Craig Shapiro became a Silicon Valley man of means in the last half decade investing early in successful startups like Facebook and Mob.ly. As tech excitement and investor dollars shifted East, he decamped to New York City in early 2011. After hunting down a Manhattan apartment in the East Village, he launched a seed pool for startups called Collaborative Fund while getting to know digital Gotham.
Through a community work space in Brooklyn’s tech boomtown in the Dumbo neighborhood, he soon met Cameron Koczon, founder of Brooklyn Beta, which hosts three-day conferences featuring DIY-minded speeches from founders of promising startups. The two entrepreneurially focused young men (Shapiro is 35; Koczon, 30) became fast friends, sharing a like-minded philosophy that startups can leverage personal values as competitive weapons in the marketplace. Their relationship helped spawn the Brooklyn Beta Summer Camp, which recently wrapped its first 12-week accelerator program. It’s the latest New York incubator for aspiring digital entrepreneurs, building off the momentum of local successes like Dogpatch Labs, which produced the hit music site Turntable.fm, and TechStars, which nurtured the 2012 home-relocation sensation Moveline.
With Shapiro as a key adviser and conduit to venture capitalists, the camp is run by Koczon’s team at Fictive Kin, a small digital company that produces apps such as Gimme Bar and Teux Deux. With partners Chris Shiflett and Tyler Mincey, Koczon chose five startup teams from some 300 submissions, awarding each $25,000 in seed money from nine local tech-oriented sponsors.
The Brooklyn Beta Summer Camp can best be described as a program for tech entrepreneurs crossed with angel investors searching for the next big thing. The teams in the inaugural session varied greatly, ranging from a practical B2B marketplace for fashion manufacturing called Maker’s Row to a video-making mobile app/website dubbed Sticker FM. Through the 12 weeks, they would venture into Manhattan, Queens and various Brooklyn neighborhoods for evening meetings to critique each other’s work. The end goal: two days of demos before an audience of New York’s biggest tech players. Their mission would be to collect the handshakes, business cards and requests for meetings with VC players to obtain funding to keep going after burning through the $25,000 in seed money.
Would any of the campers stand a chance at becoming the next New York tech darling, like Foursquare, Fab or Etsy? The program was supposed to end on an evening with each group making a final pitch to a crowd of potential investors. But just as each of the teams evolved over 12 weeks, the camp itself pivoted. Ever lurking in the background, plotting the final twist is Shapiro, propelled by the feeling that the startup bubble will soon lose air, if not burst. “It’s made for a lot of excitement, but it hasn’t created a lot of sustainable businesses,” he says, echoing a growing consensus. “In 2013, the pendulum will be moving back toward the middle after a period of overexuberance.”
In other words, the time is now. The rush was on to a conclusion no one expected.
Weeks 1 and 2
Putting Ink to Paper
The five teams—each with three members—met a week earlier for a casual, meet-and-greet dinner. On July 18, they’re getting down to brass tacks, congregating in Long Island City at a corner bar called La Familia. In the bar’s back room, they sit on cushioned benches arranged camp-style in an imperfect circle and consume sandwiches, beer and wine. Gruff-voiced and thickly bearded Ivy Leaguer Koczon sips a whiskey and soda as he holds court, immediately establishing himself as the group’s head coach.
A self-described “Airbnb hobo,” Koczon regularly visits cities around the U.S. and Canada for entrepreneurial brainstorming retreats and hackathons. Though probably more a Bad News Bears Morris Buttermaker type than John Wooden, he fits right in with these tech types. During one camper’s overly hurried presentation, Koczon comments, “I felt like you were racing ahead of me, and I am out of shape and have bad knees.”
In the first order of business, all five groups are asked to sign the Brooklyn Beta Summer Camp contract, which takes a 6 percent stake in return for the $25,000 investment. (Other financial details were not disclosed.) In the dimly lit back room, the 15 entrepreneurs put ink to paper. Along with Maker’s Row and Sticker FM, the teams introduce themselves. Calzone is a social calendar mobile/Web app, Skillcrush is a Web destination enabling digital-code novices to build websites, plus there’s a yet-unnamed mobile app for fans of farmers markets. “We have some name ideas, but we want to be patient and make sure we pick the right brand,” says John Ford, one of the app’s developers.
After the introductions, Koczon shifts the discussion to digital creativity. “Let’s use collective wisdom,” he says, encouraging the teams to embrace “a ‘slash-purpose’ mentality,” a code-referencing credo meaning Web products that inspire users and beget business. “We have some really smart people,” he goes on. “We can help each other iterate and change our products for the better.”
Tech startups tend to work within a culture based on change. All the campers have either launched other startups or left promising careers to become entrepreneurs. Fashion-minded Maker’s Row was born after Matthew Burnett and Tanya Menendez suddenly scrapped their e-commerce venture Brooklyn Bakery, filling out their team after meeting Scott Weiner through an online tech talent board. Targeting a fragmented fashion ecosystem, their concept aims to unify large manufacturers, small artisans, suppliers and retailers in one digital destination. “We were working so hard to get Brooklyn Bakery off the ground,” Burnett says. “And then Tanya comes to me and says, ‘Hey, this is a huge problem that we can tackle.’ So we pivoted.” But would their new plan stick?
Closing the Long Island City meeting, Koczon cheers them on. “We want five incredible products,” the San Diego native says. “Each one should be a hit. Otherwise, you wouldn’t be here.”
Weeks 3 and 4
On Aug. 1, the teams meet at Sticker FM’s warehouse space in Brooklyn’s Bushwick neighborhood. The dog days of summer have arrived, and it’s muggy. “Want a beer?” Igal Nassima, 32, a Sticker FM co-founder originally from Turkey, asks campers gathering on the rooftop. “It’s co-o-old.”
After a few drinks and some chitchat, the campers head downstairs to the bare-bones warehouse space for updates on their progress and pinpointing their next moves. The hosts go first, with Nassima and partners Paul Christophe, a Texan, and Avery Max, a native New Yorker, taking the stage. With Sticker FM, they explain, groups of friends create 10- or 20-second videos on their smartphones or computers to post message board-like threads but for mobile or Web.
Several campers from other teams laud the playfulness of Sticker FM’s design, which lets users scroll from left to right while watching vids. “The videos will be fun vignettes between you and your friends,” Nassima explains. Yet his group needs to attack a basic problem that befuddles all the teams—ridding their products of glitches. “The prototype is done,” Nassima says, “but now we need to rebuild it in HTML5.”
Next to present is Skillcrush, a three-woman team looking to teach Web newbies how to code their own sites. “We all come from the news industry where technology has become a disruptive factor,” says co-founder Jennifer McFadden, 40, who has worked in product marketing for The New York Times and is an adjunct journalism professor at the City University of New York. “And those people who have some technical understanding have had a much better chance of keeping their jobs over the last couple of years.”
Like Sticker FM, Skillcrush hopes to progress from prototype to finished product during the three-month camp. During their presentation, partner Adda Birnir, 27, forecasts the venture’s next steps. “We are still trying to figure out things like if we’ll have price add-ons for certain education features,” she says. “There’s a million questions.”
Campers Talk Tough Love
On Aug. 15, everyone meets at Skillcrush’s West 27th Street headquarters in Manhattan. Another typical tech workspace, it’s an open room with six-foot-long track lighting. Out the window, the top of the Empire State Building glows green and yellow as dusk nears.
During Maker’s Row’s 20-minute presentation, Burnett and Menendez describe how their online hub will unite fashionistas with designers, highlighting how their site makes it possible for both brands and consumers to design products like watches and handbags. They have also developed a directory for suppliers. After the show-and-tell, everyone in the room applauds. “A week ago, we got destroyed,” 27-year-old Burnett says afterward, explaining that the campers can be especially harsh in their design and developer criticism. “This felt good.”
Next up is the team behind the still-nameless app for farmers market devotees. The group involves early thirtysomething brothers John and Glenn Ford, at the moment working in Wisconsin, where Glenn lives. “They are pushing out [mobile code],” says their partner Josh Stewart, 33, who demonstrates for the campers how the app is evolving into a photo-friendly, Instagram-like social tool for aficionados of fresh produce.
Pretty pictures of blackberries and peaches appear in a mock-up of the app appearing on a drop-down projection screen. Stewart points to just-implemented interactive features, including users’ ability to “like” a picture. Of course, beauty is in the eye of the beholder. “Who goes on their phone to look at pictures of fruit?” asks Ryder Ripps, a member of the three-man team Calzone. “That’s freaky.”
Calzone is up next, presenting the latest iteration of their social calendar, according to Ripps, “that doesn’t suck.” A few weeks ago, the concept seemed all over the place. Now, it becomes clearer that Calzone can be useful for social networking through a so-called “smart” digital calendar. Camp coach Koczon says he thinks their project can be “like Tumblr for events,” adding, “You got a lot set up. What is this? Only Week 6? What you have left to do, that’s nothing.”
Weeks 9 and 10
Progress and Secret Chats
It is now early September, and the teams are finishing product development and starting prep for their final demos with the first round to be held at the Brooklyn Beta conference in just three weeks. The groups are quickly evolving. For example, Calzone has changed its name to Webe.at, and Maker’s Row now has close to 1,000 directory listings. “The factories have been excited about it,” says Burnett—excited himself that they seem willing to pay to be included.
Meanwhile, the budding entrepreneurs don’t know that Koczon is powwowing with Shapiro about upping the Collaborative Fund’s involvement. “I keep tabs on where they are with the camp,” Shapiro says, explaining that he wants Koczon to be the program’s lead voice. “I try to respect them and do not want too many cooks in the kitchen.”
Shapiro wants to keep his presence at a minimum—for now at least.
Prepping the Pitch
The demo days are bearing down. “We are all in the death-by-1,000-paper-cuts phase,” says Skillcrush’s Birnir.
Having put away the polos and shorts and now clad in long sleeves and pants, the campers ruminate on how to write and develop narratives for two-minute videos to be presented at the Brooklyn Beta conference one week from now. Skillcrush wonders if it should target its online service to women, to which Coach Koczon offers a blunt reality about how investors might view a female focus. “They are 28 to 30 guys that went to Ivy League schools, and they are perfectly nice people—it’s just that they are a really homogenous group that decides what goes to market,” he explains.
The biggest news on this night is from the guys behind the farmers market app. Stewart and the Ford brothers have finally settled on a company name: Farmstand. The owner of Farmstandapp.com is willing to sell the URL for just 50 bucks, and the Twitter handle @farmstandapp is available for free. They’re so ecstatic that they gave the Seattle-based URL owner a 100 percent “tip” as they finalized the online transaction. “Getting the right brand name is the hardest part,” Stewart points out.
Having arrived in New York, partner John Ford reads aloud the copy for his team’s demo, referring to “tomatoes in your local supermarket that are from hundreds of miles away and taste like cardboard” and using buzz phrases like “CSA” (community-supported agriculture). Fellow campers call out the Farmstand crew. “You don’t want to be negative and talk down to your audience,” says Shiflett, a camp co-leader. “You also want to relate a little bit to the mind-sets of people who maybe aren’t yet using farmers markets.”
Demos, Oct. 10-13
It’s harvest time for the summer campers, and each group gets set to unveil its digital crops before a packed house of around 300 at the Brooklyn Beta conference. Their demos are not the main attraction at the three-day confab, featuring events ranging from a speech by Internet guru Seth Godin to a performance by indie singer-songwriter Ted Leo. Each day at 2 p.m., one or two of the summer camp groups will present as part of the mix.
The showcase takes place at The Invisible Dog Art Center, located in a defunct belt factory. So it seems apropos that Maker’s Row goes first, with team members hopping on stage wearing branded T-shirts to explain how their website can help the garment industry. Their video features colorful footage from inside manufacturing operations, boasting how their site has already signed on 1,000 factories. The crowd applauds. Offstage, Burnett beams. “It’s been under wraps for so long that it feels really good to get it out to people,” he says.
Skillcrush, Sticker and Farmstand are also rewarded with audience approval—and feelings of relief that the big moment has finally come and gone.
The final presenter receives what is probably the greatest ovation. It’s the guys from the social calendar product, Webe.at, who present a fun video about “blowing up calendars” that ends with a space shuttle playfully bursting through their brand name. The pitch kills it for twentysomething founders Ripps, Jules Laplace and Jonathan Vingiano. Minutes later, an investor hands them his card and says he wants to talk.
Weeks 13 and 14, Postscript
A final surprise: The $50,000 pivot
Ten days after Brooklyn Beta, the campers learn that a second scheduled day for demos has been cancelled. Some are relieved while others are surprised.
Here’s what happened. Putting the five groups on stage one after the other for a big VC audition would have made for an entertaining show, Koczon explains, but it also would have been a disservice to the teams. So he opted for scheduling individual sitdowns, so the campers wouldn’t have to compete against one another for cash. The first demo day was primarily about the teams unveiling their products to the public. The second demo was to be only about raising funds.
But Koczon’s thinking was evolving as his first incubator program wound down. “If you show them all off at once, if you are an investor, you couldn’t help evaluate all of them at once,” he figures. “I’d rather them get evaluated against everything that’s going on in New York City. All our products are great.”
The campers, ultimately, cheer the move. Merely an adviser up to this point, Shapiro is now officially the camp’s principal investor. He liked what he saw so much that he anted up $50,000 for each group, enabling the teams to continue tweaking their products and go-to-market strategies for several more weeks without worrying about funding.
“I knew early on that I was going to invest, though what the mechanics were going to look like were still being figured out,” he says. “And they also wanted to make it a big reveal later in the program. That way, the groups during the summer and early fall would stay hungry and clearly focused on the product.”
So what are the startups doing with the cash? Generally, gearing up to compete like mad in the coming year.
“It has already allowed us to hire extra people, which will get us to market faster with a better product,” says Kate McGee, 27, co-founder of Skillcrush. “The money wasn’t something we were expecting, so we are really excited.”