There is a
rather useful article in the NYT about how New York is starting to pop up as a startup hub again, after Silicon Alley shut down in 2002. But what really struck me is how much of it could equally be said about London. The following are to my mind the key arguments:
Firstly, a thriving scene of mutual assistance:
THE two dozen or so people arranged around wooden tables, warming their hands and bellies with steaming mugs of coffee and plates of homemade biscuits, looked like just another Sunday brunch set in New York. But members of this group had braved knee-deep snow to gab about cutting-edge ideas and as they introduced themselves the roll call sounded like a Who’s Who of digital start-ups: Foursquare, Hot Potato, Six Apart, Flickr, Flavorpill, Trust Art, Vimeo.
The New York Tech Meet-Up is held monthly, and as many as 700 people attend, a sign of the revival of tech businesses in the city.
“There’s a lot happening right here in our ZIP code,” said Dorothy McGivney, a former Google employee who is a co-coordinator of this group, the North Brooklyn Breakfast Club, and runs Jauntsetter, a travel site for women. Like the others, she had come to the brunch to help foster the growth of her little local community of entrepreneurs.
The group had its inaugural meeting in January and is among a growing cluster of informal meet-and-greets for the local technology and media industries. A recent installment of another monthly event, called the New York Tech Meet-Up and held in Chelsea, drew 700 tech enthusiasts.
The London scene has been quite vibrant for about 3 years now, but I think what is missing is the emergence of some real category killer companies. New York has already given birth to a few, such as Etsy and DoubleClick. London doesn't really have this - yet.
As to where the London category killers may come from, London is more like New York than Silicon Valley - it's a hotbed of the more traditional Media industries which are helping drive New York startups:
Of course, services can be developed anywhere. But because so many industries now grappling with the Internet are based in New York, the city is finding surer footing among its peers as a thriving tech hub.
“Book publishing, advertising, media and even the fashion industry are all located in New York. These are the main industries that are being reshaped and redefined by technology and the Internet,” says AnnaLee Saxenian, a professor at the University of California, Berkeley, who studies regional economics and technology entrepreneurship.
And somewhere to work is key - there is a rise of incubators and workspaces again:
Some of the more interesting breeding grounds in the city are technology incubators that nurture and mentor young companies. One example is the new Manhattan arm of Dogpatch Labs, which is backed by Polaris Venture Partners, an investment firm in the Boston area.
Dogpatch, which opened in January, offers start-ups a place to work, rent-free, for several months, along with the possibility of securing an investment down the line.
Another critical factor is the input of the Universities in the area:
Colleges and universities have long helped fuel the dreams of entrepreneurs. An early pillar of Silicon Valley innovation was Stanford’s dean of engineering, Frederick Terman, who viewed the university as an incubator for the electronics industry. More recently, Facebook was born in a Harvard student’s dorm room and Google first percolated in the heads of two Stanford graduate students.
Hoping to replicate those kinds of successes, schools in New York are increasingly collaborating with local start-ups. Chris Wiggins, a professor of applied mathematics at Columbia University, regularly brings start-up founders to campus to speak to students about careers in technology and is establishing an internship program at the school.
NYC Seed works closely with the Polytechnic Institute of New York University to help students there translate promising ideas into profit-making ventures.
London has some of the best universities on the planet, so no excuses there - but more co-ordination and collaboration is required, for Cambridge to still be ahead of London is extraordinary given the assets at London's disposal. The reason for this is the main London scene-killer - funding. There is still a bigger (or at least more active) VC scene in Cambridge. New York is getting that right again, and the meltdown in teh financial sector (another thing it shares with London) is helping:
New York’s flashier industries, including big media and Wall Street, have long dwarfed the tech sector here. And the dot-com implosion only reinforced that reality. The fledgling tech scene that was just beginning to hum in the late 1990s flatlined as dozens of Internet companies folded, pink slips replaced party invitations and venture capital firms took their investments elsewhere.
During the dot-com boom, “venture capitalists were just throwing dollars at every Internet idea on every street corner,” says Owen Davis, a serial entrepreneur and managing director of NYC Seed, an early-stage technology investment fund. “There was little critical judgment about business models and ideas.”
Since then, Mr. Davis says, the New York technology industry has been steadily coming back on line and has managed to accelerate despite the economic turmoil besieging other industries.
To my mind this is still London's main weakness. All the other areas coild be done better, but are not on the critical path. But nearly every London startup I know of in the new mesia/web 2.0 space that has found funding has had to go Stateside to get it, or fairly soon after an initial round. That (and I know some of my London VC friends will disagree) to my mind is the main thing holding London back. Its not that there isn't any money here, its just that there is not enough of it, and I am concerned its not going to the right places. I think there is still too much of a tendency to give money to the "right" sort of people, rather than the sort of people who are right.
