‘New York Technology is not Thinking Big Enough’.
Bo Peabody, founder of Tripod and a Greycroft VC, speaks at the first live AMA series, recorded at Betaworks Studios. He doesn’t hold back.
For the ten years that we have been building and investing in companies, we’ve been fortunate to welcome many of New York’s tech and start-up pioneers into our community. Of course we welcome one and all from the West Coast and from around the world, but operating in New York, building in New York, means we share a bond with other New Yorkers. We thought it would be interesting to gather some of the people that have made, and are still making, New York tech tick. So, we are developing an ongoing series of live AMA (Ask Me Anything) sessions with our friends and neighbors and making them into podcasts.
Our first AMA was with Bo Peabody. Bo founded Tripod.com back in 1991. ‘91! Did the internet even exist then? I remember getting a compuserve CD-Rom in ‘94 and being distinctly underwhelmed by it. Bo and his two co-founders felt the same way a few years before me. They wanted an internet that would appeal to young people. So while he was still in school he got together with a buddy and his economics professor to launch Tripod.com. They grew it and sold it to Lycos in 1998 for $58m. That was when $58m was a lot of money.
In this episode of our podcast, Builders, you’ll hear all about the start of Tripod. How it get off the ground, why it was called Tripod, how it got funded and why they sold. You’ll hear about how when Bo first saw the academic version of Netscape he completely changed his business plan and why he gave away 9% of his company for $25k.
Bo has some great advice on the importance of getting a win under your belt when you are starting, how funding has changed over the years and what your deck should look like. This is a great episode for anyone interested in the VC world, New York tech or just the basics of starting a company. Bo is interviewed by Vanessa Gregoriadis of the New York Times. Vanessa wrote perhaps the seminal piece on early New York tech for New York magazine back in 2000: Silicon Alley 10003.
New York, New York,
There was one part of the conversation that was particularly interesting: the difference between New York and Silicon Valley. Bo was quite critical of the New York State of Mind when it comes to tech. New York had not, he felt, produced any big companies. This bristled with me a little. Betaworks was an early investor in Tumblr in 2008 and GIPHY was built here in 2013. I think of those as big companies. Etsy seems pretty big. WeWork too. But it’s true there is no Apple, Microsoft, Facebook, Google, Amazon, Uber, AirBnB, Salesforce, LinkedIn and so on. Why is that?
Bo talked about mentality a lot. While New York companies are happy to innovate within the direct to consumer space, companies such as Casper and Warby Parker are ‘big’ but not ‘innovative’. You can argue that they are disrupting their vertical industry — in other words the mattress or eyewear industry — but people in the Valley (and our friends in Seattle) think about disrupting the whole of commerce not just direct to consumer commerce.
(New York) has always been a good place for that because there’s a lot of talent around consumer facing e-commerce and media. I think in some ways though, those companies are a sign of, of what holds us back. Because it’s like let’s just take pillows and sell them online. Right? Like who cares? That isn’t innovation.
New Yorkers are traditionally seen as ‘go for it’ people, but in terms of tech Bo made the point that in the Valley if your startup blows up after a few years there are 50 companies where as an executive you can hide and lick your wounds while still feeding your family. Not so in New York. Which results in less appetite for risk.
What the valley has that we don’t have is places where executives can hide.
So if you are going to take a risk on a startup and it doesn’t work out, you need to be able to know if you’ve got a family that you can go get a job at Ebay, Google, Apple. There’s literally 50 native digital public companies within a 25 minute drive that when your startup goes south you can sort of tuck in for a couple of years. (Here) there’s no place to go. IAC is the closest thing we have to a native digital public company.
One of the reasons we set up betaworks ten years ago in New York and our first physical product (the space, Betaworks Studios) is located here is because New York has diverse inputs, it is not a one business town. We see this as an advantage : the more diverse the input the more diverse your output. But Bo sees this as a weakness. The lack of focus. LA makes the best movies and Silicon Valley makes the best tech — precisely because there is no other game in town.
I do think that the industries here that have formed the backbone of the city, hold us back. Tech is not the backbone of the city.
So creativity and finance help us make great ‘small’ companies and we’re happy with that. For most people, building Casper or Warby Parker is a win, a huge win. But for Bo that’s not thinking big enough.
Here we don’t have those kinds of expansive dinner conversations. People are too afraid of looking dumb.
Perhaps blockchain will be different?
What’s interesting to me about crypto is that the last thing that the valley hasn’t disrupted is the currency system. And I can tell you they’re going to disrupt it one way or another, they will, because I know the people out there look at what’s happening on Wall Street and they’re like, that sucks.
We continue to see huge interest in blockchain here at Studios. We have had several sessions that range from the relatively straightforward, ‘How to take Blockchain Mainstream’ to more specific sessions on how to design for blockchain. All of these events have been really well attended and you can listen to those events as podcasts. We are starting a weekly crypto lunch that promises to bring together some of the smartest thinkers in this area from the East Coast.
Are these people smarter than our west coast counterparts? Are they going to think big enough to disrupt Wall Street? Would they conspire to put the business that keeps New York together out of business? That’s the billion, trillion, dollar question.
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For more episodes of our podcast Builders, subscribe here. You’ll find unique perspectives on all aspects of the start-up ecosystem. We talk about how to design for blockchain, discuss deleting all of social media with Jaron Lanier, Alex Blumberg’s new podcast on Failure and a ton of other stuff. We release a new episode every week.
All episodes are recorded live at Betaworks Studios. If you had come to this event you would have received a free copy of Bo’s new book.
We’ll be announcing the next AMA very soon. Keep an eye on the calendar — maybe you’ll make it into the next podcast.
Until next time — Happy Building,
James and the Studios team.
