The New York City tech revival
Chris Dixon notes a revival of the startup scene in New York City:
But the question that has puzzled me is: why did New York City lag behind the West Coast this decade so much more than last decade? Especially since the internet in the 2000’s has been more than ever about consumers, media, and advertising – traditional New York City strengths?
I think the only explanation is that the finance bubble of 2003-2008 was a giant talent suck on the East Coast. The people I knew graduating out of top engineering or business programs on the East Cast were all trying to work at hedge funds or big banks or else felt like fish out of water and moved west. Money was flowing so freely in the finance world that there was no way the risk/reward trade off of startups could compete. Eventually it just became downright idiosyncratic to be a startup person on the East Coast. The Larry and Sergey of the East Coast were probably inventing high frequency trading algorithms at Goldman Sachs.
But this is why New York City now seems poised for a technology startup boom. The finance bubble has burst and the industry will hopefully return to its historical norm, about half its bubble size. The traditional advertising and media businesses are in disarray. The people who work in them will no doubt find new applications for their talents.
There is also a nice ecosystem developing in New York City. Union Square Ventures is one of the best VC’s in the country, with early stage investments in companies like Twitter and Etsy (that were followed on by top West Coast VCs at significant markups). Bessemer is an old firm that has a managed to stay relevant with investments in Yelp, Skype, and LinkedIn among others. There is also a new wave of scrappy Boston firms spending a lot of time in New York City – specifically Spark, General Catalyst, Flybridge, and Bain Ventures. First Round Capital out of Philadelphia is extremely active in early stage investing in New York. There are a bunch of veteran entrepreneurs actively investing in and mentoring seed stage startups. Google has a big office here and many people seem to be leaving to go start companies.
December 31st, 2009 at 4:52 pm
[...] me, the issue seems related to the decline of New York during this last decade. I mean, hell, if even New York was in decline, then what chance did [...]
January 25th, 2010 at 5:47 pm
[...] I wrote recently about the New York tech scene.. Now Caterina Fake offers her thoughts on what New York is missing: But what NYC is actually missing is not engineers. In NYC you can find lots of great engineers, visual designers, and great publishers and contributors to social media. But in CA I seem to find far more people with multiple skills – engineers who blog and dabble in design, designers who can do great UI but also great UX, etc. These multidisciplinary people are the ones who hack together brilliant new stuff, can innovate across the board, see various avenues of attack, and are indispensable at startups. It is these hybrid people that we are always looking for at Hunch and for whatever reason find them much more often in CA than NYC. [...]