Is New York's Tech Boom Sustainable? (PG asks) | Hacker News Reader

Is New York's Tech Boom Sustainable? (PG asks)

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79 pointsdonohoe45 comments

In my experience, the only people who weigh in on these debates are those who do not live in Silicon Valley -- like any epicenter for anything, those of us who have made our careers here hardly give a damn how the rest of the world compares themselves to us. (Or to put this another way: New Yorkers do not sit around debating if or that New York is the world's epicenter for finance.) But as someone who has grown slightly sick of the pro-NYC mania, I feel obliged to enter the fray -- if only because Silicon Valley is being misunderstood at an essential level.

While I agree that New York has displaced Boston, it is no threat to Silicon Valley's crown: New York does adequately at some variants of software service startups (e.g., the Foursquares of the world), but it is missing virtually every other element of the ecosystem. There is no microprocessor company in NYC. There is no network equipment provider in NYC. There is no computer company in NYC. There is no handset maker in NYC. There is no cloud company in NYC. Yes, Google may have a large presence in NYC, but Intel has a large presence in Portland; a single company's large presence cannot in and of itself create an ecosystem. And that ecosystem is the difference between having a "vibrant tech scene" and being the world's epicenter for technological innovation; NYC may be the former, but is unlikely to ever displace Silicon Valley as the latter.

The question at hand is not "Does NYC compare to the valley," but instead "is the NYC tech boom sustainable."

NYC tech sustainable? Yes. NYC = SV? No. And that's a good thing.

Also, Appnexus is a cloud company.

Actually that wasn't the question pg asked. He asked if NYC would ever surpass the valley and concluded that, among many reasons, the fact of NYC as a finance hub could create enough competition for devs that it might actually prevent NYC from ever surpassing the valley, i.e. there might not be enough focus on start-ups for start-ups to win.

I wholeheartedly agree that NYC is no threat to Silicon Valley. That being said, for my individual startup, why the hell should I care if there is a microprocessor company, network equipment provider, computer company, etc etc etc? I can't think of very many of the hot startups discussed on this forum where it matters to have those things in the vicinity.

Density of expertise, I suspect. If you're working on a software startup, by definition you're dealing with unknowns. Having companies in the area that have staff that are operating on the cutting edge of everything from cloud services to hardware means you're a hell of a lot more likely to trip over someone who can provide you with the expertise you need.

While not a new startup by any means, consider a company like VMWare. All their sales pitches discuss CPU architectures and how their products are compatible. (The pitches I've heard personally, anyway).

They want to be a big player in cloud, so it makes the most sense for them to be located in Silicon Valley. After that, it's a network effect.

That you don't care highlights the difference between Silicon Valley and everywhere else. Here, even the so-called "hot" startups are no more than two or three hops away from the tech giants -- and that absolutely informs our collective thinking: we know how to build billion dollar tech companies because so many of us have worked for them.

Be wary of confirmation bias. It can be argued that SV alums can build billion-dollar tech companies because they receive the financial backing of those tech companies. That's not an intractable problem for a city with lots of money like NYC.

I couldn't disagree more. I moved back to NYC because after six years in the Valley, I thought I needed some change. I have two major gripes with the Valley.

The first is that it is a bubble chamber. People there follow their passions. This is a good thing but I believe they are out of touch with the common folk.

The second is what I perceive to be a general, blatant disregard for non-engineering and non-data-driven approaches to startups. I remember when I was figuring out my own project, I had wanted to take a more design-oriented approach to it, and one well-meaning friend suggested I create a "contest" to attract designers (i.e. get them to do some work for free). At least he didn't flick off the idea of making design of central importance, on par with engineering. I mean, what gives, right? Designers are makers too.

Make no mistake, now that I'm here, I don't think it's going to be easy or pretty here. The blatant disregard goes the other way around here. I can't shake the feeling that tech is regarded as second best, that people are cynically passion-impaired, and that good engineering is simply not appreciated outside of a few top shops like Jane St. Most of the startup engineers I meet are strangely risk-averse and used to working for MBAs, practically to the point that they seem defensive when introduced to someone who isn't. Chances are, I will probably end up back in the Valley at some point.

But to think that the Valley is invincible is wrong. The success of Twitter, Tumblr, Etsy and FourSquare are ample cues to the weaknesses of the Valley. These are not edge cases. They are a pattern. And this is fine. I think the two can coexist and learn from each other. If anything, going between the two makes you realize how arrogant each of their cultures are about themselves.

>New Yorkers do not sit around debating if or that New York is the world's epicenter for finance.

It's actually been a constant debate over the last decade since SOX came in and scared away all the international companies from listing in NY.

NY is now second in the Global Financial Centres index:

http://zyen.com/PDF/GFCI%2010.pdf

(Although NY / London / HK are all practically neck-to-neck)

What New York/New Jersey does have is an army of operations staff capable of building and maintaining some of the most hardened data centers and networks in the world. In many ways, New York is still stuck in "enterprise" mode. That needs to change before New York is really incubating local startups.

I think the negatives Graham cites outweigh the positives. Ultimately, "nerdy visionaries" win out over "rapacious dealmakers."

The culture is just too different and I just don't mean the business culture. It's reflected in all walks of life.

For example, let's take dating. In NYC if you're not making money or on the very fast track to doing so then you might as well not exist. In my experience dating in the Bay Area women are much more accepting of guys who are working on something long term that may or may not payoff (not saying this is always the case, just moreso than other cities I've lived in).

In short, in the Bay Area you get points for being a creative doer, in NYC you get points for already having money in your bank account. The Bay Area culture is just more conducive and accepting of the trials and tribulations of startup life.

On the dating front, just accept that the 'money set' are people who don't want to date you, and you probably don't want to date them either. But even after subtracting them out, there are a whole lot of other interesting people in NYC.

But I'll agree that one thing about NYC is that 'the pressure is on' : whether money or time or whatever. Maybe that's part of the attraction.

You might be right but dating isn't the example to go with.

When I met my wife-to-be, I didn't even have a bank account and my fast-track job was washing pint glasses, clearing tables, and kicking people out of the bathroom for sex/drugs/both.

I don't see much difference in NYC vs Bay Area when it comes to creativity and building.

There are differences but I have yet to figure it out.

I think the point is that some businesses make more sense in New York - some businesses really need rapacious dealmakers and not fierce coders/nerdy visionaries.

Dating has changed a lot, even in the past couple of years. Being part of a startup is cooler now, everywhere. Geek is in.

See: http://www.chicagobusiness.com/article/20110924/ISSUE03/3092...

As far as culture, NYC's the most entrepreneurial place in the country, period. Half of the stuff I buy comes from a small business, whereas most of the country is buying from big box stores, chain restaurants, etc. Every cab driver, coffee stand and hot dog stand is a small business.

And as far as dating, man, half of brooklyn is underemployed with a band and a startup idea. Just get some flannel shirts and jean-shorts, you're good to go with that story. If you're actually legitimate about it, all the better.

" half of brooklyn is underemployed with a band and a startup idea "

I voted this up just for that, I'm part of that crowd, people outside of NYC don't know how true this is, awesome.

After the talk, I had a lot of time to meditate about this on the train back home.

Yes, I think it'll happen, but it won't look anything like the valley.

When I was aiming at a finance job, I had two recruiters from two separate banks tell me one of the qualities they look for is an entrepreneurial spirit. Of course, they want you to be entrepreneurial with other peoples money and forfeit the reward to your employer. This is the attitude that creates a city overflowing with smart, ambitious, miserable people. Thats a powderkeg ready to be lit.

They key will be getting the financial services industry on board. If there was an incubator run by Goldman Sachs, kids at NYU and Columbia would start talking about startups like the kids at Stanfard do.

The kids behind Diaspora are NYU students. There is a lot of people working on startups in NYC.

https://joindiaspora.com/

"distractions of city life" is no understatement. What makes NYC quite a fun place to visit or live in also detracts from it becoming a serious contender to the Valley. It's a city of bankers who have, or traditionally have had, tons of money to throw around, and the restaurants, nightclubs and realtors who serve them. Everyone else has been mostly ancillary. Maybe that will change. Maybe one of the startups here will go public and become the next Google or Facebook, but I really don't see those types of people working in the city. It seems like even at Google, the more serious engineers are pulled back to the Valley. And despite it's reportedly growing membership rolls, I'm pretty doubtful about foursquare's future as well - and I honestly think it may have had a good one if it was HQ'ed in the Valley. The reported advantages of NYC - such as the ability to just roll into the offices of media or advertising companies or fashion houses, so you can cut deals with them - are largely myths.

re: Google - I worked at Google NYC, and as I recall, over a third of the 2500+ NYC Googlers are engineers. Most of the Docs and Geo teams are headquartered in NYC. Sure, some of the more talented engineers I know travel to the Mtn View or Washington offices once every few weeks, but they still call NYC home.

re: Foursquare - Dens and Naveen seem to be moving well in my book. New app features, new API features, growing developer community, and a growing SF office. I'm bullish.

re: media and advertising - Not true. helped build a company called Invite Media in NYC. Our engineering was located in Philly (laregly UPenn grads), but we moved Product and Client-facing roles to NYC specifically because this is not a myth. Having our HQ in NYC was critical to getting our product in front of the major advertising companies, building relationships with those companies, and those relationships were a key reason Google bought us.

Seconded. I just lived there for eight months and came away with the idea that it's a great place to visit, not a great place to live.

The cognitive overhead of being frugal in NYC is absurdly high so you eventually give up on it to focus on whatever you're actually doing, and there's a persistent layer of low-level noise that sometimes makes it impossible to focus.

I have the same trouble with living in London. It takes a strong will and mental effort to manage your money and the distractions, and make optimal plans to get the basics done like getting to work and back and buying groceries, going out without spending too much on cabs and drinks. You have to plan and budget, where in other places you can just go with the flow and things just tend to work out since there aren't so many bad directions to flow in, either due to the lack of options or just hanging out with a crowd that makes do with the same means. That said, if you learn to handle a tough city, everywhere else becomes very easy, and it's probably one of the reasons I come back here every few years to force myself to grow up a little bit more.

Strongly disagree.

Seattle has distractions. SF has distractions. Any city with population > 200,00 has its share of distractions. Might be booze, and parties, or it might be hiking and the outdoors.

I lived and worked in NYC for 10 years. Bankers? Yeah, a big part of the citys blood. However they were always secondary to the tech scene which was primarily startup and media.

  The reported advantages of NYC - such as the ability 
  to just roll into the offices of media or advertising 
  companies or fashion houses, so you can cut deals with 
  them - are largely myths.

Nope. Seen it first hand. It happens from my viewpoint, not sure how prolific but not a 'myth'

As someone who's lived on both coasts, I think that the major difference between NY and SF 'distractions' is that the West Coast distractions are generally more 'related' to tech.

When I go out to any random bar in SOMA, I'm likely to meet mainly tech/startup people. It's a very insular community.

In NYC, you're more likely to meet a wider breadth of people—which can be good or bad, depending on what you're looking for and what kind of person you are.

In NYC, you're more likely to meet a wider breadth of people—which can be good or bad, depending on what you're looking for and what kind of person you are.

I think you can make an argument that as internet technology takes a larger roll in people's lives and becomes more mainstream, having a diversity of skills in your company will become more necessary as well.

Bankers were secondary to the tech scene? Maybe for a couple of years in the dot com era, but otherwise I'm not sure which NYC you are referring to. We are not just talking >200K, we are talking 8-9 million people, a mix of bankers, media folk, fashion folk, diplomats, tech companies, and the usual realtors, doctors and lawyers found in most cities. That's a big mix, and makes it difficult to stand out.

After being one of the 800 people in the room last night, I found it exhilarating that so many locals were interested in developing start-ups. What was some type of founder "dating". I was interested in healthcare and technology and randomly found a few individuals last night in the crowd. That random start-up up luck is what PG spoke of last night and was created artificially at the YCNYC last night. It happens all the time "in the wild" in Silicon Valley, as a by product of the culture. What we needed is similar type events and culture change in NYC to make such events more accessible and common place.

Tonight Paul Graham got me more excited about doing a startup in NYC than I've been since the 90s. I don't expect NYC to be silicon valley, nor do I want it to be -- there's enough about this town that makes it special. I was also very encouraged by seeing locals who went through the Y Combinator program -- it was truly energizing. I frankly don't understand how a reporter for the Times can even ask the question...

When you think long-term, to me you can't escape the fact that SC is a small suburban community when compared to a mega-city like NYC. SC started out with a big advantage due to Stanford, and NYC has had large disadvantages to overcome in the past 4 decades due to crime, the collapse of the manufacturing sector, etc. (I read somewhere that until the early 70's NYC had more manufacturing jobs than Detroit due to textiles, etc., which really puts the speed of the shift in NYC's economy in perspective.) NYC has largely solved these disadvantages - it is now a very safe place to live and has an economy based on services, which means it is stocked full of smart ambitious people.

When people are what's important, whether they are customers, engineers, or whatever else, how can a suburb compete? To me it seems analgous to the fact that the tiny island of England could never sustain dominance over the world in the face of competition with a much larger and more diverse America.

This is the perfect example of a false dichotomy. Why can't both cities thrive as tech centers with different approaches? Why does NYC have to supersede SV (or why does SV have to stomp NYC)?

I'll posit an alternative: NYC ends up being an amazing hub for startups focusing on social (Foursquare, Tumblr, Etsy), fashion (Gilt Groupe), finance (HFT boutiques and small hedge funds), and education. SV, meanwhile, continues kicking ass.

PG always talks about margins, so consider: would the marginal company that barely succeeds in SV fail in NYC? Does anyone really believe that NYC lacks the financial or technological serendipity Graham mentioned last night? After living here for a month and hustling like crazy to talk to people, I'd argue NYC is full of opportunity.

I'd also argue PG's talk yesterday aimed to generate media buzz (see today's NYT article, TC, etc.) and publicity for YC. That's a conversation for another thread.

I'm not going to comment about this comparison between SV and NYC, but I think it's really interesting how PG mentions that bit about Zuck crossing paths with Sean Parker. It reminds me of this clip from Stanford ecorner about how Max Levchin and Peter Theil randomly met one day at Terman - http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1022

I think Paul Buchheit said it best regarding serendipity - http://paulbuchheit.blogspot.com/2010/10/serendipity-finds-y...

What NYC needs is a few local cash-outs for entrepreneurs (without them having to move to SV to do so). And then those entrepreneurs to reinvest in local startups. That's the positive reinforcement loop that takes place in SV, and I think that it's required for lift-off to be achieved.

As an aside, the UK suffers the same problem : There's a ton of money in London (similar to NYC) chasing financial opportunities, but those opportunities distract people from the high risk / high return technology bets that are commonplace on the West Coast. That was one bright feature of HP buying Autonomy in the UK, except for the questionmarks now hanging over HP...

Not sure why the comment underneath this one was killed, but there's been a lot of large exits in the advertising space, and the people have gone on to invest in additional startups.

A case in point: I worked for Right Media, and then left after its acquisition by Yahoo to found a company that took angel money from (among others) the former CEOs of Quigo and TACODA.

HN just has a curious blind spot when it comes to advertising technology, which is something NYC does quite well.

At ycnyc tonight, I would have liked a show of hands of how many people came from outside NYC to attend this event. I came from Seattle, and I met a decent number of people from Boston, Philly and other cities.

Welcome to NY from another Seattle-ite. Was at the event last night, didn't meet you though...

PG. I was at the NYCYC meetup last night and I don't understand all the attention of the valley vs. New York. The startup economy is not zero sum game. It doesn't matter which location is #1, There are plenty of dollars to go around and other then competing for dev and other resources (which while difficult is not the biggest hurdle a start up is going to face) what's the point of the discussion? Cities aren't threats to each other, it's not like the port of Philly competing with the port of NY/NJ. Shipping is a zero sum game, startups aren't.

Will they post a list of all the attendees from last nights event in some type of directory?

I know the whiteboard was posted before the event, but many people I meet last night did not fill it out and did not know about it.

#ycnyc Growing list of attendees: http://123.writeboard.com/wtbsn341igep2zvx - Pwd: Second full word of invitation e-mail and sender first name. lcase/nospace

Seems that most (all?) of the start-up developer job openings posted on HN are based in SV. I wonder if there is another site like HN for NYC start-ups to advertise positions.

When did YC move to Menlo Park? Did they just make that up, or is it due to a legal address of a law firm or something?

> Is New York's Tech Boom Sustainable?

Why, yes, yes it is. The talk was very enjoyable, but the entire event felt like a sales pitch for NYC businesses to scoot over to Cali for the better weather and opportunities.

Aside from Valley elitism, there is absolutely no reason why Y Combinator shouldn't have an operation in NYC. In fact, it's about time.

I think I could name several reasons not to start a second branch when the mothership is doing so well, regardless of the locations involved.

Please do. Most entities expand when they are successful.

YC has expanded, but in a centralized fashion.

When it comes to expanding to NYC (which amounts to doubling the number of offices), here are some considerations off the top of my head:

* To have double the # of locations, you would need to hire a bunch more partners in order to double the sum talent/experience in your pool for Office Hours (lest the talent/experience density be diminished, harming YC and all its companies). But it's not just about sum talent/experience, because there's a big chunk of experience that no startup vet out there has: experience being a YC partner.

* YC dinners are about connections. To maintain the same quality of connections in a second location, the new partners would of course have to be as connected and as trusted in NYC as are the SV partners in SV.

* Launch emails (AKA the YC "press release") are typically written by PG. There is only one PG, and perhaps he can't or doesn't want to write twice as many launch emails every year. For all we know, going from ~8 potential launches to ~40 may have pushed him to the limit. If PG were made to write twice as many, he would only be half as intimate with each company.

* One of YC's most valuable assets is the reputation of its selection filter. If YC were to accept twice as many startups (assuming twice the # of applicants, of course), the partners and advisors running its current selection process would need to be either mirrored in NYC or overworked remotely. Again, this is a finely-tuned machine, and it's not as simple as "hire 5-10 smart startup vets and stick them in NYC to start interviewing candidates".

TL;DR: While I'm sure YC has considered (and are perhaps still considering) expanding to NYC, for you to claim that you understand their business better than they do is presumptuous. To suggest that "elitism" is YC's rationale for staying in SV is insulting, and to suggest that it is the sole potential rationale is woefully lacking in vision.

Why is it a competition? Why is it NYC vs SV? Why can't it be both?

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