This week has been a big one for NYC tech / entrepreneurship. No, Foursquare wasn’t acquired. And Tumblr didn’t announce a new round of funding. However, the NYC tech scene did get a bunch of attention this week. Today, an article was published in the WSJ discussing the tech boom in the city and how startups are taking advantage of it to grow at a rapid pace. Additionally, from May 23-25 TechCrunch Disrupt took place in NYC. This event in and of itself wasn’t that unique or a harbinger of great things to come for the NYC tech / startup scene. However, there was a fair amount of discussion on why NYC is not just a flash in the pan but rather a true threat to Silicon Valley as the #1 tech hub in the US. One particular panel including Chris Dixon, Ron Conway, John Borthwick, Shana Fisher, and Eric Hippeau discussed the future of the NYC tech scene. They ultimately came to the conclusion that until Facebook opens up an office or until the next great web company comes to Manhattan instead of San Francisco, NYC will continue to play second fiddle to the Valley. I, however, aim to refute this notion during the following post; such that I believe NYC is poised to take over as the #1 tech hub in the coming years without any major tipping point.
During the tech bubble of 1999-2000, startups in the Valley ruled. They were building all the underlying technology on which many of the great companies today are based. In fact, sites like Facebook and Twitter, which started in 2004 and 2006, respectively, and are based in the Valley (even though Facebook technically was started in Cambridge, MA), are now serving as the base for many up-and-coming startups. Zynga, for example, a company valued north of $10B, is highly dependent on the Facebook platform. Consequently, numerous startups can now emerge with a good idea while leveraging the APIs of Facebook, Twitter, and others for a crucial social component. In sum, a significant amount of the technical legwork has been done, so people’s creative juices can now flow with a little less concern about implementing the idea on the technical front. And what better place for creativity than the Big Apple?
NYC is the hub of creativity of all types. Designers (both fashion and otherwise), artists, photographers, and musicians flock here. Media and entertainment companies must be based here or at least have a substantial footprint. Every sports league must have a base here, and they thrive on creativity to differentiate themselves from one another when marketing to fans. All prominent financial firms are based here, and they have to have a great deal of creativity to implement the financial instruments that caused the mess back in 2008. Manhattan is a confluence of nearly every creative industry. Fascinating ideas are ubiquitous, and people are able to leverage the vast expertise of one another in various fields in a way that they are unable to do anywhere else in the world – including the Valley – which brings me to my next point…the people!
The entrepreneurial community in NYC is completely different from the Valley. Mark Peter Davis wrote a brief, yet fascinating post comparing the two cultures. He wrote that NYC is like high school: there are some cliques of people, but for the most part everyone knows everyone in some way and it’s very collegial (what I’ve found, not in the post). Meanwhile, the Valley is like college: people are spread out focusing on their own thing for the most part but you have some close friends, and of course there are celebrities that stand out like the class president and quarterback of the football team (e.g. Ron Conway and Mark Zuckerberg). In NYC, virtually everyone that is deeply embedded in the tech community is connected in some way. Any two random people have at most 3 degrees of separation between them, and oftentimes it’s less.
This closeness both in terms of friendliness, relationships, and proximity is what is going to enable NYC to surpass the Valley. You can get to virtually any part of the city in 30 minutes or less, and you can walk almost everywhere. To get from Mountain View to San Francisco it takes 45 minutes without traffic, and you can’t walk anywhere. Being able to meet in-person and constantly be surrounded by entrepreneurs should not be underrated. This startup revival is all about people, and not the technology (but that’s a post for another day). Every Sunday morning / early afternoon, I meet face-to-face with 3 different startups very easily and with just 2 brief subway rides. I could not come close to doing that out West. Oftentimes, I take breakfast meetings that are “far” from my office in Midtown with entrepreneurs and others in the tech scene. These types of occurrences would be nearly impossible if I lived in the Valley.
So, sure, for now, NYC is the Djokovic to the Valley’s Nadal, but the Big Apple and Djokovic have each been on ridiculous winning streaks lately, and I don’t see either one slowing down any time soon. Sand Hill Road and Rafa better watch out!