Seven Reasons Tech Start-Ups Are Setting Up Shop in New York
blogs.wsj.com
blogs.wsj.com
I found this interesting, as my own echo-chamber-group-think radar is sometimes set off by things I hear coming out of the Valley scene. For example, some aspects of social media remind me of the original dotcom boom.
I don't live there though, so what does the HN crowd think about that, especially Valley denizens?
As a side note there are clear exceptions, like Ycominbator's diverse portfolio and wish list (http://ycombinator.com/ideas.html), among others.
Secondly, I hate how articles (this one included) talk about new NY startups and how they are so different from ones in the Bay. While there is definitely some degree of truth to that, a lot of their examples focus on companies such as Tumblr and Foursquare, which seem like complete stereotypes of the current SV bubble: Consumer-oriented social platforms that are heavy on TechCrunch posts and light on revenue. Not that the the Bay Area doesn't have lots of those too, but if you want to talk about how "different" the NY startup scene is I think 4Sq is a terrible example. Gilt is a much better example.
Why is it that everyone is so concerned about where to start? Location is important, but having a product out, or at least a prototype available, is more important. You can do this anywhere, and when you get seed money or funding later, you can move to somewhere glamorous. It's like moving to Hollywood because you want to be an actor or writer.
If you're the coder--especially if you're the coding founder--you can make the basic prototype first. Show people the value of your code then move after you've convinced them it's golden. If you're not bringing money in or if you don't have a product yet, moving to another place will just burn up money. You want to build your product and maximize what you can do with it instead of facing money troubles the minute you move.
</rant>
"You can do this anywhere" is not at all true. I think we'd admit that being in at least a tier 2 city is a necessity or at least VERY advantageous. Outside support (your "seed money") and chance are a big deal, and you don't get that in Small Town, USA.
Yes, a lone programmer with the internet isn't an island, but a peninsula isn't awesome either.
Because where you start appears to influence -- heavily -- where you end up, or if you end up doing anything important. How many big tech companies began and stayed in in Madison, WI, or in Florida? Almost none.
There's a whole field dedicated to examining why and how this happens: economic geography. See here for a decent intro: http://eh.net/encyclopedia/article/patton.carpet . The carpet industry in Georgia is one such example; Internet startups in Silicon Valley are another; movies in L.A. is a third; and so on.
It's like moving to Hollywood because you want to be an actor or writer.
Take a look at William Goldman's Adventures in the Screen Trade, where he says:
"I find Los Angeles a very difficult and potentially dangerous place to work in, and I think anyone seriously contemplating a career as a screenwriter ought to move there as soon as it's humanly or financially possible" {Goldman@74}.
Later:
Screenwriters should go to L.A. despite the problems. As Goldman says, "To begin with the practical: Simply put, they know things out there the rest of the country doesn't, and they get that information first. The movie business is a part of the fabric of life in Los Angeles, and that just isn't true anywhere else. It is, if you will, in the air" {Goldman@80}.
People who ignore this ignore it at their own peril.
To the contrary, I actually encourage people to move to SF and NYC because of the knowledge/experience/atmosphere. But you stand to have better chances when you move _prepared_ than when you move to a big city without a plan. Especially a city like NYC where starving, talented artists are a dime a dozen. It's the capital of capitalism.
Moving to a city is a step you make when you are firmly committed to the idea. Don't just move because you have an idea. Have your things in order. It's a lot like fishing--just make sure you have your bait before you go. If you have start worrying about lease, payroll, and so on from the very beginning, well, it'll be tough. But if you have a direction, like a minimal amount of code written already, you'll move into the big city much better prepared. Remember, cities like SF and NYC are capitals of capitalism.
Before you quit you job and move to a big city, be prepared about the gravity of such a decision. You'll need to commit to a lease. NYC leases are not cheap if you aren't already there. You'll need to spend time to setup your office/apartment (often the same). You're likely moving there to hire talent. But if you start a project without a strong beginning, you'll be burning cash--and a lot of it in a big city where wages and cost of living are higher.
There is no doubt about the economic influence of a place. But being in X won't stop you from being successful. As long as you're driven, you will move to Y as long as you have a product and a plan. Just my 2 cents.
While seemingly intangible, I believe that these qualities lead to more exciting and innovative ideas in the long run. And NYC's dense and supportive startup community makes it more likely that people will connect over these ideas and form teams that would never have met each other otherwise.
Cities like NYC and SF have tremendous cultural value and produce awesome products and have tons of talented people. The whole idea of moving is to attract the best and brightest to your team.
Move when you're ready. The city pace moves fast, and so will your project too. If you move about a plan, prototype, or direction, you'll find the difficulty of whatever it is you're trying to accomplish compounded.
Basically, I agree, you should build your skills and your product wherever you are before you decide to move anywhere. It will be infinitely cheaper.
The Hollywood folks who learned their craft or made their TV pilot before hitting LA are always at a huge advantage over those who move with the dream first..
"Not so fast…
Matt Mireles, the founder and CEO of the video transcription service SpeakerText, started his company in his Harlem apartment but recently jumped ship for the Valley. Mireles said he’s making the move because of a “chokehold” he believes Wall Street has on technical talent in New York. In his experience, entrepreneurs are stuck fighting over a few start-up-minded developers.
That said, Mireles admits his long-term plan is to eventually return to New York. “If I wanted to be where there are more hot girls and nightlife I wouldn’t be in Mountainview,” Mireles said. “But I’m doing this [move to California] so in five years time I can live in New York in a big pimped out loft or something.”"
"Matt Mireles, the founder and CEO of †he video transcription service SpeakerText"
edit: spelling
Ironically, I intro'd that reporter to 60% of the people in the story he quoted, including Carter Cleveland and Cody Brown.
Start-ups in NYC are increasing. Union Square Ventures is probably a good reason for the push of NYC software startups.