Known by many as The Big Apple, and by some in the tech scene as Silicon Alley, New York City has been an international hub for media, art and business for decades. More recently New York has ebbed and flowed with the success and failures of the Internet startup culture, and is now well on its way to cementing its reputation alongside Silicon Valley as a driving global force in the industry.
New York's media obsession began to enter the tech scene in the mid 90s as new media companies like @NY in 1995 and Jason Calacanis' Silicon Alley Reporter in 1996 began to take off. In 1995, The New York Times experimented with placing content on the Web during a visit to the U.S. by The Pope, and later launched a permanent online presence in 1996. In the same year, Fred Wilson, currently of Union Square Ventures, launched Flatiron Ventures which quickly became the cities leading VC firm of the early Internet era. The following year, online agencies like Razorfish began to consolidate and quickly acquired several companies, while others, like Total New York and Yoyodyne, sold to AOL and Yahoo! respectively.
As Wilson puts it, 1999 was the year that "all hell broke loose" in New York City for the Internet wave; major offline companies flocked to the Web, and dozens of smaller Internet startups went public or were acquired. According to Wilson, over 500 startups were founded in New York between 1999 and 2000; New York was the place to be, and everything was looking up without a hint of the impending dot-com crash. Wilson jokes that the peak of this era was epitomized in a television interview with Calacanis in which he suggested Harvard students take whatever remaining money they had and use it to start a tech company.
Over the past decade, New York has pulled itself from the ashes of the dot-com crash and has risen back to the upper echelons of the top tech cities. The sheer size and density of the city has helped produce hundreds of startups, many of them, like Delicious, Tumblr and Foursquare, have become worldwide successes. In 2008, New York saw 116 startups receive funding, and in 2009 this number reached 150 - five times the amount the city saw in 1995. In comparison, Silicon Valley, which hosted 230 startups in 1995, saw just 336 receive funding in 2009 - a sign that the mecca of startups is beginning to reach critical mass while New York continues to grow.
In September of 2009, Fred Wilson spoke at Clickable's Interesting Cafe and outlined why he thinks New York is unique from other startup cities like Silicon Valley, Boston or Boulder. Besides the city's obvious penchant for media and business, Wilson says New York is in itself a lifestyle that promotes social interaction at the benefit of local startups like Foursquare and Meetup which encourage people to go outside. Another key identifying feature of the New York startup scene, he says, is the cities rich artistic culture. Wilson points to Vimeo, Tumblr and OMGPOP as examples of what he calls "the New York school of web design."
Today, the Empire City boasts an impressive cast of startups and VCs, as well as a plethora of events and organizations geared at young entrepreneurs. Along with those mentioned above, some of New York's extensive list of notable startups includes Boxee, Etsy, gdgt, Squarespace and College Humor. Funding these startups is the city's many venture capital firms, including First Round Capital, Union Square Ventures, Spark, RRE and Founder Collective.
Entrepreneurs in the big city looking for a place at which to network with the thousands of startup enthusiasts can choose from any of a number of available events, including the NY Tech Meetup, nextNY, Social Media Week, Startup Weekend New York and the Brooklyn Future Meetup. Local organizations like Echoing Green, NYC Seed and StartingBloc all provide excellent resources for different types of early-stage startups in New York. The Open Angel Forum is another event and organization that will hold its first New York chapter event in April with continuing events every three to four months. The NY Tech Meetup, which began with a small group in the back offices of Meetup in 2005, now holds monthly sessions and has exploded to include over 10,000 members.
First Round Capital entrepreneur-in-residence Charlie O'Donnell is deeply involved in the seed-level startup community in New York, serving on the board of the NY Tech Meetup, founding nextNY and being one of two chapter heads of Open Angel Forum New York. O'Donnell, who compares New York's storied tech history to the various "iterations of the Matrix," says the current version of the startup scene is supported both by early tech adopters and by veteran entrepreneurs from the early Internet days.
"Early Twitter users helped connect the scene - especially around places like the Shake Shack in Madison Square Park, which played host to many a Friday lunch outside between startups and investors alike," O'Donnell tells ReadWriteWeb. "What's great though is that the current iteration of the community is also supported by veterans of those early days - like Fred Wilson, Kevin Ryan, Dave Morgan, and Scott Heiferman."
As for the future, things are looking up for New York as the city continues to churn out successful startups at an increasing year-over-year rate. Some wonder whether New York's critical mass is higher than that of Silicon Valley, where innovation has seen a slight downturn coupled with significant job loss. O'Donnell predicts continued productivity in New York, "enough to make folks stand up and take notice," he tells ReadWriteWeb.
"What I'd love to see is for the [New York] scene to more fully develop the bench players needed to support more startups: like product managers, interface designers, etc," says O'Donnell. "And for the educational institutions to catch up and start producing students that have skills that local startups can use."
Additions and developments such as these will only help to boost New York's already booming startup scene into a future of prosperity. There will likely never be another city with quite the same dynamic as Silicon Valley, but New York is making the best run to be the de facto alternative with its own unique set of advantages.
Photo by Flickr user Marco Arment.
Thanks to Charlie O'Donnell for much of the background information about the New York tech scene history. Additional information and statistics came from Fred Wilson's 2008 keynote at the Web 2.0 expo, as well as Michael Karnjanaprakorn's extensive list of companies, VCs, events and organizations from New York.