Two articles about NYC tech showed up recently—the first by Matt Turck, a VC—“The NYC Tech Ecosystem: Catching Up to the Hype”
[O]n the one hand, NYC has become the clear Number 2 to the Bay Area; on the other hand, it’s hard not to notice that things have gone a bit quiet — at a minimum, we seem to be past the stage of unbridled enthusiasm….The bear case is that, for all the progress, NYC still suffers from many of the same issues that have plagued it for years: a relative dearth of $1BN+ exits, a lack of local anchor companies that can serve as acquirers, and a comparatively lower concentration of talent, particularly when it comes to not just starting, but actually scaling, startups.
And then Postlight Pal Anil Dash (I mean, Matt Turck is also a Postlight Pal, it’s a small city) wrote a post replying to Turck’s article here on the Medium.com website. Dash’s argument is that “New York City is unique in that its tech community is grounded in principles of social and civic responsibility.” He also points out that NYC tech is differentiated from the SV, VC-driven world because (1) there’s a broad community across industries that makes up “tech”; (2) there’s engagement with policymakers; (3) there’s a focus on community service; (4) more corporations consider their own social impact; and (5) it’s a more inclusive culture.
Both Turck’s and Dash’s posts read as accurate, although they see the industry from different points of view. I don’t have any powerful conclusions or counter-arguments, but since starting Postlight we’ve spoken with perhaps 50 different companies in depth about their technology strategies and plans. Here are a few things I’ve personally noted about doing tech/product work in NYC, at a growth company focused on product design, submitted to the reader in the hope that it’ll be useful:
- First: Frankly, this is an exhausting place to do business. Sorry to lead with it but hoooo doggies. Taxes, real estate, basic services, elevator problems, old infrastructure, inspections, slow Internet, more elevator problems (we’re at 902 Broadway and god bless anyone who needs to take the elevator), slow trains, elevators that just don’t work, traffic, and long lines for the freaking elevator—all add friction. You need good operations people and a good lawyer, before breakfast. A seed round? That’s a deposit on a lease. So I’m not surprised to see WeWork expanding at a furious pace here. Right now WeWork is subsidizing the entire startup economy in NYC. I hope that is sustainable.
- Corollary to this—the density. Obvious but true: I’ve gone to many meetings over the last few months just by walking one or two blocks. Big media companies are across the street from banks and tiny companies are peppered everywhere. It’s fun. You see people on the train. Everyone speaks different industry-specific-languages so you have to listen more.
- Corollary to that—it’s a good central office for remote teams. About 1/3 of our team is remote and we’re very committed to supporting them. Sometimes we get jealous and a little tired when we see people calling in over video-chat with their large spare rooms. Regardless, NYC is an easy flight from everywhere and a cool place to visit. So that works.
- There are huge platform companies here but no one really thinks about them that way. Bloomberg is a great example—they build the Bloomberg Terminal, which is a powerful financial information platform, and from that platform pours immense riches. Major League Baseball’s video platform is a huge first-class…well, platform. (I’m sorry to keep saying “platform.”) Disney is probably investing in it. These things exist in relationship to other, larger, more important entities. MLB exists in relationship to…baseball. Bloomberg exists in relationship to…former Mayor Bloomberg. It’s not like NetFlix where it’s its own damn thing. HBO—big deal company, right? But it’s part of Time Warner. Which wanted to merge with Comcast. It’s a city filled with mean old saber-toothed unicorns. No one would call HBO a “platform-driven company.” It’s just HBO.
- Civic engagement is actually easy. From the moment we started up Postlight we started hearing from people who were doing things for kids in technology. The philanthropic framework in NYC is professional. Events are well-run with clear goals. Institutions and museums are good at asking for help and advice. If you say “we can help,” people show up to help you help.
- Talented people sometimes head east. We get a certain number of calls from SV people who need to get the hell out of Dodge. They don’t want to talk about Bitcoin; they just want to eat lunch in peace. For whatever reason, they see NYC as a good alternative.
- NYC is a gloooooooobal city and it shows. We’ve had prospective clients reach out from Europe, the Middle East, and Asia. We’ve had prospective employees reach out from Europe, Eastern Europe, and India. This was a real surprise. The old concepts around outsourcing or setting up global firms still apply, but there’s a new thing happening that’s all weirdly super-mega-post-trans-national, like Mumbai and Beijing met at Davos, got drunk, and had a baby, and that baby is now landing at JFK and wants to get coffee and talk about William Gibson novels. It’s hard to tap into some of this, especially around recruiting, because business is not inherently global until you get to a large scale. Also Google Hangouts doesn’t work and I’m tired of pretending that it does. Which is another reason it’s hard to think globally.
- Tech is not the star. A technology company in NYC will not have the social capital of a major media company, a global bank, a major museum, a real estate firm, a major philanthropic organization, or an Ivy-league university. NYC has a rigid, incredibly well-defined social hierarchy and as technologists we’re securely in the burgher/merchant class. Frankly, unless you’re motivated by a very specific and utterly insane kind of social success, there’s no real downside. People still need you to help them! And the lack of social capital keeps rapacious sociopaths out of tech—and in media, finance, and real estate, where they belong. So what, you’ll never be a prince or princess of the city, but you’ll rarely be emotionally tortured and publicly humiliated by some vampiric Ivy-league scion. No one even thinks to mock you in the press; they’re too busy mocking SV people. Plus you get to meet lots of nice people in many industries.
- New infrastructure is coming online. There’s a whole big university technology campus on Roosevelt Island and comp sci enrollments are up all over the city. There are a huge number of think tanks and research centers here—think Rockefeller University—and a reliable corridor between Boston South Station, New Haven-Union Station, and New York Penn Station. It really is dumb how many smart people live and work here. Right now NYC is more likely to eat the unicorns than raise them. But give it a decade or two. Postlight is in it for the long haul, so it’ll be fun to watch what happens next.