eBay Comes To NYC

A lot of the coverage of eBay's acquisition of Hunch has focused on the possibility of much better recommendations on eBay. And I'm sure we will see that. Think about login with Twitter and get personalized recommendations on eBay. Hunch's technology can do that kind of magic and a lot more.

But I'm most excited about eBay's decision to build an office in NYC. According to Mike Arrington,

That New York office will eventually grow to some 200 employees, I’m told, who’ll focus on recommendations. But the team will also analyze lots of Ebay data, and perhaps productize some of it or otherwise release it.

My parter Albert calls Google's fortress on 8th Avenue "the gift that Google gave New York." That's because Google has well over 1000 engineers here in NYC and continues to build that team. Those engineers are exactly the kind of talent that web startups need. Some of Google's talent bleeds out into the startup world. But also having that kind of ballast anchoring the engineering talent pool makes it such that young software engineers are more confident to come to NYC and build their careers here.

And now we will have eBay with a team of 200 engineers. And with Twitter's acquisition of Julpan a few months ago, we have Twitter building an engineering team in NYC. Surely Facebook will come to town and start building an engineering team here too.

In the short term, this may put a further squeeze on the super tight market for software engineers in NYC. But if we invest in efforts to bring more engineers to NYC, as we are actively doing, then we can build the market together. And having some awesome large engineering teams working for big tech companies is super healthy for the NYC market long term.

So I'm pumped about this news. And congratulations to Chris and the team at Hunch on a great exit.

#NYC#VC & Technology#Web/Tech

Comments (Archived):

  1. Mordy Kaplinsky

    Now if we can only expand this growth into the hardware and chipset areas NY would be primed for growth as a serious tech hub.

  2. William Mougayar

    The single most important steady source of software engineers are the universities. I would continue working on that part to make NYC a destination for software engineering studies.

    1. Mordy Kaplinsky

      We do have the new initiative to build a new applied science university in NY but that will take time.  We need the existing universities to upgrade and expand their existing programs, on top of which we need to create the environment where NY is seen as a destination.The latter we are beginning to see but the former will take significant time and leadership.

      1. fredwilson

        Yes!! See the talk i gave at poly which i posted here a few weeks ago

        1. Mordy Kaplinsky

          @fredwilson I was merely reiterating the need in light of today’s post.  That talk and follow-up action which i’m sure you are involved in will hopefully create an NYC which can stand up to any city for the entire STEM spectrum.

          1. sigmaalgebra

            “STEM”?NYC has a lot in science, e.g., Rockefeller and Columbia. In applied math there is Courant and Columbia. In pure and applied math, science, and engineering, not far away is Princeton.For technology, there’s Brooklyn Poly and also several community colleges.What academic examples elsewhere can one point to that NYC would want but doesn’t have?I can think of some gaps in ‘education’, but there is little interest from the usual big money sources, e.g., US national security and health care, in providing big bucks to fill those gaps. E.g., we’re not going to build schools of ‘information technology’ modeled after the research-teaching hospitals in medicine with heavy emphasis on both fundamental and clinical research, professional practice, apprenticeship, professional peer review, code of ethics, professional liability, government licensing, etc.

          2. ShanaC

            Brooklyn poly actually has a very good computer security program.And CCNY has a very good engineering school for under $10k a year.


      I agree that the universities need to be a focus, but what about the universities that already produce good engineers? What measures are being taken to recruit talent from MIT, CMU, Illinois, Michigan, Cornell, etc? What are NYC’s greatest selling points?

      1. Mordy Kaplinsky

        @twitter-418616062:disqus NYC needs to be perceived as a leader in tech and the place to go for exciting jobs and opportunities in this sector.  As NYC continually gains in the next generation of successful tech startups and as a place for funding and serendipity, the relative perception of NY as the place to be grows in tandem.

      2. William Mougayar

        I wonder which is easier: a) to entice high-school graduates to start their software engineering studies in NYC (and stay there and get hired), or b) recruit graduates from other schools to come and work in NYC at tech companies.There could be incentives given to the a) crowd. For example, a government subsidy on cost of living or tuition and it gets waived if they remain in NYC and work somewhere for 3 years after graduation. 

        1. fredwilson

          As grimlock would say:DO BOTH.

          1. Dave W Baldwin


          2. FAKE GRIMLOCK


        2. Rohan

          An older and wiser friend had an interesting thing to say when I presented him with a dilemma (versus a question) earlier and asked for his opinions.. ‘Whenever I am faced with such a dilemma, I ask myself [very deeply] what it would take to replace OR with AND…’On similar lines as the Grimster. 🙂 But, just something I remember always.. 🙂 

        3. LE

          “government subsidy on cost of living or tuition”Good idea. A subsidy to build a nascent employment sector for lack of a better way to put it. Similar to what they do with tax abatement on new real estate investment in the city which “encouraged development of underused or unused land by drastically reducing property taxes for a set amount of time”.http://www.nytimes.com/2011…This is also done with Physicians, a reduction of student loans if you move to under-served areas.http://www.acep.org/content

      3. fredwilson

        HackNY and Turing and a large number of targeted recruiting efforts are underway. NYC is organized and making great strides on this

    3. kidmercury

      soon it’ll be web services like codeacademy

      1. William Mougayar

        That would be nice if it moves the needle on manpower that way.

    4. fredwilson

      Totally agree. And there are two primary efforts.1 – get more STEM grads coming to NYC right out of school2 – build up/invest in the STEM programs in the local universitiesIm very involved in numerous programs to do both

      1. tsts

        And keep more STEM grads in NYC!I am a local faculty and many of my best students take a plane to the west coast right after graduating. What is missing in NYC is the medium to larger but still really tech-focused companies that can keep the talent around. This is what Google, Yahoo, eBay, LinkedIn, and many others do for the bay area, preserve the topsoil of local talent in between start-ups.This is particularly important for non-US residents. The larger companies in the bay area know how to handle immigration issues so much better. So, yes, we need more of these companies.

        1. fredwilson

          Sue (i hope i got that right):I recently joined the board of Poly and I am hell bent to address these issues. Poly is such a diamond in the rough.

          1. tsts

            Thanks for joining our board!(It’s not Sue, but that is OK. I get that a lot.)

    5. sigmaalgebra

      “The single most important steady source of software engineers are the universities.”That is a common view.I would say that the single most important steady source of software engineers is people in the US with access to a good computer, a good Internet connection, some money to buy some software, and a lot of free time to learn mostly on their own as in, say,http://www.avc.com/a_vc/201…For the educational institutions, mostly the promising sources are high school ‘trades’ courses, i.e., modern versions of wood shop, and junior college courses.For universities, let’s see: Let’s take the recent Stanford on-line course announcements on Hacker News. Here are the five current leading examples:(1) Stanford class on Information Theoryhttp://www.infotheory-class…where will learn a little about Shannon’s theory (how many little balls, with diameter determined by the loudness of noise on the information channel, will fit inside a big ball, with diameter determined by the power of signal that can be sent), some algebraic coding theory, e.g., as inW. Wesley Peterson and E. J. Weldon, Jr., ‘Error-Correcting Codes, Second Edition’, The MIT Press, Cambridge, MA.and a little on entropy.Algebraic coding theory is heavily just a course in abstract algebra, especially finite field theory, that is, a standard undergraduate pure math course, with the coding theory done in the footnotes.Entropy is an old subject with polished sources.(2) Computer Science 101http://www.cs101-class.org/#Nick Parlante”CS101 teaches the essential ideas of Computer Science for a zero-prior-experience audience. Computers can appear very complicated, but in reality, computers work within just a few, simple patterns. CS101 demystifies and brings those patterns to life, which is useful for anyone using computers today.”i.e., ‘computer science’ for English majors, maybe so that they can use word whacking to type their great American novel!(3) Machine LearningAndrew Nghttp://jan2012.ml-class.org/”This course provides a broad introduction to machine learning, datamining, and statistical pattern recognition.”i.e., statistics without the theorems of mathematical statistics! So, learn some curve fitting but don’t learn about unbiased, minimum variance, maximum likelihood, confidence intervals, law of large numbers, central limit theorem, sufficient statistics, Cramer-Rao, Neyman-Pearson, non-parametrics, Gauss-Markov, Kolmogorov-Smirnov, the general linear model, time series, etc.(4) Probabilistic Graphical ModelsDaphne Kollerhttp://www.pgm-class.org/with some applications of elementary probability to some classic topics in applied probability and statistics but without the core, classic content. Do get a cute treatment of a simple, discrete case of Markov random fields (points X and Y are conditionally independent given the values of the points adjacent to X). So, touch on Markov processes but omit the classic limiting results. Touch on decision making over time under uncertainty but avoid stochastic optimal control.(5) Design and Analysis of Algorithms ITim Roughgardenhttp://www.algo-class.org/”In this course you will learn several fundamental principles of algorithm design.”so if ever had two hours or so from Knuth’s ‘Sorting and Searching’ or on algorithms and data structures, then need only about an hour of update. Also there is some borrowing from optimization — network flows and dynamic programming better learned from other sources, e.g.,Stuart E. Dreyfus and Averill M. Law, ‘The Art and Theory of Dynamic Programming’, ISBN 0-12-221860-4, Academic Press, New York.Mokhtar S. Bazaraa and John J. Jarvis, ‘Linear Programming and Network Flows’, ISBN 0-471-06015-1, John Wiley and Sons, New York.Ravindra K. Ahuja, Thomas L. Magnanti, James B. Orlin ‘Network Flows: Theory, Algorithms, and Applications’, ISBN 0-13-617549-X, Prentice Hall, New Jersey.Dimitri P. Bertsekas, ‘Linear Network Optimization: Algorithms and Codes’, ISBN 0-262-02334-2, MIT Press, Cambridge, MA.Q. Ma, what the heck can I do with the material in those courses?A. Anything you can find, but won’t learn how to program or do well in an interview for an NYC startup software engineer! So, won’t learn about HTML, CSS, or Flash programming. For Linux programming won’t learn about C++, Ruby, PHP, Java, JavaScript, etc., and for Windows programming won’t learn about .NET, ‘managed code’ and the .NET languages, ASP.NET, ADO.NET, or Windows Server and SQL Server management and administration.Q. Is the material in those five courses worthless?A. It’s worth what you can find to do with it. It’s nearly all quite old material, heavily borrowed with the quality lowered from topics in the ‘mathematical sciences’. In some areas of work at times some of the material is useful.Q. What can be done with such material?A. Well, the pure and applied math that covers such material, and generally much more detailed and advanced than in these courses, can be among the most powerful we have in our civilization including for information technology startups, but nearly no one knows this or can even give examples. Also it’s not fair to say that the pure and applied math is ‘software engineering’.Mostly what people want to hire are programming skills. For ‘software engineering’, that has more to do with management of software projects, and that has little to do with either math or the five Stanford courses above.

      1. William Mougayar

        I meant to include programming, software development, UI, etc..all of the technical skills that a tech start-up needs to get off the ground.

        1. sigmaalgebra

          You are talking about subjects most often taught in junior colleges and most often learned by independent study and not about what is available in universities.  

  3. Vineeth Kariappa

    Would you invest in a company whose long term goal was,”build something, get acquired”?

    1. fredwilson

      Not knowingly

  4. Robert Thuston

    Well done Chris.


    This is exciting stuff.  I’d love to see more engineers from the East Coast and beyond settling in NYC.  It seems like these companies will spearhead that movement.

  6. Bobby Davis

    Despite the allegiance I have to my college, Upenn, Cornell has the most incredible engineering and sciences facility up in Ithaca. Wouldnt it be smart for Columbia and Cornell to get together to build a joint Tech/Engineering school in New York City, similar to what they did for New York Hospital?

    1. fredwilson

      Totally. If I were the selection comnittee, id give the roosevelt island spot to Cornell and fund the CUSP downtown brooklyn proposal from NYU/CMU/Toronto as the consolation prize

      1. William Mougayar

        That’s an interesting initiative http://www.cmu.edu/cttec/Ne…

      2. deancollins

        What are you thoughts on the land reclamation project connecting Governers Island to lower manhattan? eg LoLohttp://www.nytimes.com/2011…Living in Brooklyn i think it’s a great idea, especially as they are going to be dredging anyway so good use of the material.

        1. fredwilson

          Hmm. Might be better just to use one of the battery tunnel tubes to run the subway to governors island

      3. JamesHRH

        UofT will quickly become the place for hot engineering students to go, if it has a pipeline to internships in NYC.UofW students already knows that SV is a clubhouse. Why not go somewhere that does not have that social infrastructure (yet) in the tech scene?Plus, the City advantages.

  7. Brian Shields

    This is great! Our team is actually working on a proposal to the NYC EDC to establish sustainable incubator in upper Manhattan. Incubator would attract creative entrepreneurial talent to New York with education, seed capital, and sales generation resources, and would attack healthcare and education issues of underserved communities through mobile and web platforms. Would love to know if there is support of feedback for a concept like this in the AVC community, thoughts?

    1. fredwilson

      Is this coordinated in any way with Columbia?

      1. Brian Shields

        This RFP is actually through the NYCEDC, but we are working with a collaboration with Columbia.  We have a partnership with a student club in their MBA program that does Harlem based outreach, as a way to deepen relationships with the school.  We are working on getting one or two of their professors of entrepreneurship on board, and are setting up pitches to them right now!Given the focus on “upper Manhattan” as the RFP put it, we think this could be a real great opportunity for Columbia as well. We also have a couple of angles with some of the larger tech firms (Google, Microsoft) we are working as well to bring more tech support to the project as well.This week will be a big week. We have community supporters lined up, and pitches to several NYC based entrepreneurial communities to support this as well. We will also be launching our online marketing campaign this week, to gather support from the nation.We are very excited about this, and are running top speed to try and win. It could be a big contribution to bringing more innovation to the City, and hopefully more sustainable jobs as well!

        1. fredwilson

          that’s good

          1. Brian Shields

            FYI – we have launched our website to generate awareness.  www.incubatenyc.org.  Stop by and let us know what you think!

  8. Aaron Klein

    Pardon the pun…but I had a hunch this was happening when Chris went all but silent on Twitter for most of November.Twitter is an interesting signaling engine for those in the public eye.

    1. fredwilson

      You werent the only one to notice

  9. Shawn Cohen

    Living in the Midwest where cost of doing business is extremely low, I’m surprised that businesses would want to move to NYC. But the epiphany I keep having is that the collaborative possibilities in NYC exponentially outweigh the cost of operating there.

    1. kidmercury

      IMHO the best option for bootstrapping entrepreneurs working on a web service that costs very little to build is to build in some cheap place in seclusion and then move to a major hub once you have some semblance of product/market fit. #fs

      1. JamesHRH

        Bingo.Especially for young entrepreneurs. Live in Mom & Dad’s basement until you have some traction and then you say to Fred, ‘jeepers, we really want to get funded and set up in NYC.’Perfect plan Kid.

      2. John Petersen

        I have to disagree. I agree it’s tough to bootstrap and move to SV or NYC, but IMO it’s necessary to move to a startup hub. If you build in a bubble, you run the risk of building something that misses the mark. Especially as a first time entrepreneur, you need feedback early and often from every person who will listen to you.If you wait until you’ve spent weeks or months building something to talk to users, investors, other startups, tech people, etc., it could be a lot of throwaway work or even worse a completely missed opportunity.If you’re a dedicated bootstrapping entrepreneur, you’ll find a way to move and live where you need to be in order to give your startup the best chance of success.

    2. fredwilson

      Read Steven Johnson’s Where Good Ideas Come From. It explains that very well

      1. Shawn Cohen

        Good recommendation, Fred–I’ve read it already but I’m not feeding that thinking like I need to be.

  10. EmilSt

    As Bloomberg put it: soon we will not remember of the days when NYC wasn’t the No.1 tech city in the world.They are giving free lots to universities for building technology campuses. They are doing great job for catching up with the future and that’s Great!You deserve Big credit for that as well.

  11. Goldfishes

    New York quickly becoming THE tech town. Silicon Valley has had its time. There are plenty of highly qualified engineers in NY (and surrounding areas) who do not receive the recognition they deserve, simply because they do not wish to move out west. 

    1. Matt Straz

      Completely agree. I wrote this for MediaPost recently:How New York Beats the Valleyhttp://the-makegood.com/201…

  12. awaldstein

    Yes…this is great from a number of perspectives.The discussion of the city doing something about supporting/building high-speed connectivity into the long-term plan to develop NYC as a tech center needs to resurface.Availability and cost of bandwidth is a problem and an opportunity in its solution.

    1. fredwilson

      Huge issue. The city should run fiber to every school building, fire house, police precinct, and library. Then put big honkin wifi towers on all those buildings. Then let any access provider provision service on that network. It would unleash more innovation than anything else the city could do. My partner Brad calls this “the five borough internet economic development zone”

      1. awaldstein

        Unleash Innovation project!I’m in.

      2. kenberger

        Munifi is a noble enough biz concept, too bad technically that “wifi” as we know it today has proven not be up to the task. Tried and failed so many times, many places worldwide. Also tried on a muni/for-profit hybrid basis many times. Ask those founders how that’s going.

      3. sigmaalgebra

        MUCH better idea than Bloomberg’s big honkin, green, clean, pristine, 100% all-natural, sustainable, renewable, carbon-free, save the whales wind turbine towers!

        1. testtest

          Ouch.Green is good.

          1. sigmaalgebra

            Will try put the safety catch on my A-10 Gatling gun aimed at all the ‘Greenies’ and be calm and rational, even though I’m pissed, “way, way beyond pissed” at the Greenies:The Clean Air act, net, was terrific. The air in city centers is now much cleaner. I can believe that the elimination of lead from gasoline has helped keep too much lead out of the air, water, etc. It is true that we started on cleaning up car engines and, thus, lowering combustion temperatures, compression ratios, changing spark timings (less advanced), recirculating exhaust gasses, and lowering fuel economy just when OPEC was gathering strength. If we could have kept oil demand low, then we could have kept pumping the Mideast at less than $1 a barrel. Also the ethanol in gasoline to raise octane ratings ruined a lot of fuel lines in cars, various small gasoline engines, etc. And the Act added a lot of expense in maybe 90% of the US where the air was already clean enough (I will except lead).But, gotta tell you, some guy in the rural Midwest, South, or far West driving his rusty, 30 year old pickup truck without a catalytic converter is NOT a serious problem, and it’s a PAIN to say he is.Boating in the Great Lakes resulted in a slime covered boat. The fish that there were were not to be eaten, maybe not even touched. Yes, the Cuyahoga River once just caught on fire! The cleanup efforts, whatever they cost, were really successful; tough to say they weren’t worthwhile.Whales? Any whale species with a small population clearly should be protected. Hopefully the Blues, Sperms, Rights, and Humpbacks can all come back. What the Japanese are hunting in the South Pacific I don’t know; since the Greenies won’t tell us and just say “whales”, I have to suspect that there are plenty of whales in the species being hunted.In the topics, DDT is a terrific solution against some insects with some terrible diseases, but apparently it really was true that DDT was making egg shells too thin in top of the food chain raptors. Bummer. So, by outlawing DDT, we’ve saved some raptors. Good. However, we’ve probably also killed some millions of very poor people in some topical countries. Net, mixed.Heck, hawks and falcons are amazing beyond belief. So, I’ll go along with the Greenies who say that we should kill some millions of poor people in the topics to save some of the hawks and falcons! I mean, after all, what human in the topics is nearly as neat as a hawk or falcon? :-)!!!! Gotta like the Greenies on this one!Besides, I like having the hawks and falcons eating the pigeons and rodents in NYC! Neat hawks and falcons; filthy pigeons; dirty rodents!And, about decent people coming out of their $50 million Upper East Side condos getting hit with falling pigeon bones? In the famous words of Jack Nicholson, “Decent people shouldn’t live” in NYC!Ozone hole over the South Pole? In the cold months of the South Pole, sure — there’s no sunlight there to form ozone. Were CFCs a big problem? Well, the CFCs were released mostly just in the northern hemisphere, so where was the ozone hole over the Arctic? I begin to suspect that the ozone hole was never a problem and never caused by CFCs and that the chemical companies wanted to outlaw what was then some very cheap Freon. Ruined the A/C in my cars. Bummer.CO2? Cap and trade? Carbon tax? “Bankrupt” the coal fired plants and have electric rates “skyrocket”? Sure, CO2 absorbs some infrared. Methane absorbs 100 times as much. Water vapor is the main source of infrared absorption. Yes, CO2 levels have risen due mostly or nearly entirely to human industrial activity over the past 100 years or so and now are relatively high, but I see no significant effect on ‘climate’ or anything else. E.g., from the 2006 NAS study, the temperature now is just the same as in year 1000, and the increase over the past 100 years is just like that from year 900 to year 1000. FAR too much of the talk about the effects of CO2, including from the IRCC, is clearly scientific sewage. So I’m not concerned about CO2.If look at the cost numbers for wind and solar power, then see that the main way that power has any chance of working is via massive subsidies, forcing people who don’t want it to buy it at absurdly high prices, etc. Basically, for the electric grid, wind and solar power is just flatly worthless, not wanted even for free.At this point, what I see in ‘green’ is some people running flim-flam, fraud scams on the general public for various purposes. So company A can use ‘green’ to attack company B, even though company A has no real interest in ‘green’ anyway. In CA, people used some little fish in a canal to shut down the agriculture in much of the Central Valley just to create a big stink just to raise money.I get e-mail from the EDF: Basically they use any excuse they can find in the recent news to scream ‘green disaster — the sky is falling due to evil, greedy humans’ (basically a formula fiction morality play and the same scam charlatans have played for many centuries) when what they are really interested in in ‘green’ is just the color of the money. That’s their ‘job’: Scream the sky is falling and have people send money.At this point the EPA and much of ‘green’ have become a shakedown racket. To paraphrase: “My client would like to ask a favor for which you will have his undying gratitude. You are about to have some environmental problems, and my client can make them go away.” Or, “Yes, we believe we can approve your $500 million loan guarantee, but we would also like to talk to you about being one of our campaign donation organizers.”.To me, ‘green’ has gone too far. In practice for now, we need a long moratorium on ‘green’. Later we need some actual careful thinking and good science and engineering relevant to ‘green’. And then we need to apply again a law now about 100 years old on criteria for public works projects — cost/benefit analysis.

          2. testtest

            that’s more balanced.i’m pretty disgusted at greenwashing as well.and on the birds of pray: i was fascinated by these when i was a kid. 

      4. John Revay

        Two WordsCable Vision

    2. Tom Labus

      Where is GOOG’s Fiber project?  Kansas City?

  13. testtest

    Your Disqus comments aren’t synchronized server-side. Bit mental.Go NYC!

  14. Tom Labus

    Last Sunday the NY Times had a special Metro section on the reemergence of tech in NYC. I haven’t seen that kind of ink in 10 years.With this company map too.http://www.nytimes.com/inte

    1. William Mougayar

      Yeah. I saw that map a few days ago. Very cool. I’m sure it’s making @fredwilson smile.

    2. Aaron Klein

      The map was way cool.

    3. Austin Clements

      Thats great that all of the big guys are growing their NY presence. Just as exciting is the number of programs like Turing Fellows and Hack NY that are attracting top tech students from around the country to come work in the city.

  15. Rohan

    Congrats Fred!A quote for the day for everyone..’‎’We promise according to our hopes and perform according to our fears.’Have a good one! 🙂

  16. kidmercury

    all good and well, although nyc wont disrupt silicon valley as top dog of networking technology any time soon. but second place is a good deal, no shame in that. i mean sure, second place is the first loser, but hey, we shouldn’t penalize underachievers — they’re trying their best, it’s not their fault they’re not innately good enough. the real disruption of silicon valley comes from outside of the US. this could mean a non-state network (i.e. hezbollah, anonymous, occupy wall st, fredland, etc), or for those too scared to dream of the world beyond the nation-state, china or some type of world government institution. #fs


      Silicon Valley doesn’t (and will never) have the culture that NYC has.  NYC’s culture is what will make it the tech hub of the world.  There’s something for everyone.SV is like the geek who spends his entire day coding, playing video games, and drinking Mt. Dew.NYC is like the nerd who spends the day in meetings before hitting the gym and catching a late-night show with a girl.Neither’s better than the other, just a bit different, y’know?

      1. kidmercury

        nyc has a banker/financial culture. in the age of occupy wall st, that’s pretty embarrassing. but money still talks, so they are def a contender for second place (aka first loser). 


          #ows represents a paradigm shift. Why do you think this discussion is happening now?And SV and NYC are players on the same team, not contenders.  Are you on that team?

          1. kidmercury

            they are playerrs on the same team in the way that google and apple are players on the same team. both companies benefit from the overall growth of the internet, and they collaborate in the sense that google makes apps for iOS. but they are also rivals. and only one can be top dog. OWS is the continuation in a paradigm shift towards a new international monetary agreement and political world order. how both NYC and silicon valley emerge after the shift is complete remains to be seen. 

          2. ROBOTUNICORN


        2. ShanaC

          yes, but more and more bankers are losing jobs they can’t get back.There is a really large structural shift in the economy.  I was actually talking about this with an engineer friend today; neither of us expect that banking will be the end all be all the way it is today when we’re 40

          1. JamesHRH

            Let’s hope so!Banking = extraction of value (as per Chris Dixon’s great analysis).

      2. Joe_Cool

        So true! But based on your comparison, I’d say NYC is the winner.

      3. LE

        “SV is like the geek who spends his entire day coding, playing video games, and drinking Mt. Dew.”SV has “weird stuff warehouse” though a total geekbrowsepapaloosa.http://www.weirdstuff.com/chttp://www.weirdstuff.com/c…Much better than a radio shack…

    2. fredwilson

      I dont disagree with any of this kid. But in absolute terms, what is happening in NYC right now is awesome. It shows what leadership with a clue can do

  17. Joe_Cool

    Great news! Even though I’m a west coast boy, I am a big fan of NYC, I’ll be gunning to be transplanted over there.  I’ve always wanted a slice of authentic NYC Pizza on my lunch break.

  18. Jason

    Fantastic map of NYC tech muscle http://www.nytimes.com/inte… Hopefully the efforts to entice startup engineers here are just the seed of what’s to come. It’s the right time for those efforts to take risks and go big to make NYC The startup mecca!

  19. aweissman

    Also Skype’s acquisition on Groupme and keeping that whole team here in NYC to build off of

    1. fredwilson

      I should have mentioned thatMy bad

    2. William Mougayar

      That’s pretty significant for NYC too. How many employees are involved? 

      1. aweissman

        i think they had somewhere in the 15-20 range but I imagine that will become much larger over the next year

    3. Aaron Klein

      Which now becomes a Microsoft foothold too…I have a feeling that some interesting things are on the horizon at MSFT if they put the right people in charge. Xbox, Kinect and Skype are three good seeds to start with.

      1. Tom Labus

        I ‘d toss in Mango to.

        1. Aaron Klein


  20. Will Luttrell

    The Hunch team was built right here, prior to acquisition. You CAN build world class data science shops in NYC!Ebay’s investment will only allow the core team to grow and attract even more talent.

  21. Dennis Buizert

    That is awesome news for the NYC startup world. Lets hope some can be persuaded away and work at startups! 🙂

  22. deancollins

    Its great that Ebay is opening a NY dev office, and great USV get an expect (i presume) My point is wont Ebay need an additional X number of sales where the 300-400m (multiple of 80m) represented net profit?At a 10% net profit margin (that’s profit margin on transaction fees which equate to 5-8% approx of the total sale)So basically if my back of the envelop math is right ebay would have to sell approximately 80m x 10 profit margin x 20 transaction fees = 16billion dollars in additional sales needed.This means over a 5 year period (1825 days) ebay would need to increase sales an additional 8.7m dollars each and every day for the next 5 years from the hire of these 15 people just to break even.Cheers,Dean Collinswww.LiveFanChat.com (of course my maths above could be screwy and I ignore the additional net worth increases to ebays stock price for these additional sales)

  23. JimHirshfield

    Great news for NYC and Hunch. I also like eBay’s presence here because it will give other NYC start-ups an additional possible exit partner. Although you want every portfolio company to change the world and shoot for the public markets, or perhaps a valuation on that order of magnitude, the more potential acquirers (acqui-hirers) in NYC, the better for the whole eco-system.

  24. Justin Junda

    Very exciting pumped for NYC!

  25. Justin Junda

    Good Article Fred!

  26. markslater

    all this talk about NYC when you gonna ping me about the boston coffee hour! sometime in the new year? I think ken Berger offered to assist.let me know and it can be arranged.happy turkey day to all on here.

    1. fredwilson

      Im coming to boston in feb. Send me an email

      1. markslater

        i did

    2. awaldstein

      Have a great Thanksgiving Mark!I do need to make a trip to visit.

      1. markslater

        any time – we are here!

    3. Tom Labus

      And to you to.

  27. falicon

    “Think about login with Twitter and get personalized recommendations on eBay. Hunch’s technology can do that kind of magic and a lot more.”…I respectfully disagree. They technology they have is more likely to take your past item purchases and past items viewed history and give you recommendations…Hunch’s approach has always seemed to be heavily related to statistics and probability more so than anything actually personalized or based on the actual content you generate (they closest they come to that is around the answers you give to a certain question and how that statistically relates to the products they are trying to push)….of course I’m EXTREMELY biased and sensitive to this topic because “login with Twitter and get personalized recommendations” is actually what sits at the core of my knowabout.it approach (and I designed it from the ground up to be exactely the opposite of all the work and weak results you get from a Hunch like approach).

    1. ShanaC

      Kevin, I have no doubts knowaboutit will work out somehow.Mostly because a lot of my purchases have weak ties to what you all here do.

    2. Dave Pinsen

      What you are doing is subtler but, I suspect, potentially a lot more powerful. If you’re not getting the attention for it you deserve from the tech inner circle, consider going further afield.Something that comes to mind related to this is the approach Des Moines-based Dwolla took in finding a strategic partner (as described in Alyson Shontell’s Business Insider article last week). He got John Deere’s credit union as an early investor. Probably no entrepreneur in New York or Silicon Valley would have considered them as a strategic investor, but for a startup trying to revolutionize the payments system, what a brilliant idea that was.Coincidentally, I read that article on Saturday, before catching a replay of the TechStars NYC reality show. One of the entrepreneurs on the show planned to launch a start-up delivering a new t-shirt to people every month. Meanwhile, a 28 year old in Iowa is challenging the way banks and credit cards have moved money for decades. Quite the juxtaposition.

      1. JamesHRH

        Love the last para Dave!Aggressive thinking is not location bound, for sure!

    3. Mark Essel

      The way I see the liquidation it’s part talent acquisition (hunch has a strong core team skilled at doing big data analysis through user clustering and partitioning) and part defense of Ebay’s market position (against Amazon, Craigslist, etc). I haven’t studied Ebay’s acquisition history enough to gain better insight on their rationale for pulling the trigger.I have no doubt the road map for Hunch was much larger (and likely still is), but financial reality, a lack of perpetual traction (I don’t believe Hunch was hockey sticking up), and a compelling offer are hard to deny.As to personal relevancy, there’s more than one way to do it :D. Rock on good sir.

  28. Scott Barnett

    Yes, this is great news for NYC.  I really hope this also extends a bit into the ‘burbs…. when I first moved to NJ to work at Bell Labs, Monmouth County was bursting with very talented engineers and software developers.  Sadly, that is almost all gone now.  I have a dream that this beautiful campus in Marlboro, NJ (where I live) that used to house a State Hospital but is now vacant gets purchased by Google (or Facebook, etc) to build a huge campus to rival the old Bell Labs building in Holmdel.  We’re not that far from NYC (think Silicon Valley vs. San Francisco), lots of mass transit, open space, and still some very smart people (I’m not referring to myself here :-)While I love NYC (my wife and I hope to “retire” there someday), we have raised a family and made great friends in NJ – this renaissance in NYC does not have to be limited to the city itself – the vibe is great and cool and we should extend it as far as we can in every direction.


      I’d love to see this culture extend all the way to Boston, Pittsburgh, DC, and Philly.  Hopefully a similar Chicago/Detroit tech scene will sprout up to serve all of the great schools in that area.I have faith that your Marlboro dream will come true.East Coast wins.Always.

    2. Tom Labus

      That’s a great idea.

    3. Jeff Sepp

      Scott – this definitely rings true for me spending alot of time and previously working in this area.  There used to be a huge engineering base with Bell Labs, Alcatel-Lucent, and Fort Monmouth (sounds odd, but it employed over 1000 engineers – many of them software and EE).  Not to mention the multitude of “startups” that sprung up out of these organizations. It’s good at least that Vonage took over the old Bell Labs campus, but there is still lots of engineering talent that left the area or are currently under-employed.This is what happens when taxes become over-inflated due to municipal abuse and mismanagement.  Tech companies that bring intelligent, hard-working people to an area and make it a vibrant place to live should be encouraged, not driven out.  Hopefully some driven entrepreneur will tap a booming market and make use of that campus you mentioned.

      1. Scott Barnett

        Jeff,Right on…. when I first moved to NJ, I lived in apartments right across from Fort Monmouth – used to get woken up by Reveille every morning!  There was such a  thriving tech community in this area – AT&T alone had sites in Holmdel, Middletown, Lincroft, Red Hill Rd, West Long Branch, and Ft Monmouth employed thousands, as you mention.  I’m not sure the issue was taxes so much as AT&T’s problems and cutbacks, as well as the military base cut backs.  But this area certainly didn’t seem to do much to incent them to stay, nor to encourage new tech businesses to make a go of it here.  I co-founded a company here in NJ and ran another, and while the State has programs and is trying very hard, when I talk with friends/colleagues in Boston, Silicon Valley, and yes – NYC – they are offering options for startups that NJ is not… and we need to, because the people are here.  The best way to do it is to get a big company (like Google/Facebook) to setup shop, then as Fred says, you get a bunch of spinoffs from the talent there.

  29. Wesley Verhoeve

    My lifelong love for New York Hip Hop has embedded in me a need to stick my chest out and boast that New York City is the best city in the world, also for tech and also for start-ups. I’m going to be the first one to admit it can be annoying. As a New Yorker I love to take pride in the quality and success of Tumblr, Foursquare and all the other NYC start ups, and this news made me very happy. NYC, still #1. (Even when we’re not.)I blame Biggie.

  30. LE

    “if we invest in efforts to bring more engineers to NYC, as we are actively doing, then we can build the market together”One of the hot buttons that is rarely mentioned (at least I haven’t seen it) as an advantage for a young male engineer to be in NYC vs. Silicon Valley is the availability of women.  Young single woman greatly outnumber men in NYC. In some parts of the city men won’t travel to a different neighborhood (say upper east to upper west side) because they don’t have to.In Silicon Valley, the situation is exactly the opposite. Men (in a certain age group) greatly outnumber woman. But the actual numbers don’t really give you an idea of how perfect of a situation this is for men. If you want to know, try dating in the city (not Fred of course).The above comes from my personal experience several years ago. Below is some backup for the situation regarding NYC:http://www.villagevoice.comhttp://www.observer.com/200…Part of the pitch to any company or individual as a reason to locate in NYC has to include the dating advantage for men. And also the availability of of woman in the city as an educated and motivated labor pool for these companies. I’ve attached some screen grabs from match.com. Although the methodology is quick an dirty look at the ratios. I’m not basing my argument on this data I just thought it provides some color.  I’ve also included a known singles area in Philly as a quick comparison to NYC.Here are the ratios:Nyc: Woman/Men 1.65Philly: Woman/Men 1.38SV: Woman/Men .6

    1. kenberger

      I’m trepidacious to +1 this, but not too proud to acknowledge that this was a major pull for me (from SV->NYC). And it paid off: now happily engaged, here.Your point is actually a winning and powerful sell.

      1. LE

        “not too proud”Nu?? What’s there not to be proud of?NYC is a great place. And there is now a happy woman because you moved there!Edit: Sorry I misread the context of what you were saying so my reply probably doesn’t make sense.

      2. fredwilson

        Congrats Ken! That shirt really works 😉

    2. laurie kalmanson

      i’m hoping more and more of those young engineers will be womeni am also hoping my daughter, who has math ability, will not be the only one of her friends to take that path, if that’s what she chooses

      1. LE

        One of the things you can do to encourage your daughter in a particular area is to makes positive statements about woman and engineering (this will only work if she is young.) Children pick up on what their parents get excited about as opposed to what their parents tell them to do. One of the reasons that kids like sports is because Dad likes sports and gets excited about it.  I’ve seen many examples of people who became doctors because of the esteem the parent had for doctors as opposed to encouraging the child to become a doctor specifically.


          I’d like to see this principle applied to Indian education.

        2. laurie kalmanson

          you are very wise; great advice — much appreciated

      2. ShanaC

        make it a positive experience around doing something else – engineers solve problems, help her find problems to solve.

        1. laurie kalmanson


      3. fredwilson

        Me too!

    3. ShanaC

      *sigh* don’t remind me.

      1. LE

        Assuming you have exhausted all the usual possibilities you have two choices. You can either move to a target rich environment (which you probably won’t want to do because of family reasons) or you can bring try to bring the mountain to Mohammed and additionally help the NYC tech employment scene. Here’s an idea off the top. You organize NYC tech employment junkets. You coordinate the participation of local tech companies to band together to fund the expenses (partial or full depending on how much skin in the game everyone wants) of potential engineers to fly in for multiple interviews at the cooperating companies. And you are in charge of not only putting together the deal but you also help with the 1 day of nightlife and showing the group the town. You get to meet guys and the companies get to interview people from out of the area to help with the “super tight market for software engineers in NYC”  My napkin calculations say this would be cost effective if the potential applicants were properly vetted. (The expenses would be shared by multiple companies who would get a chance to interview all of the applicants and make offers if interested.)

    4. fredwilson

      I use that pitch all the time, but subtley. I just say “assuming the comp and work quality is the same, would you rather work and live in the suburbs or the coolest city in the world?”It works on recent college grads really well.

  31. kathleen sheehan

    Will eBay enter the daily deals space (akin to Amazonlocal) w/Hunch?  I’d rather be served a customized deal on the site I’m searching (like eBay or Twitter) instead of daily email blasts on products/services that are not relevant to me.

  32. Luke Hristou

    Great post Fred,I agree whole heartedly with this post and believe that the talent pool in New York is only getting better and better. I also agree with a lot of the comments expressing that what sets NYC apart from all the rest is its culture, originality, and personality.  Inevitably I believe this is what will make NYC raise the bar on tech in the future years to come.  I just wrote a post on this very thing last night, so naturally I had to add the finishing touches on it this morning by referencing your article Fred. I’d love for you guys to check it out: http://lukehristou.com/post… and tell me what you think!

    1. fredwilson

      Nice post. On tumblr, another NYC tech company

      1. Luke Hristou

        Thank you very much Fred,I appreciate you taking the time to read it. Thought Tumblr might be a little cliche to mention, ha, but there really are so many great NYC companies and definitely many more to come!  

  33. laurie kalmanson

    awesomethey didn’t already have 100 people in nyc? whoa.happy thnxgiving.

  34. David Semeria

    It’s a very decent exit for Chris and the team, and also good news for NYC, but it’s also sad that they’ve been subsumed into the juggernaut that is eBay.I’ve been watching Hunch for a long time and greatly admire their technical skills, especially their brand of machine learning.What other startups could tell you there was a statistical link between throwing eggs at houses as a kid and liking the movie Napoleon Dynamite?In my company we’ve learned a great deal from the information they shared so openly in the past. I hope this knowledge flow will continue, but I doubt it.Most of all, Hunch could have been huge…There was something elusive missing at the product level, but the underlying tech was first rate and basically unique.

    1. fredwilson

      That last paragraph is spot on. And I too am a huge fan of Chris and the Hunch team.

    2. Mark Essel

      Agreed.”There was something elusive missing at the product level”If I knew the answer to that, I’d be a very wealthy man.

  35. ShanaC

    We live in interesting times economically.  This is happening, while at the same time banking is shrinking in NY.Hmmm.

  36. Scott Barrington

    this is great news for NYC

  37. Ela Madej

    I am happy for you guys (go NYC!). All that makes sense in the long run, I wonder how challenging the situation will get for startups in the short run (next 6-12 months) in terms of recruiting –  before more engineers flood into the city or some decide they don’t necessarily need that kind of stability… Do you see any challenges there? If I wanted to scale my startup NOW and was recruiting in NYC , I can imagine I’d be slightly less optimistic – it’s a struggle to find great people already & anywhere in the world, the poll of excellence is by definition limited!  But that seems a short term challenge. If at all true, maybe my intuition is wrong!

  38. Matt Straz

    A question, not a commentary: Is an $80 million exit off the back of a $19.2 million investment a great exit?Assuming the VC’s owned 50% of Hunch that is a 2X return after four years. In the real world of low interest rates and a flat stock market this would be a great result for an individual investor. But VC’s see the world differently. I heard one complain after GroupMe was acquired was that it wasn’t such an amazing result.Just curious to know what people think.

    1. JamesHRH

      I think it is fair to say that any money making exit is good.Hunch pivoted once – from directly facing the consumer market to a B2B2C model – and then was quickly (relative to the date of the pivot, earlier this year) acquired.If its not great, its very good (IMHO and I am not on the VC side of the table), in the overall world of tech startups.It is clearly a great exit for the NYC tech scene, given Chris’ profile and the ‘deep math’ nature of the Hunch idea (i.e., not a flash sale site).

      1. William Mougayar

        Sometimes your startup idea is so big that you need another big partner to help it reach it’s full potential. For some Hunch is seen as an exit, but for others it’s more like an evolution.

        1. JamesHRH

          Wm – true. Although strategic acquirers tend to keep the advantage in-house, so, in the long term, the impact of the idea is blunted.I tend towards Fred’s percentile evaluation: 33% fail outright, 33% wash (and cause you huge time / mindshare / energy), 33% make good-to-ridiculous returns.In that sense, Hunch is in the top third (easily I believe) and likely skews towards the 20% of stratum results.That is very good, IMHO.

    2. jason wright

      I read that the VCs involved with Hunch had previously backed Ebay. Perhaps a bit of back scratching going on here with the Hunch sale. Someone elsewhere even described this as a form of money laundering. 

    3. fredwilson

      1/3 of VC investments fail and return nothing1/3 of VC investments make a modest return1/3 of VC investments make a great returni suspect Hunch was in the middle tier for the VCs. but it may have been a great outcome for the founders and team.and in any case, there is nothing wrong with a “modest return”

      1. Matt Straz

        Thanks, Fred. Much appreciated.

  39. William Mougayar

    I think you should already give yourself a lot of credit for continuing to make NYC better for tech startups & tech in general.I”ve always believed that dissatisfaction is the first step towards progress,- and that progress has already happened.Anyone who makes their own revolution has a great future.

  40. Aaron Klein

    True.You’ll appreciate this story as a fellow school board member: I was serving as Board President this past year when we were searching for a new College President, and the faculty, staff and media interest was intense.There were meetings and travel that I couldn’t tweet or talk about to avoid speculation and keep the search process confidential. Yet the negative space sent a lot of signal too.We finally had to issue a statement to try and calm everyone down and stop the speculation. http://www.aaronklein.com/2…It was an interesting learning experience on the power of social media to send messages by omission.