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NYC tech catching up to Silicon Valley, while Seattle flails

164 pointsby badboyboyceabout 9 years ago

23 comments

mattzitoabout 9 years ago
As someone who has spent their whole career in and around startups in NYC, I think it boils down to a handful of things:<p>- The dot-com bubble in the early 2000s left a bad hangover, but also built up a set of young people with tech experience and lots of ideas who enjoyed working for non-traditional companies<p>- Those people often went to go start their own companies (disclaimer: I am one of those people). In the early 2000s, though, it was tough to find top tier VCs who were willing to invest in NYC. I remember in 2004 meeting a VC who said they would love to invest at a great valuation if we committed to moving the company to boston or the bay area<p>- Consequently, the selection criteria for NYC companies who got VC funding were often those with strong revenue streams, which led towards less sexy, less &quot;moonshot&quot; companies to those that sold products for actual money.<p>- The other driving criteria was those where geography was an advantage, which also led to financial services&#x2F;enterprises or advertising<p>- As those businesses grew, expanded, raised more capital, it drove more VC money to NYC, which created more air in the room for more startups.<p>It&#x27;s really a very straightforward evolution. As far as why Seattle &quot;flails&quot;, I think it&#x27;s even simpler - Seattle has a population of 650k people. A handful of large companies, Microsoft, Amazon, etc. can take a huge percentage of the engineering talent, and there&#x27;s neither the educational base of graduates that the bay area or boston offers nor NYC&#x27;s base of large corporations to sell to.
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dmodeabout 9 years ago
There is a lot of hype around emerging NYC tech scene. And this hype has been growing over the last 6-7 years. However, IMO, this is still a largely empty hype, due to 3 reasons 1. NYC hasn&#x27;t produced a blockbuster startup, nor is there one in the pipeline. I am talking about tech startups &gt;$50bn in value. The next giants are either in Valley (Uber, Lyft, Airbnb) or in China (Didi, Meuitan, etc) or in India (Ola, Flipkart). There is 1 in LA (Snapchat)<p>2. NYC tech portfolio is lacking startups in emerging technologies - self driving cars, VR&#x2F;AR, 3D printing, drones, robotics, space, batteries and charging, energy<p>3. Lots of high profile failures, but few high profile exits
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cavisneabout 9 years ago
It&#x27;s weird the article conflates &quot;tech&quot; with startups.<p>Within the next few years Facebook, Google will have huge headquarters (currently under construction or planning) right next to Amazon&#x27;s collection of buildings in Seattle, and Microsoft near by.<p>I think the issue startups have in Seattle is they expect to pay less than in SV, because cost of living is cheaper. However with some negotiation the Big 4 will pay you the same as in SV, while paying a quarter of SV rent for a nice apartment with a walking commute.<p>I guess that lingering smell of urine keeps people coming back to SF?
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pnathanabout 9 years ago
Seattle doesn&#x27;t have the raw cash NYC does. I think that that&#x27;s the core difference. Seattle punches above its weight and is a good place, but it doesn&#x27;t have the wealth and easy access to wealth that NYC has.<p>Also, culturally, I don&#x27;t think Seattle has a high risk appetite, and there&#x27;s a pronounced anti-commerce attitude among many of the long-term locals.
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rrdharanabout 9 years ago
I&#x27;m amused that the tech company map from the article doesn&#x27;t have an entry for the Google NYC office, considering that there are at least 2000 engineers working there (dwarfing everyone else on the map AFAIK):<p><a href="https:&#x2F;&#x2F;cdn-images-1.medium.com&#x2F;max&#x2F;1200&#x2F;1*Uva0USM-qa8W_TByjLyljA.png" rel="nofollow">https:&#x2F;&#x2F;cdn-images-1.medium.com&#x2F;max&#x2F;1200&#x2F;1*Uva0USM-qa8W_TByj...</a><p>For a second I thought it was only showing pre-IPO companies, but then I saw that Twitter and Facebook are on there.<p>It&#x27;s even more entertaining because Spotify is shown at their old address, which is actually the Google NYC building.<p>Dropbox is also missing but I&#x27;m guessing that&#x27;s because its NYC office was too new for this map (Kickstarter has also recently moved to Greenpoint).
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hedgehogabout 9 years ago
I have lived and worked in both Seattle and SV, am currently a founder living in Seattle, and am at this moment writing this from Coupa Cafe in Palo Alto. The business culture in the valley is more aggressive and the community knowledge about the informal processes at successful startups is stronger. In Seattle the community is more insular and there&#x27;s a noticeable &quot;us vs SV&quot; complex. Having said that Seattle is a good place to build a company, just know that as a founder you are likely to spend a bunch of time in the Bay area.
Apocryphonabout 9 years ago
Looking at that list, I&#x27;ll have to ask again: why isn&#x27;t Raleigh-Durham-Chapel Hill on it? I haven&#x27;t been there myself, but it confirms my suspicions that while that place might be a tech hotbed, it&#x27;s more of the research park bigcorp and research institution type, than of the startup variety. There&#x27;s nothing wrong with that, but it&#x27;s just interesting because on HN we usually associate &quot;tech&quot; as the former and not the latter. So other places like RTP or DFW might get overlooked.
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mrdrozdovabout 9 years ago
I&#x27;m currently a grad student at NYU, and previously Cornell Tech, plus I worked in San Francisco at a startup for a couple years as an SE. Let me say, I had my doubts about NYC in comparison to SV, but something is changing. There is a lot more interest in programming in the city than there ever was. Lots of initiatives by schools to introduce programming at the high school level, and lots of people in finance, fashion, marketing, etc. who want to learn how to program. Accelerators are popping up left and right. The research community in AI and VR is super active. There&#x27;s even a hacker community that&#x27;s constantly demoing cool stuff they&#x27;re working on. It feels like a renaissance. I need to write a blog post to give more details, but NYC is definitely making moves so don&#x27;t be surprised if some the power houses emerge over the next few years. All things aside, I&#x27;m having much more fun working in NYC than SF, and recommend it as the top place for anyone entering the tech workforce.
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rjdevereuxabout 9 years ago
&gt;16-year old firm is headquartered just outside of NYC in Cambridge<p>hmmmm... Cambridge Massachusetts?
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ksenzeeabout 9 years ago
<i>The idea of bringing in ‘adult supervision’ is one that was pervasive in the minds of Seattle’s investors, at least up until a few years ago.</i><p>Sounds good to me. If the Seattle tech sector appreciates the value of experience, maybe I&#x27;ll still have a job at 50.
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curun1rabout 9 years ago
My own hunch is that it&#x27;s at least partly to do with the 2008 banking crisis, where NYC was the epicenter. How many of those smart, driven people who are making their mark in NYC startups would have, instead, been drawn into finance if it hadn&#x27;t been for that chaotic period where Wall Street&#x27;s draw was lessened? I&#x27;d bet that what we&#x27;re now seeing is at least partially the natural consequence of a temporary interruption in the &quot;brain drain&quot; from the finance sector where, 6-8 years into their careers, these talented people are starting to make their mark.<p>I wonder whether it will be sustainable now that finance is, once again, able to recruit the best and brightest who want to work in NYC. Silicon Valley will always have this advantage over NYC...out west, tech is king. In NYC, no matter how successful tech gets, it&#x27;s always going to be smaller than Wall Street.
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cleandreamsabout 9 years ago
I work for an SV startup that has a satellite office in Seattle. We&#x27;re in Seattle for the engineering talent. I think Seattle&#x27;s role in the startup world has a good foundation because it&#x27;s about talent. As for NYC I can tell you what the founders say around the office. That is that the foundational tech doesn&#x27;t come from the East Coast. The business culture is aggressive and well financed but not as innovative in tech as SV. This has lots of downstream effects. Incorporating leading edge tooling is faster in SV for example. Learning from failure is a norm not an embarrassment in SV. Fundraising means driving to SF and Menlo Park, not flying. It&#x27;s easier, more networked. Etc. At this point SV&#x27;s advantages compound each other. What will happen is that SV will spread to Oakland and Berkeley, the next frontiers.
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Hydraulix989about 9 years ago
Meanwhile everyone in SV is fleeing $5000 rents to move to Seattle.
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sebularabout 9 years ago
This article is pure fluff. Instead of gathering or analyzing any data, the author merely cites a report, and then uses that as fuel to waste countless paragraphs celebrating the cultures of New York and Silicon Valley, while condemning Seattle as a bunch of scared, boring people. Most irritatingly, it turns a massive blind eye to the largest factors that affect whether a community of people do &quot;risky and interesting&quot; things with their lives:<p>Foremost, it helps to be born incredibly wealthy, or be born into a world where you have connections to incredibly wealthy, powerful people.<p>Secondly, whether it&#x27;s the bootstrapping founder or the speculating funder, the person sitting on their mountain of cash and influence has to be unsatisfied with sitting on a mountain of cash. There&#x27;s many things money can&#x27;t buy, but there is one difficult--yet attainable--thing you can do with wealth:<p>Be famous.<p>In Silicon Valley, those who are merely wealthy-but-not-famous feel envy toward Jobs, Zuckerberg, and all of California&#x27;s movie and music celebrities. These people are &#x2F; will be remembered after they&#x27;re dead. If you die with ten Ferarris in your garage, you&#x27;re just as non-existent as a blue collar worker who has a couple dozen people show up to his funeral.<p>In New York, those who are merely wealthy-but-not-famous have spent generations sitting on old wealth, but the &#x27;80s are long gone. Stock brokers aren&#x27;t cool anymore. Goldman Sachs is hovering somewhere between evil and being a joke. Manhattan&#x27;s wealthy are starting to feel envy toward Silicon Valley&#x27;s fame, so they&#x27;re throwing money at their young relatives and friends in Brooklyn. They do this in the hopes that some of that money will stick to something famous, and they&#x27;ll be a part of something more eternal than their own lives.<p>Seattle&#x27;s wealthy tech giants aren&#x27;t glamorized. Gates is the quintessential nerd who made Microsoft Windows, the eternal punching bag of boring corporate software. Jeff Bezos is strange to say the least, and Amazon, the WalMart of the internet, is a company that somehow manages to be even more culturally boring than Microsoft.<p>In fact, the concept of using wealth to achieve fame to achieve immortality isn&#x27;t lost on Bill Gates. He isn&#x27;t spending the second half of his life trying to buy in at the ground level of the next big American corporation, he&#x27;s becoming immortal by spreading his name throughout the developing world via the Bill &amp; Melinda Gates Foundation.<p>So what does this article really mean when it talks about being risk-adverse? Most people don&#x27;t have the luxury of avoiding risk. If having rent money is an actual concern in your life, the uncertainty of attaining that next round of VC funding pales in comparison. What&#x27;s more risky than putting your life savings into opening a small shop or restaurant? But since that&#x27;s not a tech startup, it doesn&#x27;t count in the rankings, and so the author of the article condemns Seattle as being a city of people who are frozen in fear of failure.<p>In fact, the article even manages to touch on the right idea, while missing the truth behind the statement:<p>&quot;Seattle&#x27;s weak spot is funding.&quot;<p>In other words, the ultra wealthy of Seattle just don&#x27;t care as much about tech startups. It&#x27;s not good or bad, it&#x27;s just a fact.<p>If you&#x27;re rich in NYC or Silicon Valley, status means buying into someone else&#x27;s good idea so that you can claim your role in being a part of the &quot;next big thing.&quot; If you&#x27;re rich in Seattle, status means that you have the best quality of life: Wealth means a beautiful house by the water, a boat, a nice camper van, and enough free time to regularly take it out of the city. Extreme wealth doesn&#x27;t mean that you get to look over business plans and sit on the board of directors for what you hope is going to be the next Snapchat. It means that you found a charitable organization, host big community events, create crowd-pleasing spectacles, and put your name on them.<p>This article is one person&#x27;s feeble attempt to put attention-grabbing spin on a statistical study. The cited study is likely trustworthy and indisputable. The article is pointless fluff and arbitrary value judgements. Everybody already knows where to move if you want to network with wealthy startup investors, we didn&#x27;t need some fool writing an article about how Seattle &quot;flails&quot;.
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droopybunsabout 9 years ago
SV has Stanford, which seems to be a unique factory of technical talent.<p>NYC has Brown, Columbia, Cornell, Dartmouth, Harvard, the University of Pennsylvania, Princeton, and Yale to draw from, and the associated financial support from the world&#x27;s finance hub.<p>Seattle has UW and the wealth blast radius of Microsoft.<p>Seattle is just weird. Not really fair to describe as flailing. It probably shouldn&#x27;t exist as a major tech center. Amazon and Microsoft growth occurred because of disastrous miscalculations by established businesses. There isn&#x27;t any magic chemical in the rain water that creates our tech industry. It&#x27;s the gravitational influence of the growth in a very few companies. Also, it seems like most of the dividends of that growth are going into the creation of a skyline in Bellevue, rather than VC funds. Maybe if we had SF&#x27;s inability to build, investors would bet bigger on startups.
stevewilhelmabout 9 years ago
Why isn&#x27;t Portland on this list?
brooklyndudeabout 9 years ago
Great article. One small issue. In a group of developers the other night. A young lady walked in, the team of (all males), were asked by her. &quot;Where do you think I should go, where to end up?&quot;<p>The answer from ALL 10 developers was: California California California California California California California California California California<p>It&#x27;s the nature. The weather here, really summer is great, but otherwise, it sucks. We have had months of just cold, rainy ,lousy weather. Nature? Line up to rent a car.<p>NYC is so crammed with bodies, it&#x27;s jut not fun. Try to get on the 6 train at 5 PM. I say no more. If that&#x27;s &quot;fun&quot; for you, I&#x27;m assuming that inserting a pointed stick in your eye is too. (IMHO)
spyspyabout 9 years ago
I expect to see Philadelphia continue to rise on the list given it&#x27;s access to university students and super cheap cost of living.
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eva1984about 9 years ago
Catching up meaning as ridiculous and as insane?
kpsabout 9 years ago
VCs are still parochial; film at 11.
hugh4about 9 years ago
Wouldn&#x27;t it be nice if someone could set up a &quot;next Silicon Valley&quot; somewhere that doesn&#x27;t already have an outrageous cost of living?
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abhi3about 9 years ago
Summary:<p>Article tries to analyse why NYC is jumping spots on the top ten US startup cities list (Up to 2nd from 5th) and also what went wrong for seattle.<p>Article concludes that while its conventional wisdom that successful IPO&#x27;s and exits help the ecosystem, in the case of NYC the opposite is true.<p>Failure of big startups like Fab put people back into the ecosystem who then built new companies and helped scale other growing startups. People who were previously at Fab have gone on to build some of NYC’s hottest startups from theSkimm to General Assembly to ClassPass.<p>Employees from FourSquare and Gilt are now in senior roles at NYC breakouts Buzzfeed, InVision, Betterment, and DigitalOcean.<p>While in Seattle risk averseness of tech talent, lack of capital compared to SV&#x2F;NYC and unsupportive investor base are leading to it falling down places.<p>Original aritcle: 1950 words (10 minute read) Summary: 140 words (less than a minute)<p>Summary does a good job of covering the main points of the article but there are more issues that the author goes into. Reading reccomended if you are intrigued.<p>If you&#x27;d like such summaries for all articles before you invest your time to read them check out: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=11535695" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=11535695</a>
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wcummingsabout 9 years ago
Anecdotally, their list is nonsense, it&#x27;s obvious to me how much more employable I am in Cambridge compared to NYC.