For Tech Start-Ups, New York Has Increasing Allure

For Tech Start-Ups, New York Has Increasing Allure(nytimes.com)

73 points by mindblink 13 years ago | 25 comments

dr_ 13 years ago |

This quickly fell off the top of the list at HN, and rightfully so. There haven't been many recent super-exits out of NYC. The only one that comes to mind is Quidsi, which was acquired by Amazon, but they weren't even actually in the city, they were in Jersey City. This is the NYTimes doing it's job of tooting the city's horn by citing a couple of examples (I give them credit for leaving foursquare out this time), and a "recent report from the Center for an Urban Future, a New York-based public policy organization" (ok, if the name of this institution itself doesn't suggest an incredible amount of bias i don't know what would). The mayor has fallen in line as well, so his legacy will not be a collapsed financial services industry(not his fault) but instead, he hopes, a tech startup paradise. And still not quite sure what the point of this Tech school on Roosevelt Island is. Stanford isn't a tech school, it just has a solid tech offering. MIT is a tech school yet Boston has failed to become a tech mecca on the same scale as the Valley.

What matters it the culture of a city or environment. NYC's culture is not tech startup, it's finance and media. It's foreign investors buying large buildings and apartments to park their black money. It's gritty and boisterous, which can be fun, but it's not nurturing.

Sure there will be a few hits, but there will be a few hits from many cities around the country. That doesn't mean they are going to become the next tech mecca and take down the Valley.

sabalaba 13 years ago |

Worth noting, the PwC / National Venture Capital association Money-tree report shows total deal size and activity on a per-region basis. Silicon Valley gets 5.5x more capital and almost 3x the deal flow of NY Metro area. [1]

I think of any ecosystem as having energy. More things happen when molecules bounce around and interact. That energy is capital.

I think it's great that NY has 'allure', but the distribution of capital amongst the various regions follows a really clear, winner-take-all power law. SV is king and will remain so for the foreseeable future.

[1] https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=region

keeptrying 13 years ago | |

I think at one point SV had 10x more capital than NYC. The difference is slowly decreasing.

(I moved from NYC to SF to start a company.)

Another big reason I see that NYC will catch up is that you just dont need that much to start a company. And also VCs are beginning to have offices in both areas.

The only real difference is the ease with which you can meet someone really important in SV. You can get an introduction to PG through one of his startups within the week if you can show you have some traction and get the respect of some founder he has backed.

And all said and done, startups are realizing that investors dont matter - creating a product that people want to use is the bottom line. If the costs are low and you can afford it, you might as well forget about having to deal with VCs and investors except for advice.

gersh 13 years ago | | |

New York had a greater percentage of investment during the dot-com boom in the 90s. Since then, it has fluctuated. However, New York hasn't produced too many big tech companies. I think New York's biggest success has been DoubleClick. Outside of media, what other big tech companies have been started in NYC?

There is a lot of media in New York, which includes internet media. Also, I think there are a lot of bloggers in NYC. Although, I don't see evidence the New York tech boosters claims match reality.

jsherry 13 years ago |

New Yorkers who play any serious role in the tech startup scene - whether it be as company, investor or advisor - know what Quora is. Please don't let this shallow piece of reporting steer you into believing otherwise.

sethbannon 13 years ago | |

I think the point that is (clumsily) trying to be made is that your average 'person on the street' in NYC isn't stuck in the tech bubble, and hence might give you more perspective. As a NYC founder, I certainly find this to be true. In Silicon Valley, you can live your entire life and rarely meet someone who doesn't work in tech. In NYC, you can't help but meet artists, writers, ad execs, people in finance, etc. These people are often your users, and interacting with them provides an invaluable perspective.

redwood 13 years ago | | |

About to move to NYC (grew up in SV) and looking forward to experiencing this paradigm shift. I have grown to resent the hive mind around social networking and big data around my home town. The one thing I worry about is moving away from the hardware backbone that made SV great originally. I've been very happy to discover a lot of 3d printing and open hardware work going on in NYC at the very least, even if it's a little "softer" than some of the R&D out west.

SomeCallMeTim 13 years ago | |

Same with those here in Boulder. Not sure what the point of that comment was in the article -- trying to imply that Silicon Valley was in its own ivory tower, but that New Yorkers were somehow more "real"?

sliverstorm 13 years ago | | |

From what I've seen on here, people always try to talk up the city they are in. Often, part of talking up the underdog involves tearing down the reigning champion.

I suspect it's basically classic social proof seeking behavior, wherein individuals will try to get their friends to do what they are doing (this "validates" the individual's choices)

wfrick 13 years ago |

I'm biased as I'm a writer covering Boston, but it's worth noting that New York's rise is tilted in the direction of a specific area: internet/mobile startups. But if you look at other innovation sectors like healthcare, energy, robotics, etc. New York is still extremely nascent.

amcintyre 13 years ago | |

...it's worth noting that New York's rise is tilted in the direction of a specific area: internet/mobile startups.

I thought that was the tilt of the entire blog/reddit/HN-osphere.

crosh 13 years ago |

This article was clearly written by someone with very little understanding NYC's tech scene. While I would agree that there is a social/mobile bubble here, many impressible businesses serving other sectors are being started by incredibly bright entrepreneurs. Each of whom know what Quora is.

In terms of finding top talent, as long as a company is building products with tangible value and the CEO can outline the immediate ROI for customers, those that flock to Wall Street are there to be had. The East Coast also has our own top universities, the originals - Harvard, MIT, Cornell, Princeton, Yale, Penn, Carnegie Mellon - who are each producing phenomenal mathematics and CS professionals with East Coast ties. The ability to staff talent is directly correlated to the quality of the company's product and founders.

notbitter 13 years ago |

Some of the advantages listed in the article are questionable. A talent pool so small that everybody knows each other, potential partners who are so out of the loop that they don't know about your established competitors, and the opportunity to hire ex-finance guys who were unhappy with their last bonus.

j2labs 13 years ago |

It's because the tech community in NYC has been very outgoing and aggressive in sharing all the awesome things they're doing.

The Hacker culture is already awesome but keeps getting awesomer. People are hanging out, sharing idea and building things because they want things to be awesome.

Other cultures have vibrant communities too. Designers. Thinkers. Financial. Branding. Services. Everyone has a network that's accessible and self-selected into outgoing, aggressive creators.

It's not often that people are so motivated, but it's happening in NYC right now.

jayzee 13 years ago | |

I think that the tech scene in nyc is anti-correlated with the stock market. I remember there was no activity when I was there and it started picking up post 2008 when the banks started laying off/stopped hiring technical people...

If the stock market picks up again I think that the tech scene will start receding. It is hard for quite a few people to turn down the pay that banks offer for the uncertain economic rewards of a startup.

michaelpinto 13 years ago | | |

Something to think about in terms of the NYC finance industry: As time goes on it employs less and less people -- even when things are going well. I also think that Gen Y students getting out of school (CS majors) aren't as much into "working for the man" which make them not just more interested in started something, but in making something. On the biz school of things if the economy turns up it could get rid of the "me too flake factor" which improves the quality of the community.

yashchandra 13 years ago | | |

"If the stock market picks up again I think that the tech scene will start receding."

Not so sure about that. Once bitten, twice shy. I work for the man in NYC but regardless of how the stock market does, my interest in tech. and startups will not recede.

j2labs 13 years ago | |

It's interesting to me that this comment had more points, but has gone down.

If you are downvoting me, would you mind explaining why? Do you not agree?

rjurney 13 years ago |

Beware: things in NY may get mighty cold if the social bubble pops (eventually they all do). Atlanta was a great place to start incubators during the dot com boom. Less so after. Many of the startups in NY can't get to real revenue fast, so if VC dries up things could get very bad, very fast.

akg 13 years ago |

Cornell's recent move to NYC (http://www.cornell.edu/nyc/) is going to be a great boon to the startup scene there. This will undoubtedly attract some very good tech talent from 3 schools (Columbia, Cornell, NYU) in a very dense area. The one draw back about Silicon Valley is how spread out everything is. I would imagine serendipitous meetings in NYC will spur the startup culture there quite rapidly. Looking forward to the exciting changes there.

melll 13 years ago |

Heard of IBM Labs? AT&T Labs? Lucent Research? Previously the venerable Bell Labs? All near NYC. There are a lot of good technical people and engineers around this area and there are a lot more who are willing to move here. There will always be those who want to be in technology and have a cultural (and maybe fashionable) life as well. Mel http://universeofmoney.blogspot.com

retrogradeorbit 13 years ago |

Berlin, even more so.