New York Tech, Stuck at No. 2, Still Shaking Pom-Poms
betabeat.com | 2-20-12
Silicon Alley is dynamite, don’t mess with dynamite.
On a recent Wednesday evening, all the red plush seats in the large, two-tiered auditorium at NYU’s Skirball Center were filled, as they usually are for the monthly assembly of the New York Tech Meetup, the largest organization of Internet professionals in the city. But the twittering audience members were about to hear some bad news they probably already knew: New York is No. 2.
Scott Heiferman, the sandy-haired founder known to smash iPads on stage for dramatic effect, flipped through slides ranking cities around the world by their tech meetup ecosystems. Chicago was No. 5; Washington, D.C. was No. 4, and London was No. 3. He reached a screen labeled TOP TWO TECH TOWNS, and he stopped. “So the Bay Area and New York,” he said mischievously, as the techies giggled and agitated in their seats. “Let’s get into this right now. Leeeeet’s take a look at this.”
The next slide showed two lines, red and blue, zig-zagging in tandem—but Silicon Valley was consistently a cut above. “Isn’t it crazy that we have been neck and neck with the Bay Area for month after month after month?” Mr. Heiferman asked the audience. “I think that has to change. And I think we need to let a little aggression out. Does anyone have an iPad?”
Nobody did—or rather, nobody offered to hand one over. But it wouldn’t be a stretch to imagine Mr. Heiferman sledgehammering a tablet from the Cupertino-based company to make his point.
The rivalry between the coastal tech hubs is not entirely friendly. “The NYC tech scene is exploding,” investor and entrepreneur Chris Dixon wrote in February 2010, an early instance of the now-common trope of pairing the words “New York City tech” with the word “exploding” (alternatively, “blowing up”; also “killing it,” “crushing it”). “Am I the only person in NYC rolling their eyes at this continual barrage of ‘IN NYC IT RAINS MANNA FROM THE SKY!’?” one commenter wrote. Fans of the East or West Coast volleyed in the comments. New York was accused of being frivolous, blustery, and “startup suicide.” California was called out for being a monoculture.
Over the last few years, the rhetoric in Silicon Alley has started to sound like a Bring It On sequel. The rhetoric is dominated by two themes: boostery New York exceptionalism—in September 2009, the high-profile investor Fred Wilson gave a talk called “NYC’s Startup Scene: What makes it special?”—and the David and Goliath narrative, with Silicon Valley as the reigning champion versus New York as the cool, scrappy young challenger.
Even City Hall is on the squad. “My ultimate goal is reclaiming our title as the world capital of technological innovation,” Mayor Michael Bloomberg said back in July. When a columnist for the San Jose Mercury News called to say he was “planning a column on the budding rivalry between our two regions,” the receptionist answered: “What rivalry? We’re winning!”
Rachel Sterne, whose appointment as the city’s first “chief digital officer” last year immediately started trending on Twitter within New York, is probably New York’s head tech cheerleader, trumpeting startup minutiae to her 29,490 followers.
Given that the three-year-old debate really hasn’t changed much, some feel it’s time to stop the pep rally and get to the game.
“The West Coast can claim it won round one of whatever ridiculous battle this is all about, but it really depends on when you start the ‘fight,’” said Aaron Price, an entrepreneur in residence at DFJ Gotham Ventures and founder of the New Jersey Tech Meetup. “Do they want talk pharmaceutical or telephony? I didn’t think so. It’s all pointless and self-serving. Let’s just all get back to work and build awesome companies that can have offices employing people all throughout the country and the globe.”
In May, the Brooklyn-based tech blogger Courtney Boyd Myers wrote a blog post for The Next Web called “Why New York City’s Tech Scene is Thriving.” It was very well-received. “Should Rachel Sterne stop talking about how New York City is ready to be the social media and technology center of the world? Absolutely not,” she wrote in an email. “That would be like forcing a father to stop telling his daughter she’s brilliant, beautiful and capable of saving the world.”
But, she acknowledged, “We need to stop comparing ourselves to Silicon Valley. We should be celebrating our differences and figuring out innovative ways to collaborate, not fighting for VC money or attention in the press. It is the World Wide Web after all.”
Rachel Sklar, a Canadian lawyer-turned-tech and media consultant and founder of Change the Ratio, got into the tech scene around the time the cheerleading started really ramping up. Since then, she’s become adept at baton twirling for New York tech. She’s done publicity for several New York startups, formally and informally. Last year, when many New Yorkers traveled to the South by Southwest Interactive tradeshow for the first time, Ms. Sklar managed a Twitter account called @NYxSW. (Sample tweet: “Congrats on an awesome SXSW, folks! Tweet at us and tell us how you crushed it, so we can RT and give you your due. #NYCrushingIt.”) Recently, Ms. Sklar roped in dozens of local founders, engineers and investors to lipsync lyrics about New York tech—New York underdogs / We can make it here, make it here—in a music video played at a benefit for HackNY, a nonprofit initiative that pits New York tech against another behemoth, Wall Street. “Every NY Tech Person And Their Dog Made A Cameo In This Music Video,” wrote Business Insider blogger Allyson Shontell, who also appeared in the video.
Most of the cheerleading and nyah-nyahs plays out in blog fights, however.
“I feel like the Valley started it,” said Ms. Sklar, who said she doesn’t “have a dog in this fight” despite her efforts to market New York tech. “I remember reading some long ranty article.”
Was it “Face It: NYC Is Not The Best Place For A Startup,” authored by former New Yorker Matt Mireles in February 2010?
“It wasn’t Matt Mireles,” she said. She’s had other blog fights with Mr. Mireles. “It was this guy, Antonio something. It was obnoxious.”
That blog post was titled, “New York will always be a tech backwater, I don’t care what Chris Dixon or Ron Conway or Paul Graham say.” It was written in August 2010 by Antonio Garcia-Martinez, the founder of a startup that was later acquired by Twitter, and it ended with a challenge: “I promise to wear one of those ridiculous ‘I NY’ shirts you buy for $3 from the Nigerians in Times Square for an entire month if the total amount of New York–based startup funding, as reported in Crunchbase, exceeds that of Bay Area-based startups in any financial quarter during the next five years.”
He concluded, “So…bring it, New York. ‘Cause I say the hippies from California will continue to eat your lox.”
Perhaps that jeering bet is what’s kept the bicoastal battle alive even after the city surpassed Boston in venture capital invested in Internet companies in 2011. New York now has a stable of plausibly successful companies, including Foursquare, Etsy and Tumblr; and with both a Facebook engineering headquarters and the Cornell-Technion tech campus on the way, one would be hard-pressed to deny the city its tech cred. California dreamer Paul Graham, who finds New York intolerable, especially when the humidity causes sweat to bead above his upper lip, encourages the startups at his incubator, Y Combinator, to stay in the Bay Area. But even Mr. Graham acknowledged on a recent visit that “New York is definitely now solidly in the No. 2 spot.” By this and many metrics, the city seems to have arrived. So why the persistent Valley-baiting?
Kirill Sheynkman, a former Silicon Valley resident who heads up the New York branch of RTP Ventures, a $750 million fund based in Russia, likes to compare the New York tech scene to a football player stammering through a history report and then blurting out, “San Dimas High School football rules!” in a panic, a scene from Bill and Ted’s Excellent Adventure.
“There’s a lot of talk about Silicon Valley in New York City, a lot of comparison. I think it’s the underdog syndrome,” Mr. Sheynkmann said, though he added that the “star quality” of New York startups, which tend to be highly visible and impeccably-branded, might have something to do with the messaging.
“I don’t see a need to compete,” he said. “The two cities are different! They focus on different areas of tech. Tech is vast. It’s like science. Science is a broad concept.”
New York talks about itself for two reasons, he said. First: it’s in the city’s nature. Second: there is pressure to tell a compelling story in order to attract talent and capital.
Still, as much as New York tech loves itself, some are wary of talking too much talk.
“I just think it’s a little bit of a wasted effort,” said Kyle Bragger, who recently returned from a session at Mountain View’s 500 Startups for his startup Forrst. “Is it really productive to have yet another blog post debate about the latest ‘New York is better or worse than other city,’ or ‘City A is better or worse than City B’?”
Maybe the persistent marketing served a purpose when New York was getting on its feet. But at this point the local tech scene is at least toddling, if not walking. “We call it the flywheel effect,” said Lucas Nelson, an associate at DFJ Gotham Ventures. “Is the flywheel going? Can it sustain itself, or do you still need to put energy in it?”
New York needs big exits and role models more than it needs savvy marketing, he said. “I think the underdog thing is getting pretty old pretty quickly,” he said. “I don’t want to dissuade anyone who is cheerleading in New York. But in the end, no amount of cheerleading will take the place of smart, experienced angels, or smart experienced anything.”
Others pointed out that the marketing for New York tech tends to get competitive mostly because talent and capital are scarce. “We need to keep investing in the ecosystem and evangelizing what is going on here,” Mr. Wilson wrote in an email. “Students still leave the CS programs at Columbia, Princeton, and NYU and go to Silicon Valley. That means we still need to market NYC.”
A survey of local tech professionals suggested that the boosterism is likely to continue. “NY tech talking NY tech is fine,” Alex Taub, head of business development at Aviary, said in an email. “I don’t think it’s an insecurity thing—I think it’s just topical because NY tech is really thriving. Real businesses are being built and scaling here.”
New York may not be insecure, but there seems to be plenty of demand for self-validation. Two entrepreneurs have organized New York Tech Day, a “science fair for startups” to “celebrate New York’s awesome startup ecosystem” in April. More concretely, it’s going to be a gigantic one-day expo at the block-sized Lexington Ave. Armory, with 200 startup booths, more sponsor and vendor booths, and a few thousand attendees rotating through.
It will followed by an awards show.
A version of this story appeared in the New York Observer the week of February 20, 2012.
CORRECTION: An earlier version of this story said Rachel Sklar moved to New York two years ago; that is incorrect. She has been in the city for 13 years. Betabeat regrets the error.