We! Are! New York Tech! (And so are you!)

On a recent Wednesday evening, all the red plush seats in the large, two-tiered auditorium at NYU’s Skirball Center were filled, as they usually are for the monthly assembly of the New York Tech Meetup, the largest organization of Internet professionals in the city. But the twittering audience members were about to hear some bad news they probably already knew: New York is No. 2.

Scott Heiferman, the sandy-haired founder known to smash iPads on stage for dramatic effect, flipped through slides ranking cities around the world by their tech meetup ecosystems. Chicago was No. 5; Washington, D.C. was No. 4, and London was No. 3. He reached a screen labeled TOP TWO TECH TOWNS, and he stopped. “So the Bay Area and New York,” he said mischievously, as the techies giggled and agitated in their seats. “Let’s get into this right now. Leeeeet’s take a look at this.”

The next slide showed two lines, red and blue, zig-zagging in tandem—but Silicon Valley was consistently a cut above. “Isn’t it crazy that we have been neck and neck with the Bay Area for month after month after month?” Mr. Heiferman asked the audience. “I think that has to change. And I think we need to let a little aggression out. Does anyone have an iPad?”
Nobody did—or rather, nobody offered to hand one over. But it wouldn’t be a stretch to imagine Mr. Heiferman sledgehammering a tablet from the Cupertino-based company to make his point.

The rivalry between the coastal tech hubs is not entirely friendly. “The NYC tech scene is exploding,” investor and entrepreneur Chris Dixon wrote in February 2010, an early instance of the now-common trope of pairing the words “New York City tech” with the word “exploding” (alternatively, “blowing up”; also “killing it,” “crushing it”). “Am I the only person in NYC rolling their eyes at this continual barrage of ‘IN NYC IT RAINS MANNA FROM THE SKY!’?” one commenter wrote. Fans of the East or West Coast volleyed in the comments. New York was accused of being frivolous, blustery, and “startup suicide.” California was called out for being a monoculture.

Over the last few years, the rhetoric in Silicon Alley has started to sound like a Bring It On sequel. The rhetoric is dominated by two themes: boostery New York exceptionalism—in September 2009, the high-profile investor Fred Wilson gave a talk called “NYC’s Startup Scene: What makes it special?”—and the David and Goliath narrative, with Silicon Valley as the reigning champion versus New York as the cool, scrappy young challenger.

Even City Hall is on the squad. “My ultimate goal is reclaiming our title as the world capital of technological innovation,” Mayor Michael Bloomberg said back in July. When a columnist for the San Jose Mercury News called to say he was “planning a column on the budding rivalry between our two regions,” the receptionist answered: “What rivalry? We’re winning!”

Rachel Sterne, whose appointment as the city’s first “chief digital officer” last year immediately started trending on Twitter within New York, is probably New York’s head tech cheerleader, trumpeting startup minutiae to her 29,490 followers.

Given that the three-year-old debate really hasn’t changed much, some feel it’s time to stop the pep rally and get to the game.

“The West Coast can claim it won round one of whatever ridiculous battle this is all about, but it really depends on when you start the ‘fight,’” said Aaron Price, an entrepreneur in residence at DFJ Gotham Ventures and founder of the New Jersey Tech Meetup. “Do they want talk pharmaceutical or telephony? I didn’t think so. It’s all pointless and self-serving. Let’s just all get back to work and build awesome companies that can have offices employing people all throughout the country and the globe.”

In May, the Brooklyn-based tech blogger Courtney Boyd Myers wrote a blog post for The Next Web called “Why New York City’s Tech Scene is Thriving.” It was very well-received. “Should Rachel Sterne stop talking about how New York City is ready to be the social media and technology center of the world? Absolutely not,” she wrote in an email. “That would be like forcing a father to stop telling his daughter she’s brilliant, beautiful and capable of saving the world.”

But, she acknowledged, “We need to stop comparing ourselves to Silicon Valley. We should be celebrating our differences and figuring out innovative ways to collaborate, not fighting for VC money or attention in the press. It is the World Wide Web after all.”

Rachel Sklar, a Canadian lawyer-turned-tech and media consultant and founder of Change the Ratio, got into the tech scene around the time the cheerleading started really ramping up. Since then, she’s become adept at baton twirling for New York tech. She’s done publicity for several New York startups, formally and informally. Last year, when many New Yorkers traveled to the South by Southwest Interactive tradeshow for the first time, Ms. Sklar managed a Twitter account called @NYxSW. (Sample tweet: “Congrats on an awesome SXSW, folks! Tweet at us and tell us how you crushed it, so we can RT and give you your due. #NYCrushingIt.”) Recently, Ms. Sklar roped in dozens of local founders, engineers and investors to lipsync lyrics about New York tech—New York underdogs / We can make it here, make it here—in a music video played at a benefit for HackNY, a nonprofit initiative that pits New York tech against another behemoth, Wall Street. “Every NY Tech Person And Their Dog Made A Cameo In This Music Video,” wrote Business Insider blogger Allyson Shontell, who also appeared in the video.

Most of the cheerleading and nyah-nyahs plays out in blog fights, however.

“I feel like the Valley started it,” said Ms. Sklar, who said she doesn’t “have a dog in this fight” despite her efforts to market New York tech. “I remember reading some long ranty article.”

Was it “Face It: NYC Is Not The Best Place For A Startup,” authored by former New Yorker Matt Mireles in February 2010?

“It wasn’t Matt Mireles,” she said. She’s had other blog fights with Mr. Mireles. “It was this guy, Antonio something. It was obnoxious.”

That blog post was titled, “New York will always be a tech backwater, I don’t care what Chris Dixon or Ron Conway or Paul Graham say.” It was written in August 2010 by Antonio Garcia-Martinez, the founder of a startup that was later acquired by Twitter, and it ended with a challenge: “I promise to wear one of those ridiculous ‘I NY’ shirts you buy for $3 from the Nigerians in Times Square for an entire month if the total amount of New York–based startup funding, as reported in Crunchbase, exceeds that of Bay Area-based startups in any financial quarter during the next five years.”

He concluded, “So…bring it, New York. ‘Cause I say the hippies from California will continue to eat your lox.”

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.

(Danny Chong)

The New Jersey Tech Meetup (formerly the Hoboken Tech Meetup) had been a sleeper success; a smaller venue where new startups could demo before their big Skirball debut at the much larger New York Tech Meetup. But the meetup, run by DFJ Gotham entrepreneur in residence Aaron Price, has been growing steadily and recently hit 1,500 members, adding about 100 members a month for the last six months. It's now the largest tech organization in New Jersey, Mr. Price said.

The NJTM has little in common with that mothership of tech meetups, the 21,000-some member New York Tech Meetup. In Hoboken, the meetup starts with speed dating style networking. Then from 8 p.m. to 9 p.m. (Mr. Price is very precise when it comes to time, and publicly shames those who RSVP but don't show up), three startups demo for around 100 or so people who then vote on their favorites. The meetup rounds out with a featured speaker and question and answer session, after which attendees decamp to a nearby bar for beer and wings.

It's not changed much since Betabeat braved the PATH out to Hoboken almost a year ago; it's just bigger. Although Mr. Price might want to be cautious about growth; intimacy is one of the advantages of the Jersey meetup over NYTM, members said.

Now the meetup is pulling in some attendees, including venture capitalists, who want to meet some new startups outside the Silicon Alley-General Assembly-NYTM bubble, Mr. Price said in a phone call yesterday.

The last meetup featured two fairly well-known startups: Mark Davis's Kohort and the Y Combinator graduate Tutorspree, as well as something called DinnerDateDeal. Joy Marcus, a venture partner at DFJ Gotham, was the speaker. "Amazing time at last night's @njtechme! 150+, standing room only," Mr. Price tweeted after the event.

The next goal is to get Senator Robert Menendez, who was made aware of the group after NJTM organized its own emergency SOPA/PIPA rally, to speak at the event.

MissionFifty

Aaron Price, organizer of the 1,000-plus member Hoboken Tech Meetup and entrepreneur-at-large for DFJ Gotham, has been working on a Jersey coworking space for months. MissionFifty, at 50 Harrison St. in Hoboken, is finally open.

Last week was open house for entrepreneurs who wanted to check it out. They found amenities in the 3,000 sq. ft. space include sitting and standing desks, lockers, and a bathroom with a shower. Pricing is not yet set, but leases are month-to-month.

UNYStartups posted a video tour of the new space:

In the start-up community, failure is a badge of honor. The Purple Heart highlights glorious stories of failure, lessons learned, and redemption.

"Probably my most interesting failure was my first start-up," Aaron Price, the fastidious director of the Hoboken Tech Meetup, told Betabeat over the phone. We were expecting him to tell us the story of how he used to sell Harley Davidson motorcycle parts on eBay, relying on a warehouse of high school students who cataloged each overstock part--a tale he had partially related over Blue Moons after the Meetup Monday night. But Mr. Price has founded several start-ups--his blog is called "Failway to Success"--and the story he wanted to tell was of DeliverU.com, born in 1999, when he was a 20-year old junior at the University of Maryland.

DeliverU.com started like all food delivery start-ups. "In college, my roommate and I wanted to order food online and couldn’t." They bought DeliverU.com and started hosting a fax server so they could transmit orders to local restaurants. It was a smash hit on campus.

"We had a lot of success on a completely viral marketing effort," he said. "But we were just very naive to the kinds of capital that it took to grow a business like that. We really didn’t think through what the business model would look like."

Mr. Price and his partner were  approached by angel investors, but they had been advised by "a bitter old entrepreneur" to never take outside investment. That was their first mistake.

"We could really have used the guidance as well as the capital," Mr. Price said. The business was popular and the salesmen had honed their pitch--DeliverU expanded to Washington, D.C., partnered with Takeout Taxi and got dangerously close to closing national deals with Chipotle and Cosi. So what went wrong?

For one, the business was profitable, but margins were thin. "We made five percent of every order that went through. On a college campus, the average order is $12. That gives us a whopping $.60 cents for every order that goes through," he said. "To make any money, you need a huge amount of volume. Customer acquisition costs could quickly eat away at those margins."

And customer acquisition was mostly on DeliverU. The merchants had the wrong incentives, Mr. Price explained, because the cost of a DeliverU order was slightly higher than one they could take over the phone. That put the burden of marketing the service mostly on Mr. Price and his partner. "We were a B2B service. But then the restaurants were asking us to be a B2C marketing company and bring them this business. That was a major flaw in our model; there was not enough money to also market those restaurants," he said.

The technology was also a challenge. Fax servers would go down and DeliverU had to maintain a backup system that was inefficient and tough to scale. When the Cosi and Chipotle deals fell through around the same time, the entrepreneurs got discouraged and decided it was time to move on. One of the partners took over the business and eventually shut it down.

"It was a failure in that I didn’t retire on DeliverU, but it was a success in that it's definitely changed the way I approach any business ever since," he said.

So what's at DeliverU.com now? we asked.

"That’s a good question. Let’s find out," he said. "It’s been a while." Silence on the other end of the line, as Mr. Price navigates to his old domain. It's a list of Google Ads; we assumed a squatter. "I think that I actually own the domain," Mr. Price said. "But I just haven’t done anything with it in so long. I guess I could change it... I guess it doesn't really matter, though."

Source: http://coolhunting.com

The Hoboken Tech Meetup features printed name tags, sandwiches and soft drinks, public humiliation for anyone who RSVPs but doesn't show, and a more-or-less prompt start time of 6:30 (there's only so much discipline that can be imposed on people, and we have to get to Hoboken). On Monday, the featured speaker was Craig Kanarick.

Mr. Kanarick was once one of the Silicon Alley dot-com kings; he co-founded Razorfish, one of the first large agencies to make websites for major brands. Razorfish grew from two employees to more than 2,000 and its share price doubled on the day it IPO'ed. Two years later, the company's value had dropped from $4 billion to $8 million and Mr. Kanarick started working as a prep cook.

"When the business was failing, and all we were talking about was who we were going to fire tomorrow, I would look across the street and see the chefs in their toques taking a cigarette break," he said. "I thought, I should be over there learning how to make soup instead of decided who I was going to make cry today." He interned at the Institute Babbo across from his former office for nine months.

It would have been interesting to go to the 1999 equivalent of the Hoboken Tech Meetup. The members are dedicated--no wantrepreneurs here--and leader Aaron Price, a spectacled and fastidious self-starter punctuated by a pair of plaid TOMS, curates a careful lineup of speakers and demos to talk in the lecture room at Stevens Institute of Technology. This was the tenth such Meetup. The internet is slow and the start-ups represented by the audience are a little 2008. Most businesses Betabeat encountered were web-based, not mobile, and there was no location-based anything!

But that may not be a bad thing, because it means the Jersey entrepreneurs are well outside the Union Square groupthink. All the presenting companies chosen by Mr. Price had precise business models, none of which relied on advertising. The New York City start-ups Honestly Now relies on referrals to small business professionals. City-based Dealery is a daily deal curator that also does its own daily deals and Jersey-based Takeoff, a collaborative video editing service, will be a paid service.

The outpost gathering is also more intimate than its city counterpart. "New York Tech Meetup is just too huge," one attendee said.

Mr. Kanarick's Powerpoint was not actually about his own dot-com hell. He talked about the history of marketing and the state of tech today (it's Global, Social, Mobile, Digital, Live, Immersive and Integrated) with some inspirational aphorisms for entrepreneurs thrown in. "Who picked out their outfit this morning?" he asked the audience of 70 or so. We all raised our hands. "You're all designers. You all designed an interface." He indicated his dark grey blazer and jeans. He recommended we read Delivering Happiness by Zappo's CEO Tony Hsieh.

Afterward, the Jersey entrepreneurs repaired to a nearby pub where we discussed Foursquare and whether it would be possible or enjoyable to live without a cell phone for a year. Mr. Price told Betabeat about an encounter with New York City entrepreneurs. "I capitalize on the fact that you guys ignore New Jersey," he said.