Young, ambitious, and about to be megarich, Gen Y is redefining power in Manhattan.
Jon Steinberg, who helped build Buzzfeed, near the Flatiron Building in Silicon Alley.
An aversion to the conspicuous consumption favored by their baby boomer parents may make it hard to pick Manhattan’s mega-achieving millennials out of the crowd on any given night at The Standard, but make no mistake about it: They are redefining what it means to be young, rich, and successful in the city.
“Freedom and independence are the new status symbols,” says Jon Steinberg, former president and COO of Buzzfeed and an advisor at Lerer Ventures, an influential venture capital fund that invests in Internet start-ups. “The goal is to build your own thing, do what you want to do, and create economic situations where you can do that.”
Steinberg knows what he’s talking about. In May, after four years at the helm of the social news and entertainment site (which gets 150 million monthly unique visitors), he stepped down to start his next big venture. “Having built this place with Jonah [Peretti, Buzzfeed’s founder and CEO] and the rest of the team, I want to go through that rush again, and there is a certain amount of freedom that I want,” he says.
This insanely ambitious group of overachievers has eschewed the old guard’s power-lunch circuit uptown, opting instead to hunker down in their offices in Lower Manhattan’s Silicon Alley or Tribeca, where they are rewriting the rules of the game with seemingly out-of-nowhere business models. “The old guard has achieved enormous measures of success,” says Steinberg, 37, a native New Yorker. “But they recognize we’re the ones in the areas where the next successes will come from.”
Most everything we traditionally associate with the city’s cultural elite doesn’t apply to these millennial mavericks. They’re not interested in acquiring the old guard’s summer homes in the Hamptons, BMWs, and bespoke suits, because they believe showing off—unless it’s on social media—is passé. But their highly personal proclivities, from where they live to how they work, are causing seismic cultural and geographic shifts in the city.
“It’s not the old mentality: make it, spend it, show it,” says Robert Dankner, president of Prime Manhattan Residential, a firm that represents many millennial entrepreneurs, who despite their aversion to high-profile consumption are willing to shell out for primary residences. “These people are really smart about their money. Downtown is hot because there are a lot of nonhomogeneous spaces they’re buying that are unique or can be built to be unique. The common denominator in this group is their nonconformity.”
So who are the names to watch among the growing ranks of the Next Establishment and how are they shaping the future of Manhattan? They may not be those you hear about every day—but you soon will. Unlike the flashier young masters of the universe before them, this idiosyncratic group of influencers is comprised largely of entrepreneurs who are making their fortunes in technology, e-commerce, and fashion with the help of an impressive roster of angel investors.
“Wall Street money was much more visible,” says Alexandra Lebenthal, president of Lebenthal & Company and often dubbed the “Queen of Wall Street.” “If you’re an investment banker, you’ve got to focus on the market, your competitors, and you’ve got to be out there socially. Maybe it’s how this generation grew up or because their businesses are so [centered] on technology, but millennials are much lower profile.”
Except when it comes to social media, which along with a cultural shift from uptown to downtown and Brooklyn has played a “major role” in shaping their lives, says Rachelle Hruska, cofounder of Guest of a Guest, a digital media company that covers the city’s social scene and offers a curated calendar of events targeting young professionals. “It used to be Bill Cunningham and Patrick McMullan taking your picture uptown, but the hottest event last week was in Red Hook thrown by Dustin Yellin and the Fat Radish chefs. Everyone in my office was fighting to go.” Hruska feels there are so many different ways to proclaim your worth or status now. “It’s not so much who your family is and where you come from, but more about how many followers you have on Instagram. There is currency in being known.”
That is certainly the case for Hruska, 31, who sites digital guru Lockhart Steele as her mentor and hung out with David Karp in the early days of Silicon Alley. (“I’m so grateful to have had a seat at the table.”) Hruska cofounded her company with Cameron Winklevoss in 2008 (she’s now sole owner, having bought out his stake in 2012) and has emerged as one of the most influential chroniclers of the city’s changing social scene due in large part to her innate understanding of the lives of the 1 million unique visitors who flock to her city-centric site each month (her full-time staff of 10 also covers Los Angeles, Washington, DC, Miami, San Francisco, and the Hamptons in season) to pore over shots of themselves or their virtual friends.
Hruska, who is married to hot hotelier Sean MacPherson and lives in the West Village, three blocks from her office, explains the allure. “The reality is that many social connections are now happening online and over mobile phones—for better or worse,” she explains. “Millennials spend far greater amounts of time on their mobile devices, sharing their accomplishments. If I don’t have any real connection to this ball or that gala, I don’t need to be there. I can watch it from home. I don’t have the desire to be social in that way. If I go out to an event, I’m going to want to Instagram from it because I want to get credit for being there. I want the world to know I made it.”
The one tangible measure of success for millennial entrepreneurs is to have a hot enough business to attract venture capital funding. Starting an e-commerce business—and staking your claim downtown—has never had such social cachet and leverage.
Aditya Julka and Alexander Gilkes near the downtown offices of Paddle8, a much-buzzed-about auction site that has drawn top-name investors like the private equity firm that owns Chanel. “We made a conscious decision to be downtown,” says Gilkes.
British-born Alexander Gilkes and cofounder Aditya Julka have found no shortage of investors since launching Paddle8, an online art auction site, in 2011. The idea of focusing on works priced below $100,000 while tapping into the global marketplace has attracted more than $17 million in venture funding to date from a consortium of investors including artist Damien Hirst; the Mellon family; Mousse Partners, the private equity firm run by the family that owns Chanel; as well as Founder Collective, the venture capital fund that backed Uber and Buzzfeed. Says Gilkes: “Without a doubt, New York City is the perfect place for us. Ideas can come to fruition very rapidly here.”
Julka says what they’ve found interesting is how millennials like themselves have been able to access the art world, “because it’s such an insider network.” But that may be due to the fact that Gilkes and Julka, both West Village residents, are hardly outsiders. Gilkes, 34, a well-known auctioneer and former worldwide director of marketing at Phillips de Pury auction house (which now goes by the name Phillips) has generated hundreds of millions of dollars and bids for organizations like Amfar and has wielded the gavel at Performa, the New York performance art biennial. Julka, 32, a “serial entrepreneur” and Harvard MBA, previously cofounded two biotech companies in India and Ireland.
Gilkes’s social circle has undoubtedly been a boon to business. Married to designer Misha Nonoo, a 2013 CFDA/Vogue Fashion Fund finalist, the couple bought interior designer Nate Berkus’s two-story Greenwich Village townhouse with its private roof deck where they host dinner parties for A-list friends including model Dree Hemingway and Princess Eugenie (who also works at Paddle8). “We made a conscious decision to be downtown because that’s where everything is,” says Gilkes. “We love the culture and the lifestyle. I rarely go uptown unless it’s to meet with investors.”
Alexandra Chong, who launched Lulu, a dating app where women can share insights on men they date, in a taxi in Times Square. She and her partner secured $2.5 million in financing from several investors, including Yuri Milner, who has also invested in Facebook.
Another London transplant, Alexandra Chong, started her business across the pond but moved to New York City to launch Lulu, a dating app where women can share insights on the men they date, last year. Chong, 32, who attended the London School of Economics, founded her company with Alison Schwartz, a friend she met during college who was a former assistant to literary agent Binky Urban. After writing their business plan during marathon sessions at Soho House, the partners secured $2.5 million in financing from several investors, including Yuri Milner, who has also invested in Facebook.
Chong is currently in temporary offices in Union Square, just below the Nomad neighborhood where she lives with her fiancé, photographer Jack Brockway, while she awaits completion of more spacious digs for her staff of 25. “My work life is a large part of my life,” she says. “Starting a company is all-consuming. We were going to get married this year, but it’s been kind of busy, so it’s going to be next year.”
Heather Marie, founder of 72Lux, which integrates e-commerce technology into clients’ websites, in City Hall Park. “A young entrepreneur can look at older industries with a fresh eye,” she says.
Heather Marie, founder of 72Lux, a software company that integrates e-commerce technology into women’s luxury apparel and accessories websites, feels the 18-hour days will be worth it. “The typical New York industries are really ripe for disruption and there are tremendous opportunities for someone to shake up those old models,” she says. 72Lux, which she started in 2011 with funding from a previous start-up and later outside investors, now gets more than 75 million unique monthly visitors within 72 Lux’s Shoppable network. Marie, 29, who has worked in retail for Ralph Lauren and Abercrombie & Fitch, says millennials have a huge advantage in business today. “A young entrepreneur can look at older industries with a fresh eye,” she explains.
Marie, like many of her fellow entrepreneurs, finds refuge downtown. She “fell in love” with New York by Gehry (the famed architect’s condo on Spruce Street) and says living in the soaring tower eases the stress of her 18-hour workdays. “I love the downtown vibe.”
Marie’s starchitect lodgings point to another trend. “Successful millennials buying downtown are increasingly opting for the ‘It’ buildings,” says Fredrik Eklund, associate broker at Douglas Elliman who appears on Bravo’s Million Dollar Real Estate. “Five years ago, all the money was coming from Wall Street, but that’s not the case anymore. A lot of it now is from technology and creative fields.”
Justin Stefano (left) and Philippe von Borries, founders of Refinery 29, downtown near the Brooklyn Bridge. The two started their company with $160,000 in seed money.
They’re also scooping up prime commercial real estate. Justin Stefano and Philippe von Borries, cofounders of Refinery29, a fashion and lifestyle website, have invested heavily in downtown by leasing 30,000 square feet of office space in the Financial District to house their 173 full-time employees. “Now we’re sandwiched between Condé Nast on both sides. There is a Four Seasons being built a block away. This neighborhood is changing overnight,” von Borries says.
The move downtown, says Stefano, “began as a financial decision, but then a lot of interesting companies started coming down here and the creative community has snowballed. It’s the perfect petri dish for our business.”
Stefano and von Borries, who started their company with $160,000 in seed money, embody the dual ethos of confidence and caution that fuels Manhattan millennials. Despite having generated a reported $24 million in revenue last year (they no longer disclose financials), both say they live “modestly” in Brooklyn. “We strive to run a profitable business, which means we’re at the bottom of the priority list and pump everything we have back into the company,” Stefano says.
Still, he did find time to recharge with a recent 12-day trip to India. “When I do go away, it’s important to be somewhere entirely different,” he says, “It’s incredibly clarifying. It’s really important to come back with an open mind-set for inspiration.”
When this group does find time to take vacation (but never fully disconnect from e-mail), the more exotic locale, the better. Hruska (via e-mail while in Costa Rica) says, “We have homes in Costa Rica and Baja, Mexico. Both places are totally off the grid and extravagant in that we need nothing but backpacks with minimal clothing to get there.” She and her husband make travel “a priority” and once spent three weeks journeying from Europe to Dubai to Cambodia to Tokyo. “It was an incredible experience I’ll never forget,” she says.
Travel, it seems is one of the few areas, beside real estate, where these millennial achievers open up their wallets, since they prefer to keep as much cash on hand as possible. “If you were in your 20s during the 1980s and saw the movie Wall Street, all that stuff shapes your worldview,” explains Jon Steinberg. “This is a generation that grew up amid a financial crisis and sees Wall Street held in tremendous disregard. That shapes your world.”
The financial crisis has also impacted how millennials look at money, says Alexandra Lebenthal. “They invest in their own companies and in other tech start-ups, not the traditional stocks and bonds,” she says. “They understand the money you can make in a successful start-up. So the idea of turning that into a significant amount is very appealing to them. It’s just the way they’re wired.”
The millennial aversion to traditional financial products and their desire to create new business paradigms is sure to impact the way business is done in the city as these entrepreneurs grow their companies. They’re willing to roll the dice and take the long view, an ethos currently out of favor on Wall Street. “We’re into building a lasting brand,” says Justin Stefano. “The danger is when you end up selling too soon. What happened to [now defunct] Daily Candy is an example of that for us.”
Alexandra Chong echoes that sentiment. “Lulu is not a company to build today and sell tomorrow,” she says. “I don’t think of what we’re doing as a company; it’s a movement. I could do something a lot safer and a lot less risky—go into banking or be a lawyer. Being an entrepreneur, you either make it or you don’t, right? You could lose a lot of important years doing it. It has to be about much more than making money.” But, she concedes. “If we achieve all we want to achieve, there could be phenomenal financial reward.”