Beyond Silicon Valley: 3 Hot Start-Up Industries in New York
BY Jessica Stillman
A VC lays out the situations where the Big Apple may be the best bet for a startup. (Plus, plenty of other alternatives if neither city appeals.)
West coast v. east coast isn’t just a rivalry for '90s-era rappers. This regional battle has flared in a new era recently as New York’s newly assertive start-up scene has been jostling for some respect versus the established West Coast hub surrounding the Bay Area.
Silicon Valley and San Francisco certainly have the longer and more distinguished pedigree as cradles of disruptive tech innovation, but New York (and its fans) certainly aren’t known for their shy modesty and unwillingness to assert themselves. So as more and more successful start-ups spring up in New York, more attention is being paid to the relative merits of founding a business on the East Coast.
If you’re coast agnostic and pondering which is a better place to launch your start-up dreams, how do you decide? Andy Manoske, a VC at GGV Capital, recently tackled the question on Quora, suggesting in his answer that the decision may come down not only to your feelings about bike v. subway and subzero temperatures v. perpetual potential to need a sweater, but also to what type of business you’re thinking of starting. He lays out three cases where New York may be the better option:
Brand management and ad-tech: "Direct access to Madison Avenue ad agencies and brands. This is one of the big comparative advantage points for east coast brand management and ad-tech companies like Buddy Media."
Consumer products and traditional retail: "An arguably closer affinity with consumer products and traditional retail. You have a much larger labor market in NYC for executives and strong individual contributors with experience in luxury goods, retail, and in some cases physical supply chain management for these industries."
Fintech: "It's arguably easier to find a personal connection to someone at a major bank or east coast hedge fund in NYC than it is in San Francisco. Fintech startups focused on B2B in these areas might thus benefit from more high-quality leads. Also, finding and closing candidates with high finance experience is probably going to be easier in NYC given the abundance of young high-churn banking and PE workers."
Monske also points out that recruiting engineering talent in New York may be a cheaper proposition due to relatively less competition. "The smaller size of NYC's ecosystem means a lower demand for young engineers," he writes. This "leads to a less-competitive recruiting environment and a lower cost per engineer."
And what if you’re a fan of neither San Fran or NYC? Despair not. There are tons of other options, as Business Insider recently pointed out in its roundup of the 20 hottest tech hubs in America. From Portland to Salt Lake City, New Orleans to Kansas City, there’s a city here to suit just about every personal preference and business type.
West Coasters, fight back. When or why is the Bay Area the best bet for a startup?
JESSICA STILLMAN is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist. @EntryLevelRebel