Last week’s panel, “New York City’s Tech Future“, got everyone thinking about how far New York City has come and how much farther we need to go. There was a lot of discussion about how New York City differs from Silicon Valley. In New York the innovation is at smaller venues and companies, we haven’t quite gotten our big Google or Facebook yet. However, Jonathan Bowles, Executive Director of the Center for an Urban Future, noted, “we’re seeing that a lot of corporations are reaching out to these smaller companies for acquisition and services”. Alan Patricof, Managing Director of Greycroft Partners, also noted that the model of fundraising is different in NYC. He noted that few firms do B-Round ($5-$15MM) here and there is a lot of seed capital around, a lot of VCs have cashed out and become angels. Additionally, Patricof noted, “A-Round requires going to an organized firm like Greycroft and there aren’t a lot of firms like these in NYC.” Nevertheless, Bowles noted that 486 start-ups got VC or angel funding last year and of those, 15 had raised $50MM+.
There are also several issues related to the recruitment of talent in NYC. Bowles pointed out – liveability and quality of life are key issues. He suggested that, in order to attract more talent in engineering and entrepreneurship, the next mayor will have to focus on creating more middle-income affordable housing, as most tech/start-up employees aren’t making six figures.
Students are another big issue. A few of the panelists suggested that there is a tendency for recent grads to start their companies near where they went to school, especially because of the focus on intellectual property on campuses, how students can and will take risks, and the advantageous recruiting opportunities that proximity presents. This focused the conversation on the new Cornell Tech campus on Roosevelt Island. Anne Li, the Managing Director, EVP at NYCEDC, argued the case for NYC to focus on tech. Li said, “NYC is underweight in the number of engineers we produce…there are not that many industries we can diversify ourselves into but tech is one”. She also noted that similar projects in other countries have been funded by the government. However, our city’s government doesn’t have those kinds of funds to give. So, the focus has really been on the universities. That’s where the partnership with Israel’s Technion came to play on this campus proposal. Israel has demonstrated itself as a country that has a strong grasp on how to commercialize research. Additionally, several other city universities have started to further develop their tech programs. NYU has started a Center for Urban Science & Progress in Brooklyn and Columbia University is expanding its engineering school. Li estimates that the three projects combined will double the number of engineers (PhDs) in 20 years. She also suggested that work is being done at the high school level as well. Li says, “great coders learn how to code in high school not college”, so there’s a computer science high school in the works.
The discussion of what students want to do after they graduate also came into play. Patricof suggested that most students in NYC want to start their own company when perhaps instead they should be “looking to join a big company to bring entrepreneurial spirit or join an existing start-up”. He noted that there are a lot of companies that are imitating one another these days: “You should start a company if you have a passion and you’ve learned a lot about it and you have a plan, not hunt for ideas or copy what someone else has done and say ‘I’m gonna do it better'”. Scott Anderson, Partner & Chief Strategy Officer at Control Group, backed him up by saying that his company looks for more skilled workers and sees great value in new recruits who have failed before. Patricof furthered the argument of the value of having worked at a failed start-up: “They don’t assign people different roles so you learn everything…you watch and learn from an unsophisticated leader and then you’re ready to do a start-up because you’ve seen the pitfalls and not spent your own money.”
So, the overall feeling was that New York City can become a more attractive destination for engineers and entrepreneurs by building more academic resources for students and by making the city a better and more affordable place to live for experienced talent. Recent graduates will need to start shifting the attention toward joining existing start-ups rather than creating imitative start-ups of their own. There will also need to be the economic support and incentive to allow them to do this – through improved fundraising avenues for start-ups, affordable housing options, etc.
Victoria Harman (@vc1harman) is a social media content & strategy specialist and entrepreneur based in New York City.