Two weeks before the TechStars application deadline, 200 or so young people pack into a New York University auditorium, paying $5 each for a class called How to Get Into TechStars NYC. The two-hour forum, led by Cohen and Tisch, focuses largely on the importance of applicants showing that they have more than a good idea. At a time when the cost of launching a Web company is close to zero, a great concept isn't nearly enough. "The best way for us to know that you're going to do stuff is to do stuff," Tisch booms from the front of the room. "Show us evidence of progress."
Most of the companies that are eventually accepted into TechStars get noticed by sending weekly, or even daily, updates about new versions of their products, new customers, and new hires. This process typically happens during the weeks after they have submitted their application, but it can sometimes drag on for years, as has been the case with Frederick Cook, a 26-year-old Virginia native. Five years ago, Cook was taking an engineering class in Virginia Tech's Norris Hall when gunfire broke out in an adjacent room. He jumped from a second-story window as his professor was shot to death in what became known as the Virginia Tech massacre. Cook had planned to work for a defense contractor, but the experience set him down the start-up path. "The shooting changed the way I think about a lot of things in life," Cook says. "And one of them was that I wasn't going to do anything less than my full potential. For me, that was starting a business." He taught himself Web development and, in early 2010, he applied to Y Combinator and TechStars.
His first company was rejected outright by both programs. His second idea earned him an interview with Tisch but not a spot. After that idea was rejected, he scrapped it, came up with a new one in a matter of days, and reapplied. Tisch was impressed, but not enough to let Cook into the program. "We've been tracking him for two years," says Tisch. "This is a kid I desperately wanted to fund. But his company sucked."
Whereas Cook's early efforts were essentially copycat social networking sites, his new company-;a website called Moveline, which helps people compare and hire movers-;has no obvious competitors. Cook has raised $400,000 from investors, recruited a capable co-founder, and, for the first time, Tisch believes, found a business that fits his personality. "One of Fred's challenges is that his energy level is a little low," says Tisch. "But this is a business that a laid-back, thoughtful guy might be able to execute well."
As with most things in life, however, the easiest way to get a leg up with TechStars is to know somebody. That's the case with Diego Zambrano, a Brazilian designer with a Rip Van Winkle beard and a background that would not, at first glance, seem to lend itself to a career as a scrappy technology entrepreneur. He's older than 30, he doesn't know how to write code, and he doesn't have a co-founder.
But none of this matters, because Tisch is fairly certain that Zambrano is going places. Before founding his start-up, Bondsy (tag line: "the social network of things"), Zambrano worked as a creative director at the advertising giant Ogilvy & Mather. "If you become creative director at Ogilvy with that beard, that means you're stupidly talented," says Tisch. More important, as Tisch tells me, Zambrano has already raised funding from a roster of well-known angel investors. "It's not that we're giving certain companies an advantage for no reason," Tisch says. "They've earned the advantage by either knowing us or knowing people who know us. My best friends in the tech world are working on Bondsy." Zambrano, it turns out, hasn't even filled out an application yet.
Tisch seems to instantly regret divulging this last fact. "I don't know if you should write in the article that you can go around the process," he says. "But look, this isn't about applying randomly. It's about building relationships."
Everybody ready?"
Three weeks have passed since the application deadline, and 1,480 applicants have been whittled down to 85 of the strongest, whose stories Tisch is now presenting to the TechStars selection committee. The group includes Cohen, partners from five venture capital funds, and two angel investors. Tisch calls the crowd to attention and begins pitching. "All right, Moveline," says Tisch. "This is a kid we've wanted to back for a while."
Tisch tells them the story of Frederick Cook's escape from the Virginia Tech massacre and then asks them to take his company seriously. He hopes to make a decision as soon as possible. "I promised Fred that we'd give him an answer tomorrow to avoid disappointing him again," Tisch says.
The investors are unmoved.
"Does this create a problem for people that doesn't exist?" one asks, wondering whether there is really a market for online moving services.
"I feel like U-Haul takes all the share in this space."
"Are we just trying to see how many times we can get this kid to apply to TechStars just for shits and giggles?"
Everyone laughs.
"Poor Fred," someone says.
"All right," says Tisch, clearly disappointed. "He's out."
Other casualties of the meeting include a book-publishing start-up whose CEO has an Ivy League M.B.A. and who served as the personal assistant to Ari Emanuel; an augmented-reality company whose 50-ish founder previously started an Inc. 500 company; and the beauty company with the flutey founder.
Bondsy makes it through. The investors, some of whom have met Zambrano, are impressed with his idea, his background, and, of course, his beard. "He's the most interesting person that you'll have in this program," says one.
