I was really curious to visit NYC and Berlin, expecting to receive some fresh air for the western startup world. And it turned out to be a very exciting experience.
Don’t get me wrong, San Francisco with the Bay Area and London are still the main hubs for startups for US, Europe and worldwide and they will probably remain so for some time, but both in NYC and Berlin things seams to be somehow easier and lighter. There is this excitement of the new comers, of the cities that need and want to do something to change their present and future and they have both decided to bet on the early stage technological market.
There are at least four reasons why NYC has become a new international hub for startups and is competing against the Bay Area to attract the best international talents, startups and investors.
First of all New York it’s easier. I was lucky enough to book a room in a boutique hotel on the 29th and I was able to reach most of my meetings walking up and down as most of the early stage ecosystem operators have office between the 15th and 35th street in Manhattan.
Apart from the physical concentration that helps people meet and create the network, I found a more open environment. People were averagely more interested in meeting a European investor-operator then in the west coast. I attended the Empire Startup Summit for a couple of days and then I had 3 very busy days of meetings up and down the city with 20 different operators. It was easier then expected to get the doors open and at the end I had to schedule some skype calls to finish meeting all the people I had contacted there. Most of the counterparts were genuinely curious to know what’s good from Europe and specifically Italy in my case.
The NYC startup ecosystem needs and want to grow and to do this they want to attract international resources. And Europeans are the first natural target, right on the other side of the ocean. Towards us the competitive advantage of the City proposition is easy: come here and work online with Europe with “only” 6 hours time difference, which makes a great difference towards the 9 hours of Silicon Valley, especially if you have a team spread out between US and Europe. But NYC proposition has been built up in a much more structured way, but very simple though.
The Bloomberg administration has pushed significantly the development of the startup ecosystem (especially after the financial crisis of 2008) focusing on those sectors that represented the backbone of the economic culture of the city itself, therefore they have attracted more resources in the fintech space but also in fashion tech, retail tech, advertising and marketing tech, real estate tech and new media. And they have been able to create more easily a critical mass on those sectors where competences and corporate counterparts were more available. Therefore if you have a startup in one of those sectors you should really consider NYC as a serious and probably better option then SF and the Valley.
Various other initiatives have been created to make life easier for startups to come here and grow. Between these one of the most notable is Digital.nyc , the online platform created in collaboration with Gust, where all the operators of the echosystem are mapped. There you can find where co-working spaces, accelerators, investors, events and startups are, but also hire and get hired.
As talents are one of the scarcest resources, another very important initiative has been the new technological university (Cornell Tech, image below) created with a joint venture between Cornell University and the Technion which is developing a new campus at Roosevelt Island but is already operative at the Google buildings in Chelsea. Yes, Google has a base here with more then 6.000 employees and also Facebook is here with a lot of sales and marketing people.
I’m not great in dealing with public institutions in the business environment but I must say that I found very professional and helpful counterparts in NYC and also this helps (a special thanks to Carlton Vann, Director of the Division for International Business at the Mayor’s Office).
In NYC the tech community is becoming more and more prominent every day but is still living next to the rest of the business and financial society but also next to the big creative, cultural and performing arts communities. All this makes a more diversified cultural society that is claimed to be another advantage of doing startup in NYC, compared to the “monotheistic” tech society of SF and the Valley. A more heterogeneous society helps building up a better startup in many sectors. And if you want to have more details about who, what and where in the Tech space in NYC you should definitively read “Tech and the City” by Maria Teresa Cometto and Alessandro Piol.
During my stay in NYC I was positively impressed on how investors here have a greater and greater attention towards the effectiveness of their “business model” in being able to really add value for entrepreneurs. New intensive models of VC funds first deployed by First Round Capital in 2005 and then developed with huge power by Andreessen Horowitz since 2009, (with their 4 billions funds and an army of 100 partners dedicated to help portfolio companies), are a benchmark for many investors, now much more focused on convincing entrepreneurs that they are the best partners because for example each partner follows no more then x companies or they have dedicated support team for PR or talents or they are leaders in their networking capabilities organizing very successful meetups.
Entrepreneurs are more and more at the center of the stage and investors feel the pressure to convince them. This is very evident in US and I had tangible proves in NYC.
In the next post I’ll tell you about my experience with the other runner up, this time in Europe: Berlin.
Contributor: Lorenzo Franchini
Traveller-in-chief - International Startup Hubs Grand Tour
Lorenzo Franchini is an Italian angel investor and entrepreneur, who co-founded IAG, the main Italian angel group. Last February he left his operative role as MD in IAG and began a long trip around the world for the discovery of the best emerging hub and ecosystem for startups. He will be posting on Startupbusiness about this issue.
(featured image: Golden September in New York City - Josh Liba)