May 27, 2011
New York, a city well-known for its high paying Wall Street jobs and massive media and advertising industries, may now be able to add tech start-ups to its list of high profile sectors.
According to TechCrunch, a recent panel discussion on the current entrepreneurial landscape of New York confirmed that NYC's presence in the tech industry is here to stay. Eric Hippeau, former CEO of The Huffington Post, pointed out that the dissolution of investment banks and hardships in traditional media have encouraged businesspeople to start their own companies. In fact, Ron Conway of SV Angel noted that his portfolio of NYC-based companies has grown to 20 percent, up from just five percent five years.
The Wall Street Journal reported that last year Venture capitalists pumped $2.2 billion into the New York metro area start-up scene to fund companies such as eyewear start-up Warby Parker, fashion website Gilt Groupe Inc. and location-based networking company Foursquare Labs Inc. That's an increase of 30 percent from 2009.
Furthermore, many NYC start-ups are popping up within New York-centric sectors, such as fashion, retail, finance and media. David Gilboa, co-founder of Warby Parker explained that New York helped the company build its vision of being a fashion brand first, and then an ecommerce company.
"We found ourselves having more meetings with designers, photographers and editors in New York. We think it is pretty hard to establish a fashion brand in the Bay Area," he said.
Many believe NYC has also become a hotspot due to its blend of brick-and-mortar companies and young programmers.
"You have a very unique convergence of talent in New York," said Richard Wong, a partner at Accel Partners, a Silicon Valley firm that opened its first New York City office in January.
Indeed, according to The New York Times, start-ups as well as larger more established tech companies are turning NY's Flatiron district and Chelsea area into the "Silicon Alley". In these areas, start-ups are drawn to the short-term leases for creative spaces with high ceilings, natural light and views of Madison Square Park--all motivation for innovation, while larger companies are attracted to Chelsea's sprawling floors so that entire companies can exist on a single floor to encourage collaboration and creativity.
TechCrunch also pointed out that, unlike to the early 2000s, NYC now has a solid angel community as well as established VCs, many of which are in the Flatiron district and Chelsea said Adam Pritzker to The New York Times. Pritzker is co-founder of co-working space General Assembly, which was established in the Flatiron district.
"There were a lot of young companies, a lot of designers and artists, and a lot of venture capitalists working in that neighborhood. There were a lot of these pieces that we wanted to put together," he said.
As the New York start-up boom continues, many argue that NYC will not overtake the west coast any time soon, as each location has slightly different strengths. Instead, Chris Dixon, CEO and co-founder of Hunch, told TechCrunch that bicoastal collaboration should benefit both the Silicon Valley and emerging Silicon Alley. Hippeau agreed.
"There's no longer the animosity between the 2 coasts that there once was, and there's far more collaboration," said Hippeau.
Compiled by Heidi M. Agustin
"Manhattan's Tech Start-Ups Settle in the Flatiron District and Chelsea," NYTimes.com, April 19, 2011, Jonathan Vatner
"New York Start-Ups Ride Tech Boom," online.wsj.com, May 27, 2011, Spencer E. Ante
"Ron Conway: 'New York Tech Is Here To Stay'," techcrunch.com, May 25, 2011, Rip Empson