By Kevin Purdy
Venture capitalist and Synacor Chairman Jordan A. Levy intends to spend millions on creating a high-tech startup scene in Buffalo. He ended a Buffalo Rising interview on the matter with this: "We'll give it a shot, man. I don't know what's going to happen, but we'll give it a shot."
Levy, along with Ronald M. Schreiber and Softbank, have launched Z80 Labs, an incubator on the first floor of The Buffalo News. The idea is to give young entrepreneurs with tech-minded ideas some funds, guaranteed mentorship, free space and infrastructure, and 366 days to either fail quickly and gracefully, or to graduate to a stage where they could see funding from a $4 million Innovate New York grant from Empire State Development Corp.
Before Z80 and his current position as general partner at SoftBank Capital NY, Levy and Schreiber founded Upgrade Corporation of America, later known as ClientLogic, now acquired by Sitel. Famed venture capitalist Fred Wilson was a board member at UCA, he and Levy became friends, and Wilson came to town this week to help launch Z80 Labs. Levy was also a senior vice president at retail chain Software Etc. (now known as Gamestop), and a co-founder of Software Distribution Service, which later became Ingram Micro. Levy is chairman of Synacor, and a board member of a number of local institutions and tech firms outside the area.
Levy gave Buffalo Rising a few minutes at Monday's launch party for Z80 Labs to talk about the particulars of Z80 and the nature of entrepreneurship in Buffalo. He was frank about the risky nature of startups, in Buffalo and elsewhere, but eager to get started with the experiment.
(Note: Be sure to read our corresponding Q&A with Fred Wilson from the same Z80 Labs visit).
Buffalo Rising: Any thoughts on how universities, and maybe nearby areas like Toronto, play into Z80?
Jordan Levy: I think universities do have their own thing. There is some university incubation, there's the STOR, Science and Technology Outreach. The university has some stuff, it's mostly designed around tech transfer, from professors and academics. That's not what I'm trying to get done here. What we're trying to build is internet-based companies, mostly. Because that's something that completely is void in Buffalo--with a couple of exceptions, as you know, Synacor obviously. But that's our focus.
Will there be life sciences? Probably, because Ron Schreiber is a biochemist by training, he loves that stuff. But that's not our focus ... Life sciences company take a lot of time and money.
Buffalo Rising: You and Ron both talk about your friends who left, partners who left ...
Levy: Kids. Both of my kids are gone.
Buffalo Rising: So when companies graduate or grow out, or even fail out of Z80, how do you keep them in Buffalo?
Levy: Hopefully, we can use our network, the Fred Wilsons of the world, and help them get funding.
Buffalo Rising: Fred's in New York.
Levy: But he came to Buffalo. I'm bringing all these guys--like Fred and our peers in venture, they are our friends--to Buffalo. They've all committed to come up here, support the fund--nearly 80 percent of them have said, "Jordy, we'll make a trip." It may not be January, February, March, but they'll come the other times. And we'll bring them here so (startups) don't have to leave.
Buffalo Rising: They won't feel like they'll need to go to New York ...
Levy: To get funding, because we'll get these guys to come here for them. We'll help give them the kind of nurturing and mentoring that will help them succeed.
Buffalo Rising: Fred and Marc Pincus and other venture capitalists that you've named--is it strictly an advisory role for them? Do they have any kind of first refusal rights to investments?
Levy: Oh, no, no no. They have nothing. They've just agreed to come to Buffalo to see what we're doing, meet with our companies, and give a speech. So all of a sudden--when was the last time people like this came here? They never did. Our point is, I'm going to change the paradigm. I'm going to uneven the playing field, so that our companies and our young talent has a chance to get exposure to all kinds of people like them that are in this business.
Buffalo Rising: What's the hardest part of this?
Levy: I have the connections outside of Buffalo. The hardest part is ... whether the talent is here, and whether people have the courage and the passion to start their own business.
Buffalo Rising: One thing that's different, I think, is that places like Austin, Boston, New York, San Francisco, if you do a startup and it doesn't work out, you can always go work for Yahoo, or Google, or one of a hundred MIT-based firms ...
Levy: Or go to another startup.
Buffalo Rising: It feels like it's harder in Buffalo to think that way. It seems like someone puts a lot on the line to join a startup in Buffalo.
Levy: Yeah, because if it doesn't work, where are you going?
Buffalo Rising: So how can Z80 help that?
Levy: The objective of Z80 is to try to create an ecosystem of entrepreneurs that are willing to take a chance and start a business. Instead of working for the bank, instead of working for a big company, instead of working at the university, or whatever few tech companies we have, it's, "I've always had this idea to start a business. I've got an environment now where I can go, and there's a bunch of other like-minded ... fools, that are willing to take the risk. Doesn't cost me anything, so I don't have to worry about paying the rent, I don't have to worry about getting telephones, my infrastructure, any of that stuff--my accounting. I can just show up here, and I've got a place to go work on my idea."
Buffalo Rising: Do you think you're personally going to be spending more time in Buffalo? You split your time generally between New York and Buffalo.
Levy: I spend the majority of my time in New York. I don't think that will change. I make a living doing that. This is not to make a living. There is no economic benefit in this for us. If there's a company we end up funding, then that would be great. This is really being done as a ... I don't want to make it sound wrong. It's not a philanthropic project, it's being done as a community project, by Ron and I. It will also help Synacor, and Campus Labs, because we want that talent to stay here and to nurture it.
... I'll be forced to be here more. I wouldn't have been here today. Normally, I would have been in New York today and tomorrow, but I'm here. So, yeah, I'll probably spend more time here, I guess, because (Z80) will make me. I'm happy to be here.
No excuses now. The money is here! Time to innovate!