For the last few decades, I’ve counted myself among the, oh, 500 million or so Philadelphians who loathed Chris Wheeler’s broadcasting of Phillies games. Because, honestly, wasn’t there just so much to loathe? The droning. The whining. The tedious breakdown of why, on the road, with two outs and a runner on third and a left-handed Cuban refugee on the mound and your stepdaughter having missed her 11 p.m. curfew, you never want to throw the ball middle-in to a right-handed power hitter. If a guy talked like that while sitting next to you at the ballpark, you’d stick his nachos up his nose.
Philly’s start-up universe has grown tremendously in the past half-dozen years. So what, exactly, is the state of the scene right now? And how can a would-be entrepreneur add his or her own creativity to the mix? Philly Mag’s Tom McGrath and Ashley Primis sat down with four leading figures (identified below) in the start-up world to get some answers.
Richard Vague: Entrepreneur and managing partner of Gabriel Investments, an early-stage venture capital group.
Apu Gupta: CEO and co-founder of social media analytics firm Curalate.
Let’s start by talking about the zeitgeist. In the past few years, start-ups have become sexy. If you’re 25 and you don’t have a start-up idea, you’re missing out.
Bob Moul: If you’re 12 and don’t have a start-up idea, you’re missing out. [laughter from the group]
Exactly. What’s going on culturally?
David Bookspan: When I was in college, the people who were cool were the people who had the band or were actors or were athletes. On campuses right now, the people who are cool are the ones who have their own companies. But also, how inexpensive it is to start a company has led to people just trying stuff a lot earlier—and the success they have found has led to more people wanting part of that.
Richard Vague: I think the bad job market has a lot to do with it. In the 1950s and ’60s, the U.S. economy was growing five or six percent per year. Exxon and DuPont and GE were hiring everybody they could hire. Today you have almost the opposite of that, and folks are finding it hard to find meaningful careers out of college. You’re more inclined to take a risk if the alternatives aren’t that great. If the string’s already been cut, you’ve got to start flapping your arms pretty fast.
Apu Gupta: Yeah, but I think there’s also a cultural change, right? You know, when I was coming out of college—my freshman year in undergrad was 1993, the first year the Mosaic browser came out—I knew I needed to be doing something with the Internet. But it was not acceptable for a 21-year-old to start a company. Culturally, we’ve changed. VCs are willing to invest in 20-year-olds now. Because otherwise, you’ve got to sit in some big building and ride an elevator and look like a chump, and why would you want to do that when you’re 20?
What one word describes the entrepreneurial scene in Philly right now?
Interesting mix. Bob, what do you mean by “tenacious”?
Moul: It’s a very scrappy bunch. Despite a perceived lack of venture capital here, people are building businesses, bootstrapping businesses. It’s a greedy bunch—they work hard, they hustle, they figure out how to get it done one way or the other.
Richard, “nascent” suggests there’s not much there.
Vague: I think compared to San Francisco or New York or Boston, that’s absolutely correct.
Bookspan: It’s really interesting, because the words that we each picked reflect what we each do. So you know, Richard is doing A-round [early-round] financing—and is very, very passionate about Philadelphia and working with the companies in Philadelphia—but the A-round is a really tough area, and there’s not that much activity in Philadelphia. My word was “evolving,” and that’s because I think we’re starting to see some momentum at the earlier stages, pre-A-round, and that’s what I do at DreamIt. And Philly Startup Leaders—I don’t think you can really give enough credit to what PSL has accomplished for the community. You know, they started basically as a group of five or six guys—
Moul: Getting beers one night.
Bookspan: And to be able to attract someone like Bob into what was basically a frat house, to add a level of professionalism and leadership, that is really commendable. And how many members are you up to now?
Moul: Well, we don’t know for sure, but the listserv has more than 1,800 people on it, and we track probably 300 to 500 start-ups.
Apu, your word was “exciting.” Does that reflect the state of your company or how things are growing here overall?
Gupta: I think [our success] certainly contributes to it. We’re based in Philadelphia, we have 300 of the world’s most well-known brands working with us, we have venture capital from the biggest brand-name VCs you can get, and we did it right here. We’re not trying to be Philly-big; we’re world-class. That’s what’s happening, and that’s what you can do in Philly.
I love that phrase, “Philly-big.” Is there enough of that world-class attitude in town?
Vague: There are a lot of highly qualified new ideas and great energetic people here, so I have every confidence that this community will continue to grow. What Philly doesn’t have, and Bob kind of alluded to this, is a lot of resident capital to fund it.
Gupta: Richard, I’d love to bounce something off of you on that. Why does the capital need to be here? I feel like we’re in a world where there’s so much competition for deals in the Valley and in New York. Aren’t we at a point where the money has to go to good ideas wherever those ideas are?
Gupta: No? You don’t think so?
Bookspan: The money, particularly in various parts of the country, is still very, very provincial. We run accelerators in Austin, New York, Israel and Philadelphia, and the companies that are coming out of Philadelphia are every bit as good as the companies that are coming out of the other cities. But they have a harder time getting capital.
What would it take to get more capital in this city?
Bookspan: It’s a virtuous circle that develops around start-ups. You know, at Monetate we have 170 employees now, and things are going really well. If Monetate has an exit, there are going to be 170 people who have been trained in that start-up and evolving path—that leads to more start-ups. From a capital standpoint, unfortunately, until recently the city was ringed with capital, but none of it was in the city itself. And you really need to have that coffee-shop interaction by having all of the pieces clustered together.
Can the city accelerate the process?
Moul: First off, kudos to the Mayor and the administration for StartUp PHL. For the first time in history, we have a seed fund in Philadelphia—a $6 million seed fund. There’s also a $500,000 idea fund—if you have an idea on how to improve the start-up ecosystem, there are grants available to help implement those programs.
So I think you’ve got to give a big shout-out to Mayor Nutter and his team for jumping in here and helping—because it’s been proven to work in other cities. We spent time in New York City. New York City five years ago was not New York City today. But Bloomberg stepped in, they put a seed fund together up there, and now they have half a dozen seed funds, at least. They subsidized space, so they made space more affordable. On the grander scale, they’re building the new tech institute out on Roosevelt Island. And Bloomberg personally gets involved, and our mayor is doing this as well. He’s in my office, in Apu’s office.
Bookspan: Richard, I don’t mean to put you on the spot, but I will. People talk frequently about taxes, and I think that people do follow the financial incentives, for the most part. Last year, Philadelphia clarified an ambiguity in the law with respect to whether venture funds would in essence be double-taxed if they were in the city. If that had not changed, would Gabriel still be based in the city?
Vague: That was big, and I think we very well might have moved.
Bookspan: My hypothesis is that people aren’t going to go from Philadelphia to Chicago because there’s a tax. But what they will do is go from Philadelphia to City Line. And the diaspora of the components of the start-up community is what works against its success.
Moul: Yeah, now you can walk down the street, have coffee with somebody, talk about the business and what’s going on.
On a cheery, sun-filled Friday in midsummer, I’m standing inside the offices of PeopleLinx—a Center City start-up dedicated to maximizing the awesome power of LinkedIn for companies and their employees—and watching as a group of bright-eyed PeopleLinxers teach a dozen new instructees the finer points of creating a LinkedIn profile. There is, alas, one hurdle: Half the instructees can’t read. Now, before you begin bitching about the sorry state of the American educational system, I should point out that several of them are only three and four years old, an age at which you’re more likely to be flipping through Spot Goes to the Farm than devouring Tom Peters’s In Search of Excellence. Nonetheless, that hasn’t stopped the PeopleLinx employees—who, yes, are these kids’ parents—from pulling out some paper and crayons and helping their offspring create their “profiles.” Oh, and business cards, too.
“What do you want to be when you grow up?” one dad asks his son.
A moment of thought. “Firefighter,” the kid says. It’s duly written down.
We are midway through what amounts to PeopleLinx’s version of Take Your Kids to Work Day, an endeavor the company—which was spun off a few years ago by some ex-LinkedIn employees and recently landed $3.2 million in A-round financing—is calling Junior Entrepreneurs Bootcamp. Its purpose? Well, in addition to letting the kids see where mom and dad go every day, it’s to show them how business works and, perhaps, plant the seed that they, too, might one day be enterprising start-up dudes and dudettes.
If Mark Zuckerberg ran a Montessori program, I suspect it would look something like this. The morning began with circle time, with the kids introducing themselves, then playing a game of Simon Says that culminated with an adult leader proclaiming, “Simon says start a business!” Ice successfully broken, the kids—ranging in age from toddlers to 10-year-olds—got down to work: a start-up lemonade venture in front of the company’s Market Street office building (with proceeds going, sweetly, to Alex’s Lemonade Stand).
First up, naturally, was securing seed capital. After explaining the concept of borrowing money from the bank, one dad stood to the side of the circle with a fistful of dollars and handed them out to the kids so they could buy supplies. But he made clear he was no chump giving out charity; like any sharp angel investor, he expected a return—$1.50 for each $1 he gave out.
From there, the kids marched to the other side of the office, exchanged their dollars for supplies, then headed to the production facility—a.k.a. the office kitchenette—to mix up some lemonade. After a brief break to create those LinkedIn profiles—you can’t sell if you can’t network!—they head outside and start pushing product.
Business is slow.
So slow, in fact, that I begin to wonder if some members of lemonade-stand management, huddled a few feet away from me, might be considering a pivot—switching to chocolate chip cookies, maybe, or developing an app that aggregates where all the lemonade stands are. (Note to self: not a bad idea.) But then someone realizes it’s a simple marketing problem, and a few of the kids move further out onto the sidewalk and begin flagging down customers. Bingo! Business picks up instantly, and the dollars pour in.
I don’t stay for the whole thing, but that afternoon an email pops up in my inbox from Liz Coleman, PeopleLinx’s vice president of client engagement and one of the organizers of the day. “Thanks for coming by, Tom!” she writes. “The kids raised almost $300 this morning for Alex’s Lemonade Stand Foundation, so we are very proud of our 1st class of Junior Entrepreneurs.”
She makes no mention of an IPO, though I suspect the future firefighter, in particular, might be looking for an exit.
Your new book chronicles how you did something new every single day for a year. Midlife crisis?
I was just in a bad place, and I really didn’t know what to do about it. There was so much change around me at work that was really overwhelming. And life changes—my daughter had gone off to college. And all this technology was coming along that I hated.
It’s not like your life had lacked for challenges. You lost your large intestine at 33, had breast cancer at 35 and kidney cancer at 45. … You weren’t content to just put your feet up?
I want to live passionately. And I think I just hit a wall. It went on for about a year where I was really upset and angry. I was waiting for something to change around me, and nothing did. And I realized: I’m going to have to make the change.
What do M. Night Shyamalan, Chris Matthews, Kathleen Kane, Marc Vetri and a bunch of drag queens have in a common?
Short answer: You can see all of them at this year’s ThinkFest. Philly Mag has announced the lineup of presenters, panelists and entertainment for the event — a weeklong celebration of creativity, innovation and the future of Philadelphia, featuring some of the city’s brightest minds and biggest names. It takes place November 4th through November 9th at various locations around Philly. Read more »
This week, we roll out a completely redesigned phillymag.com–the product of lots of thinking, lots of conversations, and lots of hard work by a lot of different people. I’m a believer in letting things like redesigns speak for themselves, but I wanted to point out a few of the changes we’ve made (and our reasons for making them):
Read more »
You’ve spent most of your career as a law professor and the legal affairs editor at the New Republic. Why move to Philly to take over the Constitution Center?
I had the best job in the world as a law professor and a journalist. But when the Constitution Center approached me, I realized this was the best job in the world.
My great passion in life has been moderating constitutional conversations. And the Constitution Center is the one place in America, in the world, that’s uniquely qualified to do just that.
In the summer of 1973, when I was nine, my father took me and two of my friends to a Phillies game at the Vet. As we drove down the Northeast Extension from our home outside Scranton, one of that summer’s biggest hits blared through the AM radio of our brown Ford LTD, and the entire car sang along:
Bad, bad Leroy Brown
The baddest man in the whole …
At which point my friends and I stopped, not wanting to sing the next word in front of my father, who nonetheless kept barreling through the song:
… Baddest man in the whole DAMN town
Badder than old King Kong,
and meaner than a junkyard dog
It was the first time I ever heard my father use a swear word, and also one of the last. (On bad language, my father liked to quote his father: “Cursing is the crutch of the conversational cripple.”)
Is that why Jim Croce, the Philadelphian who wrote and recorded “Bad, Bad Leroy Brown,” occupies such a special place in my consciousness? Or maybe it’s this: One morning a few months later, I came down to breakfast and my father told me that Croce had been killed the night before in a plane crash in Louisiana. He was 30.
Native of South Philly, graduate of Upper Darby High School and Villanova, Croce is only sometimes included in the pantheon of Rock Stars Who Died Too Young, and perhaps that’s understandable. He wasn’t a cultural force—just an excellent songwriter whose work ranged from bluesy story songs about pimps and street hustlers to more emotionally complex acoustic ballads that retain their beauty, at least to my ears, 40 years later. (Skip the treacly “Time in a Bottle” and focus instead on “Lover’s Cross.”)
I sometimes wonder what would have happened to Croce’s career if he’d lived. After all, disco was just around the corner, with punk and New Wave coming after that and MTV just a few years beyond. By the time Madonna was making hits, would Croce have been relegated to the land of Whatever Happened To? Then again, you can probably make the argument that Bruce Springsteen’s entire blue-collar oeuvre springs directly from Croce’s “Workin’ at the Car Wash Blues,” and that Garth Brooks built a pretty swell career rewriting Croce’s “Alabama Rain.”
Jim Croce passed away 40 years ago this month, a Philadelphian who became famous enough but not nearly as famous as he should have been. My 80-year-old father died 18 months ago, not famous at all but having lived a life of joy and integrity. It’s a blessing that the music made by one of them still makes me think so lovingly of the other. —tom mcgrath
Over the last few years, the work we do here at Philly Mag has changed pretty dramatically. While once we simply published a monthly magazine, these days we also host a website with seven daily blogs; push out content to (and have conversations with) more than 100,000 followers on social media; and produce more and more editorially driven events, including ThinkFest, the Philadelphia Magazine Fashion Project and Philly Mag Shops.
I’m excited to say that this week we’ll enter another new medium — e-books. Our September cover story — Lisa DePaulo’s gripping investigation into the death of Julia Law, the 26-year-old paralegal who was found dead in the bathtub of her boss and lover, noted Philly defense attorney Chuck Peruto — will be published simultaneously as an e-book, available in Kindle, Nook, iBooks and other e-book formats.