I wrote my little piece about the NYC startup scene barely a week ago. In the past few days, there have been several new articles on the topic and all the back-and-forth could use a tidy summary.

On February 1st, Chris Dixon (Hunch) wrote The NYC tech scene is exploding. Summarized:

• There are tons of interesting NYC startups, and they’re diversifying beyond media (HuffPo, Gawker) to more “California-style” startups (Foursquare, Boxee, Hunch).
• NYC now has a good number of seed investors, mid-size VCs, and big VCs.
• NYC needs a couple of runaway successes (like Paypal, Google, or Facebook) with big exits so their employees can leave and create new companies.

Last Friday (2/26), Matt Mireles (SpeakerText) stirred the pot on Silicon Alley Insider with Face It: NYC Is Not The Best Place For A Startup. His arguments:

• Too many of the VCs in New York are former Wall Streeters who don’t get how to build companies.
• There are only a few good angel investors and they’re hard to find.
• Because seed money is so hard to come by, startups have to spend more time chasing money and less time working on their products.
• Technical talent is scarce in NYC, and too many of the good engineers are used to Wall Street wages, perks, and bonuses.

While Mireles raises some interesting discussion points, the piece almost comes off like an attempt to grab angel and VC attention for his own startup. The last paragraph:

Ok, so I don’t know if this conclusion is actually true, so I’m heading out the California on Monday to test it. Honestly, I hope I’m wrong, because I hate driving, hate the suburbs, and love urban living, but we’ll see.

Translation: This is a list of grievances I’ve suffered while trying to fund my startup in NYC, and if someone here won’t fund me, I’m going to California.

Caterina Fake (Hunch) came back (2/27) with:

• Actually, VCs and Wall Street are two separate worlds and you can encounter one without running into the other.
  
• Many startups have gotten seed funding in NYC, and in many cases it’s been from a good mix of east and west coast angels.
• Raising money is hard anywhere, but the benefits of avoiding the group think of the Valley outweigh the drawbacks.
• Indeed, specialized technical talent is harder to come by in NYC and you shouldn’t hire out of work Wall Streeters just because they’re former Wall Streeters.

Chris Dixon joined Fake (2/27) in responding to Mireles:

• Dixon never meant to start an Alley vs. Valley debate, and thinks California is a great place for startups.
• California should be NYC’s role model and ally, and we should view the Wall Street mentality focused on financial engineering and metrics as the enemy, not the Valley.
• Mireles is welcome to head to California if he really thinks the grass is so much greener on the other coast.

And this Tuesday (3/2), Warren Lee (VC) added a few additional thoughts:

• NYC has seen an increase in VC funding over the past few years, and it will likely overtake Boston to grab the #2 spot soon.
• Yes, we definitely need a billion dollar company with a big exit to really kick things into gear. Luckily, there are a lot of NYC companies with that potential.
• Finding specialized technical talent is hard, but it’s getting easier as more talent relocates from Boston and the Valley.
• Debating regions misses the point, which is that we should copy the successes of the Valley and add some special NYC sauce to make the scene here truly unique.
• Essentially, the NYC startup movement is headed in the right direction on all fronts, and that momentum is part of what makes it so exciting right now.

So… I think we all can agree:

Raising money for a startup is difficult anywhere, but maybe a little tougher in NYC because of the Wall Street mentality that exists among some.

The NYC startup scene is so exciting right now because the building momentum has been a long time coming. Things are better now than they’ve ever been.

Technical talent is hard to come by.

NYC needs a billion dollar success story with a big exit.

Silicon Valley has certain strengths and Silicon Alley should emulate and improve on them.

In the following list of hot startups, can you guess how many are from NYC?

• Hunch
• Meetup
• Hype Machine
• Boxee
• Tumblr
• Etsy
• Clickable
• Vimeo
• Foursquare
• Livestream
• Squarespace
• Postabon
• Seamless Web

Answer: All of them are NY-based.

(You saw right through that contrived setup, didn’t you?)

The New York startup scene is on fire right now. With so much activity, it’s almost hard to believe the scene all but died out after the dot com bubble burst in 2000. Hunch co-founder and investor Chris Dixon posits that the financial gold rush of the mid-2000s also bore some of the blame:

“The finance bubble of 2003-2008 was a giant talent suck on the East Coast. The people I knew graduating out of top engineering or business programs on the East Coast were all trying to work at hedge funds or big banks or else felt like fish out of water and moved west. Money was flowing so freely in the finance world that there was no way the risk/reward trade off of startups could compete. Eventually it just became downright idiosyncratic to be a startup person on the East Coast. The Larry and Sergey of the East Coast were probably inventing high frequency trading algorithms at Goldman Sachs.”

But times have changed. Entrepreneurs aren’t all heading west, and the talent here isn’t going into finance. Silicon Alley (as the cool kids call it) seems to be the new hotspot:

“In 2008, New York saw 116 startups receive funding, and in 2009 this number reached 150 – five times the amount the city saw in 1995. In comparison, Silicon Valley, which hosted 230 startups in 1995, saw just 336 receive funding in 2009 – a sign that the mecca of startups is beginning to reach critical mass while New York continues to grow.”

Much of this growth can be attributed to the host of NY-based investors, VCs, and city-funded seed programs that have cropped up over the past few years.

At the moment, my personal favorite NYC startup is Postabon. Founded just a few months ago by a couple of recent Harvard Business School grads, Postabon allows people to find and share local deals. So if you’re at a clothing store and there’s a sale, just pull up Postabon on your phone to share it. Similarly, if you’re looking for deals, pull up Postabon and it’ll show you a map of all the deals nearby. It’s simple and brilliant.

Most of the time, crowdsourcing is 70% buzzword and 30% useful. But Postabon is the perfect example of crowdsourcing done right, and for the right reasons. By allowing users to submit deals and vote on them, Postabon is going to have a massive, well-curated database of deals in no time.

Companies like Cellfire and Yowza have tried a different approach, partnering with businesses to offer exclusive location-based deals. But businesses don’t want to bother offering exclusive deals on a platform nobody is using. And nobody is using these platforms because there aren’t any deals. It’s such a silly and broken business model I don’t know how companies like Cellfire are still around.

Postabon, on the other hand, is well on its way to amassing a nice userbase:

“Over the past six weeks we’ve generated over 1,000 posts with 800 in Manhattan or approximately 80 deals per square mile. The closest competitor has approximately 200 deals on the entire island of Manhattan.”

It won’t be long before advertisers are eager to offer exclusive deals to Postabon users (who couldn’t be more of a targeted audience).

And that’s only the beginning.

If Postabon cares to get creative, there are all kinds of interesting advertiser partnerships and collaborations they could come up with. Assuming everything goes according to plan, Postabon will likely become one of the great NY startup success stories for managing to go from idea to monetized business in such a short period of time.

And I haven’t mentioned the karma point system. You earn karma points for submitting deals to Postabon. Right now they’re just used for leaderboards, which is a nice way to encourage participation. But down the line, I’m sure they’ll be redeemable for coupons, discounts, and other goodies. It’s a fantastic model and a great business plan.

As far as other NY startups go, I also love what Meetup is doing. Meetup allows people to organize online for the purpose of meeting up in the real world. Their goal is to have ‘a meetup everywhere about most everything’. Meetup has been around for a few years, so it’s somewhat of a seasoned veteran in the NY startup scene.

Meetup’s co-founder Scott Heiferman also started the NY Tech Meetup, a showcase and pitching opportunity for local entrepreneurs and tech geeks. The NY Tech Meetup has certainly played a big part in the resurgence of the NY startup scene over the past couple of years.

In his book Lucky or Smart: Secrets to an Entrepreneurial Life, Bo Peabody harps on the importance of creating ‘fundamentally innovative, morally compelling, and philosophically positive’ companies. Postabon and Meetup are two great examples of this philosophy, which Peabody says will bring luck to companies who subscribe to it. Looking at a list of NY startups, it seems that many (if not most) subscribe to this philosophy.

I think NYC entrepreneur Michael Karnjanaprakorn really gets to the heart of the NY startup scene with the following quote:

“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.”

More:

+ New York Startup Movement

+ New York City is poised for a tech revival

+ Never Mind the Valley: Here’s New York City

+ My Talk Today About The NYC Startup Sector

Yesterday morning at MWC, Microsoft unveiled the Windows Phone 7 Series. I never expected to find myself floored by Microsoft software, but here I sit, floored by Microsoft software.

Like many people, I love the striking aesthetic of the minimalist typographical UI. But I’m more impressed by the serious thought that has gone into revamping the Windows Mobile experience at its core. Rather than pursuing an app-centric strategy like its competitors, Microsoft has taken a fundamentally different approach with its “hub” concept. The phone’s basic functions are broken into hubs: people, pictures, games, music + video, marketplace, and office.

Tap on the ‘people’ hub and the first contacts you see are the ones with whom you’ve most recently corresponded. The method of correspondence doesn’t even matter; it could be Facebook messages, text messages, emails, or whatever. You simply see the conversations you’ve had most recently. If you want, you can scroll over to see ‘what’s new’, which is an aggregated list (again, from various sources) of what your contacts have done lately on their social networks. The other hubs function in the same way.

For example, the ‘pictures’ hub automatically pulls in the photos you’ve taken with your phone as well as your Facebook albums, Flickr albums, and so on. This also changes the way third party apps will work. Instead of a standalone Last.fm app, there might be a Last.fm ‘plug-in’ that integrates seamlessly under your ‘music + videos’ hub.

Other mobile platforms have done similar things; the way Bing searches contextually in WPS7 is similar to the search in WebOS, and the aggregated inbox is similar to both what RIM has been doing on the Blackberry and HTC has been doing with Sense UI. But Windows Phone 7 Series is the first OS to embrace this radically different way of organizing information from the bottom up. It’s exactly what I’ve been waiting to see on a mobile platform for some time now.

With the iPhone, Apple did a fantastic job of reformatting the desktop computing experience for a handheld device. What Microsoft has done here is taken the next major step: discarding the notion that a mobile device should just be a shrunken-down version of a desktop platform.

As we move away from desktops toward increasingly powerful handheld devices, it’s become clear that we need a different way of interacting with these devices. There are so many different social networks, applications, and platforms vying for our attention that we need a better way to manage them than a separate app for each one.

Banking on this type of strategy is a bold move for any company, but particularly for Microsoft. They’ve completely cut ties with their mobile past on the gamble that some savvy marketing and their brand name alone are enough to get people to give WP7S a chance. I think it’ll pay off, given they continue to make the right decisions.

But while I’m gushing today, there are still a lot of question marks:

• The SDK. How extensive will it be? Will MS force developers to stay consistent with their hub UI/UX? (I sure hope so.)
• Multitasking. In reality, this is probably much less of an issue than most people think because most people are still thinking in terms of separate apps instead of unified hubs.
• Hardware. We haven’t yet seen any actual hardware and we don’t know the cost.
• Third parties. Will developers feel burned by Microsoft’s complete break with past Windows Mobile architecture? Will they embrace the hub concept instead of only writing standalone apps?
• Usability. What we saw yesterday was only a preview of the entire platform, so it’s difficult to judge exactly how usable this interface will be on a daily basis. It looks like there might be a little too much swiping back and forth involved.

And a couple of other things I love:

• The UI/UX polish. Slick transitions, subtle animations, and a distinctive visual style; Windows Phone 7 Series really seems alive. This is an Apple level of finesse, something the Blackberry and Android platforms sorely lack.
• The hardware requirements. Microsoft has come up with a strict set of minimum requirements for WP7S hardware, and they’re sufficiently hefty. This should ensure a smooth and consistent brand experience. Hopefully manufacturers will find more creative ways to differentiate their devices than specs alone.
• Zune integration. If you’ve got a Zune pass, you’ve got the entire Zune catalog with you at all times (provided you have a data connection). No other device can compete with that.

And you can bet there’s still a ton Microsoft hasn’t yet revealed. The next big event on the radar is MIX10 on March 15th.

+ First Look: Windows Phone 7 Series Hands-On Demo (22 minute video)

+ WindowsPhone7Series.com

Added to the sidebar 2/15/10:

• Janelle Monáe – Cold War (from the forthcoming album ArchAndroid)
• Beach House – Walk in the Park (from the album Teen Dream, out now)
• Wallace Vanborn – Atom Juggler (from the album Free Blank Shots, out now)

Via Tough Guide to Work & Holy Kaw:

When I ask people to summarize what they are wanting out of life they throw out a lot of words. Stuff like ‘Love’, ‘Achievement’, ‘Family’, ‘Fame’, ‘Peace’, ‘Money’. If you summarize the thousands of responses each aspiration really falls into just two categories.

First, “Success”: deep down many of us want to win the game of life. We want to accomplish something extraordinary. We want to be recognized and applauded. We feel pleasure when we take a step toward this goal. This can show up more strongly in some of us but we all have this need to some extent.

Second, “Happiness”. We want to enjoy our short lives on this earth. We want to fall in love, to experience joy and generally feel good. Both success and happiness are good and reasonable goals. Here’s the problem: they are not the same thing. Many business leaders spend years scaling the mountain of corporate success only to find they feel empty inside. Conversely others seek fulfillment and enlightenment; they believe happiness comes from within. But giving up on their ambitions and dreams is hard – they find themselves wanting to make progress, to take action and fulfill their need to feel competence.

Understanding what will make you successful and what will make you happy are two very important questions. But they are different questions and getting your head around that is step one.