I've
been involved in many conversations over the past few days about
whether or not New York City is sustainable for digital
media/technology driven startups or is the San Francisco area the only
fertile ground. My stance is/has been that New York has a thriving
entrepreneurial scene and certainly is more than adequate for these
types of startups.
In the nextNY group which I helped get of the ground and actively participate in, we have been discussing this topic for quite some time through our Google Group and at our monthly meetings. Randal Stross, a writer for the New York Times recently wrote an article about how technology driven startups should exist on Sand Hill Road (or thereabouts) in order to succeed.
New York City is home to the media capital of the world and Madison Avenue. We seem to quickly forget that many startups in the digital media world are driven by advertising dollars. Why wouldn't you park your startup next to where the dollars are flowing in from? I'm not saying that 100% of ad-dollars are spent in/around New York but there is certainly a heavy influence of advertising spendings from Madison Avenue. In the Valley, you're about 3,000 miles away from Madison Avenue – away from your revenue source.
The world is becoming increasingly flat thus distance is a word of the past. Skype, AOL IM, etc have all made communication effective and efficient. By utilizing these resources, a company can operate from anywhere in the world and be in constant communication with it's team. An organization today can be spread across many offices based on geographic regions or technical expertise but can be connected through and intranet and VOIP.
While venture capitalists typically follow entrepreneurial spirits to all ends of the globe there is no doubt that quite a few exist on Sand Hill Road. Some of the top global VC's have offices here and do earth shattering deals that produce the next hottest startup. However, Sand Hill Road is not the only place where VC's exist. New York is home to some extremely large and small firms a like including Union Square Ventures, Easton Capital, SJFVentures (their New York Office), and many others. These VC's recognize that New York is certainly fertile for startups and are here to work with the entrepreneurs that have a strong business plan and management team.
While Sand Hill Road has historically attracted entrepreneurs and investors, New York is certainly not to be written off. A fantastic choice for entrepreneurs in the media and advertising industries to anchor themselves, NY offers many opportunities that many places in the world cannot.
I will admit that NY may not have the same entrepreneurial atmosphere and culture that Sand Hill Road posses but each city is it's own and we here in NY should not try and be someone else. We have a thriving “Silicon Alley” and nextNY group that is dedicated to spreading the vibe and culture and NY will certainly put itself on the map for entrepreneurship in the not too distant future.
NYC bloggers and digital media evangelists should get together and keep promoting the start-ups here. There is no reason why NY can't be a fertile ground... after all, NYC is the “Big Apple” and Apple's grow on trees that have been planted in fertile soil.
One of the elements that Silicon Valley has which is extremely difficult for any other region to replicate is a high degree of professional mobility. In other words, start-up entrepreneurs have the ability to jump in and out of large companies. For example, it is not uncommon for a chip developer to come out of National Semi, join a start-up, and then go back if it doesn't succeed. (The same could be true on the internet/digital side as well, although I'd suspect to a lesser degree.) In fact, there is probably the notion that product management experience and start-up experience are seen as highly complementary. I think this is one of the things that has propelled and sustained Silicon Valley since the 1980's. Of course, I would like to see a vibrant venture and start-up community in NYC. I'm trying on my end!
Posted by: Howard Yeh | October 25, 2006 at 12:13 PM