Shut Up Nerds

New York Tech, Stuck at No. 2, Still Shaking Pom-Poms

Silicon Alley is dynamite, don't mess with dynamite.

Perhaps that jeering bet is what’s kept the bicoastal battle alive even after the city surpassed Boston in venture capital invested in Internet companies in 2011. New York now has a stable of plausibly successful companies, including Foursquare, Etsy and Tumblr; and with both a Facebook engineering headquarters and the Cornell-Technion tech campus on the way, one would be hard-pressed to deny the city its tech cred. California dreamer Paul Graham, who finds New York intolerable, especially when the humidity causes sweat to bead above his upper lip, encourages the startups at his incubator, Y Combinator, to stay in the Bay Area. But even Mr. Graham acknowledged on a recent visit that “New York is definitely now solidly in the No. 2 spot.” By this and many metrics, the city seems to have arrived. So why the persistent Valley-baiting?

Kirill Sheynkman, a former Silicon Valley resident who heads up the New York branch of RTP Ventures, a $750 $700 million fund based in Russia, likes to compare the New York tech scene to a football player stammering through a history report and then blurting out, “San Dimas High School football rules!” in a panic, a scene from Bill and Ted’s Excellent Adventure.

“There’s a lot of talk about Silicon Valley in New York City, a lot of comparison. I think it’s the underdog syndrome,” Mr. Sheynkmann said, though he added that the “star quality” of New York startups, which tend to be highly visible and impeccably-branded, might have something to do with the messaging.

“I don’t see a need to compete,” he said. “The two cities are different! They focus on different areas of tech. Tech is vast. It’s like science. Science is a broad concept.”

New York talks about itself for two reasons, he said. First: it’s in the city’s nature. Second: there is pressure to tell a compelling story in order to attract talent and capital.

Still, as much as New York tech loves itself, some are wary of talking too much talk.

“I just think it’s a little bit of a wasted effort,” said Kyle Bragger, who recently returned from a session at Mountain View’s 500 Startups for his startup Forrst. “Is it really productive to have yet another blog post debate about the latest ‘New York is better or worse than other city,’ or ‘City A is better or worse than City B’?”

Maybe the persistent marketing served a purpose when New York was getting on its feet. But at this point the local tech scene is at least toddling, if not walking. “We call it the flywheel effect,” said Lucas Nelson, an associate at DFJ Gotham Ventures. “Is the flywheel going? Can it sustain itself, or do you still need to put energy in it?”

New York needs big exits and role models more than it needs savvy marketing, he said. “I think the underdog thing is getting pretty old pretty quickly,” he said. “I don’t want to dissuade anyone who is cheerleading in New York. But in the end, no amount of cheerleading will take the place of smart, experienced angels, or smart experienced anything.”

Others pointed out that the marketing for New York tech tends to get competitive mostly because talent and capital are scarce. “We need to keep investing in the ecosystem and evangelizing what is going on here,” Mr. Wilson wrote in an email. “Students still leave the CS programs at Columbia, Princeton, and NYU and go to Silicon Valley. That means we still need to market NYC.”

A survey of local tech professionals suggested that the boosterism is likely to continue. “NY tech talking NY tech is fine,” Alex Taub, head of business development at Aviary, said in an email. “I don’t think it’s an insecurity thing—I think it’s just topical because NY tech is really thriving. Real businesses are being built and scaling here.”

New York may not be insecure, but there seems to be plenty of demand for self-validation. Two entrepreneurs have organized New York Tech Day, a “science fair for startups” to “celebrate New York’s awesome startup ecosystem” in April. More concretely, it’s going to be a gigantic one-day expo at the block-sized Lexington Ave. Armory, with 200 startup booths, more sponsor and vendor booths, and a few thousand attendees rotating through.

It will followed by an awards show.

A version of this story appeared in the New York Observer the week of February 20, 2012.

CORRECTION: An earlier version of this story said Rachel Sklar moved to New York two years ago; that is incorrect. She has been in the city for 13 years. Betabeat regrets the error.

Follow Adrianne Jeffries on Twitter or via RSS. ajeffries@observer.com

Comments

  1. rachelsklar says:

    Thanks Adrianne! Just a quick note of clarification re: no dog in the fight – obviously I’m a huge fan of New York, and booster thereof – I just meant in context of the us vs. them stuff – I actually really like SF and the West Coast and do what I can to keep Virgin in business. And that Antonio dude’s blog post was ridic.

  2. Way to compile the dialogue/shine light on the circus surrounding New York vs. SF tech hubs! I think the “hippies from California” should push for the peace-not-war approach, personally, and NY’s cheerleaders should root for both teams.  Although, I would like to see “this guy Antonio something” wearing an I Heart NY shirt for an entire month…

  3. Hey Rachel,

    I stand by my post. The day I lose the bet and am wearing the shirt you can call it ‘ridic’. What’s really ridiculous is the passel of cheerleaders in this post egging on the New York tech scene. Happy to talk pharma, and telephony and whatever else (particularly those, in fact). SF and NY ‘neck and neck’ are they? Self-congratulatory, myopic bullshit. 

    Incidentally, just having a website doesn’t make you a tech company. Spare me mentions of Etsy or Rent The Runway. 

    ~A. 

    1. Kareem Granston says:

      Mr. Garcia-Martinez.  Your comments here and on your referenced blogpost wreak of bitterness.  For the record – I never heard anyone ever say that NY would rival the Bay Area for VC in 5 years.  That’s as ridiculous as saying the Bay Area built its start-up ecosystem in 5 years.  I wouldn’t even say 10 years.  Anyone who has understanding of business/economic cycles would say you’d have to measure closer to 20 years down the road.   As far as your blog – since you closed comments I’d love to you have your email to retort every single one of your points.  Many of them – from business environment to quality of life were WAY off – as many of the persons on there pointed out to you.  I will say right here though that to compare an entire region/metro area (Bay Area) to your experience in one tiny part of a city (Lower Manhattan) is not even apples/oranges…. not even close.  The NYC metro area actually is actually spread across  parts of 4 states (NY/NJ/CT/PA).  Whatever happens economically in NYC ultimately spills over into the rest of the area.  For instance – just to use a “tech” example – the IBM research headquarters (Thomas J. Watson Center) in Westchester County (originally started at Columbia Univ on 116th street) is closer to NYC than San Fran is to San Jose.  The old Bell Labs moved from Manhattan across the river to NJ – but likewise is still closer to NYC than San Fran is to San Jose.  Get the point?  Tech start-ups will be no different… just as you should know happens in the Bay Area itself – where companies move from one locale to the next…    Left up to you – a California companies like Intel and  GlobalFoundries (or an international one like Tokyo Electron) would have not in recent times moved some of their research to “sleepy” Albany, NY (the upstate capitol) to be near the CNSE.  They think they knew what they were doing… just as Google did by paying all that money to buy an old building on the westside of Manhattan.  You should also use the same method of analysis for the quality of life you pontificated about.  I was just up in mostly rural Dutchess County (can still get there by commuter train) visiting friends – and they live right next to a horse stable, hay farm, and a wooded area where maple syrup is extracted (no chemicals).  You can even buy raw milk up there from certain farms.  Did I mention they live closer to NYC than San Jose is to Sonoma???

  4. Evan says:

    Very little tech in the NY Tech meetup. The NY Tech meetup is for wannabes that think they are techies because they use Twitter. Real techies avoid it.

    That is one of the main problems with NYC: there are more people talking about tech than actually doing it. Not much hardcore tech being developed in NY, outside of Wall St that is. So me a big open source project and I will guarantee that top committers are in California.

  5. HotRodRobin says:

    You spelled Pom Pons incorrectly in the HEADLINE.