Today, we speak with Andrew Cohen, the Founder and CEO of Brainscape, a startup building an educational platform for web and mobile.
What is your take on the startup scene in NYC today? New York is currently adjusting to a “new normal.” Back in 2009-2011, it seemed like everyone and their cousin was starting some revolutionary new social/mobile/location-based company that was guaranteed to be earning $100M revenue within five years. Now, after a first wave of successes and failures, these first-time founders are coming to grips with reality, while the few successful 2nd-time entrepreneurs are funding other startups and speaking on panels. Such recycling of entrepreneurial talent, investment and advisory is one of the most important contributors toward creating a lasting startup ecosystem in N.Y.
What do you see happening over the next three to five years? We’re almost undoubtedly entering a short period of contraction and shrinking valuations. Yes, the so-called “Series A Crunch” has already been very well documented, but we’re also likely to see a “Seed Crunch” as savvy investors become a bit more jaded by the increasing wave of failures we’ll be continuing to see over the next year or two. Raising a $500K – $1.5M seed round from angel investors will require a larger amount of validation, traction, team strength, and, in most cases, a better proven revenue model than it has over the past few years. The advent of “Crowdfunding” probably won’t be strong enough to offset this market correction. That said, in the next few years we’ll also see some new technologies that will likely support new software development platforms. Google Glass, iTV, iWatch, and iCar are a few possible platforms, and one can only begin to imagine the possibilities for developers. We’re likely to see a huge new wave of N.Y. – based innovation in these areas in a few years, but likely with a much more “realistic” and cautious mindset than this recent bubble.
What do you think the challenges are? Finding great technical and design talent will continue to be challenging. There are still far more “business” founders than technical founders in the ecosystem. However, this problem will hopefully correct itself as more people continue to teach themselves to code and as great senior developers are “freed” from failing startups that came from this recent fundraising bubble. Finding great web/mobile analytics talent is likely to be the next big challenge over the following few years.
Where does your company fit in the ecosystem? Brainscape is slowly becoming a “veteran” in this new wave of education startups. Since we have successfully found a viable mobile revenue model, we have now assumed a role of helping newer web/mobile education startups to develop their own business strategies. We regularly advise other education companies and have even taught classes on App Store Revenue Optimization.
Read what other thought leaders are saying in the “Pulse of the Alley”.