Last week I testified on entrepreneurship, for the third year in a row, in front of the NYC Council Technology Committee.  For my testimony, I responded to what some others had said during their testimony and basically said some of this and I’ll add more:

New York City is a *thriving* innovation community right now.  It is unquestionably the best place to build a web technology or digital media company on the east coast.  There are more and more experienced entrepreneurs launching their second and third companies, coming back as angel investors, and mentoring young startups.  Everyday and every night there are opportunities to network, collaborate, and learn from other startups—not just to party but to build lasting connections that drive real business value.  There is also more venture capital activity than their ever has been—and the amount of venture funding this year, in terms of companies funded, will wind up being nearly half that of the Valley.  That is, relatively, the best we have ever been.  Given the size of our startup community, utterly amazing.  In addition, Boston VCs are flocking to NYC in a big way (Polaris hiring Steinberg, Flybridge hiring Westheimer, Beim moving to NYC in March, etc).  There is a growing and tightly knit community—one that is, unlike the Valley, open and encouraging.  No one will ever look down on you for not having worked at Facebook, Google, or PayPal, and if you get venture funding, we don’t raise an eyebrow if it’s not from the right VC. 

What’s even more amazing is that we’ve gotten here largely in the absence of any kind of top-down, institutional support.  There’s no school here pumping out startup professionals en masse (ITP is relatively small).  There’s no city program we all came out of.  We built this ourselves, as a community, organically. 

After testifying, I then tried to put myself in the shoes of the average council member and digest what I heard from others, and what I would think of the NYC tech community if this was my vantage point.  Most of what people talked about was money and desks.  That’s when I realized that the city is getting *horriffically* bad data on what’s really going on with the NYC tech community and what it needs.  By failing to participate in this innovation community, the city and its affiliated entities lack firsthand knowledge of what’s going on, and instead depend on the often random, misguided hearsay of those who aren’t really in the trenches of the Big Apple’s recent success. 

Here’s an example.  Baruch College measured that the average city has about 19% of its population that identify as entrepreneurs.  NYC is down at 15%, so they conclude that we’re 4% behind.* 

This makes no sense whatsoever.  There’s no “steady state” for entrepreneurship—no systematic reason why that number is anything other than randomness—and it doesn’t apply here.  Every city is a unique mix of people and jobs, mostly due to underlying demographics, geography, and maybe even culture.  Is Kansas short on investment bankers because they don’t have 3% like the rest of the country?  Is NYC overweight people in the tourism and hospitality industry?  Guaranteed we have more people in that sector than other cities—simply because we take on more visitors.

Misguided statistical analysis without real world, in person feedback is why folks from the city keep asking “Why are we so behind other cities?”

The feedback they most often get is that we lack startup capital.  Probably 9 out of 10 entrepreneurs in this city say that access to capital is a problem.  Funny enough, 9 out of 10 startups don’t get outside financing at all—and that’s across the board.  Why?  Because most startups just aren’t based on great, well thought-out ideas.  In fact, many entrepreneurs that start out who fail to get access to funding are often forced to iterate on their models—usually revamping the entire idea.  Many folks would agree that their first iterations would not have worked out as equity investments and that they were better off going to market to try and generate revenues when they couldn’t get financing. 

Other startup ideas simply don’t have capable founders.  It’s not that they aren’t dedicated, but they may not have the right skillset or experience to lead a company. 

Think about it this way:  Would you put your own personal savings into any more than 1 out of 10 of all the ideas you’ve ever heard people come up with in your life?   I certainly wouldn’t—and I definitely don’t want the city moving that ratio up significantly either. 

Outside equity capital simply isn’t appropriate for most startups—sometimes because of their model, sometimes because of their expected size, and other times because of the lifestyle priorities of the entrepreneur.  If you don’t have the intention or capability of building at least a $50 million business, then equity capital is probably not for you.

I’ve said before we could use more smart, dedicated capital—and we’re getting that with the addition of a First Round Capital office in NYC.  No doubt other venture funds will follow.  The last thing we want to do is to compete with the city’s capital, raising the price of deals and distracting the market. 

So, if you work for the city, beware any entrepreneur who tells you they can’t raise money in NYC and that funding is a problem.  For every 9 of those people, there’s one who had no problem raising money from experienced investors because they had a big vision, exemplary skills, and a great execution plan—if not a great product already.  Many raise money from relatively unsophisticated investors—because NYC is full of money and it’s really not that hard to find someone with an extra few grand to put to work in what might sound like a promising idea to be the next big thing.

There’s another real downside to an increased percentage of startups getting funded.  There is, in fact, a limited supply of good talent—not just in NYC, but everywhere.  Great people are hard to come by in life, simple as that.  It’s hard here, it’s hard in the Valley and it’s hard in Boise, Idaho.  When ideas get funded that otherwise wouldn’t, those lower potential companies pull talent out of the market and get them working on less promising ideas—ideas less promising than those that already have customer and financing traction.  When less savvy money funds a company, you effectively raise the price of talent and distribute it inefficiently. 

But, if you’re sitting on the New York City Council, how would you know?  All you hear in these testimonies is how hard it is to raise money.  It’s the same with office space and how expensive it is.  Meanwhile, I spent the day last Tuesday going around to Sunshine Suites and TechSpace and found huge communities of growing companies—probably over 2500 people working at startups in total across these places.  We’ll be visting them during the First Round Startup Trek on January 5th.  They’re loving life there and I don’t hear a single complaint that the rent is too high.  I mean, sure, if asked, would I love my rent to be lower?  Of course.  Do I still live here?  Yes.  The fact is, if you have the revenues or the investment capital to pay someone, you undoubtedly have the extra cash to put them in a desk somewhere.  People costs are always much higher than rent in a tech business. 

The problem is that when all these folks come to testify, you have policymakers that use these hearings as their sole source of information.  They have no way to vet the perspective of any of these entrepreneurs either.  I had a guy after me testify from the NY Tech Council.  Sounds pretty impressive, only…  who appointed them New York’s tech council?  Who do they represent?  Anyone can ask a law firm or a big company for a few sponsorship bucks these days, slap a few logos on your site, and make it seem like you speak for a mass audience.  Most of the work in the community these days is being done by people who aren’t asking for money, titles or any kind of recognition.  Not surprisingly, this person’s testimony about how NYC has failed to build an innovation community couldn’t have been further off the mark.  I wondered where he had been for the last five years and nearly fell out of my chair when he said it.

People from the city government and its related entities don’t know that because they simply DO NOT PARTICIPATE in the innovation community.  We’ve been inviting city council members to the NY Tech Meetup for years, same with nextNY.  At the hearing, they asked the NYCEDC who helps entrepreneurs with business and tech questions and got little in the wake of answers.  Meanwhile, Nate and I are smacking our heads in the crowd because we know where those questions are going—to us and the other visible entrepreneurs in the community.  The answers are on Twitter, and blogs, and listservs and events.   

As one attendee to the City Council’s talk put it, listening to all this random testimony—and also to other governmental orgs who couldn’t quite get all the data that was asked for or wasn’t at liberty to share—was like seeing through a cheesecloth.  I wondered if I was living in the same city as everyone else was.  Companies talked of the lack of places to ask about healthcare, compensation, technology issues… apparently they’ve never been on the nextNY listserv before. 

Here’s a sample of just a few recent questions asked about startups on the nextNY listserv:

Pre-Alpha Release Best Practices?

Best Bank for Startup Checking, Finances, etc?

S corp or LLC

Need Web dev shop experienced with Spanish mirror sites

 

So before the city goes and commits millions of dollars to reinventing the wheel for the startup community, maybe they would be better served pointing to all of the existing resources out there that some of the newbie entrepreneurs they talk to just can’t be bothered to find.

Over the next few years, the city is planning on running events, opening incubators, connecting professionals, and injecting more capital into the system just as the community and private enterprise is doing the exact same thing—and they’re doing so without the basic relationships, experience, and context to do this successfully.  For once, I’d like to see the city support the proven, existing efforts, rather than recreate the wheel:

>> They should give tax breaks and subsidies to Sunshine Suites and TechSpace rather than get into the real estate market themselves. 

>> They should be getting venues and focusing their PR efforts for nextNY and NY Tech Meetup events, rather than competing against us for the mindshare of the community. 

>> They should encourage public participation of key stakeholders in social media (and lead by example), getting local academics on blogs and Twitter, before spending money to build a big research database no one will ever use.

But they won’t do that, because they need to own everything and get credit for it come election time.  One of the city council folks wanted to hear about the next incubator to enter her district—and she didn’t care about the new one opening in Queens.  One NYCEDC rep told me that it was “off topic” when I brought up the EDC’s lack of participation in existing community activities during a small group breakout about their planned slate of events.  That’s so far from the norms of the great NYC innovation community already being built that it will prevent the city from gaining much traction in their efforts. 

In the end, does it really matter?  Regardless of the city’s activities, the startup community will continue to grow.  Dominos are falling and it’s doubtful that anyone can stop the chain reaction now.  Can they help?  Maybe the city can help existing efforts as it does seem to be good at getting PR for itself—but if all it does is listen without participating, reinventing wheels, and duplicating community and private sector efforts, I’m not particularly bullish on what it’s up to.

 

 

*I had mistakenly attributed this stat to the Center for Urban Future prior.”

One of the best things anyone can ever do to encourage the dissemination of ideas, collaboration, and innovation is to put all the relevant stakeholders in a room, provide some focus, and just get them talking.

A topical, relevant group discussion is a simple, but enormously effective tool when done right.  It’s something we’ve been doing with nextNY for nearly four years now and I want to ramp it up significantly in 2010.  We have over 2500 up and coming digital media entrepreneurs, designers, business people, investors—a great mix of up and comers that have come together to build a really inclusive and innovative community. 

At the same time, I know firsthand that various big companies, schools, professional organizations, and service providers want to connect with this community and get some mindshare on a lot of these topics.  I was just talking to someone last week about how a lot of big companies have great event spaces that basically go unused most of the time—and yet a lot of community groups struggle to find places to hold their events.

Therefore, I’m holding an “Event Space Drive”.  I’d like to connect to as many companies willing to commit to donating event space for 50-100 people as possible.  My goal is three spaces after work a month, each month for 2010.  This way, if I book the dates ahead of time, I can guarantee the best speakers, the most well thought out topics and the right amount of planning and prep ahead of time.

So if you have space to donate to the NYC innovation community and you’d like to host a discussion or networking event, even if you can just give away a couple of dates, or one every other month, please get in touch with me at charlie.odonnell@gmail.com.

When Josh Kopelman and I first spoke about me joining First Round Capital, we talked a lot about alignment of interests—what First Round Capital was interested in with regards to investing in New York City, and also what my interests were with respect to my own career.  Given that our discussions had only started about a week and a half before my last fulltime day at my startup, I hadn’t really had a lot of time to think about what my next move was going to be.  It didn’t really make sense for either of us to commit to a big four year engagement when I couldn’t say for sure what my goals were.  Josh suggested that I help First Round firm up their footprint in NYC over the next year while I figure it out. 

So, that being said, what am I actually doing with my time?  The Entrepreneur-in-Residence title is a bit of a misnomer.  Traditionally, EIRs are out looking for the next thing to build, and are only peripherally out looking to help on dealflow.  I’ve been quite the opposite.  It took me 7 years to decide I wanted to build something in the career guidance space—I highly doubt I’ll gain enough passion for a new idea anytime soon, so I wouldn’t look for me to start a new company. 

I’m spending about a third of my time looking at deals, another third meeting with folks that see a number of startups to boost our NYC dealflow, like angels, lawyers, etc., and then a third of my time on what I’m calling “community support”—helping to make NYC a better place to build a startup.  A rising tide lifts all ships, so that not only helps the community, but helps First Round, other NYC investors, other local startups, people looking to build tech and digital media careers here—the whole ecosystem. 

Here’s a little more detail on each of those endeavors:

Deals

One thing I realized is that many people in NYC don’t actually realize what First Round does and how it differs from a typical venture capital fund.  Actually, you can think of us more like an angel investor more than anything—one that has the ability to follow on.  We’re one of the few places in NYC, other than from an individual angel, where you can get a check of $100k.  We’re more than happy to lead a $500k angel round by being half of it, and we don’t need to get 20% of the company upfront.  One way I measure my own dealflow is on how many people have a finished Powerpoint deck.  If they do, I’m seeing them much later than I want to.  I want to meet people when they just started hacking or they’re vetting the idea—not when they’re shopping it around to every investor.  I think I can be pretty helpful, having just gone through raising angel capital for my own startup, in helping people think about their financing plans, product viability, business models, etc. 

So if you’re raising an angel round in New York City, thinking about it, or you’re in an angel round, please do make sure you come talk to me.  (charlie@firstround.com) The best thing we can do for you is to be a really value added investor around the table, and the worst thing we can do is just give you a quick no—or tell you what’s missing. 

My role at First Round from a deal perspective is to uncover as many interesting startups as possible, but also as early as possible, and help vet them for the team.  We have a very team focused approach to deals and all of the partners, with the support of the rest of the team, get involved in decision making. I remarked to another VC the other day that the idea of “Partner X’s deal” seemed so foreign to the way things get done at First Round.  (It’s actually quite the well oiled decision making machine, actually…  you should see our meetings.  I was impressed when I first saw it.)

I think a lot of local entrepreneurs feel like they’re too early to talk to us until they’re ready to raise a million bucks.  Please do come see us much earlier than that—even without a deck.  I know one entrepreneur in particular that I’m helping write her deck so she’d be better at pitching us. 

Other Players in the Ecosystem

You’re a lawyer, a school running an incubator program, a designer who has worked with startups—let’s talk.  First off, I have companies that might be able to use your services.  Second, let’s chat about the NYC market in general and what we can mutually do to help make NYC a better place to build a company.  Third, undoubtedly you’re seeing a lot of companies that might be thinking about financing.  Send them my way.  Don’t worry about screening them.  That’s my job.  Screening is what I get paid to do. 

Community Support

Like I said before, the better that New York City is at supporting startups, the better it will be for First Round and for everyone else in the community.  I’m very dedicated to making that happen, and the team at First Round is also committed to participating in that effort.  I want to run a lot more events for nextNY and for First Round in New York City that are relevant, educational, and productive.  Sure, I’ll probably get roped into running another Shake Shack event, but what I really want to do is more events like we did last night at TechSales—where 100 professionals, like sales people, developers, product managers, etc.,  get together in a room on a focused topic and have a great discussion. 

That’s the kind of thing that has brought the community together over the last five years.  Give me a room for 75 people and I’ll push the community forward—or rather set the stage for the community to push itself forward like it’s been doing.  That’s the kind of thing that I think is hard for folks in government, for example, to understand.  When they do surveys and hearings about what the community needs, I tell them the community needs easy access to free event space for 75-100 people and a single person to just run around connecting everyone.  Seems too small, but that’s what innovation is.  It’s a house to house ground war, with conversations taking place just a handful of people at a time.

So if you’re a company with space to host 50, 75, 100+ people, trust me, I’ll fill it with innovative folks from the NY tech community and their ideas, arguments, and accumulated wisdom. 

Does it need to be explicitly branded First Round?  Not really.  We have a great network in New York and I’ll be making sure that network not only mixes with itself, but gets out in front of the community.  So, expect to see a lot of experienced pros from the First Round portfolio on various panels and out at events more often, but don’t expect a lot of in your face banners and schwag. 

This is syndicated from an e-mail list I’ve been sending this out to over the past four weeks to hundreds of people.  If you’d like to receive this on Monday mornings, please sign up here:  http://eepurl.com/e3On

Welcome to Holiday Party Season!

No doubt your inbox is full of places to imbibe with friends, clients, and investors under the guise of holiday merriment.  Just try not to overdue it and stay off your hipster scooter if you've had a few too many.  Here now, we present a list of things to do that won't necessarily lead to yuletide blackouts.

Monday, December 7th

7PM: Boxee Beta Unveiling - If you haven't figured out by now that this is the**EVENT OF THE WEEK** then you need to hangout with cooler friends.  At the event they'll demo the new Beta, launch new applications from partners and start a 4-weeks early-access for users to test the Beta before we release it to the public at CES on Jan 7th.  You know what they say--750 people in Brooklyn can't be wrong.

Music Hall of Williamsburg

66 N 6th St

Brooklyn, NY 11211

RSVP: http://boxeebeta.eventbrite.com

Tuesday, December 8th

6:30PM - 9PM: MatchupCamp II is the reprise of a past successful nextNY event. It is all about startup networking, creating a place for ideas and talent to meet.  MatchupCamp has the sole objective of bringing together people looking to start, expand, or join a startup in New York (and the tri-state area).  If you want to get your hands dirty and build something new, this is the place.

For Your Imagination Studio

22 West 27th ST

RSVP: http://matchupcamp.eventbrite.com/

6pm – 9pm: Launch Party for Hive at 55 – Downtown New York’s newest coworking space.  The Hive at 55 is a workspace for freelancers and small business owners. 

55 Broad Street, 13th FLoor

More Info: http://www.downtownny.com/news?nid=222

RSVP: hiveat55@downtownny.com

Mediaite Launch Party

6:30PM - 8:30PM

Plaza Hotel

RSVP: I wish I knew, because Rachel Sklar is pretty cool, but I didn't get an invite.  Oh well.

Wednesday December 9th

Digital Dumbo: Purple Sangria Digital Festivus

Bringing together the Digital Minds of NYC, Digital Dumbo facilities idea sharing and networking all while drinking purple sangria. This months event is sponsored by Purple Rock Scissors.

Galapagos Art Space

16 Main Street

RSVP: http://digitaldumbo.eventbrite.com/

6PM -8PM: Insider Tips from the Big Apple's Best Tech and Digital Media Sales Professionals - Sales Pros Only!

We've assembled some of the Big Apple's best tech and digital media sales talent for a very interactive discussion that every new and accomplished sales professional in tech should attend.

Deutsch Inc

111 8th Ave

RSVP: http://www.nextNY.org/TechSales

Thursday, December 10th

5PM- 7PM The DEMO New York City Meet-up is one stop on the DEMO Innovation tour where Matt and the DEMO team will travel around the country to connect with the DEMO community in search of  the best innovation to showcase at DEMOspring 2010.

3 Ten Lounge

310 Bowery

RSVP: http://demoinnovationnyc.eventbrite.com/

7PM URDB (http://urdb.org/) Presents: World Record Appreciation Society #10

Following a brief NYC hiatus and two sold-out events on the West Coast, the World Record Appreciation Society is coming back strong with holiday-themed world record blowout extravaganza.

Odd addition to our list?  Perhaps, but I'm showing up purely to see Andrea Rosen set the record for "Fastest Time To Open An Advent Calendar And Eat All The Chocolates In Order".  How awesome is that?

Pianos

158 Ludlow St

RSVP: http://guestlistapp.com/events/6627

Real Time Twitter Booze NYC

If you're building a business around the real time web or just tinkering with a few product ideas, you'll want to get drunk here.  The founders of Stocktwits, fourSquare, Bit.ly, Hootsuite, and Winetwits will be in attendence. 

Swift

34 E 4th Street

RSVP: http://realtimeboozenyc.eventbrite.com/

Friday, December 11th and Saturday, December 12th

Open NY Summit & Codeathon

The Open NY Summit will be the first of many events produced by open government practitioners and volunteers.  Two day conference includes Open NY Co-working, discussions, and a hackathon.  Revolution!

The Open Planning Project

148 Lafayette St

Penthouse (PH)

RSVP: http://opennyforum.org/2009/11/open-ny-summit-09/

Sunday, December 13th

12:45PM: NY Tech Gives Back - Ice Skating is a day for the NY tech community to come together for a good cause through volunteerism and giving. For our inaugural event, we are partnering with CampInteractive, a not-for-profit organization that empowers inner-city youth through the inspiration of the outdoors and the creative power of technology. When asked what event the kids would most like, they chose ice skating. We're making it happen. Your ticket will pay for you + 1 CampInteractive child to go ice skating (+pizza).

RSVP: http://techiesgiveback.eventbrite.com

I can’t tell you how many times I’ve told startups to forget about raising money and instead to just go out and sell something.  To me, if there’s any one area that New York City has a serious advantage in, it’s experienced salespeople.  You can never have enough.  They are the rainmakers—the ones who bring in the lifeblood of your company—cash. 

But selling technology and digital media is a different animal.  These aren’t dental supplies—this industry changes every single day.  Given all the experience we have here locally, I thought it would be useful to put together a bunch of knowledgeable sales professionals to share what they know in a take aimed at full time sales professionals. 

So, if you’re a sales rep, director, or VP selling digital media or technology in NYC, this event is for you, and boy have we assembled a murderers row of sales experience here.

The event will take place next Wednesday night, December 9th at 6PM at 111 8th Avenue at Deutsche Inc. 

You must RSVP here.

They’ll be talking about what they did to get to the next level... ie. was there a turning point in their sales career and  when did things came easier... when did they "get it" and when did they really break through.  They’ll also cover what kind of training and methods worked for them, what didn’t and the things that maybe go against commonly accepted sales wisdom. 

Here’s the lineup:

John Roswech, President, Jingle Networks

Prior to joining Jingle Networks, John Roswech served as vice president of sales for Atlas Solutions (Aquantive), where he managed sales and account management teams for third party ad serving, search, rich media and landing page optimization, with revenue growing $100mm plus under his sales leadership. Before Aquantive, Roswech was senior director of sales with Matchlogic (Excite@Home), where he was part of the management team at Narrative Communications and responsible for rich media and lead generation products.

Jed Savage, Chief Revenue Officer, ScanScout

A twelve+ year Digital Media Sales veteran, Jed was the Director of Business Development for eBay’s Strategic Partnerships unit before joining ScanScout.  He served for 4 years with Microsoft’s MSN division, holding positions including Eastern Sales Director, National Sales Manager and General Manager of MSN Sales. Jed increased revenue 10-fold in his first two years at MSN, and helped make the MSN sales division one of the leading revenue organizations in the industry.  Before working with MSN, Jed created the National Sales Team for CBS Sportsline. As the company’s Vice President of Sales his team drove over $30 million in total revenue during his first 2years at the helm.

Jeff Stewart

Jeff is the founder of Urgent Career, a pioneer in the use of linguistic technology to match sales professionals with compatible employment opportunities.  Jeff has founded over a half-dozen companies, which combined employ over 600 people. Immediately prior to founding Urgent Career, Jeff founded a technology-based financial intelligence firm that provides real-time analysis of semi structured text information for Hedge Funds and other Institutional Investors. The seeds of Urgent Career grew out of the observation that semantic analysis of massive amounts of textual data yields valuable insights.

Emily Twomey, SVP Sales, Oddcast

Emily has over ten years of experience in online media sales & interactive product sales. Prior to her position at Oddcast she held the positions of Director of Sales at Razorfish Networks and Senior Sales Manger at The New York Post.  She started her sales career at the downtown style bible PAPER Magazine.

Mark LaRosa

Mark LaRosa is the CEO of QuotaCrush, a sales consulting company focused on helping start-ups with sales strategy and outsourced sales management.  In its first year, QuotaCrush has brought two start-ups from zero sales to break-even – in a horrible economic climate.   Prior to QuotaCrush, Mark was also the founder of Dynamic Mobile Data, a wireless enterprise software company focused on vehicle location and dispatch software.  Mark sold over $20 million in enterprise software in this startup to companies including Pepsi, SHL, UPS, Purolator Courier and Kraft/Nabisco.

 
Vivek Sharma, Former Area Mgr., North America - Engine Yard 

Vivek is currently working on a stealth startup, but he most recent ran the sales team at Engine Yard that covered the eastern part of North America and EMEA.  He was the second salesperson in the company and best performing regional manager in 2008 and was on track for similar success in 2009.  In 2008, he brought on nearly 40% of Engine Yard's net new revenue and closed the largest deal ever in the company's history. )

Almost overnight, the Ace Hotel lobby has become something of a phenomenon.  On any given day, you’ll run into an actor, a fashion designer, a model and—randomly enough--an tech entrepreneur. 

Just this week, as I was taking meetings in my relatively new role on the First Round Capital investment team, I got to meet Charlie Rose, spotted Tobey Maguire, and most notably, Boxee’s Avner Ronen and Jetsetter’s Drew Patterson.

With a long study hall style table, comfortable couches, and wifi whose codes are the worst kept secret since USV’s Foursquare funding, the Ace had attracted a growing following from the New York City startup world.  The Stumptown Coffee right off the lobby doesn’t hurt the geek pull either—everyone knows high quality caffeine is the fuel that makes code go.

I discovered the Ace Hotel thanks to a coffee invite from Nick Bilton.  As it turns out, Phin Barnes, my colleague at First Round had known about it for a while, and on any given day you’re likely to run into one of us taking meetings with entrepreneurs here. 

The question is whether the Ace Hotel will embrace its newfound friends in the Big Apple’s creative class.  While the waitresses aren’t pushy with getting people to order—yet—little cards have started showing up reminding folks that these seats are “guest only”.  I’ve yet to find a guest among the Ace’s laptop nation yet, but I’m currently sitting within spitting distance of Malcolm Gladwell as I write this.  I’m pretty sure he’s not staying at the hotel either.

There’s certainly an argument that attracting the local tech scene’s “cool kid” crowd, like Zach Klein, who I ran into the other day and passed on an office space tip to, is good for business.  Being community friendly will help the Ace become the go to place for innovators from the creative class.  I mean, wouldn’t you like to be the place where the next Google or Facebook was hatched?  That’s especially the case since many of the young innovators are also the trendsetters in music, food, clothing, etc.  I doubt anyone wants someone to build a router at the study hall table at Ace, but they should certainly extend an open invite for Anthony from Hype Machine to come hack here with his tech team. 

To look at a similar story, you can go back to when the local NYC tech community adopted the Shake Shack in Madison Square Park as its unofficial social hub.  That’s a good example of a business totally embracing the community.  Mentions of the Shake Shack on Fred Wilson’s blog date back to the summer of 2004, when foodie entrepreneur Joshua Schachter and del.icio.us had a little office at 915 Broadway.  Since then, the venue has hosted two of the best tech events in NYC and an epic snowball fight that featured Shake Shack employees participating and free hot chocolate.

The Shake Shack further fostered their relationship with the local tech community by letting a couple of hackers claim and build off of the @shackshack Twitter account.  By powering it with a retweet bot, they created a way for local “insiders” to skirt the line by seeing who they knew was already there.  Now, much of that functionality can be found on Foursquare, but still, the fact that the folks from Danny Meyer’s burger paradise in the park didn’t attempt to block the account speaks well to the kind of relationship they want to have with the community.

So the question is, will the employees from the Ace Hotel be ready for the West 29th Street snowball fight with local entrepreneurs or will we soon get booted for being wifi and table moochers. 

Video from last year’s Shake Shack snowball fight.

 

UPDATE:  I got this message via the little Plugoo chat window on my blog: 

“ACE NEW YORK LOBBY SIGNS > "Thanks for pointing this out. We want to balance the needs of our guests & the community - both are very important to us. NY lobby signs are down & we hope this flows naturally & organically. – Ace”

That’s really the best response I could have gotten.  It makes me want to go there more and to make sure I’m spending a little money and recommending them, too.

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LET THESE NYC STARTUPS MAKE YOUR HOLIDAY WEEK!

While this will be one of the quieter weeks in the NYC tech scene, no doubt that it's going to be one of the most hectic weeks at home. You're probably hosting, cooking, and shopping (and drinking), so why shouldn't the internet make your life a little bit easier and more entertaining this week. I've picked out a few local companies that might make this the best Thanksgiving week ever.

I did find free jazz on the (covered) rooftop of the Empire Hotel tomorrow night, which looks like a pretty cool thing to do.

First off, you can't host a great party without inviting anyone, so Pingg should be your first stop for party invites. They wrote up a piece for all the T-day hosts out there that you should check out.

Before all the festivities, you should definitely make the traditional trek to the Upper West Side to see the Macy's Thanksgiving Day parade floats get blown up. Who else is going to be there, though? How will you find them and share the experience? Hotpotato, a First Round portfolio company, just got back from launching at Crunchup and should be up and live in the app store by the time the first bit of helium makes its way into Snoopy. Share photos, notes, etc., with others in real time all around this annual event.

Meals are going to be pretty standard--turkey, stuffing, etc.--but make sure your wine selection isn't. Check out Snooth.com for the best recommendations from the most comprehensive wine database in the world.

What on earth are you going to wear? Try out a bunch of outfits and ask your friends to vote on the most appropriate ensemble with Fashism. If you're like me, you can barely dress yourself, so this kind of thing is best left to crowdsourcing.

Men, you will undoubtedly spill wine, gravy, and cranberry sauce on your white shirts, so come this Friday, it's going to be time to go shopping for a new one. Don't just buy one off the rack. Customize and personalize your own unique dress shirt with Propercloth, another cool NYC startup.

You've made way too much food and will undoubtedly be eating turkey between now and 2015. Looking for the best recipe to mashup the leftovers? Look no further than this week's Food52 Turkey Leftovers contest. I feel like that one is going to be a win-win all the way around.

Enjoy your holiday!

Yesterday, I bought an Xbox off of BigDeal.com, one of our First Round Capital portfolio companies. I spent nearly an hour and a half bidding against some guy to try and buy at increments from about $18 all the way to $168.  I tried every strategy I knew…  holding out to the last second to try and lull him into a sense of security and then jump in…  then brute forcing it by counterbidding every second all throughout the $30 and $60 range to try to wear him out.  It was an addictive bidding frenzy—and my downside was just buying it at the Amazon price, so I couldn’t really lose.  (I didn’t win, but I’ll be back!)

TechCrunch did a good job of covering the company yesterday, so I’ll just pull the highlights:

“BigDeal lets users purchase virtual bids $0.75 each which can then be used to bid on goods ranging from video games to high-end televisions. Whenever you bid on an item, its price increases by $0.15 and an extra 30 seconds are tacked on to the duration of the auction. With this model, items end up selling substantially below their market value. But one of the main criticisms of Swoopo was the risk of losing your money spent on bids (regardless of whether you win or not) when the auction concludes. BigDeal takes a couple of steps to mitigate this risk.

With BigDeal’s model, any users who get outbid get a full credit of the money uses for bids to buy the item via a “Buy Item Now” option (which Swoopo also has, called “Swoop-it-now”). So if you spent $10 on bids, your Buy It Now price will be dropped by $10. Of course, the Buy It Now price will frequently be higher than the price of item sold for in the auction but at least users aren’t necessarily losing money all together. And the Buy It Now price is set at the same price that Amazon lists for the same product.

That’s not all. BigDeal provides an added incentive for bids by letting all users trade in the money they spent on bids for gift cards. All users get $1 gift card discount for every $1 spent on bids. So if you buy $25 in bids, BigDeal will give you a $100 gift card for $75…

…It seems that Big Deal has taken the best elements of Swoopo’s model and added several features which make it more of a win-win for consumers. Plus, it adds information, like bidding history, to the process to make the auction more fair.”

I’ll be interested to see how the company works towards providing more and more auction transparency.  Admittedly, when I bought my Xbox, I didn’t realize that I wasn’t getting my bid points back when I took the “buy it now” price.  I thought everyone was seeing the same price, like a loaded gun on the table, and that everyone’s bid lowered it.  I figured everyone else’s lost bids were subsidizing my price, but as it turns out, I didn’t really get “refunded” my points back—they just came off the MSRP.  So, I effectively just paid the MSRP price…  not what I wanted, but not a terrible outcome, since it’s been years since I had a game system and I was kind of itching to get back into it.  Perhaps I’ll bring it to the new First Round offices in Union Square (coming this January) and we’ll have entrepreneur Madden tourneys!