Behind a nondescript door in Flatiron is what looks like any number of startup dens in New York, San Francisco and other cities appealing to the millennial entrepreneur: Twenty-somethings in headphones tap away at laptops on long wooden tables and standing desks. You can spot developers sprinkled throughout from their bigger black monitors on which they code. In the back are the requisite couches and snacks.
The scene on the sunny April day could be a spec set for a startup accelerator the gang from HBO’s ‘Silicon Valley’ might go to visit, from the mass of chargers plugged to every power outlet to the side cubicles and small conference rooms where you can see the requisite charts on the whiteboard. The difference is the big sign on the back wall, reading: “Friends of
The unmarked door is, in fact, just steps away from the brightly labeled front entrance to the New York office of eBay, the 20-year-old ecommerce company. One wall over from the startup hive are 200 eBay employees tasked with the company’s forward-looking initiatives like redesigns and new products that the company hopes can make it feel fresh again, even despite the $70 billion market cap. With
Friends of eBay, as the program is called, is a bit unusual in the tech scene. The startups there are offered six months of space and services for free, without giving up any equity to eBay, though many raise seed rounds while they’re in the program. A dozen startups get picked out of hundreds for each batch—the crop I am watching is relatively new, having moved in a month before in March.
“If you look at the other tech giants in New York, none of them let startups co-locate,” says program director Justin Stanwix, the former marketing director of funding software platform Gust. “Part of what makes Silicon Valley great is the number of ‘collisionable’ hours to bump into people who can be helpful to your business.”
Because it’s eBay, the companies are typically related to commerce in some way, or could benefit from working with eBay partners like GE. One such startup is Gleem, a new jewelry marketplace where the typical necklace or estate ring will sell for between $2,000 and $5,000. Founder Nikki Lawrence, a former director at Gilt Groupe and Soap.com, calls joining the program the “rare no-strings attached deal.”
What eBay’s getting out of all of this is a bunch of soft benefits. Potential talent who visit to interview for jobs at eBay are walked through the Friends of eBay office, and people working for the big company can rub shoulders with the startup founders. “It’s hard evidence of the focus eBay is placing now on making the site more contemporary and bringing in new models of innovation,” Stanwix says. “And there’s paying it forward as a large organization. We were a startup once.”
That community goodwill is more apparent in the fliers the program is taking on startups without a commerce or marketplace backround. One-time Lerer Ventures analyst Max Stoller found the program through a friend who was a member of the previous class. Stanwix noticed Stoller hanging around and okayed his crashing. Now Stoller’s a formal participant with his startup Red/Green, which aspires to be a better way to tell your friends when you’re free, especially people you might see if you were both bored and near each other, but whom you don’t know well enough to proactively text. Stoller Stoller says he’s as interested in being around the other startups in the group as he is the tech company itself. “It’s not weird at all for us to be with eBay. I could’ve done this out of a venture capital office, but they have expectations. They’re more transactional,” Stoller says, such as an unspoken expectation that the firm will get a first crack at investing when a startup raises.
But while Friends of eBay may be good for morale and for putting the company forward in the New York startup community, it’s hard to believe the company wouldn’t swoop in if a startup within its walls had a big idea deeply relevant to eBay’s own business. In that sense, the program could make sense purely as prospecting: Invest a few million dollars in deep exposure to a number of early-stage startups preselected largely for their potential relevance to eBay’s current or future product roadmap, cultivate each one, and if there’s a billion-dollar opportunity that emerges, be best positioned to partner early or gobble it up.
Stanwix acknowledges that eBay is gaining insight into what’s popular or emerging in the startup market, but says the company’s not cynically growing startups just to acquire. None of the startups have been acquired by eBay to date, though some have been acquired by others and met with eBay before they did for advice. More common are vendor relationships with startups and program alumni.
. “There’s no agenda,” Stanwix says. “There’s a commitment to rethinking what we are doing at eBay. This is a goodwill effort with the best of intentions to help advance these nascent companies.”
The other current “Friends" of this crop are CosmicCart, Fleek, HyperScience, Lettuce, MaestroIQ, Mave, Perch, Skip, Teleparty and Alexander Pease.
