A Glimpse Inside NYC's Startup Scene
In the years since the financial crisis, New York has become a startup magnet. Here's a look ata diverse mix of Gotham entrepreneurs.
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Five years since the financial crisis, New York City has blossomed into a startup magnet. (Please see related story, "Big Ideas in the Big Apple.")
Thanks to an influx of capital and entrepreneurial resources, the Big Apple has seen a rise of new ventures spanning a host of industries. Many have been born in the city's accelerators and incubators. Still others have benefitted from New York's tech-savvy labor pool.
Here's a look at some upstarts groomed in New York's fast-paced business community.
Cathy Carroll contributed to this report.
Flint and Tinder
Jake Bronstein was not happy with his underwear. In fact, he wasn’t satisfied with the quality of any men’s underwear in America, most of which is made in other countries, such as China, Indonesia and Thailand. So in 2011, he founded Flint and Tinder, with a pledge to make noticeably superior, affordably priced, American-made men’s underwear, and help revive the American cut-and-sew industry in the process.
Within 30 days of posting a video on Kickstarter, Bronstein pre-sold $291,493 worth of underwear. He’s since raised $850,000 from other investors, including Tony Hsieh and Fred Mossler of Zappos, David Tisch and Lerer Ventures.
The company’s five employees work out of an office in Chinatown (ironically), which they share with another online startup. The underwear and packaging are made in Brooklyn, North Carolina and Nevada. The biggest benefit of launching a company in New York is “we are constantly surrounded by inspiration,” says Bronstein. “As for cons... we would never speak badly about our city, but the rent is too damn high.”
This isn’t Bronstein’s first startup. He and a business partner previously created Buckyballs, magnetic desk toys that had been a big hit but have now ceased production due to child-safety complaints.
Location: Union Square
Entrepreneurs Robert Johnston and Andrew Reid kept hearing from big brands that digital advertising wasn't paying off – that the brands wanted deeper connections to consumers. So Johnston and Reid created SponsorHub, a platform and marketplace that connects brands to sponsorship opportunities like big events, and lets the companies manage and measure those opportunities.
Here's how it works: Those seeking sponsors, from local sports teams and stadiums to professional event organizers, create a free, online account about their upcoming gatherings, which are submitted to SponsorHub’s private network of brands. The big brands can then choose which events to sponsor. So for instance, IBM has tapped SponsorHub to sponsor a technology industry event, Crunch Fitness sponsored a cycling event, and Ford sponsored a marketing event. SponsorHub focuses on premium events, from dinner for 30 guests with professional athletes, to music festivals for audiences of up to 30,000.
The company earns revenue through a 15 to 20 percent transaction fee for each successful connection, as well as platform licensing fees. Its sponsors (a.k.a. outside investors) include Barry Silbert, founder of SecondMarket, the Gerson Lehrman Group, Quotidian Ventures and Redwood Partners, as well as other entrepreneurs and industry executives.
Can’t live with the daily offerings from Banana Republic, Nordstrom and Fab.com, and yet can’t live without them?
Launched in 2010, Keep Holdings aims to put more power in the hands of consumers by managing the daily barrage of promotions and product offerings flooding their inboxes. The company, which is the brainchild of About.com co-founder Scott Kurnit, has raised $43 million from investors.
Its free Swizzle service lets users unsubscribe from commercial emails within minutes and consolidate the offers they do want into a daily digest. Its Keep product flips that concept on its head by letting users browse, search and shop multiple sites in one place to find exactly what they’re looking for, whether it’s glassware or the perfect dress for Valentine’s Day.
While working as the director of nonprofit VisionSpring, Neil Blumenthal quickly learned that it costs far less to make glasses than most manufacturers charge. So when one of his business school buddies left his $700 glasses on an airplane, the idea of selling inexpensive eyewear directly to consumers became crystal clear. “We were looking for a business idea,” says Blumenthal, who teamed up with that friend and two others to launch Warby Parker in 2010. “It was serendipitous.”
Three years later, Warby Parker is selling eyewear online and in a handful of showrooms around the country. Glasses start at $95, with lenses. Buyers can pick out five pairs to try on at home for free, or use the “virtual try-on” feature, which uses uploaded photos and advanced facial recognition technology to show buyers how frames will fit their face.
The company has raised $55 million from investors, sold hundreds of thousands of pairs of glasses, and is in the process of opening a New York showroom in the historic Puck Building on Houston and Lafayette streets. While it’s been a quick success story, Warby Parker hasn’t lost sight of its philanthropic roots. For every pair of glasses customers buy, it donates a pair of glasses or provides funding to its non-profit partners.
High school students spend a lot of time trying to get into their dream schools but are often clueless about how to make the most of the college experience. Likewise, most college students don’t have a great grasp on how to parlay their education into a fitting career.
Enter Modern Guild, an online mentor program that connects high school and college students with career coaches and professionals working in the real world. “Like a lot of smart kids I found myself going to the career center and being molded into what I could do rather than what I should do,” says Adrien Fraise, the company’s 33-year-old founder and a former consultant who was involved in recruiting on college campuses.
The company takes students through three stages of development starting with identifying potential career paths and working up to landing that dream job. Students pay $1,499 per eight- to ten- week course, which include video conferences with career coaches and real world professionals.
Last year the company piloted the program with 100 students on 10 different campuses. In January it began accepting applicants and says it was flooded with 4,000 requests for 50 slots.
Employees: 3 plus an expert tasting panel
Location: Flatiron District
Michael Horn discovered his love of "craft" coffee (as in, made by a small, independent roaster) in law school more than a decade ago. With no Starbucks in the area, he stumbled on a local coffee roaster and was instantly hooked. Though he took a detour as a Wall Street finance lawyer, Horn was brewing his own business idea. In 2010 he launched his artisan coffee-of-the month subscription service. Each caffeinated care package features coffee selections from three different roasters that are pre-screened by an expert tasting panel.
Working alongside other NYC startups at General Assembly in the Flatiron District, Craft Coffee now has shipped thousands of pounds of coffee to subscribers in all 50 states and in more than 20 companies.
Imagine a farm offering New York City chefs and shoppers fresh, high-quality ingredients year-round at competitive prices. Now imagine that farm in Brooklyn – on the roof of an industrial building. That was the vision that Viraj Puri, Eric Haley and Jenn Nelkin realized when they created Gotham Greens in 2009.
Their greenhouse in Brooklyn’s Greenpoint section is where they grew over 120 tons of premium produce last year, from zingy, peppery arugula to succulent bok choy. The company supplies more than 30 New York City restaurants and retail stores.
New York is fertile ground for launching a start-up, Puri says, with talented, creative, innovative thinkers sprouting up like weeds. The cost of doing business is expensive and sometimes fraught with bureaucracy, but it is “arguably the center of the world,” he says.
Location: Madison Square Park
After helping her sister plan and organize her wedding, Kellee Khalil traded her career in finance for a startup that uses technology to keep bridezillas at bay. Launched in 2011, Lover.ly is a visual search engine to help brides find inspiration, save and share ideas, and shop for everything they need for the big day. Users can browse wedding ideas by color or search an archive of more than 130,000 images for everything from mini-cupcakes to purple bridesmaid dresses.
Having raised $1.2 million from angel investors to date, the company recently partnered with Real Simple magazine and is relaunching its site on (but of course) Valentine’s Day.