Enduring Startup Lessons From Silicon Alley 1.0

Gannett's Maryam Banikarim talks to a group of original media startup pioneers to see which lessons still apply 20 years later.

Back in the early ’90s, when Facebook’s Mark Zuckerberg was still in middle school, having an email address set you apart from the crowd and people debated the viability of CD-ROM vs. the Internet, a group of tech pioneers changed the world.

Working out of run-down New York lofts and windowless offices, this ragtag group of entrepreneurs launched a handful of Web-based media companies that brought us the first e-zines, online city guides, live webcasts, and branded websites for companies.

These founders of Silicon Alley (1.0) stood out for their courage, optimism, and curiosity. They all deeply believed in the transformative power of the Internet and were motivated, not by money or fame—there wasn’t much of either in the industry then—but by the infinite possibilities for creativity and innovation that the technology promised.

I was lucky enough to be part of this group, having left my job at Turner Broadcasting to join a 10-person team at MetroBeat, an online guide to New York City. We worked in a dodgy building at the corner of Lafayette and Spring streets (an area that's now a hotbed for new-media startups), where a door resting on two filing cabinets served as a desk, and, if you complained about the heat, the super would threaten to "break your kneecaps." Needless to say, we had space heaters.

There were six other companies that I remember getting to know in those early days of Silicon Alley: Agency.com, Feed, RazorFish, SonicNet, Total New York, and Word.

Recently I caught up with the founders and early employees of these businesses. I was curious to know where they had gone since they left the companies they launched and grew, many of which were sold, shut down, or integrated into larger businesses.

I also wondered if they remembered the early ’90s in Silicon Alley as I do—as a very special moment in time when you felt as if you were part of something big, when everyone found the courage to pursue an idea with passion, regardless of the risk or the reward.

What I discovered is that the same conviction that drove these individuals to succeed in the beginning of the Internet Age guided them in the decades that followed. Some of them, like me, returned to the corporate world, taking with them the lessons they learned at their startups. Others launched new companies and continued shaping the media landscape. Still others left the industry altogether, finding different avenues for their passion.

What we all shared, then, is the belief that the Internet would change the world. What we share today is the knowledge that we had a hand in making that happen.

Becoming A Global Change Agent Requires The Right Partnerships

Launched in 1995, Internet ad agency Agency.com quickly found success. Clients in the first year included Sports Illustrated, MetLife, and American Express. The company grew to 1,800 employees with offices around the world and peak annual revenues of $200 million. It went public in 1999 and, in 2003, privatized and sold to Omnicom Group, which dismantled it in 2010.

Cofounder Kyle Shannon launched several businesses after leaving Agency.com and now runs Storyvine, a Boulder, Colorado-based company that produces on-brand videos.

"For us, the Internet was very much religion—like discovering something that no one else knew," says Shannon. "You knew it was going to change the world. That’s the reason we focused on big global companies as clients because we knew that if they put their resources behind something, it could affect incredible amounts of change."

Cofounder Chan Suh served as Chairman and CEO of Agency.com until 2009. After a stint in the nonprofit sector, Suh joined Prophet, a brand and marketing consultancy based in New York, in 2013. Suh stresses the team as key to any organization’s ability to effect change. He says, "hire the best people at the expense of everything else."

Strong Voice Has Inherent Value

Feed, founded in 1995 by Steven Johnson and Stefanie Syman, was one of the first e-zines, with a slew of well-known and talented writers contributing. The quirky content quickly gained loyal readers and critical acclaim. In 2000, Feed merged with Suck.com to create Automatic Media. Both sites were shut down in 2001.

Syman now serves as a principal at Spark No. 9, a New York-based company that helps startups of all sizes and at different stages of the launch process. "Feed was really potent because we never had any illusions that we were trying to create mass media. We were trying to create good media for people who, we imagined, shared some of our interests," she says. She also ties the success of the site to its strong sense of voice and perspective: "I see it again and again in successful properties."

Getting Big Can Create Complications

Metrobeat, one of the first online city guides, was born in 1995 and merged with CitySearch in 1996 after founder Mark Davies turned down offers from Microsoft and ABC. CitySearch merged with Ticketmaster in 1998 and continues to operate today.

Davies, a serial entrepreneur, went on to found, with John Browning, Nick Denton, Adam Gold, and Julie Meyer, the First Tuesday networking group for entrepreneurs and venture capitalists in the U.K. More recently, Davies’s entrepreneurial energy has been focused on Africa. His current project, Esoko, uses mobile technology to digitize African communities and connect farmers with market data.

Davies recalls, "when I look back, these were passionate people who had some sense of technology and who created something that was quite pure. Once the ‘suits’ got involved, then there was a lot of talk about risk assessment."

It's Not About The Money

Interactive marketing giant RazorFish was founded in 1994 by Jeff Dachis and Craig Kanarick. The company grew to have global influence, eventually employing 2,200 people in 15 cities and nine countries. In 2009, Paris-based Publicis Groupe acquired the company, which is still a leading digital marketing solutions company, for about $530 million.

Today, Dachis is the founder, chairman, and CEO of Dachis Group, a global leader in data-driven social marketing solutions. "The pathway to wealth was not a well-worn path in ’93-’94…It was about a strong desire to be part of this burgeoning digital thing," he says. "You could sense it and smell it. There was something about to happen."

Kanarick is now a freelance consultant and CEO of Mouth.com, an online retailer for independent food products, agrees. "The desire to be in the business was not a desire to get rich," he says. "We sensed that something was coming. We were inventing a new cultural phenomenon, an entire new world. There was no tech industry. We didn’t know what it was going to be."

What You’re Capable Of Learning Is More Important Than What You Know

SonicNet founder Tim Nye launched the music news website in 1994. Nicholas Butterworth served as president and guided the company through several strategic partnerships until it was acquired by Viacom, parent company of MTV Networks, in 1999. Butterworth went on to serve as president and CEO of MTVi, the online counterpart to MTV that formed after Viacom acquired SonicNet; his newest project is a photo-sharing startup that helps parents share photos of their children, privately, with family and friends.

"We knew that we weren’t hiring people because of what they already knew; we were hiring them for their capacity to learn and discover," Butterworth says. "We had to find people who were genuinely intellectually curious, interested in constantly reinventing and learning, and I think that’s still true of the best product developers and engineers and entrepreneurs."

Success Requires Sacrifice

Total New York, one of the first online city guides, was founded by John Borthwick and Adeo Ressi in 1994; in 1997, it was bought by AOL Digital City, a subsidiary of America Online.

Borthwick is now CEO of Betaworks, a New York-based tech company that builds products and seeds startup investments. Tumblr was one of Betaworks's first investments.

"It was a genuinely exciting time, and I think it’s lasted. It’s all turned out to be even more disruptive than any of us could have believed," he says of the early '90s.

Today, Ressi is a serial entrepreneur who sold his website design firm Methodfive to Xceed in 2000 for $75 million. His other startups include TheFunded.com, an online community for entrepreneurs to rate investors, and the Founder Institute, which teaches first-time entrepreneurs how to be successful.

Ressi’s Silicon Alley reflection: "Back then, you had to want to live a different life because the sacrifices you had to make to be in a startup were enormous, especially a technology startup. There was very little money…You’re talking about a hostile operating environment at the time. You really were picking an alternative lifestyle over conventional lifestyles, and making great sacrifices to do so. Today that’s just not the case."

Your Only Limit Is Your Own Creativity

Word.com, another e-zine, launched in 1995 to critical acclaim. Zapata Corp. acquired the multimedia experience from ICON CMT in 1998. It was shut down in 2000.

Founding member Marisa Bowe changed course after the shutdown of Word. She became involved in community planning and continues to advocate for smart planning in her Brooklyn neighborhood. But the experience she had can be applied in any industry: "There were no boundaries yet, so we could try anything we wanted. As a person who likes to experiment, I was just thrilled," she says.

Tom Livaccari, another Word.com founding member, is now a financial adviser for a wealth management group, a subsidiary of UBS. His clients often include young entrepreneurs. "Money wasn’t the driver," Livaccari says. "It sounds cliché, but it’s true. (It was about) trying to solve a problem, come up with innovative products."

Word.com's Dan Pelson spent 15 years in the startup world, going on to launch Concrete Media and uPlayMe. He now heads a Sony spinoff group that creates direct-to-consumer digital services. "The biggest lesson," he says, "is you’re only limited by your creativity when it comes to content and digital, though it’s very easy to fall into a rut of creating a standard experience."

[Image: Flickr user Doc Searls]

Add New Comment

0 Comments