Going Beyond Early Promises, NY Works On Its Follow-Through (Part 2):
"What’s Next for the New York Ecosystem?"
For cities to truly thrive in this economy, fresh ideas must be cross-pollinated from beyond their borders—and New York offers its share of honey to lure in startups. This international gateway can be the place for companies to break into the U.S. market, meet new collaborators, and tap the resources of well-heeled investors.
A panel drawn from the city’s innovation scene, venture capital community, and mayoral administration gathered Thursday to discuss “What’s Next for the New York Ecosystem.” This was part of a daylong event presented by the Worldwide Investor Network, which helps international technology startups find funding and other support to enter the U.S. Addressing an audience of largely international entrepreneurs, it was a chance to hear how startups from abroad can be part of the city’s growth.
The panel comprised David Aronoff, general partner with Flybridge Capital Partners; Jessica Lawrence, executive director of New York Tech Meetup; and Benjamin Branham, chief of staff with the New York City Economic Development Corp.
Aronoff heads up Flybridge’s New York office, which opened a bit more than a year ago. He said the firm, though headquartered in Boston, is rather familiar with the innovation community here. Aronoff and some other members of the Flybridge team were with Greylock Partners during the prior tech boom. “[Greylock] started investing in the New York tech scene with DoubleClick,” Aronoff said. “At the time, the Internet was nascent and the idea of investing in a tech company in Manhattan was really a strange concept.”
Though the first tech bubble burst, he said he did not stop coming to New York. “There was something that started then, this kernel that has really continued to blossom,” Aronoff said. Starting about six years ago, partners from Flybridge spent more and more time in New York, he said, and in 2010 the firm’s deal flow here began to rival its deals in Boston. “Now more than half of our deal flow is in New York,” he said.
The various efforts to train more homegrown engineers over the next decade are changing the city, Aronoff said. “The mayor’s legacy is going be transforming New York into a true tech center,” he said. “That’s the reason why we’re back.”
New York Tech Meetup’s Lawrence has been championing not only the monthly tech demos hosted by her organization but also the local innovation community’s presence. She said NYTM’s membership has grown from 15,000 in April 2011, when she became part of the team, to currently more than 32,000. “The trajectory has been insane,” she said. “I feel like I joined the organization right at that point when tech industry and community in the city was really taking off.”
The idea of community, she said, plays a substantial role in the growth of the tech industry in the city. Lawrence said members of NYTM turn to each other to find resources and advice. Each month New York Tech Meetup lets innovators demo ideas in front of an always-packed theater of some 800 people, with more watching remotely via video simulcast. The organization’s influence extends far beyond the monthly presentations. “Our meetup has led to a lot of others,” she said. “There are over 650 tech-related meetups in the city.”
Perceptions of the city have evolved, Lawrence said, as more tech talent gathers here. “We started a list of companies being engineered in New York to combat the problem of people thinking there were marketing and biz-dev people here but no engineers,” she said. That list quickly grew to more than 500 companies with at least 50 percent of their front-end and back-end engineering done in New York.
In spite of the progressive moves in the city, she said sometimes people on the periphery are unaware of the opportunities the tech industry offers. Lawrence said she was surprised recently while speaking to a class of computer science students at Pace University. “I started throwing out names of tech companies like Etsy, Airbnb, and TaskRabbit, and they had totally blank looks on their faces,” she said.
Lawrence believes more can be done to get the word out about the city being a center for jobs for computer science graduates and others looking for careers in technology.
Branham spoke about plans to create more academic institutions to reinforce the technology industry here. That includes the forthcoming Cornell NYC Tech campus, the NYU Center for Urban Science and Progress, and the expansion of Columbia University’s Institute for Data Sciences & Engineering. “The one thing we’ve heard time and again from entrepreneurs, founders, and the funding community is that New York City needs more talent to sustain this incredible growth,” Branham said.
The mayor’s administration also works with partners to start initiatives such as the World to NYC program, he said, which brings startups and entrepreneurs from around the world. “Last week we hosted a delegation from Central Europe with iCatapult and VentureOutNY,” Branham said, “so they can think about whether establishing offices here or relocating makes sense.”
New York sent its own delegation to Israel in April to meet with funders, accelerators, and incubators, he said, to keep lines of communication open.
For all of the city’s benefits, a number of concerns such as the high cost of operating here might keep startups—especially from abroad—from moving to New York. One audience member at yesterday’s forum eagerly asked to know what the city is doing to make sure more visas are available to allow international entrepreneurs to come to the U.S.
Branham said Mayor Bloomberg has been very vocal about immigration, which is also at the center of heated national political debates. “[The mayor] started a wide-ranging coalition of bipartisan interests to push for the exact type of immigration reform that will allow visas to be issued more efficiently,” Branham said. “The last thing we want is reverse brain drain.”
He referred to the phenomenon of students from abroad earning advanced degrees in the U.S., only to be forced to return to their home countries where they start businesses. “That’s not a win,” Branham said. The NYCEDC may not have lobbying muscle to sway the matter directly, he said, but the mayor has been out in front of the issue.
Lawrence said NYTM is part of the coalition Branham mentioned, which is preparing the virtual March for Innovation planned for May 22 and 23 to get politicians in Washington, DC, onboard with immigration reform. “It covers people from New York and Silicon Valley as well,” she said. “Our U.S. Senator Chuck Schumer has been pretty vocal about immigration as well. We hope with all of these different voices that we’ll get somewhere.”
The venture community, Aronoff said, also supports the March for Innovation effort. “We’re all aligned,” he said. “This is good for the city; it’s good for the country.”