Living in New York City’s tech community for the past year has been a wild ride. But we’ve seen more success than failures and it’s inspired us to keep running. We’ve seen pivots, partnerships, massive hiring, a major acquisition and rapid rounds of funding. We welcomed accelerators like TechStars and DreamIt Ventures and played with new incubation models like Gramercy Labs Collective and Prehype.
2010 was a spirited year for the New York City startup scene with hundreds of companies launching out of coffee shops and studio apartments. Coworking spaces like WeWork Labs, General Assembly and Dogpatch sprung up to house them all. After a year in the business, it’s safe to say that our entrepreneurs have learned a thing or two. They learned how to hustle. How to hire. How to talk to users (and how to keep them). They learned when it’s time to pivot and when it’s time to put your nose to the grindstone and ignore everybody else. They learned how to raise cash and how to bootstrap it. They learned about camaraderie.
All Killer, No Filler
We’re bringing Momentum to New York: our newest event, showcasing only the best speakers and startups.
We tracked down a dozen New York entrepreneurs who run companies that turned one year old this year, and asked them to bestow their earthly wisdom upon us…
Adaptly’s Nikhil Sethi
Adaptly helps brands take advantage of various social networks including Facebook, Twitter, LinkedIn and StumbleUpon with a single media purchase. The company was incorporated in April 2010 by Nikhil Sethi and Garrett Ullom, who are 23 and 22 respectively. Adaptly was incubated through DreamIt Ventures in Philadelphia and is now based in New York City with 30 employees.
Sethi says that, “Managing a company from the 0-10 employee level is a very different game from the 20-30 person level. It’s tough to maintain the family feeling unless you hire for that. Our team is very “hodge-podge”, ranging from the best data scientists from MIT and CalTech to high school drop outs… People come from all walks of life… We’re an advertising company where almost no one in the company has any advertising experience. Without those preconceptions we can really innovate and push boundaries.”
“When we look for people to join the team it’s solely based on elements of gut. We don’t even look at resumes. There are some really smart people we’ve turned away because they don’t fit into the team dynamic,” says Sethi.
Within the first 24 hours of launching in August 2010, Adaptly had over 400 brands and agencies using its platform. The company expects to exceed $10 million in revenue this year through the services it provides directly to clients and as a white-label service through advertising and PR agencies. Adaptly’s clients include brands and agencies such as PepsiCo, Diageo, News Corp, Razorfish and hundreds more.
So what advice does Sethi have for other young entrepreneurs? “Work/Life balance is complete bullshit in the startup realm. I think the real thing I’ve learned is the Work/Health balance; not just for you but your whole company. We get our whole team to do pushups or sit ups every hour.”
Funding to date: $2.7 million to date from investors including First Round Capital, Charles River Ventures, Lerer Ventures and kbs+p Ventures.
Adstruc’s John Laramie
Adstruc launched on August 15th, 2010 in New York City with one mission: to disrupt the outdoor advertising industry. The company boasts 70% coverage of available outdoor inventory across the U.S and is adding 1,000 units of outdoor industry a day to its platform.
“I think it’s important to always focus on the bigger vision of where you are taking the company, but make sure you are setting achievable goals on a week to week basis. A startup is like getting taken into an alley once a week and getting mugged. That’s just going to happen. So having things you need to accomplish week to week is important to communicate with your team and investors.”
-Adstruc CEO John Laramie (pictured below)
Earlier this year, ADstruc released a campaign titled, “Billboards for Everyone,” supported by partnerships with BA Reps, Spread ArtCulture Magazine, and JWT New York. Through this campaign, Adstruc has worked with outdoor street artists such as Shepard Fairey and Ron English. Adstruc also launched an epic marketing campaign with notable businessman, Gary Vaynerchuk, better known as “Gary V”. Next up for Adstruc, is a new Billboards for Everyone campaign in New Jersey featuring a notable few reality TV shows by the artist professionally known as Trustocorp.
Funding to date: In September of 2010, Adstruc closed a $1.1 million Series A investment led by DFJ Gotham, with participation from RRE, Founder Collective, Jeff Clavier, David Cohen, Kal Vepuri, David Tisch and Social Leverage.
Artsicle’s Alexis Tryon
Incorporated in November 2010, Artsicle showcases emerging artists and lets everyman art lovers rent fine art for cheap. By joining Artsicle, users like you and me, who don’t have time to keep up with the modern art scene and gallivant around Chelsea, can discover today’s top emerging artists and show off their work in our homes. Users can rent original artwork for just $50 per month or purchase art with prices ranging from $500-$1,500.
Artsicle now has 52 artists live on its site, compared to only 10 artists with the first version. Its email list has grown from just friends and family to over 4,000 subscribers. There are over 75 pieces of art out at any given moment, which CEO Alexis Tryon says will triple by the end of the year. “It’s almost doubling monthly right now and I’m pleased to say that we’ve made over $10,000 for the artists in sales and rentals,” she says.
“Looking back at the last year, I’ve learned two important things. One, that funding is not really an accomplishment. It’s a necessary part of the process but it puts you no closer to success and in some ways it can put you closer to failure because it can give you a false sense of success. Two, that as much as we talked to our customers, I wish we had been talking to them more from day one. We ended up building things we didn’t really need. I can say that I’ve never wasted time talking to our users.”
When Artsicle first started, Tryon was literally out on the street talking to strangers, meeting with friends of friends and–as she puts it—“accosting people in coffee shops”. Once she launched the first version of the site, she started reaching out to customers with Live Chat. “Live Chat has been the most valuable UX tool. It tells me what people can’t find, what questions they have and what’s not working on their browser,” she says. Tryon also sends out 100 customer service emails per week, reaching out to new users, and particularly power users. She says 15-20% of them respond with feedback.
While Tryon currently runs Artsicle with her CTO boyfriend Scott Carleton (pictured above); the two are looking to hire 5 new full-time employees by the end of the year. And unlike other organizations in the art world, Artsicle offers full benefits to its employees, which is a mega perk.
Funding to date: After boostrapping and eating ramen for a full year, Artsicle has now raised $390K. Tryon says she now can afford pasta with butter but that she and Carleton are still making less combined than what she was making at her old job at American Express. But she doesn’t regret it in the least. Read our original story on Artsicle here.
BillGuard’s Yaron Samid
Launched in April 2010, BillGuard is the world’s first people-powered antivirus system for bills. While the company won’t share its most up-to-date user numbers, it’s found at least 1 unwanted or unauthorized charge on over 20% of its user cards, totaling a whopping quarter of a million dollars in savings. BillGuard’s predictive algorithms alert users of unwanted charges such as hidden fees, billing errors, scams and fraud on credit card bills. It also alerts you when a similar charge on your credit card has been flagged by others or is complained about on the web.
This is my third company and one thing never changes, I’m always learning new things about the magical adventure of building a company. A company is a living organism that ebbs and flows with the intellect, creativity, ego and emotions of each individual involved. Managing that orchestra is a fine art and a science. It’s different each time. This time around I’m learning how to delegate better. That’s really important for a CEO but particularly hard for me as a UX-obsessed product-centric CEO.
-BillGuard CEO Yaron Samid
For young entrepreneurs, Samid says: “Don’t get caught up in buzz-crack, personal brand, name dropping, startup scenes, hyper growth and hyper funding, celebrity angels, stealth modes and all that other noise the tech blogs love to dish. Focus on building something that normal people actually want and will tell a friend about. That’s really all there is to this game. Keep it simple, elegant and oozing with love for the product, not for the money.”
Funding to date: The NYC and Tel Aviv based startup has raised $13 million in total from a number of well known investors, including Khosla Ventures, Founders Fund, Innovation Endeavors, Bessemer Venture Partners, Chris Dixon, Ron Conway, IA Ventures, Howard Lindzon and Yaron Galai. For more on BillGuard, read our full story here.
Birchbox’s Katia Beauchamp
Birchbox founders Katia Beauchamp and Hayley Barna met while sitting next to each other during their first semester at Harvard Business School. One year later, they launched Birchbox, an online service that sends coveted beauty samples to members’ doorsteps every month. It is a $10 monthly subscription (shipping included, US only for now) that delivers 4-5 product samples of the top 43 brands like NARS, Benefit, Laura Mercier, Stila, Korres and Cargo. Since officially launching last September, Birchbox now has over 45,000 subscribers and customers in all 50 states.
Katia Beauchamp (pictured below, right) believes that entrepreneurs should make their idea as simple as possible to execute in order to launch quickly for market feedback:
“Take it down to the minimum viable version of the idea. This way you can launch and not wait 6 months or a year to have a product. Then you can see how the industry and consumers feel about it. The market is there to help you understand how to turn your idea into a product.”
Now, Beauchamp and Barna lead a 45-person team and have expanded into other categories like chocolate, teas and snacks for the company’s 45,000 subscribers. They’ve also launched Limited Edition boxes, which are one-off deliveries for special occasions such as “Brides to Be” or “Just Because.” In just one year of being in business, the Birchbox ladies has seen dozens of copycat companies from across the globe, like Germany, Europe, Australia, Brazil. They’ve seen Birchbox for Mom’s, for Men, for Kid’s, etc. (Read up on how Subscription Service Startups are the Hot New Thing.)
Total funding to date: $12 million, with a recent $10.5 Series A round led by Accel Partners with First Round Capital, Harrison Metal, Forerunner Ventures, Lerer Ventures, Sam Lessin, Consigliere, Gary Vaynerchuck, Dave Morin, Stanford University Endowment and Andy Dunn.
ExFm’s Charles Smith
Last summer, 3 music geeks came together to launch ExtensionFM at Google I/O; their product was a simple extension for Google’s Chrome browser that made it 100 times more enjoyable to search for and play free music on the web. Since then, the team has grown in size to 7 employees but shrunk its name to the preferred exfm.
Considering its quick pivots, Founder and COO Charles Smith says:
“We built our original company on the assumption that the Chrome operating system was going to power net-books, so our strategy was to become a music utility for an operating system that Google was going to push. That clearly did not happen. The biggest hardship was giving that up, and realizing that a big part of why we launched the company the way we did was based on a flawed assumption. You never want to be wrong. But, still we had to radically change our thinking. Fast forward 18 months and that’s why we have a web-based “Push-Play” experience.”
Funding to date: $1.25 million from Spark Capital, Betaworks, Founder Collective and Dave Morgan.
Gojee’s Mike LaValle
The mouth-watering photos on Gojee, a recipe startup based in NYC, are delicious enough to make Mary-Kate Olsen hungry. Tell Gojee what you have in your kitchen and curated recipes pop up in seconds. Peruse over 10,000 recipes handpicked from 160 food writers. The site will even deliver recipes based on what you crave and what you dislike.
But Gojee wasn’t always so tantalizing. The company officially launched in June 2010 as a Mint.com for groceries. No one wanted it. Then, founders Mike LaValle, Veronica Chan and Brian Borger built Twitter for food. “It was too much. We threw too many features into it and simply didn’t build a good product,” says La Valle.
LaValle explains that everyone really loved their recipe feature in the Twitter for food product. “It was a very emotional reaction. We showed it to people and they loved it. We really saw this new wave of connecting the emotional experience of food and content discovery.” Four months later, the current Gojee was born, which is in a battle for users’ taste buds with sites like Foodily and PunchFork.
“The one core thing that led to our success is focusing on the emotional product and obsessing about design. We’re really obsessed with how the product sells. People were forgetting about the human element and that’s what we put front and center,” he says.
Now the company, which has grown from 2 to 7 employees, has members in 199 countries around the world and 25,000 members registered on its Google Chrome Web App, one of the highest rated in the Chrome Web Store.
Funding to date: A $1.2 million seed round led by San Francisco’s Kapor Capital.
GroupMe’s Jared Hecht & Steve Martocci
GroupMe is a free, group-text-messaging startup that launched in July 2010 and may be New York City’s most successful startup to have launched last year. Just a few weeks after its first birthday this summer, it announced that it was being acquired by Skype for a rumored $85 million.
GroupMe’s cofounders are start-up veterans Jared Hecht and Steve Martocci, who previously worked at Gilt Group and Tumblr. When asked about the highlights from this past year, Martocci said, “Almost every single day was a highlight. We rode this wave and continued to push harder and harder than we ever thought we could. It’s been such a dramatic and amazing year for us.”
Hecht adds that “SXSW was a really special moment for us” as was the company’s “unification with Skype”. Regarding any changes since the acquisition, Hecht says that “not a whole lot has changed, except we’re traveling a lot more!”
“Advice for other entrepreneurs? Have fun. Have as much fun as possible. Learn as much as possible. I’ve learned more in a year’s time than I ever thought I could. Learn by surrounding yourself with really, really great people,” said Hecht. “Fun people you trust.”
Funding to date: Before being acquired by Skype, GroupMe had raised two rounds, bringing its funding to $11.4 million led by Khosla Ventures with participation from additional investors including General Catalyst Partners, First Round Capital, Lerer Ventures, betaworks and SV Angel.
Of A Kind’s Claire Mazur
We covered Of a Kind’s launch as “The world’s first Tumblr store” in November 2010. Since then, the NYC fashion start-up has been bringing high-end, exclusive fashion to the social media scene. “I think Tumblr lends itself really well to the distribution of visual content. There’s a rabid fashion following on Tumblr. And it targets early adopters,” explains Claire Mazur, one of the company’s two co-founders.
Of a Kind combines storytelling and exclusivity, and by latching onto the power of a viral, rapidly tumbling web tool, it’s attracted over 35,000 followers. The company has began launching 2 editions a week and has a big redesign with Hard Candy Shell in the works. Early next year, Of a Kind will be launching a capability for its featured designers to upload their own products from their collections to the site, significantly upping inventory and revenue.
I remember meeting Mazur in the months leading up to Of a Kind’s launch, and her company was all she could talk about. For entrepreneurs just getting started, Mazur says:
“Tell everybody what you’re doing. Don’t be precious with the idea, don’t keep it a secret. You never know who you’re going to meet or who might know someone who could help you. Ask for what you want and don’t be shy about it. You never know what people are willing to give you.”
Funding to date: $275K from friends, families and angel investor Rick Webb.
Savored’s Benjamin McKean
Savored, which was originally called VillageVines took a very different approach to the daily deals scene. While it looks like a daily deals site, it’s not. It’s an unpretentious fine dining club that helps up and coming foodies dine as if they were making 6-figure salaries. Members pay $10 to book reservations and receive 30% off their entire bill, including alcohol. The discount is applied automatically and discreetly to the bill at the meal’s end, allowing diners to avoid that cheap coupon shame. In the last 6 months alone, the service has increased reservations by 335%, so it’s a win-win for restaurants and customers.
VillageVines first launched in September 2010 with 6 employees. Now, Savored has 42 employees and nearly 500,000 members who can choose from over 650 restaurants nationwide. This year, Savored will generate over $25 million in revenue for its restaurant partners.
“Stay core to your principals,” says CEO Benjamin McKean. “A major core principal of ours is to stay on the side of the restaurant and represent that restaurant. It’s not about going out and getting as many consumers as possible. I think what you’ve seen with the many failing daily deals sites is that wasn’t a core principal of theirs. Don’t change your core principals even if everyone else is doing something different.”
In addition to New York, the site is active Washington, D.C. (the founders are Georgetown grads), San Francisco, Los Angeles, Chicago, Boston, Philadelphia, Atlanta, Miami and Denver.
Funding to date: $4 million backed by Hearst Corporation and Grand Banks Capital.
VYou’s Steve Spurgat
We first wrote about VYou when it launched last November, the social video network that’s like a combination of Justin.TV, Formspring, YouTube, and Twitter. VYou is laid back video conversation, letting users send and receive messages with friends and experts in a casual when-you-can-find-the-time fashion. Since its launch, the New York-based startup has served over 50 million video views, launched an iPhone app and Quora style montages. The network features noted VYou members including Bob Vila, Deepak Chopra, Ladytron and Grafitti6. Expect major upgrades to VYou in early December.
Paraphrasing Venture Capitalist Fred Wilson, VYou founder Steve Spurgat says that early stage companies go with their gut while later stage companies go with the data:
“We’re definitely more in the data stage now,” Spurgat says. But it’s really important to treat startups as more of an experiment than a business. You’re constantly reacting to what’s happening whether it’s user feed back or the data. Bring your product to market before you go out and raise capital. For us, launching and getting traction on our product before raising money gave us a better valuation and better terms.”
“Partnerships are wonderful, but don’t let them interfere with your product plan. Stay true to your vision, even if that means turning down offers from some big brands,” adds Spurgat.
Total funding to date: $3 million, led by RRE Ventures and Highland Capital Partners.
Yipit’s Vinicius Vacanti
In February 2010, co-founders Jim Moran and Vinicius Vacanti launched Yipit, a daily deals aggregator that tracks 1,000 deals a day and delivers only the ones you want into your inbox. When the gents launched they had 2,000 users and were aggregating all 20 of the daily deal sites on the market. Now, Yipit boasts a subscription list of 300,000 users in 100 U.S. and Canadian cities with two more launching per week. The service is aggregating the majority of the 800+ daily deals sites out there, and that’s just in the U.S.
In 2010, Yipit made exactly $0 of revenue; now the company is set to make more than a $1 million in revenue on an annualized basis. Since launch, Yipit has also seen an endless number of company copycats- some of which have copied their design right down to the pixel.
During this past year, Yipit has watched daily deals sites take off in almost every country in the world, meanwhile Facebook failed when it tried to do so. In the past year, Yipit has watched Groupon raise $950 million dollars and receive valuations ranging from $30 to $10 billion. Then, just yesterday, Groupon’s IPO put it at the 2nd highest tech evaluation since Google– at $12.7 billion.
Vacanti says, “The first stage of building a company is doing whatever it takes to build something that gets traction, that solves a real problem and that consumers emphatically tell you is something they’re interested in and excited about. The second stage is when it’s no longer you that has to build the product; you have to go out and find the team that’s going to build the product. And that’s a hard and scary transition to make. If you haven’t built a network and you dont know people and you aren’t good at recruiting, you’re going to struggle. And when you’re looking to hire, the primary quality to look for is passion.”
Funding to date: $7.3 million from Highland Capital Partners, RRE, DFJ Gotham and IA Ventures.
Other great companies that turned one year old in New York City this year include Wanderfly, which in one year inspired 4 million travelers from over 200 countries; Lot18, online flash sales site for epicurean delights, which recently raised $30 million in its Series C round; and AHAlife, which raised a $6 million round over the summer from DCM and FirstMark Capital and is focused on discovery shopping within the lifestyle, wellness and luxury categories. Did we miss anyone? Let us know in the comments.
And Happy Anniversary to each and every one!