No City Has A Lock On Innovation

The New York Times asked me to give them an opinion piece on the Mayor's effort to bring a new science and technology University to NYC. They also asked a few others, like Caterina Fake, Eric Reis, Dave Tisch, and several more students of NYC and technology. The entire discussion is here.

But the best thing I've read on this topic was not in the NY Times. It was on a blog, of course. Written by NYC's very own Chris Dixon. He nailed it.

This is what I wrote:


The entire world is now a rival to Silicon Valley. No country, state, region, nor city has a lock on innovation in technology anymore.

The Internet has made this so, and there's no going back. We will see Apples and Facebooks get built in China, India, Brazil, Eastern Europe, Western Europe, the Middle East, Africa, and plenty of other places.

New York City has benefited enormously in the past decade from this trend. In technology, it has become the second most active start-up market in the U.S. Sadly, this is not yet true for biotech and energy tech start-ups.

Until recently, "technology" was largely about "moving electrons on wires." Now, "technology" is about building all kinds of interesting applications on top of the Internet. An increasing number of engineers and entrepreneurs are applying their ideas and energy to creating compelling services on the Internet.

Given New York City's cultural diversity, it has always attracted creative people. Amid intense global competition for innovation, it is well positioned to draw more talent.

The Bloomberg administration is wise to get behind the emerging technology sector and support it. The effort to build a world-class science and engineering campus is smart. Of course, we already have a number of great universities in the city, and these institutions are not sitting still. They are producing talented scientists and engineers in greater numbers every day.

The Bloomberg administration should also consider investing in science and engineering education in our public schools — particularly high schools — and the existing universities. We should be supporting what's already working here in addition to building new institutions.

#NYC#VC & Technology#Web/Tech

Comments (Archived):

  1. stanleyyork

    Technology has broken barriers, as described by Friedman over 100s of pages in The World is Flat, but there’s something to be said for being in a physical environment of like-minded people that technology hasn’t quite translated yet. Sitting in an office with people who have the same energy, passion and drive may one day be replicated by technology (Cisco, Skype, etc. are coming close), but as of right now human-to-human environments still drive a lot of innovation. This is something places like Silicon Valley, NYC and other cities around the world have, but not all.

    1. Dave Pinsen

      From Matt Taibbi’s review of The World is Flat, “Flathead: The peculiar genius of Thomas Friedman”:On an ideological level, Friedman’s new book is the worst, most boring kind of middlebrow horseshit. If its literary peculiarities could somehow be removed from the equation, The World is Flat would appear as no more than an unusually long pamphlet replete with the kind of plug-filled, free-trader leg-humping that passes for thought in this country.

      1. Adrian Sanders

        The David Rees cartoon really notches it up to 11:…

        1. Dave Pinsen

          Our intellectual class should be embarrassed by how many of them credulously read and quote Tom Friedman. Most of what he writes doesn’t hold up if you bother to think about it for more than a moment (as I noted in a comment on the last Friedman column I subjected myself to). 



      3. stanleyyork

        The comment wasn’t about Friedman and focusing on him missed the point. I could have plugged in any number of “technology is changing the world” authors (obviously that was my mistake). Nonetheless, your view of Friedman is noted.

  2. William Mougayar

    Great series of interviews. Definitely, the playing field has been leveled for all, globally speaking. But it doesn’t just take smart developers to make things happen. Success is a holistic thing. The cities, countries, regions sill have to nurture the various pieces of the ecosystem and plug holes as needed. (as Bloomberg is doing)And success takes repetition and a lot of people involved that have done it, failed or succeeded and doing it again. Most importantly I think the various players and pieces inside have to work together synergistically 100% to reach that natural state of equilibrium where it’s all good and flowing naturally like in Silicon Valley. It’s that natural flow that’s missing from other places where you have to push and bitch in certain areas to get it all done.

  3. Joe Marchese

    Back to your Cooper Union post: Cooper doesn’t have the brand or the scale on which to compete, but it does have the best approach to the convergence of technology and design. They will probably join with another institution to participate in the race. I urge everyone to get behind their bid, not just as a local favorite, but as a school modeling the way.

    1. ShanaC

      I mean, I love the guys that I know who went to cooper (brilliant and interesting) – but one of the reasons cooper is like that is because cooper has a unique model of free education.  And I am not sure that their free education model will scale….

      1. Joe Marchese

        Fair point. Sounds like an opportunity to innovate, find a way to add their gifts in a way that makes a bigger impact. I’d love to be part of the process (proud alum).

    2. fredwilson

      it is a fantastic institution

  4. Dan Cornish

    One of the most important things New York can do is to reduce the cost structure of doing business for startups. For highly funded, fast growing venture-backed companies an extra 15-30% in overhead is irrelevant, but to achieve real meaningful job growth, it is the large middle tier of companies who operate on smaller margins that would benefit most. There is a real reason why New York has a net loss of population over the past 10 years and places like Texas are generating a large percentage of new jobs.   I love New York and lived in the city for 20 years. I worry that the baked-in cost structures of a large government and high pension/healthcare costs will choke out the large middle and leave only the very poor and the very rich. 

    1. raycote

      BINGO!Are their any?Is it possible to have any national / internationalStandards for corporate participation in helping pay the freight on social infrastructure within the context of democratic community?Or is the divide and conquer reality inherent in jurisdictional / regional commerial self-interests the ultimate hull speed for corporate participation in democratic community structures?Can capitalism be retrofitted to meet the demands that emerging network based, organically interdependent, democratic community structures will place on it?________________________________From this vantage point in history it is looking hopeless!But as H. G. Wells points out, when faced with nihilism what should we do?”Carry on as if it were not true””History is a race between education and catastrophe”Hope springs eternal !!!

  5. mterenzio

    Right on. Something would be wrong if NYC wasn’t a leader by virtue of its size and diversity. But the world is flat.

    1. raycote

      Not for the poor and unemployed it’s NOT.Unless you count the fact that they are getting flattened 😉

      1. mterenzio

        Good point. How bout the poorly employed. Me. : )

  6. Robert Thuston

    No city has a lock on innovation, because no city has a lock on information.I can get the most up to date information on growing trends in the tech sector by reading this blog as well as a few other websites.  This puts entrepreneurs one step from the center of everything without having to be at the center.  I can also share information and build an online identity from anywhere through participation in dialogue on the web, blogging, etc.  It puts entrepreneurs in the position to build an audience for an innovation or build credibility from an anonymous location.I hope for collaboration across geographies to build on a larger scale in the future.  Science and Art are also a driving force behind innovation, and the ability to create physical environments for those of interest in them helps drive innovation.

    1. raycote

      Virtualized, creative recombinant flux density effectsstill have more friction than their real life visceral counterparts but they are coming up fast on the inside track!_____________________________________…

  7. JLM

    While no individual city has a lock on innovation, NYC does have some huge unique selling advantages.NYC is the gateway to Europe and beyond historically, emotionally and transportation wise.  It is the point where the melting pot starts bubbling.It is also an enormous center of learning, population and a huge marketplace.  While other cities have the same characteristics and the Internet makes it possible to cast a pebble into a big pond electronically, NYC is a huge real market filled with a critical population and a pretty intense focus group upon which to unleash products.It is also a financial center — destination financial center for the holy grail of “going public”.  That is a big advantage.  While other locations are great for VC, NYC is a better hedge fund and  public market arena.While NYC is not for everyone, it is for a lot of people a very liveable and cool city; and, don’t ever underestimate the importance of cool.

    1. ShanaC

      I love NY, a part of me is not a SF valley girl at all – it is hard to deny that SF is the gateway to Asia…And I think some of the cool is overrated..

      1. Dave Pinsen

        One of your shorter comments, but it still takes some unraveling. Let me take a crack at an exegesis:I love NYOK, so far so good: you love NY.a part of me is not a SF valley girl at allThis one’s a bit tougher. “SF valley” = San Fernando Valley? Interesting, since the discussion here has been about Silicon Valley. This line also sort of comes out of nowhere. It would make more sense if it followed a line about how you loved “SF valley”, and this worked as a qualification of is hard to deny that SF is the gateway to Asia…OK, here I’m guessing “SF” refers to San Francisco.And I think some of the cool is overrated…What are we talking about again? San Francisco?

        1. ShanaC

          No, some of the cool, was supposed to be ny – I apologize for needing to be parsed.

    2. raycote

      Yes the power of recombinant flex density.When you put it that way it makes me jealous.I’m stuck in a city that rolls up the sidewalks way to early!

      1. JamesHRH

        What SV has on everybody else – Larry & Sergey have breakfast with Andy. They leave with a check, even though no bank account exists for a check made out to Google Inc.That takes time to build – a culture and infrastructure that support innovation risk.Other places will build it, do it differently, but SV was first and they have to give up the ‘cradle of innovation’ position (they may not go quietly on that front……..’hi, my name is John & I would like to lead your next round – I am thinking $200M on a $4B valuation 😉

  8. Dave Pinsen


  9. Daniel Lizio-Katzen

    On the last point of investing in public education (full disclosure, I have 2 kids in the NYC public school system), I am a strong proponent that CS should be added to the high school science curriculum. Not to knock AP Organic Chemistry, but do we need more chemists or more software engineers?Also, tech companies in general, and startups in specific, should be actively looking to fill internship roles with high school students. Let’s not forget that getting accepted into the elite NYC high schools is almost as hard as getting into Stanford and Harvard.

    1. Adrian Sanders

      I think that we do need more chemists, but then again, I know a lot of people who have benefited from discoveries in chemistry over the years.Why, when we discuss education is it always about swapping one thing out for the other.We don’t mind pouring billions into DARPA etc because every once in a while there’s something like the Internet that gets invented… so the wins outweigh the losses.Imagine what education for our children would be like if we valued it as much as DARPA…

      1. Dave Pinsen

        Imagine what education for our children would be like if we valued it as much as DARPA…We already spend plenty on education for — 7% of GDP, versus 4% for defense. We spend more per student on primary and secondary education than Japan does. We spend more per student than Germany does. Compared to the money we spend on K-12 education the money we spend on DARPA (>$10 billion?) is a rounding error.

        1. Adrian Sanders

          http://www.usgovernmentspen…You can look at other years if you want, I pulled up 2009.My point isn’t that DARPA doesn’t deserve money, it’s that we treat DARPA as it should be treated: the wins outweigh the losses. It’s ok that we have 3 or 4 total failure helicopter designs if we end up with something revolutionary (like the internet).All I’m saying is that basing funding for research into education implementation shouldn’t be as tight as it is. I’m for offering as much as possible in as many ways as possible, and a firm believer that in the end, it creates the most opportunities for children to succeed, build careers, etc. 

        2. raycote

          That  7% on education is as it should be!Spending on education is paramount.Building out a modern online platform to extend the efficiency and flexibility of the educational process is also paramount.The real question is!What road blocks are holding that evolution back?

          1. Dave Pinsen

            Building out a modern online platform to extend the efficiency and flexibility of the educational process is also paramount.I have no idea what that means, but at least I can’t imagine it costing $800 billion+ per year.

          2. raycote

            Scaling out online education is about investing in integrated teams of educators, animators and developers competing to deliver high quality interactive learning modules for all high-school and undergraduate courses.These can be continually improved / tweaked and are massively reusable.As you have pointed out the financial incentives are very high! – 7% GDPSo why on serious action on this front?What is the road block? It is the strangle hold the presently very profitable educational accreditation industry has over this whole process.We need validated independent accreditation test centres to breakup this logjam!

          3. Dave W Baldwin

            For @daveinhackensack:disqus also… the roadblocks are simple.  You spend so much on Education, the sloths will rule… using connections to gain political favor and keep the same vehicle moving on the same path… simple.No, we don’t need $800b to change education, just a little more understanding of the neural involved and focusing on the POV of who it is we’re trying to reach… the kids.The way around the roadblock is doing the bigger game plan in private then move into the public because all of the experts taking the public are simply promoting what simply has not and/or will not work.

        3. FAKE GRIMLOCK


          1. fredwilson


          2. Robert Holtz

            WOOT! We’re #1!!! LOL… Just kidding.

    2. ShanaC

      we need more of both, especially because we’re making breakthroughs in biochem, and you never know what that chem internship will lead you when it comes to making something for a semi.

  10. jason wright

    Bloomberg spends too much of his time in the company of the Wall Street glitterati to get the need for a more diversified NYC economy. The place needs more tech engineers and developers than bond dealers and currency traders. Where’s the teaching?

  11. baba12

    NYC should not try and compete to being like SV. It should try and build out what is unique about NYC and play it to it’s advantage.As long as we have financial services companies doing business here in NYC, talent will go to the highest bidder. In NYC innovation is all in finance, fashion, advertising and possibly marketing. If the idea is we shall have technology as one of these it will be only as a supporting/enabling role. The mindset of investors, of people with connections is all about holding it together, investors are very risk averse and those who know people don’t wish to connect them with anyone else. This mindset is of the old school European way of thinking. If anything is shared it is within the same pool of folks. In SV there is a different mindset and you can’t expect and should not expect to have that in NYC. We should play to our strengths and not try and be something we are not meant for. If it was otherwise it would have happened already.

    1. raycote

      If that is true? There is a very good reason to change that up!SOFTWARE CODE IS THE CRUCIAL COMPONENT OF EVERYTHING IN THE 21ST CENTURY!” open quoteSoftware is what the 21st century is made ofWhat steel was to the economy of the 20 th centuryWhat steel was to the power of the 20 th centuryWhat steel was to the politics of the 20 th centurySOFTWARE IS NOWIT IS THE CURIAL BUILDING BLOCKTHE COMPONENT OUT OF WHICH EVERYTHING ELSE IS MADEand when I speak of everything – I mean of courseFREEDOMas well as TYRANNY as well as BUSINESS AS USUALas well as SPYING ON EVERYONE FOR FREE ALL THE TIMEIN OTHER WORDS THE VERY COMPOSITION OF SOCIAL LIFEThe way it works or doesn’t workFOR USThe way it works or doesn’t workFOR THOSE THAT OWNThe way it works or doesn’t workFOR THOSE WHO OPPRESS  ALL NOW DEPENDS ON SOFTWARE!close quote ” – Eben Moglen…

  12. Kasi Viswanathan Agilandam

    World was never flat and never will be. World is flattening … I really had my tears busting laugh when i heard the title of the book … haven’t read the book and will never. With all due respect to those intellects. That is one of crappiest thing by this guys Nilekeni and Friedman.  Mount Everest will always be Mount Everest…. We can always hoist a 30000-feet long pole in the deserts of Sahara and call it “World is flattening”…. may be 1000-poles … even millions won’t make it to Everest. If America starts believing the “World is flat” then i am for sure we all will be deep down in the bottom of the sea along with the fossil algae one day.I agree with you that Apple’s and Facebooks will be built in other countries you mention … Are they going to build the next generation Apple and call it Orange or they are going to “Ctrl C” “Ctrl V” … I am sure Ctrl-C-V is quite possible. But Orange will never come from these countries … Orange has to come from U.S. then Orange-Ctrl-C-V will come from these countries.

    1. raycote

      How should I read that?AS INEmpires never wanes?

      1. Kasi Viswanathan Agilandam

        If that is how you want to read it that is fine.It takes a lot of effort to bring down the Empire.But if the kings under the empire start believing “The Empire is waning” then there is no stopping the “Empire from Waning ” . Raise the bar and move up. That is what i had in my mind.

  13. cmutty

    “New York City has benefited enormously in the past decade from this trend. In technology, it has become the second most active start-up market in the U.S. Sadly, this is not yet true for biotech and energy tech start-ups.”Could NYC ever be an active start-up market for biotech and energy firms?  It seems to lack ample space for R&D which is not the case for the I-495 corridor or Silicon Valley.  NYC is perfect for High Tech given our ability to cram desks and computers in close vicinity.

    1. ShanaC

      Govenor’s Island?  If we build better commuting, we could go to nassau or ct or north newyork, and north Jersey _ Jersey already has similar labs doing food and scent research, so why not bio?

  14. Andy Rosenberg

    I couldn’t read the Times piece without listening to this..…

    1. Esayas Gebremedhin

      forgot about that. lol

  15. Dave W Baldwin

    Have to place the position I posted on Mark Suster’s blog regarding LA.  All the geographical regions need to step up to the plate.  In this way, we will achieve more via the regions achieving more and together (region to region) gain even more.With the rise of AI regarding the cognitive, the ability to bank on a company coming in with 1,000+ employees will diminish.  The better bet is offering a place for several companies to come in producing revenue/tax base.  The odds of benefiting from the greater number of companies with higher moral fabric will benefit any city/region.Obviously, the infrastructure is at the top of the list… be it metropolitan or rural.In the case of NYC, play to its strength related to being a buffet of culture and taste.  Enable the numerous niches to grow into something disruptive.  We are at a time where CS should be taught at the JH level, those kids are like sponges if you give them the chance.  If we move out of the strict custom of labeling the child’s interest (piano, art, fashion, speaking) pushing them to focus that way 100% and over to becoming more multifaceted, everyone wins. 

    1. Peter Beddows

      Well said.

      1. Dave W Baldwin

        Thanks(!) and you know that was written for our friends in pheasant hunting land also.  BTW, they’re having trouble with pheasant hunting currently and if you want to know a boring program to watch… it is on that  ;).Will be back on the farm in NE MO later next week… hope I don’t have to go thru that again.

  16. Cam MacRae

    In the end it all boils down to the quality of the investors. Perhaps post GFC a slice of the ridiculous amount of purportedly “conservative” capital in NYC is being staked on more “risky” investments; startups.Sure, it’s possible to make an investment in another city/region/country (as USV does), but these would tend towards the later rounds.Edit: Having just read the NYT piece, I’m with Caterina Fake. A lack of technical talent or big ideas is not what’s holding NYC back.

    1. fredwilson

      i don’t think its the investors that are the problem. of course, i am one of them

      1. Cam MacRae

        Without trying to flatter you, I think you’re an exception to the rule. However, the rules do appear to be changing.

  17. Francesca Krihely

    Great post Fred. We really need more startups that feed off New York City’s social and cultural capital. Foursquare + Gilt are two of the only NYC startups that effectively leverage our “natural resources” (Etsy has been around for so long, I don’t even consider it a Startup anymore, but Etsy is a Genius idea for the Hipster class of DIY Brooklyn that has gone mainstream. Good pooling of NYC resources)NYC is turning into a city of leisure and commerce–it might already be 100% there–so people moving to NYC need to use those resources to turn that excellence into a growing movement. Really, I think it’s crazy that more tech entrepreneurs are not innovating in the Fashion space. Gilt did it well with Daily Deals, but now we need a new model that will work once daily deals get boring. Fashism is an interesting idea, but it doesn’t work with a large user base. We need new innovations that will help mid-sized designers promote their products and engage their loyal customers. 

    1. fredwilson

      there are a bunch of young startups. my wife, aka gotham gal, has invested in a bunch.

  18. awaldstein

    Fred…If the mayor attacks the core asks from Chris Dixon’s post with the same intensity that he focused on getting the movie industry here to NY, we are well on the way.Need to restate that along with being the world’s stage, wonderfully culturally diverse and a creative center, NY’s pure people density by itself makes it a unique sandbox for creating and proving connected solutions. Nowhere can touch that dense human social experiment that we live daily here.

  19. Tom Labus

    There was a move in 2000 or so to make Governor’s Island a Tech Hub.  This idea had some legs for awhile but kinda drifted away.  Corzine was backer but mostly for political reasons.Some how we need a plan to infuse the entire area, NJ, NY, CT, 

    1. Dave Pinsen

      What about making it a den of iniquity, where New Yorkers could do let loose and do things that Mayor Bloomberg frowns upon, like smoking cigarettes and sprinkling salt on their food?

      1. Tom Labus

        Toss in taxes too!!

    2. fredwilson

      we need public transportation to governors island to make this a reality. we could make it happen by running the subway through one of the two tubes in the brooklyn battery tunnel

  20. Michael Lewkowitz

    Another aspect to talent being everywhere is the opportunity – even imperative – for companies to design themselves to be effective working with and attracting talent around the world. If the service is global so should be the organization. Having a presence in a regional hotspot is good, building an entire organization in one is limiting. Automattic and StackExchange are paving the way. The next great organizations will take it further.

  21. falicon

    “Nothing attracts a crowd like a crowd” – P.T. Barnum

  22. Carl J. Mistlebauer

    On one hand we have Donor’s Choose which highlights some real issues in our educational system and on the other we have the Bloomberg administration wanting to increase spending in science and engineering.  On one hand we bemoan the low scores our nation high school kids get in science and math compared to the rest of the world then on the other we want high school to teach computer science.Oh, and then we have the issue of teachers, their unions, and their pay which is coming to the forefront in quite a few states.Seems to be a whole lot of demands and expectations being put on our school systems and our teachers and honestly, seeing what teachers get paid, I wouldn’t want to be a teacher!After the Bernie Madoff scandal all business schools starting teaching ethics…hey, if you have to take a class in ethics then the school system is not the problem and besides if you don’t run into ethics until you are working on an MBA then well, its probably too late!SV is what it is because of the social aspect.  Just like anyone who wants to act goes to Broadway.  The reality is that maybe what NYC needs to focus on is not innovation as a pure science but rather innovation as a integrative process.Now colleges have so many requirements for a major that it takes 5 to 6 years to graduate; I went to a college where it took 6 classes in a field for a major and everything else was an elective….but you also had more students attempting to get into junior level classes as sophomores for example.  Maybe we need less requirements and more electives?So, lets teach science, engineering, and computer science is high school and how much experience and or training will the teachers have?  Not enough to make a difference…Maybe what we need to do is be a little more radical in our ideas!  

  23. Cwesterberg

    Perhaps no city has a lock on innovation but something else may – In today’s Huffpo, an update, as the lede, no less :http://www.huffingtonpost.c…Know this is veering off the location angle of this thread, but at least this story is becoming more mainstream, as it is a troubling development in the innovation and entrepreneur arena.  Also, NPR did a fairly major piece on this a week or two ago.  Know you and Brad talked about this awhile back but would like to hear updated views.  

  24. sigmaalgebra

    For having NY and NYC compete with SV, the first problem I see is too much desire to ‘learn’ from SV, essentially, copy, say, by rote, instead of thinking through the problem and solution from the beginning in a way that clearly makes sense.E.g., one problem with such ‘learning’, ‘copying’, and ‘rote’ is that SV keeps changing.SV so far doesn’t really have to “think through the problem and solution from the beginning” because what is there has so far been able to reinvent itself and continue on as needed. NY/C do not have that luxury.A second problem I see, with irony, illustrated by the NYT piece of this thread, is a case of R. Frost’s “We dance round in a ring and suppose, while the secret sits in the middle, and knows.”. That is, the descriptions for how NY/C should try to be successful look like many quite different recipes for witch’s brew along with assertions that somehow what is needed is ‘magic’. Nope: Let’s set aside the search for ‘magic’ and stay rational.From all I can see, SV has some serious, fundamental failings. Basically SV reinvents itself — HP, Apple, Intel, Oracle, Cisco, Yahoo, Google, Facebook, Apple again, Google again — just enough to have a good success each five years or so. I’m reluctant to believe that there is any fundamental reason the ‘cycle time’ can’t be a lot shorter than, say, five years. NY/C should aim for a shorter cycle time.Then, a little more generally, for NY/C, my first recommendation would be to aim higher than SV. Second, use techniques SV is not using well and, maybe, later have SV try to learn from NY/C.Let’s look just a little closer: SV has Stanford and Berkeley. But NY/C have Courant, Columbia, Rockefeller (did someone mention bio-tech?), Cornell, and not far away, Princeton and Yale. Are NY/C really short on universities and associated smart people? I don’t think so!Techniques SV is not using? Did someone mention DARPA? So, take a look at DARPA, in particular their flexibility, willingness to do things that are radically new, still with a solid mission to have important practical results, with a surprisingly high batting average and a world-class home run average, their processes, especially their ability to evaluate, with high accuracy, projects proposed just on paper (just ‘ideas’, which is about all DARPA funds and which DARPA definitely does not regard as “easy”, “plentiful”, or “pretty much worthless”), and both the technical and practical qualifications of their problem sponsors. I contend that, by borrowing from DARPA, NY/C can take a nice step up in beating SV.But, there is a ‘virus’ that throttles nearly everything in ‘innovation’ everywhere in the US. The new school of engineering and applied science needs to eradicate this ‘virus’. One of the advantages of Stanford is that it partly has so eradicated. How? No doubt the history surrounding Stanford’s Dean Terman.The virus? Academic theoretical physics envy coupled with, in each narrow field, bitter hatred of anything outside that narrow field and, with great pride and arrogance, bitter, angry institutional hatred of anything practical, vocational, professional, corporate, or entrepreneurial. Let a virus take over a garden, and will get little useful output; similarly for a school of engineering and applied science.The main source of the virus is that nearly universally in academics the profs have an important symbiotic relationship with the virus that is a key to their financial security. To beat the virus, need to pay more attention to the financial security of the profs. In effect, Dean Terman made some progress here.NYC Irony: Two of the foundation biggies are digital computing and digital communications. Well, long one of the world’s best for one of these was in Yorktown Heights about 45 miles north of Wall Street, and long one of the world’s best for the other one was in NJ about 45 miles west of Wall Street. So, why was SV not near NY? The virus also infected industrial research. That any of the research would be very close to the business was bitterly resisted.Point: The entrepreneurial future desired should not hope to stand heavily on self-taught high school hackers who dropped out of college or graduate school, as SV has in recent years. Instead, and for how to aim higher than SV, there should be crucial contributions from academic research. DARPA knows this. So does the NIH (anyone mention bio-tech?). Indeed, academics actually are the best sources of some ‘special sauce’ that can be one of the keys to beating SV. But to get these contributions, have to eradicate the virus. So, at least need a Dean Terman, maybe one with a load of 2 x 4s to swing at profs infected with the virus. And, as Dean Terman had, need some financial security for virus-free profs who are making the desired contributions to the economy.Point: For the new school of engineering and applied science, need in the halls and giving seminars at least as many venture capitalists and entrepreneurs with problems looking for solutions as graduate students and professors with solutions looking for problems. Indeed, commonly the research should start with problems from off campus so that any good research results likely already have at least one good application (and, thus, much higher probability of two or many applications).Point: Borrowing from medical school professors, engineering and applied science professors should be, in part, professional practitioners with a code of ethics and professional practice peer-review who meet with, and serve the needs of, people with problems from the world of practice off campus. Students in apprenticeship or looking for problems, industry contacts, etc., should be close at hand.Point: The school of engineering and applied science should borrow from a research-teaching hospital (also try a school of agriculture) where the halls are awash with real problems needing solutions. The leading edge, original research should be in all senses close at hand to the real problems. E.g., when someone comes in with a problem in production scheduling and/or resource allocation, don’t just argue that the problem is in the class NP-complete and f’get about it but, instead, get about the best practical solution possible and then work on better practical solutions. Indeed, the NP-complete theory says that so far we will not be able to guarantee software that can get all the savings down to the last fraction of the last penny, always quickly, on even the worst case problems. However, saving all but the last tiny fraction of 1% is commonly quite doable yet widely ignored.A big point is project evaluation: Here can learn from DARPA and NIH and solidly beat SV. So, projects should be proposed and evaluated just on paper. The top three dozen US research universities are actually quite good at evaluating both research proposals and research results just on paper. The batting average is nicely high. The evaluation criteria are “new, correct, and significant”. These criteria are also good for entrepreneurship except also need solves a practical problem where customers are willing to pay enough to give high margins and high market capitalization. It should still be possible to do the evaluations just on paper. For how to do such evaluations, look at parts of research academics, DARPA, and NIH and do not look at Sand Hill Road. Here NY/C can beat SV like the US military beat Saddam in Gulf War I. NY/C can totally blow away SV (self-taught high school hackers and college and graduate school dropouts with project ‘ideas’ from sophomore all-night beer bull sessions) in information technology — faster cycle time, much more powerful research, engineering, applied science, and technology in the projects, much more accurate project evaluations, much more ambitious projects, much earlier funding for projects. Totally blow away.The last point is equity funding. The money in NYC makes the money in SV look like chump change. NYC has the money. Indeed, with high irony, likely NYC has more SV LP money than SV has. NYC is not short on money.NYC is very short on how to invest money in entrepreneurial information technology projects and, in particular, how to evaluate such projects, especially as I outlined, quite early on just on paper.Yes, NYC is willing to pursue information technology projects, even challenging ones with high risk, say, exploiting field-programmable gate array devices to save milliseconds in communications time for ‘high frequency trading’, IF the projects are in-house and IF the gains are from securities trading. NYC can evaluate projects when NYC really wants to evaluate projects.There is a lot of resistance to writing checks for information technology startups based just on ideas on paper. But the US DoD has been doing just that with fantastic results, a surprisingly high batting average, a unique in all of history home run average, at least since WWII. If the US could do the Manhattan Project (more irony) in the early 1940s, spend $3 billion in scarce 1940s dollars on a one page letter, some equations, some cross section experiments, and a few research papers, then NY/C finance can learn to evaluate or to direct the evaluation of information technology projects on paper.Projects on paper? Here is an outline. Let’s get another solution to the problem of high speed, wireless, digital solutions over the last mile! Might use this in farms, suburbs, or cities.Pick an area, say, a neighborhood of NYC. There get FCC permission to broadcast in a narrow band of frequencies. Also pick some positive integer n for the maximum number of customers want to serve at once. Agree that want to serve each customer at some nicely high data rate, say, 100 million bits per second (Mbps). Really, roughly, want to serve each of the n customers, all at the same time, with the full bandwidth allocated by the FCC.Partition time into some time windows, say, 1 millisecond each. Get a nicely fast, say, 100 billion bit per second (Gbps) per connection with a few such connections, connection to the Internet backbone. At that connection, install a server with some high performance and some special software and maybe some special hardware. At each of n points in the area, install a transmitter. Connect all the n transmitters to the server.Suppose there are n customers connected. Suppose in the next time window, for i = 1, 2, …, n, customer i wants to receive digital signal s_i(t) for time t in the 1 millisecond time window. During that time window, transmitter j = 1, 2, …, n will transmit digital signal u_j(t). For frequency w, let S_i(w) be the Fourier transform (‘frequency spectrum’) of signal s_i(t), and let U_j(w) be the Fourier transform of signal u_j(t). Then during the window there will exist ‘transfer functions’ H_ij(w) so that, for each frequency w, S_i(w) = H_ij(w) U_j(w). So, at each frequency w, we can find U_j(w) by inverting the n x n matrix whose component in row i and column j is H_ij(w) and multiplying on the right by an n x 1 vector whose component in row i is S_i(w). With U_j(w) for all the frequencies w, we can take the inverse Fourier transform and get signal u_j(t). Recall the Cooley-Tukey fast Fourier transform (from about 45 miles east of Wall Street and about 45 miles north of Wall Street). Do this for each j and get all the n signals to transmit u_j(t). Now, are getting, say, n times more bandwidth through the FCC frequency band than would get with usual wireless approaches. “Look, Ma, I’ve got my full 100 Mbps, and so does everyone in the neighborhood, and it’s all wireless!”.We should be able to make some first-cut evaluation just from the paragraphs above. So, that’s an ‘idea’, is not necessarily easy, plentiful, worthless, or trivial. It should be possible to evaluate such a project mostly just on paper. Maybe DARPA could loan some people good at evaluating synthetic aperture radar, spread spectrum radar, phased array radar, phased array sonar, etc.Maybe a problem in NY/C and CT is that in some important places in Manhattan, Long Island, and Connecticut, $1 billion that might come from an information technology startup just is not seen as very much money!

  25. Matt Straz

    New York has soundly beaten the Valley in one important sector: advertising technology. DoubleClick is still Google’s largest acquisition at $3.1 billion. Admeld was another top Google acquisition at $400MM and there have been countless other success stories over the past ten years. New York’s dominance in this realm is unprecedented.Given that New York is a key hub in the half trillion dollar global media advertising business and the fact that most B2C internet businesses ultimately come to rely on advertising for growth, perhaps this sector should be a particular focus for the city going forward.

  26. Zeaun Zarrieff

    I’m glad to hear that NYC is heating up for startups.  I’m working hard to make sure Chicago does the same.Kudos.

  27. ianb

    I suspect NYC will never likely be a player in BioTech and CleanTech.  These are tech industries which interface with manufacturing and the movement of atoms, not bits.  They require space, among other things, which is a commodity in short supply in the boroughs.  These businesses all tend to grow in the suburbs, where space, energy, etc. are cheap.

    1. fredwilson

      that may well be true. but boston has managed to build a vibrant biotech business



  29. markevans99

    You can make movies anywhere in the world, but there’s still only one Hollywood and it’s where the creatives still congregate in mass. I think the same goes for Silicon Valley.

  30. John Rorick

    There is a huge hole in the Mayor’s tech university “attraction” plan: Modeling this effort on the notion that a university model actually works. As an often ranting refugee from higher education administration I would be disappointed to see NYC’s leap in Tech focused on getting the bubbly model of a university infrastructure added to the NYC ecosystem. Can we start this city investment and educational “hack” with a hack on the traditional infrastructure of higher education? Having worked at NYU before fleeing for the private sector I am 1000% confident in stating you can run that university with about 2/3rd’s less admin costs. A transformation is needed.Peter Thiel and more recently Bill Gross of Pimco are on to something :…. Lets truly innovate in the founding of a new university tech hub and obliterate the staid inefficient model that I personally feel will eventually implode in the form of numerous middle of the road liberal arts colleges across the country closing their doors in the coming decade (and I attended one of these for undergrad).When you innovate on the model of the university that is drawn to this investment, you can then truly innovate in drawing tech talent and investment to the region. You will have developed something quintessentially New York – not SV east. Just adding a Stanford or Cornell extension campus in a ‘cool’ location does something from a name brand standpoint, and little else. New York is different, I hope the educational model that eventually comes to the Navy Yard is innovative as well. 

    1. ShanaC

      something I hate saying – even though they are nonprofits, most good universities exist the way corporations exist.  That’s why they have the overhead and big donor pools

      1. John Rorick

        There is little if anything about most large research 1 private universities, or most of their siblings, that is nonprofit. When you drive an admissions engine to grow tuition revenues each and every year by “x” percent and go about development drives like you are securing your Series Z financing they both look about the same. One big difference though: large corporations typically respond to consumer/market demands of price and quality…colleges just raise tuition. Very different ways of treating your “customer”.

        1. ShanaC

          I know, but it makes me sad to say that much aloud..

  31. Esayas Gebremedhin

    The first time I saw this post I thought: “Innovation and the spreading of humanity around the world have always been interconnected.” The internet accelerates the process insanely. Knowledge is more and more equally distributed. The internet as a rhizomatic system will lead to what you have described as “We will see Apples and Facebooks get built in China, India, Brazil, Eastern Europe, Western Europe, the Middle East, Africa, and plenty of other places.”What I find challenging is the notion of location in relation to the web. DO WE HAVE TO CHANGE OUR NOTION OF A PLACE AND SEE EVERY PLACE AS ONE?

  32. jeffreymcmanus

    “No city has a lock on innovation in technology anymore. The Internet has made this so”This can’t be true as long as VCs keep thinking regionally. If it’s still true that most VCs won’t invest in you unless you’re less than an hour’s drive from their offices (and I’d say that it is), then the internet hasn’t done much of anything to separate innovation from geography.

    1. fredwilson

      we invest in berlin, ljubiana, tel aviv, london, SF, Waterloo Canadanone of these places are an hours drive away

  33. William Mougayar

    Right on Charlie. You say it very well in that post. There’s something naturally flowing in SV that you don’t get elsewhere. It’s in the air, everywhere…There are no barriers to starting-up because it’s been done so many times. It’s like everybody has been to that movie before, and they sing from the same song sheet without any prompting. Other places may have that same chemistry at a given moment and place, i.e. when you get into meetups and gatherings, but it’s kind of sporadic and spotty. The more even that becomes (and I’m sure NYC is getting there), the better it is for everybody involved.

  34. Douglas Crets

    I think I know why this is hard to find in NYC. People are walking around and living like addicts, closed off to real enriching experiences and micro-focused on their success and only their success. I noticed when I was in California, that people really love collaborative discussion there and they like “outside” ideas. In NYC, I really don’t have that sense. I do have a very strong feeling that ideas here are circumspect and it’s more about the money behind the ideas, than the ideas themselves. That being said, I have found very small pockets of ingenious and liberated thinking in NYC. Grand Assembly dishes some good stuff, and have you all seen what’s happening in DUMBO? I think there are like 72 tech companies in Dumbo alone. 

  35. Zeaun Zarrieff

    Charlie,I don’t think the valley has a monopoly on Social Capital, or even more than other markets, I just think that the startup founders, and aspiring startup founders, in the valley are in a position to capitalize on those contacts more than in other locations.  On one end of the spectrum they have Angel/VC by the boatload, and on the other they have more bright, talented innovators than they need.  It’s the best of both worlds.

  36. Baum_stephen

    “Right on the money,” but I would add an attitudinal note: one of my foreign-born entrepreneur clients (I coach business owners) observed that most people in NY and London during initial fund-raising focused on his resume, pedigree and business plan while everyone in Palo Alto (where he lives) focused on “who you are, really,” “what you have passion to accomplish” and “what you can do toward our goals.”Stephen H. Baum

  37. Joe Yevoli

    I’m just curious, and I mean absolutely no disrespect so please don’t take it that way, how much time have you spent in NYC?

  38. Adrian Sanders

    I am really glad I don’t live in a place where everyone has to watch the same movies and sing the same songs to stimulate a sense of community and innovation.This mythical place you’re referring to reminds me a lot of China…New York City is about doing what you want to do and getting excited and respecting the diversity of others doing what they want to do. Dunno if I’d trade that for anything no matter how good people are at singing Kumbaya in Cali…

  39. Matt A. Myers

    I think I will have to visit this mystical Silicon Valley…

  40. William Mougayar

    No disrespect, but I don’t respond to personal attacks. If you have an issue with a discussion item, please say it here, and let me and Charlie or others rebutt you on it. How much time have you spent on AVC? (you don’t have to answer because Disqus stats reveal your level of participation)

  41. William Mougayar

    I’m not sure why it was implied that my comment had anything negative to say about NYC. It didn’t. Please read the link that Charlie put up, and I was echoing his comments which I concur with.

  42. Adrian Sanders

    Your post implied that there was something in the air in SV that set it apart for people wanting to launch a startup.No one will argue that SV has the experience and the largest community of people in startups.But you’d be hard pressed to convince me that NYC doesn’t have the social capital (in investment, different verticals, and community) already, it just looks different.I’m from the west coast. I know what it’s like out there and it really works for some people. But you can’t get a better bisection of culture, business and art than in New York – that’s a value add of “social capital” that has nothing to do with the tech community per se, but everything to do with their success and future. 

  43. Joe Yevoli

    William, no personal attack intended whatsoever.  I’m sorry if I offended, I should have qualified my question further.  I just tried to make a quick comment in between my morning reading.The reason I asked is because all the points you’ve raised ab SV, I find to very much be true ab NYC.  Having never been to SV myself, I can’t comment on the subject.  If you’ve experienced both NYC and SV, I’m curious to find out what its like out there.I understand sometimes text can cause statements to be read incorrectly, which is why I wrote no disrespect.  I apologize if I offended you.And yes, my disqus stats do need improvement.  I’m working on it 🙂

  44. awaldstein

    Charlie…Ping me when you are in town. We should meet in person.

  45. Matt Straz

    I’m a fan of Philly as well. Pointroll, Invite Media, etc. Personally I see it as an extension of New York’s startup community with key execs making the daily trek to NY each day.

  46. awaldstein

    Great. You have my contacts so let’s connect when closer. 

  47. raycote

    My SOCIAL CAPITALis as big asyour SOCIAL CAPITALmaybe a different issue than theFIRST MOVER – SNOW BALL EFFECTthat clearly benefits SV

  48. fredwilson

    that’s why i put it in quotes. i was talking about what investors call technology not what the word actually means

  49. William Mougayar

    I didn’t mean to come too hard on you, and I apologize if I did. But this whole discussion is about comparing and contrasting SV, NYC and other localities. Not one location is perfect and each has its positives and negatives, so we shouldn’t take it personally if we’re attached to a particular location. The fact that other locations can emulate the good parts of SV doesn’t detract from the fact that SV is still a special place in many respects, and doesn’t detract from the fact that NYC is also a great place in different aspects.

  50. Zeke Vermillion

    Yeah, I set up my little law office in Dumbo with the intention of moving to Manhattan at some point. But so far that point has not come. Every day we meet new and interesting people in the neighborhood. Not just clients, but general community stuff that makes it a good place to hang out. Just the other day I wandered down to the end of Jay St. and found an enormous new coffee roasting outfit behind a little door with a couple bikes tied up outside.

  51. Peter Beddows

    I hate to admit that I do not recall where or what is DUMBO?

  52. ShanaC

    When you do, can I come…I bake!

  53. JLM

    Go over the Brooklyn Bridge and take a left.

  54. Guest

    There is a fine bakery there and Bubby’s too. DUMBO made a fine place for me to use as a base camp area for NYC when I was there a bit ago.

  55. Peter Beddows

    Good job someone in TX knows where parts of NY are! 🙂 Thnx JLMSent from my Verizon BlackBerry via BES on XO hosted Outlook.

  56. JLM

    This is one of my favorite walks in NYC — across the bridge and back.

  57. Peter Beddows

    Ironically, while living in LI back in the day, it’s one I had in mind but never got to do. I did, however, succeed in completing going to top of Empire State and World Trade Center and always enjoyed visiting Greenwich Village. Actually got lost in Brooklyn first time there trying to find V bridge coming from LI. Sent from my Verizon BlackBerry via BES on XO hosted Outlook.