Three Thirty Five

Sometimes the hard way is the right way.

Today, we opened applications for GCT’s third class. This is our signature moment of the year, and always causes us to pause and reflect. When we started Grand Central Tech two years ago, we did so with the goal of bringing together the very best technologists and entrepreneurs under one roof and materially advancing their prospects. Part of that equation is obviously the terms, and on this GCT’s zero-downside value proposition cannot be beat. We offer a full year at GCT’s awesome offices for free – no rent and no equity. But the more meaningful part of the equation has always been to create a competitive advantage for our companies by creating a best-of-breed environment for them to operate in, and delivering the most valuable resources they need to grow in a targeted way.

GCT is sector and stage agnostic – we just want the very best companies working on the biggest opportunities. This has some wonderful advantages (versus, say, a sector specific program, or a stage specific program), namely that there is absolutely no (business level) competition among our teams, allowing everyone to work openly and share their know-how.

But the fact that not everyone fits into the same mold also means that they all have very different needs. This, and the fact that our program operates over the course of a full year, means that we cannot and will not take a cookie-cutter, one-size-fits-all approach to how we go about supporting our companies. You might say we run 18 bespoke accelerator programs every year, instead of a single one. Our model is predicated on being responsive to the unique needs of our companies. While this model may not “scale” like a software model… it really doesn’t need to. It needs to deliver real value on behalf of our companies and it needs to get better every day.

We all know that starting a company and growing it successfully is one of the hardest things a person can do; this is true both psychologically and statistically. In addition to a ton of luck, success requires an incredible support network, grit and access to key resources – including talent, dollars from customers, and (often times) dollars from investors. Stats from GCT’s 2016 class show just how successfully these resources have been brought to bear – across the class headcount has grown 74% in the last six months alone, and new funding has topped $30 MM.

As we embark on the process of bringing on board our third class, we’re proud to welcome two new team members that demonstrate our “doubling down” on our commitment to driving value to our companies.

Galina Ozgur has come on board as GCT’s General Manager. In this role, Galina will focus exclusively and constantly on expanding and leveraging GCT’s resources on behalf of our companies. This includes identifying the right experts for our mentor platform, drawing in the heft of our corporate partners, and making our companies’ time at GCT the most productive twelve months of their lifecycle. She joins us from ERA, where she ran programs for the last four years.

GCT’s new Director of Fundraising is Nelson Schubart. Nelson joins us from NYU Stern (he also ran recruiting for our last cycle and runs recruiting for InSITE Fellows) and he is dedicated entirely to working with each of our companies to make sure that they are prepared for their fundraising needs. That includes working on hitting key milestones, preparing decks, strategy and investor outreach. Consider him another full time resource to make sure that a major headache for startups no longer exists.

At risk of turning ourselves into a meme, this is a little bit of a sand mandala — the ornate, beautiful sand murals built by Tibetan Buddhist monks over a long period of time and then dismantled once they’ve been completed… to be done all over again. We’re not doing this the easy way, we’re trying to do it the best way for our companies and for NY Tech. And we wake up every day trying to do things just a bit better.

If you’re interested in having access to these resources and working with us to really take your business to the next level, apply now. We’re so excited to see what the next year brings.

Just under a year ago, the New York City Economic Development Corporation (“NYCEDC”) put out a request for proposals (“RFP”) for the development of an “Urban Tech Growth Hub”. Their goal was to find a location and an operator that could work with the City to build a premier community of tech companies specifically focused on the challenges (and opportunities) of urban living. It is with great pride that we are sharing NYCEDC’s announcement of Grand Central Tech’s having won its bid.

This is a big moment for Grand Central Tech as an organization. In a little under two years we have established ourselves as a premier accelerator program; executed a verticalized real estate model that compounds the value of our community year over year while at the same time doing away with the headache of securing reasonably sized, priced, and timed (lease tenure) real estate; and demonstrated operational excellence at a level worthy of a multi-million dollar grant from the City (please pardon the minor bragging). If you were wondering why you hadn’t heard from us in a while… we’ve been hard at work.

If you’re trying to keep score at home, this means that GCT will continue to function as an accelerator program with affiliated coworking space for graduates and also operate the Urban Tech Growth Hub, which, in the interests of super straightforward branding, we’re calling the Hub@GCT.

So what exactly is going to happen at the Hub? Good question. First, we have to build it. Thanks to the ceaselessly remarkable generosity of the Milstein family, we are currently in the process of demoing and custom outfitting 50,000 square feet of space on the floor just above GCT at 335 Madison Avenue. We anticipate the space opening in June of 2016. Second, between now and then we will hire an Executive Director to run the space (and provide said ED with funding to build a staff around him/her). Third, we have to begin recruiting companies into the space.

Broadly speaking though, we intend to capitalize on the NYCEDC’s considerable support (a minimum of $2.5MM) to go above and beyond even their expectations for the program. It is our ambition to build the Hub into a true leader, both nationally and internationally, exemplifying the importance and opportunity inherent in thoughtfully considering how and where tech can improve the urban environment. We want companies increasing the efficiency and sustainability with which we build new construction or retrofit existing construction; we want companies thoughtfully considering how IoT can be capitalized upon to improve insights around city resource usage; we want companies rethinking sewage systems to help clean our waterways; we want companies rethinking education, financial services, community empowerment/advocacy for the modern urban, environment; and on and on. We are being intentionally broad. We intend to select for excellence, not some preconceived notion of what urban tech does or doesn’t mean.

If you are reading this right now and work at a company that you think falls under the umbrella of “urban tech”, or know someone who does, please sign up for our mailing list here. We anticipate creating flexible and heavily subsidized office solutions tailor-made for companies that range in size from 2 people to 75 people, so no need to limit interest based on company size.

If you are reading this right now and think you or someone you know would make an ideal candidate for our Executive Director role, please check out the job description/application here.

It is a real honor to have won this grant and to be tasked with this challenge. A big thanks is in order to all of our friends, partners, and advisors for their support throughout.

Onwards and upwards.

Like all of you we’re sure, we at GCT are busy closing out some last items, reflecting on 2015, and looking ahead excitedly to 2016. In doing so, we thought it would be fun to asked our companies what they thought the BIGGEST thing that happened in 2015 was, and what the BIGGEST things to happen in 2016 would be. What do we mean by “BIGGEST”? We left that up to them to decide. Their responses were entertaining and insightful and often boiled down to a few major themes:

  • Space. We all got to see Pluto, found out there is water on Mars, are watching a fully privatized space race heat up between the likes of Virgin, SpaceX and Blue Origin, and NASA is now accepting new astronaut applications. These developments, coupled with the growth in cyber warfare and geopolitical competition over higher-orbit satellites all point to space becoming more and more interesting.
  • The Paris Climate Change Accord. Most notable perhaps was the US’ involvement within it and the seeming, final “turning of a corner” with regard to American public opinion on the issue.
  • ISIS and the Migrant Crisis. In particular, folks remarked on ISIS’ impressive usage of technology and the Migrant Crisis straining the definition of the “nation state.”
  • American Politics. The sustained popularity of Donald Trump has to say something about the Republican party/state of the country, and the high likelihood that a major political party will run its first female candidate at the top of the ticket are certainly big developments. Not to be forgotten in a wild year – the Supreme Court ruling in favor of gay marriage.
  • Artificial Intelligence. AI is firmly on everyone’s radar now. OpenAI has captured our community’s attention in very short order.

Not surprisingly, predictions for 2016 mirrored notable developments of 2015. Our portfolio companies were also quick to point out that their inevitable meteoric success will be a pretty big deal in its own right. While we certainly share the enthusiasm and optimism, we thought we’d stick to the more broadly notable predictions:

  • Space (again). The prediction we saw here a couple of times was that alien life will be confirmed to exist or have existed at one point. The practical ramifications of such discoveries would likely reverberate across society, challenging foundational arguments of a number of organized religions.
  • Deflation/Correction of the Tech Bubble and increase in M&A activity. The venture investment market seems to be in “pause” mode. We’ll leave it to other blogs/prognosticators to opine on 2016, but our founders did have some fun predictions for M&A:
    • Google buys Yahoo or Twitter
    • Apple buys Ford
    • Salesforce buys Slack
  • Climate Change. Paris Accord aside, we’re likely to start seeing more effects to go along with the particularly balmy December we’ve been experiencing.
  • New Science. CRISPR is gaining increasing attention for its potential to cure disease (thumbs up) and modify genetics (uncertain which direction to point thumb). The disproving of one pillar of Einstein’s theory of relativity – namely that “spooky action” at a distance has been proven true – should have a number of implications, perhaps most notably on the emerging field of quantum computing.
  • Global Turmoil. Several of our founders fear another major conflict. Antarctica seems to be capturing folks’ attention, too. Others see opportunity in disruption – most notably new remittances solutions to handle the more than $600 Bn predicted to cross borders to developing nations in 2016.
  • The Next US President. But of course, this is never not a big deal.

As for GCT itself – we spent 2015 growing into our mandate. We have 8 truly incredible corporate partners, and 6 amazing growth partners. We have an incredible portfolio of companies building not only fantastic, ground-breaking technologies but also a vibrant, supportive, inclusive community. We take not only immense pride in the work we’ve been able to do over the past year, but also feel immense gratitude. This is fun. And we have a number of exciting developments already lined up on the horizon for 2016 so stay tuned…

Last, so as not to lose focus on what really counts, here’s wishing you and yours a Happy Holiday Season and all of the best in the New Year.

On Tuesday, October 27th GCT hosted the first 2XinTech Conference. Judging from the response we generated, we think we’re onto something…

  • We received nearly 1,000 applications for spots;
  • ~350 of some of the top women in tech from around the country ended up attending the conference
  • 22 of the top VC’s in the country were in attendance, nearly all of which sent female representatives.

In the week since the event, the feedback from the participants has been resoundingly positive, and we could not be more proud (and relieved!) to have thrown what so many are telling us was a worthwhile event.

It would be impossible to sum up all the wisdom exchanged throughout that day, but we did want to share just a few thoughts/soundbites from each of the discussions here. This is a longer post, but worth the time if you want to get a feel for what was discussed. All “quotes” are not literal quotes; they are paraphrased.  

Good friends, Susan Lyne and Kara Swisher kicked things off with a great back and forth on today’s VC climate. In commenting on issues that plague the VC industry, Susan noted that “we can’t expect people who’ve always been investing a certain way to change. Instead, we are going to see a new type of investor funding a new kind of entrepreneur.” Susan’s firm, BBG Ventures, is certainly a good example.

Marleen Vogelaar, one of the cofounders of Shapeways now CEO of Ziel discussed the promise of startups for helping people find purpose in their work, suggesting that, “if you’re not 100% aligned with the mission of your company, you should probably leave.”

Alexis Maybank spoke next, reflecting on her experience as the founding CEO of Gilt. She talked about the nervy moment when the Gilt site first went live, remembering and reciting the exact cities from which Gilt’s first 5 orders were placed. Her talk zeroed in on cultivating culture: “You can’t dictate culture from up high – get various people involved so you can scale.”

Tammy Han (First Round Capital), Kathryn Minshew (TheMuse), and Milena Berry (PowerToFly) all weighed in on “Hiring the Best” in a panel moderated by Sara Holoubek (Luminary Labs). There were a number of pearls of wisdom in this session, but one that particularly caught our ear was Kathryn’s questioning of the “hire fast / fire fast” mantra, suggesting instead that “firing someone is awful: hire thoughtfully, and start people on contract before transitioning to full employee status.”

Maren Kate Donovan gave what we’re sure all would agree was one of the more revealing talks of the day, reflecting on her experience building Zirtual up to great heights, only to wind it down herself upon deeper inspection of a few core issues. She touched on an issue we discuss quite a bit at GCT — In some regards working at a startup is liberating, challenging people to see what they’re really capable of and ultimately to stretch how they define themselves. The dangerous flipside of that coin is when folks find themselves executing serious tasks (financial management, etc.) that they aren’t trained to handle. We actively try to identify these types of issues with our companies at GCT and lay them bare so the right expertise can be brought in, whether from our partners (Decision CFO, WSGR, Eisner Amper, etc.) or others.  

Kate Ryder, CEO of Maven spoke about the future of women’s health, noting that women make 80% of all healthcare decisions in the US but also, disturbingly, have been woefully underrepresented in the research and policy agenda.

Camille Ricketts from First Round Capital moderated the panel on User Acquisition & Growth with Hayley Barna (Birchbox), Amanda Bradford (The League), and Chantel Waterbury (Chloe+Isabel) – a key topic for any startup obviously. One particular gem was Hayley Barna’s suggestion that “not just you, but everyone at your company should know your top 3 KPIs and stay focused on them”.

Kelly Peeler, CEO of NextGenVest, revealed top trends and behaviors of the next generation of consumers around money and building trust in her 10 minute talk. Generation Z will demand products that save them time and are highly customized.

WayUp’s CEO Liz Wessel spoke next about the meteoric success of WayUp and how, to keep her finger firmly on the pulse of things and guarantee a certain level of experience, she handled every single customer service ticket herself in the early stages.

AppNexus’ General Counsel Nithya Das moderated everyone’s favorite panel topic, “Fundraising for Pros” with Angela Ceresnie (Orchard Platform), Alexandra Wilson (Glamsquad), Alisa Volkman (Babble), and Tania Yuki (Shareablee). Alexandra pointed out how knowing the calendar of your business can be the key to building the ethereal but all-important “investor interest momentum”. If you know when your sales/numbers are going to be high or low, you can plan your investor outreach accordingly.

Judith Spitz of Verizon, the foremost sponsor of the day’s events, gave a riveting talk about why diversity in tech matters pointing out how, if Kurzweil and other futurists are right about technology being a core feature of human evolution, there is tremendous danger in that technology being developed primarily by one sex.

Our last panel of the day on “Selling into the Fortune 500 / Working with Big Brands” featured three of Grand Central Tech’s key corporate partners. Microsoft’s Tereza Nemessanyi moderated the discussion, with L’Oreal’s Rachel Weiss and Goldman Sachs’ Caroline Arnold functioning as panelists along with Janet Balis (EY Advisory) and Daniella Yacobovsky (BaubleBar).

Last, but certainly not least, Kara Swisher gave the keynote address. Kara had been MC’ing throughout the event offering her trademark, hilarious commentary throughout. But it was in her keynote that she really drilled in and offered some of her own observations on the evolution of the tech sector broadly, and the role of women within it specifically. Some particularly notable observations included, “The men I meet in Silicon Valley are more confident, the women are often more competent”. She also noted how, in an era of political dysfunction and paralysis, it is the business community that is best positioned to advance culture in America. Accordingly, she challenged the women in the room, and women in general, to go out, start businesses, and be a part of changing American culture writ-large. We couldn’t agree more.

It was a fantastic day and we are deeply thankful to all of our speakers and attendees for making it so, and to our corporate partners for making the day possible. It’s also clear to us that we should keep building on the momentum of 2XinTech and will begin hosting 2XinTech Talks – a bimonhtly meetup – at GCT. Keep an eye out for those. We’re also establishing a 2XinTech listserve. If you’d like to be added to it, please drop us a line.

Onwards and Upwards.

Today, we are proud to announce that Verizon Ventures has joined Grand Central Tech as one of our amazing Corporate Partners, and that Dave Famolari has joined our Board of Advisors. Dave brings to the table years of investing and operational experience that will continue to inform how we deliver value to our startups. And Verizon has always been an important player in the tech ecosystem, and especially now, in light of its recent AOL acquisition, is poised to be all the more pivotal to the entire community.

You can check out the press release here, but we’ve used this development as an opportunity to continue to evaluate what our corporate partnerships mean and how, together, we can drive value to the community of entrepreneurs writ large by leveraging the collective strength of all of our partners , including Microsoft, L’Oreal, Google, IBM, Intuit, Goldman Sachs, JP Morgan Chase and Pepsi.

On the face of it, we don’t know of a more impressive grouping of true leaders in their industries. To unpack that a bit, it’s not easy to appear “cutting edge” while also being an industry stalwart. There’s something seemingly incongruous there and contrary to the inertia of tech news press anointing the next big thing every five minutes. But that’s baloney. GCT’s class of corporate partners are demonstrating leadership and courage in acknowledging both the pace of innovation and a changing appreciation of work-life rippling through the entire economy in the wake of the burgeoning tech sector. We’re giving each of our partners a mechanism by which they can bring their heft to bear to the benefit of our companies without in fact being overbearing as many single-company sponsored accelerators/incubators often appear/are.

There’s often a lot of discussion on the difference between the two coasts, and where the best place to build your company is. These partnerships serve to highlight one of NY’s major competitive advantages: the density of major corporations, and the velocity of commerce, depth of expertise and talent that they bring along with them.

Together, every day, we’re driving sales growth to our startup companies through key introductions and accessibility, cutting the red tape around procurement processes. And it is by placing key experts from within our partner organizations alongside our portfolio companies to help guide them and champion them to the market that we’re able to do so. We’re proud to have such a great lineup, and proud to be a part of making NY one of the best places to build and grow your company in the world.

Applications for our 2x in Tech: Female Founders Conference close today. Apply to join all of us there.

If you’ve ever taken a cab from SFO to downtown San Francisco, you’ve undoubtedly seen the slew of startup and tech related billboards dotting the highway. They tend to range from the boring, to the funny to the woefully tonedeaf (and this isn’t a commentary on ANY of that). That you can’t go 300 feet without seeing one in SF isn’t a new phenomenon.

However, the fact that in NYC, you can’t get into a cab, hop on the subway without seeing an ad for HandyBook, Casper, Postmates, AirBnB or the like is indeed a new one. All of a sudden, subway stalwarts like Dr. Zizmore and 1-800-MARGARITA have real competition (though this probably says something about the shifting demographics and concerns of the city itself). It’s to the point where we’re pretty sure we can plug “SUBWAY” into the promo field for just about any startup website and get 20% off for anything from a rented bike, to a house cleaner, to a website for our small business, to nachos from Yankee stadium.

If two of the key drivers of growth are awareness and customer acquisition, then there may be no more captive audience than a packed subway — the last bastion of nonexistent cell service where discourse, let alone eye contact, amongst fellow citizens is tacitly forbidden. So, it’s to the rafters we look, and it’s increasingly startup ads we find (or mediocre poetry – though we commend the effort by the MTA).

But the fact is that many of these ads go deeper than just being a simple tool for customer acquisition — they’re also a declaration aimed at attracting the great talent that travels along these routes every day. This is reflective, of course, of the influx of dollars into the space. However, this battle to attract top talent at hefty costs is also reflective of the very real status of the engineer as rock-star (saying “rock star” in that context also makes us want to throw up…but bear with us).

When we say “rock star” we don’t mean it in the same way as “ninja!” or “Maven” or whatever other stupid name a corporate “that’s not like the other corporates” (or the dreaded “startup within a big company”) throws into their job listings. We do mean that in this economic environment, the only area of secular growth is coming from the tech sector and ecosystem. Engineers (and founders) are quite literally the only group of people that can take nothing…and turn it into something of (sometimes) immense value. Whereas at one point true-blue rock stars like Van Halen used to be able to demand a bowl of M&Ms with ABSOLUTELY NO BROWN ONES, now, it means that we provide our teams with ergonomic keyboards and chairs, game and nap rooms, and all types of awesome perks.

But the truth of the matter is that despite what the comment section of the NY Times says, these aren’t just the trappings of a “new bubble” or spoiled millennials — it’s the incrementally modest comfort, tools and protections afforded to a group of individuals from whom wildly outsized returns are expected and generated.

Making sure that we provide our entrepreneurs with everything they need to succeed and feel like this is their home is one of the key ways we’ve found to help build community and drive productivity at GCT.