Monday, Paul Graham gave a speech at General Catalyst. Paul has great insights into what makes a great tech hub and zeroed in on the final piece of NYC’s start-up ecosystem. The piece just now cementing into place: Entrepreneurs' ability to run into high quality mentors. Paul used Shawn Parker’s mentoring of Mark Zuckerberg as the classic example. Facebook would not be what it is today had Shawn not run into Mark. HP, Apple, Intel and Google all have similar serendipity. The founders all received critical help from the ecosystem.
Paul is right to highlight the importance of running into smart, driven people who are experienced in entrepreneurship and technology. This continuous cross-pollination of experience, vision and innovation is paramount.
Over the last 15 years, the NY tech scene has really evolved. Although it takes 20 years to build a robust start-up ecosystem, NYC has made great strides since 1995 when we started SquareEarth our first internet technology company. Back then, similar to today, there were great reserves of engineers inside wall street, but pulling them out was almost impossible. I got lucky. Marc Andreessen came to visit Solomon Brothers to spread the gospel of the browser, and I was able to pull from the pool of engineers whose lives were changed by his visit. Back in the mid 90s, Solomon Brothers was pioneering the use of the browsers as part of their $400,000,000 annual technology investment. Banks and hedge funds are still huge pools of technical talent, but today, technical talent is more willing to transition to a tech startup. Companies like Aristotle Circle, Delicious, Gerson Lehrman, TheLadders and Secondmarket were all founded by former Wall Streeters.
Back in 1995 people in NYC interested in tech-startups were few and far between. Guys like Peter Bloom, Michael Bloomberg and Bernard Weinstein were important tech mentors, but your chance of running into them on the street was three in a million. Today, we have a vastly different story. Now there are hundreds of veteran tech start-up professionals in NYC playing that “Sean Parker” role.
Outsiders think access to technical talent is the gating factor for faster start-up growth on NYC. It is not. (like Silicon Valley, our demand for exceptional technical talent is limitless). Others think the constraining factor is Seed Capital. Untrue. NYC is full of dozens of seed-stage funds, hundreds of Angels, and thousands of qualified investors, all looking for investments. You could argue that the lack of a MIT or Stanford will mean NYC will always be a tier 2 tech hub, but neither does this tell the whole story. NYC is currently pursuing Stanford and 14 other top engineering schools to set up a multibillion dollar campus in NYC. Plus, NYC is already a college town, There are about 594,000 university students in New York City attending around 110 universities and colleges. Low rent space, easy transportation, access to media, and a huge creative class all help, but it is the high density of people passionate about startup tech that makes all the difference.
Maybe my view is skewed by having offices on either side of Union Square, with my main office sharing an elevator with Foursquare, resulting in a regular flow of random reconnections.
That said, like a diamond dealer making regular trips to Antwerp, or a movie star visiting Hollywood, as a tech entrepreneur, I still need to make regular trips to Silicon Valley. It’s Tech Start-Up Mecca, but after 15 years, it’s good to see NYC has achieved its “Sean Parker” density.