With that in mind, we pulled a few folks from the New York tech community together last week for a dialogue with a key policymaker in Washington, D.C..
A few interesting themes emerged from the audience. There was wide consensus that New York had an unprecedented opportunity to emerge as a global center for tech and media innovation and that technology startups could be the largest part of the New York City economy in 10-15 years. As the opportunity has shifted from the infrastructure to the applications, the critical success factor for startups has shifted from electrical engineering to social engineering. While New York has good engineering schools, they have never been regarded as the best. New York has, on the other hand, always been a Mecca for people who want to influence other people through art, literature, design, or marketing. Those people seem to relish the diversity and richness of life in New York. Everyone acknowledged that this new opportunity was not created by government, but that public policy over the next few years could either accelerate the momentum or stifle it.
Several issues were presented specifically:
1) Net Neutrality - almost everyone in the room worked for startups that depend on direct access to consumers over the internet. With the shift to broadband most of us now depend on only two providers for access to the internet. There was a general concern that access providers are motivated to discriminate among applications, and now with deep packet inspection technology, they have the means. There was specific concern that without the appropriate structural separation, the merger of Comcast and NBCU would limit startup's access to consumers. Ultimately, such discrimination by an access provider would stifle startup innovation.
2) Immigration - Many of the entrepreneurs in the room were immigrants. All of them wanted access to the best talent regardless of where that talent was born. The group recognized the significance of getting an immigration reform bill passed in the first half of next year, where a key provision of that bill would be that any foreign student who graduated with a Masters or a PHD in Science, Technology, Engineering, or Math (STEM) would automatically be given a green card.
3) Consumer Protection on the Internet - The entrepreneurs in the room were concerned that hasty and uncoordinated intervention by different government agencies could stifle innovation. The conversation was especially pointed around the issue of privacy. In the end, I think everyone agreed that a framework was needed to provide the predictability entrepreneurs need to operate and the flexibility they need to innovate, while still protecting consumers.
4) Patent reform - there was a funny moment when I could not recall the list of policy issues I had prepared and was reaching for my notes when several people in the audience shouted patent reform. This has become a huge issue that disproportionally hurts New York startups because they are more likely to create applications than infrastructure. Almost no one in the audience would object to a patent being granted in biotech, greentech, or materials science, but software and business method patents have become a barrier to innovation not a boon. Many people in the room have had to fight off patent holders wielding very broad software patents. Often the startup had never heard of the patent holder because they operated in entirely different markets (if they operated at all). In the most egregious cases, startup companies who could not afford to fight, have had to settle and as part of the settlement have licensed their technology to the patent holder to enable them to do the thing they claim to have invented.
Together these issues, and a few smaller ones (open government data and lower net worth requirements for angels) make up a "web startup innovation" agenda. This is not the same as an innovation agenda. Many government policies intended to increase innovation are focused on big company, big science, and big budget research projects. It is not even a startup innovation agenda, because other startups, in energy, or biotech, for instance, may have a different view on some of these issues. Web startup innovation is different. It is capital efficient, emergent, organic and decentralized. It is also what is happening in New York. Our challenge is to make sure our politicians understand the value being created by web startups and their unique policy needs.
We need your help in two areas. First, we need to define a "web startup innovation" policy agenda. We seemed, last week, to have consensus on the points above, but we need to hear from more web entrepreneurs about how public policy affects their ability to innovate. What are four or five things that government can do to help and another four or five things government might do to hurt this important sector? We could use your help compiling that list. Second, we need to become more effective policy advocates. The group last week represents the most important growth sector in the New York economy. Collectively, those 40 entrepreneurs are likely responsible for more net new jobs in the city of New York over the last two years than any single company, so we are important, vital and growing. Our challenge is to figure out how to organize and concentrate our advocacy of a "web startup innovation" policy agenda so that we can help our representatives in government help us.
]]>I couldn't be more excited.
Personally, there's the simple fact that I'm moving from San Francisco to New York City. Professionally, instead of building software and designing web apps as I've previously done at places such as Trilogy, Tribe.net and Cisco, I'll be focusing on other relevant functions and learning to look at things through a different lens.
Moreover, it's going to be fun working with the team at USV, the talented entrepreneurs and employees within the portfolio companies, and the fine people who visit this blog. The Internet is just getting started, and these are the people who are creating new value and inventing new experiences.
I look forward to meeting you all. You can also find me on Twitter.
]]>
]]>
So we are excited to announce our latest investment - Work Market. Work Market is exactly what it sounds like, a marketplace for employers and workers to connect to get work done.
Work Market is the latest startup founded by serial entrepreneur Jeff Leventhal. Jeff has been working in this sector for the better part of twenty years and Work Market is his fourth startup. We love working with serial entrepreneurs with a deep passion for a particular domain. That's Jeff and his passion is bringing transparency and efficiency to work markets.
Work Market is expanding their team and is looking for A+ development and product management talent (Java and PHP) in the Greater New York area; click here to see the company's job openings.
So that's what Jeff and his founding team will be building with Work Market and we are really happy to be along for the ride. Also along for the ride are our friends at Spark Capital who invited us to this opportunity. We'd like to thank them, especially Mo Koyfman who will be joining me on the board.
]]>Apple, Facebook, and Twitter are all companies operating in a global economy under the laws of one or more countries, but thinking of them as profit driven entities, making things in competition with other companies doesn't really help. A for profit company is expected to maximize returns for its shareholders. In that light, Facebook's move to control the economic activity on its platform through Facebook Credits makes perfect sense, but I was not convinced it was the right thing for them to do.
As I thought about it, it became clear that web platforms really don't make much. Instead, they create the conditions that encourage others to invest their time and energy to create useful services. The value of Twitter is not in the software that runs on their servers; it is in the content that 180 million people contribute to their network - same with Facebook. Many would argue that Apple makes things, but even there, the full experience of the iPhone has a lot to do with the 200,000 applications that others created to run on the device.
A lot of people have begun using the term ecosystem to describe these big platforms. That captures their decentralized, emergent character, but ecosystems do not have a central point of control. Apple decided to eliminate third party analytics between one release and the next. That doesn't happen in an ecosystem. The right analogy is a government.
Facebook is a government. Facebook's users are citizens, and Facebook's applications developers are the private companies that drive much of the economy. Apple. Twitter, Myspace, Craigslist, Foursquare, Tumblr and every other large network of engaged users (including some services of Google) plays a similar role. We have always tacitly acknowledged this. We talk about these networks as communities, communities have governments.
It is easier to make sense of this spring's events if you think about large web platforms explicitly as governments. Was Apple's move an unwarranted extension of state power into what had been private sector analytics, or a necessary and restrained regulatory constraint on companies that may not have been acting in the citizen's interest? Did Twitter's announcement of its own URL shortener suggest the state planned to move into an area better left in private hands or are they simply providing basic infrastructure like a highway - a natural state monopoly that benefits everyone.
Once you start thinking about large web platforms as governments, the logical question is what kind of government are they. One thing is for sure - none of these platforms are democracies. They are oligarchies controlled by founders, investors or shareholders. That may not be at all bad. As long as citizens (users) can move freely from one government to another with little switching cost, there is no reason to burden these polities with the inherent inefficiencies of popular democracy. But that does put a special premium on emigration policies and property rights. Do I own my data, can I export it freely? It also suggests that large networks that have strong network effects may someday need other incentives to act in the best interests of their citizens.
So how do the events of this spring look through this lens?
Apple looks like a monarchy. The monarch got angry when he found out that many of the applications that ran on the iPhone collected device information which developers use to improve the reliability and performance of their apps, but that that same information allowed analytics providers to access state secrets, like the existence of a new device - the iPad. He reacted impulsively, as monarchs sometimes do, and banned all analytics providers, without having an alternative in place for developers. Apple argues that the new terms of service for OS 4 are designed to protect the privacy of users but if you saw Steve Jobs react to the question from Chris Fralic at the All Things D conference, it's pretty clear what drove the new terms of service.
Facebook looks a little like the Russia of Vladimir Putin. Facebook was originally a state economy. The vast majority of the services were provided initially by Facebook. Later, they liberalized their economy with the introduction of the Facebook API. That unleashed a torrent of investment and innovation, but also some bad behavior and unsavory characters. Now the state is reasserting control over the economy with the introduction of Facebook Credits. They would argue this is for the benefit of all citizens and well behaved private companies, and that a common currency and a state controlled monetary policy will benefit everyone. Others might say using the currency as a mechanism to tax everyone in the economy at a 30% rate is aggressive in light of what it actually costs to run this particular state.
Twitter, by comparison, seems to have a more limited view of state power. They can still appear arbitrary and capricious, especially to companies who make URL shorteners, or iPhone clients, but they did not use state power to ban anyone, or to extract a tax. They may well introduce a currency in the future or more restrictive terms of service, but they seem from a distance (we are investors but I am not on the board) to have a qualitatively different relationship with the companies in their economy and the citizens in their state.
In the end, the big networks on the web will all have to find a balance between state power and private initiative. Despite Craig's progressive personal politics, Craigslist lives the credo "a government governs best that governs least". They make very few changes to the site, and then, only when users ask for it. Their business model is restrained. They only make money in a few of their 455 cities and only on a few types of postings. The business model emerged as the result of user requests to stop abusive automated reposting by real estate and employment agencies. This restrained approach created a phenomenally profitable business. It also has led to conflicts with their host (real world) governments. A number of headline grabbing attorneys general want Craiglist to assert more state power to eliminate some uses of the service they feel do not fit with broader social norms.
If you accept the analogy of web services as governments, the example of Craigslist offers a couple of insights. First, it's possible to be fabulously profitable as a restrained government, but perhaps at the expense of top line revenue (or the government's share of total GDP). And second, that no web service is an island. Web services will compete with each other for the time and attention of their users and for investment from the private sector (applications developers), but they will do this in the context of their host government's who are also competing for tax revenues and private sector investment.
So as you watch the large web services evolve, think about how they are balancing the relationship between the state and the private sector? What does Facebook's introduction of Facebook Credits say about its monetary policy? What is Apples foreign policy? Do they act unilaterally promoting their own proprietary standards or do they act multilaterally embracing international standards? What is Twitter's industrial policy? Do they invest in state owned services or encourage decentralized economic development? The choices these platforms make reveal a lot about who they are, and ultimately how well they serve the companies operating in their economies and the citizens who live there.
]]>My name is Christina, and I graduated from Stanford with a BA in Economics and an MS in Management Science and Engineering, a program that combined industrial engineering, human-computer interaction, and product design. Most recently, I worked on projects for telecom and financial services companies as a consultant with the Boston Consulting Group in New York. Prior to BCG, I worked for Deutsche Telekom/T-Mobile in Berlin on a small team that uses design research to develop new mobile services. Much of my work focused on the digital norms and social etiquettes that are forming around new devices and online services.
While in Berlin, I began working with FrontlineSMS:Credit, a startup that offers a platform to facilitate money transfers via SMS between financial institutions and their customers. Like many mobile banking platforms, FrontlineSMS:Credit is focused on projects in the developing world and capitalizes on two powerful disruptions: the emergence of mobile banking and the expansion of financial services to people who previously had no access.
I've also been fortunate to spend some of the last few years living and working in East Africa and Southeast Asia. Seeing technologies adopted around the world has provided one lens through which I view the disruptions caused by new technologies.
I'm excited to explore these ideas, as well as many others, at Union Square, and I'm very much looking forward to continuing this conversation with all of you.
]]>Christina can be found blogging at Kidogo and tweeting.
]]>
]]>
We want to thank everyone who participated in the process for their time and insights. We learned so much, ranging from what recent College graduates feel about the changes at Facebook to what the General Manager role might entail.
We remain committed to developing an ongoing relationship with those who have expressed an interest. This will be one of the first things for the General Manager to work on, so stay tuned.
]]>We are now in the process of inviting candidates for in-person interviews. We are still figuring out the exact details, but it looks like we will be meeting with about 25 candidates (15 for the Analyst position and 10 for the General Manager position).
Our goal is to have everyone either scheduled or notified that we unfortunately cannot meet them in person by early next week. In the meantime, we want to thank everyone for their contributions, including the many comments on the hiring blog posts, the great ideas discussed in phone screens and in follow-up emails. We have learned a great deal from all of you about this process and the positions!
]]>
]]>
As evidence of this success in action, Brad Burnham recounted to me a very telling story about the growth and popularity of Stack Overflow: Brad was flying back to New York on a flight and seated next to an iPhone developer. The subject of Stack Overflow came up and the developer said the site had quickly because his #1 resource for finding answers to the questions he encountered in Objective C programming. But, he was having some trouble building a reputation on the site because all the good questions in his domain of expertise were getting answered too quickly. He said he felt like the loser on Jeopardy, who could never hit the buzzer in time to answer the question before his fellow players. When Brad heard this he knew that Stack Overflow had hit a rich vein of talent in building their community.
The founders were impressed by the growth and quality of the network and thought the underlying system they built could be used in other technical and niche verticals. They built Stack Exchange as a platform for rolling your own Stack Overflow-style site and have seen some encouraging success in niches like advanced Mathematics research. So, the conclusion was to raise venture capital in order to scale the platform across a variety of new verticals. Clearly, we agreed that was a good idea.
We at USV are delighted to be working with Joel, Jeff and an impressive roster of angel investors and advisors on this opportunity. Brad will be joining the board of directors, and we look forward to working together to help Stack Overflow and the Stack Exchange network of sites grow over the coming years.
We managed to complete a first pass of all 616 applications (359 for Analyst and 257 for General Manager). As a next step we will conduct 75 telephone screens (47 for Analyst and 28 for General Manager).
We will contact everyone and let them know where they stand in the process by the end of this week. There is no particular rhyme or reason to the order in which we will be contacting folks as the applications have been shuffled around a number of times.
Narrowing down this amazing field of candidates required a lot of tough and often subjective choices. As a result we are sure that some folks that should be getting a call won't and vice versa (we just don't know who!).
As several of you had suggested, we have some visualizations of the applications -- kindly provided to us by the team at Jobscore.
First, geographic distribution. Here are two maps of the US showing where applications came from (apologies to the international candidates we are omitting from this).
For the Analyst position
For the General Manager position
Second, wording. Here are two word clouds based on the cover notes.
For the Analyst position
For the General Manager position
We recognize that all but two applicants will end up getting less than they hoped for out of this process. To that end, we would love to make interesting opportunities available to all who applied and plan to encourage our portfolio companies to look at our candidate pool once we have completed our process. We are hoping that we can use Jobscore for that. If you don't want to participate in Jobscore matching or any other matching, please make sure to opt out of the Jobscore network if you haven't done so already during your application.
In light of the volume of applications, we are also planning on using Jobscore to communicate the status of your application, including to those who we are moving out of the process. We realize that getting a "form email" from us is not ideal and we are looking at ways we can continue to engage with everyone who has participated in this process.
We are big believers in the power of networks and we are delighted to have the opportunity to add over 600 new people to our network here at Union Square Ventures. We haven't determined the ideal way to offer everyone the opportunity to join the Union Square Ventures network but we are going to figure one out. Stay tuned.
]]>