Article by Samantha Epstein, Practice Manager for Workbridge New York
Anyone who has been at the fore-front of the tech industry over the last 3-5 years has seen what’s been coming. It started out in Silicon Valley many years ago and has been trending east ever since. As the public markets started to tank in 2008, putting a damper on the finance industry in New York’s boroughs, Silicon Alley really started to take on a new shape as public investment capital was funneled into private VC investments in tech companies. What we’ve been experiencing since is nothing short of an all-out land grab that continues to push the limits of financing, real-estate, and manpower in our already over-extended city.
Money is not new to NYC, and neither is venture capital. But between 2007 and 2011, the New York region experienced a 32% growth in VC deals. Not only does that figure speak for itself, but when you look at that same number nationally, it’s quite simply insane:
That’s on top of the hundreds of already funded start-ups in NYC, the existing enterprise companies that are investing their own capital back into technology, and the thousands that are making the rounds to VCs pitching their idea every single day. So what does that mean? That means money. Lots of it. Money to hire developers; money to buy licenses; and money to buy hardware, software, and office space (not to mention the beer and pizza).
So what is going on with all this money? Well, most of it is going into tech. So much so that there is an entire industry dedicated to getting these new tech companies off the ground faster; meet the “accelerator.” The number of start-up accelerators in NYC went from 0 in 2008, to 12 in 2012*. Essentially a start-up boot camp, these organizations help start-ups grow rapidly by providing resources things like: business plans, organizational development, and product development, and they do it fast.
So now we have hundreds of funded start-ups who not only have cash but teams of advisors working to get these companies up and running. However, part of building out a company is being able to get everyone together in the same room to share ideas and do the legwork. And for tech companies the space must typically include at least minimal technology infrastructure.
NYC has always been a real-estate bubble. It’s no shock that rent is more expensive here. It is, after all, an island. In previous years, that was a determining factor in a company’s interest and willingness to move their operations to the Big Apple. However, the recent influx of financing coupled with good old fashioned collective bargaining power has begun to change this. In 2010, the media/information and computer/tech industries footprint in NYC real estate grew from 3.8M SQ FT to 6M SQ Ft:
Those same VCs and Accelerators that I mentioned previously played a big part in this. All these start-ups need places to work; places with desks, computers, coffee, and other techies to share ideas (and costs) with. Though the Bloomberg administration has made their life easier with tax-breaks and other incentives, when you’re working with a very small budget and already taking a huge risk at a startup, you need something a tad bit more temporary than the $1.8B office Google purchased in 2010*. Enter: the co-working space.
A co-working space is a shared working space that allows start-ups to share resources and collaborate with one another. Alongside the recent development of accelerators, these co-working spaces play a critical role in the real-estate side of things. Possibly the most well-known co-working spaces in NYC, General Assembly (which is also well known for its educational programs) grew to 350 members and upwards of 100 start-ups after about a year*. And they’re not alone in their quest. Aside from their cheap rent and great extras, these spaces have enabled their start-up hatchlings to grow their business before stepping out to make it on their own.
One other solution being currently explored by many start-ups in NYC is moving outside of Manhattan. You can see tech communities popping up in parts of Brooklyn and Long Island City; places that you previously may not have expected. But the bang for your buck in these areas is enticing a lot of these companies to set up shop just a short subway ride from the city’s center, and it’s paying off in cheaper rent and larger spaces.
Now, we may have money and real-estate, but you can’t build a tech company without manpower. All of these ideas can’t take shape without the people who can mold them into products. In the tech world, that primarily takes developers. Working with their product and marketing teams, these guys lay the bricks to the next big thing, and without them these tech start-ups would never get past the idea stage.
When compared to the private sector, IT job growth in NYC in recent years is astounding:
Based on the upward trend in the markets that 2013 has brought us, we can only assume this number will continue to rise. But this growth has not been matched with the number of available, qualified, tech job seekers in the city; A problem that could become the bottleneck of the whole industry here if it isn’t addressed. Luckily, we are seeing several Bloomberg initiatives aimed at targeting this bottleneck, from the Cornell Campus on Roosevelt Island to the High School engineering programs the administration has launched locally. But it’s going to take more than just a college campus and a few dozen high schools participating to fix this completely.
As the manager of a recruiting team here in midtown NYC, I can attest to the rise in business over the last several years (in fact, here at Motion, we are seeing historical production highs on an almost monthly basis). Companies are definitely leveraging the recruiting industry’s ability to help identify and deliver existing talent. However, using recruiting/staffing agencies like ours may help, but it’s a well-known fact amongst recruiters that we simply need more candidates ourselves.
So what are we to do? We’ve got more money being funneled into tech here in the city than the budgets of many small countries. We’ve solved the real-estate problem by sharing space or thinking outside the box. For all intents and purposes, we are in the middle of The Great NYC Land Grab as it relates to technology. But we don’t have enough settlers heading east to New York City.
From where I sit, the answer is simple. We need to talk about it more. We need to tweet it, email it, text it, post it, like it and all out yell it from the rooftops. We need to engage the already active technology community with those interested in becoming a part of the industry through meetups like TechInMotion. We need to start with children using technology in education, and support organizations that teach this like the Bronx based CampInteractive , which fosters the idea as they turn into young adults and gets kids excited about technology and entrepreneurship. We need to take high schoolers and college kids and talk to them about the demand and the rewards. And we need to do it now.
It’s going to take all of us, from VC’s to techies to recruiters. And it’s not going to be easy; we will have to change the way many people think about traditional career paths and how they look at technology as a part of everyday life, not to mention the way we educate our youth. But if we don’t do this, all of us are out of luck. After all, technology has become the universal language, and we’re all in this together.
*All data and/or statistics used in this post have been pulled from the Center for an Urban Future’s article entitled New Tech City published in May, 2012.
By: Andy Dalton, Recruiter at Workbridge San Francisco
Anyone who has ever struggled with watching their grandmother try out her new iPhone or spent an hour helping one of their friends set up a new social media account knows that usability is everything. An easy-to-use, negotiable interface can be the difference between a product that is wildly successful and one that never makes it off the ground. People don’t want to have to fumble through their applications. They want an experience that is both intuitive and fluid.
It seems that some startup founders have forgotten the importance of usability, and, in doing so, will lose touch with their user base. Sure, they need the “rock star” engineers who will create the bare bones of the product and make it functional, but that’s just the beginning. Who will make it usable? How can they mold it in a way that will be attractive to tech-savy teenagers, your grandmother, and everyone in between?
I connected with Kai Brunner, a talented UX Designer we recently represented, and he gave me a lot of insight into the importance of usability and his own views on design. He believes, “the best UX design takes root in architecture, to where form following function can become inspired design credo.” He went on to say, “too often startup founders bring the practice of UX design late into the development process and use it as a blunt tool to fix usability issues that were long introduced by non-designers.” Like Kai, I too see the problem in waiting until after your product has launched to focus on user experience design. Usability should be emphasized from an application’s conception, and should be a top priority of management.
Even the most useful application will not succeed if it is not designed in a way that makes sense to its users. People use technology because of its efficiency and its ability to save them time. For companies this provides an interesting challenge. How do you make a complex application simple to use? In order to do this, you will need to hire a design team that places on emphasis on usability and understands the importance of simplicity. Kai weighed in on this issue stating, “simplifying a process that is inherently complex means to clarify and organize multiple steps into the perception of them being easy and simple to complete.” Here, he touches on the essence of strong UX design and what it takes to truly engage with your users.
Usability boils down to simplicity. How can an application be stripped down to its essence and designed in a way that is most logical and intuitive for its users? This requires careful analysis of what it is about the product that needs to be showcased and an evaluation of how to guide users through the process so they can get the most out of the application. If you wait until it’s too late to hire a strong UX team, you’ll be stuck with a product that works, but is inaccessible. One good designer can mean the difference between a good idea and a great idea.
This week Workbridge Boston spent a couple of hours at the Cradles to Crayons Giving Factory. Cradles to Crayons provides children from birth through age 12, living in homeless or low-income situations, with the essential items they need to thrive at home, at school and at play. These items are supplied free of charge by engaging and connecting communities that have with communities that need. During our time at the Giving Factory, we sorted through winter coats ensuring that they were in good condition and that any kid would be happy to receive them.
In Massachusetts alone there are 305,000 children under age 12 that are living in poor or low-income households and more than 100,000 Massachusetts children will experience homelessness in any given year. Helping Cradles to Crayons provide for these children was an amazing experience. Our entire volunteer group was able to impact almost 400 children during the two hours we were there, providing them with winter coats, baby clothes, toys, and kid packs containing school supplies, outfits, books, and toys.
It felt great contributing to such a wonderful cause and we had a ton of fun in the process. If you want to help out and contribute to Cradles to Crayons' mission there are many different ways you can get involved. The organization is always welcoming new volunteers at the Giving Factory as well as any donations of children's items, monetary donations, or you could even host a collection drive of your own. Click here to learn more about how to get involved. Keep up with them on twitter and learn more about what they are doing by following @C2CBoston.
@HeadstandAbby and the rest of Workbridge Boston
Last week, Workbridge Orange County hosted Tech in Motion: OC's event Starting a Startup: Everything you need to know from K5 Launch. K5 Launch is a startup incubator here in Orange County that focuses on helping new startups find the footing that they need. Ray Chan spoke about what they look for, how the help, and how others can get involved in the burgeoning startup community in Orange County. Afterwards, we had 3 startups "pitch" their ideas to K5 Launch and the audience, getting real time feedback for their ideas. Here are some questions we got to ask Ray Chan and the startup presenters after the event.
Interview with Ray Chan:
WB: What is the importance of startup incubators in Orange County?
RC: First of all let me distinguish an incubator from an accelerator. An incubator is more a real estate play, they rent offices and attract tenants by hosting entrepreneurial networking and educational events in the office. While an accelerator actively involves in the startups as well as providing seed funding and strategic connections to accelerate startups to become angel or VC invest-able in 3 to 4 months. K5 is an early stage venture investment firm where we provide funding to early stage startup as well as operating an accelerator. The importance of startup accelerator is because OC business culture is very transactional and not too entrepreneurial and risk taking. Although there are a plenty of talents, wealth, successful businesses, entrepreneurs in OC, they are very scattered and loosely connected. It would typically takes first time entrepreneur many months just to connect all the dots and find out all the resources they need, or their other option is to move to the Bay Area. K5 basically accelerates startups by providing a clear road map and needed connections and launch them with solid foundation in 3 to 4 months.
WB: How did you form K5 Launch?
RC: My partner Amir and I have been investing for many years, mostly in the Bay Area. But then we ask ourselves, why we put money in the Bay Area? The more we invest in the Bay Area, the more OC talents will be lost to the Bay Area. As described above, we have so many talents here, so much wealth, so many high tech companies, we just have a very weak entrepreneurial eco system here. So we build K5 Venture to fill the void.
WB: What has been your biggest, successful moment working with K5 Launch?
RC: Watching startups succeed
WB: 1 piece of advice for future startups?
RC: Don’t start unless you LOVE and HUNGRY for your vision.
WB: How would you describe your startup?
SG: CultureWidget is centered around the fact that a cultural fit is the prime determinant in long term hiring success. As it costs a company between 150-250% of employee salary in costs to replace, and our goal is to enable companies to hire more successfully, and eliminate this cost.
WB: What is your motivation for starting your startup?
SG: I want to help candidates and companies find better cultural fit for the long term success of both. We are very passionate about measuring, analyzing, and providing tools to help identify and address cultural gaps and issues that infiltrate the hiring process.
WB: What did you take away from participating in Tech in Motion:OC?
SG: It was a great opportunity to present our idea, seek feedback and validation, and connect with people we can work with, including K5 Launch.
WB: Talk about your startup
SD: Pick2Pay, a mobile/web app that helps you maximize your credit card rewards. Pick2Pay is an app that helps you answer the simple question- Which card in my wallet should I use for every purchase I make in-store or online? We are available on the iOS store and on the web at Pick2pay.com/app.
WB: What is your motivation for starting your startup?
SD: I have had the problem of deciding between my cards every time I made a purchase. I used sticky notes at times to remind me which card to use while shopping to maximize my rewards. This became a much bigger problem while shopping online where there are credit card portals which have different rewards for each store. So we decided to work on this problem during a startup weekend at Cornell in Ithaca, NY and ended up winning the competition.
WB: What did you take away from participating in Tech in Motion:OC ?
SD: We got some great feedback from the mentors to learn from the mistakes of our competition and some engaging questions from the audience about our user base and loved the interest from the audience who approached us with further questions and suggestions at the end of the pitch.
WB: Please describe your startup.
CV: A revolutionary new method for eliminating use/handling of loose change/coins during small cash transactions & putting them to good use.
WB: What is your motivation for starting your startup?
CV: It was an "a ha!" moment & started doing research, realizing the potential. Always felt I had "entrepreneurial blood" in me. If I can't figure out everything myself, I'll surround myself w/people that can help.
WB: What did you take away from participating in Tech in Motion:OC ?
CV: Great to bounce one's ideas of of many intelligent minds at such an early stage & help better form one's concept w/helpful input. Great gathering of intelligent minds. Great opportunity!
It was one of the best events yet for Tech in Motion:OC with over 140 RSVP's!
If you haven't checked it out yourself, make sure you do at www.meetup.com/techinmotionOC. Our next event is set for May 1st at Amazon featuring Tom Nora talking about the future of E-Commerce!
On Wednesday, March 27th, Workbridge Associates had the pleasure of hosting yet another exciting Tech in Motion Los Angeles meet-up at BlankSpaces. The guest speaker was Tom Nora, CEO and Founder of the start-up neoRay and Executive Director of Startup Workshops.
Tom spoke to us on the boom in Silicon Beach and Los Angeles of E-Commerce companies and the technologies that make them successful, in his talk "The Next Generation of E-Commerce Technologies." We had a great group of people in our audience and everyone left with some new ideas and more confidence to continue in their startup endeavors.
We were able to ask Tom a few questions after the event and here is what he had to say.
WB: When did you first discover your love of technology?
TN: When I was a 11 my brother built a homemade crystal radio. It was fascinating to see him assemble these inert parts and then hear sound come out. From then on I was hooked on technology and electronics.
WB: What is your favorite part of your job?
TN: The unknown factor, the challenge to create the future and make something grow from nothing.
WB: What sparked the idea for NeoRay?
TN: The original idea for me came from seeing people use their cellphones to buy from vending machines in Japan. Simultaneously Alessio watched his father create a PayPal competitor and he wanted to make something more futuristic for mobile payments; he then saw a WIRED article "Kill The Password!". We compared notes and decided the timing was right for mobile payments without passwords leveraging advances in biometrics..
WB: What in your opinion is the next big thing in technology?
TN: The 15 Minute Website and Personal Website "Portfolios" - soon anyone will be able to build multiple personal sites with full e-commerce, payment systems, community, social networking, SEO, and big data analytics with no coding and very easy manipulation. Currently there is a barrier to this - you must know some coding to optimize this and it's difficult to manage multiple sites. People and companies will have a portfolio of websites and not even think about it.. Most of the tools already exist but need a lot of refinement; it will take another 2-5 years.
WB: What excites/interests you most about tech startups and what makes them successful?
Thanks to Tom Nora and BlankSpaces for a successful and fun event!
If you are interested in networking with like-minded tech enthusiasts join our meetup at Tech in Motion:Los Angeles!