3 Ways to Gauge the Health of the NYC Startup Market
If you’ve read any startup news recently, you’ve likely gotten the sense that the sky is falling. From headlines about unicorn valuations being slashed left and right to questions about the potential fraudulence of companies like Zenefits, the confidence of many is shaken as the startup market appears in flux.
On the other hand, Lizette Chapman at Bloomberg Business suggests that venture capitalists are merely “sitting on their hands” for a bit, while waiting to see what will happen next. She takes a much more relaxed view, forsaking a “the sky is falling” approach for a more relaxed perspective.
As co-founder and President of Work Market, I have a vested interesting in understanding the current health of the marketplace. After speaking to friends working in Silicon Valley both as investors and entrepreneurs, it’s clear that many are rattled by the Armageddon-esque changes taking place. There is a world seemingly more shaped by booms and busts. But what do all of these changes mean for the startup market in NYC (a place with a finance boom/bust or twn to its name)?
A quick poll of the New York venture capitalists and entrepreneurs in my circles indicate that it’s business as usual here in the Big Apple. Our market has always been rooted in the fundamentals, which has led to sustained, scalable growth that’s not going anywhere.
Understand the Market
While some unicorns may lose their horns due to fluctuations in the economy, NYC startups will remain largely stable. The NYC startup market is driven by more fundamental data than most in Silicon Valley, and as a result, we’re likely to avoid the panic mode our west-coast counterparts are currently facing.
Business models without any real revenue behind them tend not to get taken seriously here, so there’s less of a risk of bloated valuations and inevitable down rounds. The New York market is fueled more by hard numbers, and less by hopes and dreams.
Look for Indicators of Growth
Everywhere you look in New York, the startup market continues to gain influence and prestige. Just this past December, JP Morgan & Chase made the push to rebrand in the image of successful startups in an ongoing effort by big banks to appeal to tech companies as startup incubators.
Companies like Etsy and Kickstarter are expanding their offices and making the move to Dumbo Heights thanks to tax relief plans from the city intended to foster a new tech hub rivaling the renowned campuses of Silicon Valley. The new public-private partnership Digital.NYC recently launched their “Startup to Watch” initiative, profiling promising NY-based tech companies on a monthly basis.
Embrace the Innovation Evolution
In my Forbes piece on Startup Phases and the Turning of the Team, I talked about how new tech companies must learn to evolve and adapt in order to be successful as they scale. This reality isn’t new to the startup market, and it’s easy to conflate the natural drop off that occurs as businesses explores their long-term viability as an indicator of a struggling economy or a bad market.
While this feet-on-the-ground approach might not result in a stirring origin story for the next Snapchat, Instagram, or Uber, there’s still plenty of room for new ideas in the New York City market. As the landscape for innovation continues to shift in the coming months, we can remain confident that our strong foundation will provide stability and assurance during uncertain times.
Hare, meet Tortoise…oh, and Chicken Little is probably at the party too.