Blog Post

New York can’t & shouldn’t try to rival Silicon Valley

New York’s mayor, Michael Bloomberg, envisions his city wresting the title of “technology capital” of the U.S. from Silicon Valley and has embarked on an ambitious plan to build or expand a science and engineering campus in New York. But in hearing the talk, it sounds like Bloomberg believes he can build his way to Silicon Valley success, which I don’t think is possible. And as others are pointing out, it shouldn’t be the goal, either.

A discussion in the New York Times‘ Room for Debate roundtable explores the question of whether New York can rival Silicon Valley, and most of the participants come away saying no. But what many point to is the fact that New York doesn’t have to rival or emulate Silicon Valley; it can be its own success story, with its own unique culture. And that is what the region should be looking at first, rather than trying to gain some bragging-rights parity with the San Francisco Bay Area.

You can’t teach entrepreneurship

Caterina Fake, the co-founder of Flickr (s yhoo) and Hunch, points out that you can’t expect a campus to build a spirit of entrepreneurship, which she says can’t be taught. It needs to be nurtured through apprenticeship, which can happen faster if the city attracts more startups and engineers. Craig Mod, a writer and designer at the Shape of Digital Content Laboratory at Flipboard and also a mentor at incubator 500 Startups, said New York can’t become Silicon Valley but can create its own tech culture that builds off the local vibes of the city:

Rather than find a way to transplant Mountain View into Manhattan, New York should provide greater support for risk-taking. Nobody wants to see New York clone Facebook. Instead, we are anxious to see the sort of Facebook that can only emerge from the unique fabric of New York. Great start-ups emerge from great start-up culture. Silicon Valley has it in full. As for New York, it feels like something special is brewing. We’ll have to see.

New York Flavor

Foursquare co-founder Dennis Crowley

New York is already excelling in many ways, said David Tisch, the director of accelerator program TechStars. He said that New York’s wealth of brands, ad agencies, publishers, content providers and media assets, along with its population density, is helping give birth to very New York–flavored startups like Foursquare, Etsy, Kickstarter, Meetup and GroupMe.

I have to agree. Having made the trek from San Francisco to New York in the past year, I see a really thriving tech culture here in New York that is extremely active and has some of the best traits of Silicon Valley. But what impresses me the most is that many of the best startups seem to resemble the city they came from and take advantage of New York’s strengths in finance, data, retail, media and advertising. These are things that Silicon Valley doesn’t have as abundantly. But it makes up for it by its scale, support and a culture of risk-taking, which ends up attracting bright minds from the East Coast.

Build a startup culture

What New York needs to do more of is build out the infrastructure for a startup culture. It needs to support the schools it has now and reach out to those institutions and their students to show that building a company in New York is as viable as doing it on the West Coast. Facebook, for example, was created at Harvard but eventually evolved in Silicon Valley. The challenge for cities like New York and Boston is to show that that doesn’t have to happen. It’s about creating critical mass in New York and working with what’s already available, said Chris Dixon, Hunch CEO in a recent blog.

We need PayPals – companies that spin out boatloads of talented entrepreneurs and “smart money” angel investors. Big successes also reinforce the “culture of equity” that is so strong in California – the idea that owning options in a startup is the best path to financial and career success.

If that happens, New York has a great chance to continue to thrive. Will it be a place for big hardware or biotech development or a true rival to Silicon Valley? Probably not. Silicon Valley has a major head start, and it’s not slowing down. But New York can build upon its heritage and culture to be its own tech destination. And it’s got a lot of room to grow. There’s a good amount of local talent and plenty of cash available; and with the lean nature of web and mobile startups, it doesn’t take much to get a startup going.

Use money wisely

But the city needs to use its money wisely. Vivek Wadhwa, a visiting scholar at UC Berkeley’s School of Information, recently wrote that only 21 percent of the graduates of New York’s state universities launch their companies in that state, while 69 percent of California graduates start their companies in California. He gave New York the best shot at competing with Silicon Valley, but he said the money for the campus could be better spent on building out New York’s startup infrastructure.

cluster efforts, such as the one Bloomberg is attempting to create in New York, never produce the intended result: greater innovation . . . Instead of using the $100 million to build a new university, use the money to seed start-ups, or educate the underprivileged to become entrepreneurs.

In many ways, New York was built on ambition and dreams, and there’s no reason it can’t replicate that success in technology. It is already seeing more VC deals than anywhere else outside Silicon Valley. But again, the goal shouldn’t be recreating an East Coast version of the Valley. It should be in nurturing the spirit of entrepreneurship and fully supporting the startup culture that is already blossoming. That will create something that may not rival or eclipse Silicon Valley. But it will be a place unto itself that doesn’t have to take a backseat to the Valley.

8 Responses to “New York can’t & shouldn’t try to rival Silicon Valley”

  1. John Winger

    Silicon Valley boring as hell and mostly male (nerds actually). NYC is a far cooler place to live and work. Why would anyone want to be in the Valley instead of the Alley!?

  2. I believe there’s some confusion here, and a simple explanation. Bloomberg’s PR effort to compare NYC to the Silicon Valley is a metaphor for the area’s economic development objectives — it’s not intended to be taken literally.

    Ditto for the UK government’s “East London Tech City” initiative. The problem with using a these well-intentioned analogies is it sometimes creates misunderstandings.

    Case in point: the original “Silicon Roundabout” district of East London wasn’t given that name because they have a cluster of semiconductor companies.

    In time, I’d expect each digital/tech cluster will establish their own distinctive identity and associated value proposition.

  3. Bennett

    NYC doesn’t want to become SV, NYC wants to trump SV. It already has it’s unique culture and success stories. It will be a silent march, and one day we will wake up and say, Wow, all of these acquisitions and IPO’s are from NYC companies and VC’s… that’s what will happen, IMO.

  4. “So, rather than obsess over clusters, we need to start obsessing over people. We need to remove the obstacles to entre­pre­neur­ship — such as knowledge of how to start companies, fear of failure, lack of mentors and networks, government regulations and financing. And we need to repair our university research commercialization system so that research breakthroughs translate into invention. That’s the correct formula for nurturing regional growth.”[1]

    1. [Vivek Wadhwa] Industry clusters: The modern-day snake oil

  5. Marianne Bellotti

    “educate the underprivileged to become entrepreneurs”

    Statement like this are everything that’s wrong with the way organizations try to build “startup infrastructure” It assumes that diversity is absent from the startup world because entrepreneurship takes special elite skills that minorities, the underprivileged and women are not familiar with.

    The skills of a good entrepreneur are SURVIVAL skills. Everyone has them. Everyone has the ability to use them. Underprivileged people do not need “education” on becoming entrepreneurs they need ACCESS. Which means they need ways of breaking into the scene and meeting people that do not involve paying $100 – $1000+ up front for a conference/workshop/panel discussion or working for free as an “intern” for six months.

    Those opportunities are out there but they need to be encouraged, promoted, and there need to be more of them.

  6. Jordan Lampe

    Great summation and overall piece, Ryan. I haven’t spent much time in the Alley or the Valley compared to some, but you can definitely tell a difference in culture (energy, attitudes, tenacity). That’s not a bad thing. Matter of fact, it’s a great thing. It provides diversity in thought and product.

    Wherever you come from, Alley, Valley, or Prairie, I think you should cultivate the culture around you and nurture it to prominence. Sure, building programs to support the atmosphere is crucial, but do in a way that makes sense locally. Transplanting and then enforcing a foreign model/system into a region is always a disastrous idea (Note: See the Middle East).