I traveled back to the west coast this weekend for a wedding. Coast to coast flights are always draining but they give me an unbridled opportunity to do a lot of thinking. This trip in particular was special because it was the first time I flew to the west coast as a visitor and the first time I flew out of NYC as home base.
There have been hundreds of articles written about NYC’s attempt to be the next Silicon Valley. Access to talent, historic precedent, and capital have all been quoted as reasons the Valley reigns high. A friend, who happens to be a very smart investor, told me “Foursquare’s exit is key to NYC being deemed a worthy Valley competitor.” This isn’t because Foursquare is the only successful company in NYC. There are many, but Foursquare is the traditional “valley-like” company that was born out of a city known as the capital of finance, fashion and media. Fashion, retail and media-based successes make sense but if a hyper-local, social network can find success in NY, without being acquired by a Valley behemoth ( a la Doubleclick/Google), then the race is on.
It is an incredibly interesting time to be an investor given the ever-present successes of 2012. Apple’s margins continue to grow; huge acquisitions highlight the presence of a bubble on the cusp of a Valley-darling nearing IPO. Big data, healthcare IT and international e-commerce continue to grow as exciting areas to invest. And unbeknownst to Wall Street, finance is no longer the sexiest job in town. Ivy League graduates are gravitating to the startup world. This gravity, though, is the reason I believe NY will emerge as the center of tech - competing very aggressively with the Valley.
The Valley is becoming sexy. Palo Alto is raining money. Hackathons are the go-to Friday event and engineering companies are serving custom blue bottle cappuccinos in-house. Investors are making 1000% returns on a photo-sharing app. This is not reminiscent of scrappy, gut-wrenching hard work.
I’m not saying Valley companies aren’t working hard. They are and they will, but more often than not, I see desperation in the eyes of a NYC entrepreneur and ease in the eyes of an SF entrepreneur. The NYC tech scene is synonymous with struggle. You’ll always be competing with “that Valley company,” you’ll never have enough space (getting chewed out by the NYC real estate market), and access to investors will be limited. You struggle in the morning, you struggle at night. You are not at the center of the information exchange, so you’re continuously playing catch up. And when you are playing catch up, you run as fast as you can.
NYC knows its at the cusp of something great but its not being showered with praise. I always believe the underdog wins and this time, the Empire State is keeping a low profile - waiting to emerge.
I can’t wait to be a part of it.