I am truly blessed to have been part of the Hot Potato team that was recently acquired by Facebook. It was an amazing experience and I’m excited for the entire team and the amazingness they’ll be building at Facebook. I learned a lot from Justin Shaffer and the rest of the talented team that graced us with their presence at the old Hot Potato office in Williamsburg, now the Makery.

Over the past week, I’ve been asked two main questions, which I’ll answer in this post: 1) Why’d Facebook acquire Hot Potato, and 2) What are you doing next?

I’m not in any liberty to answer the first question knowledgeably (other than what you read in the press), but the main thing I learned from my experience at Hot Potato is that none of this happens overnight.

Entrepreneurs like Justin Shaffer of Hot Potato, Scott Belsky of Behance and Dennis Crowley/Naveen Selvadurai of Foursquare have been “hustling non-stop” at this for the past 5 + years. So, when you read that Hot Potato has been acquired by Facebook, Scott Belsky has a national bestseller, or that Foursquare has recently closed a $20M round. This has been years in the making.

Justin Shaffer was the Senior Vice President of New Media at MLB for 7+ years. He helped build up MLB into what it is today. And from there, he’s been thinking about this location/activities/presence problem for years, which he’ll continue solving at Facebook for over 500M+ daily users. There’s nobody else in the universe that can solve this problem better than Justin Shaffer.

Same thing for Dennis Crowley and Naveen Selvadurai at Foursquare. I don’t need to repeat the story behind Dennis and Dodgeball but Naveen was the Lead Architect at Socialight, which is when he started thinking about the intersection of mobile, locations and “checking-in”. It’s no surprise that Naveen’s experience at Socialight helped with the success of Foursquare as a location based business.

Scott Belsky helped grow the Pine Street Leadership Development Initiative at Goldman, Sachs & Co, which was focused on organizational improvement. Even before that, Scott wrote his college thesis on organizing the creative community at Cornell. From there, he interviewed hundreds of the most creative professionals in the world to help him understand the problem he was solving through Behance. This is a problem he’s been thinking about for the past 5+ years.

All of these entrepreneurs have been solving the same problem for years. They’ve been working non-stop to get to where they are today because none of this happens overnight. A lot of new entrepreneurs think they can quit their job at XYZ company and launch a successful tech startup because it’s the hot thing to do right now, but that’s usually a recipe for disaster.

So, that leads me to where I am today. After working with Scott Belsky at Behance and Justin Shaffer at Hot Potato, I feel that it’s my time to follow in their footsteps. It’s been a life-long dream to start a for-profit tech company with a social mission at it’s core. I’ll be launching an education/learning startup (similar to this TEDTalk) here in New York City, which I believe is going through it’s own technology renaissance.

I’ve always been fascinated with how to flip the traditional notion of education on its head because I believe the biggest problem in our society is that people stop learning when they graduate from school, which is a social problem we’re aiming to solve. We’ll be in stealth mode until we launch, but always looking for talented people to join our product team (design, development, marketing), so please reach out if you’re looking to make our world a better place.

Relentless focus is the key to success for any new business idea. With that said, I’ll be stepping away from professionally competing at the poker table and stepping down from All Day Buffet and The Feast Conference (this year will be my last one!) so that I can focus all of my time and energy on my new social venture. I’ll be passing the baton to Jerri Chou for The Feast, and I’m confident she will create even more social impact through what we’ve already created together.

Over the years, I’ve made a ton of mistakes but I’ve learned that as long as you always morally do the right thing, maximize the happiness of those around you, and stay passionate about what you do – things will always work out for the best.

I’m truly blessed. Thank you to everyone that have mentored me along this journey. Until the next one…

“Good fortune is what happens when opportunity meets with planning.” – Thomas Edison

Recently, I gave a talk at the Harvest Hobby event about poker, risk taking and decision making. While giving the talk, I slowly realized that no one in the audience really cared about the intricate strategies behind  poker. Terms like “check-raising” and “sucking out” didn’t really resonate with a crowd of non-poker players. Then I quickly realized that the audience related to the real life examples that I gave near the end about decision making and relationships (DUH!), which is what inspired this article I’m writing tonight. (Also, I can’t take credit for the thoughts below as everything I’ve learned were based on mentoring from Annie Duke & Rafe Furst). So, here we go!

Wikipedia defines decision making as “the mental processes resulting in the selection of a course of action among several alternatives.” Pretty obvious right? Poker is a game of decision making under conditions of uncertainty, which is caused by chance and imperfect information.

The higher the uncertainty, the higher the risk, so your goal is to reduce uncertainty.

There are 1,326 distinct possible combinations of hole cards your opponent might be holding. If you can narrow that to a range between 10-20, you’ve allowed yourself to make a better decision by reducing uncertainty. You’ll never *know* what they’ll have, which is why poker is mathematically unsolvable, but as long as you make good decisions in the long run, you’ll be a winning poker player.

In life, your goal is to reduce uncertainty and connect the quality of your decisions with the quality of your outcomes by taking calculated risks. You want to take calculated risks when the upside outweighs the downside.

If you’re completely unhappy with your 9-5 job right now, you’ll still be unhappy 25 years down the road doing that same job on the brink of retirement. This outcome will not change unless you identify what you want out of life, and start taking some calculated risks to get you there. Think about what you’re missing out on life by not taking some type of risk right now. The opportunity cost of possibilities is tremendous!

Taking calculated risks has nothing to do with “losing” because you can always learn from your “losses” and mistakes. Your goal at this stage is to increase your confidence and risk tolerance to try bigger things later.

You can do this by taking small baby steps while minimizing the downside. This could be as simple as talking to a stranger in the street who could end up being your wife, or traveling to an exotic location for the experience. This is why some poker players are comfortable buying in for $100, while others buy-in to a poker game for $1M. They slowly built up their confidence and risk tolerance to get to that level.

So, let’s say you want to be an entrepreneur. You can start by researching, developing a plan, launching a prototype, etc to build your confidence and risk tolerance to swing for the fences later. The goal of your business plan isn’t to convince others that you business is going to work. It’s to convince yourself that your idea is going to work.

Success throughout your life comes from making good decisions by reducing uncertainty and taking calculated risks. The more risks you take in your life, the more chances you’ll have to maximize your happiness and be successful. So what are you waiting for? What risks in your life are worth taking right now?

“There are no original ideas. There are only original people.” – Barbara Grizzuti Harrison

A couple of weeks ago, I met with a passionate entrepreneur who pitched me an idea that he was working on for the past couple of months. He was in the “feedback” stage of his idea, which is when entrepreneurs tell everyone they know about their idea to hone down their pitch, and gather feedback to fill holes in their idea. As we talked about his idea, it resembled another idea that was already launched, which I briefly mentioned. Surprisingly, his enthusiasm went from being extremely excited to utterly disappointed within a couple of seconds. He couldn’t believe that another company was executing something similar to his idea.

At this stage, most entrepreneurs will dismiss their idea because they believe “it’s not original or innovative” enough if someone else is doing it. Most entrepreneurs fall into the trap of killing off their ideas way too early before exploring all of the possibilities that can lead to true innovation.

In poker, there are simple rules you can follow to put yourself ahead of 90% of other poker players. One of my favorite rules revolves around removing any attachment to the value of poker chips. When playing poker, the chips in front of you have absolutely no value, they’re just a medium for you to win chips from other poker players. Most players don’t play their A-game because they’re trying to “make the money” and don’t want to risk losing all their chips (which they end up losing anyways).

Last weekend, Rafe Furst told me a story about Dewey Tomko who is an amateur golfer and professional poker player. Dewey has issued a $1M challenge to any golf pro to a round of golf, which he usually wins for two main reasons. First, none of the professional golfers are used to betting $1M of their own money, so they succumb to the pressure of hitting clutch shots (they are too attached to the amount of money on the line). Secondly, Dewey doesn’t think about the $1M stakes as he’s become immune to attaching himself to the value of chips or bets. Framing the way you play poker with this simple rule can increase your odds of being successful.

I’ve followed a similar rule to frame creativity and innovation: For every idea you come up with, there are probably ten other people in the world executing that same idea.

Once you just embrace this rule, you won’t worry too much about what other people are doing. Just think of it as part of the process of being an entrepreneur. Look at Coke & Pepsi, which are almost identical products but both billion dollar companies. There’s no such thing as original ideas, only original people. Don’t fall into the trap of killing your idea off too early because it can change, morph, and turn into something truly amazing.

Do you have a billion dollar startup idea? Is it going to be the next Facebook, Paypal, or Google? If you’re an entrepreneur looking to raise capital, it’s almost impossible to raise money for a “small” idea that you might find amazing, game-changing, and innovative.

And you know what? It’s not the end of the world if your idea isn’t going to be the next Groupon.

A couple of nights ago, I had dinner with Nick and Thompson who told me about movie directors and their “calling cards” (if you don’t have friends outside of the tech/startup industry, you should start widening your circle because the more people you know outside of your industry, the higher your chance of being innovative and gauging good ideas).

A lot movie directors have “calling cards” which are small budget, creative, and game-changing films that garner interest from major studies to land the big film. The film they really want to do. The big kahuna.  But, in order to land the big film, they need to prove themselves with a film that provides them some exposure, credibility, and experience. You’ve seen this with Quentin Tarantino and Reservoir Dogs, Kevin Smith and Clerks, & Darren Aronofsky and Pi. All of these initial films led them to where they are today.

A lot of entrepreneurs default to thinking about launching the next billion dollar idea (mine is starting an online bank).  The only problem is that most new entrepreneurs don’t have a “calling card” that can help them get their big startup idea off the ground. The next time you have coffee with a successful entrepreneur, ask them about their “calling card”, or better yet, ask them about their past failed ideas. Every entrepreneur has at least one.

Time is your biggest expense, so start your project/idea sooner than later, but don’t worry about launching the next big thing. Put something out there because you’ll learn a lot whether it succeeds or fails.

In the meantime, keep a big startup idea spreadsheet or diary. Who knows? If your “calling card” takes off, you might have to close your eyes and pick one of your big ideas sooner than you think.

Thanks to Nick and Thompson for inspiring this article.

“You are the average of the 5 people you spend the most time with” — Jim Rohn

Are entrepreneurs born, or are they made? A recent Tech Crunch article argues that entrepreneurs can be made based on a $50M research project conducted by the Kauffman Foundation.

“The key is to provide education at “teachable moments” — when the entrepreneur is thinking about starting a venture or ready to scale it.   Highly motivated individuals with “scalable ideas” can be recruited to be entrepreneurs and to be made successful, by surrounding them with a network of other experienced entrepreneurs; sources of money; and mentors.  It is probably education, exposure to entrepreneurship, and networks that led these people to pursue the entrepreneurial path.”

This reminds me of the entrepreneurial story of Blake Mycoskie, who is the Founder of Tom Shoes.  He started his entrepreneurial career at 19 when he started a laundry pick-up business in college. From there, he started an outdoor advertising company, television network, and technology company that provided drivers’ education for teenagers.  These were successes and failures before he started Toms Shoes.  There are two things to note with Blake.  1) He started his entrepreneurial career at 19 (he wasn’t born into an family of entrepreneurs) and 2) all of his companies were stepping stones to Toms Shoes (he failed and learned a lot of times before he was finally successful).

Another great story is the one behind the Paypal Mafia.  What’s interesting about the Paypal Founding Team isn’t what they did at Paypal, it’s what they did after they sold the company to Ebay.  They’ve launched everything from Youtube to LinkedIn to Kiva to launching rockets into space.  How insane is that?  And why?

“You never think it could happen to you,” says Hurley. “But seeing Peter and Max and the guys come up with ideas and seeing how to make things work gave me a lot of insight. You may not have a business degree, but you see how to put the process into effect. The experience helped me realize the payoff of being involved in a startup.”

This story is repeated over and over again. There’s the Google Mafia (another article), 351 Massachusetts Mafia in Boston, and our very own About.com Mafia in New York.

So, one could argue that entrepreneurs are not born, but maybe made over time.  Maybe it’s nurture,  and not nature? And if it’s nurture, is there a way to structure a fund around the concept of “smart money”?  Recently, there have been a lot of great funds that have started in the NYC startup ecosystem including Founder Collective and Lerer Media Ventures, which offers “smart money” to entrepreneurs (investment, experience, knowledge, contacts, etc) as well as financial investment.

Is there a way to create a fund that doesn’t invest any funds? Is there a way to focus on the entrepreneur while traditional funds focus on the company? Can a new fund invest knowledge, experience, networks, and ideas to making entrepreneurs better?

As ideas become cheaper and easier to implement in the tech space, entrepreneurs don’t need millions of dollars to get something out the door. Yes, they’ll still need money to scale and grow  when they gain traction and success,  but what about those entrepreneurs at that “teachable moment” when they just need some guidance?

Here’s how a fund that doesn’t invest funds could work:

1) It would consist of a “class” of entrepreneurs (around 3-4) and mentors (around 3-4).
2) The mentors would all be successful entrepreneurs that have grown and sold their companies ($50M+). The entrepreneurs would be the next up-and-coming class that will probably grow and sell their companies for $50M+. ($50M is some arbitrary number I picked. It could be any measure of success.)
3) The mentors would act as overall advisers for all the entrepreneurs (taking a minimal equity stake), and the entrepreneurs would have a peer-to-peer mentoring network with each other (with a cross-equity option pool for the startups). The mentors can offer advice and knowledge on everything from hiring to personal life/work balance to work cultures. The entrepreneurs would also have access to each other.
4) The overall fund would take a small percentage of equity from the startups.

So, to paint a even more realistic picture.  Here’s an example of how one class would look like. The mentors could be Caterina Fake (Hunch & Flickr),  Scott Kurnit (About), and Scott Heiferman (Meetup) in NYC. The entrepreneurs could be Naveen Selvadurai (Foursquare), Andrew Kortina (Venmo), and Justin Shaffer (Hot Potato).

A very strong thing to note is that this fund would be focused on “nurturing” the entrepreneur versus the actual company. The problems with the actual company would still go to the angel investors, board, and VC’s that invested money into the company. The problems s/he faces with being an entrepreneur would be directed towards this fund (mentors and peer entrepreneurs), with the equity coming out of the personal founder stock.

What do you guys think? Would you take investment from this new fund?

Even more importantly, “if you are the average of the 5 people you spend the most time with,” who are the 5 people you are surrounding yourself with today?

2010 is finally here and I think it’s going to be one of the best years yet.  I have friends traveling around the world, raising money for their startup, and others questioning conventions and the status-quo (hopefully to launch their own startup)!!  As we move into 2010, I thought I would share what I learned in 2009 from the many mistakes I made (there are many) and the mistakes I avoided. My goal is to provide some guidance for younger entrepreneurs because these are all things I wish I read a year ago.  I hope you find some of these useful.

1.  Focus on focusing. I spent the majority of 2009 “incubating” startup ideas and spreading myself way too thin.  Chris Dixon wrote about the trap that many entrepreneurs face with incubators.  ”The appeal is the idea that you can do not just one startup but many, and just focus on the “fun stuff” in each one (idea generation, product features, strategy, etc).”

In 2009, we launched By/Association, TBD, and Lovely Day while growing The Feast and All Day Buffet from the previous year. (You read that right.  I was involved with 5 different companies.)  When things weren’t going as well as planned with a new venture, we just launched a new one.  We fell into the “that’s a great idea, let’s launch something and see what happens” trap.

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I’m actually as proud of the many things we haven’t done as the things we have done.” — Steve Jobs (h/t Caterina Fake)

If I could this all over again, I would have said NO to the majority of projects and ideas. By spreading myself thin over many different projects and startups, By/Association never got the love it needed to take it to the next level (Since then I have stepped down from the other startups to focus in 2010). I learned that success equals 1% idea and 99% execution and perspiration, so focus on the 99%.  Saying no is more important than saying yes.

2.  Biggest cost is time, not money.  My favorite two articles from 2009 were from Caterina Fake titled “Working Hard is Overrated” and “Working on the Right Thing.”

“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard. — Caterina Fake”

Working on the wrong things are very, very, very costly for entrepreneurs.  In 2009, I found myself running around like a chicken with his head cut off.  I read almost every article on “re-iterating fast” and how “business plans were dead” so I took the advice and went with the flow and planned accordingly.  It ended in disaster for me.  I ran around in circles. It was like I was driving 90 MPH on the highway without a final destination.  Looking back, I realized that I could have efficiently spent that time moving the ball forward for a plan with an end-point.

Having an end-point is essential for your business and personal goals.  Yes, it can change.  And yes, it probably will change.  But thinking about a strategy will set you in a direction to achieve your goals and milestones.  By committing to something in the future, decision-making in the present becomes much easier.  It’ll save you money.  And make you even more.  That’s a win-win in my book.

3.  Trust you gut.  Timing is everything. We launched By/Association in July of 2009, and it’s been growing and gaining traction every month, which is really exciting.  We have some big plans for 2010 which resulted from two major decisions we made:  1)  We turned down a small amount of investment money; and 2) we didn’t touch the website for nearly 6 months other than fixing bugs and changing marketing copy (this was on accident because of lesson #1).

As many of you know, I play a lot of poker and part of being a good poker player is trusting your intuition.  Most amateur poker players don’t follow their gut, and lose a lot of money in the process.  At the end of the day, the timing wasn’t right for By/Association.  We turned down money because we didn’t know where we were going. There was no plan.  The product/market fit was nowhere close to 40%.  And most importantly, my gut told me to sit back and wait for a better spot to “go all-in.”

If we took the angel investment to build what I thought should have been the next version of By/Association, we would have wasted a lot of time (refer to lesson #2) and built something that would have ultimately been thrown in the trash.  Rather than re-iterating fast, quick, and deploying new versions every 2 weeks; we decided to think about the overall bigger picture by observing trends and talking to our members.  This resulted in a better concept that solved all of the major holes in the older version.  How do I know this will work? Because my gut’s telling me that the timing is right to build the next version, achieve product/market fit, and scale up.

4.  The power of time off.  Stefan Sagmeister recently spoke at TED about the power of time off.  ”Every seven years, designer Stefan Sagmeister closes his New York studio for a yearlong sabbatical to rejuvenate and refresh their creative outlook.”

After producing and curating The Feast in October, I took the next month off to really think about my 5-year plan.  Let me rephrase.  I took the next month off to commit to something for the next 5 years of my life.  Making this type of commitment takes a lot of self-reflection and soul-searching which can only happen when you take a 50,000 feet view as a lens for the future.  It won’t happen if you have a lot of the same day-to-day distractions i.e. running your business.

I spent some time in Maine and New Orleans thinking about all the opportunities that I could take in my life.  I talked to all my mentors, advisers, and friends (who were very supportive so thank you).  And I emerged with a clear understanding and direction for 2010 and beyond.  Taking time off is essential in making the right decisions, which leads to my next lesson.

5.  Always make the best decisions.  Lastly, a real quick story to wrap things up.  Earlier in the year, I had breakfast with Annie Duke (professional poker player) who told me a great life lesson and story around sunk costs.  In the most basic terms, the concept is used in making good decisions (which is the secret to the success of professional poker players).  Wikipedia defines sunk costs as “costs that cannot be recovered once they have been incurred.”

So, for example, if you’re waiting in line at the grocery store, and the line next to you moves faster, most people won’t hop over to the faster line because of the time they “invested” in their current line.  This makes absolutely no sense as anything invested in your past shouldn’t influence your future.  Another example revolves around relationships.  Most people stay together because they’ve “been together for the past five years.”  Again, people shouldn’t make decisions based on past investments.  And if you’re wondering how this applies back to poker.  Once you make a bet and put your chips in the middle, that money is no longer yours (so you shouldn’t make bad decisions on getting it back).

Instead, you should look toward the future and look at all the different paths, opportunities, and possibilities presented to you right now.  The sky is the limit.  Everything in your past gets you to this point but it’s up to you to make the best possible decision on which path you want to go down. Because at the end of the day, if you make the right decision for yourself, there’s no way that it’s a bad one.

As we move into 2010, I hope many of you swing for the fences because entrepreneurs can and will change the world.  There’s nothing wrong with making mistakes.  It’s a rite of passage to becoming successful.  And to close, remember, “there are no ceilings.  Only the sky.  The sky is the limit.” – Lil Wayne (via Notorious B.I.G.)

“You can tell by my attitude that I’m most definitely from New York
Concrete jungle where dreams are made of
There’s nothing you can’t do
Now you’re in New York
These streets will make you feel brand new
Big lights will inspire you
Let’s hear it for New York, New York, New York!”

Just in case you didn’t get the memo; the New York startup scene is taking off. Both Fred Wilson and Chris Dixon wrote on the New York Startup scene, and I thought I would add in my thoughts from what I’ve observed over the past couple of years.

“Greenwich Village 60s … Venice Beach 70s … London 80s … Silicon Valley 90s … Blogosphere 00s … NYC now…” — @RafeFurst

What sets New York apart from the rest of the world?  New York attracts the most creative, ambitious, and hard-working people into one extremely diverse city.  There’s an energy here that can’t be replicated anywhere else in the world.  Mix that with a great nightlife, culture, and a city that never sleeps — you can see why the New York startup movement has been picking up momentum.  I believe that NYC tech startups have a better eye for design, user experience, business models, and creating companies that solve real problems (and not launching more “me-too” companies).  And the icing on the cake?  The companies coming out of NYC right now are just… sexy.  There’s no other way to explain it.

Need proof?  Here’s a list of all the awesome things happening in the Big Apple.  (You should press play on the Jay-Z “Empire State of Mind” video for the full experience).

UPDATE (December 22, 2009): Just to clarify, I did not write this article as a “NYC versus the world” thought-piece. I wrote this piece to give a 50,000 feet view of what’s happening in New York City.  There are many other cities with a thriving startup culture such as Boston, Silicon Valley, Seattle, New Orleans, Boulder, Los Angeles, etc. Each city is unique in its own way, and each city will continue to pick up momentum and be successful. For example, Post-Katrina New Orleans is starting to become the hub for social entrepreneurs. That’s very powerful. They’ll uniquely define themselves for the history books. If we take what works in each city, this is something that can be replicated in every community around the world. Entrepreneurship is vital for innovation, and can work everywhere from New York to Africa. (Endeavor.org is a great example of a non-profit organization building entrepreneurial hubs around the world to lift communities out of poverty).

COMPANIES
I put together a short list of some of the more prominent startups and established companies in New York. There are hundreds and thousands of other companies that can make up this list, so please add missed companies to the comments section below.  Apologies if your company, organization, or initiative was left off this list.

One thing I’ve noticed over the past year is that NYC’s version of Silicon Valley will be Soho, which has been primarily associated with the fashion industry.  The combination of the falling price of leases stemming from the 2008 financial collapse, and the dropping rent (all the bankers moved out of Manhattan); there have been dozens of creative startups opening up office in Soho.  I’ve listed the ones I know in the list below.

1. 20×200 sells art for everyone at ridiculously affordable prices (Soho).
2. Aviary makes creation accessible to artists of all genres.
3. Behance organizes the creative world to make their ideas happen (Soho).
4. Betaworks is an internet media company.
5. Blip.tv is the next generation television network (Soho).
6. By/Association is a private service for new introductions to remarkable people (Soho).
7. Bug Labs is a modular, open source system for building devices.
8. Boxee is the best way to enjoy entertainment from the Internet and computer on your TV.
9. Carbonmade helps you build and manage an online portfolio website (Soho).
10. ChallengePost is a marketplace for challenges.
11. Clickable is an online solution that makes creating and managing online advertising simple and effective.
12. College Humor is the best humor site on the internet.
13. Designer Pages is a free social application for finding products in architecture and interior design.
14. Drop.io allows simple real-time sharing, collaboration, and presentation.
15. Etsy is the world’s most vibrant handmade marketplace.
16. Foursquare gives you and your friends new ways of exploring the city (Soho).
17. gdgt is the new consumer electronics site by the guys behind Engadget and Gizmodo.
18. Harvest allows simple online time tracking, timesheet, and reporting (Soho).
19. Hello Health helps doctors communicate, document, and transact with their patients in person and online.
20. Hot Potato allows you to find events, join the crowd, and share the experience.
21. Hunch helps you make decisions and gets smarter the more you use it.
22. Kickstarter is a funding platform for artists, designers, filmmakers, musicians, journalists, investors, and explorers.
23. Knewton allows students to prep for GMAT & LSAT with online courses guaranteed to raise scores.
24. Livestream is the most powerful live broadcast platform on the internet.
25. Meetup helps groups of people with shared interests plan meetings and form offline clubs in local communities around the world.
26. OMGPOP is the #1 place to play free multiplayer games with your friends.
27. Parachutes aims to reinvent how people teach and learn.
28. Quirky is a social product development company.
29. SeamlessWeb is the fastest, easiest, and smartest way to order food delivery online. 
    
30. SecondMarket brings together buyers and sellers in an independent marketplace and auction platform for illiquid assets.
31. Squarespace is a fully hosted, completely managed environment for creating and maintaining a website, blog or portfolio (Soho).
32. Stocktwits is a realtime stock tips community.
33. Tumblr is the easiest way to blog.
34. Vimeo is a respectful community of creative people who are passionate about sharing the videos they make.

PUBLISHING/EMAIL COMPANIES
New York City has always been the epicenter of the publishing and advertising industries.  And that hasn’t changed with this list of innovative companies changing the publishing and email businesses.

1. Daily Candy is a handpicked selection of all that’s fun, fashionable, food related, and culturally stimulating in the city you’re fixated on.
2. Flavorpill is a daily guide to quality cultural events in New York City, Los Angeles, San Francisco, Chicago, Miami and London.
3. Gawker is an online media company (Soho).
4. Gilt Groupe offers luxury designers and fashion brands at prices up to 70% off retail. 
   
5. Huffington Post offers syndicated columnists, blogs and new stories with moderated comments.
6. One King’s Lane offers exclusive sales on designer home accessories.
7. Tasting Table is a free daily email about the best of eating and drinking culture.
8. TBD is a free email newsletter that delivers one world-changing idea and one collective action to improve our future.
9. Thrillist’s daily emails sift through the crap to find the newest and best the Nation is hiding (Soho).
10. Urbandaddy brings you the single thing you need to know every day about your city.
11. Very Short List is a collection of distinct, free, daily e-mails that each recommend one must-see gem a day.

VENTURE CAPITAL
Every city needs a strong VC and angel community to support everything from seed to established companies.  New York City has a strong list of investors supporting the entrepreneurs.

1. First Round Capital is a venture capital firm dedicated to helping talented entrepreneurs build remarkable companies.
2. Founder Collective is a seed-stage venture capital fund, built by a collection of successful entrepreneurs.
3. Polaris Venture Partners invests in seed and early stage companies and in growth equity companies with substantial operating income.
4. Spark Capital is a venture fund focused on the conflux of the media, technology, and entertainment industries.
5. RRE Ventures focuses on expansion stage information technology ventures.
6. Union Square Ventures is an early stage venture capital firm.

CO-WORKING SPACES
Every new startup needs a place to work out of when they first get started.  NYC has launched some new co-working spaces in the past year.

1. Dogpatch Labs is an open source startup lab.
2. Green Spaces is work space to launch green entrepreneurs.
3. New Work City is a community coworking space in Manhattan.
4. Rose Tech is an incubator and co-working space in Madison Square Park.
5. Sunshine Studios is where startups grow up.

EVENTS
Free events are essential to networking, culture, and innovation.  Here’s a list of some of the premier events in NYC.

1. Brooklyn Future Meetup is designed as an authentic off the record forum for discussing what the world might look like in 30+ years.
2. Internet Week is a week-long festival of events celebrating New York’s thriving Internet industry and community.
3. New York Entrepreneur Week (NYEW) is the largest entrepreneurial movement through New York State.
4. New York Tech Meetup is an event  where entrepreneurs can demo something cool to New York’s tech community.
5. NextNY is a fun way to connect both socially and professionally with up-and-comers who have a stake in the future of tech and new media in New York City.
6. Social Media Week identifies and advances the use of social media in the corporate, public and non-profit sectors.
7. The Feast is a series of programs addressing social innovation and new ways to make the world a better place. 

INNOVATIVE NON-PROFIT ORGANIZATIONS
What’s a community without charity?  These charities are re-inventing philanthropy.

1. charity: water is a non-profit organization bringing clean and safe drinking water to people in developing nations.
2. Echoing Green provides seed funding and support to social entrepreneurs with bold ideas.
3. Endeavor transforms the economies of emerging markets by identifying and supporting high-impact entrepreneurs.
4. Freelancer’s Union is a national membership organization that’s free to join.
5. Pop!Tech is a network of remarkable people, extraordinary conferences, powerful ideas & innovative projects that are changing the world.
6. StartingBloc educates, empowers, and connects emerging leaders to drive positive social change across sectors.
7. TED is a small nonprofit devoted to Ideas Worth Spreading.

GOVERNMENT
Every city needs the support of the government and politicians.  The City of New York has made numerous commitments to support entrepreneurship.

1. Mayor Bloomberg outlines 11 initiatives to support New York City’s financial services sector and encourage entrepreneurship.
2. NYC Seed funds seed-stage technology entrepreneurs in New York City.
3. New York City Investment Fund identifies and supports New York City’s most promising entrepreneurs in both the for-profit and non-profit sectors.

EDUCATION
New York City has access to some of the top schools in the country for technology, design, and entrepreneurship.

1. NYU ITP is a two-year graduate program who mission is to explore the imaginative use of of communications technologies.
2. NYU Reynolds Program for Social Entrepreneurship is designed to attract, encourage, and train a new generation of leaders in public service.
3. Parsons is the premier design and art school.
4. Pratt Institute offers studies in architecture, art and design, and information science. 
   
5. SVA is a fine art and graphic art school in New York City specializing in art education for aspiring professional artists.

FUTURE OF THE NYC STARTUP MOVEMENT
All of these things are essential to a thriving startup movement.  Established companies, investors, education, talent, events, etc.  But, what are some other things I’d like to see in 2010 and beyond to support the NYC startup movement and take it to the next stage?

1. Government support. The City of New York should set something up similar to the initiatives of the Greater New Orleans, Inc. GNO, Inc has setup a venture capital match program, which provides for a match investment ($1 for every $2 up to $5MM) for qualified venture capital funds.  The also have angel investment tax credits, which redeems 50% of the initial investment to investors in the form of LA income tax credits.  Both of these initiatives can spur the investment community in New York City.  
2. Summer incubators. To support younger and inexperienced entrepreneurs, programs such as Y-Combinator and TechStars should launch in New York.  Venture Capital firms should put up the capital to support these programs. This will attract some of the world’s most talented entrepreneurs to NYC while providing them an education and experience that will be vital to their success.  And hopefully keep them here in New York.
3. Mentorship programs. The gap between new and successful entrepreneurs needs to be closed. Informal and/or formal mentorship programs should start for the up-and-coming entrepreneurs in New York City.  Why not lend your expertise and experience to the next Steve Jobs when you’ve already sold your company for $500M?  Pay-it-forward, please.
4. Access to capital needs to stay open.  Another way to make this happen is through pitch events such as TechCrunch50 but our version in New York City.  Even if none of the companies get funded, it allows entrepreneurs and investors to network, meet, and hopefully close some deals for investment in 2010.  It would be even sweeter if the City of New York provided a tax credit for these investors (refer to #1).
5. More failures and successes. In 2010, New York City needs to see more failures to show the world that we’re willing to swing for the fences.  And we need to see more successes to set the bar higher for all of the startups launching and growing.  Fail harder.

I often get asked, “what’s happening in New York” and now I can finally zip over this link to answer that question.  If you live in another city, take note on what’s happening in NYC right now.  It’s a good case study to adopt and practice in your own community.  And to quote Jay-Z, “You can tell by my attitude that I’m most definitely from…. Let’s hear it for New York!”

Feel free to add suggestions, ideas, and thoughts to continue this discussion in the comments section below.

I’ve been thinking a lot about investing into startups (if you couldn’t tell by my last post).  Most entrepreneurs spend the majority of the time thinking about how to get the highest valuation for their startup, and giving the investor the minimum amount of equity.  For the past couple of weeks, I’ve decided to look at it from the lens of an investor, and how to structure a fair deal for both sides.

I believe the future of business will revolve around collaboration, creativity, and innovation.  So, why not create a model around it?  I’ve been following companies like Betaworks, Idealab, and Virgance, which are small conglomerates that incubate and invest into different startups.  They have the smartest people in a room working on different startups together.  The key words here are “smartest people working together.”

I’ll start explaining my new investment concept with this Venturebeat article I read about the Founder Institute:

Specifically, the institute asks participating founders to contribute warrants providing the option to purchase 3.5 percent of the company at the time of its first funding. Now the institute is setting aside 10 percent of that warrant pool for investors — the first 20 investors in Founder Institute startups will each get 0.5 percent of the total pool of all companies.

It got me thinking.  Why not create a startup revolved around working together and the shared economy?  Why not create a startup that incubates and launches other startups?

Let’s say 2-3 talented entrepreneurs are in the incubation/idea stage of their business, and they decided to create an incubation/labs company together.  (This is how Max Levchin created Slide and Yelp out of his incubator: MRL Ventures).  Each entrepreneur would be the CEO of their own startup, but would share the resources of the most talented web developers and designers.  So, the development team would be working across 2-3 startups versus working on just one startup.  I believe this is essential for creativity, innovation, and problem solving — taking a step back from a project.

The CEO’s of each startup would support each other with strategy, connections, etc.  Everyone would be incentivized to work and help each other because everyone has equity in the overall company, which is diversified and spread through the three startups.  They’ll also be an environment that allows them to test, kill & improve various ideas while working with the smartest & most creative people in the business.

Let’s say 20% of the company would be set aside for investors.  The investors would invest and own 20% of three different startups.  If any of the startups take off, the startup would break off and turn into their own LLC or Corporation.  Having a flexible structure at the beginning allows the CEOs to really focus on killing and improving ideas.

It’s a win-win situation for the entrepreneurs and investors.  The entrepreneurs own a piece of each other.  The investors own a piece of the pie too.  It’s kind of like putting together the ultimate all-star basketball team (Kobe, Lebron, Wade, CP3).  Would you invest into the founders and startup team behind NY-based Kickstarter, Foursquare, and Hot Potato before they took off?  I certainly would..

Someday in the distant future, I would love to be an investor.  I’m a huge supporter of nurturing entrepreneurship (tech+social) in New York City, and would love to see more startups launching in that space. Let’s say I started a small $50M fund, I would split my investments over the following: 1) investing in companies; 2) investments to support the NYC startup movement; 3) donating to innovative non-profits; and 4) investing into people.

The companies listed below are in no particular order, and I selected them based on innovation/idea, management team, opportunity, and “excitement.”  Or in other words, whether I get excited by the idea or not.  The reason I have “excitement” listed as one of the filters for companies is because I would love to spend time with each of the companies and lend my ideas, creativity, connections, etc to make their ideas and companies more successful.

New York Based-Companies

1. Kickstarter is a new way to fund creative ideas.  Kickstarter is a funding platform for artists, designers, filmmakers, musicians, journalists, inventors, explorers…
2. Behance is a company that organizes the creative world to make their ideas happen.
3. Harvest allows small businesses to track time, log expenses, invoice clients, keep track of account receivables and revenue.
4. Foursquare gives you and your friends new ways of exploring your city.
5. 20×200 (Jen Bekman Projects) is a website for art collectors. The site releases at least two new limited-edition prints a week: one photo and one work on paper.
6. Hunch is a decision-making site that gets smarter the more it’s used.
7. By/Association is a private service for personal introductions to remarkable people.  (Disclaimer: I’m Co-Founder)
8. Eat.ly allows you to track your meals and discover new social food via images.
9. TBD is a free email newsletter that delivers one world-shaking idea and one collective action to improve our future.  (Disclaimer: I’m Co-Founder)
10. Hello Health is an innovative new primary care practice platform that helps doctors communicate, document, and transact with their patients in person and online.
11. Quirky is a social product development company.
12. Boxee is the first social media center, an open-source software platform for entertainment across computers or traditional living room devices.
13. Carbonmade helps you build and manage an online portfolio website.
14. Frogtek is an early-stage social venture that will bring the IT productivity boom to micro-entrepreneurs in the developing world.
15. SHE “is developing a franchise model to manufacture and distribute eco-friendly sanitary pads using local materials, such as banana fibers. The aim is to sell pads for 30 percent less than existing brands, while creating a profit so that the model can be self-replicating.”

Outside of NYC Companies

1. Vittana is an early-stage startup bringing student loans to the developing world through the power of person-to-person microfinance.
2. Fitbit accurately tracks your calories burned, steps taken, distance traveled and sleep quality.
3. 23andMe provides genetic testing for over 100 traits and diseases as well as DNA ancestry.
4. NAKEDpizza’s mission is to make an unhealthy and popular fast food healthy, raising consciousness about nutrition, health and the food supply, as well as the social impact and obligations of modern business.
5. Full Tilt Poker is the fastest growing online poker room.

Investments to Support NYC Startup Movement

1. I would invest into incubator programs like the Y-Combinator, Unreasonable Institute or Techstars version based in NYC.
2. I would invest into world-class events like The Feast (Disclaimer: I’m Co-Founder) or TEDxNewYork (if there is one).
3. I would invest into co-working spaces such as New Work City and Green Spaces.

Investments in Innovative NYC Non-Profit Organizations

1. charity: water is a non-profit organization bringing clean and safe drinking water to people in developing nations.
2. Echoing Green invests in and supports outstanding emerging social entrepreneurs to launch new organizations that deliver bold, high-impact solutions.

Investments into People (Superstars)

Rafe Furst wrote an article on “investing into superstars” where investors would buy a percentage of someone’s expected lifetime earnings.  I followed up with a whole article on why the idea is so revolutionary (and light years ahead of its time).

Imagine you are in your early twenties, out of college several years and your best friend, who recently came into an inheritance of $300K cash told you they could think of no better way to invest the money than to invest it in you.  Not the company you started, not as a loan, but invest it in YOU, as if you were a startup.  In return your friend said all they wanted was 3% of your gross income for the rest of your life.  Do you think you would take it?

Now what if your friend said that they didn’t care what you did with the money or how much you made each year.  If you wanted to sit on a beach in Nicaragua learning to surf, go work in the Peace Corps, stay at home and do your art projects, whatever you want it would be fine, just as long as you made sure to always pay the 3% of whatever you make (as little as that may be).

And finally, what if your friend said you could buy out of your obligation at any point for $6 million in cash.  Then would you take the deal?

I would do the same for this investment fund.

So, all in all, these are the companies, ideas, and people that would make up the portfolio of my investment fund.  Obviously, the fund would make these investments to turn a profit and get a nice return.  But, I also believe in supporting the greater good — supporting the startup movement already happening in New York City.  Who would you add to the list?

Imagine you are in your early twenties, out of college several years and your best friend, who recently came into an inheritance of $300K cash told you they could think of no better way to invest the money than to invest it in you.  Not the company you started, not as a loan, but invest it in YOU, as if you were a startup.  In return your friend said all they wanted was 3% of your gross income for the rest of your life.  Do you think you would take it?

Now what if your friend said that they didn’t care what you did with the money or how much you made each year.  If you wanted to sit on a beach in Nicaragua learning to surf, go work in the Peace Corps, stay at home and do your art projects, whatever you want it would be fine, just as long as you made sure to always pay the 3% of whatever you make (as little as that may be).

And finally, what if your friend said you could buy out of your obligation at any point for $6 million in cash.  Then would you take the deal?

I know what you’re thinking.  It’s completely insane right?   Words like indentured servant and CRAZY are probably popping in your head right now.  But, let’s push aside all the logistical numbers, equity, buyout multiples, and think about the overall concept for a moment.

How would you live your life differently if you didn’t have to worry about finances for the next year or two?

Would you still be working your job?  Would you travel the world?  Would you take a year off like Stefan Sagmeister to figure your life and how you plan to make a huge impact in the world?  Would you spend a year launching your idea and collecting investment?  What would you really do with the freedom?  That’s the BIG idea here.

Rafe and Phil are investing into people to help them figure that out.  And they are betting that you will figure it out sometime in your lifetime, and buy out of the contract.  Financially, they benefit because you buy out out of the contract.  Idealistically, they benefit because they helped you find your way in life.

For the investee, you just accelerated something that would have already happened.  So, let’s say you’re going to be a millionaire when you’re 40, but you had to work 10 years to get comfortable to take “that leap.”  Now, rather than hitting it when you’re 40, you hit it when you’re 35.  The 5 years you save in time can be tremendous.  You could turn that $1M into $10M.  You could take those 5 years off.  You could do whatever you wanted.  The opportunity cost is tremendous.

Let’s take it a step further.  Let’s say that someone started a $100M venture fund to invest into people, not ideas.  How would that revolutionize the investment community?  How many smart, creative, innovative, talented people would not climb the corporate ladder, or work for investment banks, law firms, etc?  How would you pitch yourself to investors over your lifetime?

Would I take the investment if it was offered to me?  I have absolutely no idea.  But it has definitely changed the way I think about my future.