Bloomberg Says London, Not Silicon Valley, Is New York City's Top Tech Competitor

New York City Mayor Michael Bloomberg says he spends more time eyeing London than he does Silicon Valley in the battle to be the champion city for the tech industry.
"Our competition is only going to be in other cities that have similar kinds of characteristics. And the city that comes to mind is London," Bloomberg said at a seminar held at the law firm Proskauer's New York City office on Friday.
Bloomberg, whose term ends in 81 days, said U.S. immigration laws are "mashugana" – a Yiddish word for "crazy" – and are driving tech talent to international cities. London has the advantage of being a family-friendly city that speaks "the business language of the world," he said.
Bloomberg has been outspoken about his support of immigration reform. Last year, he joined several other prominent business leaders in pushing for reform in an online March on Washington. While the Obama administration has outlined broad plans for reform, including a provision to offer startup visas, the legislation is languishing in Congress. In the meantime, entrepreneurs and top tech talent are being forced to leave the U.S. because of issues with their visas.
As for cities within U.S. borders, Bloomberg argues San Francisco and the surrounding area is too much of a "vacuum" to be competitive.
"If you play golf, it's ok. If you ride a bicycle, it's great. If you live in front of a mirror, I guess that's where you do it," he said. "If you are going to build product, and you are going to sell stuff around the world... you don't want those kinds of people. And you don't want people who don't have other interests. You want well-rounded people."
Meanwhile, Silicon Valley proponents have argued that California is a better location to start up because the Big Apple offers entrepreneurs too many distractions.
Bloomberg also rejected the notion that Boston is the technology center of the world. "I pointed out to them that New York City has more students in college than Boston has people, so that ended that."
It comes as no surprise that the fearless leader of the Big Apple would be its strongest advocate. Bloomberg also took a round-about opportunity to compliment his own work. "This city has an enormously strong hand to play," he said. "This city, if it doesn't screw it up, has enormous potential to keep going."

Inside Breuckelen Distilling's Labor of Love

Entering the light-filled space that houses Breuckelen Distilling, a small-batch producer of artisanal gin and American whiskey, you may find owner Brad Estabrooke taste testing Mason jars of alcohol. He does this to find the "heart" of the batch that has just been distilled, the middle portion that has the right balance of flavors. The spirit is tongue-scorchingly intense stuff: It has yet to be diluted and turned into the marketable liquor for which the distillery is known.
Estabrooke, 34, is a lean, intense man of average height. On the day Entrepreneur.com visits, he is wearing stained work jeans and a gray T-shirt advertising 77 Whiskey, one of his products. One of his employees, Osiris Martinez, 30, sits at a work bench nearby bottling whiskies and sealing them with wax. To do this, he dips the head of each bottle in a tub of hot black wax -- something like a fondue fountain -- and then places them on a rack to cool.

When Breuckelen Distilling sold its first bottles in July 2010, it became the first gin distillery in Brooklyn since Prohibition. Micro-distilleries have popped up around the country in the past several years, ever since new laws were passed making small operations economically viable, for instance by reducing the cost of getting a distiller's license. Estabrooke's entire operation employs five people, including its founder, and runs in a 2,500-square-foot space in the borough's Sunset Park neighborhood. The location once served as a boiler r
Like so many entrepreneurs these days, Estabrooke began his journey as a result of the recession. After eight years of being a bond trader, including a stint at Fidelity, he was laid off in December 2008. By then he had already decided to found a distillery. The layoff accelerated his plans.

He went to his friends and family for money. He managed to raise a six-figure amount -- he won't say exactly how much, but notes that it was only a third of what his original business plan called for. Still, he was grateful for the votes of confidence. "Some of them believed in the vision, but I think most of them just believed in me," he says of his investors.

Now his libations are available in 13 U.S. states and in Washington, D.C., and are also distributed in Europe and Australia. "We've sold as much gin in Europe this year as we have in the U.S.," Estabrooke says.

Breuckelen Distilling is part of a resurgence in manufacturing in a borough once known for its huge factories. But where Brooklyn's old-time manufacturers employed thousands of workers, most of the borough's producers today are small-scale, artisanal affairs.

Which is not to say their growth isn't impressive. Although Estabrooke originally thought his distillery would be the only one in Brooklyn, it now has plenty of company -- Kings County Distillery in Bushwick and New York Distilling Co. in the Brooklyn Navy Yard, among several others.

Among his fellow Brooklyn artisans, Estabrooke singles out for praise Rick and Michael Mast, two brothers who have been producing upscale chocolate bars in Williamsburg since 2007. He also tips his cap to Brooklyn Brine Co., a four-year-old manufacturer of specialty pickled vegetables, and to Gorilla Coffee, which operates a café in Park Slope and plans to open a 4,000-square-foot roasting facility and coffee bar in the Gowanus neighborhood this fall.

But Estabrooke has harsh words for 3D printing, a phenomenon often lumped together with businesses like his when describing Brooklyn's new wave of manufacturing. "That's a crock of shit," he says. "That's not manufacturing. That's designing." As he sees it, "five guys sitting around a 3D printer" is a world apart from the hard work of turning grains into spirits.

Spirit distillation is indeed a labor-intensive process, at least when you do it from scratch, as Breuckelen Distilling does. It begins with pallets of organic grain shipped from a farm upstate, whose contents are milled into flour. The flour is dumped into a mash tank, along with water and enzymes. The resulting mixture is heated, then cooled, combined with yeast and pumped into one of four 18-foot-high steel fermenters. Then a custom-built copper pot still receives the now-alcoholic liquid, known as the wash, and heats it to the point of evaporation. The alcohol steam passes through a condensation coil and re-condenses into a colorless spirit which is drained into Mason jars. This product can either be placed in oak barrels to age into whiskey, or re-distilled with botanicals to become gin.

Breuckelen Distilling sold about 1,500 cases of liquor in 2012, Estabrooke says. It is on track to sell 2,000 cases this year, and should turn a profit for the first time. (At Astor Wines and Spirits, a major retailer in New York City, the distillery's gin sells for $32 a bottle, while both whiskies sell for a little more than $40 a bottle.) So far, the distillery has stayed afloat with traditional loans and additional seed funding. He raised a second friends-and-family round shortly after opening.

Although money is a concern, Estabrooke is more focused on perfecting his craft. He enjoys discussing the many variables that influence a spirit's taste, including light, temperature and climate, even the type of soil in which the grain was grown. "At the end of the day, you have to surrender to what you have and where you are and to your ingredients," he says, regarding an oak barrel and its slowly aging contents. "This is going to be a New York whiskey."

Alleged Creator of Silk Road Detained Without Bail

Ross William Ulbricht, wearing a green prison uniform and with shaggy brown hair, showed little visible reaction as Magistrate Judge Kevin Fox announced today that he would be detained without bail in advance of his criminal trial.
On a back bench of the Manhattan courtroom, Ulbricht's mother, Lyn, embraced family members. "That's so unfair," she whispered.
Ulbricht and his private defense counsel, Joshua Dratel, departed through a side door, leaving Lyn and others to face a handful of reporters in the hall. "He certainly should have been granted bail," she told the press.
Twenty-nine-year-old Ulbricht is the alleged creator of Silk Road, a Bitcoin-fueled online black market for illegal drugs, fake IDs and even contract murder that was shuttered by federal authorities in early October, when Federal Bureau of Investigation agents also apprehended Ulbricht in San Francisco. In siding with the prosecution, Fox appeared to have been swayed by allegations that Ulbricht had operated "a huge online drug empire" like a cartel boss, ordering the deaths of six people and using sophisticated techniques to evade capture by authorities.
Since being transported earlier this month to New York City, where an agent from the FBI's cybercrimes division swore out the criminal complaint that led to his arrest, Ulbricht has been held in the high-security Special Housing Unit of the Metropolitan Detention Center in Brooklyn. He has been kept from using the inmate email system.
At issue on Thursday was whether Ulbricht would make bail. His family and friends had pledged assets of more than $1 million to secure his release. In a letter sent to the judge prior to the bail hearing, of which Entrepreneur.com has obtained a copy, Dratel argued that Ulbricht's character and concern for his family's livelihood would keep him from making any attempt to flee. "Individuals from all aspects and time periods of Mr. Ulbricht's life affirm that his reliability and integrity have been constants throughout his life," Dratel said in the letter.
At the hearing, however, Dratel was unable sufficiently to counter the claims made by the prosecution. He complained that he had received crucial documents from prosecutors only the evening before.
A prosecutor from the U.S. Attorney's Office for the Southern District of New York described for the judge how, in forensic analysis of Ulbricht's laptop, the FBI had discovered "an extensive journal" detailing the creation of Silk Road. Agents also found spreadsheets showing Ulbricht's net worth and recording various transactions, along with entries for "SR Inc.," valued at $104 million, the prosecutor said.
More lurid was the allegation that Ulbricht had ordered the murders of six people, only two of whom had been previously mentioned in court documents. The hitman he used for the first attempted murder-for-hire, the prosecutor said, was an undercover federal agent, who accepted payment of $80,000 and provided staged "proof" of the hit. The target was a former Silk Road employee who Ulbricht allegedly feared would rat him out to the authorities.
In ordering this first killing, Ulbricht steeled himself for the possibility that violence might become a permanent feature of his criminal empire, the prosecutor said. "I would like the experience in case this ever happens again," Ulbricht told the undercover agent whom he believed to be a hitman, according to the prosecutor.
Indeed, the attempted killings didn't stop there. Later, Ulbricht paid a supposed hitman $150,000 to kill a blackmailer, according to a Maryland district court indictment against him. That hitman reported back that the target, under interrogation, fingered an accomplice. But there was one problem: The accomplice lived with three other people. If he were killed outside the home, Ulbricht wouldn't be able to take possession of his drugs and money. Better to kill all four people and split the booty 50/50, the hitman urged.
"Hmm okay I'll defer to your better judgment," Ulbricht is said to have told the hitman. He allegedly provided half a million dollars in bitcoins as payment for the quadruple murder.
It's worth noting that so far, authorities have not uncovered any actual murders in connection with these attempted contract killings. At this time, it's unclear whether the evidence is yet to be found, or whether the supposed hitman was swindling his client. It may be that no blood was shed. But Ulbricht still had the intent to kill, the prosecutor argued Thursday, and that makes him a dangerous man.
Finally, there is the matter of Ulbricht's digital wealth. Of the 600,000 bitcoins that he allegedly earned in Silk Road commissions, the FBI has seized some 144,000. Ulbricht may have spent the rest, or he may have stashed them in other digital wallets, the prosecutor said. If so, he would have access to a fortune upon release that could finance a life on the run.
Dratel, when it was his turn to speak, sought to counter the government's depiction of Ulbricht as a drug lord. Ulbricht has no prior criminal history, he pointed out. His family has rallied around him. He was not himself directly involved in buying or selling drugs. And as for the murders-for-hire, Dratel said, you can't judge real intent from online chats.
"If he's supposed to be this criminal mastermind that they're alleging," he would have run after Department of Homeland Security agents interviewed him at his home in July about a shipment of fake IDs, Dratel said.
He conceded that restrictions could be placed on Ulbricht's activity as part of the terms of his release. One condition might be no computer usage. His family would help to ensure that he complied. According to the letter Dratel sent to Fox, Ulbricht's parents were prepared to relocate to New York to stay with their son for the duration of the trial.
But that wasn't sufficient for the government. "It was worth $730,000 to him to kill a witness" and blackmailers, the prosecutor said.
In the end, Fox was convinced that Ulbricht "[had] the means to flee," along with a sophistication that made him dangerous. He gave his ruling; and in the back row, Lyn's shoulders sagged.