Start-Up Brooklyn: I Just Got Funding, Now What?
New York City has long been a dreamscape of absurd instant wealth, but while fur has lost its sheen and steel has oxidized, the allure of easy money has yet to fade for the city's next generation of hopefuls. There are ever-growing numbers of these young and ambitious sorts who now seek their riches from behind a computer screen in a sleek converted warehouse in Brooklyn.
"In LA everyone’s got a script — here in New York, everyone’s got a business plan," said Samir Ajmera, who runs NYU Poly's DUMBO Incubator and who keeps his thumb on the pulse of New York's booming start-up scene, the second largest in the country after Silicon Valley.
"There’s been a lot of success, and it's good that that success influences others. But when Instagram gets bought for a billion dollars, they think that’s the lottery ticket they should be betting on."
Legions of basement tinkerers, mad scientists and nerdy avengers may fantasize about an office keg fridge and a buyout from Facebook with unfathomable zeros behind it, but most first-time entrepreneurs have no clue how to file their taxes, much less how to take their business from idea to an IPO, Ajmera said.
"It’s usually 20-somethings who have a good idea and don’t know where to turn," said Brooklyn Law School professor Jonathan Askin, who runs free legal clinics for new start-ups. "There's [legal issues] you can’t expect a small start-up to consider — a lot of them throw up their hands."
Even the savvy can struggle with the day-to-day operations of a growing business. Fortunately for them, Brooklyn's burgeoning tech scene is full of equally creative and ambitious organizations that can help.
One perk of running your own business is that you get to choose your own health insurance. One drawback of running your own business is that you have to choose your own health insurance — and then you have to pay for it.
Still, you and your healthy, 20-something co-founders and your high-deductible catastrophic policy are living the dream — or you would be, were it not for that really weird pain in your knee. You Googled it. Now your knee hurts and you can't sleep. You probably have cancer. Or it's nothing. Or it's cancer.
"The most common thing that we have is the ‘Is this a thing?’ call," said Dr. Cheryl Swirnow, co-founder and COO of Sherpaa, a DUMBO-based medical-consulting service that caters to the local start-up scene. "The way health care is now, doctors are only paid if you come into the office — our doctors are not paid that way. [Clients] can follow up and follow up and not have to take time off of work."
The physicians at Sherpaa help clients like Tumblr navigate the wilderness of competing health plans to find the one that fits their business. But their real innovation is a 24-hour call and email service that connects clients with doctors who can separate a real medical issue from a WebMD-induced anxiety attack and guide those who need it to a local specialist who takes their insurance.
"Google and Facebook have on-site clinics — this [clients] can use as a virtual clinic," Swirnow said. "[Tumblr] saw it as a perk and a recruitment and retention tool. Some of our smaller clients use it as a cost-savings tool, because over 70 percent of the time we’re solving the problem [without a doctor's visit]."
Quitting your day job to chase down your dream requires a certain radical independent streak, but it's still not Walden Pond.
"The value of co-working and incubators is collective intelligence, the feeling that you’re not doing it alone," Ajmera said. "Being part of the start-up community is very critical to helping you accelerate your business."
NYU-Poly's DUMBO incubator is among a growing number of city- and state-sponsored start-up hubs offering rich incentives to new businesses in Brooklyn, with creative clusters in DUMBO, Williamsburg and in the so-called "tech triangle" around MetroTech in Downtown Brooklyn.
Their aim is to be a one-stop-shop for innovators, supplying hand-selected companies with everything from fridge space to venture capital funding while helping them attract top talent, a critical step to success that few entrepreneurs consider when they're just starting out.
"Team development is the hardest thing any company has to go through," Ajmera said. "You don't just want to hire anyone — it has to be someone who gets the startup mentality, that there’s sweat equity required, that failure is a chance."
As start-ups continue to expand across the borough, Brooklyn's business community is organizing its efforts to serve them.
"DUMBO is such a densely populated neighborhood with start-ups, we kind of have our finger on who’s here and what resources exist," said Alexandria Sica, executive director of the DUMBO BID. "For companies that are not lucky enough to be part of an incubator experience we try to help them as much as possible."
Innovation is no excuse for breaking the law. Unfortunately, a lot of entrepreneurs end up learning that the hard way.
"I like to pick clients that are doing something relative novel," Askin said of the free legal clinics he offers promising local start-ups. "It’s a great idea, but for the fact that the law isn’t accommodating it, and it’s going to die because the law hasn’t caught up with the concept."
As with insurance policies and internships, intellectual property law can be confusing even for the tech world's best and brightest. Similarly, many seasoned transactional attorneys still struggle to square 100-year-old laws with radically new ideas.
"My goal is to train the next generation of attorneys capable of growing and evolving lockstep with their digital clients," Askin said of his students. "It gives my students the ability to leapfrog over the legal profession."
In the years since he started the program, Askin said he's seen the center of New York's tech universe shift dramatically.
"When I started doing this six years ago, I spent five nights a week in Manhattan," Askin said. "Now I spend four nights a week in Brooklyn, because it’s happening here."