{"id":7709,"date":"2019-04-03T09:05:02","date_gmt":"2019-04-03T13:05:02","guid":{"rendered":"https:\/\/blog.brainstation.io\/?p=7709"},"modified":"2019-04-03T13:57:20","modified_gmt":"2019-04-03T17:57:20","slug":"why-new-york-is-poised-to-surpass-silicon-valley","status":"publish","type":"post","link":"https:\/\/brainstation.io\/blog\/why-new-york-is-poised-to-surpass-silicon-valley","title":{"rendered":"Why New York is Poised to Surpass Silicon Valley"},"content":{"rendered":"

BrainStation has now been part of the New York tech community for the last three years, and in that time, people have begun to talk about the city as a competitor to Silicon Valley.<\/span><\/p>\n

Far fetched? Not when you take a closer look. <\/span><\/p>\n

Here are some reasons why New York may be poised to surpass Silicon Valley. <\/span><\/p>\n

A Real Startup Ecosystem Has Been Established<\/b><\/h3>\n

Between 2012 and 2013, New York City saw the creation of 127 startups, which was on par with the combined <\/span>131 in San Francisco and Palo Alto<\/span>. <\/span><\/p>\n

“One can now start a company in New York City, and find top venture capital firms and a thriving tech ecosystem for the first time. New York’s tech ecosystem is now built to last,” Sam Hamadeh, the Founder and CEO of PrivCo and Co-Founder of VAULT.com, said at the time.<\/span><\/p>\n

He wasn\u2019t wrong. According to the 2018 Global Startup Ecosystems Report, New York City is now <\/span>home to over 7,000 startups<\/span>, and the breakneck entrepreneurial pace of 2012 \u2013 spurred on by the acquisitions of DoubleClick (by Google), Tumblr (by Yahoo) and Jet.com (by Wal-Mart) \u2013\u00a0has been matched by a similar increase in venture capital. <\/span><\/p>\n

In 2012, New York startups raised $2.6 billion, an amount that was quadrupled in 2017, when startups in the city received $11.5 billion in <\/span>venture c<\/span><\/a>a<\/span>pital<\/span><\/a>. All told, the New York startup ecosystem is now valued at an estimated <\/span>$71 billion<\/span>, making it the third most valuable ecosystem in the world. <\/span><\/p>\n

And while New York has not yet produced a tech giant on the scale of an Amazon, it has been bolstered by a stream of successful IPOs, including Etsy and Blue Apron. There\u2019s also reason to believe that the nature of its leading companies bodes well for the local tech scene\u2019s continued growth.<\/span><\/p>\n

\"Erik

Erik Grimmelmann, New York Technology Council<\/p><\/div>\n

\u201cThe first wave of tech innovation was basically building the infrastructure \u2013 getting the plumbing of the internet in place,\u201d says Erik Grimmelmann, President of the NY Tech Alliance. That, he says, would be your Googles, Facebooks, and Amazons, who developed and now dominate new industries. The wave of tech startups in New York, however, are most often applying technology to disrupt long-standing industries and businesses. <\/span><\/p>\n

“It’s about reaching out to consumers and letting them interact with businesses in a different way, and applying technology to different industries,” Grimmelmann says. <\/span><\/p>\n

A good example is Ribbon, which had the largest funding round of New York-based startups in 2018 ($225 million in a combination of debt and Series A equity financing). In simplest terms, Ribbon helps people buy homes, using data analysis to predict a buyer\u2019s mortgage eligibility, paying for houses, and then giving people time to find the financing they need. <\/span><\/p>\n

“We’re introducing the first ever platform that allows buyers, sellers,\u00a0and realtors to participate together to guarantee a home transaction,” said Shaival Shah, Founder and CEO of Ribbon. “Buyers can now compete effectively on the open market against institutional investors, Wall Street capital and very wealthy individuals.”<\/span><\/p>\n

It\u2019s Already a Second Home for Silicon Valley Giants<\/b><\/h3>\n

New York\u2019s rise as an east coast rival to Silicon Valley is perhaps best evident in the city\u2019s current role as a second base for some of the largest tech companies. <\/span><\/p>\n

In 2006, <\/span>Google set up shop in Chelsea<\/span>, and now has \u201cthousands of employees,\u201d in the city, notes Grimmelmann. Five years after that launch, Facebook announced it was opening its <\/span>first engineering office outside the West Coast<\/span> in New York to tap into the area\u2019s \u201cremarkable technical talent.\u201d <\/span><\/p>\n

Giants like Uber and Twitter have offices in the city too, and despite Amazon dropping Long Island City as\u00a0\u201chalf\u201d of the company’s\u00a0HQ2, the company did sign<\/span>\u00a0leases<\/span> for <\/span>more than 400,000 square feet<\/span><\/a> of office space there in 2017 alone.<\/span><\/p>\n

\u201cAdvertising is done in New York, so it’s a natural fit for businesses to set up second shop here,\u201d says Grimmelmann. <\/span><\/p>\n

There has, however, been a change in the way these companies are expanding into New York. <\/span><\/p>\n

\u201cWhen California tech giants Google and Facebook first came to New York, they opened tiny offices and hired locals to run ad sales shops,\u201d Greg David and Cara Eisenpress <\/span>wrote in Crain\u2019s New York Business<\/span>.<\/span><\/p>\n

\u201cToday they house the computer engineers developing the Google cloud and applying artificial intelligence at Facebook in building after building.\u201d<\/span><\/p>\n

The Tech Industry Continues to Grow \u2013 Rapidly<\/b><\/h2>\n

\u201cBoom\u201d might be the only way to describe what is happening to the New York tech industry. <\/span><\/p>\n

“It is the third-largest portion of the New York economy now, and the fastest growing,\u201d Grimmelmann says, adding that New York has added <\/span>more than 76,000 technology jobs<\/span><\/a> over the last decade (with <\/span>14,350 new software engineering jobs<\/span><\/a>, according to data from Emsi). <\/span><\/p>\n

There are now more than <\/span>7,500 New York\u2013based tech companies<\/span> based in the city, fueled by nearly $40 billion of investment in the past five years alone. These companies take up nearly 17 million square feet of Manhattan office space and employ more than 120,000 people \u2014 a whopping 60 percent more than a decade ago.<\/span><\/p>\n

As mentioned above, some of those companies are headquartered elsewhere. But the sector\u2019s explosive growth is really being underpinned by its local tech scene, which is a good sign for the future. <\/span><\/p>\n

According to Built in NYC<\/span>, the city\u2019s 100 biggest local tech companies \u2014 including Etsy, Oath, Shutterstock, and BuzzFeed \u2014 currently employ more than 38,000 people, and <\/span>80 percent of them<\/span> planned to expand in 2018. As these companies grow, the city is giving \u201cestablished tech destinations a run for their money,\u201d Grimmelmann says. <\/span><\/p>\n

This continued development of the tech talent market is key to ongoing growth, but the city\u2019s current workforce is in decent shape, <\/span>ranking 5th<\/span><\/a> on CBRE\u2019s top-ranked North American tech talent markets.<\/span><\/p>\n

The Government is Supporting the Industry<\/b><\/h2>\n

In 2017, Mayor Bill de Blasio announced the <\/span>New York Works plan<\/span><\/a>, a series of 25 initiatives that the city hopes will create 100,000 jobs in emerging fields, including cybersecurity (30,000 jobs), life sciences and healthcare (15,000 jobs), among others.<\/span><\/p>\n

\u201cThese are the fast-growing, high-paying industries that represent the future of our city, but only if we invest now in the places, the workforce and the infrastructure to compete,\u201d de Blasio said. <\/span><\/p>\n

The plan intends to establish New York as the global hub for cybersecurity, with the city investing $30 million in training, academic R&D labs, and the first business \u2018accelerator\u2019 dedicated to early-stage cybersecurity firms. <\/span><\/p>\n

The city has also maintained the \u201cWe are Made in NY\u201d campaign first launched by Mayor Bloomberg in 2013. The campaign\u2019s website provides access to subsidized office space, funding through NYC Seed, training grants, and opportunities to bid on government contracts. Tech entrepreneurs can also benefit from a wealth of guidance resources for founders of new companies, including <\/span>Oceans, a mentorship program<\/span> led by former tech executives. <\/span><\/p>\n

Not to be outdone, NY state\u2019s 2018 budget committed <\/span>$30 million over five years<\/span><\/a> to K-12 computer science education, teacher training, new academic standards, and supporting gender parity in the tech sector. \u00a0<\/span><\/p>\n

“We must equip our children with the tools and resources to level the playing field and help ensure every New York student, regardless of their gender, race or zip code, can succeed,” Governor Cuomo said. <\/span><\/p>\n

“With the nation’s largest commitment to computer science education, we will ensure New York’s students receive the education and training they need to join the workforce of the future and help continue to move New York forward,” he said. <\/span><\/p>\n

There\u2019s Only One New York<\/b><\/h3>\n

\u201cThe old saying goes, \u2018If you can make it here, you can make it anywhere\u2019 \u2014 and that\u2019s definitely true for the nightlife community,\u201d says Benjamin Silbert, the Founder and CEO of Bar & Club Stats, a scanner app that creates data sets wherever IDs are checked. \u00a0<\/span><\/p>\n

\"Benjamin

Benjamin Silbert, Bar & Club Stats<\/p><\/div>\n

\u201cWe have a ton of users here in New York and people say, if it\u2019s good enough for this 15,000-person bar in New York City, then it\u2019s good enough for me,\u201d he says, which speaks to the city\u2019s position as the country\u2019s (and arguably the world\u2019s) center of commerce, with large finance, media, healthcare, publishing, and advertising sectors. If your startup can get a leg up here, it can create a perception of credibility. And unsurprisingly, the city\u2019s economic might provides an unmatched opportunity for networking and partnerships. <\/span><\/p>\n

“If you’re in fashion, if you’re in the financial services, or you need access to financial services partners or any industry that happens to thrive in New York, then you want to be here, because it’s a 10-minute ride to anyone you would ever want to meet, and you could set up a meeting that morning and meet them that afternoon,” Shan-Lyn Ma, the Founder and CEO of Zola, recently told the Verge.<\/span><\/p>\n

When you factor in the added diversity of the local workforce, you\u2019re suddenly talking about a real advantage over Silicon Valley, which has been criticized for its insularity, and one-industry nature. <\/span><\/p>\n

\u201cIt’s a just much more diverse city, in every sense of the word,\u201d Grimmelmann says, adding that this will play a leading role in the development and recruitment of tech talent. A survey by Accenture and Tech:NYC backed this up, finding that <\/span>74 percent of respondents believe that New York\u2019s diversity of industry<\/span> will enable tech companies to attract top talent.<\/span><\/p>\n

And in the end, recruitment can only be helped by the romance and allure of New York itself. \u00a0<\/span><\/p>\n

As Chad Dickerson, the then-CEO of Etsy told CNBC in 2013: “It doesn’t feel as much like New York is trying to be something. New York is something.”<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Sound far-fetched? Not when you take a closer look. <\/p>\n","protected":false},"author":7,"featured_media":7711,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[533,692],"tags":[642,242,641,88,637,639,638,640],"yoast_head":"\nWhy New York is Poised to Surpass Silicon Valley | BrainStation\u00ae Blog<\/title>\n<meta name=\"description\" content=\"BrainStation has now been part of the New York tech community for the last two years, and in that time, the city has become a legitimate competitor to Silicon Valley. 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