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Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

metamorphblog.com

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Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#2

Post by MediaSquirrel »

Just to be clear, I'm not hating on investors. I just think that often they get a disproportionate amount of credit and glory as compared to the founders who slave away in anonymity for long periods in an effort to create something of value. VC's have their place, but it is not at the center.

Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#4

Post by apu »

MediaSquirrel wrote: post #2

Just to be clear, I'm not hating on investors. I just think that often they get a disproportionate amount of credit and glory as compared to the founders who slave away in anonymity for long periods in an effort to create something of value. VC's have their place, but it is not at the center.

Sure, but when you're talking about what makes a place better than another for startups, what matters is not who's more important, but what the limiting factor is.

And to me it seems clear that in NYC it's investors, not entrepreneurs. Sure there might be tons of smart & innovative hackers here. But if most of them aren't going to get funded, then they're gonna move to the Valley.

(I realize more investors could move here/get started here, and it does seem to be happening, but they have much more inertia and are rich, so they don't have to move, unlike most cash-strapped entrepreneurs looking for the next bit of funding that will allow them to really expand.)

Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#5

Post by jfi »

I think a big factor of "why now in NYC?" was the recession: with firms collapsing, job security at an all time low, and dismal salary and bonu$ prospects, all the talented individuals that had flocked to Wall Street and hedge funds were now leaving or forced out. This yielded two things: smart, networked, tech savvy individuals that had monetary padding (via a few years of pulling down salaries and bonuses back in the gilded era) to bootstrap an idea and the network to tap into AND investment oriented folks looking for opportunities that offered a better ROI than the dismal public capital markets'.

Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#6

Post by pw0ncakes »

MediaSquirrel wrote: post #2

Just to be clear, I'm not hating on investors. I just think that often they get a disproportionate amount of credit and glory as compared to the founders who slave away in anonymity for long periods in an effort to create something of value. VC's have their place, but it is not at the center.

I think people who invest their own money deserve as much credit as founders, because they're taking personal risk. Institutional VCs, not as much; the worst thing that can happen to them is that it takes 10 years to have a hit and become partner instead of 5, whereas entrepreneurs are out of a job if they fail.

Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#7

Post by pw0ncakes »

jfi wrote: post #5

I think a big factor of "why now in NYC?" was the recession: with firms collapsing, job security at an all time low, and dismal salary and bonu$ prospects, all the talented individuals that had flocked to Wall Street and hedge funds were now leaving or forced out. This yielded two things: smart, networked, tech savvy individuals that had monetary padding (via a few years of pulling down salaries and bonuses back in t…

There's some truth to this, but it's probably overstated. Almost all of the smart people on Wall Street are quants and, except in large-scale layoffs, they aren't likely to be let go.

Also, the deciding factor regarding whether New York can become an innovation/startup hub will be if the rents come down fast enough. So far, signals are mixed but more negative.

Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#9

Post by jfi »

pw0ncakes wrote: post #7
jfi wrote: post #5

I think a big factor of "why now in NYC?" was the recession: with firms collapsing, job security at an all time low, and dismal salary and bonu$ prospects, all the talented individuals that had flocked to Wall Street and hedge funds were now leaving or forced out. This yielded two things: smart, networked, tech savvy individuals that had monetary padding (via a few years of pulling down salaries and bonuses back in t…

There's some truth to this, but it's probably overstated. Almost all of the smart people on Wall Street are quants and, except in large-scale layoffs, they aren't likely to be let go. Also, the deciding factor regarding whether New York can become an innovation/startup hub will be if the rents come down fast enough. So far, signals are mixed but more negative.

Agreed - likely not any one thing, but a combination of several trends.

Quants are smart, but not necessarily in a startup way - they could definitely be on the startup team (build the product, crunch the data, etc.), but might not be the best fit as a founder (obviously this is a sweeping generalization, but so was your "almost all of the smart people on Wall Street are quants")

There are plenty of other smart people that make up Wall Street (traders, investment bankers, pwm, sales / marketing) and likely better equip to take on the multi-faceted beast that is a startup venture. Also, few were safe in 09, regardless of what role they filled.

Rents in New York definitely need to come down in order for the innovation / startup hub to continue it's upward move ... having banks and funds recover and salary / bonus talk coming back will not help either.

Re: Why the NYC Startup Scene is Hot (Hint: Not Fred Wilson)

#10

Post by btilly »

pw0ncakes wrote: post #7
jfi wrote: post #5

I think a big factor of "why now in NYC?" was the recession: with firms collapsing, job security at an all time low, and dismal salary and bonu$ prospects, all the talented individuals that had flocked to Wall Street and hedge funds were now leaving or forced out. This yielded two things: smart, networked, tech savvy individuals that had monetary padding (via a few years of pulling down salaries and bonuses back in t…

There's some truth to this, but it's probably overstated. Almost all of the smart people on Wall Street are quants and, except in large-scale layoffs, they aren't likely to be let go. Also, the deciding factor regarding whether New York can become an innovation/startup hub will be if the rents come down fast enough. So far, signals are mixed but more negative.

There are a ton of smart people on Wall St who aren't quants. And I personally know startups being started because of exactly what the parent said.

Incidentally based on my experience of NY, a seldom noticed major drag on startups is that by default if you create a startup while working for someone else, your employer can declare it a work for hire and just take all of the associated intellectual property. (Said default is reinforced by the standard employment contracts.) In California your right to own what you do in your own time with your own property is protected by state law. This is huge.

How many startups never happen because people have been burned by this, or know people who have been burned by this?

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