The State Of The NYC Tech Ecosystem

Matt Turck has penned a “State Of The City” post about where the NYC tech ecosystem is right now. I get asked this question all the time and I haven’t been doing a great job of answering it. I will use some of Matt’s work the next time that happens.

Here’s some of my favorite points from Matt’s post. If you live and work in the NYC tech ecosystem, or care about it, you should go read the whole thing.

NYC as a leading AI Center:

The New York data and AI community, in particular, keeps getting stronger.  Facebook’s AI department is anchored in New York by Yann LeCun, one of the fathers of deep learning.  IBM Watson’s global headquarter is in NYC. When Slack decided to ramp up its effort in data, it hired NYC-based Noah Weiss, former VP of Product at Foursquare, to head its Search Learning and Intelligence Group.   NYU has a strong Center for Data Science (also started by LeCun).  Ron Brachman, the new director of the Technion-Cornell Insititute, is an internationally recognized authority on artificial intelligence.  Columbia has a Data Science Institute. NYC has many data startups, prominent data scientists and great communities (such as our very own Data Driven NYC!).

 

NYC as a home to “deep tech”:

Finally, one trend I’m personally particularly excited about: the emergence of deep tech startups in New York.   By “deep tech”, I mean startups focusing on solving hard technical problems, either in infrastructure or applications – the type of companies where virtually every early employee is an engineer (or a data scientist).

For a long time, MongoDB was pretty much the lone deep tech startup in NYC.  There are many more now.  A few of those are in my portfolio at FirstMark:  ActionIQ, Cockroach Labs, HyperScience and x.ai.   But there’s a lot of others, big and small, including for example: 1010Data (Advance), BetterCloud, Clarifai, Datadog, Dataminr, Dextro, Digital Ocean, Enigma, Geometric Intelligence, Jethro, Placemeter, Security ScoreCard, SiSense, Syncsort or YHat – and a few others.

 

The Diversification and Broadening of NYC’s Tech Ecosystem:

One way of thinking about New York’s tech history is one of gradual layers, perhaps something like this:

  • 1995-2001: NYC 1.0, lots of ad tech (Doubleclick) and media (TheStreet)
  • 2001-2004: Nuclear winter
  • 2004-2011: NYC 2.0, a new layer emerges around commerce (Etsy, Gilt) and social (Delicious, Tumblr, Foursquare), on top of adtech (Admeld) and media
  • 2012-present: NYC 3.0 – in addition to the above, just about every type of technology covering just about every industry

Certainly, the areas that put NYC on the map in the first place continue to be strong.  New York is the epicenter of the redefinition of media (Buzzfeed, Vice, Business Insider, Mic, Mashable, Bustle, etc.), and also home to many great companies in adtech (AppNexus, Tapad, Mediamath, Moat, YieldMo, etc.), marketing (Outbrain, Taboola, etc) and commerce (BarkBox, Birchbox, Harry’s, Warby Parker, etc.).

But New York has seen explosive entrepreneurial activity across a much broader cross-section of verticals and horizontals, including for example:

  • Fintech: Betterment, IEX, Fundera, Bond, Orchard, Bread
  • Health: Oscar, Flatiron Health, ZocDoc, Hometeam, Recombine, CellMatix, BioDigital, ZipDrug
  • Education: General Assembly, Schoology, Knewton, Skillshare, Flatiron School, Codecademy
  • Real estate: WeWork, HighTower, Compass, Common, Reonomy
  • Enterprise SaaS: InVision, NewsCred, Sprinklr, Namely, JustWorks, Greenhouse, Mark43
  • Commerce infrastructure: Bluecore, Custora, Welcome Commerce
  • Marketplaces: Kickstarter, Vroom, 1stdibs
  • On Demand: Handy, Via, Managed by Q, Hello Alfred
  • Food: Blue Apron, Plated
  • IoT/Hardware: littleBits, Canary, Peloton, Shapeways, SOLS, Estimote, Dash, GoTenna, Raden, Ringly, Augury, Drone Racing League
  • AR/VR/3D: Sketchfab, Floored

 

 

I like the NYC 3.0 moniker. It’s a very different place to start and invest in tech companies than it was even five years ago. Bigger, deeper, broader, and scaling nicely. Just like the companies themselves.

The Rise Of Women Leaders

Although we are not where we need to be, it feels to me that we are entering a period where women will be increasingly the choice for leading our companies and our countries.

The rise of Theresa May in the UK is the latest high profile example of a woman being selected to occupy an important leadership position.

In the US, Hillary Clinton is currently the odds-on favorite to win the Presidency.

Imagine the power of the imagery of Angela Merkel, Teresa May, and Hillary Clinton meeting at an important event. That picture will tell a thousand words about the rise of women leaders.

In the tech business, women have rarely been in top leadership positions. But that too is changing. Women hold the CEO positions at IBM, Oracle, HP, Yahoo, and a number of other leading tech companies.

In the largest companies I work with, women hold many of the top leadership positions and these women are extremely talented executives and are likely to end up running companies someday soon.

So from where I sit, I feel we are on the cusp of a new era for women.

None of this changes the specific challenges that exist for women, the conflicts between family and work that are still more acute for women than men, the societal biases that still exist, and the muscle memory that will take time to unwind.

But as a husband and father of three amazing women leaders, it’s a great feeling to see the promised land emerging over the horizon. I am quite confident we will see real gender equality in the workplace in my lifetime.

Sleeping On It

I like sleeping on decisions. I think it leads to better decisions.

I am not in favor of delaying decisions, particularly hard ones. I want to make them and move on.

But making a decision and giving yourself 12 hours to “sit with it” really helps. Sleeping on it does that for you.

It also does something else, which is it lets your subconscious brain work on the problem overnight and you wake up with more clarity than when you went to bed. At least that is how it works for me

So “sleeping on it” literally means sleeping on it as well as buying a short amount of time to sit with the decision and make sure it feels right.

There are certainly times when you don’t have the luxury of taking the night to sit with a decision. In those moments, you need to deliberate with whatever your team is and make the call and execute. These are crisis driven decisions, war time stuff. There is no sleeping on them.

But when you have the luxury of a night to sleep on something, I would encourage everyone to take that time. It really helps.

Nailing It

I saw dozens of pitches for what was essentially YouTube between 1998 and 2005. But when YouTube launched, it was pretty clear pretty quickly that they had nailed it and nobody else before them had.

I saw way more pitches for what was essentially Pokemon Go between the arrival of the iPhone and now. But when my daughter told me to download Pokemon Go and play it, I immediately realized that they had nailed something that nobody had before them

AVC regular LIAD tweeted this today:

You are not alone LIAD.

I recall seeing John Geraci‘s ITP senior thesis project in 2005 which was a web version of this idea powered by Google Maps, and understanding that we all want to interact with interactive media in the real world.

I’ve always loved the idea that we could do a massively public treasure hunt together using the web and mobile. But it took over ten years since I first saw this idea to have it really happen.

It made me smile when Emily told me to download it and I am still smiling days later. And I have a gym right outside my front door.

gym on W side hway

Usage Based Pricing For Code Execution

I’ve been thinking about Amazon’s Lambda service which I mentioned in the Hacking Echo post last week. Lambda is not new, but last week was the first time I saw it in action. I need to see things in action to understand them.

Business model innovation is interesting to me, maybe more than technology innovation. Because new business models open up new use cases and new markets. And new markets create a lot of new value. And I am in the new value business.

Think about this value proposition:

AWS Lambda lets you run code without provisioning or managing servers. You pay only for the compute time you consume – there is no charge when your code is not running. With Lambda, you can run code for virtually any type of application or backend service – all with zero administration. Just upload your code and Lambda takes care of everything required to run and scale your code with high availability. You can set up your code to automatically trigger from other AWS services or call it directly from any web or mobile app.

“You pay only for the compute time you consume, there is no charge when your code is not running”

So we have gone from “you have to buy a server, put it in a rack, connect it to the internet, and manage it” to “you can run your code on a server in the cloud” to “you can run your code on a shared server in the cloud” to “you can pay for code execution as you use it”. And we have done that in something like ten years, maybe less. That’s a crazy reduction in price and complexity.

But we also have put a ton of code in an open repository that anyone can access and copy from.

So, like we did in the Hacking Echo situation, you can now browse GitHub, find some code, use it as is or modify it as needed, and then put it up on Lambda and pay only when you execute it.

I think this is going to make for a lot more hacking, experimentation, and trying new things.

And that is going to result in new use cases and new markets. It may already have.

Video Of The Week: Regulating With Data

Here’s a talk my colleague Nick Grossman gave at Personal Democracy Forum last month. We have been advocating for some time with anyone in government who will listen that we need to change the paradigm of regulation from yes/no to yes,if and the if is all about data. We call this new data driven regulation paradigm “Regulation 2.0”. Nick walks the audience through this thinking in this talk.

And here are his slides from the talk

Furious Friday

Typically on fridays, we do something light and easy to get the conversation flowing here at AVC. Fridays are less about me writing and more about us talking.

But I’m not feeling very light and easy today. It’s been a bad week here in the US. It started with yet another fatal shooting of a black person by law enforcement and ended with snipers killing officers in Dallas last night.

We have a problem in the US with gun violence and race relations. And our law enforcement professionals are at the epicenter of these issues.

It is all so tragic and ghastly and awful.

Zero And Negative Interest Rates

Larry Summers has a post in the Washington Post about the incredibly low interest rate environment we are witnessing right now.When you consider the effects (slim as they are) of inflation, there are cases where the rates borrowers are paying are zero and even negative.

That means the lender is happy to get back less than they lent because they think that’s a better deal than they can get elsewhere. Think about what that says about the mindset of lenders (or holders of capital assets writ large) right now.

My partner Albert has written a book called World After Capital in which he argues that what has been scarce until now (capital) will no longer be scarce and that we will move on to other forms of scarcity. 

When capital is abundant and when you are getting paid to access it temporarily that leads to a very different set of decisions.

What we don’t know is whether this is a temporary situation (as Larry Summers hopes and policy makers are attempting to ensure) or a more permanent situation as Albert envisions. That is an important question.

Hacking Amazon Echo

My friend Stephen and I have been talking about hacking the Amazon Echo so it can be a front end to our Sonos systems. Stephen decided to make it more than talk and downloaded some code on Github and stitched together a system that works. I was at his house yesterday evening and he showed it to me. Here’s a blurry video taken from a phone that shows it in action.

Stephen’s system uses the cloud based Skills interface to parse the commands, then sends instructions to some of that Github code running on Amazon’s Lamba cloud based code execution service, which then sends instructions to a local server on Stephen’s laptop that runs the code that controls the Sonos locally on his home network. It’s a kludge for sure, but it works and I am going to get this hack working on my Sonos system over the next few weeks.

But the whole experience got me thinking about hacking the Echo to do other things. The possibilities are endless.

Here’s an idea for some enterprising engineer out there. We own some bungalows in Venice that are rented out on Airbnb and VRBO. We have a Sonos Play in each of them. And we have a Google Doc that has frequently asked questions on it hanging in the kitchen of each bungalow. What if there was an app for Amazon Echo that could take in that Google Doc, parse the frequently asked questions and answers, and train Alexa (the voice command interface in Amazon Echo) to answer the frequently asked questions. That would get me to swap out the Sonos Plays in each bungalow for Amazon Echos. And Airbnb could promote that app to all of its hosts.

Anyway, there are all sorts of things that would be fun to make by hacking Echo. And I suspect they will. These voice based devices could be the next big platform for developers to make things on.

The Online Club

I recall reading a history of The Beatles and as it is told, they developed their performance skills playing in rock clubs in Hamburg Germany in the early 60s. They played night after night and developed a style and technique that formed the essence of the band for the next decade.

I thought of that today when I read a NY Times piece on our portfolio company YouNow.

My long time friend Steve Greenberg, a thirty year veteran of the music industry, is quoted in the piece talking about one of his young developing stars who performs on YouNow:

In the old days, an artist would have to find some club to get good about relating to an audience. With YouNow she can just go online and play, whether it’s for hundreds or thousands of people, and get real-time feedback.

What used to require moving to Hamburg and playing clubs every night can now be done in the comfort of a teenager’s bedroom, it seems.