The first week in the NYC is almost over. Our first 7 days in the NYC was about the making of a «New» New York, the tremendous shift towards making NYC a center of attraction for start-up companies in media, biotech, and software industries.
Before financial crisis, the economy of NYC was based on consulting and banking activities. However, the turmoil on financial markets caused problems in the consulting and banking industries and in turn helped to initiate some reforms to diversify the economics of the city. Michael Bloomberg, the former Mayor of NYC, introduced an idea to create in the city a good infrastructure and facilities to attract investments and support entrepreneurial needs. As a result, co-working spaces, accelerators and incubators were created in order to support innovation and attract young entrepreneurs who are eager to make their own start-up.
From the whole range of company visits, presentations and interacting with entrepreneurs, I especially liked the visit to NYU Leslie ELab. The place is really interesting. NYU Entrepreneurial Institute managed to create an amazing atmosphere of entrepreneurship there. Frank Rimalovski’s presentation was devoted to how NYU helps to do startups.
I was surprised to know that Etsy, a company that held an IPO last month and has a market cap around $2B, was created with support from NYU. Frank also provided statistics that 42 percent of startups created products with no market need. It means that more failure happens because of lack of customers than problems with technology or product. Frank mentioned the “toothbrush test”. Larry Page, the co-founder of Google, insists that new products must be so important that people would like to use them at least twice a day. Certainly, it is quite a tough standard, but startups should aspire to reach this threshold.
One of the key ideas of the presentation was that startup companies should talk to customers, and try to figure out their problems. It turns me back to our marketing class, because we learnt that customer is in the center of the marketing model. Therefore, I believe that the quotation that written on staircase in Leslie Elab — «The best investor in the world is your customer» — is a key to success for many start-ups.