
NYC tech catching up to Silicon Valley, while Seattle flails - badboyboyce
https://medium.com/@sandimac/nyc-tech-catching-up-to-silicon-valley-while-seattle-flails-here-s-why-97ba7147b5f6#.e84c892cd
======
mattzito
As someone who has spent their whole career in and around startups in NYC, I
think it boils down to a handful of things:

\- The dot-com bubble in the early 2000s left a bad hangover, but also built
up a set of young people with tech experience and lots of ideas who enjoyed
working for non-traditional companies

\- Those people often went to go start their own companies (disclaimer: I am
one of those people). In the early 2000s, though, it was tough to find top
tier VCs who were willing to invest in NYC. I remember in 2004 meeting a VC
who said they would love to invest at a great valuation if we committed to
moving the company to boston or the bay area

\- Consequently, the selection criteria for NYC companies who got VC funding
were often those with strong revenue streams, which led towards less sexy,
less "moonshot" companies to those that sold products for actual money.

\- The other driving criteria was those where geography was an advantage,
which also led to financial services/enterprises or advertising

\- As those businesses grew, expanded, raised more capital, it drove more VC
money to NYC, which created more air in the room for more startups.

It's really a very straightforward evolution. As far as why Seattle "flails",
I think it's even simpler - Seattle has a population of 650k people. A handful
of large companies, Microsoft, Amazon, etc. can take a huge percentage of the
engineering talent, and there's neither the educational base of graduates that
the bay area or boston offers nor NYC's base of large corporations to sell to.

~~~
hijinks
I've spent 6 years now in the Bay area and before that 5 years in NYC all with
startups. When I left NYC the biggest difference between the areas (other then
easy Bay area money) was that most startups in NYC seemed to be started by
business people while out west they are mostly started by tech people.

My time at 3 startups while in NYC were mostly the same. The founders and exec
team looking at the engineers like a dime a dozen work force that they could
easily replace. When I moved out west it was a shock that engineers were held
with high regard.

Things may have changed but that's the main reason I felt was holding NYC
back.

~~~
cloudjacker
Just made the jump myself, my experience with NYC was similar.

Also, NYC has like 3 big VCs: Union Square Ventures, Union Square Ventures and
Union Square Ventures.

So you really just have to stop pretending and get in front of Silicon Valley
VC firms that all have a variety of different interests and objectives. They
also don't want to talk to anybody not in SV.

~~~
mattzito
I don't think your perspective is valid anymore - in the mid-2000s USV was the
only game in town, but today there's probably 5-10 good size NYC-based VCs
focusing on tech, tons of little firms (<$100m funds), and many other SV firms
with a NYC presence, and then the whole second order of NYC investors in PE or
funded from a vertical perspective (like real estate investments, etc.).

~~~
cloudjacker
Just look at the funding numbers between different areas. NYC still pales from
an infrastructure perspective and general mentality of paying it forward,
compared to SV.

~~~
mattzito
Oh sure, I'm not trying to compare NYC vs. SV directly, SV is clearly an order
of magnitude larger. I was just comparing fundraising in NYC today vs. 10
years ago, and it's lightyears different. I can tell you from working with
VCs, the whole attitude towards nyc startups is very different.

As far as the general mentality of paying it forward goes, I've got a healthy
sense of cynicism towards that (maybe it's the new yorker in me). I find
successful individuals are equally supportive here as in the bay area, but in
NYC there's a lot less of the ridiculous hustler optimism that technology can
cure all ills, and fewer ridiculous startups get funded out here.

But sure, yes, SV is much bigger than NYC, that's not in doubt.

------
dmode
There is a lot of hype around emerging NYC tech scene. And this hype has been
growing over the last 6-7 years. However, IMO, this is still a largely empty
hype, due to 3 reasons 1\. NYC hasn't produced a blockbuster startup, nor is
there one in the pipeline. I am talking about tech startups >$50bn in value.
The next giants are either in Valley (Uber, Lyft, Airbnb) or in China (Didi,
Meuitan, etc) or in India (Ola, Flipkart). There is 1 in LA (Snapchat)

2\. NYC tech portfolio is lacking startups in emerging technologies - self
driving cars, VR/AR, 3D printing, drones, robotics, space, batteries and
charging, energy

3\. Lots of high profile failures, but few high profile exits

~~~
cli
$50 billion? Why that number? That seems extraordinarily high. Target has a
market value of about $53 billion, and Deutsche Bank $49.7 billion.

~~~
dmode
Potential to be a >$50bn tech company seems to be a pretty generous one to be
considered blockbuster. Especially considering the frothy valuation scene.
There is no point in comparing with low margin business like Target. Let's
look at the biggest tech companies today - Apple (~$600bn), Google (~$500bn),
MSFT (~$450bn), Facebook & Amazon (~$250bn), Oracle (~$250bn) so on and so
forth. If we are concluding that NYC is catching up to Silicon Valley, then at
least one startup needs to demonstrate potential to be worth 10% of Google.
That doesn't seem extraordinarily high metric to me.

------
cavisne
It's weird the article conflates "tech" with startups.

Within the next few years Facebook, Google will have huge headquarters
(currently under construction or planning) right next to Amazon's collection
of buildings in Seattle, and Microsoft near by.

I think the issue startups have in Seattle is they expect to pay less than in
SV, because cost of living is cheaper. However with some negotiation the Big 4
will pay you the same as in SV, while paying a quarter of SV rent for a nice
apartment with a walking commute.

I guess that lingering smell of urine keeps people coming back to SF?

~~~
fffernan
Yeah what is a tech company? I here people in Bay Area saying they work in
tech all time time. Uber is a transportation company not a technology company.
If Uber is a tech company then American Airlines is a tech company too. Both
have an app which will let you get on some form of transportation and get one
place to another. Boston Dynamics is a technology company for example. They
build robots for the sake of building robots and hoping to sell the
technology.

~~~
mrdrozdov
Uber is definitely a tech company. They have internal software infrastructure
that would rival any other, and attract similar talent as other tech
companies. American Airlines is probably as much a tech company as Walmart
is...

~~~
yolesaber
I'm no fan of Walmart but they do have a research wing and open source
contributions as well.

~~~
mrdrozdov
Yeah. You're absolutely right. I suppose working in "tech" is probably a more
powerful distinction than working at a "tech company". For instance, if you
work on the data science side of a political campaign, it's probably fair to
say that you work in "tech".

------
pnathan
Seattle doesn't have the raw cash NYC does. I think that that's the core
difference. Seattle punches above its weight and is a good place, but it
doesn't have the wealth and easy access to wealth that NYC has.

Also, culturally, I don't think Seattle has a high risk appetite, and there's
a pronounced anti-commerce attitude among many of the long-term locals.

~~~
larrykubin
I live in Seattle, but have worked remotely on a startup based in SF. There is
definitely a cultural difference. Many of the SF folks I know seem to be
ashamed to work for a big company and not "doing their own thing". These
people work for very well respected companies with great products, but always
seem to be planning their escape to something new. If you are doing some crazy
ridiculous experimental thing in SF, it is "cool".

In Seattle, I have talked to many employees of Amazon and Microsoft and they
seem more proud of working at a top big-name company. They are working on
products that are already used by millions of people around the world. When I
mention that I work on no-name startup, I sometimes get the feeling that they
feel bad for me. It's like "Oh that's cute, if you are looking for real job, I
can probably get you in at Amazon".

~~~
hkmurakami
> many of the SF folks I know seem to be ashamed to work for a big company and
> not "doing their own thing".

I really wish that this weren't so prevalent. Sacrificing your ambitions to
provide stability and safety for your family is a noble thing, and I wish the
public rhetoric appreciated this more.

~~~
rdl
It's not necessarily good for society on the extreme either way.

It's beneficial to the world to encourage people to take some level of risk.
It's bad to encourage people to take stupid risks, but it's also a bad outcome
if the next Elon Musk decides to spend his life working as a line engineer
somewhere forever for safety. This is one of the biggest problems with
inequality/etc. -- a person from a poor background gets a $20/hr job and would
be unable to do anything which puts that at risk, even if it has a huge
positive expected value. A rich person could comfortably optimize for EV.

(Incidentally decoupling survival from wages is one of the big benefits of
basic income; it's possible this would lead to a more beneficial deployment of
human capital and thus greater wealth overall.)

------
rrdharan
I'm amused that the tech company map from the article doesn't have an entry
for the Google NYC office, considering that there are at least 2000 engineers
working there (dwarfing everyone else on the map AFAIK):

[https://cdn-images-1.medium.com/max/1200/1*Uva0USM-qa8W_TByj...](https://cdn-
images-1.medium.com/max/1200/1*Uva0USM-qa8W_TByjLyljA.png)

For a second I thought it was only showing pre-IPO companies, but then I saw
that Twitter and Facebook are on there.

It's even more entertaining because Spotify is shown at their old address,
which is actually the Google NYC building.

Dropbox is also missing but I'm guessing that's because its NYC office was too
new for this map (Kickstarter has also recently moved to Greenpoint).

~~~
buckhx
Palantir is building a 9 story office across the street from Google too. I was
surprised to not see either of them. Uber has one too, but it's only a couple
of teams there.

------
hedgehog
I have lived and worked in both Seattle and SV, am currently a founder living
in Seattle, and am at this moment writing this from Coupa Cafe in Palo Alto.
The business culture in the valley is more aggressive and the community
knowledge about the informal processes at successful startups is stronger. In
Seattle the community is more insular and there's a noticeable "us vs SV"
complex. Having said that Seattle is a good place to build a company, just
know that as a founder you are likely to spend a bunch of time in the Bay
area.

------
Apocryphon
Looking at that list, I'll have to ask again: why isn't Raleigh-Durham-Chapel
Hill on it? I haven't been there myself, but it confirms my suspicions that
while that place might be a tech hotbed, it's more of the research park
bigcorp and research institution type, than of the startup variety. There's
nothing wrong with that, but it's just interesting because on HN we usually
associate "tech" as the former and not the latter. So other places like RTP or
DFW might get overlooked.

~~~
wcummings
>why isn't Raleigh-Durham-Chapel Hill on it?

No one wants to live there. It's not in the same league as NYC, LA, Boston,
Seattle etc.

~~~
Apocryphon
It always sounded more like vying for the same league as Portland and Austin,
actually.

~~~
lbhnact
Carrboro: mini-Portland Chapel Hill: mini-Berkeley Durham: mini-Oakland
Raleigh: mini-Atlanta

~~~
eitally
This is a pretty good comparison, imho (lived in Cary since 2003, first for an
RTP-based company, then one based on San Jose, and relocating this year to
CA). I'm trading my beautiful suburban 4300sqft home on a nice lot in a
neighborhood with 2mi of private greenways and very little traffic that I only
paid $499k for ... for a 1700sqft ranch built in 1950 costing $1.4m and loads
of traffic everywhere you look. The upside is the new job and the tech
community, but I'm not 100% convinced I'm trading up re: quality of [family]
life.

~~~
Apocryphon
What city is Cary comparable to?

------
rjdevereux
>16-year old firm is headquartered just outside of NYC in Cambridge

hmmmm... Cambridge Massachusetts?

~~~
krisdol
Apparently there's a Cambridge, NY with a population of 2000 people

~~~
greenyoda
... which is about as far away from NYC (185 miles and a 3.7 hour drive from
Manhattan, according to Google Maps) as Cambridge, MA is. It's near the NY/VT
border, north of MA.

I'd guess that "just outside of NYC" is a typo for "just outside of Boston"
rather than an ignorance of geography.

~~~
bitwize
In California miles, Cambridge, MA _is_ just outside of NYC.

~~~
GunboatDiplomat
In California miles, I live in Manhattan.

------
mrdrozdov
I'm currently a grad student at NYU, and previously Cornell Tech, plus I
worked in San Francisco at a startup for a couple years as an SE. Let me say,
I had my doubts about NYC in comparison to SV, but something is changing.
There is a lot more interest in programming in the city than there ever was.
Lots of initiatives by schools to introduce programming at the high school
level, and lots of people in finance, fashion, marketing, etc. who want to
learn how to program. Accelerators are popping up left and right. The research
community in AI and VR is super active. There's even a hacker community that's
constantly demoing cool stuff they're working on. It feels like a renaissance.
I need to write a blog post to give more details, but NYC is definitely making
moves so don't be surprised if some the power houses emerge over the next few
years. All things aside, I'm having much more fun working in NYC than SF, and
recommend it as the top place for anyone entering the tech workforce.

~~~
cddotdotslash
I agree whole heartedly. I moved to NYC for a startup job three years ago
after graduating. I didn't expect the tech community to be as large as I found
it to be. Honestly, I've actually come to prefer the community here. When I
was in SV, the tech community seemed so self-absorbed. All they talked about
was tech, their startups, and VCs. In NYC, the atmosphere is different. You
have tech workers, but a good portion of them are doing tech in a non-tech
company (fashion, finance, etc.). The conversations I've had here are much
more interesting and applicable to the rest of the world. SV may have the top
spot for tech, but it feels so insulated from everywhere else. NYC has tech,
but it's just one of many industries in a truly global city.

~~~
TarpitCarnivore
> SV may have the top spot for tech, but it feels so insulated from everywhere
> else. NYC has tech, but it's just one of many industries in a truly global
> city.

This really sums up the difference. A lot of the companies doing tech in NYC
are not in the "hot" or "flashy" realm of tech companies. They're not dime a
dozen apps or services that are so prominent in SF. A lot of them are in other
sectors, and often with business models, so they don't come across as being
relevant when they really are.

------
ksenzee
_The idea of bringing in ‘adult supervision’ is one that was pervasive in the
minds of Seattle’s investors, at least up until a few years ago._

Sounds good to me. If the Seattle tech sector appreciates the value of
experience, maybe I'll still have a job at 50.

~~~
WalterSear
The only times 'adult supervision' has been added to startups I've been
employed at, it has been the pointy-haired, wingtipped, point-the-company-in-
the-worst-possible-direction-for-all-involved kind.

------
curun1r
My own hunch is that it's at least partly to do with the 2008 banking crisis,
where NYC was the epicenter. How many of those smart, driven people who are
making their mark in NYC startups would have, instead, been drawn into finance
if it hadn't been for that chaotic period where Wall Street's draw was
lessened? I'd bet that what we're now seeing is at least partially the natural
consequence of a temporary interruption in the "brain drain" from the finance
sector where, 6-8 years into their careers, these talented people are starting
to make their mark.

I wonder whether it will be sustainable now that finance is, once again, able
to recruit the best and brightest who want to work in NYC. Silicon Valley will
always have this advantage over NYC...out west, tech is king. In NYC, no
matter how successful tech gets, it's always going to be smaller than Wall
Street.

~~~
yellowstuff
> I wonder whether it will be sustainable now that finance is, once again,
> able to recruit the best and brightest who want to work in NYC.

Banks are still cutting jobs, and many hedge funds have had a rough patch for
the last few years. What finance companies are recruiting the best and
brightest?

~~~
Tiksi
I'm a Sysadmin/ops guy these days, not strictly a dev, and I wouldn't put
myself into the "best and brightest" category, so my experience might be
different, but I have a constant barrage of calls and emails from recruiters
for hedge funds, hft companies, and some other finance related companies (I
generally stop reading the second I see that it's a finance company so I'm not
sure what they actually do)

------
cleandreams
I work for an SV startup that has a satellite office in Seattle. We're in
Seattle for the engineering talent. I think Seattle's role in the startup
world has a good foundation because it's about talent. As for NYC I can tell
you what the founders say around the office. That is that the foundational
tech doesn't come from the East Coast. The business culture is aggressive and
well financed but not as innovative in tech as SV. This has lots of downstream
effects. Incorporating leading edge tooling is faster in SV for example.
Learning from failure is a norm not an embarrassment in SV. Fundraising means
driving to SF and Menlo Park, not flying. It's easier, more networked. Etc. At
this point SV's advantages compound each other. What will happen is that SV
will spread to Oakland and Berkeley, the next frontiers.

~~~
Tiksi
Yes, what has Bell Labs ever brought us?

------
Hydraulix989
Meanwhile everyone in SV is fleeing $5000 rents to move to Seattle.

~~~
dmode
If everyone flees $5000 rent, wouldn't the rent then come down ?

~~~
throwaway_exer
In a normal market, yes it would.

But there is literally no residential construction in most parts of the Bay
Area.

------
sebular
This article is pure fluff. Instead of gathering or analyzing any data, the
author merely cites a report, and then uses that as fuel to waste countless
paragraphs celebrating the cultures of New York and Silicon Valley, while
condemning Seattle as a bunch of scared, boring people. Most irritatingly, it
turns a massive blind eye to the largest factors that affect whether a
community of people do "risky and interesting" things with their lives:

Foremost, it helps to be born incredibly wealthy, or be born into a world
where you have connections to incredibly wealthy, powerful people.

Secondly, whether it's the bootstrapping founder or the speculating funder,
the person sitting on their mountain of cash and influence has to be
unsatisfied with sitting on a mountain of cash. There's many things money
can't buy, but there is one difficult--yet attainable--thing you can do with
wealth:

Be famous.

In Silicon Valley, those who are merely wealthy-but-not-famous feel envy
toward Jobs, Zuckerberg, and all of California's movie and music celebrities.
These people are / will be remembered after they're dead. If you die with ten
Ferarris in your garage, you're just as non-existent as a blue collar worker
who has a couple dozen people show up to his funeral.

In New York, those who are merely wealthy-but-not-famous have spent
generations sitting on old wealth, but the '80s are long gone. Stock brokers
aren't cool anymore. Goldman Sachs is hovering somewhere between evil and
being a joke. Manhattan's wealthy are starting to feel envy toward Silicon
Valley's fame, so they're throwing money at their young relatives and friends
in Brooklyn. They do this in the hopes that some of that money will stick to
something famous, and they'll be a part of something more eternal than their
own lives.

Seattle's wealthy tech giants aren't glamorized. Gates is the quintessential
nerd who made Microsoft Windows, the eternal punching bag of boring corporate
software. Jeff Bezos is strange to say the least, and Amazon, the WalMart of
the internet, is a company that somehow manages to be even more culturally
boring than Microsoft.

In fact, the concept of using wealth to achieve fame to achieve immortality
isn't lost on Bill Gates. He isn't spending the second half of his life trying
to buy in at the ground level of the next big American corporation, he's
becoming immortal by spreading his name throughout the developing world via
the Bill & Melinda Gates Foundation.

So what does this article really mean when it talks about being risk-adverse?
Most people don't have the luxury of avoiding risk. If having rent money is an
actual concern in your life, the uncertainty of attaining that next round of
VC funding pales in comparison. What's more risky than putting your life
savings into opening a small shop or restaurant? But since that's not a tech
startup, it doesn't count in the rankings, and so the author of the article
condemns Seattle as being a city of people who are frozen in fear of failure.

In fact, the article even manages to touch on the right idea, while missing
the truth behind the statement:

"Seattle's weak spot is funding."

In other words, the ultra wealthy of Seattle just don't care as much about
tech startups. It's not good or bad, it's just a fact.

If you're rich in NYC or Silicon Valley, status means buying into someone
else's good idea so that you can claim your role in being a part of the "next
big thing." If you're rich in Seattle, status means that you have the best
quality of life: Wealth means a beautiful house by the water, a boat, a nice
camper van, and enough free time to regularly take it out of the city. Extreme
wealth doesn't mean that you get to look over business plans and sit on the
board of directors for what you hope is going to be the next Snapchat. It
means that you found a charitable organization, host big community events,
create crowd-pleasing spectacles, and put your name on them.

This article is one person's feeble attempt to put attention-grabbing spin on
a statistical study. The cited study is likely trustworthy and indisputable.
The article is pointless fluff and arbitrary value judgements. Everybody
already knows where to move if you want to network with wealthy startup
investors, we didn't need some fool writing an article about how Seattle
"flails".

~~~
intrasight
Words well spoken. But that fool article did spawn this very interesting and
enlightening discussion, so credit must be given for that.

------
hugh4
Wouldn't it be nice if someone could set up a "next Silicon Valley" somewhere
that doesn't already have an outrageous cost of living?

~~~
dmode
Wouldn't that only be a temporary thing, before tech salaries drive up cost of
living ? Surely, Seattle was not very expensive a few years back

~~~
radicality
Even if it's temporary, it's still beneficial for the temporary time. Maybe
you could also purchase a house in that area, and later on have it appreciate.

~~~
rconti
And sell it for a huge fortune to people you decry as "ruining the place"

------
droopybuns
SV has Stanford, which seems to be a unique factory of technical talent.

NYC has Brown, Columbia, Cornell, Dartmouth, Harvard, the University of
Pennsylvania, Princeton, and Yale to draw from, and the associated financial
support from the world's finance hub.

Seattle has UW and the wealth blast radius of Microsoft.

Seattle is just weird. Not really fair to describe as flailing. It probably
shouldn't exist as a major tech center. Amazon and Microsoft growth occurred
because of disastrous miscalculations by established businesses. There isn't
any magic chemical in the rain water that creates our tech industry. It's the
gravitational influence of the growth in a very few companies. Also, it seems
like most of the dividends of that growth are going into the creation of a
skyline in Bellevue, rather than VC funds. Maybe if we had SF's inability to
build, investors would bet bigger on startups.

------
stevewilhelm
Why isn't Portland on this list?

------
brooklyndude
Great article. One small issue. In a group of developers the other night. A
young lady walked in, the team of (all males), were asked by her. "Where do
you think I should go, where to end up?"

The answer from ALL 10 developers was: California California California
California California California California California California California

It's the nature. The weather here, really summer is great, but otherwise, it
sucks. We have had months of just cold, rainy ,lousy weather. Nature? Line up
to rent a car.

NYC is so crammed with bodies, it's jut not fun. Try to get on the 6 train at
5 PM. I say no more. If that's "fun" for you, I'm assuming that inserting a
pointed stick in your eye is too. (IMHO)

------
spyspy
I expect to see Philadelphia continue to rise on the list given it's access to
university students and super cheap cost of living.

~~~
Apocryphon
What's Philly's scene like? I never hear anything about it even compared to
say, Pittsburgh, despite the size and prestige of the city. Boston/Cambridge,
NYC, and Pittsburgh tend to dominate the East Coast startup discussions.

~~~
spyspy
You're not wrong. Philly really does fly under the radar, but they're there.
The only "startup" I know with an office in Pittsburgh is Uber.

------
eva1984
Catching up meaning as ridiculous and as insane?

------
kps
VCs are still parochial; film at 11.

------
abhi3
Summary:

Article tries to analyse why NYC is jumping spots on the top ten US startup
cities list (Up to 2nd from 5th) and also what went wrong for seattle.

Article concludes that while its conventional wisdom that successful IPO's and
exits help the ecosystem, in the case of NYC the opposite is true.

Failure of big startups like Fab put people back into the ecosystem who then
built new companies and helped scale other growing startups. People who were
previously at Fab have gone on to build some of NYC’s hottest startups from
theSkimm to General Assembly to ClassPass.

Employees from FourSquare and Gilt are now in senior roles at NYC breakouts
Buzzfeed, InVision, Betterment, and DigitalOcean.

While in Seattle risk averseness of tech talent, lack of capital compared to
SV/NYC and unsupportive investor base are leading to it falling down places.

Original aritcle: 1950 words (10 minute read) Summary: 140 words (less than a
minute)

Summary does a good job of covering the main points of the article but there
are more issues that the author goes into. Reading reccomended if you are
intrigued.

If you'd like such summaries for all articles before you invest your time to
read them check out:
[https://news.ycombinator.com/item?id=11535695](https://news.ycombinator.com/item?id=11535695)

~~~
minimaxir
As mentioned by others in the other threads, I would not recommend continuing
these summaries in an attempt to promote your Apply HN.

At _minimum_ , it is an attempt to influence votes.

~~~
JesseAldridge
I like it. I'm busy and that summary was really nice. Let him have his one
line advertisement.

~~~
DanBC
His one line ad is repeated across several articles.

~~~
scotcha1
His service is providing value. Why can't he mention the product and promote
it further?

~~~
minimaxir
See dang's comment in reply to the GP.

------
wcummings
Anecdotally, their list is nonsense, it's obvious to me how much more
employable I am in Cambridge compared to NYC.

