Gotham Gal

Roaming around Brooklyn

Fred and I decided to take a journey to Brooklyn.  We just wanted to drive around and see what is happening.  We started by taking the BQE all the way out to Sheepshead Bay.  Driving out there brought back memories.  I used to drive every day to Kings Plaza in Marine Park/Marine Basin to go to work at Macys.  On the way home I'd usually take the back roads instead of the highway and it was how I really got to know the neighborhoods.

I wanted to check out Roll-n-Roaster which has been around for over 40 years.  This is an area of the world that few Manhattanites get out to.  The place was packed with the local community.  Not much better than one step above McDonalds but just a classic. 

You can tell from the sign that it has probably evolved over the year with pizza and other items.  The classic is their roast beef sandwich, onions rings, a lemonade and milkshake.  BTW, you can order anything you want with cheese on it.  We stuck with classic but no shake.

After we left we drove over to the main strip, Avenue U, and stopped in the Donut Shoppe.  The place is more like an old run down one counter diner.  I was hesitant but we were not the only people who stopped into buy donuts.  We tried both a glazed and jelly powdered donut.  Melt in your mouth.

We drove from there all the way over to Prospect Heights on the back roads.  Driving through each different section of Brooklyn is just awesome.  One of the most unique diverse areas of the world.

I just love New York.

 

The rise of Angel Investing

There are probably a variety of reasons on why there has been such a rise in angel investing over the past decade.  More than likely the affluence across the globe and the desire for those individuals to diversify their assets.  Putting money away in more traditional risk adverse areas is not giving investors the returns that they got in the past.  Also, doesn't everyone want to be part of the start-up nation? 

I am seeing a significant change in the power of the angel investor over the past year.  There are many businesses that I have invested in that are going out to get their next round of financing.  These are businesses with traction, engagement and revenues.  They are not having the easiest time getting VC's to lead the deals.  Why?  Maybe they don't see those businesses are multi-billion dollar businessees, maybe they don't believe the entrepreneur will stick it out to get big, maybe maybe maybe.  I don't know the answer but I am finding we don't necessarily need the lead VC.

What I do know is that I am seeing these entrepreneurs raise $1-2 million from angels, super angels, original investors putting money back in and they can close their round without a lead.  I know because I am leading these deals.  I am not leading them financially but because I am intimately involved with the company and I believe that this next round of financing is the key to the next step in growth, I am putting together the documents and setting a price.  I am pretty sure that these companies will either never have to raise more money or have zero problem raising money at the next turn. 

As more successful entrepreneurs who have cashed out, more people who have a desire to invest in start-ups that they understand and can make an impact in, more women (PLEASE!) get into this game, I believe I will be doing more leads on the Series A and others will to. 

Angel investing is changing and that is giving more companies the ability to grow because angel investors are happy with a $50m exit or even getting paid dividends on a business of that size and VC's are not. 

Sara Sutton Fell, FlexJobs, Woman Entrepreneur

Sara is quite the success story.  She started her first company at 21 that sold for $30M.  Then she started another company in the same space when she was pregnant with her first child.  She started her second company, FlexJobs, because she herself was looking for a professional job that she could do from home that had flexibility which included telecommuting, part-time work etc.  Tell me that this would not spark anyones interest. 

Sara grew up in Pittsburgh.  Her parents were divorced when she was young.  Her mother got remarieed and stayed at home with the kids. Her step-father ran his own production company making corporate marketing videos. Her Dad moved to Los Angeles and was in the movie industry.  He spent a few years in NYC too.  Sara worked for as long as she can remember.  In college she worked even worked the front desk of a hotel.  She always made money. 

Sara really wanted to go to boarding school for high school.  She went to Taft located in Connecticut where there are about 500 kids that attend.  She says that Taft gave her world awareness, kept her academically focused and helped her think about balancing herself.  At high school graduation her parents asked her what she wanted for a celebration gift and the answer was a plane ticket for everywhere.  She had never been abroad before.  It was 1992.  She traveled to Russia and even Siberia.  That experience made her think about being in international relations.

She chose something completely different for college, UC Berkeley.  Sara majored in interdisciplinary society technology and the environment.  She did not start until January so she began mid-year. It was at Berkeley where she learned how to get through red tape and bureaucracies after all the school is huge.  The summer of her junior year Sara spent her summer on the east coast doing an internship with the Center for Living Democracy doing data base management.  

She was living with one of her best friends that summer.  Her friends father was an entrepreneur.  They would talk about what they wanted to do after graduation and he would prod them saying you do not have to go work in a job with a suit but you could do something on your own.  That got both and her friends juices flowing.  They kept talking about what could they do?  Should they open a store?  They kept coming back to how hard it was to get a summer internship.  Back then the college offices were just loads of files in folders.  It was 1995.  They came up the idea of an online data base of college internships and entry level jobs post college.  By the end of the summer they had both convinced their parents to let them take some time off from school and build this company.  They called it Job Direct.  It was a great time to start an Internet company and very few women were doing it.

They put together a business plan and started to raise money.  Neither of them were computer science people.  Her partner wanted to be a special education teacher.   Their first round of capital came from friends and family.  They both understood the student market best but they had to decide which they should build first.  They decided the first thing was a resume data base.  They marketed it to students with college reps who each got money for every student they got to enter their information. 

This was the time of serious guerrilla marketing.  They rented an RV with a table of computers and networks partnering with an email service company.  They drove from college to college down the east coast.  They had started with about 1000 resumes and after the first tour they had 25,000.  The next semester they did the east and west coast.  At that point they had a sales force and were working with several colleges. 

The first year was amazing.  Sara found herself running the web development team.  She spent so much time on the computer that she convinced her team to let her move back to San Francisco, open the west coast office while heading up the web development team and finish Berkeley.  Going back and finishing Berkeley while working really made her appreciate how great it was learning just to learn. 

The company eventually got to 125 people.  It was 2000.  Sara left a few months before the sale.  They sold to Korn Ferry, a recruiting company.  It was not the best fit and eventually Korn Ferry sold Job Direct to Monster.com. 

Sara was 25 years old with a nice exit in her pocket.  She decided to take a job with Ancestory.com.  She was so young when she started Job Direct that she felt she wanted to work for people she could learn from.  She liked their mission.  The company was not that big when she began.  The founder understood Sara's entrepreneurial spirit and hired her with no title.  She started to dig in and tackle different problems.  Eventually she became the director of Communications and Marketing. 

In 2001 everything in the Bay Area imploded so both her and her boyfriend (now husband) decided to move to Boulder, CO.  They made a list of pro and cons to figure out where they should go.  They wanted a place where they could afford to buy a house, they wanted access to the outdoors, they wanted to be near a major airport and they wanted the same type of vibe and culture as the Bay Area.  Boulder was top of that list.  They visited and fell in love. 

They got to Boulder, Sara was 27.  She got a puppy.  She took time off to really think about what she wanted to do next.  She wanted to do something totally different.  She got a job in a cooking school doing some marketing and running some home cooking classes.  It was her first 9-5 job.  Within 3 years they asked her to run the school.  She had actually been looking around for the next challenge.  She had been offered to be the Head of Operations for a UK cosmetic company that wanted to launch in the US.  An internet company.  She decided to take that job instead of the cooking school opportunity.  Two months into the job she realized that culturally she was not the right fit.  The good news is she realized she was pregnant.  Eight months into the job they layed her off and gave their son her job who consequently ran the business into the ground.  It was eye opening and she decided to just let it be.  The place was so negative and it was time to take some time off. 

Sara had started to look into doing some freelance jobs before she was laid off.  The company she was working for kept saying how difficult it was to find good flexible virtual employees.  Once an entrepreneur always an entrepreneur.  Sara started to think is there an opportunity here to start a business around this need.  She came up with the idea of FlexJobs and raised some money right before her son was born.

It was 2007.  Starting a family and a company at the same time is a little crazy but she took the plunge.  The guy she was freelancing for told her to go for it, backed her with money and took a seat on her board.  He believed in her.  That was six years ago.  It has been an amazing process.  She first build a platform for job seekers.  The concept was to get employers to pay to post their jobs and job seekers could use the platform for free.  That was not sustainable.  Nine months in they flip-flopped the model  They got job seekers to pay a low cost subscription model that will be fully refunded from an employer once they get a job.  They want people to walk away happy with a job.  The employer side has been harder particularly during the recession so the sales process is not that easy even though it is free for an employer to post.  Also, during the recession they got 3X's the amount of unqualified resumes. 

Currently the company has 27 employees.  There are successful hires every single day.  Sara now has two kids who are 4 and 6.  She'd like to spend more time in the entprenreurial community in Boulder but there is only so much time in the day.  She says there are alot of professional part-time jobs out there. She is a woman with serious energy.  This is company number two.  I am watching Sara.  There is no doubt company number 3 in her future. 

 

 

Thomas Zipp at Harris Lieberman

What I have found over the years is that artists tend to not be singularly dimensional when it comes to their field.  Photographers are also musicians, Painters are also photographers, etc.  Thomas Zipp is multi-dimensional.  Harris Lieberman just opened the show of his work over the weekend and it will run through mid-March.

What drew me in was the paintings.  They are thought provoking with all the words running through each piece.  I particularly love this piece.

And this piece.

At the installation there is also photography of his to see.  Yet this is the most interesting is that in the middle of the gallery is an engineering project.  A bicyclist peddles around these drums and bells.  The energy created by bicyclist plays the instruments.  It is pretty cool.  It could be a childrens paradise.

Definitely worth stopping by for a peek. 

Steak and Brussel Sprouts Stir-Fry

The Bon Appetit this month was a winner.  I saw this recipe and made it over the weekend.  A few little changes but they are reflected in the recipe below.  Definitely one to be made again.  This is also one that you could substitute chicken, pork or even broccoli. 

This is for four hungry people

4 Tbsp. Oyster Sauce

4 Tbsp. Soy Sauce

3 Tbsp. Rice Vinegar

One and a half lbs flank sliced thinly sliced against the grain

3 Tbsp. chopped ginger

6 Scallions whites and greens thinly sliced

2 Jalapenos sliced into rings (one red and one green)

3 carrots peeled and thinly sliced into thin sticks  (I bought these already sliced for ease)

1 and a half lbs brussel sprouts cut in half

Vegetable oil

 

Whisk together the oyster sauce, soy sauce and rice vinegar in a bowl. 

Coat the bottom of a large deep frying pan with vegetable oil.  Add the brussel sprouts (season with kosher salt) and cook getting them browned at a medium high heat.  I just shake the pan a few times to move them around.  Takes about 8 minutes.  Take out the brussel sprouts and put them in the bowl you plan on using to serve the meal.

Put a little more oil back into the pan and put in the meat.  Let the meat just brown.  Takes a few minutes.  Stir a few times.  Add this to the brussell sprouts mixture sitting on the side.

Put a little more oil back into the pan again.  Add the scallions, jalapenos and ginger and brown for about a minute.  Add the carrots and mix for about two minutes. 

Put the steak and brussel sprouts back into the pan with the rest of the ingredients, pour the sauce over it and mix everything together.  The mixture should start to thicken from the sauce.  Stir for about a few minutes on medium heat. 

Put back into the serving bowl and serve along side with steamed white rice.

 

 

Question of the week #21

For any of you reading, I need more questions!

One of the most frequently asked questions I get when people ask me about the companies that I have invested in is, what is your favorite investment.  I always answer the same, I have no favorites, I love them all. With that being said, here is a good question for this week. 

what are the business types/trends that you see getting really exciting in 2013?

We are already almost to months in to 2013 but I am definitely seeing some interesting changes in the ecommerce world.  I have a few investments in the pipeline around this platform.  I really believe that the big brands that will make an impact in the ecommerce world are platforms where they are going after a certain segment of the population as in you can't be everything to everyone.  I also believe there is a balance between online and brick and mortar.  I have written about this before, I like the models where 15% is brick and mortar and 85% is ecommerce.  There is something to be said for an extension of a brand where you can see it and touch it in markets that might have the most traffic. 

I do believe a key factor in 2013 is revenue.  In order to get funding and a real look from investors you have to prove a revenue model.  I don't think anyone is interested in figuring out what to do with all the eye balls as they were in the past.

Lots of changes in the consumer product markets from food to organic to no chemicals.  The issue with that is those businesses have a hard time getting funding.  They need to hit a certain mark before a good amount of capital comes rolling in the door.  Perhaps places like Circle-up and other consumer product incubators with cash will change how that industry grows.  I hope so.

More heatlh care, more education and more banking start-ups.  Hoping that one day we won't have to carry cash or even a credit card.  We will see.

 

Shame on Yahoo

The businesses that launched in the early days of the internet were set on changing the world.  That also meant changing the work place and their environments.  I know because I worked in one.

I was the second person at Silicon Alley Reporter in the mid-90s when anyone involved in the Internet scene thought that we were all going to change the world.  Now we all know the way we live our lives is not going to change over night but it was the beginning of change.  Here is what was life changing for me.  I worked at Silicon Alley Reporter heading up all sales including involvement in the overall big picture of how the company was going evolve.  I had 3 young kids at home all under the age of 5 and I worked from home.  I had a home office that was next to the kids playroom.  I fielded 150 emails a day, 50 phone calls and faxes.  The business grew and the sales grew and I eventually hired a sales staff in LA and NY.  I came in once a week and talked to my group daily.  Trust me we did not lose out because we were not all under one roof every day.

Certainly Yahoo has found itself way down a path where the culture of the company is perhaps out of control.  The company has gone through several CEO's in a very short amount of time.   Changing the culture of an organization is like turning around a cruise ship.  It takes a long time.  I do not believe that shooting a new mandate across the bow of the ship is going to change the culture. 

There are 14,500 people who work at Yahoo.  Digging in to every single division is time consuming.  Who is running each area, what are they getting done, what projects are they working on, what are they just maintaining, are the creative people getting together a few times a week face to face, are divisions working together or are there a variety of fiefdoms, can the company be more nimble and efficient with 9000 people.  I am going to assume that these questions are being asked and the powers that be are digging down into management from the bottom up.  It takes time but if you can clean up the company and culture in a strategic disciplined calculated way then the concept of flexible work can and should exist.  It has to.  It is the principles that Yahoo and others companies of that generation were built on.

When I worked at Macys, many years ago, they went from being a publically trading company to a privately held one  They took on massive debt.  How did upper management deal?  They put restrictions on all management so that nobody had any flexibility to make decisions because they micromanaged the process from above.  That is exactly what is happening at Yahoo.  What happened at Macys is the best and the brightest jumped ship. 

Beware to Yahoo, you will get what you paid for.  The best and brightest will jump ship, the next round of employees will not be self-starters but working stiffs, the environment will become boring with zero innovation and will feel like an old school bank and the costs will be higher for every employee to have a chair and people will be clamoring to get out and home by 5pm.

Yet the worst thing that they have done is send a message to families, working parents who want and truly need the flexibility to be productive at work and be productive happy parents at home.  Their dreams that internet businesses will change the work environment is over.  In particular the ability to give women especially mothers the opportunity to work and be present in their childrens lives while leveling the playing field because technology has created a platform to do that....well that bubble at Yahoo just burst.  Shame shame on Yahoo.  No longer a leader of change. 

Loverly relaunches

Today Loverly relaunches. Click on the link and take a look. 

The site is incredibly user friendly.  I love the business model.  Search for weddings.  You can create your own bundles and concepts in your own one easy location on the site.  You can purchase products from the site.  You can find vendors from the site.  You can discover on the site.  You can also get ideas for your own wedding from the site.  The annual spend on weddings in just the United States is around $100 billion.

The launch party was last week.  You know you are at a launch party that is run by a woman entrepreneur when there are beautiful hearts pinned on the wall.

There are champagne glasses lined up with raspberries in each one for your enjoyment.

When the food table is color coordinated and set up perfectly.

I spent some time in the back seeing the new site.  They did an amazing job.  BIg hats off to the team. 
Especially loving the new logo.  Bold just like the woman, Kellee Khalil, steering the ship. 

 

Can technology really change behavior?

This is a subject I have thought a lot about recently.  I am fortunate that I see a lot of businesses that are using technology to change the way we live our lives.  I also think to myself, "will this play in Peoria?".  No disrespect to Peoria because what I am really thinking is how long will it take for this to move out of the excited early adapters of the start-up world to everyone else...and will it.

I do not know the answer but here are a few things that I have witnessed recently which just makes me wonder.  I was sitting in the doctors office this past week and next to me was a woman that I would put to be in her early 60's.  On her knee she had her check book and she was balancing her check book.  It was the exact check book that I used when I was in college.  Totally old school.  It obviously worked for her.  Then she took out of her bag a Filofax where she had paperwork stored including her calendar and address book.  Funny enough she also had an old blackberry and she appeared to be taking information from it and writing it down in her check book and filofax.  My conclusion is that the blackberry was purely for communication purposes. 

In the late 80's I remember walking through the garment center and seeing two random men talking on phones that were as large as their head.  I thought why on earth do they need to be constantly connected like that.  It just seemed utterly ridiculous and of course expensive.  This is certainly an area where consumer behavior has totally changed. 

My brother is embarking on his next career journey.  My sister-in-law asked if he would help her get organized while he was working out of the house with her.  She has her own successful business that she runs out of a home office to be with the kids.  The ultimate balance multi-tasker.  My brother tried to help but she kept saying well that won't work because that is not how I do it.  I know Fred has wanted me to put lists in particular ways so he can have access and analyze the data how he likes to do it and it just doesn't work for me.  I do not think like that. 

I can imagine a lot of ways to make our lives easier particularly when it comes to managing our healthcare or managing our money.  I do believe that when people in college start using certain products as they enter adulthood will be the time when many of the behavior changing options will begin to stick.  Once most people go down a certain path on how they run their lives it is really hard to change their behavior.  Most people do not like change. 

That doesn't mean that the companies that are building life changing technologies aren't exciting, it just means that it will take some time before they scale to the masses. 

 

 

Nelly Yusupova, TechSpeak for Entrepreneurs, Woman Entrepreneur

Nelly first contacted me about getting a press pass for the Womens Entrepreneur Festival in 2012.  She was interested in a media sponsorship for Webgrrls.  We were not doing any sponsorships at that point but we gave Nelly a ticket to attend. Soon after Nelly attended an intimate dinner that I went to and it was there that I really got a better insight into Nellys smarts.  Fast forward to the Womens Entrepreneur Festival of 2013 where we quickly caught up on her latest venture, TechSpeak for Entrepreneurs.  A two day intensive boot camp designed to help educate non-tech entrepreneurs on how they communicate and manage their tech teams. Great idea.

Nellys story has a lot to do with her drive and chutzpah.  Nelly grew up in Thadjikistan.  A town in Southeast Asia that was part of the former Soviet Union that bordered Afghanistan and China.  I first thought it must be really cold there but actually the climate is like living in Arizona.  Her father had a shoe making business as buying shoes off the rack were ridiculously expensive.  Her mother was a nurse that had stopped working when her twin brothers were born. 

When Nelly was 13, during the Afghganistan/Soviet war they left.  The USSR was protecting the border from the Taliban coming into the region because it was mostly muslim.  Nellys family were Jews living in a muslim community.  The family had relatives in both Israel and the US both working on getting them VISAS.  The Soviet Union was beginning to collapse and they realized that war was going to break out.  The decision where they would end up was completely based on which ever VISA came through first.  The US came first and off they went. 

They family was able to buy plane tickets to get to the US through a Jewish organization as the ruble had completely collapsed and their net worth was now zero.  They came with 15 other people that included her extended family members of uncles, aunts etc.  They ended up in Forest HIlls living with an aunt where there is a large Russian Jewish community.  Of the 15 of them only 2 spoke English.

The whole family went to work.  Her parents worked in any job they could from delivery person, dishwasher, working the register at a food store, etc.  Nelly worked too.  Eventually her father saved up enough money to open a shoe repair shop in Long Island and her mother learned English and took all the exams to become a registered nurse.  Yet their number one priority was getting an education for their children.

After graduating high school in Forest Hills, Nelly had to decide what to do for college.  It was 1996 and She was 17.  She decided that she should do something in computers because that was the future.  Education in Russia is very different from the US, Nelly said the math and sciences there were more advanced and that is why she easily moved towards computer science.  She had zero idea what it meant to be a programmer and they did not even have a computer in their home but she just knew it was the way to go.  She took a class at Queens College and found she was the only person in the class without a job in computers.  She said she felt as lost that first day of college as she did when she landed in the US for the first time.

The lab was where she got on a computer for the first time in her life.  She sat down to this guy who was typing super fast and she thought he must be so smart.  Once she started to learn how to write code she realized that all that guy was doing was changing directions in DOS.  At first it just seemed to amazing but she quickly realized it was not as hard as she thought.  Nelly worked really hard to get an A in that class.  She says as an immigrant, failure is just not an option.  Once she understood the power of being a techie she fell in love and finished the program in 3 years.

During her time in school she always had a full time job.  In every job she had she would start out on the floor (shoe store and bagel store) and soon find herself getting more responisibility to become a manager.  About a year and a half into college during these type of jobs she decided she should get a professional job.  She put out feelers everywhere and Webgrrls was the first company that responded.  They gave her an internship with a promise that within two months they would hire her to work in the tech area.  At first she was just answering phones and doing community development but was more interesting is that she started to meet entrepreneurs. That was what really excited her.

Nelly moved into the area where there were 20 people sitting in a room working on a program called Town Hall with message boards and chats.  She was hired to manage that.  She was doing the work and blown away at how Internet companies work the same time.  Soon she was put in the tech department with two other guys.  Sooner than later she learned how to run the tech department, the two guys left and she found herself in charge.  It was 1999 and she was graduating at the same time.

Like many others, Nelly was offered a job at Paine Webber and took it.  She thought well this is the dream working for a big company.  She got a wonderful card from all the people at Webgrrls saying she would be back.  They knew what she did not know.  Paine Webber was a corporate environment and there was zero excitement.  It was the total opposite of what she loved about Webgrrls.  She loved the working in a small company wearing a million hats where you get to do everything. 

A few months into the job she CEO of Webgrrls asked her if she was happy at Paine Webber.  She said she was not but felt she should stay a year because it was important to stay in a job for at least a year.  The CEO asked why.  If you quit I'd hire you to become the CTO of Webgrrls.  Nelly was 21.  She looks back now and is shocked that they gave her that opportunity.  She knew she had drive and could figure it out as she went along and so she took the job.  Nelly really does believe that she was a very mature 21 year old because she was really forced to grow up very quickly when she came to the US.

Nelly has been the CTO of Webgrrls since 2001.  They have given her a platform to work on the projects she loves while being a CTO.  In 2004 she became the New York chapter leader of Webgrrls.  Webgrrls gives Nelly a lot of flexibility to be entrepreneurial because she is capable of managing her clients, getting the work done and helping other people how to leverage their businesses on the side.  It is an incredible cultural environment that has allowed her to spread her wings.  At Webgrrls she started something called Digital Women where she would speak on the behalf of Webgrrls to help mostly women entrepreneurs understand their businesses.  Working in an environment where you get to learn the 360 degrees of the business from biz dev, tech, sales and talking to investors has given her a unique perspective and she believes that a CTO should understand all those parts.  Through Digital Women Nelly would be hired by businesses as an entrepreneurial consultant looking at businesses from top down. 

The more she worked with companies the more she realized that one of the biggest issues is that non-tech company leaders and entrepreneurs would go down the wrong path technically spending money where they did not need to.  I have seen happen countless times.  Developers promise one thing and then the entrepreneurs who hired them did not get the product that they want.  There is a disconnect.  Nelly realized it wasn't only the developer fault but is also the entrepreneurs fault because they do not know how to communicate or understand the process of developing something and because of that they make the wrong choices that are laid out for them from the developer.  She started asking questions to entrepreneurs and she began to see the red flags that the entrepreneurs can not see with their developers.  That is why she decided to launch TechSpeak.

Nelly set up processes in Webgrrls that allow her to grow TechSpeak.  She has a road map that she is following and she is teaching other entrepreneurs to use that map to leverage technology in their own businesses.  TechSpeak puts on two day seminars across the country.  Not surprising Nelly knows exactly how many people she needs at each class in order to make TechSpeak a profitable business.  Nelly has created something that many first time entrepreneurs should consider taking.  It can save one a lot of money and frustration down the line.  Keep in mind that Nelly has built this business while maintaining the tech infrastructure for 100 Webgrrls chapters across the country and world.  She understands how to run an efficient tech infrastructure after all she can built a business at the same time.  Impressive woman and techie that has taken her knowledge and figured out how to give back by training others to do what she does so well.  Most of the people she has touched are women.  

I am looking forward to watching what Nelly does next.  An impressive woman.  Really glad she crossed my path. BTW, for anyone who is game, here is a 15% discount off the two-day class.