Ben Sun got his start in New York tech almost 20 years ago when he launched Community Connect in 1996 out of his Manhattan apartment. The company, an early social networking site and online publisher targeting niche demographics, grew into a network of some of the highest trafficked sites on the internet over 12 years.
Shortly after Community Connect was acquired by Radio One in 2008, Sun co-founded LaunchTime LLC, an early-stage investor and incubator focused on e-commerce and digital media companies. LaunchTime’s portfolio companies included Coupang, Upsight, Yipit, and Howaboutwe, to name a few. Through his extensive experience in the e-commerce space, Sun then co-founded Primary Venture Partners with Brad Svrluga, armed with a mission to support early-stage, industry-transforming companies by leveraging a built-out and established network of startup experts.
As a next-gen e-commerce veteran, Sun was instrumental in putting together the firm’s initial investment in now-unicorn Jet.com back in 2014 (since purchased by Walmart), and continues to lead all e-commerce investments at Primary. A long-term believer in Jet’s strategic vision, and now the largest U.S. e-commerce transaction to date, Primary Venture Partners was the only New York-based seed fund in Jet’s first round. We caught up with him to discuss why he created the firm, what he looks for in entrepreneurs and the current state of investing in e-commerce in New York City.
Built In: Why did you start Primary Venture Partners?
Ben Sun: Brad and I got together and started Primary Ventures partners with the thesis that if you strive to be the most helpful guy in the cap table, you’ll build a reputation of doing great work and that will get you good deals. What’s interesting about us as a firm is how we try to be helpful to companies. When I started investing and started thinking about why VCs are not as helpful as they should be, the first thing I realized was the VCs traditionally tend to act like physicians in the 1950s.
Built In: Meaning?
BS: There used to be one doctor that tried to treat you for all your illnesses, whether it be a broken leg or appendicitis. And that’s what it looked like in my boardroom. That’s how VCs tended to act, and they really should be acting in the same way modern medicine works. You have a general practitioner to help you diagnose the issue, but when it comes to treating an illness, you need to see a specialist.
Built In: How do you apply this thinking to e-commerce investing?
BS: At Primary, we have over 200 people in our expert network, all ranging. If you have to build a warehouse, we have someone for that. If you have to do Facebook marketing, we have someone for that. If you have to build an inside sales team for enterprise software, we have someone for that. The idea was to build a network of these experts and specialists to help solve operating issues that early stage startups often go through.
Built In: What do you look for before investing?
BS: First and foremost we look for a team of entrepreneurs — we specifically look for superstars. Before we really dig into the idea, we dig into the team and find out their background and what they’ve accomplished and what’s driving them. We are looking for great entrepreneurs who are solving different issues, whether it be for pet food or food ordering or storage, and want to make the experience 10 times better.
We deal with really early stage companies — a lot of these businesses are just an idea or a product that just launched in beta. Whatever product they create or solution they come up with, it’s still the beginning and what they’re really tackling is the market. So we ask ourselves, how big is the problem they’re trying to solve and how big is that market?
Built In: How has being located in New York City affected you as an investor?
BS: I pretty much spent my entire career in New York tech. In my mind, over the past five or six years, New York tech has really taken off. Right now, New York is having a watershed moment where talent and experience are coming together. When I was first working in tech in New York, almost 20 years ago, people looked at you like you’re crazy when you said you wanted to start a tech startup. Then the financial crisis happened. Before that, every really talented, smart person would go work in finance. People’s attitude toward working at the banks and hedge funds changed suddenly dramatically. So you saw this influx of really great talent into the New York tech scene. That, combined with the fact that a bunch of these early New York tech companies have found success.
For example, Gilt was started in the mid 2000s, and it produced a lot of great talent in people learning how to bring a business to a significant scale and mistakes in what to do and not to do. New York has shown that it’s able to produce a few unicorns and these companies are breeding entrepreneurs that are going to grow even bigger. You look at New York City, and it’s the second largest tech market in the country, but it’s only the beginning. It’s only started to hit its stride, and a lot of that is in commerce.
Some responses have been edited for length and clarity.
Image provided by LinkedIn.
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