Thursday, April 24, 2014
Inquirer Daily News

Why two Web pioneers moved to Philly

Perceptual Networks' Jim Young and Cheyenne Ehrlich, backed by YouTube and PayPal founders and Josh Kopelman's First Round, picks "one of the few places well-positioned" to foster tech

Why two Web pioneers moved to Philly

Read about Procedural Networks, a new Philadelphia company backed by $1 million from prominent Silicon Valley investors and Philly's own First Round Capital, in my column in today's Inquirer here. Investors listed below this item. Excerpt:

Jim Young, raised in Apple's hometown of Cupertino, Calif., developed the notoriously successful face-and-body comparison-voting site HotOrNot.com while getting his Berkeley PhD. Cheyenne Ehrlich developed ClickTheButton.com, a PayPal predecessor, and went on to help build firms in Silicon Valley and East Asia, from his home on the Hawaiian island of Maui.

These pioneers are now partners - in Philadelphia, where they've started their new company, Perceptual Networks, backed by $1 million from Josh Kopelman's First Round Capital, YouTube cofounder Steve Chen, PayPal cofounder Max Levchin, Gabe Weinberg of Philly's own DuckDuckGo, and more than a dozen other tech web investors, mostly household name in the last generation of Silicon Valley entrepreneurs.

They say their choice of Philly's revived Northern Liberties neighborhood is more than a sign that, in this era of free-development software, entrepreneurs can go anywhere:

"Philly is not random," Young told me. "Philly is one of the few places that is very well-positioned to do these things. There's the fact Josh is here now. The fact you have Penn and Drexel," and events like PennApps, which drew 300 student software developer teams to the University of Pennsylvania last weekend.

"There's the quality of life, how cheap it is relative to New York and San Francisco. And the food scene here is amazing, and the arts-and-culture scene - those are the things that draw entrepreneurs and creative types." You can't get that, Young added, "in places like Baltimore."

Can Philly keep these smart people as they mature and start families? "We have two kids, 2 and 5, and one of the main reasons I choose to be here, I think the quality of life is much better for families here, than in New York and San Francisco," Young said. "Philadelphia is much more family-friendly."

Even its school system? "The public school system scares me," Young admitted. But his wife, Sarah, is a proud Central High graduate ("Class 258," in 1999). Which is why Young first experimented with Philly living, as a young parent, three years ago.

Young lured Ehrlich. "Jim and I met at TED in 2004," Ehrlich told me, citing the "Technology, Education, Design" conferences that have grown into a national phenomenon for circulating quick ideas. They've been sharing proposals for a joint business ever since.

"Starting a company together is like a form of marriage," Ehrlich added. That's what it took to "get me off Maui." In Philadelphia, he was pleased to find "a fair amount" of technology companies, "mostly in the 'burbs, and a lot of great talent in the city," giving city employers an edge in hiring.

"Hey, it would be impossible to do what we're doing back on Maui," Ehrlich concluded. "Markets like Philadelphia contain people who live here by choice, and who want to be here, as opposed to people who are on the gold rush. And that's who you want for your team."

Besides First Round and Silicon Valley's Bullpen fund, Procedural Networks backers include:
• Max Levchin (founder of PayPal and Slide and Chairman of Yelp),
Steve Chen (founder of YouTube and AVOS),
Michael Birch (founder of Bebo and Monkey Inferno)
Richard Yoo (founder of Rackspace and ServerBeach)
•  Shawn Colo (founder of Demand Media)
•  Joshua Schachter (founder of Tasty Labs and Delicious)
•  Alexis Ohanian (founder of Reddit)
•  James Hong (founder of HotOrNot)
•  Philip Kaplan (founder of Fandalism, Blippy, AdBrite, TinyLetter and many, many more)
•  Naval Ravikant (founder of Epinions and AngelList)
•  Tikhon Bernstam (founder of Scribd and Parse)
•  Garry Tan (founder of Posterous and Partner at Y-Combinator)
•  Gabriel Weinberg (founder of DuckDuckGo and NamesDatabase)
•  Jameson Hsu (founder of Mochi Media)
•  Bob Ippilito (founder of Mochi Media)
•  Ken Keller (founder of IGN.com and Cadence)
•  Paul Bragiel (partner at I/O Ventures)
•  Tom McInerney (former COO at Klout)
•  Bill Lee (founder of Remarq and Social Concepts and investor in Tesla)
•  Nils Johnson (founder of Beautylish)
...so many that Ehrlich said the partners had to turn some investors down.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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