In most respects California’s Silicon Valley has New York City outgunned when it comes to nurturing and growing great technology companies. All of the resources that a startup needs — money, management and engineering talent — are available in abundance in the Valley. But after decades of living in California’s shadow, New York is poised to seriously compete as the best place for software technology startups. Here’s why:
Brands. Unlike many Valley companies that create software for users first and then worry about brands later, New York firms tend to balance the needs of users and brands. Foursquare is a great example of a city-based startup that built an app for consumers but also incorporated brands and retailers right from the start. This leads to products that have a better chance at being commercially successful.
Ad tech. New York enjoys a clear leadership position over the Valley in advertising technology. Whether it’s been ad servers like DoubleClick, behavioral targeting engines like Tacoda or new social media platforms like Buddy Media, New York is the undisputed king of ad tech. There’s no reason to believe that this dominance shouldn’t continue given the industry’s proximity to Madison Avenue.
Media. Media advertising is a $500-billion industry, and New York is the world’s media capital. Agencies like GroupM buy one out of every three television ads globally. Mediavest manages the spending of massive brands like Coke and P&G. Agencies like these hold the keys to how brand marketing dollars are spent online, and which startups will benefit.
Marketing. As the number of apps outpaces the number of people who can possibly use them all, startups will need to rely on something other than search engines and app stores to drive trial. That something will be marketing — and New York is rich in branding, public relations and advertising expertise.
Money. Entrepreneurs in New York are now fortunate to have access to plenty of investment capital. The big West Coast venture firms like Accel Partners have been opening offices in the city, and there are New York firms like Greycroft Partners and Union Square Ventures ready to fund the next great wave of startups. New York also has a growing number of individual angel investors, thanks to the profitable exits of companies like DoubleClick, Tacoda and The Huffington Post.
Leadership. Mayor Bloomberg, a highly successful tech entrepreneur in his own right, has been an active supporter of New York’s startup community. While some debate the merit of the mayor’s goal of building a large campus for engineers in the city, everyone can agree that his leadership in this area has been a positive development.
Press. New York has a vibrant and diverse trade press that supports and covers its startups from founding to exit. We also have The Wall Street Journal, The New York Times and other top business news publications right in our own backyard.
Cool. If there’s a cooler city than New York to start a company I haven’t found it. Whether it’s the lobby of the Ace Hotel or shared workspaces like Grind, startups can keep overhead low and flexibility high as they build their company. The vibe and scenery in this city is second none, with fashion, art and food combining to create the most varied and entertaining culture on earth.
Commitment. Despite all of its success, there appears to be a growing fatigue with Silicon Valley and its short-term thinking. Mark Zuckerberg recently said that if he had to do it over again he wouldn’t have moved Facebook from Boston to the Valley. “There’s a culture out here where people don’t commit to doing things, I feel like a lot of companies built outside of Silicon Valley seem to be focused on a longer-term,” Zuckerberg said.
Of course, there are obstacles to New York becoming the top hub for startups. Some of our startup neighborhoods (Flatiron, Williamsburg, Meatpacking, etc.) could use more reliable networking infrastructure. Like everywhere else, software engineers are in short supply. We also need to better market New York to recent engineering and design graduates as a startup Mecca. And then there’s the matter of New York’s winters, for which there is no solution.
But as someone who is now founding his third company, I can honestly say that there’s no place on earth I’d rather do a startup than right here in New York.