Regressive Taxes and NY Bridges

The news this week in NY is focused on the budget deficit for the MTA.  The NY Times City Room has a nice article about the current thinking of the Governor, the Mayor, and the various boards involved.  I agree with this commenter that a toll on the inter-borough crossings (Brooklyn, Manhattan, and Williamsburg bridges) is a bad tax.  This mainly lies around the issues that tolls are inefficient.  40% of the income would go to maintaining the toll.  That doesn't include the increased waste caused by sitting in traffic, the BQE backing up, and Williamsburg being full of cars waiting to pay the toll. 

The best solution is a gas tax.  Increasing the gas tax would cost virtually nothing and it would raise money in a much more equitable way.  The tax would ideally come from all the counties where the MTA operates.  If that is not possible, the 5 boroughs should be where the tax is raised. 

The underlying problem of inefficiency in spending is still to be addressed, but honestly, I'm not sure where this waste is.  MTA workers may get paid slightly more than they should, but it's not over the top.  Every year, the Post uncovers some $1M that was wasted, but that's the nature of a billion dollar operation.  That's not waste, it's just organizational inefficiency - it can be battled but not defeated.  The only area I see waste is in the bus system.  On 23rd street, every morning, there are about a dozen buses pulling up every 5 minutes - each with just one or two passengers.  I presume that most of the passengers were dropped off in midtown but if this is the case, the buses should terminate at midtown and the passengers should take the subway or a local bus.  Otherwise, express busses that are terminating in Manhattan should accept local passengers while in Manhattan - that would be another good option to reduce waste., revision control, and Creative Commons

There's been alot of buzz about over the past few weeks (I can't believe it's only been that long).  Lawrence Lessig is excited about the use of the Creative Commons license (which we also use) and Tim O'Reilly really wants them to use a version control system.  I like Tim O'Reilly, and he's made great contributions to the technology community and society at large.  However, Larry Lessig is much more measured in his responses - rightly so. 

Using the CC license is definitely the right way to go on the site - it makes it clear to people that the content on the site is public and that there is no hidden value to the information there - that one day a user couldn't be sued.  It also allows for instant and automatic use of the content (i.e. full redistribution by bots of the content to users behind government firewalls). 

In addition to issues of applicability, the use of the CC license is also a signal that Obama wants the entire government to move towards an open by default stance.  This movement was started by Carter and others with the Freedom of Information Act - these are great contributions to a free and open society. 

Version control is a separate issue - no less important.  Unfortunately, I think O'Reilly goes too far.  I don't disagree with anything he says, but his focus is not tight enough.  Just as Lessig acknowledges that the CC license won't apply to otherwise copyrighted information coming from other departments (yet), the same measured approach needs to be taken with versioning. 

O'Reilly wants everything to be shown as a versioned document, specifically legislation.  While that is great in theory, it doesn't even meet basic tests.  Most legislative disputes are discussed either by informal discussion or in private committee.  The deliberative process needs to be kept secret in order for legislators to horsetrade, bluff, bandwagon, and balance against and with eachother.  This may sound Machiavellian, but it's important. 

Really, there are two applications for revision control.  The first is to document why and how a document changed.  This is what I refer to above and I think is not realistic to implement it - regardless, it confuses the issue.  The second application is to track official and approved changes to a standing document.  This is very much how a proper blog is maintained - or in an old fashioned sense, how newspapers display retractions.  O'Reilly and others need to push for version control on standing documents - where the need is great and the drawbacks are few. 

Having solid version control on these standing documents makes changes more transparent and provides accountability to the people.


One of the first things that even an ultra-light startup needs to worry about is a checking account.  I already had an account with Citibank, so I figured I should go with them.  That way I could manage my personal and business money easily.

Citibank does not work that way.  In order to access business funds, one has to log into the business interface.  This thing must have been designed in 1998 and hasn't been touched since.  In addition to a terrible user interface, it loses my cookie every few days so I have to put in a whole slew of information to get back on the site.  They give me a random number generator to get onto the site as well as me having a password - that should be enough for security sake.  Google is smart about these types of things and they actually design systems (like Analytics) for different size organizations.  If I had millions of dollars in my account, maybe the extra hurdles would be worth it.  However, with about $3k in the bank, what's the point?

Another issue is the $20 monthly fee.  Chase is much better with regards to these issues and I would recommend to people that they consider Chase or BoA before Citibank.  Local banks may also be a good option but I don't know.

Legal Docs for Startups

I just found the National Venture Capital Association's page of legal documents.  This is a fantastic resource for the ambitious and cheap entrepreneur.  In the ultra-light startup mode, there is no money for lawyers.  However, that doesn't mean that the legal framework can be eschewed.  Entrepreneurs should be concerned about the following issues:
  1. Intellectual Property - Make sure that everybody who works on the project signs any IP claims over to the company.  If somebody has some particularly valuable piece of IP that they don't want to just give up, they can license the IP for free to the company.  That way, they retain ownership but the terms of it's usage are clear.
  2. Incorporation - Everybody says LLC is great, but Adeo Ressi of is pretty clear that a C-Corp is the correct option.  Investors don't want to deal with an LLC because then they would have annual (quarterly?) tax obligations as partial owners.  The C-Corp protects them from that - they only have to worry about dividends and capital gains when they sell.  It's good to start an LLC just to handle things like buying your computers and stuff until you're ready for a C-Corp. does a great job.
Everything else is secondary to those two issues above.

They really are "Pipes"

I wasn't looking for it, but this might be the oldest reference to electronic communication paths as "pipes".  This history page of the top 100 posts of the BBS era has a bunch of examples like that. 

I presume the history of using the word "pipes" in a communication sense comes from the actual use of pipes to talk between two floors in a building or on a ship.  Even as recently as the 40s, talking through pipes was more reliable for short range communication than electric lines.

Google tries out user rankings

I always wondered when Google would come up with a way for the end user to moderate up and down certain search results.  For example, has garbage with a ton of ads.  Unfortunately, always gets to the top of search results for basic computer queries. 

It looks like now Google will address that with these moderate up and down keys next to the search results.  They call it SearchWiki.  They're pretty explicit about how this only affects one's own results - but I'm confident they're just trying to not incentivize SEO black hats from using click farms to moderate up their placement.  In the end, Google will have to consume this information and modify search results accordingly (I hope).

Public Key

This is my public key.  This allows you to encrypt a message (with the public key) in a way that is only decryptable by me (with the private key paired with that public key).


Version: GnuPG v1.4.8 (Darwin)






















Software I Use

I keep wondering how people do their work as it's really become an issue for me. I don't think I work efficiently and I'd like to be more productive. Most of my productivity problems come from psychological or physical barriers issues like lack of focus, socializing, eating, etc... Some of the problems though are simply organizational and process deficiencies. It is these that I can address. This is not a blog post however. My goal here is simply to give the casual reader knowledge of the software I use so that other people can learn from it - and ideally, let me know what to change in order to get a fix.  As you may notice, I'm a convert to the cult of Mac OS X :-) Note: Some of these links benefit me with a referral fee. I will NEVER recommend anything that I won't use myself. Here it goes: Programming: Design: Organization: Communication: Shopping: Music, etc... Big Question Marks (these are open issues for me where I use this software but am unhappy or not sure what I really want):
  • Music ... iTunes?
  • Notes ... Stickies?
  • Calendar ... Google Calendar?
Other people's software: Ted Leung On The Air (Python guy at Sun) 

Tax Credits

For anybody in New Orleans, here's a great post from Chris Schultz about tax breaks for startup investment in there.  Montreal has similar tax breaks for investment as well.  These types of things can really help out an economy although I think they need to be well targeted and they need to have an expiration date.  Otherwise, the government starts getting deep into moral hazard. 

NY, in it's infinite capitalism, has things like NYC Seed for which we just applied.  They want to make money though, nothing for free :-) 

There is a group called ITAC which will help out all sorts of technology companies in New York City with getting government money in addition to help with business plans and such.  I met the head of that group a few Friday's ago, Franklin Madison.  He seemed like a very nice fellow. 

This fantastic post was submitted by David Rose on the NY Tech Mailing list, although I can't find a link to it so here it is in full.  It really sums up what is needed in the city, coordination of all the resources available.  I don't think this is anybody's fault - it's just that there's so much going on that there really needs to be a solid team of people working on putting it all together for people to read and understand: 

The Council of the City of New York October 27, 2008 Committee on Economic Development jointly with the Committee on Small Business Oversight: Encouraging the Growth of the City’s Technology-Based Business Sector Testimony of David S. Rose, Chairman of New York Angels

Good afternoon. My name is David S. Rose, and I am a serial entrepreneur-turned-early-stage-investor who has been founding and financing technology companies in New York City since 1983.  I testify today as Chairman of New York Angels, the largest and most active organization of professional technology angel investors in New York City. Our 75 members, including many of the best-known high-tech investors on the East Coast, have invested over $35 million into more than four dozen early stage technology companies during the past six years. The question being addressed by the Committees today, how to encourage the growth of the City’s technology-based business sector, is an extremely important one…although I must say that this hearing is reminiscent of the movie ‘Groundhog Day’. This is not the first time that I, or other witnesses at today’s hearing, have appeared in this room testifying on this same issue before one or both of these committees. My first time came over a decade ago, at the dawn of the dot com boom. At that hearing, I and others spoke about the need for a technologically skilled workforce, early stage financing support, technology transfer initiatives, IT venture incubators, and more. Over two years ago, the Committee on Technology had a similar hearing, with much the same speaker list. One year ago this week, the Committee on Economic Development held a hearing on this same exact topic. Unfortunately, the results of all these hearings have, to put it mildly, been disappointing. Today, however, New York City’s economy is in a different place, and perhaps the body politic, in both its legislative and executive incarnations, is at last ready to take action, and the action that needs to be taken is very simple and straightforward. Let us start by analyzing the basic conditions necessary for a thriving early-stage technology environment in any city: 

(1) a base of entrepreneurs with high tech experience; 
(2) educational institutions supporting both entrepreneurship and state-of-the-art technology programs; 
(3) access to early stage capital to fund new ventures; 
(4) affordable work spaces for startups, and the infrastructure supporting them; 
(5) access to a technologically skilled workforce; and 
(6) coordination, integration and promotion surrounding all of the forgoing. This is, indeed, a daunting list. Now let us see how New York City rates on these criteria. 

One, Entrepreneurs: New York has over 12,000 high-tech enterprises, plus an additional 34,000 self-employed high tech workers. The New York Tech Meetup, a self-organized, informal group of technologists and tech entrepreneurs that meets monthly, has over 7,500 members. New York City has more technology entrepreneurs than any other place in the world, outside of California’s Silicon Valley. Entrepreneurs are not a problem! 

Two, Educational institutions: New York has over 75 universities and colleges within the city limits, more than any other city in the world. These include some of the finest business school entrepreneurship programs in the country at NYU, Columbia and Baruch, as well as engineering and technology programs from the pioneering Interactive Telecommunications Program at NYU, to the Brooklyn Enterprise on Science and Technology at Polytechnic, to award winning departments and programs at Columbia, CUNY, Cornell, Cooper Union, New York Institute of Technology, and more. Education is not a problem! 
Three, Funding: New York City has over 300 venture capital firms and half a dozen angel investment groups, more than any place in the world except Silicon Valley. Even before the establishment of NYC Seed, the City’s own startup fund, there were dozens of venture funds specializing in seed and early stage technology companies, and in the years since the dot com crash, members of New York Angels have invested over $35 million into technology startups. This year alone there have been over 120 VC and organized angel financings of seed and early stage tech deals. Access to capital is not a problem! 

Four, Startup Spaces: With over 350 million square feet of commercial real estate within the City, New York has affordable, functional office space for startups at every conceivable price point. In addition to typical office, industrial and loft space throughout the five boroughs, there are a host of shared work spaces designed specifically to support high tech startups. From Tech Space, Sunshine Suites and New Work City in Manhattan, to Williamsburg CoWorking and Ditmas Workspace in Brooklyn, to Poly’s BEST incubator, Columbia’s Audubon incubator, and my own SparkPlace technology center, startups can move in tomorrow to ready-to-go workspace for as little as $500 a month. Real estate is not a problem! 

Five, Technology Workforce: Last year’s study by the New York Industrial Technology and Assistance Corporation found that the New York metropolitan area employs over 620,000 people in technology jobs, generating earnings of over $12.5 billion, making it the world’s largest center of high-technology employment. Tech workforce is not a problem! 

Six, Coordination, Integration and Promotion: Supporting and coordinating and promoting all of these breathtaking resources, New York has…oh, right. Nothing. Nada. Zip. That, I suggest, is the problem. It certainly isn’t for lack of trying from within the industry. Many programs have been started by smart, energetic people, and have done great things. These include ITAC’s FasTrak Tech program, the New York Software Industry Association's myriad programs, the New York City Partnership’s technology efforts, the erstwhile New York New Media Association, the incubation and tech transfer initiatives at NYU, Poly, Pace, Columbia and the New York Institute of Technology, the technology and web MeetUps, Gary Sharma’s weekly calendar of all the City’s high tech events, the numerous independent self-help organizations in and around the tech sector…and New York Angels, our early stage investment consortium. The problem, however, is that although we all know and support each other, there is no central, City-sponsored, pro-active coordinating entity to leverage all of these independent activities. Why? Because the City has yet to make this a priority and commit itself to answering the challenge. This brings us to point number two: funding. Here we are in New York City, the economic capital of the world, and despite paying lip service to the goal of supporting its startup technology sector, the City has not allocated any funds at all to back such an initiative. We are not talking about hundreds of millions of dollars, let alone the billions that the large venture capital firms invest. We are talking about something more than lip service and the reallocation of existing programmatic funds. Realistically, an initiative of this sort, in a city the size of New York, will require an investment of single-digit millions of dollars annually, dedicated to this goal. This is a drop in the bucket compared to the overall City budget, but, a drop with a potential hundred-fold payoff in the overall economic future of New York. If the political will to undertake such a venture exists, let us consider how it should be organized and what should it entail. It needs to be a dedicated, high-profile, independent activity of the New York City Economic Development Corporation, established and funded with consistent, vocal and visible support from the Mayor and the City Council. It should have a small, dedicated staff reporting to a dynamic, entrepreneurial executive with direct, hands-on experience in the technology sector. The venture—let us, for the sake of simplicity, call it “New York Tech”—would have the mission of encouraging the growth of the City’s technology-based, early stage business sector. It would not deal with large, established entities or major employment or real estate programs. Those are important, but should be handled elsewhere within EDC. New York Tech’s target constituency should be the small, high-potential tech entrepreneurs, who will become tomorrow’s Googles or Microsofts. New York Tech would carry out its mission through five strategic programs: 

1) Establishing a directory and web site that will serve as the central coordinating locus for everything happening in, around and about New York’s technology community. It will provide one-click access to resources, guides and services, from work spaces to funding sources, from educational courses to government programs. It will have a calendar of everything happening in the sector, a comprehensive How To section, and answers to frequently asked questions about starting and developing a tech business in New York City. 

2) Sponsor and organize real world events and online communities that bring together all of the constituents that make for a vibrant, growing technology sector. New York Tech should be a ubiquitous brand name at every tech networking event in the City, from MeetUps to Expos, from financing pitches to ITAC’s FastTrak Tech, from the nextNY mailing list to InternetWeek (which should build on this year’s success to become a permanent Spring event.) 

3) Convene semi-annual summit meetings of all the major institutional constituents in the sector, including universities, venture funds, angel groups, corporations and government agencies. These would be both strategic planning sessions to guide future support efforts, as well as networking sessions among industry leaders to ensure that one hand knows exactly what the other is doing. Each constituent group would thus know when, where and how to get additional support for companies with which they were involved. 

4) Serve as the promotional and publicity arm for New York’s tech sector, blowing the City’s entrepreneurial horn and standing up as the focal point for anyone seeking to start or develop a high tech company here. It should not be possible for any would-be tech entrepreneur within the five boroughs to NOT know that New York Tech is the first place to turn, right after the spark of ‘startup genius’ strikes. 

5) Finally, undertake an ongoing recruiting effort throughout the national technology community heralding New York’s position as the nation’s second largest, and most supportive, environment in which to start a high tech business. Taken together, these five activities have the potential to effect a sea change in the way New York City plays, both in perception and in reality, on the world technology stage. They will leverage the truly phenomenal resources that are already in place here, and will ensure that New York’s future economy is not dependent on a few giant financial services companies, but rather by hundreds—if not thousands—of true New York technology entrepreneurs who will be building the world of the future. I strongly urge the two Committees here today to work with the Administration to appropriate and invest several million dollars to create a New York Tech under the NYCEDS, that will take full advantage of the extraordinary resources, including local and state, public and private, that this great City of ours has to offer the 21st century. 

Thank you.

David S. Rose, described by Red Herring magazine as "patriarch of New York’s Silicon Alley" and by Crain’s New York Business as “the father of angel investing in New York”, is an entrepreneurial executive and investor with extensive experience in high technology, venture capital investing and government. He was named by Inc. magazine to the 1998 Inc 500 list as CEO of one of the fastest growing private companies in America, and Crain's named him one of New York's 25 most influential technology executives.