Startups · Entrepreneurship

How has NYC beat Seattle in the startup game where they clearly had a head start?

Bill Wade Software Engineer at Cloudflow

April 25th, 2016

It's looking more and more (and this article is just the latest)  like seattle is losing it's edge as a #2 startup community. NYC passed it even though Seattle has tons of talented people from amazon, microsoft and beyond.  The author claims it's risk aversion by entrepreneurs and investors but would love to hear from people in both cities what's working or not working....
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Marsh Sutherland

April 27th, 2016

Easy... NYC has way more money, population, and massive Fortune 500 clients with huge budgets as clients for NYC startups. 

I'm a native Washingtonian who lived in Boston for 17 years and has returned to WA

Tom Jay

April 25th, 2016

I think you need two types of people for startups. Very young and cheap willing to make mistakes and learn and very old and willing to commit long term for delayed pay with lots of experience,

If you get someone that is mid-career and then offer them all but nothing in a startup it will be hard for them to commit. Wives tend to like money, kids like to eat, need shoes and want cool toys.

I look at Seattle as a "Low Risk" employment and not really part of the "Bleeding Edge" like we have in the SF Bay Area.

If you look at other major cities you will see Berlin is exploding as well as Amsterdam and London, I'm doing lots of mentoring there lately in these cities.

NYC is always a great place to work but can be expensive like SF for living, maybe a bit harder since I have little to no connections there.

It really does not matter where you are if you have the team and connections.

Anonymous

April 27th, 2016

I've worked in NYC all my life and have seen this happen over and over with other industries. Look at the parallel with coffee: Seattle ruled, and for a long time it was pathetic how long we went with crappy coffee. 

But NYC is big, there's a lot of money here, and people are comfortable making the new. So when people finally wake up to the potential they wake up in a big way. There's money to invest, there's a lot of people to start lots of organizations, and they like taking it to the next level. 

With startups it's taking longer than with coffee to catch up with the leader because it's a cultural change. I was wow'd back in 2005 to drive through the Valley and see geeky billboards along the highway with messages aimed at engineers. You still don't see that in NYC. Culturally that's still a weird thing here.

Michael Heiligenstein Marketing Manager

April 28th, 2016

I second Marsh on this. NYC is a hard city to compete with. The metro area is 5x the size of Seattle's, and that includes millions of educated workers and plenty of young talent. NYC is also the global center of several key industries - I'm thinking finance and marketing specifically here.

Plus, Seattle was always going to be the #2 tech startup on the west coast. NYC has become the tech hub for the eastern US. How many people can take a train into Manhattan any given day?

Rob G

April 28th, 2016

I live in Seattle and have started 4 companies here.  Prior to my first startup i was a VP for a large NY based software company, so while i have not lived in NY I understand the business 'culture'.  The following are broad generalizations with plenty of exceptions, but in general:
1. shear mass (population): NY metro area is #1 (almost 6x the size of Seattle metro), Seattle metro #15. 
2. risk averse: Seattleites just don't seem to have the same appetite for risk that New Yorkers have.  Wall street is, after all, the legalized gambling capital of the world.  while seattle may have the largest concentration of software developers and engineers (Microsoft, Amazon, Expedia, Boeing, Zillow, and a pretty strong biotech base, etc.) we don't have the financiers and investor mindset that NY has.  the first generation of software millionaires came out of MS.  Most MS millionaires were minted in the mid to late '90's.  There were lots of tech startups started by and/or funded by new MS angels.   Then the dot com implosion hit in early 2000 and these new angels and the few VCs pulled way back.  MS stock bumped along pretty flat for the next 14 years.  Those who had already cashed in their options were pretty gun shy about investing in startups.  We lots of money here, just not in the hands of those with the appetite for startups.  We still have a few VC firms, but they have not forgotten the startup dust bowl of the early 2000's. Compared to the bay area we are still toddlers. 
3. "I want to give back to the startup community":  Seattle tech millionaires don't seem to have the same connection to the startup community that you find in the bay area - I can't compare that to current NY.  I'm not sure why that is.  It could be that a lot of the local tech millionaires made their money from a relatively mature MS and Amazon and never really had an opportunity to experience 'startup' culture. MS felt quite entrepreneurial early on, but the 'adults' took over in the early 90's.  Expedia is a great company, but it was never really a true 'startup' - it was an internal project at MS that got spun out on it's own.  Rich Barton is a great guy and great investor, but it wasn't like he and  bunch of cofounders had to live on ramen noodles for years.  I'm hopeful that Zillow (also started by Barton) will eventually become a startup mothership.  Given Jeff Bezos's entrepreneurial mindset I'm hopeful that Amazon will spit out more entrepreneurs and tech-investors. 
4.  NY wins hands down in the world of advertising, marketing and finance.  Startups need 2 internal skill sets (minimum):  product development and sales (or marketing if b2c).   We have a pretty good supply of engineers here who want to start their own companies (still rather risk averse to joining others), but we don't have strong pools of experienced tech sales and marketing people here. 
Again, these are pretty broad brush strokes, but that's what it feels like from the entrepreneurial trenches here in the silicon forest. 

Brett Noyes Managing Partner unbank.ventures

May 13th, 2016

I am a native Washingtonian who has transplanted to the Bay. I totally agree with Marsh Sutherland comments. I also think that Startup Weekend being headquartered in Seattle was one of the largest catalysts for building a startup ecosystem in Seattle.  Now that it has merged with Techstars and moved leadership to Boulder I would expect a decline in Startup activity.  

Seattle has minimal VC and has a very conservative risk tolerance.  I think its commendable what has been built but it is not at all surprising that NYC has surpassed it.