Engineer! Engineer! Engineer!
That’s why the 19 New York startups, including the well-known ones-Foursquare, Tumblr, Etsy, GetGlue, Gilt Groupe, and a few VCs-Union Square Ventures, First Mark Capital, and RRE Ventures- came to MIT for recruitement. NYCEDC and Next jump, a New York-based “old” startup, hosted the trip. Its founder, Charlie Kim, gave the speech on the NYC startups, sounded like he’s stepping into the incubation and investment area.
They claimed to have 19 startups but it turned out to be missing a few. They claimed to have 200 registrants but there seems to be less than that, and not many are MITers.
Most start-ups are social network or social network related. Foursquare, Get Glue, Tumblr, MyCityWay, SocialFlow, Hunch are of the kind. Couple of E-Commerce and related such as Etsy and Gilt Groupe. An interesting note is social media and E-Commerce have their relatively fixed head count structure respectively. Social Media companies range between 20 and 60 employees (Tumblr has around 30, Foursquare around 60), while E-Commerce companies usually have more then 100 and aim for 200 (Etsy has around 150 and Gilt Groupe around 200). This gives us a hint that E-Commerce start-ups are better off financially, and are in greater need of engineers at this stage of the game. Of course, we also need to count in the time spend they’ve been in the market.
Still, revenue and business model are the pains for social network sites. Even for Foursquare, with its popularity in the mobile market, when asked about the profitability of their business, the recruiter responded that this is not their goal at the moment. Obviously, user base is what they care about at the moment. Foursqure, Get Glue and Tumblr all have more than million users (Foursqure aims for 10 million, Get Glue has 1 million, and Tumblr has 20 million users).
On the other hand, what E-Commerce companies care about is sales. Etsy, the niche market place for hand-made products now has a sales of around 35million and is doubling every year. Gilt from its previous reveal to Internet Retailer that it’s ranking between $400m to $500m. Now Gilt has raised $138M for Series E which totaled $236M in funding. But Etsy looks a bit embarrased when asking its fund raising process. It might cease the fund raising efforts and keep it private for some time, according to an engineer.
I expressed my concern about social network to Gary Chou from Union Square Capital: since Facebook is giganic, there seems to be not much room for the social sites to grow. Everything that other social sites can do, Facebook can do better given its incredible user base, just like Tencent in China is eating up most of the market share of the start-up by copying the proved-to-be-successful business models. Gary’s answer is that Facebook is trying to become a one-for-all social network. However, people need differentiation and diversification, thus comes up with the new needs for social network. Now what they target are anti-facebook platforms that have the potential to create buzz.