Testimony before NYC Council’s Joint Meeting of

Committee on Technology in Government and Committee on Economic Development

on behalf of MIT Enterprise Forum of NYC, Dec 16, 2009
Alan Mitchell, alan@armak.us, 646-267-8296

New York, NY – On Wednesday, December 16, 2009 at 10 AM in the Council Chambers

of City Hall, the New York City Council Committees on Technology in Government and
Small Business will hold a joint public hearing to examine how small technology start-ups are
surviving in this tough economy. This hearing will help the Council understand the dynamics
behind successful firms as well as what options are available to the City in aiding these
important businesses in their struggle to remain competitive and viable in a global
environment.
City lawmakers are seeking ways to foster small business growth and boost New York City’s
image as technology and digital media leader. Small businesses and information technology
groups offer a myriad of job opportunities and ideas to the broader economy. Current
incubators, venture capitalist funds, and industry consortiums help improve the economy and
provide support for future entrepreneurs. By understanding the dynamics of how these firms
operate, the City can help facilitate broader innovation and attract additional companies within
knowledge-based industries.

1. Acknowledgement and Introductions. Thank you Committee Chairs Brewer and White
and all Joint Committee Members. I am Alan Mitchell. I run a strategy and operations
consulting practice in New York City, ARMAK and Associates, that serves clients on the
supply-side and the demand-side of Internet information and communications
technology. I am also a Board member of the MIT Enterprise Forum of New York City,
and it is in that capacity that I testify today. I want to address two agenda items: (i)
options that are available to the City in aiding small technology start-ups, and (ii) ways
for City lawmakers to foster their growth and boost New York City’s image as a
technology and digital media leader.
2. Overview of MITEF-NYC. First, allow me to briefly introduce the MIT Enterprise Forum
of New York City. We are a volunteer, not-for-profit organization whose mission is to
provide educational programs and services that promote networking and innovation at
the intersection of business and technology. We are one of 24 chapters worldwide of
the MIT Enterprise Forum, which was formed by MIT alumni in 1971. Membership and
program participation in our events is open to all. Our chapter has approximately
5,400 subscribers to our email services and over 200 active members, representing the
entire ecosystem surrounding and supporting start-ups in digital media, biotech, clean
teach, software as a service or cloud computing, aerospace, and so forth.
3. Available Options. For the first agenda item I promised to address, options that are
available to the City in aiding small technology start-ups, I offer the MIT Enterprise
Forum of New York City and its Board for expert consultative support of the
Committees’ planning and deliberative activities and future public events we might
jointly sponsor. Allow me to distribute my business cards for my contact information
and the Chapter’s web site, where you can play streaming media of our recent events,
find an introduction to Board members, and sign up for our email notices∗.


http://www.mitef-nyc.org
 Testimony before NYC Council’s Joint Meeting of
Committee on Technology in Government and Committee on Economic Development
on behalf of MIT Enterprise Forum of NYC, Dec 16, 2009
Alan Mitchell, alan@armak.us, 646-267-8296

4. Ways to Foster Growth. Let me briefly address the second agenda item, ways for City
lawmakers to foster small business growth and boost New York City’s image as a
technology and digital media leader.
a. Finance. To foster small business growth, lawmakers need to ensure that new
sources of financial assistance for start-ups are available as they evolve past the
seed/incubator phase into the revenue phase. There is no significant payoff for
New York City from fostering start-ups at the seed phase unless we ensure that
they can enter the revenue phase and profitably grow long-term in New York
City. However, small businesses are being starved for credit globally. We hear
the President jaw-boning CEOs of our large bailed-out banks in this regard. PBS
News Hour this past Monday had a heart wrenching piece called “Small
businesses struggle amid credit crunch”, which you can find on pbs.org. On Dec
10, the Economist wrote a piece called “Small business, big problem”, which you
can find on economist.com. The Economist reminds us that firms with fewer
than 500 workers accounted for 64% of new jobs created in America between
1993 and the third quarter of 2008, that 90% of small enterprises rely on banks
for all of their financing needs, and that most of the banks on which small
businesses have relied have either failed or stopped lending to small businesses.
Therefore, there is a need for City lawmakers to immediately pass regulations
and laws that would offer guaranteed low cost loans, rent tax breaks, and other
financial measures that would help ensure that start-ups stay in New York City as
they grow. These financial measures could be affordable for the City, offer a
significant long-term return, and create an important competitive differentiator
that motivates start-ups to choose and remain in New York City.
b. Marketing. To boost New York City’s image, lawmakers need to centralize a
coordinated critical mass of marketing, including market research, publicity, and
multimedia ads. In this regard, being able to tout outstanding financial
assistance programs, supported by small business testimonials, would go a long
way toward boosting New York City’s image to a differentiated level that attracts
and retains technology and digital media entrepreneurs.
5. Closing. In closing, let me summarize by saying that the MIT Enterprise Forum of New
York City is ready to support the Committees and City Council in significant ways toward
our common objectives of ensuring that the City is a preeminent location for technology
and digital media businesses, from seed phase through the life-cycle of long-term
growth.