[I was] driving a number of early stage investments, such as Etsy, and at the same time was on the board of large, established companies, such as Marvel Entertainment.
The entertainment, media and consumer companies we see in New York today are as interesting as any geography in the world. We initiated a partnership in China, in 2004, and have been driving investments with our team there over the last six years. We have a similar view that New York over the next 10 years has tremendous opportunities to build very large-scale Internet businesses.
Q. – Is this a sign that Accel will significantly increase its investments in New York?
A. – Absolutely. We already have a pipeline of investments that we’re tracking in New York, In some cases, it’s much easier than our China initiative, which I led in 2004 and 2005.
Q. – You know, very few people are as bullish on New York, as they are on China.
A. – That’s good news for us. We started raising our funds in 2005 in China, and today we manage over a $1.5 billion in China, with a team of seven general partners.
I don’t know if New York evolves over the next decade to that kind of scale, as part of Accel, but I have very strong optimism that in all stages, seed through growth, we have great opportunities to build very defining companies over the next decade here in New York. We’ve invested over $100 million in New York-based companies in the last three years.
Q. – What types of New York start-ups do you find most interesting?
A. – A perfect example would be Etsy, in Brooklyn. We certainly were early and excited about investments in social networks and invested in Facebook in April of 2005. We’ve done a number of other investments and around the country in areas we consider to be right at the intersection of social networks and commerce. Groupon, Etsy, Diapers.com and a number of companies we believe certainly had elements of not just social networks and the advantage of social platforms but had deep commerce enabling teams. We historically have found companies that fit at the intersection of colliding industries to be extremely interesting, we believe that not only in social commerce today, but in some of the areas where entertainment and media intersect social networks. There will be outstanding entrepreneurs, and many of them that we’re currently looking at and meeting with are here in New York.
Q. – What do you think of the talent pool in New York?
A. – There’s always been a great talent pool, of course, in the New York area, in these areas. What is different today is, for example, this morning, I met early with a team that is in their early 20s that has moved to New York to pursue opportunities where social networks are being applied to a very interesting new space in media. What is different today, from five to seven years ago in New York, is that teams are coming directly out of colleges and choosing to take advantage of platforms, such as Facebook, and building those businesses here in New York, most often in Lower Manhattan, Union Square. We’re seeing now a generation of entrepreneurs that are choosing to build their businesses here as opposed to perhaps feeling that they have to move to Silicon Valley. Cloud infrastructure services, some of the applications built on top of new technologies, virtualization, all of these are technologies that are allowing teams in New York to scale and build their businesses in ways that we didn’t see five years.
Q. – Do you think more graduates, who may have traditionally gone to Wall Street, are now opting for the start-up world?
A. – I’m on the board of dean’s advisers at Harvard Business School and spend a lot of time with people who are graduating or recently graduated. Given what’s happened on Wall Street, there has been some shift for many students in terms of career pursuits and the kinds of businesses they would like to pursue.
It’s too early to tell whether this will be the long-term trend that survives the inevitable bounce back of Wall Street. Entrepreneurs and young teams can build applications that are exciting in entrepreneurial environments, that scale very quickly. These are attributes that are very attractive to many of the best students today and many of them are choosing to locate those businesses in New York.
Q. – You realized the value of Facebook very early. Do you see a New York company with the potential to be the size of the social networking behemoth?
A. – We’re always looking for the potential long-term, home-run outcome. We take a 7- to 10-year view of our investments. The goal of venture capital is to try to find teams and entrepreneurs early where we can make 50 to 100 times our money, and help those entrepreneurs build very large businesses.
Today, it’s always very hard to predict how a young company eventually evolves, in terms of scale. But there are some extremely fast-growing companies in our portfolio, here in New York, that have a chance to define what their particular segment looks like, not only in the next year or two, but in coming years. Etsy, Glam and many others are scaling very nicely. But honestly it’s always too early to tell in terms of true breakout potential until companies generally break the $100 million revenue per year. Groupon and Facebook of course have.
Q. – So you won’t tell us which company will be the next company worth $50 billion?
A. – I wish I knew.