There’s been a lot of discussion in the past couple of years about the resurgence of New York City as a tech center (I actually called the comparison to Silicon Valley a silly one about a year ago).In the past couple of years, however, a lot of factors seem to be pointing to New York not only becoming an important force in the technology space but also finally achieving its potential not as another tech center but more as its epicenter, displacing Silicon Valley after almost three generations.
The rise of New York to prominence is, first and foremost, due to a series of happy accidents. While the technology world was long dominated by hardware and algorithms, the current phase (often referred to as “the social web”) is all about people.
In order to full back those assumptions, I’ve created five lenses, each with its own post:
- Monocultures have negative impact. Polycultures take longer to create powerful organisms but inherently build ones that are more adaptable.
- Living in a city is inherently a social experience. Living in a car-driven society isn’t.
- Everyone poaches techies — the New York tech scene was born of those people that can’t be poached and found ways to attract like-minds.
- Don’t look at adversity as something that can be overcome with brute force, deal with it as a normal condition and you will find innovative workarounds.
- Businesses are ultimately about money so to continue fostering success, valley startup might do well to act a little more like New York ones if they want to build sustainable futures.
A historical settingThe New York dotcom scene of the 1990s was vibrant but ultimately flawed. Its own hubris killed it (and I should know as I was one of those people) and along with it killed the chance of New York displacing Silicon Valley as the epicenter of the technology world. A decade after its implosion, New York is being given a new chance to pick up the mantle, along with some distinct advantages this time around.
With many veterans still being part of the scene, it seems the lessons of the past have not been forgot10 so the challenge to Silicon Valley’s supremacy will be substantially stronger than it has been in the past. I hope this series will give both groups chances to think about the different issues facing their own environment and work on dealing with those.
At the end of the day, if both Silicon Valley and New York were to emerge stronger than they are today, this conflict could leave the US more prepared for the next set of challenges that will push both coast to pull together and fight against the rise of cities in foreign locale to try to take the leadership away from the USA. If you are reading this, you probably have a dog in that fight and it is up to you, as well as everyone else in the field, to ensure that this competition ends up turning each location into the best it can be.
There has been a lot of writing about the talent shortage in the Valley now that large companies like Google and Facebook have gone into a talent arm race, prompting some to think that this could be the beginning of a new bubble.
New Yorkers used to talent wars
Bubble or not, the New York tech scene has been used to technical talent being poached. Because there are other dominant forces in the city, New York startups have often fought the talent wars at a monetary disadvantage. Wall Street can attract some of the most talented mathsematical minds with interesting problems and extremely high salaries. The media and advertising world has been appealing to creative types and people who enjoy being close to the spotlight.
The New York tech scene was born of those people who felt that there was more to life than working for a large company, making gobs of money, or hanging out with famous people. People in the New York tech scene tend to be people that view the tech field as attractive for its own sake, a place where one can build an interesting business. So talent wars have always been part of the make-up, just another business problem to solve.
By comparison, the valley had it easy as it was seen as the place to go if you are a techie, always replinishing its engine with fresh new talent and the supply always was roughly equivalent to the demand for new talent, leaving the system mostly properly balanced.
Now that larger actors like Google and Facebook have gone into hyper-hiring, demand in the valley has been exceeding supply, reaching a level that is probably no different than the one people in the tech field in New York are used to. But for people in the valley, this is a new dynamic to adapt to; for people in the city, it's business as usual.
There is also a virtuous circle to the rise of New York turning it into an ever more attractive place for members of the tech field. As Fred Wilson recently pointed out:
If you are a 22 year old man or woman just starting out in life, would you rather live in suburbia and work on a campus or would you rather live in Williamsburg and work in Flatiron?
So the more successful the city becomes as a tech center, the more attractive it becomes to people who want to help it become more successful as a tech center. The quality of life element is going to be an important challenge the valley will have to change if they want to survive the New York onslaught.
New York, however, will have to continue, as Fred points out, its effort to foster local talent straight in college. While it is OK to import talent from the schools along the rest of the northern corridor, other cities could try to stop that migration. It is up to New York's academic circles to start developing the next version of Stanford locally if they want the current growth to be sustainable.
Takeaway: Everyone poaches techies -- the New York tech scene was born of those people that can't be poached and found ways to attract like-minds.
New York is not always an easy place to live in. Poor bandwidth, inadequate mobile networks, and massive population breed adversity. New Yorkers have learned to deal with it and leverage it to create new experiences.
Adversity is Potential
But where some people look at gaps as an example of why something or someone cannot fulfill its full potential, entrepreneurs look at those as opportunities to create new businesses. So things like making it impossible to open sample sale places in multiple locations around the globe led to the creation of Gilt, creating a whole new model for online commerce; issues around improving government efficiency led to see-click-fix; or more efficient ways to locate where your friends have gathered led to FourSquare.
Another aspect of the advantage of adversity is that it forces New Yorkers to think about solutions that are adverse-condition resistant. So while many look at inappropriate bandwidth being an issue, it's led New Yorker to create solutions that can work in the US as well as overseas, in markets where bandwidth is more constrained.
I was recently chatting with a New York based founder who told me that he was relocating his technical team from Ukraine to Estonia because, beyond the cost of employees, Estonian users tend to use slower computers and have less bandwidth. I was confused as to why that would be a good thing so he explained to me that since his company was developing software for mobile devices, it was better to have programmers who knew how to wring every single bit of performance out of a 5 to 10 year old computer because that's the kind of processor you get on a mobile device today. Estonian programmers have been doing that for a long time and it has now become a valuable skill, one he couldn't find in US markets.
I, not unlike many people in both the valley and New York, have often called for more bandwidth as something that is essential to future growth but that entrepreneur showed to me that such a call may not be necessary: smarter use of limited resources may be a more efficient approach and only when we have have wrung out every little bit we could out of the bandwidth and processing power we have should we start begging for more.
Because investments in large-scale ambitious technological projects have been successful in the past, money in Silicon Valley tends to be less scared when it comes to investing heavily in creating brand new infrastructures. So when an adverse condition arises out of constraints, there is a natural 10dency to address the constraint by throwing more resources at it. This brute force approach may not always be the best way to handle it (although, in some cases, it could be: for example, digging up the existing electric grid and replacing it with a smart grid would be something to look at).
So whereas the valley looks at a way to steamroll a constraint, New Yorkers look at a way to mine it.
Takeaway: Don't look at adversity as something that can be overcome with brute force, deal with it as a normal condition and you will find innovative workarounds.