Goldmark: New York could become fertile ground for entrepreneurs
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Good things are happening in New York.
Last spring I wrote about the Entrepreneurs Roundtable Accelerator, which assembles and shepherds start-up entrepreneurs. I returned to ERA headquarters on 29th Street in Manhattan this week to see how it's doing.
You can feel the energy the minute you walk in. Jammed into tight quarters are intense conferences, impromptu hallway conversations and young entrepreneurs speaking earnestly into mobile phones.
ERA puts together classes of 10 new start-up companies twice a year and coaches them in skills like building strong products and marketing strategies. At the end of the four-month program, ERA presents them to potential investors to seek funding.
By now three classes have graduated, the fourth is about to and the fifth class is signed up. In an astounding example of the famous dynamic "Build it and they will come," there was enormous demand from the outset: 600 start-ups applied for the first class, more than a thousand for the fifth. Of the 30 start-ups in the first three classes, 28 achieved market-generated financing beyond the sweat equity, family contributions and the ERA initial investment -- which is now $40,000 per start-up, up from $25,000 in round No. 1. Just one of the original start-ups imploded and another is in the ICU -- over all a remarkably low failure rate.
What do some of these firms offer?
One called StrayBoots.com offers the individual consumer a guided tour of U.S. and U.K. cities right on a mobile phone. If you click on New York, you'll find more than a dozen specific tours within New York City, at $5 to $20 per tour. Rather than book with a tour company or lug a guidebook, consumers and tourists can choose their own plan, download it onto their cellphones, and use it as much or as little as they want while they're visiting.
Another company targets small businesses, which spend a lot of money (often as much as $25,000 per year, for even the smallest) to manage routine business documents. Seamlessdocs.com reduces paperwork and will keep documents electronically in cloud storage for a small fraction of that amount. There are customized packages for everyone from dentists to fraternities.
The three founders of ERA -- Jonathan Axelrod, Charlie Kemper and Murat Aktihanoglu -- spend their time coaching, comforting, advising and stiffening spines, assisted by more than 200 mentors who volunteer to coach individual companies.
What have they learned?
Axelrod says that ERA is adding value to the start-ups along three principal axes: teaching the entrepreneurs how to improve their products, coaching them in building effective marketing strategies, and helping them develop compelling business stories and exposing them to the right funders.
I asked if there were any sobering lessons. It turns out that no matter how hot the start-ups are, the process takes longer than is generally understood. A lot of the "overnight sensation" stories we hear only track success from the moment of liftoff. But usually there are long and difficult months or years on the runway, fueling up or taxiing into position before the start-up can even attempt flight.
The ERA story and others like it are a huge success story for New York. More than 400 investors came to inspect the offerings of the third class. This is how enterprise, comparative advantage, business edge and growth engines are built. This is how everything from Google to Facebook started out. Route 128 in Boston and Silicon Valley in California pioneered high-tech start-up booms and powered their states to long-term growth. Now it's happening in New York. This is how you help give a new generation the technical and business tools to be among the most innovative and successful on a fiercely competitive planet.
Peter Goldmark, a former budget director of New York State and former publisher of the International Herald Tribune, headed the climate program at the Environmental Defense Fund.