I have pondered what it would take to get New York to rival San Francisco as a tech leader. I have come to a few conclusions and I want to share them with you:
Big Money Exits. SF has a lot of big money exits. It is not uncommon to read that exits in the valley are over billion. The exits are not only big money but they seem to happen consistently. Every time you turn on your tablet or phone, you read about another acquisition. You get lost in the sea of money. New York needs to have more exits of this caliber. Money attracts people, attention, resources, and fame. A recent impressive exit was Buddy Media. It wasn’t in the billions but it was a great exit. It was great because it draws attention to New York based startups and the New York startup ecosystem. New York is known for advertising and financial services technology. Personally, I would like to see more consumer web and ecommerce exits to diversify New York's portfolio of exits. The diversity will definitely attract attention from different kinds of startup entrepreneurs, coders, etc...On a similar note, Fred Wilson wrote a recent article about NYC IPO’s. It is recommended read, especially if you have questions or comment about startup exits.
Academic Environment. One of the things that always impressed me about Silicon Valley is its connection to Stanford. Stanford has been one of the main sources of Silicon Alley success. The New Yorker states:
“Five per cent of Google employees are Stanford graduates. The president of Stanford, John L. Hennessy, is a director of Google; he is also a director of Cisco Systems and a successful former entrepreneur. Stanford’s Office of Technology Licensing has licensed eight thousand campus-inspired inventions, and has generated $1.3 billion in royalties for the university. Stanford’s public-relations arm proclaims that five thousand companies “trace their origins to Stanford ideas or to Stanford faculty and students.” They include Hewlett-Packard, Yahoo, Cisco Systems, Sun Microsystems, eBay, Netflix, Electronic Arts, Intuit, Fairchild Semiconductor, Agilent Technologies, Silicon Graphics, LinkedIn, and E*Trade.”
Read more,http://nyr.kr/Ntlfki
The academic environment provides three things: connections, opportunities, and a subsidized development environment.
The subsidized development environment is important because it gives smart talented students an opportunity to prototype/pilot their ideas, cheaply. This is so helpful to young entrepreneurs. Sometimes when you are executing in the real world the cost of doing business can be daunting. A subsidized development environment gives a sense of stability and protection, which helps entrepreneurs just focus on execution.
Connections are equally important. Think of all the alumni that your professor knows that you are connected with now. You are a phone call away from an established professional i.e. investor, entrepreneur, programmer. These connections make your network infinitely bigger.
Putting a bunch of smart, ambitious, idealistic people in a place creates interesting outcomes and opportunities. Having a strong, academic environment, essentially serves as incubator for these talented young people. They can partner on ideas and then just work (as mentioned above) on execution. Heck! Even if you are no interested in “doing your own thing”. You will have opportunities to tag along on your professors research or use those awesome connections to pursue an opportunity somewhere else. If you want to delve deeper into this issue, read this article about why some universities generate more startups than others.
Talent. We have plenty of talent and talented people in New York but I feel all the talent that are noted for breakthroughs are on the left coast. Let me give you an example. Recently, I became a student of growth hacking. As a part of my studies, I have been tracking the careers of growth hackers in the startup space. I have noticed about all them worked or have worked for left coast companies, mainly in SF. It was definitely a "Wait a minute" moment. Why are all the growth hackers in Cali? The simple answer is that they work for the companies with the most money, and the most growth potential. Historically, many of the rising companies, even if they got their start on the east coast went to the West because the valley had the most money, the most experience and the best mentorship i.e. Facebook leaving Boston and going to Silicon Valley. It may not seem like that big of deal because other tech locations are starting to flourish, but I think it points to a larger issue of rising talent comes from companies that are rising. If New York is not able to create more of these companies then the talent and media hype around the talent will not be there. This leaves New York in a tough position in regards to recognition and superstar talent.
Notoriety. Just more press. More and more press. More recognition of our companies, their accomplishments and the rock stars behind their accomplishments. This issue really has to do with messaging. New York needs to be presented in a way that is a mover and shaker in all facets of technology. I think more press; more powerful storytelling will lead to people adopting a different view of NYC.
Connect & Work. The work /collaborative culture of NYC needs to change. My experiences in NYC are that most coders/technically capable people and non-technical founders do not have a "work to build" culture. A "work to build" culture is a culture where founders and coders work together on an idea without the reward of immediate compensation. In short, they work for free. In some cases, there may be some stock options, which are used to bind people to the idea. I do believe New York, like Europe, does not have a share options culture. I do not know if it is because we are heavily influenced by Wall Street culture or we just are not impressed with our exits. Financial services pays developers well, and they pay them upfront. These are two combinations you do not have at the beginning stages of a startup. It is just ingenuity, passion and diligence and the promise of hope.
