New York City’s Silicon Alley has claimed a place among the ranks of top tech-hubs across the country such as Boston, Dallas, Seattle, and of course, its namesake and the “mothership”, Silicon Valley. While each of these start-up communities boasts its own set of advantages, Silicon Alley benefits from New York’s buzz and density people, which, in the past few years, has played into the hands of the social media phenomenon. Yet in many ways, the most important feature of any tech boom-town is the availability of funds.
Enter: the venture capital firm. Steve Schlafman is a principal investor at one of these firms, Lerer Ventures, which focuses on funding companies in the “seed-stage”. That is, Lerer trudges through the weeds of all start-up hopefuls to find entrepreneurs with “product vision, consumer insight, focused execution, and unwavering ambition.” Although he is now in the position of the lender, Steve is no stranger to the experience on the other side of the table. His work experience spans from startups such as Stickybits and Turntable.fm, to more traditional environments such as The Kraft Group and Microsoft.
And what’s in Lerer’s portfolio these days? Just so happens they were one of the VC’s that took a stake inGroupMe (prior Q-naire feature, recently aquired by Skype), as well as other awesome hits like: Dispatch,Hipster, Yoke, and Venmo. Previous investments that have already made it big include: the Huffington Post,Paperless Post, Thrillist, and Business Insider.
How did you get involved with Lerer Ventures?
Believe it or not, I learned about my position at Lerer Ventures on Twitter. While I didn’t know Ken and Ben Lerer or any of the partners personally, I was close with at least a dozen folks who had strong ties to the firm. I was able to leverage these strong relationships to get my foot in the door, which is often the hardest part.
Describe your day-to-day activities:
My daily activities include meeting with entrepreneurs, conducting due diligence on potential investments, researching industries, testing new products, reading blogs to catch up on the news, and providing support to our portfolio. I also spend time meeting with other investors and strategic partners who might benefit from a relationship with one of our portfolio companies or vice versa.
Best perk of your job:
I’d have to say the best perk of my job is learning about new products and markets from incredibly smart, talented, and passionate entrepreneurs. I meet with designers, technologists, and business hustlers who are on a mission change the world and disrupt massive companies and industries.
Where do you see yourself in 5 years?
That’s a good question. I’d like to think I’ll continue as a VC for the long run because I truly enjoy working with entrepreneurs, giving advice, making intros, and playing around with new products. On the other hand, I enjoy making things too, so it’s entirely possible that could be running my own company down the road.
The most important factors to consider when evaluating a startup:
At the earliest stage of investing, it’s all about the entrepreneur. We look for founders who are obsessed with the customer and have an intense focus on product. We also look for entrepreneurs who understand the importance of building a great team and a special culture.
Any notable startup red flags?
There are number of red flags I look out for. If a startup doesn’t have a product demo, then it’s hard for me to take it seriously. I need to have confidence that the entrepreneur can make something out of nothing. I’m also skeptical when an entrepreneur focuses more on the their press mentions, business model, or market than on the product and the customer.
When and where are you happiest?
I love NYC but I’m the happiest outside the city. There isn’t great hiking close to NYC, so I drive nearly 6 hours to Lake Placid, NY to vacation because it’s a great place to unplug.
Your greatest indulgence:
Espresso. I’m always in pursuit of the perfect shot or cappuccino. My favorite spots include Kava, Gimme!, La Colombe, and Stumptown.
Your role model:
Is it cliché to say my Mom? She has the strongest work ethic of anyone I’ve ever met and she has an enormous heart. She worked two hard jobs so my siblings and I could live in a safe town, get a great education, and have access to the things that every kid wants. She has always put her family ahead of herself and has always stressed the importance of family. Most importantly, she has always supported our decisions and encouraged us to be unique.
Talent you’d most like to have?
I’d love to be a world-class skier.
Greatest tech innovation in the last year:
That’s a tough question. My favorite young companies in NYC include Turntable.fm, Skillshare, and Dispatch. Turntable.fm was the first company to truly crack social music consumption and discovery. Skillshare has created a marketplace for community-based education. Dispatch has created a web-service that allows you to access all of your web files all in one place.
Define the Silicon Valley vs. Silicon Alley dynamic:
The Silicon Valley vs. the Silicon Alley debate is over-hyped. Both places are great environments to build companies because they value innovation, creativity, success and hard work. That said, Silicon Valley is run by engineers whereas Silicon Alley is run by a mix of designers, hackers, and hustlers. There’s no question that Silicon Valley has a greater pool of engineering talent, but I’d argue that New York has greater cultural diversity and density.
The advantage of running a tech startup in NYC:
First, the population density and number of businesses makes it a perfect place to find customers and strategic partners. Second, there are at least a dozen co-working spaces that are affordable and come with a built in community. New York is special too because it values self-expression, creativity, hard work and risk-taking probably more than any other city in the world. It also has ample seed capital to fund entrepreneurs and innovative ideas. So what if NYC doesn’t have the sun (or the sheer numbers of engineers) that Silicon Valley has—I’d still argue there’s no better place to start a company.