It sounds like a small thing, but when more and more of your new client meetings are taking place beyond the confines of the suits, skyscrapers and tourist haunts of midtown Manhattan, you know that the message about New York’s booming tech ecosystem has finally gone global.
That’s what I was thinking as I made my way to a breakfast meeting in the West Village the other day. A year ago, my client would probably never have suggested such a venue for our meeting and nor would have I, for fear of alienating them before we’d even met. A year ago, I would have been anxious to inform them that one of Google’s main campuses was just a floor above us, and another, housing more than 1,000 of their finest engineers, only a block away. But, on this day these "nuggets" felt a little passé. My client already knew that every one of the top US tech companies had a large engineering team in New York City, or like Facebook, was about to put one here. And they knew that New York was the right new home for them, too.
There’s been lots of "New York versus Silicon Valley" discussions going around recently, prompted by major headlines like how New York is now second only to Silicon Valley in invested capital or how the new engineering-focused university on Randall’s Island (close to Manhattan, in the East River) will cement the city’s tech credentials for decades into the future. For more than 100 years this city has been the hub for so much big ole business I suppose we shouldn’t be surprised it’s taking a stubbornly long time to update our reputation. But, these very same "legacy" industries are a critical ingredient in New York’s unique attraction for technology-driven businesses and this becomes crystal clear once you set foot here.
New Tech City
In May of this year, a New York think tank published a report about the New York tech scene, partly funded by AT&T. The New Tech City report discusses the major factors behind New York’s rise to prominence; the energy and density of the tech community here, the proactive support of the Bloomberg administration and most importantly, the changing nature of "tech".
As the report’s author, Jonathan Bowles, succinctly put it: "Today’s technology revolution is much less about creating the infrastructure and plumbing for the internet, but about applying technology to traditional industries like advertising, media, finance, fashion and health. New York is a natural for this wave of technology growth because it is a market leader in most if not all of these sectors, and boasts an unmatched concentration of talent in each of these fields".
The report is a fascinating and enjoyable read and I’d recommend it to all entrepreneurs thinking of entering this market, whether you’re in start-up mode or an already well-established company. It talks about the easy access to seed capital in New York and how it’s the only US city to see an increase in VC deals in the last four years (a whopping 32pc increase versus a decrease of 10pc in San Francisco). The report also discusses the seven key tech sectors at the heart of the New York scene – digital media, social networking, e-commerce, ad tech, fin tech, health tech and ed tech – and the investors, entrepreneurs and companies that are making them thrive.
New York vs Silicon Valley
As far as the New York versus Silicon Valley discussion goes, it’s time for y’all to face the facts. According to a March 2012 Economist Intelligence Unit (EIU) research report, New York is the world’s most competitive city and that makes it a hands down great location for companies looking for the best in human capital, investment dollars and innovation capabilities.
The city’s challenges for foreign companies are the challenges of any large US city; it’s expensive on all fronts, from set-up costs to accommodation, to taxis to dining out. It’s also hard to find good people here and the salaries they command leave my clients feeling weak at the knees. On the flip side, most of the daily networking opportunities the city has to offer are a quick subway ride away and they’re completely free. One of the things I love about New York is that the business culture here is less about passion and more about the bottom line. And, if you’re tenacious enough, you’ll get access to your targets quicker in New York than you will anywhere else on the planet.
For us Europeans, New York is also a lot closer to home base. That’s important for personal reasons, of course, but it’s strategically important because the closer we are to the market the more willing we are to empower our people on the ground in the market, increasing the chances of success.
Aaron Taylor, the CEO of Gogamingo, a Belfast-based games platform company, spends a lot of time in both New York and Silicon Valley but there’s no question in his mind where he’ll put down roots and seek his next tranche of investment.
"I want my company to feed off the energy and booming tech scene that pervades New York," Taylor says, and well, I couldn’t agree more.
Niamh Bushnell is an entrepreneur and an angel investor in a number of New York-based start-ups. She is also the creator of TechResources US, which connects Irish technology companies with trusted and up-to-date information and connections to essential in-market resources, services and supports, including accelerators, investors, networking groups, co-working spaces, conferences, online resources and academic research centres.