wilson minces no words. There’s no hesitancy, even when he replies to a most pointed question. Some may call it candidness where others may see rebelliousness, even recklessness. I think he has answered these questions before and he just decided to peel the layers of half-truths to tell you what it’s really like out there.

This perspective may come from seeing failed startups. The failure rate, as most publications will tell you, is about 75 percent. For those in the industry, it’s 90 percent.

Wilson said he embraces failure, but he is quick to qualify it. He doesn’t mean lifelong failure but failure that toughens you up, because in the fickle tech world, even the most successful ones fail. So he is suggesting that as long “as you learn the tough lessons of failure,” he is willing to overlook it and take a chance on you. “Making a mistake should not be a Scarlet letter, as long as you realize the mistake.”

But to rewind a bit from the talk he gave along with Piol and Oringer, the Columbia Engineering’s talk was centered on New York’s beginnings in the tech scene and perspective on critical opportunities and roadblocks facing innovators and startups in the future.

Where Oringer credited outgoing Mayor Bloomberg for the thriving tech scene, Wilson was quick to counter that it was Google and the hundreds of engineers it brought to the city that was the catalyst for New York’s emergence as the Silicon Valley of the East.

“Bloomberg was friendly, but it (the tech scene) would have happened even without Bloomberg.”

“The biggest thing that happened in New York was when Google’s software and engineering team came to New York. Google is a gift to New York,” he added. Ex-Googlers these days have their own startups in New York.

Still, Oringer pointed out how multilingual New York also made it easier for startups to take their products or business model on a global scale.

Tech and the City author Piol was more specific, saying the turning point was 2008 when the financial meltdown made many people switch to the tech startup scene.
Wilson wrote the foreword in Piol’s book.

At the time New York-born and -raised Jon Oringer was already running Shutterstock. Today, the stock photo company is earning $200 million.

Wilson answered more questions.

Asked how low-income countries with software development capabilities can compete against the United States, Wilson said, “There’s no culture of entrepreneurship in those low-income countries, because there is no capital.”

Asked about 3D printing’s future in New York, he said the city has the talent for it but stopped short of predicting New York is going to be the center of 3D printing.

After the talk, people were led to the startup demos of students and alumni of Columbia University in an open reception. The startups were Urban Compass, Trek Medics, eBrevia, KeyMe, and Meal Logger

Urban Compass offers a technology platform that enables customers to manage their entire apartment search in one place. It has a team of agents for good measure.

Since August 2012, Trek Medics’ dedicated full-time staff has been working to complete beta-testing for their SMS-based emergency dispatching software, Beacon, with efforts currently focused on the southern coast of Haiti. Beacon addresses response gap by allowing community paramedics to quickly locate, treat, and transport emergency victims from the scene to the hospital.

Another startup, eBrevia was created to assist corporate attorneys, in-house counsel and business executives perform tasks more efficiently.

KeyMe is a cloud-based “keychain” that stores key’s cutting instructions, while Meal Logger is a photo food journal designed to empower people to improve their lifestyle.

What does Wilson look for in a startup founder? “You have to be charismatic,” he said, adding that it’s an important quality to have if you are asking people to fund you.

“I like someone who has a vision who can “get to an opportunity from ‘0 to 60’.”

And if you’re a founder, he said the first five people in a startup is the most critical.

But if having Fred Wilson’s ear is going to help you, well, it depends on what you have to offer him, of course.

Dennis Clemente with Fred Wilson back in November
Dennis Clemente with Fred Wilson back in November

NYTech demos showcase Artiphon, Skillfeed, Touchcast

By Dennis Clemente

Every month the NY Tech Meetup presents an evening of tech demos that look like the presenters are going to burst into song ala Broadway musical, if only because the magnificence of its venue–the Skirball Theater and its wide and luxurious space–transforms the most stoic presenter into a giddy presenter. It might just happen someday for all you know. You could call it NY Tech The Musical.

Last December 4, eight companies presented their startups and products. These are still too many demos judging by the antsy reactions from the audience by the fifth or sixth presentation. But it’s how they have formatted this show-and-tell for the longest time. It doesn’t hurt that the theater makes for comfortable seating.

Before the demonstrations, Senator Charles Schumer took to the stage reminding everyone about why he is for immigration reform (to bring or keep much-needed IT talent here) and patent reform (to protect startups). Keeping it convivial to suit the buoyant atmosphere, the senator said he was part of the demo. He should joke around more often.

The eight demonstrations proceeded accordingly with the audience mesmerized the most by Artihpon‘s Artiphon Instrument 1, a guitar hybrid of sorts — one that can play guitar, piano, violin, drum machine and more, as it uses Apple’s Garage Band app. It’s powered by iPhone in its belly. The demo made people hush down – and listen intently. Like I said, it felt like I was in a musical.

Another interesting demonstratation came from General Assemb.ly’s Skillfeed with its project-based narrative-led approach to learning web and app development from comprehensive video lessons and snack-bite videos.

General Assemb.ly founder Brad Hargreaves showed two nifty features–a checkpoint, which works to help learners make sure they are on the right track and another, a split screen that shows how your app design looks like as its rendered on a smartphone.

The other presenters of the night have been at some smaller show-and-tell meetups before, like Canopy Apps. Funded by the National Institutes of Health, it aims to facilitate healthcare coordination with patients who do not speak English. I like to think it’s an emergency interpretation app–with ready-made responses and a direct line to interpreters from all over.

It’s interesting how a different type of audience reacts to one product over another. Touchcast got oohs and ahhs when it presented to the NY Video group at Columbia University; they can certainly appreciate what Touchcast has achieved here. But here’s the solid on this: What the Touchcast team likes to call the video web may be the future of broadcasting.

Touchcast’s Erick Schonfeld, a former tech journalist, launched the desktop version at the venue, showing how it works when broadcasting a show.

He said it’s a way for us to get rid of the second screen, because you can have the Internet on your Touchcast screen as you capture everything around you on video. Multimedia journalists should love it.

Touchcast certainly deserved more than five minutes on that NY Tech meetup stage. Erick, you might as well do a musical with the Touchcast. That could go viral.

Other presenters included Hitlist, an alert system for getting affordable flights to your dream destinations using skyscanner for data; Nextdoor, a private social network for your neighborhood; and Priori Legal, which connects businesses to a network of trusted and vetted lawyers at below-market and fixed rates.

The last presenter and not in the schedule was Free the slaves, which demonstrated how it works to help law enforcement catch prostitution rings. Data is mostly mined from — guess where? — Craigslist.

Being a serious advocacy, we expected the night’s mood to shift to glum seriousness, but even the presenter hummed along as he showed code after code on the giant screen. He was the most musical of all.

It’s great how the NY Tech meetup gives startups their opportunity to present, but with its growing audience, it wouldn’t hurt to take the format to the next level. As it is, it’s like any other tech meetup in the city with its big venue as the only difference. It could be the TED Talks of startup demos if it wants to keep things interesting.

Former HopStop CEO Joe Meyer on everything you need to know to run a startup

joe meyer

By Dennis Clemente

It’s been awhile since former HopStop CEO Joe Meyer has spoken before a large audience after the transit navigation app was acquired by Apple in July, but he was certainly eager to talk about the key lessons he learned in a small meetup group just before Thanksgiving weekend at AlleyNYC.

In the startup world where it’s common to see megabuck deals, the no-nonsense CEO said HopStop only raised $2 million in five years, so how did HopStop make it? HopStop takes pride in its routing engine and routing algorithms on top of its licensed core IP plus tremendous amount of data. But in terms of sustaining success, Meyer outlined the following as the keys to the company’s success:

Focus on building, not selling. “People make the mistake of thinking of an exit strategy early. Build a real company and hopefully, a great company, so you’re never interested in selling it. Keep building real value; if you sold your company tomorrow, what tangible ‘assets’ would the acquirer be buying. Don’t start a startup because you think it’s going to get acquired. Entrepreneurship is not a ‘career path’.”

If you get partnerships along the way, he suggests reaching out to them early and to keep them informed along the way. “Get clarity on their interest level upfront. Make sure key decisions makers are involved. More important, engage them with statistics. Fish or cut bait quickly.

He points out a list of don’ts:
• Don’t get distracted by partnership discussions, because they consume time and resources.
• Don’t begin working on a “potential” partner opportunity until a deal is signed. Don’t allocate resources to “maybes”
• Big companies will tend to waste your time; they have all the time in the world whereas you don’t want to waste your time

Raising money vs. generating revenue. “Not all startups should be venture backed,” he said. “If you don’t have a real revenue model, then you a least need to have a massive user acquisition growth. You need at last one in order to raise real venture money.”

Meyer doesn’t believe ad-supported models are revenue models. “We were one of the top 10 apps. But it wasn’t enough (for us) to use ads as a revenue model. This revenue model is really tough unless you have massive reach like Facebook,” he said. However, HopStop did get geo-targeted ads, because it was able to locate people’s whereabouts.

Ultimately, every good business needs recurring revenue. Meyer thinks you should kKeep trying to find a real revenue model. “A revenue model should complement your core product/service and seamlessly tie it into the UI. But if your money is about to dry up on your fifth year, it’s too late.”

Extending the runway. Being profitable is the best way to be cash-flow positive, i.e., cash on-hand increasing month after month. If not, you’ll need to do the following:

• Go after every potential revenue opportunity
• Only spend on critical things
• Delay/postpone bills as long as possible (manage cash)
• Aggressively collect accounts receivables
• Be careful with venture debt

“Our revenue went up first 3 years up but only steady afterwards,” he admitted.

Check your board and investor dynamics. He said a supportive, professional, non-dictatorial board is essential. “Having a board member who’s available is important. Hold board meetings bi-monthly, not quarterly or monthly,” he said, emphasizing how board members need to be in person in a meeting. “If they aren’t willing, they’re not worth it.”

Venture capitalists are more actively involved compared to angel investors who like to spread their funds around. “We had 20 angels, but didn’t see 17 of them,” he said.

What constitutes a board? “One or two founders and one investor is not a board,” he stressed.

As for advisors, he said they are good for valuation “but if you are on your way to generating revenue, they’re less valuable. It’s window dressing in early stage.”

How you present yourself to your board is just as important. “Hold it every other month, so you can focus on your own work for four weeks (you are not meeting them).”

Hiring and firing. Meyer said the CEO-founder should interview every job candidate in a company with less than 50 employees.” And remember that you don’t need a huge team. Bad seeds can kill the entire garden. It’s better to have a hole in your team than an asshole on your team.”

A list of his don’ts:
• Don’t hire someone unless you know how you’re going to pay for that person’s salary for a year
• Leverage part-time employees, contractors and interns; variable costs are better than fixed costs
• Get two interns at most and no more. Why? Those who manage them loses time, too
• Avoid headhunters

As for getting a tech founder to work with you, he said, “If you can show proof of concept to an engineer he will be inspired about (your initiative).”

As for managing engineers, he said it’s crucial to let them know your desired outcome, how you should check-in-along the way, and then get out of their way.

And to avoid friction, don’t take on big engineering projects without truly understanding what you are doing with it.

Marketing and customer acquisition. Meyer does not believe in spending a lot on marketing to grow your business. “We embrace traditional PR. We have done newsletters, SEO campaigns in addition to having cross-marketed across owned and operated platforms.”

HopStop has made use of user listings, speaking engagements, keyword optimization for app discovery, tapped Outbrain to amplify earned media, and engaged in social media and with users.

Being scrappy is important for him. “SEM and other paid advertising (methods) only make sense if the economics of your business justify it.”

User/customer feedback. He thinks your end users/customers are your best marketers and best source of new product ideas. “Look at customer support as part of your R&D/product management efforts, not an inconvenience. Responding to user feedback creates loyalty and trust.”

“If enough users are reporting the same issue, you either have an issue to fix (or opportunity to innovate). Users are way smarter than you think and there are far more of them than there are of you,” he said.

Administrative. He also enumerated a list of must haves

• Hire a good bookkeepers/office administrator
• Get annual audits, valuations, tax returns
• Only enter into contracts that are necessary and critical
• Patent your IP (example of an actual asset)
• Keep good records

Lessons learned as a CEO. Everybody wants to be the man (read: CEO) but no one knows what it truly means. For Meyer, the CEO needs to be highly ethical, highly moral. “You need to be comfortable in overruling people you disagree with. The CEO/ founder should be the hardest working person in the company.”

“Don’t drink your own Kool-aid,” he stressed more than once.

Having worked for a venture capital firm before, he said you can be transparent in terms of financials but know also when not to reveal too much. “You can say revenue is going in the right direction and that you have sufficient capital in the bank.”

He acknowledges how everybody in a startup needs equity, but he also insists on having contract /legalese in terms of company ownership. And as is more commonly said these days, Meyer said finding an opportunity to innovate is more motivating than beer and pool.

And if you think your role as CEO will last a lifetime, think again: “Operational CEOs typically replace founder-CEOs,” he said. “You are lucky if you remain a CEO for five years.”