February 26, 2024

Bits Blog: Is New York’s Tech Boom Sustainable?

The battle royale brewing between New York and Silicon Valley to be the nation’s dominant epicenter for tech innovation and hot start-ups wages on.

On Monday night in downtown Manhattan, Paul Graham stood before a jam-packed auditorium of 800 entrepreneurs, developers, programmers and others who were curious about what makes a city a fertile environment for a thriving community of start-ups. Mr. Graham is a well-known investor and esteemed figure in Silicon Valley because he created Y-Combinator, an incubator in Menlo Park, Calif., that has given seed money and mentorship to start-ups,

At the Y-Combinator event, Mr. Graham raised the question of the sustainability of New York’s future as a hotbed of technology innovation and whether the city could ever grow to rival Silicon Valley.

“The truth is that I don’t know what’s going to happen,” he said. “Hubs tend to stay hubs.”

Mr. Graham gave the keynote talk of the evening, but also welcomed several Y-Combinator alumni to the stage, including Sam Altman of Loopt, Alexis Ohanian of Reddit and Joe Gebbia of Airbnb. Mr. Graham kidded that his keynote talk could have been titled “On the Other Hand,” because for each theory he had about why New York, a decade after the dot-com bust, is springing back to life and might give rise to the next Facebook or Google, he had a counterpoint to rival it.

He said that geographically speaking, there are several elements that contribute to a healthy ecosystem to nurture young start-ups. After all, he acknowledged, most start-ups don’t make it past their infancy.

“But places aren’t sprayed with start-upicide,” he said. “A start-up needs keys to success.”

He noted that New York, like Silicon Valley, had the same density of tech-savvy types working in similar industries that is required for the kinds of happenstance encounters and introductions that could revive a company’s flailing fortunes and help right its trajectory.

He recalled the serendipitous sidewalk meeting of Mark Zuckerberg and Sean Parker, the founder of Napster, who helped shape Facebook in its early days and became its founding president.

“The antidote for a failing start-up is Sean Parker,” he said.

However, Mr. Graham also said that New Yorkers tended to prize making money above all other goals — which could prove to be advantageous or disastrous for a fledging company or business idea.

“The Valley is a magnet for nerdy visionaries,” he said. “New York is for rapacious dealmakers.”

Mr. Graham went on to list a few other factors that detract from New York’s viability, including the distractions of city life and other, more lucrative industries, like Wall Street, along with the Valley’s perennially sunny climate.

But he did note that New York had surpassed Boston, long considered a nexus of technology and start-up culture.

“New York is solidly No. 2 right now,” he said.

New York, Mr. Graham said, was ripe for the kinds of companies that can disrupt and transform some of the city’s legacy businesses, like fashion, advertising and finance. Whether or not they can give rise to a large-scale technology company along the lines of Google and Facebook, he said, remains to be seen for now.

However, even Mr. Graham isn’t immune to the siren call of the hot start-ups cropping up around the boroughs of New York. Although he said he had no plans to bring a version of his incubator to the East Coast, like Ron Conway, a lauded angel investor, and Accel Partners, a well-known investment firm, who each have turned a keener eye to New York in recent months, Mr. Graham did say that he hoped to lure more New Yorkers to the annual Y-Combinator start-up class.

But for those entrepreneurs who are accepted into Y-Combinator and, after finishing their three-month incubation period, want to move back to New York? He wishes them the best of luck on their journey.

“I don’t try to stop them,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=07a28879481c7c566d6822cc20a3df3a

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