The NYC Web Startup Sector
I'm giving a talk tomorrow night as part of our portfolio company Clickable's monthly speaker series. The talk is sold out so I am not going to link to the event page. If this talk is well received, I will look for another venue to deliver it again where more people can attend.
The topic of my talk is the NYC Web Startup Sector, why it is different from other startup hotbeds, and what makes it a special place to start and grow a business. I wrote a post about this talk a couple weeks back and linked to a wiki that a bunch of people went to and contributed thoughts. I really appreciate everyone's contributions to this talk.
Here is a pretty close to final draft of the slides I'll use. I prefer to use images to make points and let my voice do the talking so you may have trouble making much sense of this. But I do think you will get the high level points.
If you have any thoughts about the slides or the general themes in the talk, please leave them in the comments. I am always looking for more feedback on these talks.
About factor number 5 and 12: they kinda fit together, NYC is a “global magnet”, and a dream destination for millions accross the world, a real melting pot of ideas, talents, .. And any lawyer in that city knows how to quickly get an E visa. I think NYC counts up to 35% of foreign born … !Also, NYC has karma. I don’t know if it fits in your talk, but no other city i’ve ever visited have this…
I am not sure if this has been a factor with any tech companies yet, but NYC is a perfect bridge for Europe to connect with the US. I am sure that the NYC-London connection reinforces Wall Street’s dominance. I saw that you are suffering from jetlag, but London -> San Fran must be worse!
that’s true. i tried to capture that in my international trade hub slide.
I wish I lived in or near NYC to attend your speeches. Is there a way you could use UStream for the rest of us who cannot attend?
probably not for this one, but if i do it again, i’ll make sure it is streamed live
I agree with charliepinto, I would enjoy viewing future presentations online.
Same here. Or at least a way to tape it to share afterwards.(oh, only saw the comment by Max below now – all good)
We plan to videotape and post online. Additionally, I always do video recaps with the speakers at Clickable’s Interesting Cafe events.
I think they want a live stream max
Live is awesome, but even a simple flip cam near a loudspeaker does the job. I’d love to hear this presentation in more detail because we’re trying to make it happen in Melbourne, Australia too.
I’ll see what we can do
we’ll livestream from here: http://www.ustream.tv/chann…
Great stuff. Thanks, Max!
Fred, you might want to add whos/who in the financing ecosystem eg who are some of the key incubators, mentor programs, angel groups, and seed stage VC funds focused on web startups. Chris
that mirrors charlie o’donnell’s suggestion that i include the key community groups.on the investor side, its dangerous territory for me. if i leave out an investor, does that mean i am “dissing” them?
I understand your point. Painting a picture of the key community groups/ecosystem in NYC would work and be very helpful information
I can’t tell if you are mentioning this in your talk, but the NYC social network is fantastic. The startup community is particularly close knit and helpful, and each person has valuable connections beyond the startup circles into “mainstream” companies and industries. It creates a really unique hub-and-spoke network that Silicon Valley can’t match (they got the hub part, but little reach beyond the circle).
that was charlie o’donnell’s suggestion. he gave me some good thoughts which i will incorporate. thanks for seconding them.
Here’s a starting point (not complete) which depicts some of the pieces as a semantic cloud:http://portal.eqentia.com/n…
That’s definitely true about nyc: there is a fairly tight and supportive community here that is highly accessible. Then again, the Valley has a deep, rich, and wide network and social fabric in the tech scene that’s a plus in their favor (at least if you’ve worked it, like I have 😉
That’s why I didn’t mention community. NYC’s is great but not as strong as the valley’s
I’m late in the game- but I thinkjust the idea that NY is a city with lots of neighborhoods in it is a key idea to touch upon. It’s not just an investor thing- it’s also that lady down the hall who says hello to you in the morning, and the fact that people have favorite coffee shops. There is a social fabric to New York outside of Startup Land that keeps people going, involved, and gives them ideas, by giving them a place to reflect upon the normalcy of every day life in the city (I guess I am thinking of your Urban Architecture post and Jane Jacobs here)
That’s really great. One of my favorite things to do is get on my bike and ride out through the neighborhoods in brooklyn to rockaway beach. As you go from neighborhood to neighborhood, you get very different sights and smells. Its amazing
That’s exactly how it feels following the NYC scene from distance.
Can 12 factors be reduced to 3 NYC advantages? What can become rhetorically memorable for people juxtaposing NYC/SV NYC/Boston etc? What is the distilled NYC advantage?
in the past people have tended to focus on verticals like finance/media/marketing but i think it is mindset that is the most important so for me it is creative/commercial/chutzpah
That is an overwhelmingly true factor of “what makes nyc” different. Chutzpah. Not saying that this isn’t found in other places, but sheer tenacity and a “we don’t fck around” attitude has directly translated to success (or as importantly, quicker failures) for so many companies across many industries here.
Chutzpah is wonderfully memorable and echoes NY in a variety of culturally and socially significant ways. I don’t know that we are “more creative” than the valley. The Valley seems to have evolved to be much, much more media friendly than they were 10 years ago. In that same way, NY has many, many more talented programmers than it did a decade ago.I actually feel our communities have become more cooperative and integrated as people have moved back and forth, investors have started investing bi-coastally, and blogs and social media have drawn us closer together.This has given me a great deal more faith in our community. I remember conversations about how different the valley mentality was even 5 years ago. Feels like I am having that conversation much less than I used to have it.
When I say creative, I am thinking of the massive number of artists who live here and work in music, dance, painting, photography, theater, etc
I remember a guy I worked with years ago, during the infancy of web apps, he said there would be a time with no traditional ‘verticals’ and nor would there be generic ‘horizontals’ – all apps would have to become ‘diagonal’ … it’s beginning to make sense, some 10+ years later.
Ooooh. I love it
Yet not chutzpadick- really big difference. People still try to be nice. And Try to help each other out. Very important about New York.
You’re right, that’s been my experience, and it’s a crucial distinction.
Fred – one other thing NYC offers is a dose of “healthy skepticism”, which can be both a blessing and a curse. The reason why the west coast has always been a great source of ideas (yet not always of revenues) is that no matter how wacky your idea, the people around you will tell you that it’s brilliant and provide support.In NYC, your friends are always there to tell you how stupid your ideas sound. Now, that may suppress some creativity, but it also makes people work harder to make sure their ideas are viable and to think about customer adoption (if not monetization). During the boom period, the west coast may have a greater trajectory, but in this economy, NYC startups will have given more forethought to the business model behind their startup.
when i go out to dinner with friends and tell them about the things we invest in, i almost always get these looks like we are crazy.
Which investment gets the craziest looks?
Speaking of Bug (and bugs), I tried posting this link to contact info for OSU tsunami experts for Bug in the comment thread of the last post, but the comment didn’t take for some reason.
Didn’t take here either. Its a bug :)))
recommendation: last slide is a screenshot of the comments section of AVC and the caption says “Continue this conversation with the AVC community…”
What about Paltalk.com, leading video chat since 1998? founded and based in NYC
what about it? are you suggesting i should mention it? or is there some lesson in it’s success that i should mention?
A few days ago, Fred, I seem to recall you said you wanted to be more Sex Pistols than Frank Sinatra in terms of how you represent contemporary NYC – I did leave a comment (with a YouTube link) but it seemed to disappear.Try again – ie, why not combine both the ‘Pistols and Sinatra? ;-)http://www.youtube.com/watc…Good set of slides – like it. Hope it goes well – am sure it will.
In light of his recent passing AND his impact on NYC culture of the early 80’s, I’d suggest you go “Jim Carroll” here.
This presentation is not going to have audio after all. It was fun to think about it but I bagged it
The Cult contributed a song (“Star”) to the soundtrack of the movie version of Jim Carroll’s The Basketball Diaries. Here’s the video, from YouTube — it’s very New York: Star.
The cult! How was the show at terminal 5?
It was great. I mentioned you and Gotham Gal in my post about it: Hell’s Kitchen isn’t a DMZ.BTW, they’re playing in Montclair, NJ in November if you want to check them out then. I don’t know if you’ve been to Montclair before, but it’s got some well-regarded restaurants.
I’ve been to montclair. Its a great town
How did you let everyone know about the talks? Just by blog? Or did you advertise on the radio?Thanks Albert SmegalSEO Consultant
My channels are blog, tumblog, and twitter
I’ve been curating a new NYC Tech super aggregator that groups all the news related to NYC and Tech into one place, and 2 things strike me as unique to NYC, which could be further taken advantage of:1) NYC is host to a staggering number of technology conferences. I don’t have the stats, but it’s probably at par with Silicon Valley or close to. It seems like a great opportunity for the local stakeholders to use these mega-conferences to attract further activity to the area. E.g. have an NYC-sponsored Tech Biz Development booth at every big Tech conference that passes by NYC. 2) The Meetup communities are very vibrant in NYC. For example, the NYC Semantic Web group has over 1,000 members and that’s 25% of the world’s total of 5,000 members for that group.There is a great display of what’s already happening in NYC at the news aggregator where we’re tracking about 70 companies, 30 key people, 20 VC’s, etc… Would love to crowdsource its development to help support NYC Tech. http://portal.eqentia.com/n… (Click on About this portal for helping to crowdsource suggestions) or follow on @nyctechnews I can sympathize with the fact that there are challenges to most Tech geosystems outside of Silicon Valley, and letting everyone know what everyone else is doing is a small step in fostering further progress, collaboration and growth for the local stakeholders.
Great project william. Thanks for posting about it
Thanks Fred! It could use some ground-up feedback/suggestions…anyone, pls tweet me @wmougayar or @nyctechnews with #nyctech
William, I”m interested in your tech aggregator and a friend of a company that could potentially lend some useful technology to your crowd sourcing goals. Check out http://www.socialapproach.com.
Thanks. Can you put me in touch with them via email? william AT eqentia dotcom.
Slides 3-5 (which bring up a startling, super-strong point w/ which to lead off) say “San Francisco” and “New York”. Are the stats really about startups in just those 2 cities, or rather the metro areas in which they reside? Silicon Valley people will be all over you if refer to the region as SF, and SF folks continually point out that they’re not in the Valley. (Maybe change to “Bay Area” and “NYC Metro”?)Reasons 8&9: looking fwd to hearing how that fleshes out in the “so what?” slide. Totally agree on #8, but need to give an example of a company here that prevailed because of it. And “bright ambitious young adults”– sure, but do other contending areas really suffer a dearth of this?Also, the 2 working titles shown here include “NYC web startup sector” and “NYC startup scene”. The 1st seems specific, the 2nd generic. Is the topic deliberately limited to web (as opposed to mobile, and other tech areas (Bug Labs, anyone?)) Maybe you’re really going for the “NYC TECH startup sector”, or indeed go more specific if you’re excluding cleantech, biotech, etc. Charlie named NextNY’s mailing list “NextNYDIGITAL” or something like that, for example.Lastly, I think this excellent deck does a good job of mixing your portcos in along w/ some others in which you’re not invested. Very imp to be super-sensitive to this. People aggressively will look for chances to scream “pitch”– especially those bright ambitious aggressive NY’ers 😉
Good question/catch on “SF”. Its actually all early stage/seed tech investments between SF and San JoseWe’ll change it to silicon valley
Not so fast! Those 2 sentences do not match. If you now change it to Silicon Valley based on that new definition, you still wouldn’t have it technically right, and believe me it *will* get caught by some. Either you now mean SF and SJ *inclusive*, and so you’d be claiming SF is in the Valley (it isn’t), or you’re not including those 2 cities and you now have a study referencing silicon valley without SJ, which would make no sense. Or the above qualification is still wrong in some other way. *Plus*, Silicon Valley technically does not include the area known as “The Peninsula”, which includes San Mateo, etc.And most importantly, to ensure apples to apples comparisons with the specific figures, which area do you mean by “NYC”? Are we comparing metro areas, or subsections? If it’s really total nyc metro (including northeast NJ etc) but you don’t include Berkeley and East Bay on the other side, then I’m pointing at lies, damn lies and statistics 🙂
Hmmm. Got to check about the east bay. Good point. Certainly the intention is all of ny metro vs all of silicon valley
Ah, that’s different. If you mean the whole region then you mean “Bay Area”.Hey, at least you didn’t call it San Fran or Frisco ! (only NY’ers use those terms).
If you mean what it sounds like you really meant, you can probably get away with: “San Francisco / Silicon Valley” vs “New York City”.Which is more than fair to this west coast counterpart.
I might leave my heart in San Francisco but I like to hustle with an Empire state of mind. Nice deck Fred.
Fred- hope this is not coming in too late but perhaps we can mention something about how the university spin-off activity in NYC has really been picking up as well? I run the Venture Lab at Columbia and can tell you that we just spun-out 13 companies in FY 2009 and as a school have just surpassed 100 spinoffs historically… Granted many of them have been life sciences- but IT and consumer internet plays are on the rise at the b-school and from the undergrad ranks… I’ve been posting about this lately here: http://www.davidblerner.com All the best for your talk.Regards,Dave
I never thought of nyc as a place where that happens. Certainly its a factor in boston and the valley. But I’ve never seen one in NYC. I’m glad to hear that it happens here
It’s definitely getting going… we’ve now spun-off 100 companies: http://bit.ly/4bkwRVand here are a bunch of our historical exits: http://bit.ly/3RvQKr (Albert’s been helping us with one we’re about to spin-off)All the best,dave
Got it. Thanks for pointing that out
Fred I think your themes are well-defined and impactful.In the spring I pulled together a similar presentation for a group of tech women. Some additional findings, which you are welcome to use:1. Some contextual history: many of the 20th century’s defining technologies were seeded during the Great Depression, when massive R&D was happening: film, radio, recorded music, aerospace/airlines, automotive, nylon, advertising and publishing. Clearly NYC was dominant in Advertising and Publishing.2. Entrepreneurial Immigrants, Universities and Advertising (#3, 5, 10, 11): In the mid-1930’s, an Austrian émigré named Paul Lazarsfeld arrived to NYC and became Prof of Sociology at Columbia U. There he established their Bureau for Applied Social Research. They pioneered political polling and collaborated closely with market research and advertising agencies. It was the root of advertising as we know it and why Madison Avenue is dominant in NYC. Some now say that Columbia U’s neuroscience dept in the School of Medicine is similarly world-leading and groundbreaking….and has semantic web applications. Incidentally, CU has the largest, most productive patent office in the U.S. and probably the world.3. #9 “Bright, Ambitious Young Adults”/Talent: There are more insanely qualified women in NYC than anywhere else. As a talent pool it is underexploited. Think Harvard MBA’s, PhD’s in statistics, engineers, developers, project managers, marketers…whose banker husbands are out of work or not getting bonus. How can they keep Junior in private school? Mommy quits the PTA and starts earning again. Many are eager to work in flexible ways which can be enormously cost-effective for startups (part-time hours, contract work, may not need insurance). See NYT article 9/19: http://bit.ly/3xbtXsbest, Tereza
Great comment! Thanks
haven’t checked out the video yet boss but just wanted to comment in delight about how great it is that you are now a TOURING blog star. you should do a live debate with mikey, lol, that’d be the best. howard lindzon and i can moderate.on a more morbid note, nyc has a large danger factor, not due to guys in caves, but rather the feds. govt is out of control in nyc, even more so than other places; the ban on guns, cops at every corner….the good news is that 9/11 truthers have focused on NYPD and we have a lot of them on our side. this will prove to be priceless if the cops are given an order and but have enough knowledge to know if they should disobey it or not.prices are also preposterous, making it a questionable investment IMHO for cash-starved startups. and the subway system, while fantastic and a true rarity in the states, does come with the burden of terrible things like inefficient government and unions. unions that go on strike and paralyze the city.
All that is much ado about very little when it comes to starting a company though
Kid,Do any of you ‘truthers’ feel that there was a conspiracy behind the Oklahoma City bombing? There was some suspicious news about that one out today, that the FBI had apparently edited security tapes of the explosion. A local reporter has argued for years that there was a Middle Eastern connection to that bombing and a third terrorist who wasn’t captured.
yup, okc was an inside job. it’s the same story over and over again, clinton wanted to pass some anti-terror bill that would have taken away liberties. folks were like no way. then the feds staged okc and they got their bill passed. they did the same thing with 9/11 and the patriot act.mcveigh is a former military person. the patsies are always former military people. even the alleged 9/11 terrorists (i.e. mohammed atta) were trained at US air force bases, govt officials on record testifying to that. lee harvey oswald was CIA, that’s why his 1963 tax returns are still classified “for reasons of national security.” because if they were declassified we’d all see he was a CIA employee which would cause us to ask wtf? and the criminals can’t have that. they control everything (media, banks, military, governments, etc) and so the only thing they are deathly afraid of is a massive awakening. too bad for them they didn’t foresee that the internet would result in social media!
Fred,Great format and love the many reasons. Well done.These are probably in your talking points for slide 9, but proximity to the big media co’s and density of ad agencies fueled the previous and current ad network boom. And is fueling the launch of some of these next gen companies like on slide 28.Eric Franchi
Yes indeed. That is a big part of what goes on here
I see where you are going with this deck and I like it. I am looking forward to hear your perspective on NYC startups tomorrow night.
looking forward to it – see you there – I’ll be raising my hand on slide 33 to say “payments”!
I am guessing that rcaccappolo is referring to mobile, but I am not sure about the NYC startup community working within this area.
I will second your hand raising. I am actually working on that very thing.
oneTXT’s ORCA platform http://www.onetxt.com
Good slides. How about Factor # 13: IBM Watson Research Center? (If you consider the state, not just NYC )http://www.watson.ibm.com/g…
I have never seen a startup that came out of there. Maybe I’m not looking in the right places
Love slide 6 (trading places) and slide 9 (times sq red line newstand?). Anyclip comes to mind in terms of how our media obsession turns into an engine for new business models.I’m not sure if slide 12, factor 6, the nyc lifestyle is a strong enough photo… To me NYC is the most data intensive city. NYC’s population are the heaviest users and providers of data for meeting scheduling, bar hopping, sports checking, restaurant critiquing, work emailing, calorie counting, and multiplicity of check-ins each day. I feel that the sample of data and relevance of that data to a population does not exist even in SF let alone the valley. There’s a reason that foursquare and meetup started and thrive in NYC and it’s not just to get people away from their computers, it’s because they already are, and NYC is the city that’s tracking that behavior best.
Great point. When I talk about lifestyle, I am thinking about a place we walk around and get places on trains filled with people and are not isolated in our cars
Two general thoughts/questions I have about New York as a business center. I’d be interested in the responses of the community here.1) To what extent is the recent increase in start-ups related to the longer-trend decline in large businesses calling NYC home?2) NYC can be a hard place to live, from the weather, to the sometimes ragged infrastructure, to the traffic, to the cramped housing (for those who aren’t wealthy or living in rent-controlled exceptions), etc. To what extent do New Yorkers zealously emphasize the city’s strengths in an effort to convince themselves that their struggles are worth it?
I think these are reasonable requuests, yet I still would like to know the numbers of those pouring into and out of this city.
Whatever they are, the numbers are probably muddied by New York and the metro region being a gateway for immigration. For example, if memory serves, I believe New Jersey has seen net out-migration by native born residents, many leaving for lower-cost, lower-tax states with milder climates. But the state remains densely populated due to immigration.
That’s what I love about america. We stay fresh
May be beneficial to put a couple of bars around the Iowa/Kansas area to actually show the relative and absolute growth. If you are in control of the slides and can go back and forth it isn’t much trouble, but the audience mayn’t be able to do that.
Lovely Photos.Secondly, make community a more general note. We all are tied to more than one community, and I would hope that those involved in these scenes are sustained by more than one community, and derive our ideas from all of the people in all of our communities (not just tech.)Thirdly, I would also like to think, more so than the valley, that NY is hyper-urban. In some ways, it’s very physical structure mimics technology. I used to think when I was a child that motherboards looked like Manhattan- that they had lots of tall buildings on them. Most of the city is very short blocks. Problems are easily seen and thought about, since they are smack in your face. For those inclined, one can go about solving them, even if it seems like an uphill challenge. It’s an excellent place to think about making a company, because you live in a city that is filled with opportunity literally built into its physical plant as a reminder.
Wow. Gotta reblog this comment on fredwilson.vc
This makes me feel like today is a good day to start classes.
Ok I need to somehow borrow my own comment and turn it into something physical. That’s going to be a tough one.
i think i’ll put this in the presentation shanahttp://www.flickr.com/photo…
Fred, superb presentation.An interesting way of summing up all of NY characteristics would be, the “NY Vibe”.NY vibe = outcome of this crazy melting pot called NY. NY vibe = what you feel in the streets and what you feel when you go into a cool startup’s office in NY.NY Vibe = creativity+ jouas de vivre+ 247+design+culture+immigrants+hotdogs+hot+cold..The second point , that I have noticed (pure intuition not fact based), is that as you pointed out NY is more application oriented.Basically one could generally say that the infrastructure and base inventions are done somewhere else, but NY startups take it a step further especially in coolness UI and commerce experience.for example : media center > boxee, etc..Now that by the way comes back to the NY Vibe. It’s not enough for it to work. It has to be cool as well.peace
It is quite interesting to look at the similarities between NYC and London, where I’m based. They have many of the same things going for them. The differences are actually more interesting.
That’s one reason we like investing there. My partner albert has been there since sunday and I was there all last week
I chanced upon to view your blog and found it very interesting. Great … Keep it up!
I have not had time to go through all of the comments, so forgive me if already raised and disposed of. First, great talk last night, enjoyed it immensely. When conversation started down the road of what is holding NY back, I focused on one of your earlier comments, NY is an expensive place to live and work; are angels and VCs generally (excluding NY-centric VCs and angels) willing to permit its portfolio companies to pay NY salaries (NY rents, NY taxes, NY cost of living) on a scale that would permit creation of the “firewall” that Chris Dixon pointed out would be necessary to take the next step here on the East Coast? Only time will tell, however, as pointed out last night, believe we need some meaningful exits here to raise awareness of wonderful NY ecosystem.
I’m more concerned about the lack of angel/early stage money than the ‘unfriendly to business’ issue. San Francisco isn’t all the business friendly either but they are doing great with startups
Fred,I had the pleasure of attending your presentation last night and you make a great case for why NYC is a special place for startups. I’ve had some time to digest it, and rather than write up my reactions/questions as a blog post, I figured I would just post my thoughts here…As someone who has been fortunate to have launched several successful companies in NYC over the past decade (without needing outside funding), I think you should consider doing a follow up to this presentation (or set up a wiki) titled along the lines of, “NYC’s Startup Scene – What Makes it Difficult?”.1. Bootstrap or Funded? – Your talk seemed to focus more on startups that have already gotten a seed round of funding. What about startups that are looking to *get* funded?2. Access to Angel $$ – Outside from someone being well-connected or having wealthy relatives, there seems to be an overall weak angel network in NYC to help out most startups who may need just $500k or less of initial funding. And many VCs who historically would provide seed round funding will no longer invest in a company unless they’ve already hit $1M in annual revenues.3. Unfriendly Business Environment – New York is the second most business unfriendly state in the country (Source: 2010 State Business Tax Climate Indexhttp://taxfoundation.org/pr… ). The startup community needs to work more closely with the city to foster funding through groups like NYC Seed offer inexpensive temporary office space/incubators/etc.4. Cost of Business – Things like rent, taxes!, insurance, legal/accounting fees, etc… it all adds up fast.5. Location/Technology – Yes, there are many “Bright, Ambitious Young Adults”, but you don’t need to physically be in NYC while getting your company/product/platform off the ground, when there are other, much less expensive cities near lots of universities which provide young talent. Fred, how many of your portfolio companies offshore their technology development overseas? Or, are “headquartered” in NYC but in reality it’s more or less just a sales office with the ‘heavy lifting’ done elsewhere?Don’t get me wrong, I’ve been living/working in NYC since the early ’90s and have loved (mostly) every minute of it. I just wanted to stir up a little debate, and maybe a kickstart a follow-up topic 🙂 Good stuff!- Bob
That is so true. But its not what makes this city special because other places have it too. But as you point out, without it you can’t do much
I almost always write them in real time.I am going to give this talk again and I will stream it then