- What the NYC startup world needs (and doesn’t need)
- Pivoting into a new corporate structure
- The downside of accelerated investment decisions
Here’s what I think NYC needs to become a serious, long-term startup hub:
1) Some extremely successful startups. We need PayPals – companies that spin out boatloads of talented entrepreneurs and “smart money” angel investors. Big successes also reinforce the “culture of equity” that is so strong in California – the idea that owning options in a startup is the best path to financial and career success.
2) More web product design talent. This is the scarcest talent of all (more so than engineering). NYC has perhaps the best design community in the world, but most of the designers are trained in non-web design fields (e.g. print design). Most of the good design schools don’t emphasize web product design (some exceptions – e.g. my friend Zach Klein taught an excellent class at the School of Visual Arts last semester on web product design). NYU’s ITP stands out as a program that focuses on the intersection of design and technology (e.g. the Foursquare team went to school there). CMU’s HCI program and MIT’s Media Lab are also great. Other schools need similar programs.
3) More engineers. However, this doesn’t mean we need more engineering schools (although that wouldn’t hurt). Like Silicon Valley, NYC is populated mostly by people who moved here from other places. For the right opportunity, it isn’t hard to convince, say, recent MIT grads to move to NYC. The problem is that NYC startups are basically unknown to students at MIT, CMU, Penn, and even (shockingly) to engineering students at NYU and Columbia (big props to HackNY for trying to fix this). East Coast CS students also view startups as a much riskier path than they actually are. I say this having been at dozens of events with East Coast students over the last year or so talking about startups. I’m constantly amazed that most of the students simply don’t realize startups are a viable option. What we have is primarily a marketing, not a supply, problem.
4) High-speed internet throughout all the “startup areas” of Manhattan (Flatiron, Meat Packing, Soho etc) and Brooklyn (Williamsburg, Dumbo, etc). It’s amazing that we have such a fundamental infrastructure problem in a city as advanced as NYC, but I can’t tell you how many startups I know that struggle to get working high-speed internet access that has solid uptime.
5) More marquee tech companies opening large tech offices here. Google has something like 1500 engineers here. This adds a lot of vibrancy to the tech culture and attracts more engineering and design talent to the city.
Some things we don’t need:
1. Government or university organized events that introduce entrepreneurs to other entrepreneurs. There seems to be one such event each week. Entrepreneurs are by nature very good at meeting one another and it’s a small enough community that pretty much everyone already knows each other anyways.
2. Expensive projects like big engineering universities. Again, the more engineers and CS programs in the US the better (even better yet we need more CS majors – which probably means more CS education in high school and earlier), but I can think of far more productive ways to spend $100M to help the NYC startup and tech world.
3. Lower rents. No doubt the rents are too damn high and lower rents would be great. I’ve been living here since college when my room for one year was a hallway in a friend’s apartment. I sympathize with people who say this. But the idea that NYC is unaffordable on a typical startup salary is a complete myth. You can rent a decent place in a cool part of town on a typical startup salary. As to commercial space, for venture-backed startups the difference between rent in NYC and rent in other cities is generally the difference between spending, say, 3% versus 4% of your total financing on rent.
4. More early-stage investment capital. There are plenty of smart angels, seed funds, and VCs who are either based here or are based elsewhere but actively invest here.
Most of all what we need is for our tech and startup scene to reach critical mass (and to sustain that critical mass even if a tech downturn comes). Facebook wasn’t started in Californa and lots of future big successes will be started in all sorts of random places. NYC needs enough tech critical mass that the next Mark Zuckerberg seriously considers relocating to NYC.
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