[zmitri]

In my experience that makes it a better place to live -- but not necessarily a better place to try to build a (very large) technology company.

The difference between NYC and the Valley was unclear to me when I lived in New York, but after spending just a few months out west, it became very apparent to me that there is an order of magnitude difference between the two -- and I believe that will translate into an increased chance of success.

There are lots of reasons that New York just doesn't compete with SV, mostly to do with people and networking, but the difference that really struck me was the openness and positivity in the Valley. Yes there's an echo chamber, and yes you need to keep your BS detector on at all times, but when you are just 3 or 4 people trying to crack into a behemoth of an industry you need all the help you can get. I felt lots of people in New York were looking for weaknesses in what we were doing or trying to figure out who would acquire us, whereas people in the Valley were looking for ways to help us really succeed.

The combined operating experience is not only greater in the Valley, but much more accessible too. I felt like larger companies like Tumblr and Foursquare were silo'd off from everyone else, whereas you can barely shake a stick in Mountain View without hitting someone at Google.

Personally, I believe New York is the greatest city in the world and due to it's culture and array of experiences, a great place to start a company -- but if you want to build a big tech company, you should move out west. In fact, it's one of YC's indicators of success after going through the program.

As a side note, the closest thing I've seen on the east coast with a similar vibe to the valley is Waterloo, Ontario. Although very, very small, they've somehow captured that same feeling.

[willholloway]

> I felt lots of people in New York were looking for weaknesses in what we were doing or trying to figure out who would acquire us, whereas people in the Valley were looking for ways to help us really succeed.

NYC is a weary, jaded and cynical metropolis, it's inhabitants perpetually cranky from six months of winter in their cramped, expensive, rented domiciles.

It's not your company, it's their depressed mood coupled with feelings of inferiority constantly triggered by the immense glittering wealth that surrounds them, always just out of their grasp.

[riggins]

Here's another hypothesis.

It's the finance industry culture. Why?

Finance is a zero-sum game. That leads to a set of incentives where what you need to do is beat the next guy.

Tech is almost the opposite of a zero-sum games. That leads to a set of incentives where what you need to do is crack a complex problem. Cracking complex problems requires collaboration.

[gumby]

"Here's another hypothesis: It's the finance industry culture."

I have been on boards in the valley and in NYC, and I can see this very directly. The NY VCs were far more transactional, and more aggressively willing to drop a company and take the loss early.

Not that it's rainbows and unicorns in the valley! The VCs, after all, work for their customers (err, "LPs"). I've noticed that as the valley VCs are more and more frequently finance rather than former operating guys that they are more like this. I saw it in the dot-com boom, and guess which VCs got shellacked? Mostly the finance guys.

[willholloway]

That sounds very correct, and is true for all the dominant industries in New York: Finance, Fashion, Law & Media.

It leads to a lot of savage energy channeling through the system, a lot of deep career dissatisfaction and a feeling that someone, somewhere is tightening the rack, with you on it.

I suspect the only real winners in the city are the landlords.

Whatever the cause, in all my time on the road I have never come across such a congregation of pessimists as I did in New York.

[nerfhammer]

Nonsense. Bay Area rents are just as expensive and Chicago's winter is twenty times worse than New York, yet these area have their own unique personalities

[untog]

NYC is a weary, jaded and cynical metropolis

and I wouldn't change it for the world. I far prefer living and working in an environment where I am surrounded by people from different industries and backgrounds that will question me and force me to reconsider my assumptions than a Silicon Valley world where everyone is "crushing it" until their funding suddenly dries up and everyone realises their idea was awful in the first place.

[youssifa]

It probably depends on what kind of a company you are trying to start. Groupthink or an approach that over-emphasizes engineering in place of value prop / understanding the market you are serving can hinder you, and that could be a competitive advantage for NYC.

One thing I will point out: most investors in NYC are looking for Series A or later. Or proven profitability. It's a more conventional community; the type of investors you'll see in New York made their money in PE/finance/investment banking and not tech. NYC as a market is very much a place to build a company where your primary metric is not MAU's or an innovative idea but rather something that moderately takes a linear approach in helping an established industry innovate. Or already profitable. I'd be surprised to see the next Amazon, Google, or Tesla ever come out of New York. The next DoubleClick or Travelocity? Sure.

[leelin]

> but if you want to build a big tech company, you should move out west. In fact, it's one of YC's indicators of success after going through the program.

Fascinating! Is this something the YC partners have mentioned recently? In my batch of 26 companies (that was 5 years ago), I can definitely see a huge correlation between leaving the bay area and failing. I just always assumed it was just randomness or that some left because no investors were forcing them to stay (in our case it was both lack of investors and NYC housing our entire customer base).

[zmitri]

Yes, a partner said that. They also specifically noted that NYC might be an exception to the rule, but they still believe SV is an order of magnitude better for "all things" startups.

Also, pg has mentioned something similar in an essay before - not specifically re: NYC but with regards to bad location in general.

[jval]

This is a great post, thanks for the insight. I notice you work with writers and the press, most of whom I imagine would be living in NYC if not the East Coast cities. Do you think there's an advantage to being closer to that? Or do you think that any advantage you get from being closer to those you work with is outweighed by the skepticism you get from other people around you?

I was watching an interview where the Airbnb guys said they were constantly flying to NYC because many of their early customers were there and I was wondering why they didn't simply relocate together, although perhaps the positivity and accessibility of expertise outweighs the burden of travelling.

Also - in your opinion, do you think New York could ever replicate the SV mentality, even just in its own tech scene silo (obviously Wall St bankers will never adopt it), or do you think this is bound to fail?

[zmitri]

We've talked about this, and we decided it makes more sense for us to be removed from traditional media companies.

My co-founder Adrian asked the AirBnB founders that question believe it or not! They said they always planned on staying in SF and that's where the heart of the company was. New York was just where it took off first and they thought that if they could nail the model there, they could do it anywhere. Turns out they were right.

It felt far away from it when I was there, but I believe it could become more ingrained with time though. I think it's very clear that there are great investors (USV is world class) and companies/founders at various stages (eg. Kickstarter, RapGenius) in New York, but there's still a bunch of missing pieces in the ecosystem that SV has nailed down.

[AndrewKemendo]

>there's still a bunch of missing pieces in the ecosystem that SV has nailed down

Can you expand on this point? Is there something that you can point to that is structurally different in SV that cannot be replicated elsewhere eg. infrastructure, legal environment etc...?

[zmitri]

By nailed down, I meant "done right" and functioning smoothly -- not nailed down as in impossible to duplicate else where.

For example there is nothing very early stage in New York that wields the respect and track record of YCombinator or SV Angel. Both of those have become institutions in SV and are very important as connectors and seed stage investors.

The Stanford ecosystem is another example that is well oiled. The Cornell Tech campus in NYC has tons of potential, but it's still quite new.