

Why Yahoo Buying Tumblr Is Not Great For NYC's Tech Scene - jmduke
http://www.forbes.com/sites/ciocentral/2013/05/24/why-yahoo-buying-tumblr-is-not-great-for-the-nyc-tech-scene/

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carterschonwald
I think there's enough other tech companies going on in NYC that it frankly
doesn't matter. (Modern journalism is often borderline link bait as is).

Tying an entire ecosystems vitality to one company that was making a blogging
platform, wrong and boring. That is all.

There's so many interesting companies that are both in the black AND have neat
tech challenges in NYC. You just have to take the time to look. Admittedly
most of these businesses are boring or opaque to those who don't deeply know
tech or aren't familiar with the specific vertical, but all the better for
those businesses! They get to focus on their customers and product and evade a
publicity circle jerk with folks who don't understand their business.

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ChuckMcM
Its an interesting thesis. I too have noticed that there are many fewer 'tech
billionaires' in NYC than in the Bay Area. But the investment percentages of
money are what really seem telling to me. People tend to invest in what they
know, and if banking and trading are the things that made people wealthy, they
are more likely to invest in new banking/tradiing schemes than tech schemes
which they don't have a deep understanding of the mechanics for.

We hit this cognitive wall here in these discussions all the time, which
basically is the difference between how difficult something _looks_ versus how
difficult something _is._ And while I've done some Angel type investing in the
past I only have done so with other tech startups because that is something
I've done from the ground up so I really feel like I can understand it, but I
would never feel comfortable funding a new trading scheme or HFT algorithm
because I could not dive down to the bottom of the idea if I was uncomfortable
and re-assure myself. It would feel way too much like the gambling it is and
so I don't do it.

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nissimk
"Another way to put it is that there are lots of billionaires, just no tech-
billionaires." False.

From your hedge fund list, at least James Simons and David Shaw are tech
billionaires and probably some more that I don't recognize. Also, one of the
most successful NYC tech billionaires your forgetting: Michael Bloomberg.
Although all of these guys are finance/tech it is still tech.

Comparison of the size of venture capital funds is probably accurate, but that
is changing as well.

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rayiner
Relevant biographical info: "David Elliot Shaw (born March 29, 1951) is a
Jewish-American computer scientist and computational biochemist who founded D.
E. Shaw & Co... A former faculty member in the computer science department at
Columbia University, Shaw made his fortune exploiting inefficiencies in
financial markets with the help of state-of-the-art high speed computer
networks."

D. E. Shaw & Co. also hires a ton of STEM folks. Also: "D. E. Shaw Research
(DESRES) is a computational biochemistry research laboratory based in New York
City. Under the scientific direction of David E. Shaw, the group's chief
scientist, D. E. Shaw Research develops technologies for molecular dynamics
simulations (including Anton,[1] [2] a massively parallel special-purpose
supercomputer, and Desmond,[3] a software package for use on conventional
computers and computer clusters) and applies such simulations to basic
scientific research in structural biology and biochemistry, and to the process
of computer-aided drug design."

~~~
busterarm
I used to work for DESCO. Some seriously smart folks there and especially in
the DESRES group.

That's the thing though. The top engineering talent goes to financial
companies in New York because that's what's fashionable there. There's an
actual cultural difference.

There's one other big cultural difference that has an affect on who wants to
do tech startups. In SV people care about "What can you do?/What have you
done?" where in NY it's more "Where did you go to school?/What's your
pedigree?" and in my experience, Ivy Leaguers are generally funneled into
Finance. There is a lot of money spent on recruiting them, so it's easier to
just take the hedge fund job out of school than go work for or found a
startup.

When Jeff Bezos, who used to work for DESCO, founded Amazon, he didn't do it
in New York.

~~~
untog
_The top engineering talent goes to financial companies in New York because
that's what's fashionable there. There's an actual cultural difference._

I think that _was_ the case, but it certainly isn't now.

~~~
busterarm
As much as the Occupy movement made a splash in the news, I haven't really
seen an impact in the employment prospects of my circles in NY. I haven't seen
a single person leave finance other than on the grounds of being overworked
and burnt out.

~~~
untog
Not sure what the Occupy movement has to do with it- I'm talking about
engineers in the startup industry. NYC barely _had_ a startup industry a few
years ago, now I know a great many talented engineers employed by it.

People might not be leaving finance, but I'm not sure how many engineers are
going _to_ it. It's definitely not "cool" here any more.

~~~
tomkarlo
It was never cool, unless you were going to be a Master of the Universe or BSD
trader. It just paid really well. It still pays well.

~~~
busterarm
Exactly. It's only ever been cool to people looking to get "Fuck You Money".

But it still goes back to the pedigree thing. NY is an extremely pedigree-
sensitive city and it's way more impressive to talk at cocktail parties about
what financial you work for than what no-name-startup/consultancy/generic-
design-shop you're working for.

My social circle shrunk noticeably when I left my hedge fund gig in 2008 and
worked as a bike messenger; New Yorkers only care about (potential) money.

~~~
tomkarlo
Having lived there and worked both inside and outside of finance, I don't
think it's so much pedigree-focused as paycheck-focused. New York is the only
city where you can say you're a banker, and someone you just met will ask
"what kind of banker." There are circles where your college / private school
matter but I'd argue that's still less true in NY than in London or even
Boston. I felt like I was rarely asked what schools I went to.

The funny thing is that the NYers in finance or law will often tell you how
much they'd rather be working at a startup. (Or, well, anything else.)

~~~
busterarm
> The funny thing is that the NYers in finance or law will often tell you how
> much they'd rather be working at a startup. (Or, well, anything else.)

Yuuup.

I can't even count on two hands the number of people I know who left finance
and went on to physical jobs they thought were more satisfying. Bike
messengers (like I did) were common, but so were roughnecks, delivery drivers
and all sorts of other odd jobs.

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potatolicious
The Tumblr acquisition was the best possible outcome for the NYC startup
scene.

The author is right that for NYC to really try to claim competitiveness with
the Bay Area they need some _big_ exits that establish anchor tenant
companies. They need their own Google, or Sun, or Facebook.

But let's be honest, Tumblr was never that company. They didn't, don't, and
probably will never have the kind of revenue required to be a Google or a
Facebook. Tumblr took Yahoo's offer because a massive IPO and becoming a giant
amongst NYC's tech companies was clearly not going to happen.

So they did the next best thing: they showed that large, successful exits are
possible in NYC startups.

We're still waiting for a Google here, and it'll probably take years to _get_
one, but Tumblr was anything but bad for the local tech scene.

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samspenc
Or Tumblr could have gone under. In which case it would have been moot.

At least this way there's now some focus on the NYC tech scene, which I think
is pretty exciting.

