Imagine you’re sitting fireside in the living room of your professor’s home. He calls out to each of you by name. Not only are there students in the room, students you call friends, but you’re surrounded by alumni and teacher assistants who mentor you along the way. It’s this kind of supportive, family style setting that epitomizes the startup accelerator TechStars. And this week, TechStars unleashed its first New York City class, a total of 11 startups out into the world.
Here’s how it works: TechStars, which was founded in 2006 in Boulder, Colorado by David Cohen and Brad Feld, invests a small sum of money into a selected set of tech startups — $6,000 to $18,000 on average — for a 6% equity stake in the companies. In exchange, the startups get access to an incredible network of mentors, experienced members of the local tech scene, who advise them on business and product development and the ins and outs of growing a company.
On Friday afternoon, we caught up with 29-year old David Tisch, the startup accelerator’s Managing Director in New York City. Tisch, the grandson of self-made billionaire businessman Laurence Alan Tisch, is as New York as New Yorkers come. In fact, aside from the 4 years he spent as an undergrad at UPenn, he’s never lived anywhere else.
Last June 2010, at Angel BootCamp in Boston, Tisch bumped into TechStars’ founder David Cohen, who was in town for the Boston class of TechStars’ Demo Day. Cohen told David he was going to launch the next TechStars in New York (L.A. was also on the list at the time), but he needed to find a managing director to run the program locally. The eager Tisch asked him what he was looking for in a director. Cohen spelled out 5 criteria.
1. Has launched a successful start up.
2. Has raised venture capital.
3. Has a failed startup.
4. Has made an angel investment.
5. Is a native to the city.
“I told him, well, I have 3 out of 5 of those criteria,” says Tisch. Cohen was still interested, in fact, before meeting him, he’d been told by several people to keep an eye out for Tisch as a possible candidate. After a long meeting in Boston, Cohen asked Tisch to come out to Colorado. “I said, ‘I can be there in 5 days.’ I had no planned meetings other than one with Brad Feld [Cohen's TechStars Co-Founder]. I was basically just coming to hang out in Boulder for 5 days,” says Tisch.
Hours before Tisch was supposed to meet Feld, he went to watch him on a panel. Cohen said, “Alright Tisch, go up there and get on that panel.” Tisch suddenly found himself on a panel with Feld an hour before their interview and still had never met him. “I probably talked 5 times during the panel, only when I was really confident. Fortunately, 4 out of the 5 times, Brad expanded on what I had to say,” says Tisch, relieved.
Tisch returned home to New York and Cohen spent the next month calling people, asking them about Tisch. At the time, Tisch mentioned that he had set up a meeting with Fred Wilson. “It took me 2 months to get that meeting,” says Tisch. So Cohen called up Wilson and said, “Fred, you’re his final interview.” Tisch, unknowingly went into the meeting, completely unaware it was his final interview for TechStars.
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2 days later, Cohen called up Tisch and offered him the job. (He no longer has to wait 2 months to score a meeting with Fred Wilson.)
TechStars has a warm and fuzzy feeling going on. Every year, we have an alumni reunion. This past fall, to launch TechStars NYC, we had the reunion in New York. Out of 70 TechStars graduated companies, only 3 are based here, but 59 of them showed up to the reunion. 56 companies got on an airplane for the reunion. [The remaining companies were either too busy to make it or couldn't travel from Seattle at the time.] That says a ton about this organization.
This past Thursday at New York City’s Webster Hall, TechStars’ inaugural NYC class held its first Demo Day to an audience of 750 investors, mentors, press and startup community. (And for the first time in Webster Hall’s history, the boys’ bathroom line was longer than the girls’.)
Also known as the “olympics for startups,” TechStars is harder to get into than Harvard or Yale. Out of 579 applicants (including 3 food trucks), 11 were chosen. Over the 3-month program, 234 pizzas were delivered to the TechStars offices, there were 4 name changes, 3 idea changes, lots of late nights and a hell of a lot of Red Bull. On Demo Day, each of the 11 teams gave 8-minute pitches to investors in the audience.
So who are the 11 startups? Allow me to introduce you, in no particular order…
On September 1, 2010, the first day TechStars NYC was announced, Tisch received an e-mail from a company called SocratED. The subject line was: “The #1 reason why SocratED should be a part of TechStars NYC.” The message said, for the next 75 days until the application deadline, we will send you a reason, everyday, of why we should be in TechStars. The #1 reason? Education in America is broken.
Tisch wrote back, ‘Don’t miss a day.” For 75 straight days, SocratED founder Lee Hoffman wrote Tisch a reason. On day 30 he wrote, “I’ve been working in tech for 12 years. I was the CTO of Razorfish when I was 18 and and my cofounder has been working in education for 8 years.” Tisch’s jaw dropped, “I couldn’t believe they had waited until day 30! I wrote Nicole [Glaros, Managing Director, Boulder] an email and said, ‘Holy shit, they’re for real.’”
In the program, SocratED changed its name to Veri. The startup aims to create ‘the learning moment,’ and it’s getting people to pay attention online using gamification, such as multiple-choice trivia quizzes created by users. According to Veri, users stay on the site for an average of 27 minutes, which is very impressive, particularly for an educational site. The company plans to make money by including and promoting quizzes submitted by brands and companies.
VERI founder Lee Hoffman also attracted quite a bit of attention. 20 mentors wrote Tisch asking for Hoffman in the program. Tisch says VERI is now coming out of TechStars as perhaps the buzziest investor wise.
Veri is raising $750,000 with $300,000 committed.
40 million people move each year in the US., spending a total of 1.6 billion hours on their search. The three founders of nestio, Caren Maio, Matthew Raoul and Michael O’Toole are setting out to disrupt the online real estate industry. The result is such a brilliant platform for organizing your apartment search that it actually inspired me to think about moving.
“We’re here today because moving sucks,” says Maio. “The stress, frustration and time consumption. nestio is the easiest way for you to find an apartment and achieve transparency on your findings.”
The product launched in beta 10 days ago, and is starting with NYC apartment rentals. Nestio offers users the ability to make better decisions with local photos, timely notifications, location-based context like near by restaurants as well as building history. It’s also a place for users to keep track of their apartment hunt. Nestio’s handy bookmarklet allows users to easily copy paste URLs from external sites like Craigslist and Streeteasy into a nestio “folder”. Once inside nestio, users will be able to add a “collaborator” (future roommate) from Facebook and instantly view saved listings and add some of their own.
A sweet mobile app is in the works that will allow users to take notes, receive realtime notifications of apartment listings and snap photos. Nestio is raising $750,000.
We will have a full on interview with the founders and product demo of nestio for you on Monday. Stay tuned.
Another location based daily deals service? No. ThinkNear is an API that is smarter, much smarter. Thinknear specifically helps local merchants drive foot traffic to their stores during slow periods. The technology also pulls in data like weather, events and traffic to determine when to deliver mobile offers to nearby users. Additionally, the platform agnostic startup relies on ad networks such as AdMob and Where to push out discounts to users, who then have a limited time to redeem their offers.
ThinkNear’s open API lets developers integrate local deals into their own apps. Since releasing its API 2 weeks ago, there are already 25 apps building on it.
Thinknear is raising $1.2 million and has $550,000 committed.
Have you used the app Exit Strategy to navigate NYC’s subways? Because you should. Do you love FourSquareandSevenYearsAgo? Because I do. The guys behind both of these projects created Friendslist, which aims to replace Craigslist in the same way Craig obliterated the newspaper classified industry.
“Friendslist is the best opportunities from the people you trust. As Craigslist grew, it lost cred. It lost the personal touch, curation and trust and grew to become a scary, anonymous place,” says Founder Jonathan Wegener.
Wegener plans to get Friendslist into the hands of major social influencers in New York, and have it organically grow into a platform that empowers people to connect with each other, whether its by helping people post relevant job openings or knowing where you can borrow a lawn mower.
“We’ve got a dream that we can help our friends be more helpful,” says Wegener. “Friendslist can turn you from a busy middle man into a hero.”
They are raising $300,000.
Digital billboards and out-of-home (OOH) advertising are a 3.5 billion dollar industry. By 2016, OOH advertising spending is expected to reach $6 billion. And immersive wants to make ads smarter. Their software works with existing digital signs, using facial recognition and data to determine age, gender and attention time. It even works with large crowds. In theory, if you are a 25-year old man, this means you may never have to look at another Tampax advert again.
See a quick video of their current business plan here.
They are raising $1 million with $300,000 committed.
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OnSwipe founders Jason L. Baptiste and Andres Barreto stole my heart back in January when they first gave TNW a sneak peak of their awesome product. Simply put, OnSwipe is a platform that makes it incredibly easy for any publisher from a blogger using Posterous to the New York Times to make their content and advertising an immersive, aesthetic experience on iPads via a Web browser. Mind you, OnSwipe IS NOT AN APP, but it delivers an app like experience on the web that looks stunning on an iPad.
In just 30 days the boys raised a sweet 1 million in seed funding from Spark Capital, Betaworks and AdMob investor ENIAC Ventures. Angel investors included Hubspot CTO Dharmesh Shah, Jennifer Lum, Roy Rodenstein and Wayne Chang. They are currently raising a series AWESOME round.
“Techstars allowed us to quickly go from not being in the New York Tech community to being a company on the rise. Its helped us hire, generate buzz, and clarify our mission to publishers. It’s also allowed us to be rock solid focused on executing on a huge vision.” -Jason L. Baptiste
Watch this video of their TechStars presentation, shot on my hand held like a proud mother in the early 90s.
CrowdTwist is making a safe and big bet on social media’s ability to create brand evangelists. The white-label platform helps companies find their loyal users and reward them for promoting the brand across social networks. The technology tracks statistics on every social interaction from user engagement to demographics, so clients can measure their campaigns.
CrowdTwist helps brands engage across multiple platforms like email newsletters, YouTube channels, Twitter, Facebook, etc. Live Nation was one of its clients and has seen 900% increased engagement. Ticket sales also doubled, says crowdtwist’s Founder Irving Fain.
They’ve raised a $750,000 seed round and are currently raising a Series A.
There’s nothing quite like a handsome Spaniard selling you on cloud data migration. MigrationBox helps people migrate any type of data, be it email messages, contacts, documents and appointments to the cloud.
While only 5% of companies have moved their data to the cloud, 3,000 companies are moving to GoogleApps a day, so migrationbox is poised for success in a deeply fragmented space. It currently supports Google Apps and several social apps with more coming soon.
They are raising $500,000.
Melanie Moore and Eric Jennings are disrupting the largest inefficiency in fashion- pricing. Items are discounted at a predictable schedule until they sell out. That $500 bag you want? It’ll be $200 on GILT in less than 6 months. But might you have paid $300 for it? TVF is betting yes.
Using an innovative auction-type model to discover what every person will pay, ToVieFor wants to disrupt online fashion with a destination site that is really bringing realtime supply and demand to market. Using the product, fashion seekers can search for an item, buy it or “vie for it,” setting a price they’re willing to pay.
The site launched 10 days ago and they’ve grown to 5,000 users, earning $15,000 in revenue with 51% gross margins. They are raising $750,000 with $250,000 committed.
Shelby.tv looks awesome. The consumer video service aggregates all of the video links on your social networks and turns them into one, customized channel. The technology is built to discover new sources, learn which videos you like and don’t like, and drive revenue for content creators. Videos can be tweeted and Liked from Shelby.tv too.
They are raising $500,000 and already have early commitments. Oh, and their mentor is Fred Wilson, nbd.
11. Red Rover
Red Rover is a “company directory on steroids” that acts like a a peer-to-peer learning platform. Let’s say you need to learn photoshop, Red Rover will immeadiately suggest relevant employees witin your company to you that are photoshop experts, thus eliminating all of the unneccessary hunting and emailing you would’ve had to do before.
It uses information from Linkedin, Youtube, Quora, Wikipedia and all social networks to create a more efficient, tight knit community of efficient employees, even at a large company. They currently have 10 clients and booked $1.6 million in revenue last year. In the next 12 months they will close 2 tier 1 clients, adding an additional $1.4 million to their revenue stream.
Red Rover is raising $1.5 million.
According to Tisch, 6 companies immediately raised money following Demo Day, which was capped off with a party sponsored by AOL Ventures in NYC’s Union Square.
New York is taking off right now. Everything is coming together. Late stage startups like Foursquare are continuing to grow and that fosters new growth. The big companies like Google and Facebook are opening offices here. At the startup level you have an incredible support infrastructure being built, collaborative organizations like Betaworks and General Assembly that allow people to find their way into this community earlier. Also, tech mashed with media has helped get this scene a lot more attention. The digital media world in NYC is interchangeable with the startup scene, and this dynamic isn’t anywhere else.
- David Tisch
After so much success, TechStars’ NYC will take place this summer, beginning in early July and lasting until late September. So far, they’ve already received 350 applicants (including 4 from Google based companies). Tisch estimates they will receive 800-1,000 by deadline. While 25% of startups always apply the last day, Tisch warns that this isn’t a good move. The earlier you apply the better, because it gives them more time to get to know you.
“The best recruiting tool for our next class of NYC TechStars? The 11 companies graduating this one,” says Tisch.
With a focus on education and developing a tight-knit community, TechStars is shooting for the moon. Plus, they’ve chosen to camp in New York City, the greatest city in the world.