Brooklyn is the geographic center of NYC tech: Charlie O'Donnell - Technical.ly Brooklyn

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Feb. 17, 2014 12:45 pm

Brooklyn is the geographic center of NYC tech: Charlie O’Donnell

Charlie O'Donnell is the founder of Brooklyn Bridge Ventures and one of New York's best-known investors. After recently announcing his $8.5 million fund, O'Donnell discusses how he invests outside of the center.
Charlie O’Donnell.

Charlie O'Donnell.

(Photo courtesy of Charlie O'Donnell)

Between the surging growth of technology companies in lower Manhattan and the maturing of Brooklyn’s creative business community in a widening portion of this big borough, the geographic center of New York’s innovation economy might not be where you would expect it to be.

“It’s probably on this side of the river,” said Charlie O’Donnell, the Brooklyn-branded investor. Of course, O’Donnell isn’t purely objective in making the case that Brooklyn is more than just a bedroom community for professionals and a playground for the creative class.

O’Donnell is the Bensonhurst native and New York tech scene founding father who has never been outside of the city for more than three weeks in a row. It was he who, two years ago, launched Brooklyn Bridge Ventures, the borough’s first early-stage investment firm. Last month, after establishing a portfolio with early money, he announced his venture firm’s first official $8.5 million fund.

So he has a big stake in Brooklyn getting its due.

But it seems O’Donnell is more than comfortable with the investing class, popular media and other tech scenesters who assume Manhattan is the only tech game in town.

Because to find an idea truly new and experimental enough to have a chance at being disruptive (and a proverbial investing home run), you shouldn’t be looking where everyone else is.

“The further you go from the center is where the cheaper, more interesting ideas come from,” O’Donnell said. “Innovation happens on the edges.”

During a conversation last month in the conference room of the NYU-Poly Dumbo incubator, where he works from, seated behind a battered whiteboard, O’Donnell talked about that perceived middle of New York tech.

“Say you just finished being a management consultant at McKinsey and you’re going to start a startup,” he said. “You would take a [General Assembly] class and read TechCrunch and Fred [Wilson]’s blog and the Lean Startup book because those are the loudest, most obvious places to start.

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“But that’s also the circle where you’re least likely to find the next big thing because the next big thing doesn’t look like the one before.”

That, when it comes right down to it, is why O’Donnell says he launched Brooklyn Bridge Ventures.

Sure, it was nice to take on real leadership — after stints at Union Square Ventures and being First Round Capital’s “man in New York” — and there had to have been some hometown pride, though he doesn’t let that shine. Staying local also cut down on his commute: on this frigid, windy morning, O’Donnell arrived a few minutes late wheeling his bicycle, wearing an oversized winter coat and without the goggles he wears in the cold.

But all of that aside, the bet O’Donnell is really selling his backers is that the fundamental shift in how entrepreneurship is happening in the United States today requires him to be on this side of the East River.

“It used to be that companies moved to the money,” he said, dressed in sweatshirt and speaking in his signature soft tenor. “Now the money has to move to the companies.”

That phenomenon, one of the legs of the rise of the rest movement that has tech entrepreneurship communities bubbling in nearly every U.S. city, means, in O’Donnell’s eyes, that Brooklyn was bound to flourish.

More and more, goes his thinking, founders and engineers will decide to get off the A train in Dumbo, rather than cross into Manhattan because the costs and the lifestyle will demand it. And O’Donnell is positioning himself as any Brooklyn founder’s first pitch.

O’Donnell doesn’t only invest in Brooklyn — of his first dozen investments, half are based in Brooklyn, a higher percentage than he expected. His portfolio also shows that interest in being on the edges of new ideas: unlike the pedigree of a Silicon Valley portfolio, just one of the founders of his companies have ever run a venture-backed company before (Mike Perrone of SocialSign.in).

Those people without the pedigree, as O’Donnell put it, are the ones he wants to work with, both out of his personal interests and because his investment strategy requires him to get in early with smaller sums of money.

To do that, he’s looking for people who are far away from the perceived tech startup center. As that center crosses the river into north Brooklyn, O’Donnell is bicycling farther again — he’s working on two deals in Greenpoint.

“The traits you find in entrepreneurs who you should believe in are many of the same traits you find in people who live in changing neighborhoods,” O’Donnell said. “The people who don’t follow the trends. They help lead them.”

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