December 16, 2009

Gale A. Brewer
Council Member
250 Broadway, Suite 1744
New York, NY 10007

Re: Committee on Technology in Government and Economic Development Hearing

If you asked me ten years ago where the best place to start a technology company was, I would
have told you it was right here in New York City. During the late 90’s I was one of the early team
members of a successful start-up by the name of GiftCertificates.com. We were a consumer
brand with a billboard in Times Square, an investor group in Manhattan, and the best and
brightest talent pulled directly from the immediate area. We experienced significant growth in
a short period of time and employed approximately 400 people as a result. Now, ten years
later, I am the CEO of Bintro.com, an internet start-up also based in New York. However, it is a
decidedly different experience for me this time around and I can no longer so simply endorse
our city as I used to. Please make no mistake, New York has and will always be the center of the
world to me, but it may not currently be the best place to start an internet company. This is of
concern to me, so it should come as no surprise that I am keenly interested in improving
cooperation between the government and private enterprises. Thus, I offer honest explanations
for the causes of this problem and what I feel are practical solutions.

One of the biggest challenges for any start-up is creating basic infrastructure. When Bintro
began, it operated in the extra space of a real estate firm in Midtown Manhattan. Many start-
ups are not so fortunate. For many entrepreneurs it is a huge expense and hassle just to find
small, short-term space of professional quality. The process is laborious, the broker fees are
grossly disproportionate to the term of the lease, and there is no easy way to grow without
abandoning a lease or paying for multiple spaces. This is compounded by the fact that many
founding teams do not have the experience or time to work their way through such a complex
process. In a nutshell, the problem is a lack of spaces that are simple and cost-effective to rent
for short periods of time. This is why I believe the government should work with start-ups to
alleviate this issue. Any empty office space the government has could be listed online for short-
term subletting specifically for creating a business within the city. The government could easily
bring in revenue with its spaces that would otherwise be vacant simply by catering to the cost-
effective needs of start-ups. Furthermore, I know plenty of private companies that have done
this with great results, yet it is not a formalized or endorsed practice. Imagine the benefit to the
local economy if the city offered tax savings or rebates to businesses that supported this. Why
should any office space be empty when it could support the growth of what may be the next
Google, Apple, or Microsoft?

Another of the early hurdles for a start-up is finding legal counsel and the creation of a proper
business structure. For example, by the time a start-up’s first institutional round comes to pass
they may have to clean up their capital structure or even face deal-breaking due diligence
issues because they did not know the right way to set up their business in the first place. To
remedy this, I propose that the government and investors come together in the creation of an
industry accepted ‘Starter Kit’, wherein standards for due diligence within New York are firmly
established and made accessible to all entrepreneurs online. By consulting entrepreneurs in
this standardization, VCs can ensure that due diligence becomes a shorter and simpler process
for both parties involved.

Also important to any startup is the creation and growth of a solid team. However, this has
become more difficult over the years. For example, I recently met with a group of undergrads
from the computer science program at RPI. Each student told me they already have a full-time
job waiting for them after they graduate in the Spring. This is great news of course, but it is
important to note that they were all hired by a large enterprise and not a start-up. In fact, they
made it clear that start-ups were not part of the dialogue in their career advisement. I suggest
a better and more open dialogue between schools and the start-up community. I am interested
in speaking with students and sharing with them what skills we believe will be most needed
when they graduate. I would like to make sure our job opportunities are available to them and
that they see working for a start-up as a good path for building their career. I suggest the
creation of a committee to figure out how we can better communicate the needs of the start-
up community to schools and how we can cater to the needs of students coming out of school.

Finally, since this is ultimately about us and our city as a whole, I’d like to touch upon the bigger
picture. With the right attention on the right things over the coming years, I firmly believe New
York City can become the Internet capital of the United States. Time and resources are crucial
to the success of the start-up community of course, but so is recognition. As of now, we are
missing that recognition. We have yet to form our “Personality” and reputation in the sector.
This is why the city of New York must actively support emerging technologies in order to
become recognized as their rightful sponsor. For example, Bintro is a company that specializes
in the field of semantic technology, connecting vast public and private databases of knowledge
to create intelligent applications. As the web becomes smarter and smarter, semantic
technology is becoming more and more important. Luckily, it is not yet dominated by Silicon
Valley, but it is gaining momentum in New York, Boston, and Northern Virginia. This is the time
to take advantage of the edge we have to make New York a bastion for new internet
technologies.
My closing suggestion is for New York to have a Chief Product Manager. As a former product
manager and someone who relies on product management as the centerpiece of building a
company, I believe someone must be the external liaison between business leaders, investors,
and technologists. There must be someone to channel the needs of these groups into a
cooperative effort so that we may create solutions and products more efficient than before.
This person would play a key role in visiting with investors, start-ups, and the city to create the
presence our community is so in need of.

I love New York and I am so glad it has been the center of my life for so many years. I want to
see it flourish from the ground up and I am proud to be a part of the solution. Thank you for
your time and I look forward to continuing our efforts.

Sincerely,

Richard P. Stanton
Chief Executive Officer
Bintro.com

______________________________________________________________________________
About Richard Stanton

Richard Stanton is the CEO of Bintro, a semantic technology company that specializes in connecting vast
public and private databases of knowledge for intelligent web based applications. Mr. Stanton joined
Bintro as CEO in June 2008, bringing significant experience in new media and internet related business
to the company. His credentials include being the number five employee and member of the senior
executive team at GiftCertificates.com, where he was instrumental in growing revenues through online
sales. As Vice President, he led product management and creative marketing teams through two
mergers. After leaving GiftCertificates.com, Mr. Stanton was Managing Director of a boutique consulting
firm where he provided operational advice and analysis to the management teams of multiple
companies. Prior to GiftCertificates.com, Mr. Stanton was an independent consultant specializing in
business strategies for new media and e-commerce initiatives. Beyond business, he is a frequent
speaker on the topic of “Defining the Essence of Ourselves” and blends such inspirational topics with his
love of technology and how it can benefit the greater good. He is regarded as a leading speaker in the
area of the Semantic Web and is actively involved in raising awareness for Web 3.0 applications. As a
result, he has been quoted in the popular press numerous times, ranging from American staples such as
the Wall Street Journal all the way to industry-specific news such as CACM. When he's not passionately
promoting Bintro and the possibilities of new technology Mr. Stanton can be found with his wife,
daughter and son in upstate New York.