Is #NewYork the Next Startup Land of Oz?

Angel Investor, Business Development, CEO Succession, early stage, founder, photography, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

A few things have happened recently to cause me to look a little closer at NY for the next amazing companies in Internet technology. First, a friend announced that they were moving their startup geo-lo based company from L.A. to New York; Second, I caught the recent live stream of the Disrupt NYC Hackathon; Third, A New York Times article about how NYC’s “allure” is increasing.

I know, it’s a very expensive place to live and do business, lots of traffic, etc. I’ve done it before. But if a Tipping Point could be created there it could over come the costs. Here are some of the factors:

(1) Amazing Engineering Skills – Let’s just start with the big one. There is a highly under-known fact in the software engineering world – many of the best developers and architects are not in Silicon Valley, but in the New York metro area. Between AT&T, the Financial houses and all the great local engineering schools they’re not only the best but there are a lot of them. C++ and Object Oriented design were invented at AT&T, and there are many more examples. New York developers have less attitude, more performance. They’re expensive , but a very large and strong group.

(2) Long Term Scalability – See #4 below – Over time, s a comapny tries to get into a rhythm of continuous growth, they need to develop a reliable growth model. To do this you need human resources beyond techo-nerds – sales, marketing, strategy, bus dev. These people abound in New York. You also need infrastructure and friendly government. Again, New York blows California away here.

(3) Mentor Network – Retired Fortune 500 executives, Harvard/Princeton/Yale scholars, Financial Industry experts, many successful entrepreneurs.

(4) Respect for BUSINESS – Sales, Marketing, Advertising, Strategy were all practically invented in NYC.

(5) Diversified Portfolio of Industries – The best startups draw from several disparate industries around them to be able to grow and learn and diversify. New York is the Fashion, Financial, Art, … (fill in the blank) capital of the world.

(6) Spirit – Nobody has has the same type of spirit as New Yorkers; you know this if you’ve ever been there, especially if you’ve done business there. It has some kind of magic in the air.

(7) Night Life – Many budding high technology centers aren’t the best in terms of top cultural options and the best restaurants. Well, New York… no need to explain.

I could go on, but the combination above is plenty for a startup tipping point. Just watch the Disrupt videos, they’ll give you a glimpse. I’vealways loved New York and doing business there, even though I’m a born and bred Californian. Now they’re heading toward my niche, very exciting. Maybe Zuckerberg should’ve put Facebook there instead of Silicon Valley. Maybe FB stock would be going up instead of down right now.

[Facebook Stock Could Fall Twice as Far Before It Hits Bottom]

@tomnora

It’s The Profit and Growth, Stupid.

Business Development, CEO Succession, early stage, founder, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

I’m paraphrasing a Clinton/Carville line “It’s The Economy, Stupid” in the title above. They used this to win the 1996 election by rallying people who were tired of such a weak, debt ridden economy. Sound familiar?

The Bubble Begins To Pop

Today it was announced that Betterworks is shutting down after $10.5 million in investment and 18 months of operation. Incredible but not. Around town people have been saying that BetterWorks is one of the strongest startups in L.A. They actually threw a party a month ago “The Silicon Beach 500”, celebrating the amazing growth of local startups.

Betterworks is one of many companies these days that aren’t really companies, they’re an idea, good hype, the ability to trick the public while they’re trying to work it out (We’re doing Great, We’re killing it. We’re hiring.) and the arrogance to say we don’t need any help. I could name another 20 startup in L.A. alone that are in the same boat – they are failing and will shut down eventually, but right now are promoting the facade of success and growth when they’re not either. I won’t names names, but I see their ads on the web. “we’re growing”, “dog friendly workplace”” We Love Startups!”. What about REVENUE and GROWTH and PROFIT and PREDICTABILITY? These are the definitions of Scalability.

Currently early stage startups all want the Facebook model – L U C K. Mark Zuckerberg invented something by accident that grew so far beyond his wildest dreams that it could cover a thousand mistakes. He got funded while wearing jeans and a hoodie. But eventually Facebook had to make Revenue and Profit. Be Scalable.

Most companies aren’t like that. They require good decisions and actions DAILY for YEARS.

Betterworks actually has/had a great idea, they just didn’t quite know how to properly build a business for the long term, and refused to listen to advice. I know that’s harsh, but another few hundred companies are doing the same right now. These companies stifle innovation, not promote it and teach the wrong skils – they need to be called out.

The result will be thousands of pissed off, unemployed people sitting on the beach in Santa Monica wondering what the hell happened. After the 2000 crash Profit and Revenue came back into style, spawning and reinforcing real companies like Google and Salesforce.com which are Profitable and Grow. 2013 will repeat the cycle, so let’s all change our thinking, get back to basics, put the egos aside and respect the expertise available to us.  Contact me if you’re in this camp. @tomnora

Updates on Startup Workshops and the Startup we’re launching

Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

I started a new group 2 months ago in Los Angeles – Startup Workshops – #SUWSLA to teach startup success concepts and try to launch new startups.We have over 100 members now, have had a few meetings and are in the process of launching a new startup with some of the members. Below is my update to the group today. Please feel free to join (it’s free to join) even if you’re not in LA, you can get involved in the discussion and we travel to many other places. And if you are in So Cal, please join us for one of these events. The next one is a Happy Hour Thursday night in West Hollywood.

Message to group 5/14/2012:

This group now has over 100 members, with minimal exposure – pretty cool.

I never had a goal of maximizing overall # of members, just to provide tools that can be used immediately as well as a network where members actually help each other to start and grow startups. So far, so good – we have some pretty amazing people in the group and we’ve (almost) started a startup.

HAPPY HOUR – looking forward to this, 16 rsvps so far plus a few more I know of. The goal of this is to make connections and hear about the startup we launched together in April. There’s a lot of frustration in trying to get a business going, especially when it relies on technology to succeed, so please come if you can and bring a friend who is interested in the startup thing.

STARTUP #1 “LAUNCHED” – WE’RE STILL EARLY EARLY STAGE – Last week we had our second meeting, this week we’ll have our third, with home work assignments, so it looks we may be actually doing something here. It’s an experiment so stay tuned. We have a strong team, but we’re still looking for more development skills.

NEXT GENERAL MEETINGS – I’m getting ready to announce this, leaning toward Funding The Startup as a topic. I’m trying to finalize sponsors and the venue. Not sure if we should try to launch another startup after this one, what does everybody think? Starting to look like an incubator here. Also working on an Orange County meeting for late June, details coming. Also looking at Palo Alto, Scottsdale, Boulder, Austin from inquiries there.

Hopefully I’ll see/meet you Thursday night or soon after.    @tomnora

Cloning Startups: Blackmail, Duplication, 11 Pinterest clones, Overnight Cloning.

Angel Investor, Business Development, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

Cloning Startups: Blackmail, Duplication, 11 Pinterest clones, Overnight Cloning.

And we’re not in a bubble?

Original startups are so Unoriginal that of course they’re getting ripped off…

http://j.mp/KRdQMK

TALK LESS! (or, the fine art of Sales)

Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, Tom Nora, venture

The current massive movement of new startups is an awesome moment in our time. The power of the individual is unprecedented.

But one of the problems with the new would be all-functions entrepreneur is lack of training in some of the key areas of entrepreneurship – SALES skills. The technology has changed, but the art of selling and closing sales has not. Humans make decisions by being convinced by other humans, even if the convincing is implemented by automation, data mining, and semantics. Respect the human sales skills.

In most of the pitches I get from early stagers these days, they start talking and demoing and don’t know when to quit. They keep “selling” me. This one one of the most fundamental mistakes of selling. It’s much better to say as little as possible, then shut up and listen as much as possible. Pretend you’re interviewing the other person and you want them to talk. You’ll be amazed.

When I hear a pitch, I want to ask questions, probe, dig deeper into specific subjects. If someone talks too much I often forget or lose interest in my original questions. I also feel like they must be a bit desperate. The other night someone was trying to show me a demo of their mobile app in a loud bar. Since we couldn’t hear the audio, they were trying to scream the features to me. Very sad demo.

So don’t talk so much, listen more, you’ll close more sales.  @tomnora

The Art of Sales by Alec Baldwin :

http://j.mp/ILFWw3

My Response to “The dirty secret behind the incubator boom” in #VentureBeat

Angel Investor, Business Development, CEO Succession, early stage, founder, Launch, Revenue Growth, Scalability, startup, startup CEO, Uncategorized, venture

This is great! Congrats to Mr. Dao for stepping up to this. Thx @lieslchang for forwarding. I was at that same pitch fest. This is what I call “Harvesting Youth”.

I think MVP is usually MVBS. There are so many things wrong with the current climate. I’ve written about this many times in my blog, often being called a spoil-sport. Many “mentors” are teaching young entrepreneurs the wrong things, in order to cherry pick them for their own projects. They’re being taught to recite stupid sayings like “Killing It” and “Pivot” and “Seed Round” when they’re doing none of those.

A $50K seed round? $25K?

As someone in the startup world for over 20 years it’s sad to watch what the word startup has become, sunk to. A startup is inventing, it’s UNIQUE technology, UNIQUE idea, UNIQUE deployment. A shoe store is not a startup. A startup is something to be nurtured, built, caressed, enhanced.

For the L.A. vs. Silicon Valley comparison, these mini-launches aren’t helping L.A.s reputation. There are some incredible companies growing in L.A., but way too many fake startups.

The other crazy thing going on? Now everyone says “I’m gonna learn to code”. Ridiculous.

@tomnora

 

The dirty secret behind the incubator boom