In what is the first but certainly not the last time we’ll hear of Silicon Valley venture capitalists opening up an office in New York, storied venture firm and Facebook/Groupon backer Accel Partners has opened a New York outpost at 11th and Broadway. This will be the second US location for Accel, which has offices in Bangalore, Beijing, London, New Delhi and Shanghai.
East Coast vs. West Coast has been a universal theme ever since Biggie and Tupac and now it’s extending itself to the world of startups and venture capital. Accel Partners is justifying the move by saying that it’s made over 15 investments in the New York Area in the past three years and that it does not plan on stopping its aggressive NYC investment pace. Indeed, its (offical) New York investment roster includes:
· Quidsi – Diapers.com – parent company for www.diapers.com and www.soap.com
· Etsy – DIY craft marketplace
· Squarespace – Website and blog publishing platform
· Learnvest – The leading independent personal finance website for women
· Glam – Online interactive consumer magazine
· Global Grind – Hip-hop social media site
· Bauble Bar – Curated jewelry site
· Birchbox - Beauty product samples
· Loosecubes – Rent a desk service
· Salescrunch – Sales platform
· Bonobos – Men’s clothing company
· Collective – Ad platform
· VenMo – Mobile payments startup
· Exclusively.In – Gilt for Indian decorations
New York does seem to be part of some zeitgeist and the latest expansion also comes at an amazing time for Accel, as portfolio company Diapers.com has just exited for about $540 Million.
Partner Theresia Ranzetta explains the motivations behing the move, “We had a critical mass of companies exhibiting early stage growth and saw an increasing number of interesting opportunities, we thought now would be a good time for Accel to have an outpost in New York.”
While none are permanent, Accel plans on rotating the partners heading up the New York office on a per initiative basis, this week it will be partner Jim Breyer (who owns an apartment in downtown NY) and Ranzetta, the next week it will be Sameer Gandhi, with the basic idea that sector experts will fly in from Palo Alto as needed. Perhaps the most exciting part of the move for aspiring entreprenuers? Accel plans on holding startup networking events as well as bringing in EIRs from Silicon Valley and beyond. Interested parties can email nyc@accel.com to get on the mailing list.
Partner Richard Wong attributes the move instigating critical mass to the ease of setting up a startup, “Prior to Amazon Web Services it was difficult to get distribution. Now you’ve got companies popping up in places you’ve never had before.” And Wong is acutely aware of the first mover principle, “Being the first Silicon Valley VC to establish an office in New York is going to be a key part of being successful in the next 3-5 years.”
Exactly.
Image: Mark Heard
So argues David Harsanyi today in his column (which is also at Reason), and Harsanyi gets a big boost from John Fund at the Wall Street Journal. We’ll start with Fund’s analysis of the impetus for the FCC’s decision yesterday to once again claim jurisdiction over the Internet, despite an earlier court ruling against it and Congressional action to warn Julius Genachowski of attempting it again. The intent of this camel’s-nose regulation is to establish FCC authority over the Internet, Fund argues, but that’s just the appetizer:
There’s little evidence the public is demanding these rules, which purport to stop the non-problem of phone and cable companies blocking access to websites and interfering with Internet traffic. Over 300 House and Senate members have signed a letter opposing FCC Internet regulation, and there will undoubtedly be even less support in the next Congress.
Yet President Obama, long an ardent backer of net neutrality, is ignoring both Congress and adverse court rulings, especially by a federal appeals court in April that the agency doesn’t have the power to enforce net neutrality. He is seeking to impose his will on the Internet through the executive branch. FCC Chairman Julius Genachowski, a former law school friend of Mr. Obama, has worked closely with the White House on the issue. Official visitor logs show he’s had at least 11 personal meetings with the president.
The net neutrality vision for government regulation of the Internet began with the work of Robert McChesney, a University of Illinois communications professor who founded the liberal lobby Free Press in 2002. Mr. McChesney’s agenda? “At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies,” he told the website Socialist Project in 2009. “But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.”
A year earlier, Mr. McChesney wrote in the Marxist journal Monthly Review that “any serious effort to reform the media system would have to necessarily be part of a revolutionary program to overthrow the capitalist system itself.” Mr. McChesney told me in an interview that some of his comments have been “taken out of context.” He acknowledged that he is a socialist and said he was “hesitant to say I’m not a Marxist.”
Fund does a remarkable job in detailing the financing behind the Net Neutrality movement, which is also tied to campaign finance reform organizations. The FCC used studies funded by activists on Net Neutrality to bolster their claims, especially with Harvard’s Berkman Center, which gets a good chunk of funding from the Ford and MacArthur Foundations, not exactly neutral political players. These two foundations funded the kind of media reform efforts advocated by McChesney through Free Press. Did anyone doubt what those studies would show?
Harsanyi argues that the FCC’s push into private networks in competitive markets shows its obsolescence, and its danger:
It’s not that we don’t need the FCC’s meddling (or worse); it’s that we don’t need the FCC at all. Rather than expanding the powers — which always seem to grow — of this outdated bureaucracy, Congress should be finding ways to eliminate it.
Why would we want a prehistoric bureaucracy overseeing one of the past century’s great improvements? As a bottom-up, unregulated and “under-taxed” market in which technological innovation, free speech and competition thrive — at affordable prices, no less — the Internet poses a crisis of ideology, not commerce, for the FCC.
It’s about control and relevance. What else can explain the proactive rescue of the Web from capitalistic abuses that reside exclusively in the imaginations of a handful of progressive ideologues?
What is the FCC doing? It’s complicated, and in some ways, it’s irrelevant. It claims that regulatory power will ensure that consumers enjoy an “open Internet.” (With more broadband providers than ever, is there anything moreopen than the Internet?) But the FCC can censor speech. And once the FCC can regulate Internet service providers, those providers will be more compliant and more interested in making censors happy.
Why do we need the FCC in the 21st century? Most television channels are narrowcasters, using satellites and cable channels that don’t eat up limited broadcast space in local markets. The phone system in the US is no longer monopolized, and the issues of access and competition in those areas could be handled by state public-utility commissions, as they are now. The licensing of broadcast stations could be handled by the Commerce Department, or by a greatly-reduced FCC with binding limitations on jurisdiction.
We have managed to free ourselves from the encumbrances of monopolization over the last thirty years. This country doesn’t need a bloated bureaucracy getting in the way of innovation and commerce. It needs government to acknowledge that its communications-regulation apparatus is archaic and in need of downsizing, rather than attempting to nationalize the media.
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