How Eric Hippeau Powers New York's Surging Tech Scene
Eric Hippeau has invested tens of millions of dollars into 80-plus startups, roughly two-thirds of which call New York City home. And if the French-born, English-raised, Brazilian-trained, Silicon Alley-bred media exec had his way, he'd probably still be running one.
After CEO stints at Web 1.0 giant Ziff Davis and Web 2.0 exemplar The Huffington Post, Mr. Hippeau, 61 and a partner at Lerer Ventures, has emerged as one of the most sought-after digital consiglieri to entrepreneurs knocking down the analog walls of media and marketing.
He has not approached the rock-star status of a Fred Wilson, the now legendary venture capitalist at Union Square Ventures. Nor does he carry himself with the swagger of David Tisch, whose term as managing director of the startup incubator TechStars was a crucial step in the evolution of the New York City's entrepreneurial ecosystem. But if Mayor Michael Bloomberg's vision of the Big Apple as a tech hub rivaling Silicon Valley is to become reality, it will need more Eric Hippeaus: experienced investors who understand finance and operations as well as they do tech and can build startups focused on some of the city's key sectors -- media, marketing, commerce and fashion -- into national, perhaps global, powerhouses.
While entrepreneurs seek him out in part because they know he has the ability to infuse capital into their fledgling businesses, young CEOs from BuzzFeed's Jonah Peretti to Buddy Media's Mike Lazerow have learned that Mr. Hippeau's value extends far beyond that .
"Very few people have had successful media careers, successful internet careers, and successful venture careers," said Mr. Lazerow. "Eric's someone who knows how startups work -- that it's not just about the plan you put into spreadsheet, but that day-to-day grind where things are not predictable and don't always go your way."
Not 'just another blog'
The funny thing about Mr. Hippeau's position is that if he'd had his way, he probably wouldn't be in it. He'd still be running The Huffington Post.
Mr. Hippeau had volunteered himself for the CEO position there in the spring of 2009 when he was a board member because, as he says, "We were either going to blow up into something fantastic or just be another blog." He ran the company for the year and a half leading up to the AOL acquisition and pushed it to become a business with $30 million in revenue in 2010.
By now, it's common knowledge in media circles that Mr. Hippeau wasn't in favor of The Huffington Post's sale to AOL in 2011. He saw the potential to build a giant, independent media company that could one day go public.
"Eric was a big believer in the IPO plan," Arianna Huffington said in an interview. "He had gone that route successfully before, and we had a very clear plan on how we would get there. The only argument in favor of the acquisition was something that both Eric and Fred [Harman, a Huffington Post board member] agreed on: The acquisition would dramatically accelerate the [IPO] plan."
With the acquisition, Mr. Hippeau's own vision for HuffPost was extinguished. He immediately announced that he would join the fledgling seed-stage investment firm that HuffPost Co-Founder Ken Lerer had launched with his son, Ben. He went back to investing -- something he had spent nine years doing at Softbank Capital in between his work at Ziff Davis and The Huffington Post -- and sooner than he would have liked. But for the burgeoning New York startup scene, it may have been a blessing in disguise.
Mr. Hippeau's entrepreneurial roots stretch back more than 30 years to Brazil. His father was a United Press International exec whose career would take Eric on a country-hopping journey -- to Switzerland at age 3, back to France at 7, and to England at 10, where the young Mr. Hippeau learned English from watching TV programs such as "Coronation Street ."
At 20, he dropped out of Paris' Sorbonne and purchased a one-way ticket to Brazil, where his parents had moved. He never graduated college. There, he landed a gig as a sports journalist at a small English-language newspaper called the Brazil Herald. Following a staff exodus, he became editor-in-chief while still in his early 20s and later launched Data News, a Portuguese-language publication that he describes as Brazil's first computer magazine. When a government-ordered ban of international computer sales wiped out his advertising, he sold the publication for $50,000 to International Data Group in a deal hashed out at the Copacabana pool in Rio de Janiero. He went on to work for IDG for 15 years.
In the early "90s, Bill Ziff poached Mr. Hippeau from IDG to become publisher of PC Magazine. "Working for Ziff Davis was like you had arrived," Mr. Hippeau said. "And I felt like if I failed, it would be the end of my career."
He did not, and it was not. At Ziff Davis, Mr. Hippeau rose to CEO and oversaw or had a hand in several innovations, including building one of the first online business extensions of a print publisher in ZDNet and launching a tech cable news network in ZDTV. He earned a reputation as a doer who did not let decisions linger. He ranked tasks by importance, took on the most pressing matters and delegated furiously. To this day, when a big decision is needed, he gathers information quickly, analyzes it, forms an opinion and makes the call. He always trusts it's the right one.
"Eric walks that fine line between being confident in a healthy way but not being arrogant," said Rayna Brown, Ziff Davis' former head of human resources. "That was a very specific model for execs who were very successful at Ziff Davis."
Now, when he mentors others, he pushes his understudies as well to focus, gather information and make decisions swiftly, while at the same time letting them develop their own styles and leaving room for their entrepreneurial intuition.
Before Buddy Media became a marketing-software company that Salesforce would acquire for $745 million, Mr. Hippeau, a board member through a Softbank Capital investment, supported Mr. Lazerow through Buddy's several iterations -- from app developer to agency and then software company -- until he found a business model that worked.
When Ben Lerer was looking to hire a No. 2 to push his men's lifestyle media company Thrillist to the next level, Mr. Hippeau convinced him that the "unicorn" hire he was envisioning simply did not exist and that he should hire two executives instead.
And when Jonah Peretti realized that his little project called BuzzFeed was growing into more than a lab for digital experimentation and that he would have to develop some real chief executive skills, he called on his observations of Mr. Hippeau's running of The Huffington Post. "Eric's style is few words, lots of action, keep it simple, work hard," Mr. Peretti wrote in an email.
Now, the Hippeau Way is spreading to a newer class of company founders who have taken on early-stage funding from Lerer Ventures. The firm typically invests $200,000 to $300,000 in a startup for an average 3%-to-5% equity stake. Akshay Kothari, CEO of Pulse, the Flipboard news-aggregation rival, looks to Mr. Hippeau for guidance as he begins to hire a business team to craft the right go-to-market strategy for his app's advertising products.
"Anytime I have a question on monetization, there just isn't anyone who's as familiar and as experienced as Eric is ," he says.
For Jonty Kelt, CEO of Group Commerce, which makes an e-commerce platform used by media companies, Mr. Hippeau offers insight about how to address the challenges of the modern-day media company one day and then gets into the weeds of how to correctly structure a software-as-a-service business on the next.
"He knows a lot about a lot," Mr. Kelt said simply.
When Mr. Hippeau's knowledge isn't needed, his contact list is .
"Every time we meet with Eric, we come out with three new introductions of people we should talk to," says Noah Brier, co-founder of Percolate, a social-marketing-software startup.
Mr. Hippeau does certainly enjoy some luxuries. He owns an 82-foot Horizon yacht outfitted with a small crew on which he frequents the Bahamas. But most days he is all business. He rises at 5:30 a.m. and attends to his email in-box. At 6:30, he visits the gym for a workout. He's in the office by 9 and often takes five to six meetings a day.
In early meetings, he comes off a bit like the intimidating figure that money-hungry startups typically first meet. There's a dead stare straight through the end of any given question, without a hint of a nod or other gesture. An analysis is going on, but whether it's of the interviewer, the question or both is not clear.
But after a few visits, his demeanor changes. His handshake, which is tentative when one first meets him, strengthens. He is quicker to smile and perhaps even cracks a joke. This is the Eric Hippeau that entrepreneurs and fellow investors say emerges when the formalities are stripped away.
"He's a real gentleman and very generous and courteous," says David Lee, managing partner at SV Angel, the famed Silicon Valley investment firm with which Lerer Ventures has an informal partnership. "Not being a jerk is surprisingly a way to differentiate as an investor."
Building from scratch
"Thinking about the CEO changes at the NYT's, it occurred to me [that ] @erichippeau would be the best answer to fill that job!" went a tweet in December from Greg Coleman, a friend of Mr. Hippeau who previously ran advertising sales at The Huffington Post.
The New York Times did not speak to Mr. Hippeau about the position, which was filled in August. But Mr. Coleman's recommendation, however biased, raised a good question: After the way things ended at The Huffington Post, could Mr. Hippeau envision himself as a CEO one more time?
"Yeah, why not?" Mr. Hippeau shrugs off the question. "But that 's what we're doing here: We're building from scratch."
He is referencing Soho Tech Labs, a startup incubator and just one more example of how he is trying to cultivate a Silicon Alley farm system. Its home is in Lerer Ventures' SoHo office, and its supervisor is former HuffPost Chief Technology Officer Paul Berry. Soho Tech Labs has launched one company so far, a house-swapping site called CasaHop, and has several others in the works. Mr. Hippeau also has a hand in NowThis News, a new video news network for the mobile age.
When pressed about his interest in running a big company once again, Mr. Hippeau says he already has his hands full. And with Lerer Ventures creating a third investment fund, totaling $30 million, there will only be more entrepreneurs to mentor.
"We believe this can be the largest infrastructure in New York for entrepreneurs," he says.
Still, when you hear Mr. Hippeau talk about the sale of The Huffington Post and watch his eyes widen as he discusses the digital-media and digital-marketing innovations of our time, it's hard not to think he may very well have one more CEO gig in him. And if he wants to make it happen, he may not have too far to look. As Buddy Media's Mr. Lazerow said, "Most companies he's involved with he could be the CEO of ."