Stowe Boyd of True/Slant has a new blog on the NYC Startup Scene called Hotbed. This is an awesome development. Cody Brown asked, I seconded, Chris Dixon approved, and now it seems we have all received. Awesome. Welcome Stowe!
Now that you're here, there's something I wanted to clarify. From your inaugural post:
New York City’s tech scene is expanding at an astonishing rate these days, which raises the obvious question: why now? And, if New York has all the right ingredients to create a rich and deep technology culture, why didn’t it appear earlier?
My theory is that New York lacked, until recently, a critical factor: smart early stage investors.
The other parts of the puzzle were in place: great schools, brainy entrepreneurs, and abundant media and PR people. But without the manure that VCs provide, what looked to be a great greenhouse was cold, and very little would grow.
It is manure that makes greenhouses hot, that makes them hotbeds, and the critical factor is now being provided by folks like Chris Dixon, Fred Wilson, and John Borthwick.
via trueslant.com
I think you have it backwards, my friend. NYC has an abundance of entrepreneurs, for the reasons you mentioned and more. In particular, lots of tech savvy would-be media folk like me and Cody have opted out of the media ash-heap and are deciding to do the startup thing. But there's a relative scarcity of capital relative to demand. Early stage investing in NYC is a small pond with not a ton of players.
This dynamic of abundant demand, scarce supply makes early stage investors feel that they can be choosy and risk-averse. They know there’s not a lot of competition, so why take lots of risk? Yet at the systemic level, people like me see the dynamic in action and consider heading West. But at the same time, folks like Ron Conway see the supply/demand imbalance and head East. Good deals are to be had, perhaps more so than on the West Coast.
What the NYC scene needs is more of this outside capital to flow inward. As it is, I myself am in California for 10 days playing this very game.
Also, umm, Fred and Chris are cool peeps and all, but let's get one thing straight right now: Startups happen because entrepreneurs make them happen. Entrepreneurs are the real fucking heros in this story, not VCs. We lead, they follow. Don’t forget that.
Obviously, Chris Dixon is an entrepreneur himself (Hunch). But based on blog visibility, it’s easy to get the impression that the NYC startup scene is happening because Fred Wilson and Chris Dixon are blogging about it. They are high-visibility champions and wonderful contributors to the community, giving us all an added sense of pride and support. But in so much as they act as a source of capital, they only enable.
It is the little guys you’ve never heard of who struggle, take risk, fail and create. Remember them, always.
Stowe, welcome to New York. We should grab beers sometime.
Agreed! With Columbia, I am doing my best to roll the ball up the hill, but there’s a lot of institutional momentum to overcome.
Honestly, I think it’s as much about creating a mythology and legend amongst the students. And the way you do that is by having a huge exit, but I worry that the conservatism of the early, early stage capital owners is gonna prevent that. I hope I’m wrong.
Agreed! With Columbia, I am doing my best to roll the ball up the hill, but there’s a lot of institutional momentum to overcome.
Honestly, I think it’s as much about creating a mythology and legend amongst the students. And the way you do that is by having a huge exit, but I worry that the conservatism of the early, early stage capital owners is gonna prevent that. I hope I’m wrong.
Matt –
Charlie and I have been discussing this for quite some time – check out his post and my post on the topic.
I, for one, am thrilled to see the impact of the meltdown of CorporateLand and the financial bubble in freeing up money. One of my relatives was telling me that there is over 5 TRILLION sitting on the sidelines. It is now almost 18 months since the meltdown. This means that investors are ITCHING to get their money working again.
My concern: no one is bringing the infrastructure (incubators), the education (training people how to become facile with tech) or experience (previous success players) in a way that creates a positive spin.
I am sorry, but the schools in NYC while excellent in many areas, have not fostered entrepreneurial thinking – they are often fostering COG thinking (where can I get a job to settle down). As Columbia ramps up its program, and Poly/NYU begins to ramp their program – give it five years – THEN I will be very proud of the schools.
I am excited about the fact that entrepreneurs with experience are making NYC their home (Stowe, Caterina, Matt, JackD, etc) and that many of our homegrown are staying with us here. That is VERY important.
Now, if we could convince Mayor Bloomberg to figure a way to really incentivize people to build businesses here – like finding a way to bring down the base cost of running a business in the City. Come on, NYC has one the HIGHEST tax base for businesses in the nation (IMHO). Mayor Bloomberg – are you listening?
Matt –
Charlie and I have been discussing this for quite some time – check out his post and my post on the topic.
I, for one, am thrilled to see the impact of the meltdown of CorporateLand and the financial bubble in freeing up money. One of my relatives was telling me that there is over 5 TRILLION sitting on the sidelines. It is now almost 18 months since the meltdown. This means that investors are ITCHING to get their money working again.
My concern: no one is bringing the infrastructure (incubators), the education (training people how to become facile with tech) or experience (previous success players) in a way that creates a positive spin.
I am sorry, but the schools in NYC while excellent in many areas, have not fostered entrepreneurial thinking – they are often fostering COG thinking (where can I get a job to settle down). As Columbia ramps up its program, and Poly/NYU begins to ramp their program – give it five years – THEN I will be very proud of the schools.
I am excited about the fact that entrepreneurs with experience are making NYC their home (Stowe, Caterina, Matt, JackD, etc) and that many of our homegrown are staying with us here. That is VERY important.
Now, if we could convince Mayor Bloomberg to figure a way to really incentivize people to build businesses here – like finding a way to bring down the base cost of running a business in the City. Come on, NYC has one the HIGHEST tax base for businesses in the nation (IMHO). Mayor Bloomberg – are you listening?
Unfortunately, startups are a bit more mobile than capital. It’s an inefficiency in the system for sure, but c’est la vie.
Unfortunately, startups are a bit more mobile than capital. It’s an inefficiency in the system for sure, but c’est la vie.
I am in southern California in Orange County and people tell me if I am going to raise money I need to head north to the valley. I hope that the work we are doing is enough for people to come this way as well and we don’t always have to get on a plane to go north. Good ideas are every where and good entrepreneurs make them happen!
I am in southern California in Orange County and people tell me if I am going to raise money I need to head north to the valley. I hope that the work we are doing is enough for people to come this way as well and we don’t always have to get on a plane to go north. Good ideas are every where and good entrepreneurs make them happen!
Indeed it is. But as with so much of life, simple and obvious does not mean that it’s the common perception.
Indeed it is. But as with so much of life, simple and obvious does not mean that it’s the common perception.
Amen.
Amen.
umm as another south floridian I’ve thought about this alot. We’re wondering what the solution is to this (how do we foster this growth best).
In new york’s case, i think the issue ultimately boils down to first the recession, and second the shriveling up of wall street. If you were smart, and even remotely capable in the last ten years and wanted to live in or near nyc, chances were an investment bank, hedge fund, or some other wall street company could probably lure you away.
now with those jobs both harder to get and slightly less lucrative, there are a lot more people willing to strike it out and test the choppy waters of entrepreneurship. with a recession the opportunity cost of being an entrepreneur is lower.
umm as another south floridian I’ve thought about this alot. We’re wondering what the solution is to this (how do we foster this growth best).
In new york’s case, i think the issue ultimately boils down to first the recession, and second the shriveling up of wall street. If you were smart, and even remotely capable in the last ten years and wanted to live in or near nyc, chances were an investment bank, hedge fund, or some other wall street company could probably lure you away.
now with those jobs both harder to get and slightly less lucrative, there are a lot more people willing to strike it out and test the choppy waters of entrepreneurship. with a recession the opportunity cost of being an entrepreneur is lower.
Seems so simple & obvious, my friend. 🙂
Seems so simple & obvious, my friend. 🙂
Amen!
Here in South Florida everyone is crying that the problem is the absence of VC funds, and they loose the real focus: building products, companies, services. If every other week there is a new cool startup or product shipped from the same area, I’m sure the smartest VC and angels will flock there to catch deals (at lower evaluations than if they were in the Bay) before everybody else realize something is going on in that area.
I just wrote a post about this very same topic a couple of weeks ago: http://www.davidedicillo.com/social/squarepik-building-the-local-tech-community-for-real/
Amen!
Here in South Florida everyone is crying that the problem is the absence of VC funds, and they loose the real focus: building products, companies, services. If every other week there is a new cool startup or product shipped from the same area, I’m sure the smartest VC and angels will flock there to catch deals (at lower evaluations than if they were in the Bay) before everybody else realize something is going on in that area.
I just wrote a post about this very same topic a couple of weeks ago: http://www.davidedicillo.com/social/squarepik-building-the-local-tech-community-for-real/
Startup money is very cyclical. Once enough money is allocated in one area, the velocity of the cycle increases. This accelerating momentum acts as a catalyst of expansion and before you know it, NYC feels like California. I wrote a post on my blog http://lfablog.com/?p=262 about this exact growth of startup culture a little while ago.
Startup money is very cyclical. Once enough money is allocated in one area, the velocity of the cycle increases. This accelerating momentum acts as a catalyst of expansion and before you know it, NYC feels like California. I wrote a post on my blog http://lfablog.com/?p=262 about this exact growth of startup culture a little while ago.
Hint: It’s the Great Recession
Hint: It’s the Great Recession
Fred, it’s great to have you in the ecosystem. You’re kinda like the Papa Bear of the NYC scene. We are lucky to have such a humble, thoughtful backer.
Fred, it’s great to have you in the ecosystem. You’re kinda like the Papa Bear of the NYC scene. We are lucky to have such a humble, thoughtful backer.
totally correct. entrepreneurs are the raw material of the startup and VC business. without them we’ve got nothing
totally correct. entrepreneurs are the raw material of the startup and VC business. without them we’ve got nothing