Читать книгу Screw the Valley - Timothy Sprinkle - Страница 10

CHAPTER

3

“I believe that more and more Stanford graduates will find themselves moving to Silicon Alley, not only because we’re the hottest new tech scene in the country, but also because there’s more to do on a Friday night than go to the Pizza Hut in Sunnyvale.”

—Former New York City mayor Michael Bloomberg,Stanford University commencement, January 2013

MICROSOFT’S NEW YORK CITY office is in Midtown, not far from Radio City Music Hall and the NBC studios at Rockefeller Center. It’s a sleek, modern space on one of the building’s upper floors, highlighted by walls of windows, long straight hallways, and the well-known red-green-blue-yellow color scheme from Microsoft’s logo played out in everything from artwork motifs to carpeting. The lobby downstairs is marble—white walls, gray floor—with vertical lighting and soaring, twenty-foot ceilings.

And for the monthly meeting of Ultra Light Startups, one of the oldest startup-investor pitch meetups in the city, the office space is packed to the gills. There are probably 300-plus entrepreneurs, investors, and other technology pros in the Microsoft auditorium when I arrive, all there to hear from a handful of founders and VCs and to debate the latest-and-greatest in digital currency innovations. The night’s discussion is centered on bitcoin and the New York–area startups that are working to make sense of the fast-emerging digital currency.

“So here’s what we’re going to be seeing,” explains Graham Lawlor from the podium. Lawlor is the founder of Ultra Light Startups as well as BrightMap, a service that leverages technology to connect event MCs and potential sponsors. Prior to founding this series of startup pitch events, he spent a decade as an IT project manager in the financial services industry, including positions with UBS and Deutsche Bank. He continues, “You’ll hear pitches from nine startup companies, all of which are built with or for bitcoin in some way. Once we hear from them, we’ll hold the contest and give out prizes to the winners.”

Standard stuff. But the interesting thing about this particular event is that it’s bringing together several different parts of the New York City economy. There are tech enthusiasts and startup watchers here, to be sure, but there are also representatives from the financial services industry—attracted by the focus on a digital currency that at the time was poised to shake up the business of money management—media representatives, and a variety of non-tech investors. At first, that might seem pretty unique. But the ability to access multiple industries and bring them all together in one room is a hallmark of the New York business world, and is one oft-cited advantage that the city offers its startup founders. Since the region is home to so many different companies in so many different sectors—just about every firm of note has a New York–area office, even if their headquarters and primary businesses are far away from Manhattan—it’s not difficult to reach out across industries when looking for new clients or potential partners. Want to sell your product or service to the fashion industry? Great, everyone you need to talk to essentially works within in a few square miles of Midtown. Want to expand your financial technology business beyond the banks and mutual funds? No problem, there are dozens of other industries to reach out to in the city, all just a subway ride away. It’s that whole “crossroads of the world” effect in action, and it can make life a good bit easier for growing startups.

Afterward, Lawlor explains to me that the New York startup ecosystem has been on a strong growth trend since about 2008, as evidenced by the large crowd that came out for the Ultra Light Startups event on bitcoin. (And his events are not alone in this, by the way. The New York Tech Meetup is generally considered to be the largest meetup group in the world with some 33,000 members.)

“I would say there was something of a dead period for startups [in New York] probably about after the tech bubble burst from 2000 to 2001,” he says. “And back then, there really wasn’t a startup community at all. It was all very, very limited. You know, if you told people back then that you were involved in startups you’d get a lot of blank stares. The attitude was kind of, ‘wasn’t that over in 2000 when the bubble burst?’ ”

That’s all changed now, Lawlor says, with growth happening in both the number of overall startups in the city (counting all five boroughs) as well as the number of people founding companies and working for them:

Everything is growing. The number of investors, the number of angels, the numbers of VCs, the number of local VCs as well as the number of outside VCs that are opening offices in the city. There’s also more diversity in the set of startups and the projects that they’re working on and the sectors that they’re working in.

Not surprisingly, given these various trends, he is very optimistic about the city’s long-term prospects.

“I think it’s entirely possible that [New York City] could even overtake Silicon Valley at some point as a hub for startups,” he says, “just because the city is bigger and the economy is bigger. And if tech grows in parallel with the size of the economy, then it will be. I think a lot of it is driven by the size of the city itself and the size of the economy. Tech is a trend that’s just going to span everything. I think it’s kind of inevitable. Big cities are hubs of economic activity, so just by virtue of the fact that New York’s as big as it is, it’s almost inevitable [that entrepreneurs will play a major role in the city’s economic future]. Every big city is going to be this way.”

As far as technology is concerned, New York City is already in the big time.

In fact, the city ranks behind only the Bay Area itself and Boston-Cambridge in terms of metro areas by venture capital investment, according to the National Venture Capital Association, with more than 8 percent of the overall VC market and 10 percent of the deals as of 2013. And the New York City startup ecosystem is massive, easily dwarfing every other metro area that I visited as part of this project in terms of number of startups, amount of venture funding, numbers of mentors, and support organizations.

The fact is, startup life in New York is intense. While it’s easy to see the appeal in many other cities (including the Bay Area) where success seems within reach if you have a novel idea and the right kind of business sense to make it happen, entrepreneurs who set up shop in America’s largest city are cut from a different cloth, given all of the challenges that come with doing business there. It’s expensive, it’s competitive, the market is crowded, and no matter what you’re doing, there’s a good chance the city has seen it all before and is far from impressed with your latest version.

In short, it’s New York.

But, across the board, the city’s entrepreneurs don’t see it that way. When they look at New York City—the massive, overwhelming, challenging, hyperactive city that it is—they don’t see the same hurdles and challenges that I do. All they see are the opportunities that being in this city at this time in history affords them.

“I mean, the difference between New York and San Francisco really is that in San Francisco technology is just ingrained in everything you do,” explains Alex Taub, the cofounder of Social-Rank, a startup dedicated to helping brands find their most valuable social media followers. “So, you know, unless you’re someone like a Drew Houston or Brian Chesky, the founders of Dropbox and Airbnb, you’re still small potatoes compared to these big tech titans.”

Whereas in New York, he says, the scene is still early enough in its development that a founder can still make their mark and “be somebody” in the tech community pretty much right away. Meaning you don’t need to start a $4 billion company to get noticed. Even as of 2013, an entrepreneur can get something started, do a really good job with it, and be considered one of the founding fathers and mothers of the New York tech scene. The city’s ecosystem is just at a different point in its development than Silicon Valley is.

“When a company in San Francisco starts and then sells itself for, you know, $100 million, it’s great, but they’re not the new kings and queens of the Bay Area tech scene,” Taub says. “They’re just someone who sort of just cashed out. In New York [with an exit like that], you would really be somebody.”

This trend has not gone unnoticed in City Hall, where former mayor Michael Bloomberg (who was New York tech’s chief cheerleader during his time in office) long promoted the city as a high-tech destination and fertile breeding ground for startups. By the end of his third and final term in office in 2013, the city was home to a growing technology sector that had already seen its first $1 billion–plus exit when Tumblr sold to Yahoo. In fact, according to a report released in September 2013 by Mayor Bloomberg’s personal foundation, there were at that time 262,000 workers in the New York tech/information sector, including those at startups, those at more established tech companies (like Google and Facebook), and those working for “major information companies” like Reuters and the New York Times. Economist Dr. Michael Mandel, the author of the report, estimated that those jobs contributed almost $30 billion annually to the New York economy in the form of wages.

“Despite the aftermath of the financial crisis, New York City’s share of the nation’s private sector employment stands at the highest level since 1992,” Mandel wrote in the study. “The reason: In an era of massive convergence, New York City rapidly reinvented itself as a world-class, urban tech/information hub, uniting tech startups with the city’s publishing, media, design, and entertainment companies, all of whom are rapidly digitizing themselves. A key catalyst of this reinvention was policies undertaken by the city itself to improve the tech infrastructure, build and promote a tech/information community, and provide training and support for entrepreneurs.”

The data is staggering. According to the Bloomberg report, the tech/information sector is now the second most important part of the New York City economy, behind only the financial services industry, and was reportedly responsible for one-third of the private sector job growth in the city since the start of the Great Recession in 2007. And that’s in a metro area that saw its number of private sector jobs increase by about 4 percent between 2007 and 2012, compared to a 3 percent drop in those jobs nationally. In fact, since the beginning of the recession, New York tech has added about 26,000 jobs worth some $5.8 billion in wages to the city’s economy.

This growth extends beyond Manhattan, as well. Brooklyn’s tech/information sector alone has reportedly outpaced almost every other large startup area in the country—including Austin, Seattle, Boston, the Research Triangle, and even Silicon Valley itself. Only San Francisco has been growing faster.

“The mayor, himself being an entrepreneur but also focused on ensuring the economy is diversified, has devoted a ton of focus and effort into growing the tech sector here,” explains Eric Gertler, executive vice president and managing director of the New York City Economic Development Corporation’s Center for Economic Transformation, the office charged with keeping the city’s economy prepared for the next century. “It’s been a major focus of ours to ensure that, you know, we’re involved in making sure that we’ve got a very vibrant tech community. And I think we’re pretty proud that, if you look at the statistics, you know New York has become now the number two geographical area in the US for most venture capital invested in all these tech startups.”