Hacker News Reader

Comment by WoodenChair | Hacker News Reader

This comment thread and the article itself are like parodies of all of the detachment from reality that the tech industry faces. Only in this community do you increase in investment size by 200% over a 4 year period and still see people questioning whether your market is becoming more viable. New York's investment share is apparently more than 1/4 that of Silicon Valley and climbing. That's a big deal for a city that was once seen as tied exclusively to old money.

"The amount of venture, angel and private equity money invested in New York soared about 200 percent from 2009 to 2013, to $3 billion from $799 million, according to CB Insights, a data analysis firm that specializes in venture capital trends. Silicon Valley, by contrast, took in $11.4 billion in 2013."

View on HN

The problem isn't with investments (there's plenty of cheap money). It's that there are no huge exits.

The city needs a "super-unicorn" technology company with a multibillion-dollar valuation to mint a fresh crop of millionaires and enrich thousands of engineers. These engineers will go on to build the next big technology startups—without them, the city will remain indelibly tied to old money.

Is part of your point here that these engineers, having made a stack of money, will be more inclined to take a risk (to found/fund/build the next big thing)? i.e. that the reason the exit is important is less that it's a signal about what's possible, and more that it creates freedom for those who might otherwise take a 'safe' job?

Huge exits may be a sign of success, but only in SV are they the only sign of success. Technology success and railgun-style startups are orthogonal.

The reason why huge exits are so important is that they are what the venture capital industry relies on. It appears that New York(ers?) is/are attempting to develop a VC funded entrepreneurship sector, which requires the existence of big exits.

I don't think anyone questioned if it was becoming more viable, but if you are concerned with macro figures I think this one is much more telling:

SV: Largest exit so far 2014: WhatsApp: 19B

NY: Top 5 exits since 2009: Tumblr: 1.1B Indeed: 1.0B Buddy Media: 745M Shutterstock: 570M Ascend Health: 500M

Not sure where the parody or detachment from reality factors in.

Is it really fair to compare the exit of WhatsApp with Tumblr? Tumblr has been around much longer, is used regularly by a lot of people, and isn't too hard to monetise via advertising. WhatsApp was purchased by a giant with a lot of money simply to prevent it's competitors from getting it. Obviously WhatsApp provided a lot more value to it's investors but the comparison just doesn't seem fair to me.

Edit:

It's also important to realise that our idea of a huge exit has changed rapidly over the last few years largely because of Facebook. A couple of years ago Instagram's $1bn astonished people. And yet Tumblr's $1.1bn isn't considered huge?

I wasn't trying to compare WhatsApp to Tumblr, I was trying to compare one exit this year vs the top exists from an entire ecosystem over the past 5 years.

I think New York is great, and I think Tumblr is great, but I think if Tumblr were perhaps in SV, things could have went differently.

This isn't what people are concerned with - a pissing match of exits. They're concerned with "is this a viable place to raise money for a startup." The answer, based on the momentum (200% growth in investments over 5 years) and overall figures is undeniably "YES".

An order of magnitude difference the top 5 exists in 5 years vs the top exit of this year isn't a pissing match -- it's complete domination.

surely you're joking by including WhatsApp in this list.

we can't all be privy to Mark Zuckerberg's paroxysms. let's not confuse the astronomically weird actions of child with too much money for anything resembling reasonable investment behavior.

Reply on news.ycombinator.com