Posts from NYC

Loyalists vs Mercenaries

One of the things that entrepreneurs, founders, and CEOs obsess over is holding onto their team. When I propose some sort of difficult decision to a CEO, I am often met with the response “the team will freak out and we will lose them.” And I understand where this emotion comes from. You spend so much of your time recruiting, training, and managing a team and getting them into a place where they can execute for you and you can’t imagine having some of all of them walk out the door. Neither can I to be honest.

But teams come in all flavors. There are highly loyal teams that can withstand almost anything and remain steadfastly behind their leader. And there are teams that are entirely mercenary and will walk out without thinking twice about it. I once saw an entire team walk out on a founder. That company survived it, remarkably.

I’ve been thinking a lot about the factors that go into determining whether your team skews loyalist vs mercenary and what you might be able to do about it. Here are some of the most important factors:

1) Leadership. At the end of the day, people are loyal to a leader they believe in. Leading is not managing. Although it is impossible to lead if there is no management. But leading is that special thing. It is charisma, it is strength, it is communication, it is vision, it is listening, it is being there, it is calm, it is connecting, it is trust, faith, and belief. The best founders are great leaders. They may be shitty managers which means they need to find managers to help them. But they are great leaders. One of the things we look for in founders is leadership. If we want to follow them, we believe that others will too.

2) Mission. People are loyal to a mission. I’ve seen super talented people walk away from compensation packages 2-3x what they currently make because they believe in what they are working on and think it will make a difference in their lives and the lives of others. This is why investing in mission driven companies can produce great financial returns. Mission driven companies have something most companies don’t have. They have “why” that keeps the team together through difficult times and when the compensation isn’t close to “market”.

3) Values and Culture. My friend Matt wrote a post about Values and Culture the other day. I read it and responded “values are the house and culture is the furniture”. He thought that was about right. People want to work in a place that feels right to them. They need to feel comfortable at work. In the way that a welcoming home with comfortable furniture is pleasant to be in, a company with good values and culture is pleasant to work in.

4) Location. I spent the past week in europe. In Berlin, Paris, Istanbul, Vienna, and Ljubljana. These are very different talent markets that the bay area or NYC. In the Bay Area and NYC, your employees are constantly getting hammered to leave for more cash, more equity, more upside, more responsibility, and eventually it leads to them becoming mercenaries. It is incredibly hard to hold onto a team in the Bay Area and NYC. If you are building your company in Ljubljana, Waterloo, Des Moines, Pittsburgh, Detroit, or Indianapolis, you have a way better chance of building a company full of loyalists than if you are building it in the Bay Area or NYC.

If you mess up any of these dynamics, you can easily turn your team from loyalists to mercenaries. Changing leadership is the most common one. Almost every time I have seen a founder leave and be replaced by a new CEO, I have witnessed a significant exodus of talent from the company. It is better if the new CEO comes from within, but even then I have witnessed a significant exodus of talent. When the CEO comes in from the outside, it is almost always much worse.

If you move your team from Philadelphia to NYC or from Des Moines to the Bay Area, expect more turnover. Expect to turn loyalists into mercenaries. These talent starved locations create mercenaries. It’s the nature of the beast.

So what can you do to build a company full of loyalists instead of a company full of mercenaries? First you must lead. If you think you are a good leader, get better. If you think you are a great leader, you can get better. Get coaching and focus on becoming the best leader you can be.

Second, build a mission driven company. Make sure you are doing something that matters. If all you are doing is trying to make money for yourself, then all your employees will try to do is make money for themselves.

Third, invest in values and culture. Matt’s post is a good starting place for some tips on how to do that.  Build a welcoming home and put comfortable furniture in it. I mean that metaphorically of course. But the office does matter too.

Finally, think about being somewhere other than the Bay Area or NYC. Yes, they are great places to start companies, find talent, and get investment. But they are also places where others start companies, get investment, and find your talent. It’s a ratrace, a treadmill, and it’s grueling. If you can avoid it, you owe it to yourself to try.

There are many reasons why the startup sector feels stretched to me. But possibly the most significant one of all is the increasing amount of mercenary behavior I am witnessing in it these days. Hopefully this post will help you avoid that as much as possible. It’s hard these days.

Video Of The Week: My NYU Poly Commencement Address

Several weeks ago I gave a talk at the commencement of NYU Poly, NYU’s School of Engineering. I’ve been on the board of NYU and NYU Poly and this is the first time I’ve given a talk at commencement. It was fun.

The talk is short, about five or six minutes, and the video cuts me off at times, but you can see most of it and hear all of it.

Why be civically engaged if you’re in tech?

Tomorrow, Ron Conway and I are going to kick off Disrupt NY 2015, with a fireside chat with Kim-Mai Cutler. We plan to discuss philanthropy and civic involvement. I’m looking forward to this talk. I think folks in the tech sector need to embrace philanthropy and civic involvement and I look forward to making the case for that.

I’ve been working in the VC business since the mid 80s. And for most of that time, I’ve felt that the tech sector was surprisingly uninterested and uninvolved in things outside of the tech sector. That’s a great strength of the tech sector, it’s is focused on innovation, making things, and building companies. And it does not get distracted by things outside of that realm.

But we know that the things we make and the companies we build have great impact on those outside of the tech sector. It can be for the good, like building cars that don’t use carbon fuels and showing the auto industry that it can be a good business to do that. It can be for the bad, like automating away jobs that once paid the way for a middle class lifestyle.

It feels to me that our economy and our society is now deeply entwined with technology and being significantly impacted by it. If that is true, I believe it is shortsighted to avoid getting engaged in the discussions and debates about what kind of world we need to work toward. I think one way or another the tech sector is going to get pulled into these debates. It will be one thing if that happens thoughtfully and positively and another if the tech sector is pulled into them kicking and screaming.

Regular readers of this blog know that my partners and I have been involved in these discussions since we started USV over a decade ago. We spend our time, energy, and capital in areas like policy debates, philanthropy, and civic engagement. There are others in the tech sector who do the same. Ron Conway comes to mind as someone who has spent a similar amount of time, energy, and capital on this stuff. And I am thrilled to share the stage with him tomorrow as we discuss these issues.

We go on stage at 9:05am eastern tomorrow. I’m hoping the talk will be livestreamed and you can watch it live. If it is, it will be somewhere like here.

Video Of The Week: Lin-Manuel Miranda at the White House

Last night the Gotham Gal, our daughter Jessica, and I went to see Hamilton at The Public. This is a hip hop musical about the life of Alexander Hamilton. The writer and star of the show, Lin-Manuel Miranda, read Ron Chernow’s biography of Hamilton, got obsessed with Hamilton, and started writing a hip hop record about him. That eventually led to the show.

But along the way, back in 2009, the White House invited Lin-Manuel to Poetry Night and he performed the opening number for the President, the First Lady, and their guests. This is the video of that night. It’s great and serves as the perfect trailer for the play, which you should try to see when it opens on Broadway this summer.

Fun Friday: Coming Up With A Better Name For NYC’s Tech Community

It’s no secret that I HATE the term Silicon Alley. It’s a wannabe term if there ever was one. NYC’s tech community doesn’t want to be Silicon Valley. If they wanted that, they’d move there. NYC’s tech community is gritty, artsy, and full of edges like NYC itself. I am in no way dissing or dismissing Silicon Valley. It’s mecca when it comes to tech. Everyone knows that. I’m just saying that calling ourselves Silicon Alley is lame. We can do so much better.

So I’m turning this over to the AVC community. What’s a better term for the hundreds of thousands of people who work in thousands of tech companies, large and small, in NYC?

Video Hackday

Some friends of mine are organizing a video hack day in NYC on Saturday May 9th. If you like to hack on video and have been looking for an excuse to spend some time on that thing you’ve been wanting to build, this is your opportunity.

Here are the details:

Video Hack Day is on May 9th, 2015. Sponsored by Google and organized by Ziggeo, it will take place at General Assembly in the Flatiron District of NYC.

Video Hack Day is a time to play with all things video. You’ll learn about new video APIs, develop fun video projects, and get feedback from judges at Google Ventures and Union Square Ventures.

Ziggeo is organizing the event, and it’s sponsored by: Google, Amazon Web Services, YouTube, Clarifai, Firebase, Dropbox, Oovoo and Vimeo. If you’re also interested in sponsoring Video Hack Day, please contact us here.

If you’d like to participate in Video Hack Day, please sign up here. You can also follow Video Hack Day on Twitter, #VideoHackDay.

Video Of The Week: NYC’s Internet History

This is an oldie but goodie. I’ve posted it here before but not since I delivered this talk almost seven years ago. This is my history of the NYC Internet community from 1995 to 2008. It’s about 25mins long.

Kingpins 2015

Insite is a great program that connects graduate students at leading universities to the startup community around them. It started in NYC and has been connecting graduate students at NYU and Columbia to the NYC startup community for well over a decade. It is now active in other startup communities around the US.

They raise money each year for their NYC programs with a bowling event called Kingpins. Startup companies and VC firms buy lanes and half lanes and the result is a fun night of eating, drinking, and bowling. The startups and VCs mingle with the Insite fellows and all sorts of good things happen.

This year’s event is Monday, April 13th, from 6pm to 9pm, at Chelsea Piers. Half lanes are $1000 and full lanes are $1800. If you are a VC firm and want to support the local community, Insite, and meet startups, you should buy a full lane. If you are a startup and want to drink beer with VCs, think about a half lane. If you are just a regular community member and want to joint the fun, you can buy a single ticket for $150.

The details and tickets are here.

ScriptEd Summer Internships

If you are in a tech company in NYC (or if you run a tech company in NYC) please consider hosting a ScriptEd summer internship this summer. Here is what you need to know to consider that:

1/ ScriptEd is a nonprofit supported by CSNYC. It recruits software developers to volunteer in low-income high schools around New York City during the school year and teach a foundational course in web development and computer science. Over the summer, ScriptEd connects its students to paid six-week summer internships at tech companies and with tech teams within other types companies. Some of its past internship partners include About.com, Contently, Thrillist, JP Morgan and American Express. ScriptEd currently serves more than 300 students across NYC and will place 100 of its students in internships this summer.

2/ ScriptEd will hold a Summer 2015 Internship Information Session on Wednesday, March 4th at 6:30pm. They are specifically looking for companies with at least 40 New York City based employees and at least 3-4 developers on staff. If you are interested in attending this event, please fill out an interest form here. To learn more about their internship program, click here.

3/ ScriptEd’s internship program was so successful last summer that they are aiming to place five times as many students in internships this summer. All of their internship partners from last summer reported that they are re-engaging with ScriptEd this summer, and many have asked for an increased number of interns this summer.

4/ ScriptEd’s long term goal is to ensure that low income NYC students have the experience, mentorship and confidence they need to pursue careers in tech.

5/ The technology industry is growing faster than ever and diverse talent is becoming more difficult to find.

6/ Companies can try to solve for their own tech talent shortage by stepping up recruiting efforts to capture a bigger piece of the tech talent pool but that is not a long-term solution. Expansion of the tech talent pipeline – attracting young women and young students of color to the study of STEM and careers in tech – must be a part of the solution.

7/ ScriptEd’s student population during the 2013-2014 school year was 30% Black, 43% Hispanic, 24% Asian and 3% White. Its 2014 internship class was 50% female and 50% male.

8/ Fin

For ScriptEd’s annual report, click here.

For ScriptEd’s  internship brochure, click here.

Veniam

I’ve been talking a lot and writing a lot about mesh networking. I think it has the potential to wrest control of the last mile of the wired and wireless internet from the carriers who mostly control it around the world. Peter Kafka noticed yesterday that we had finally put those words to work with a mesh networking investment:

We made this investment, in a neat company called Veniam that comes out of Porto Portugal, some time earlier this year but they finally got around to announcing it yesterday.

My partner Brad talked about it in a short post on usv.com yesterday. And our partner in the investment Om Malik talked about it here.

I had breakfast with Om in NYC earlier this year and told him about Veniam. Those breakfasts do pay dividends eventually. This is how Om describes that breakfast and what came of it:

Union Square Ventures’ Fred Wilson introduced me to João after a long, spirited discussion about network neutrality, new models of networks, and policies that will influence the future of the internet. As we walked back to our office (aka my favorite cafe), he said, “You should talk to this guy in Portugal that my partner Brad [Burnham] has been in touch with. He has some interesting ideas.” An email introduction with João followed, and we were soon talking to each other via Skype. He quickly came to San Francisco, and we met for coffee on the weekend and then again the next day. João likes to talk: It is his super power. And here we are.

So enough about all of that. What does Veniam do? They make a “stack” of wireless technology that lets moving objects (think buses, garbage trucks, cars, vans, etc) carry a wifi access point/router and mesh with each other and anyone else who wants to join the network. With enough density, buses driving around your city can provision a wireless mesh that anyone can use on their smartphone when they are out and about. It’s a big vision and will take a lot of work (and luck) to realize, but this or something like it is eventually going to work and we are going to have a better way to access the internet on our phones than we have today.

Here’s a video of Veniam’s technology in action in Porto. I suspect you will want this in your city too. I certainly do.