With New York Observer alum Jim Windolf at the helm and featuring contributions from George Gurley and Mark Ames, Punch! put out three issues before announcing that it was going on hiatus on August 14. 

Jim Windolf (Right) at a Rufus Wainwright Performance at Rose Bar in 2010. (photo courtesy of Patrickmcmullan.com)

Now Punch! will be focusing entirely on its new app-developing platform, described by its company CEO as a "Blogger" for app makers, while putting its editorial plans on ice for the foreseeable future.

"Somewhere down the road, it became clear we had two businesses in our hands," David Bennahum, CEO of Punch! Media, told The Observer earlier this evening.  "We had potentially a media-business producing the Punch!  products, which you know, then we had the technology business giving other companies this very powerful tool that we developed ourselves."

The initial plan was to have the custom-app division fund the editorial content. After raising $2.25 million in seed funding from venture capital funds like Betaworks and Techstars, Punch! seemed poised to publish a year's worth of issues.

But after just three editions, the magazine is on "hiatus" and its editorial team, which included Brooke Siegel (formerly of Daily Candy), is no longer with the company. 

"We had to wind it all down," said Mr. Bennahum. "We couldn't do two things at the same time."

"As we kind of look at our options, knowing we really couldn't do both, it became clear that the technology business was just a very large and exciting opportunity relative to the original business," said Mr. Bennahum. "Doing the Punch! the magazine app well requires complete focus."

With the magazine scrapped (for now), Mr. Windolf said he is no longer with Punch! 

"If he [Mr. Bennahum] restarts the magazine, I'd like to do it, which might happen," he added. (Disclosure: Daniel Edward Rosen was commissioned by Mr. Windolf in June to write a story for Punch!).

The news came as a sudden and sad twist to a publication that just months ago was poised to reinvigorate the magazine medium with new interactive content. Videos like "32 and Pregnant" and "Tiny Pundits" (featuring The National Memo Editor-in-Chief Joe Conason and three precocious and pugnacious kids) were picked up by The Daily Mail, The Atlantic Wire and Politico and lauded as spot-on spoofs.

"We did some good things, got a lot of attention for the few issues I put out as editor," said Mr. Windolf. "I was especially happy with the videos made for Punch! by young director Chioke Nassor, a huge talent and great guy."

"Also nice magazine-style pieces by Mark Ames (on Romney's Mormon history) and George Gurley (on sad-sack character actor Fred Stoller) and a good essay on viral culture before the internet by Kliph Nesteroff ([who] writes for WFMU's Beware the Blog). So it was starting to come together, I think."

Mr. Windolf has spent the past month working on Fairchild Fashion Media's revival of M Magazine, edited by former Observer editor in chief (and Windolf muse) Peter Kaplan. M will be hitting newsstands on September 24.

"It looks incredible," said Mr. Windolf. "Kaplan put a lot of his tricks in there. It's beautiful; I hope it's a hit."

Speaking from the Democratic National Convention in Charlotte, N.C., Mr. Bennahum would not rule out a return of future issues of Punch! the magazine.

Despite rumors that Punch! had run out of money, Mr. Bennahum insisted that the company's financing is "secure."

"We don't have plans to announce another round of financing at this stage," he added.

drosen@observer.com 

But as the New York program took off, Mr. Cohen started to think maybe his excitable director was right. The incubator had a warm reception, with a waiting list of more than 200 top-tier mentors, Mr. Tisch said. "We've had 85 mentors out of 100 who have come by already for the season and over 60 that have engaged with companies directly. In other cities we only have 50 mentors, period."

Companies in the first New York class are already getting interest from investors familiar with the TechStars brand, and the April demo day is two-thirds sold out, he said.

"We could have taken 20 companies," Mr. Tisch said. "I said it to a lot of companies we had rejected: 'If you had applied in other cities you would 100 percent be in this program.' We just didn't have room for all the qualified applicants. It became a clear necessity to do a second program," Mr. Tisch told The Observer.

"The city's ecosystem is just able to support 20 companies in two programs, and wants to," he said. "We believe we can do two equally strong programs. If we can do two why wouldn't we? We'd be leaving ten companies out that should be part of this program."

Mr. Tisch was also worried that if the program adjourned for six months, people would forget about it. In other cities, people buzz about the fall TechStars season all year, he said. In New York, TechStars would drop off the map and probably be replaced in that time.

It seems Mr. Tisch has won his argument. TechStars announced a summer program yesterday, which will run from early July to mid-October and is now accepting applications. "David Cohen really understood the ecosystem in New York when he came here and saw how strong and supportive it is, and how key a piece we could be," Mr. Tisch said.

ajeffries [at] observer.com | @adrjeffries

But those 17 new incubators all have different application processes. Blueprint Health, in New York, limits its application to less than 1,000 words; BoomStartup in Salt Lake City wants to know how many lines of code you've written, what books about startups inspired you and a slew of other questions with no maximum word count. The TechStars application wants you to describe your company in 140 characters and then answer six essay questions.

This disparate application process is one of the things the new network will streamline. A $200,000 grant from the Kauffman Foundation will pay for the creation of a common application process to be used throughout the network and outside, if other incubators choose to adopt it.

TechStars NY accepted 11 companies to its first class of startups this year. The program is in its second month.

ajeffries [at] observer.com | @adrjeffries

The Observer broke the names yesterday of the eleven startups in TechStars NY's inaugural class. 

OnSwipe focuses on building a simple platform for tablet publishing and advertising. New York players like Betaworks and Eniac Ventures got in on the seed round. In fact, Betaworks CEO John Borthwick was OnSwipe's first user. 

According to founder Jason Baptiste, the company, which has roots in Miami and Boston, has been criss-crossing the nation over the last month on a marathon fundraising trip. "I don't think I've spent more than 48 [hours] in a single zip code over the last 30 days." 

New York, however, will be OnSwipe's permanent home base. Baptiste is already calling out competitors in the city's tight market for tech talent. “Hide your designers, hide your developers, because we’re recruiting everybody out there.”

Those are bold words, but $1 million isn't really heavyweight cash in the city these days. Of course, the company does have the added advantage of being a TechStars company, which means access to the top players in Silicon Alley. 

Silicon Alley is certainly the right place for the company, because it positions them close to media and publishing giants. With 50 million tablets expected to purchased by 2012, and tablet sales of magazine apps disappointing so far, there is a big opportunity for a new platform to emerge. 

OnSwipe is also wisely aiming beyond just the iPad, delivering its content through a native HTML5 app experience via the browser on any touch-enabled device.

Typically TechStars companies wait to graduate to begin raising money, so a million bucks on the first day of class is an auspicious start for the fledgling New York program. 

For those who are keeping track, that means one more company slipped in than was originally planned. 

It's an interesting range of companies. Two companies have yet to write a single line of code, four have raised some funds already, one is generating a lot of revenue and another two are actually profitable. 

"This definitely skews towards much later stage companies than Techstars is known for working with," says managing director David Tisch. "We've been so happy and impressed that these companies see value in working with Techstars and the mentors we've brought together."

Techstars will help the early stage companies to form their identity and figure our their business model. For the later stage firms, they will work on helping them to focus and scale. "We're in the business of getting our companies funded by other people," says Tisch. 

In other words, a million dollars is cool, but you know what's really cool...

Here they are:

CrowdTwist - NY, NY Social Loyalty and Rewards Platform

FriendsList - NY, NY Social Classifieds

HomeField - NY, NY Online Video Analytics Platform for Sports

MigrationBox - Chicago, IL Easy Email Migration

Red Rover - NY, NY Engagement Platform for Institutions and Enterprises

Relusions - Los Angeles, CA Customers On-Demand for SMB’s

SocratED - NY, NY Mobile / Interactive Learning Platform

ToVieFor - NY, NY Fashion + eCommerce + Gaming

UrbanApt - NY, NY Community Driven Hyper-Local Guide for City Living

Wiji - Boulder, CO Interactive and Intelligent Digital Signage Software  

And a mystery company focused on building a "Platform for Tablet Publishing and Advertising."

bpopper at observer dot com - @benpopper

The TechStars startup incubator is teaming up with Twilio—a startup that sells a platform for building apps that interact with cell phones or landlines—to sponsor an app contest where the first prize is a meeting with startup mentors and investors.

Developers are invited to submit proposals for apps that uses the Twilio A.P.I. (Application Programming Interface) along with at least one A.P.I. or product from any TechStars company.

Twilio has a track record of powering hot apps, and the company has had success with contests before. Twilio sponsored the hack day at the TechCrunch Disrupt conference that produced one of New York's star startups--GroupMe, which built a way for feature and smart phone users to have a group conversation via text message.

The other sponsor, TechStars, is based in Boulder but recently opened an incubator in New York City.

ajeffries [at] observer.com | @adrjeffries

"Applications to @TechStars in #NYC are now closed. 579 applications mean 1.7% will be accepted," TechStars tweeted this morning.

There is no official list of who applied, but if you follow the trail of brownnosing online, you can spot a few likely aspirants. 

KartMe, a web app for organizing bookmarks, and Text-A-Cab both put in applications, judging by the amount of kissing up they did on Twitter. One entrepreneur who got an early rejection has already uploaded a video of himself making the best of it -- "Why I'm happy our 2010 TechStars application was denied" -- to YouTube and Reddit.

TechStars offers promising startups up to $18,000 in cash plus three months of coddling from New York's biggest founders and investors in exchange for about a six percent equity slice, similar to the Y Combinator program that has been called "the new model" for tech investment.

The biggest draw for entrepreneurs is the all-star lineup of 87 mentors, which include Silicon Alley notables like Dennis Crowley (FourSquare), David Karp (Tumblr), Chris Dixon (Founder Collective) and Fred Wilson (Union Square Ventures).

Now Check Out: Techstars Battles Y-Combinator For NYC Talent

The New York office will be run by seed stage investor David Tisch and TechStars CEO David Cohen, who according to Silicon Alley Insider, is temporarily moving to the city to oversee the new program. As the official announcement puts it: "The rapid growth and intensity of the New York tech scene has been well documented. We look forward to joining the movement and integrating a New York flavor of the TechStars program into this thriving entrepreneurial community."

The team of mentors they've assembled for New York features a long list of founders that includes Foursquare's Dennis Crowley, Hunch's Chris Dixon, Tumblr's David Karp, Yipit's Vinicius Vacanti, Drop.io's Sam Lessin, Thrillist's Ben Lerer, and Hot Potato's Justin Shaffer. They've recruited a number of prominent money men, too, including Fred Wilson and Albert Wenger from Union Square Ventures, Charlie O'Donnell and Phin Barnes from First Round Capital, Roger Ehrenberg from IA Venture Partners, and Dave McClure from 500 Startups. Also on board are web consultant Rex Sorgatz and HackNY's Hilary Mason and Evan Korth (from bit.ly and N.Y.U., respectively). The full list of advisors can be found here.

Applications for TechStars NYC's inaugural three-month session are due in November; according to TechCrunch, the incubator will take a 6 percent equity stake in each startup they support. 

Christopher Poole thought Boston was going to be great. He lasted there just one summer, though, and now he's in New York, where he grew up, trying to get a start-up going.

Mr. Poole, the founder of the mega-popular Web forum for hackers and mischief-makers known as 4Chan, was a sophomore at Virginia Commonwealth University when he visited Boston for the first time in the spring of 2008. Some local tech enthusiasts from Harvard were putting on a whimsical Internet convention called ROFLCon, and by the end of the weekend, Mr. Poole, known as "moot" in the tech community, had fallen in love with Cambridge and decided he had to quit school and move there immediately. He had never before been around people who were as excited as he was about technology. In Cambridge, with all the engineers and mathematicians studying at MIT and Internet policy wonks at Harvard, they were everywhere.

"I remember walking down the Infinite Corridor" — a long hallway that runs through MIT's campus — "and just looking left and right into certain labs, and looking at the posters that were hanging on the walls," Mr. Poole said recently over an Italian soda at the Housing Works Bookstore. "'Human-Computer Interaction Club! Let's meet up and talk about HCI!' It was like I'd found my people."

The plan was to transfer to MIT. By the end of August, though, after a few months of euphoric hanging out and chatting about cryptographic algorithms, Mr. Poole had ascertained that while the talent and the brains were all there, Cambridge as a tech town held no future for him.

Anyone with a stake in the continued growth of New York's Web start-up scene, commonly understood to be crippled by a programmer shortage, had better hope that Mr. Poole's decision to come here was not just a function of the fact that New York is his hometown. In other words, they had better hope that entrepreneurial techies like him—kids who aren't immediately tempted by the salaries available to "quants" on Wall Street or the seemingly endless opportunities in Silicon Valley—don't start thinking it's a good idea to try to make it in Boston, where efforts are under way to build a network of early-stage Web start-ups and angel investors to rival New York's ecosystem.

If those efforts succeed, and top-grade MIT coders start seeing a reason to stay in Cambridge, then the two-front war New York start-ups have been fighting against Wall Street and the Valley in pursuit of the country's most gifted programmers will become even tougher than it already is.

So far, with the exception of Hunch, the recommendation engine whose co-founders include Harvard Business School alum Chris Dixon and MIT grad Tom Pinckney, New York start-ups have not made concerted attempts to establish a direct line into the Boston talent pool. Interviews with recent grads suggest that for all the noise New York social media companies are making lately—hello, Foursquare!—they're still not getting through to the young developers in Boston-area math and computer science programs.

"Making it more clear that they exist would be helpful, for starters," said Adam Goldstein, who bee-lined for the Valley to launch a start-up after graduating from MIT earlier this year. "It would also help to emphasize the things that suck about working on Wall Street."

New York's other problem, Mr. Goldstein said, is that many of the engineers coming out of top programs like MIT and Carnegie Mellon are not that interested in working on a consumer-facing social media services like Foursquare, Tumblr or Kickstarter.

"I think among many MIT engineers, it's viewed as sort of a soft problem—what makes the software work well is the extent to which you can sell people on it," Mr. Goldstein said. "In general, it doesn't require research or new algorithms. People find it less quantitative, and less directly technologically challenging, even compared to working on Wall Street. The same way that some MIT students view Harvard as an easy school where all you have to do is write nicely and suck up-that's how a lot of them view social media stuff."

The fledgling start-up scene in Boston as it exists today began to take shape around 2005, when two locals, Paul Graham and Jessica Livingston, opened a venture firm there called Y Combinator, designed to fund and provide mentorship for early-stage Web start-ups. Boston, of course, has long been a hotbed for technology, but the firms that flourished there along route 128 during the 60s, 70s, and 80s produced either hardware or back-end enterprise software that ordinary people—consumers—never used or cared about.

These days, that is changing, with several entrepreneurs in Boston actively working to make their city more hospitable to small, consumer-facing start-ups that create Web applications similar in character to social media services associated with New York. It has not been easy for them. The main problem is that while Boston is full of brainiacs and huge venture capital firms, the angel investors that early-stage start-ups need to leave the runway—people who might throw a couple hundred thousand at some college kids—have historically been few and far between.

Last summer, the Boston scene took a hit when Mr. Graham and Ms. Livingston, who are married, decided to pull the plug on Y Combinator's Boston operation in order to focus on its West Coast chapter. The primary reason given for the decision was that the couple was preparing to have a child and would no longer be able to sustain a bicoastal life. But in an open letter to the Boston tech community, Mr. Graham also acknowledged that the abundance of angels in the Valley just made it a much better environment for the types of companies YC was built to help.

Many of those who had hoped YC would be a potent catalyst for Boston start-up culture were left grief-stricken and discouraged.

It would have been easy to imagine at that point that the Boston tech scene would be at least temporarily extinguished by YC's departure. But according to people who have since concerned themselves with improving the angel situation in Boston, things have been changing for the better.

One significant factor was the swift arrival of TechStars, a Boulder, Colo.-based early-stage investment firm and "entrepreneurship boot camp" not unlike YC. Shawn Broderick, who directs TechStars' Boston operation, sounded a confident tone in an interview this week, saying that at this point anyone in Boston thinking of starting a tech company would be "crazy to leave." "We've seen a lot of changes in the last two years that make that ecosystem much healthier," he said. "There are definitely more start-ups and there are more dedicated small funds that are investing in those start-ups."

Jon Pierce, founder of a workspace called Betahouse that hosts events and provides desks for hackers, designers and start-ups, recently organized an Angel Bootcamp, a gathering of wealthy people from the Boston area who want to be angels or have been talked into considering it. The purpose, according to Mr. Pierce, was "getting experienced angels and aspiring angels together in a room and getting them excited about doing angel investing and teaching them how to do it and pairing them with people they can do deals with." He said more than 200 people came—an eye-popping turnout for anyone who remembers the barren landscape of just a few years ago.

"As an angel investor and entrepreneur, I'll say that the overall level of energy and activity in the Boston area has skyrocketed over the past couple of years," said Dharmesh Shah—founder of one of Boston's biggest start-up
s, an inbound marketing software company called HubSpot—in an email. "I've been living in the Boston area for over 10 years now, and this is the most vibrant startup scene I've seen here in a while."

Mr. Shah said that he has no trouble recruiting talent for HubSpot from Boston-area schools. Intuitively enough, he said, what helps is that he's so close to them.

"Startups connect to potential talent via online and offline networks-i.e. people you know," Mr. Shah said. "For example, every year, we end up recruiting fresh graduates because they already know us. They might know us because a classmate of theirs interned at HubSpot. Or, because they attended some startup talk I gave. Or, because they know someone that works here already."

Reddit co-founder Alexis Ohanian, who spent two years in Boston working on his start-up and is now in the process of moving to New York for a new project called Breadpig, said he spoke at Angel Bootcamp and was astonished to see the number of angels who had shown up. It was an encouraging sign for Boston, he said, which always seemed to him like it would be a perfect place for early-stage start-ups if only there were more angels.

"You give these college kids a cool environment where they can go out and get drinks when they need to and hang out with people like them who are working on similar kinds of problems, and then give them funding to live off of—that's pretty much the stew," said Mr. Ohanian, who has invested in three Boston-based start-ups as an angel. "The missing component for Boston, really, is just that there aren't many people funding these kids hanging out in their apartments."

If that continues to change, then New York start-ups interested in those Boston-area geniuses may soon find themselves at a serious disadvantage.

All that said, there are plenty of people who disagree with the conventional wisdom about New York having a shortage of talented developers. Among them are the founders of HackNY, an organization geared toward encouraging creative young technologists to consider going into start-ups instead of taking lucrative bank jobs as quants. Founded by professors Christopher Wiggins and Evan Korth, of Columbia and N.Y.U., respectively, and bit.ly scientist Hilary Mason, HackNY has so far funded fellowships for 12 programmers and has planned several "hackathons," where programmers get together and work through the night.

"We certainly have the talent," said Mr. Korth. "Chris and I know that because we train the talent."

"I know plenty of people who have trouble recruiting in Silicon Valley, too," said Ms. Mason. "There are a lot of developers in New York, but I do think they're often overshadowed by people who are on the business side. In New York, we have this almost hidden culture of technologists. ... We have a machine-learning meet-up that gets 80 to 90 people a month!"

According to Mr. Wiggins, the problem comes down to little more than communication—if the students knew the start-ups wanted them, maybe some wouldn't be accepting jobs at Goldman and Morgan Stanley. "It is difficult for start-ups to find students, and the students don't know that there's this other ecosystem that desperately needs them," he said.

Whether the students that attend HackNY are from MIT or any other Boston school is of little concern to the organization's founders. While they're certainly open to reading applications from people who went to those schools, there are no firm plans to actively recruit them.

So why don't New York start-ups send their own people to Boston? Get booths at the job fairs alongside Microsoft and Google and all the investment banks and get in the game? Or else attend Boston-area events and hackathons and recruit kids that way?

One simple reason: they can't afford it.

Mr. Poole, who is in the process of hiring developers for his new start-up, Canvas Networks, said he'd love to access Boston talent, though at the moment he relies on referrals from friends.

"I would be ... interested in attending a 48-hour hackathon and actually get to hang out at 3 a.m. with people and see what they're working on and get to know them," he said. "But I'm a two-person company right now. It's hard for half the company to leave for a weekend to go chase people in Cambridge."

Mr. Ohanian, the Reddit founder, said that angel investors — like himself — should be helping.

"The real secret will be getting a bunch of angels together," he said, and having them go up to Boston and make the case for New York. "It doesn't take that much work to send someone to these universities, to these job fairs, and just have a table. The pitch would go something like, 'Instead of dressing up in a suit and coming to work for someone else, why not invest your time in a start-up?'"

Failing that, it seems that entrepreneurs looking for Boston gold will have to figure out a way to get to it on their own power.

"I'd argue that if you're a founder and you're a hustler, you can go up to Boston for a weekend!" said Ms. Livingston of Y Combinator. "It's not that far. You take the Amtrak — no, you take the Chinatown bus! That's 10 bucks. If you're a real hustler, you would figure out how to do that."