A City Is A Startup: The Rise Of The Mayor-Entrepreneur

On stage at last month’s Le Web conference Shervin Pishevar, a Managing Director at Menlo Ventures, stated “The World is a Startup.” It’s an interesting perspective, and I think what’s true for the world is also true for countries, states and municipalities. With developments like last month’s announcement that Cornell was selected to build a new tech campus in New York City, it seems to follow that if “a city is a startup,” then the best mayors are the ones who are looking at their cities in much the same way as entrepreneurs look at the companies they have founded.

The ingredients for a successful startup and a successful city are remarkably similar. You need to build stuff that people want. You need to attract quality talent. You have to have enough capital to get your fledgling ideas to a point of sustainability. And you need to create a world-class culture that not only attracts the best possible people, but encourages them to stick around even when things aren’t going so great.

Paul Graham has written extensively on this topic in essays like How to Be Silicon Valley and Why Startups Condense in America. Much of his thinking no doubt played into the decision to base Y Combinator entirely in Silicon Valley. Boston’s loss was the Bay Area’s gain and a striking example of why it’s important for mayors to view their cities through an entrepreneurial lens. Paul viewed Y Combinator through that lens and it led him to believe that Silicon Valley simply had more of the ingredients that would make his companies successful than Boston did.

So let’s take a look at those ingredients. Making products and services people want to buy has to be at the top of the list of any forward-thinking mayor. Extensive research by the Kauffman Foundation shows that virtually all job creation comes from companies less than five years old. So if you’re running a city and want to increase the number of jobs in your city, you should be doing whatever you can to encourage more viable startups. It’s something that Ed Lee, San Francisco’s newly-inaugurated mayor seems to understand, telling TechCrunch back in November “I want them [tech companies] to start here in San Francisco, and I want them to stay and to grow.”

Talent is another important factor and lies at the heart of Bloomberg’s efforts in New York City. Creating a world-class engineering campus in New York can be thought of as the municipal equivalent to Facebook’s acquisition of FriendFeed or Gowalla. By having more talented people in the city, New York is better able to compete with other cities in the same way that Facebook better competes with rivals by having more talented engineers under its roof. (What’s more, Facebook recently announced that it will open an NYC engineering office in 2012.)

Of course, getting top engineers and designers to actually work for a city might prove challenging (with a notable exception to be seen in the success of the Code for America program), but mayors can have a significant impact on helping a city to attract the best and brightest.

I recently spoke with Daniel Huttenlocher, the dean of the Faculty of Computing and Information Science (CIS) at Cornell University, who played an integral role in Cornell’s bid for the Roosevelt Island campus (read more about this effort in Eric Eldon’s interview with Huttenlocher).

His observation that Bloomberg’s history as both a technologist and an entrepreneur helped him and others in his office to better understand the need for New York to increasingly be a hub for the best technologists on the planet. Bloomberg is to New York City as John Calipari is to Kentucky basketball, intuitively adhering to Vinod Khosla’s notion that CEOs should be spending a very high percentage of their time recruiting.

Capital is another necessity for a city’s success. In some cases this might mean mayors actively courting angel investors and venture capitalists. The success of the Silicon Valley ecosystem is due, in no small part, to the availability of early-stage capital and its density of investors. Other metro areas have historically struggled to replicate this investment ecosystem but more attempts are underway.

Sergio Fernández de Córdova, the founder of Fuel Outdoor and chairman of New York Entrepreneur Week, pointed me to an effort underway in the state of Connecticut to provide more funding to early-stage companies in the state. In addition, New York City announced $150 million in funding solely devoted to startups in the city as part of the tech campus announcement. While these efforts might pale in comparison to the latest billion-dollar fund raised by a Silicon Valley venture firm, they are a step in the right direction for states and municipalities trying to spur innovation.

A final ingredient is culture which can loosely be translated to livability when we think about cities. This was impressed upon me recently during a meeting with Eric Garcetti, the former Los Angeles City Council President and leading contender to become the city’s next mayor. Garcetti recognizes the challenges that LA has when competing against the Bay Area to be the home base for the next great technology company. Indeed, Los Angeles has lost a number of its most promising companies to the north such as Lookout and Yammer (born out of Los Angeles-based Geni).

Still, Los Angeles is one of the most desirable cities in the country to live in and the recent Silicon Beach resurgence is due in part to this. Listening to Garcetti talk about LA’s strong points reminds you of Larry and Sergei discussing why Google’s culture made it possible for them to attract so many outstanding engineers or Tony Hsieh sharing why Zappos’ quirky, fun work environment helped them retain top performers. By emphasizing LA’s strengths, Garcetti hopes to retain talented USC, UCLA and Cal Tech grads who might not be so keen on spending “Junuary” in San Francisco.

As we roll into an election year, many cities are in a state of crisis. Budgets are a mess and job growth has been minimal for a good swath of the country. Cities in need don’t just need strong leadership, they require transformational leadership. It’s no easy feat but it’s likely that the more that mayors view their cities through an entrepreneurial lens, the better they will be able to adapt to a rapidly-changing world.

Bloomberg seems to be leading this charge with his efforts in New York City and mayor’s offices around the country are taking notice. Others like Ed Lee, Garcetti and Newark mayor Cory Booker appear to be taking a similar tone in their respective cities. Perhaps these are the first examples in what will become a long line of mayor-entrepreneurs.

Excerpt image by Greg Knapp via Creative Commons

This post originally was taken from TechCrunch.com

The Real Pirates Of Silicon Valley?

ArcticStartup recently broke the news about an ambitious seasteading endeavor called Blueseedstarted by Silicon Valley founders Max Marty and Dario Mutabdzija. The post came shortly after Max pitched the idea (embedded below) at JumpStartDays on October 17th, in which he received a huge round of applause.

Seasteading isn’t a new idea. Other than pirates, one of the first well known attempts at seasteading was the data haven called HavenCo that was located on a sea platform off the coast of England. The sea platform was its own country called Sealand, with its own passports, currency, etc. The project was a direct result of restrictive laws around online gambling.

Similar concepts have been developed around floating hospitals called Mercy Ships, where medical treatments are performed on large ocean vessels. While these ships currently serve developing countries, one can imagine how similar ships could provide low cost healthcare all around the world by operating out in the open waters free from the various laws that restrict the ability for inexpensive medical treatments through competitive pricing.

Back when I was a sysadmin, I became friends with one of the residents of Sealand and officers of HavenCo, Ryan Lackey and later a few of the founders of Havenco, Jo and Sean Hastings. I was such a huge fan of this endeavor, that I begged Ryan to let me come join him. At the time, I was pondering either working at HavenCo or on a project in Antarctica. I was very young, and this was some phase in my life where I wanted to push myself to extremes. I also loved the idea that there could be ways to make change in the world by applying pressure from outside of a system through creating market choices. This is what Blueseed is attempting to do, but instead of gambling, they are taking the issues around not being able to get H1B immigration visas head on:

Blueseed aims to provide an alternative solution to the US work visa problem for Silicon Valley and allow professionals lacking a visa to legally work in close proximity to companies and investors from the Valley.

Blueseed plans to do this by providing living and office accommodations on a vessel anchored 12 nautical miles offshore from California (half an hour by ferry), in international watersoutside the jurisdiction of the United States.

Target customers include startup entrepreneurs for whom a satisfactory U.S. work visa solution doesn’t exist, staffing companies impacted by the January 2010 Neufeld memopreventing 3rd party employee placement, and other high-tech professionals interested in the advantages provided by Blueseed’s location.

Its no secret that I’m a libertarian and a lot of people disagree with my stances on limited government, but I do believe people from all political sides in Silicon Valley are with me when I say our country’s immigration policies are pretty fucked up. I agree with Greg Anderson from ArticStartup, who wrote, “As an American citizen, I don’t know if I should feel really impressed or disappointed aboutBlueseed’s plans.”

I got a chance to interview Max about Blueseed and here’s a summary of our interview:

Max became interested in seasteading and creating what he calls the “Googleplex of the sea” after he heard an online talk by Patri Friedman. Max sees seasteading as a response to the reality of the world in which he currently lives in and as a way to change the system from the outside, by simply offering people a better alternative. “If you are comfortable with what you’ve got, that’s fine, but if not, we may have something for you…”. Through complete chance, he eventually met Patri in person at a conference in San Jose and through that luck and serendipity, he ended up joining them at the Seasteading Institute.

While director of the institute, Max met his partner Dario. Max had been searching for ways to apply something practical to the concept of seasteading and after looking at things like medical tourism, etc., he decided to become focused on solving a problem near and dear to him.

Max is a first generation immigrant and his partner is an immigrant.

While Max was in college in Florida, he made friends with amazing and talented people from around the world and after they graduated, they found it incredibly difficult to stay in the US. Most returned home where they started their professional careers, even though that wasn’t what they wanted. They wanted to stay and become part of what once made the US great by helping to create economic growth and prosperity. If you think about many of our entrepreneurial stars in Silicon Valley, you’ll come up with many names of amazing people who came to our country as immigrants. I can name a few off the top of my head such as Max LevchinLuke Nosek and Alfred Lin, but just for fun and to add gravity to why immigration is so important, you should list as many as you can think of in the comments.

Max Marty’s own family didn’t have to go through the pains of sponsorship and visas, because being from Cuba, they were considered political refugees, but he saw this problem all around him and considered it ridiculous that our country treated professionals and entrepreneurs in such a terrible way. Max stated, “Our political reality is that coming to work here is not actually possible.”

“The idea came to me while I was on a Reason cruise. When you are on one of these ships, it feels like you are in a small city and part of a community.” Max and I discussed how his ship would need to be an extension of the Silicon Valley community in order to connect with the right talent and investors. Being so close, people would be able to come to shore on visitor visas and take meetings and have a social life.

One of the reasons I didn’t go to Sealand was due to gender ratio. Even though I’m well accustomed at this point being surrounded by men, I can always go home and have my girly hideout, but on a platform and in an intimate setting like that, it just didn’t seem like a good idea. I brought this up with Max and he said that the organization will be actively looking for startups led by female entrepreneurs from around the world.

The logistics of doing anything on the ocean are mind boggling. His team is currently raising a round of funding to help get to the next stage of making this dream a reality. With a few investors committed, they are one step closer to getting some of the logistical planning out of the way such as food provisioning, establishing relations with customs and border protection, dealing with Internet access, etc.

Because this is such a huge endeavor, I asked Max what he most needed help with if I could get the word out there and he said, “Recently we were thinking about the environmental angle to it. Maybe people would be interested in showcasing or demoing their sustainability products on the ship. Come help us create a sustainable environment on the vessel, so that we’re not a blight on the ocean. It would be great to connect with individuals in this space.”

I don’t know about you, but it seems to me that we can talk about being pirates all we want, but to truly be a pirate, you have to have a ship. This is a crazy idea, but one I would love to see succeed. Hats off to Max and Dario for dreaming big and trying to make a difference in the world.

Jack Dorsey: “The Hardest Thing For Any Entrepreneur Is To Start”

Twitter and Square co-founder Jack Dorsey took the stage at the GigaOm Roadmap conference to talk about his experience being well, basically a jack of all trades (rimshot).

 

Dorsey revealed that both his own and his family’s experiences with entrepreneurship were inspiration for his two current startups — both of which remove friction from human communication and industry, a process Dorsey described as “getting rid of the ‘conceptual debris’.”

 

Dorsey has long identified with the struggles of entrepreneurs; He brought up the example of his mother, who ran a small coffee shop in St. Louis, “Starbucks came and it didn’t go so well,” he said.

 

Then he brought up his dad, who co-founded “Two Nice Guys,” a pizza restaurant also in St. Louis. When Dorsey’s dad and his co-founder began to hire people, Dorsey said, they promised each other they wouldn’t date any of the wait staff. “First person to get hired is my mom,” Dorsey went on, “And so my dad had to leave the business and I was born.”

 

Before quickly relating these stories, Dorsey said that companies need to start quicker and iterate more; “The hardest thing for any entrepreneur to do is to start.”

 

One of his favorite things about Square, he emphasized, is that it helps companies start, “It is amazing, you are in business right away, in terms of anyone being a retailer. The line between consumer and retailer, the counter blurs. You see this at Apple, people don’t wait in line, don’t wait behind a point of sale system, there is no counter. It takes the friction out.”

 

Dorsey said that Silicon Valley’s culture of mentorship also appealed to him because of its frictionless quality, “Any entrepreneur can come up to me and discuss and idea. As people who are also just getting started, we need to make sure that we’re always accessible to people who want to start something new.”