Startup

MACK MCALLISTER EXITED his East Village apartment building wearing a royal-blue gingham-checked button-down shirt tucked into jeans and a navy blazer. He carried a soft brown leather briefcase with two buckles, given to Mack by his father when he graduated from the University of Texas and on which his initials—WSM, William Sumner McAllister—were embossed in gold capital letters. His dark brown hair was close-cropped, which highlighted his somewhat ungainly ears. Mack considered his ears his secret weapon in that they made him just slightly unattractive, a characteristic that he found made him irresistibly disarming to women.

This morning, Mack had agreed to give a breakfast presentation at Startup Boot Camp, an incubator that gave founders office space and access to venture capitalists and other successful entrepreneurs for one year in exchange for 10 percent of their companies. His Uber, a silver Prius, pulled up right as he put his headphones on and opened the MindSoothe meditation app on his phone. He hit pause as he confirmed his destination, an office building in the financial district, with the driver. Then the opening chimes played, and a soothing female voice said, “Welcome to your meditation session. For the next twenty minutes, you have granted your mind and your body permission to connect with the world of thought and feeling.” He closed his eyes. Certainly an Uber in Manhattan at rush hour was not the most conducive atmosphere for meditation, but Mack had made it a goal to try to meditate in the most inhospitable environments. Anyone could meditate in a silent, darkened room, but could you find peace crawling down Broadway? That was the mark of true enlightenment. Meditation was relatively new in Mack’s life, despite the fact that he had developed a workplace-wellness app. But the practice had become popular in the startup scene as a kind of self-improvement mechanism—supposedly even Zuck was a devotee—and it did seem like people at TakeOff were much more productive ever since he had begun offering guided meditation in the office once a week.

As the car inched along, honking every minute or so, he tried to focus on what the app was telling him—“Continue to bring awareness to the breath.” But his mind kept drifting to his meeting with Gramercy Partners next week, where he was going to make a case to the partners that they should lead his next round of funding, his Series A round. He knew it was ambitious, but he was hoping for a valuation of six hundred million dollars, and then, maybe, just maybe, the next round of funding would value TakeOff at over one billion. In startup parlance, TakeOff would be a unicorn. Silicon Valley might have already been overrun by unicorns, but here in New York City, they were still a rare and coveted breed.

TakeOff had started as a company that promoted workplace wellness; at any point in the day, you could open the app and tell it what your mood was, and it would immediately give you something to help improve how you were feeling (Mack believed that even if you were in a great mood, you could always feel better). Sometimes it was a cat picture or a funny meme, sometimes it was an instruction to take a walk around the office, sometimes it was a song. Now he and his team were working on developing something even cooler, a new version that would go beyond the workplace and would anticipate your mood at any time of day or night, based on your past inputs but also on sentiment analysis from your social media accounts, emails, text messages, and IMs. TakeOff didn’t actually read your emails, texts, and IMs or store them, of course; it just combed them for keywords and relevant emoji. Like if you were using the sad-face emoji too much or if you had the word pissed in your emails or texts more at a certain time of day, the app would take all of that into account and send you a notification when it perceived that you were feeling bad.

Even if TakeOff wasn’t a unicorn quite yet, six hundred million dollars would be nothing to sneeze at. Six hundred million dollars would make his remaining 23 percent stake in the company worth approximately one hundred and thirty-eight million dollars. He said that number to himself a few times, just to get used to the sound. One hundred and thirty-eight million dollars. One hundred and thirty-eight million dollars. One hundred and thirty-eight. Million. Dollars. What would he even do with that much money? Maybe he would hire a personal chef and finally start that gluten-free paleo diet everyone was talking about. Actually, fuck it, if he had a hundred and thirty-eight million dollars, he could afford to buy a private plane and staff it with the personal chef.

“Take a long, slow, deep breath in through your nose.” Pause. “And now release that breath out through your mouth. In and out. In and out. Slow your mind down and guide yourself into a new state of awareness.” He had learned through meditation that it was important not to think too much about worst possible outcomes, because then that was what you ended up manifesting into existence. Instead, as his Uber picked up speed a bit, he brought himself to that new state of awareness in which he was a multimillionaire and he was the one turning down meetings with VCs.

“Sir?” He opened his eyes, startled. They had stopped in front of a glass-and-steel tower. “This the place?”

He hit pause and removed his earbuds. “Yes, sorry about that.” He got out of the car quickly and, after handing over his ID at the security desk, took the elevator to the eighth floor.

“Hi,” he said to the woman at the reception desk. “I’m here for—”

“I know who you are!” She stood up to shake his hand. He sized her up quickly: She was probably around twenty-two or twenty-three, wearing a floral dress and tights and bright red lipstick. Her light brown hair was in a bob with bangs. Not his type, exactly, but cute. “It’s so great to meet you, Mack. We’re so happy you’re here! I’m Gina, I’m the office manager. I’ll take you to the conference room! There’s breakfast and some drinks all set up.”

He followed her back through the open-plan office. It was a large room, packed with desks and computers. Small signs indicated each company’s name at its workspace, most of which had three or four desks. People looked up as Mack walked by. Most of them smiled. A few stood up and followed him and Gina to the conference room, where there were already five or six people seated at a long table, including the guy who’d invited him, Peter Fernandez. Peter stood up as Mack came in. “Mack!” He made his way over and shook Mack’s hand. “So glad you could be here this morning. Help yourself to a bagel or coffee.” Peter was a former venture capitalist who had left the VC world two years ago to start this incubator. So far, seven of the incubator’s companies had been bought, netting Peter around twenty million dollars in the process.

Mack poured himself a cup of coffee. “How’s everything going?” he asked Peter.

“You know, Mack, everything is going great. We have a killer class right now—I’m just really psyched about the potential everyone brings to the table.” He glanced around the room, which had filled up. “You ready to do this?”

Mack nodded. He had prepared his speech the night before, practicing in front of the full-length mirror in his bedroom. “Great. I’ll give a short intro and then you can just go into it.” Peter cleared his throat. “May I have everyone’s attention?” The room quieted down. “I’m very pleased to introduce today’s breakfast speaker, the extraordinary Mack McAllister.” Everyone applauded. “He’s a guy who needs no introduction, really—I’m sure you all have TakeOff on your phones—but I’ll give him an intro anyway, just so we can be reminded how incredibly awesome this guy is. So Mack got kind of a late start in the startup world—he founded TakeOff at the ripe old age of twenty-five, which should give some of you here hope.” Everyone laughed. Peter pointed at a tall guy leaning against the wall in the back of the room. “I’m looking at you, Sunil.” Sunil saluted, grinned. “Sunil just turned thirty-two,” Peter stage-whispered to Mack. “Anyway. In addition to founding TakeOff, which now has sixty-three employees, Mack’s on the board of the New York Startup Series and he also founded Tech for Kids, which teaches children in underserved communities how to code. Oh, and he’s run the New York City Marathon three times.” Peter mock bowed down to Mack. “Really, dude, is there anything you can’t do?”

“I never could master German.” The room laughed with him. “Seriously, though, thanks for that intro, Peter. So…show of hands. How many of you, growing up, thought you were one day going to start a company?” Around half of the people in the room shot their hands up. “Wow, impressive. How many of you thought that you would one day work for a startup?” Another smattering of hands. “And how many of you thought that that startup was going to be in New York City?” This time, no hands went up. Mack grinned. “In the past few years, this city has experienced nothing short of a revolution. And it’s all because of people like you, and you, and you.” He pointed at a few random people in the room. “Heck, it’s because of all of you! I moved to New York six years ago, and believe me, things were not the way they are now. The city was in a depression. And I don’t just mean economically—I mean the whole city was depressed. Wall Street had basically imploded. New York was spiraling. Those point-zero-zero-zero-zero-zero-one percenters at the top, they never got rid of their Hamptons houses or their yachts, but a lot of people at their firms lost their jobs. So when things started to change, it wasn’t Wall Street leading the way. You know who it was?” He paused for dramatic effect. “It was people like you and me. The tech industry. We were the ones taking leases on office space no one wanted. We were the ones hiring. And we were the ones trying to build a community.”

Mack had moved to New York after getting a Facebook message from a college friend he hadn’t heard from in a while saying that he was looking for people to work for his startup. A couple years later, the startup failed, but Mack decided to stay. He bounced around a few other startups before finally landing on the idea for TakeOff one day when he was running along the Hudson River, and after three months of all-nighters he’d raised one million dollars.

“Let me ask you something. Do you think Wall Street would have started a game-changer like the New York Startup Series?” He paused for effect. “Here’s the answer: They had over a hundred years to do it, and they didn’t. We’ve gotten over two hundred companies funding through the Startup Series. Because we’re the visionaries in New York now. This is a new city. It’s not about who your parents are or what school you went to anymore. It’s about who you are and what you do, and what you can do for the greater good.” He’d given a version of this speech at least a dozen times, and it never failed to make him emotional. “This means responsibility—great responsibility. But what could be better than giving your life to something greater than yourself?”

The room broke into applause. A couple people whistled. He waited for it to die down and continued. “Of course, there will always be naysayers about the tech industry. That just comes with the territory. There are always going to be the finance guys who think they can keep pretending they still rule the world. Then there are those types on the opposite end of the spectrum—you know, the ones who barely even know what the internet is? Once your companies begin to get off the ground and you start looking for office space, you’ll understand this—there are people out there who will raise hell about a relatively small tax break for a tech company to stay in New York and create jobs.” He shook his head. What he always wanted to add, but didn’t, was how supremely annoyed he was by the entitlement of people who would fight tooth and nail to keep their rent-stabilized apartments even when they had country houses and sent their kids to private school. This was basically socialism. Meanwhile, his employees lived off subway stops in Brooklyn he’d never heard of.

“Now, look, I understand that there might come a time—well, let’s say, there will hopefully come a time—when I’ll find Wall Street and its access to capital markets extremely useful.” Peter, and a couple others, laughed. “But until then, I will continue to argue that the tech industry is the best thing to happen to New York City since a Dutchman bought this whole dang island.” The room erupted into applause.

Something else Mack always left out of his talk was how his dad had built an incredibly successful contracting company from nothing—but he had never forgotten that he’d been turned down by five banks in Dallas for a small-business loan when he was starting out. If he’d had the same access to capital that Mack had had, he’d probably be one of the richest men in Texas by now. But VC firms were built to understand and profit from this new world. So what if they ended up owning a chunk of your company? They knew that it took money to make money. In fact, it was considered a bad sign if your company was profitable too soon; you had to spend the money you were earning to build your business or else your investors would wonder if you were thinking big enough and taking enough risks. That was Startup 101.

Mack’s dad still didn’t totally understand what Mack did, or what the company did, or even really how VC funding worked or why Mack would take money from someone else and “let them get into your business like that,” but he loved to talk about how entrepreneurship was in the genes, and Mack had overheard his mother on the phone with one of her friends when he was home for Christmas last year bragging that he was going to be on the local news in Dallas talking about being a tech-company founder. What they really didn’t understand, though, was why he was single. His younger sister, Hailey, had gotten married three years ago, when she was twenty-three, to a guy she’d met at SMU, and everyone at the wedding had seemed surprised—Hailey’s single girlfriends, pleasantly—that Mack came unattached. He’d ended up hooking up with one of Hailey’s sorority sisters and her best friend from high school, and he was pretty sure that neither of them knew about the other and that Hailey knew about neither of them. He still occasionally got texts from the high-school friend; he responded if he knew he was going to be back home for a few days. She was always up for something fun.

His parents knew he dated around but didn’t ask too many questions. The closest they had come was when he was home briefly at Christmas; he’d been watching football with his dad and Hailey’s husband, Colton, and when Colton got up to get a beer from the kitchen, Mack’s dad had said, quietly, “Your mother’s worried about you.”

Mack’s response was to laugh, a little nervously, until he saw the dead-serious look on his dad’s face. “I mean it, son, she’s worried about you. I know things are going well with the company, but she is just worried that…well, she’d just really like you to meet someone, is all.”

Mack had to laugh again to break the tension. If only they knew…“Dad. Please, she has nothing to worry about. You have nothing to worry about. I do fine.” This seemed to do it; his dad clapped him on the back and said, “Enjoy it while it lasts.”

Still, they were old-fashioned in their way. They didn’t want to meet any of Mack’s girlfriends unless Mack felt like it was serious. And Mack would probably have to bring the girl to Dallas because his parents had yet to set foot in New York. Until very recently, he hadn’t been with anyone he’d even remotely considered taking to Texas. But lately, the thing—he hesitated to put a more concrete label on it—he had with his coworker Isabel seemed to be getting more serious. They’d been seeing each other secretly, and nonexclusively, for the past year, neither of them willing to articulate anything that suggested a desire for commitment, but now Mack was starting to think he was “catching feelings,” as they used to say in middle school. And he had probably felt this way for a while, if he was being completely honest with himself. Maybe the next time he and Isabel hung out, he would broach it.

He suddenly realized that the applause had died down and people were looking at him expectantly. “Are there any questions?” He took a sip of his coffee. In the back, Sunil raised his hand. “Yes?”

Sunil nodded. “First of all, thank you for coming today—your talk was truly visionary and inspiring. Second, my question has to do with scale and hiring. At what point did you need to add layers of, shall we say, administrative staff? You know, finance, HR, and the like. My company is obviously way too small to start thinking about this, but I’ve seen a couple of friends get tripped up by it and I was curious how you’d handled it.”

“Sure. To be honest, we’ve been winging that stuff a little bit. Investors don’t want to hear about you hiring a head of HR. They want to hear about you hiring engineers. So it’s on our radar, sure, but not totally a priority.”

“Thanks,” Sunil said. He didn’t seem totally satisfied with the answer but didn’t ask a follow-up.

“Any other questions?”

“Where do you see TakeOff going from here?” This was from a woman sitting near the door. He’d noticed her on his way in—she was a little chubby, with curly blond hair. He’d dated girls like her in high school.

“I was waiting for someone to ask me that question.” He smiled at her. Was she blushing? She was blushing. “What was your name?”

“Bella.” She smiled back at him. Maybe she was cuter than he had initially thought.

“So, Bella, the goal right now—and by now, I mean, let’s say, the next nine to twelve months—is to scale as fast as we can. We’ve got a new product that’s launching very soon that I can’t say anything more about, but as soon as that launches we’re going to be kind of in a new phase. We’re going to need probably a dozen new developers ASAP. And then, I mean, we’re looking at international expansion, we’re looking at a version for teenagers, we’re exploring partnerships with some major companies right now…there’s a lot happening. It’s a very exciting time.”

All of this was, of course, totally true, but also hugely exaggerated—but, he told himself, in a “fake it till you make it” kind of way. And it wasn’t completely faking it—so far, everything he had “faked” he had subsequently “made.” So he had no doubt that, even though it would mean everything going 1,000 percent according to plan, he would be hiring a dozen new developers, even if that depended on getting the money from Gramercy and being able to find a dozen developers. And he hadn’t exactly discussed the viability of international expansion or a teenage version with anyone on his staff, but these were things that certainly could