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Startup Geography: New York vs. Everywhere Else

Paul Graham asks "Could you reproduce Silicon Valley elsewhere, or is there something unique about it?" in an essay titled How To Be Silicon Valley. It's a very insightful analysis of what's essential to a startup economy. He concludes that people matter most and the geographical challenge is to attract the people -- which is not an insurmountable challenge.

Along the way, he cites New York as the poster child of a town that doesn't have what it takes to attract a technological creative class, or as he puts it "People don't so much enjoy living there as endure it for the sake of the excitement." If E.B. White was right in the opening line of his timeless essay Here is New York -- “On any person who desires such queer prizes, New York City will bestow the gift of loneliness and the gift of privacy.” -- then perhaps these gifts scare away startup people.

New York, in a way, started and lost Silicon Valley in the first place. Paul also makes a historical analysis of how the Valley came to be and cites the seminal Silicon Valley technology company Fairchild Semiconductor, which was started by the brilliant but discontented workers of Shockley Semiconductor that most notably included Gordon Moore and Robert Noyce. The Valley pioneers where funded by Fairchild Camera and Instrument Corporation (which had an option to buy out their stock), a company located in a Long Island town called Syosset -- just a little under an hour outside of Manhattan. Fairchild Camera had what Arthur Rock calls an "Eastern mentality." Under the terms of the deal, the founders weren't getting nearly as rich as their parent company from their astounding success. Moore and Noyce left to found Intel using what would now be thought of as a more traditional venture capital financing, and the rest is history.

Fast forward to today, and it seems in the ashes of Silicon Alley there's a tech startup community alive and well in New York, as reported by a recent New York Times article. The last NY Tech Meetup even had 500 RSVPs. We've interviewed entrepreneurs all over the world, including a handful of successful New York tech entrepreneurs such as Fabrice Grinda, Joel Spolsky (who himself wonders about New York) and Scott Heiferman. All of these entrepreneurs are still focused on growing their businesses, or starting new ones, in New York.

New York has made startup waves in the past in the technology business. Does it have what it takes to make an even larger impact? What other cities are poised to rival the Valley?

Posted by Greg Galant on May 30, 2006 | Permalink | Comments (0) | TrackBack (0)

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