There has been a lot of talk lately about how massively the NY tech business has grown over the past year. And DogPatch Labs is evidence of the trend. The tech incubator opened just a month ago and the space is already at capacity.
Dogpatch Labs was created by Polaris Venture Partners to connect
entrepreneurs and help founders conceive and launch startups. The group
has offices in San Francisco and Boston and just opened a New York
office that provides free office space, web access, coffee, and snacks
for a small group of early-stage startups and entrepreneurs.
It’s been called a “Frat House for Geeks,” and there are already many geeks lining up to get in. Fourteen companies (including AssuredLabor, Collecta, ekoVentures, Good Crush, Group Commerce, KidMango,Scoop St., and Postling) now share DogPatch office space south of Union Square.
I caught up with Jon Steinberg, the executive in residence at DogPatch, and Polaris Partner Peter Flint to talk about Dogpatch’s move to New York, why they’re so obsessed with local and how do get digital tools past the “lunatic tech fringe.”
Why open a Dogpatch branch in New York now?
Peter Flint: New York is on a tear right now. There are a lot of really interesting young companies getting started. New York’s always been a great place to start companies, but over the past 12 to 18 months there’s been a revitalization and a new breed of entrepreneurs that’s happening. What we’re seeing now is really a lot of bright young people who are second generation internet.
Jon Steinberg: I really think Wall Street was such a huge talent suck. Now, with the dislocation that’s gone on, it’s more of a right pricing. It’s really a different world than it was a few years ago.
What business areas are you most interested in developing right now?
PF: We are looking at companies in consumer internet, consumer mobile and cloud services — with anywhere between one and four employees.
JS: I don’t know if it’s my bias having worked in local, or Polaris being interested in local as well, but we’ve been drawn to local. I think the reality of it is that in New York, because of its density, you’re seeing a lot of local stuff happening here. If you want to experiment with local businesses, you can just walk out onto your street and you’ve got 200 within a few blocks. Whereas if you’re in Paolo Alto or Mountain View, it’s not the same. In Mountain View you have to drive four hours to see 200 businesses. In Paolo Alto the entire town is 200 businesses.
How many companies are you working with in local? What are you most excited
JS: In DogpatchNY we have several companies focused on local: namely Scoop St. and Postling. Scoop St. is a local group buying platform, and Postling provides social media management tools to small/medium businesses, most of which are local. My more general thoughts on why local/mobile is exciting and New York is the place to work on it can be found here:
How do you know that a local product will work outside of urban areas?
PF: It really depends on what the product or service is. There are some products and services, where immediately, I call them the lunatic fringe — those people who are likely to try any new and interesting application that comes out. But whether it sticks with us, or the rest of the lunatic fringe out there, who knows? The real key is — is it a fad or a trend? If it’s a fad, and gimmicky, it’s fun for awhile and the lunatic fringe plays with it, but it doesn’t get massive large scale adoption. Foursquare or other products like that, are they going to become pervasive and mainstream? They’re pervasive amongst the lunatic fringe now in New York and California, because that’s where a lot of us are. But the real key will be whether it gets beyond that, to people who aren’t in technology. I hope it does as they have some great opportunities ahead of them.
What about less tech focused local products, like one of your New York
companies, Scoop Street?
PF: What Groupon and Scoop Street are doing is taking activities that people normally would do. People like deals, whether it’s discounts or coupons. Groupon and Scoop Street are facilitating a new way for the average consumer to get discounts on things they might be interested in. They’re not creating a new buying behavior.
Has the iPhone made local a more interesting place for startups? What do
smartphones bring to the sector?
PF: Yes smartphones have made a dramatic change in the ability for start ups to be successful. In the past companies had to deal with wireless providers and handset manufacturers in a way that created “gate keepers.” This was not healthy for innovation .
JS: Also, the volume of web usage on iPhones and Androids is many times that of traditional or feature phones. A better browser combined with location awareness and 3G has made for so much more usage that it’s almost comparable to the desktop now.
What about brands getting into local? Do you have any advice for them? How
can companies distinguish different trends from fads?
PF: Brands should be in local and testing various ways to increase consumer engagement. There are companies like Foursquare and soon Scoop St. which will offer brands creative ways to build brand and drive revenue.
JS: Also in many ways I see services as the new content. So brands should consider using services in the way they traditionally bought around content. See here:
What is most missing from the local market right now? Is there a problem you’d like to see a startup fix?
PF: I think the big problem is fragmentation. There are just so many companies trying to do similar things and of course there is Google who wants to now own local along with search. Also, local small businesses do not self service. They don’t “buy” advertising they need to be “sold” it.
JS: I’d love to see a self-service platform that small businesses can readily use that does not require “feet on the street.” I’ve written about that more here.