Let’s stop the Silicon Valley comparisons, and take a look at why NYC is kicking butt

Every Seattle techie needs an "I love Seattle" coffee mug. (Schlosser photo)

Overdone. Counterproductive. Tired. Whiny.

Those are some of the words I’ve heard in the past few weeks as the Seattle startup community looks itself in the mirror, debating our standing as an innovation hub in relation to Silicon Valley. We’ve had a pretty active discussion on GeekWire about it, and there’s been no shortage of chatter at local tech events.

Some have grown tired of the debate, saying it is time to shut up and start building some ground breaking companies. Others point out some notable wins in recent weeks, including Zillow’s IPO, PopCap’s sale and the meteoric rise of Zillow.

But, please, just humor me here for one moment as I’d like to talk a bit about how Seattle’s tech industry stacks up. I don’t want to chat about the Bay Area. I want to discuss New York.

I’ve been in a New York state of mind over the past 48 hours, and it’s not because of some new-found love for Jay-Z or Billy Joel.

On Tuesday afternoon, I (willingly) got tossed into the lion’s den when the organizers of the WTIA’s TechNW event asked me to moderate a panel titled “Seattle as Startup Ground.”

It was lively discussion to say the least, powered by the strong opinions of Redfin CEO Glenn Kelman; TechStars Seattle executive director Andy Sack; Lockerz CEO Kathy Savitt; and Zumobi founder John SanGiovanni.

Instead of Silicon Valley comparisons, the discussion centered around New York’s burgeoning startup scene.

There were a few fireworks and some juicy quotes, and certainly no shortage of strong views. I’ll have more of what the panelists said in a moment.

But, before I get into the specifics, there was another piece of news that crossed my desk this week that got me thinking a bit more about New York.

On Wednesday, I got my hands on a fresh copy of CB Insights’ quarterly venture capital report. As is typically the case, the report provided a detailed breakdown of venture capital investing during the past quarter, digging into specific categories, investment stages and — most importantly for this discussion — geographies.

And here’s where things get a little — well, let’s say, for all of those in the “Seattle Nice” camp — troubling. During the third quarter, venture capitalists invested $197 million in 29 deals in Washington state. That accounted for just two percent of the total venture capital pie.

Now, take a look at New York. Its share of the VC pie — an appropriate metaphor, I think, since New York-style pizza also was an ongoing topic during our panel — doubled from five percent to 10 percent. Meanwhile, New York startup companies attracted a whopping $831 million during the third quarter — more than four times the amount in Washington state.

Now, I know what you are thinking: New York is a bigger state, with more than three times the population base.

But here’s the deal: Not too long ago, Washington was out in front when it came to venture capital dollars.

Curious about this, I went back to an old report I wrote at the Seattle P-I. And there it was: In 2007, Washington companies attracted $1.3 billion in venture capital. New York registered $1.2 billion  – an investment level that it could possibly eclipse this year.

So, what the heck happened?

Of course, there was a recession to deal with. But, given the Wall Street meltdown, one would think that New York of all places might take the bigger brunt of that fiasco.

Kathy Savitt

It also got far easier (and cheaper) to start companies given the rise of cloud-based services like Amazon Web Services — but that trend helps startups whether they are in Seattle, San Jose or SoHo.

There have been some especially crappy weather years in Seattle, but I don’t think that led to a mass exodus of the region’s big brains and entrepreneurial talent.

So, what is it?

Kathy Savitt, the former Amazon.com executive who relocated Lockerz from Pittsburgh to Seattle two years ago, has a theory. And it is not really about Seattle as much as it is about New York, which she said rallied as a venture capital and entrepreneurial community four to five years ago.

“That venture capital community …  threw down the gauntlet and said: ‘We are going to make it happen. We are going to be a hub. We are going to be #2 to San Francisco. This is the greatest city in the world, and we are going to do it. And I think a lot of that was driven by the venture capital community, and that became evident in the compensation packages, it became evident in the amount of time that, not just CEOs but rather board members who had had big successful outcomes, were spending with the entrepreneurs and helping them with their career track. If you ask me, the number one thing we can do –and it would be my challenge not just to our venture capital community here but to every successful entrepreneur … or senior executive… — is rise up for your city. This city should be #2 and ultimately should be akin, in my mind, to the Valley.”

(Earlier in the day, Isilon co-founder Sujal Patel offered a similar call to action).

Redfin CEO Glenn Kelman countered Savitt’s remarks by saying that it is unfair to put the weight on the venture capital community. “I don’t think (venture capitalist) Fred Wilson made New York. I think the entrepreneurs of New York made New York.”

At the end of the day, Kelman said many young engineers prefer to relocate to Silicon Valley or New York.

“I just come back to engineers, engineers, engineers. I don’t think it is any more complicated than that,” he said. “I don’t think there’s a shortage of capital, there’s a shortage of engineers with good ideas.”

Andy Sack, who is attempting to incubate a new class of entrepreneurs at TechStars and has rallied the venture capital community behind the effort, agreed that Seattle needs to cultivate “really hungry, ambitious, well educated, young talent.” New York, Boston and the Bay Area have that “in droves,” an advantage which eventually attracts capital.

Andy Sack (Randy Stewart photo)

“I just don’t look for excuses,” he said. “Whether you are a transplant (to Seattle) or not, I think you have to deal with the natural resources and the environment and make it happen. I think Seattle is a great place, as good as place as any, for building a great company.”

Savitt agreed, but noted that busy entrepreneurs usually don’t have time to take on the important leadership positions necessary to make a region a startup hotbed. And that, in her view, is what’s sorely lacking in Seattle.

“It has nothing to do about money. It has everything to do about leadership, and pride in a geographic area,” she said.

To the amazement of friends, I’ve never traveled to New York City. I don’t know the tech community there, nor do I profess any sort of deep knowledge of how it works or why it has risen so quickly.

In fact, I don’t particularly like the East Coast. I am a West Coaster, and I love Seattle. If innovation hubs were a fantasy football game, I’d still proudly hold on to Seattle as my starting QB.

But if the current trends continue and we don’t come together to foster a stronger, richer, vibrant community, that may not always be the case. The venture capital dollars tell part of the story.

But, at times, it does feel like what’s really needed in Seattle is a …. coach.

  • http://twitter.com/chrisamccoy Chris McCoy

    Awesome, awesome, awesome data and insight to drop, John. 

    My logic: Seattle is pretty risk adverse, which works against the culture of go big or go home entrepreneurship. So naturally, younger entrepreneurs are best to start companies since their risk profiles are lower. Problem is the talented folks out of the UW–our state’s “finest” minds per admission statistics–aren’t starting companies. They are joining them. 

    Andy Sack and the TechStars crew are doing the most to change this.

    But honestly, more pressure should be put on the UW as center for true, game-changing entrepreneurship. It’s just not happening.

    I love the UW, created my own major around entrepreneurship (CIE was just getting rolling), and am pretty disappointed in the type of entrepreneurship that’s coming out of there vs. the amount of talent within its walls. I’ve traveled / met students at USC and Stanford and they’re just on a different level in terms of the ambitiousness of the entities they are trying to bring to life. I’m rarely impressed by what I see out of the UW–and that should not be the case. Really great stuff should be coming out of there. 

    Why are CS graduates getting swallowed up by MS/Goog (its akin to Harvard grads going into big consulting or PE)? How do the CIE and CS departments work with / against each other? To me, that’s the story. 

    Also, you don’t have to be an engineer to bring a company to life. I’d argue you have to be a better designer and engineer manager so you think through the user-experience first. But that’s a different point.

    • http://www.about.me/tgowland Tara Gowland

      Good points – maybe someone from UW can jump in and lend some insight..

    • http://www.about.me/tgowland Tara Gowland

      Good points – maybe someone from UW can jump in and lend some insight..

    • Ldodson

      Student Loans?

  • http://twitter.com/bstraley Ben Straley

    Good article John.  I agree with much of what was said in your piece.  I’d also like to add a new wrinkle on the NYC v. Seattle discussion.

    What do Tumblr, Foursquare, and AppNexus have in common?  Several things.  1)  They have raised a bunch of $.  2) They are based in NYC.  3)  They are media companies.

    NYC is the media capital of the world.  Many of the noteworthy startups that have raised money and gotten traction in recent years are media companies at the end of the day.  Their sales teams are pitching ad technology and/or sponsorship packages to American Express, AT&T, Proctor and Gamble, etc. and making money at it.  NYC is where ad dollars get spent.  The place with the most people that know how to create compelling media content and sell advertising on it is NYC.  (I didn’t say “best”, I said “most”…)

    In light of these facts, it’s not surprising to me that NY has emerged as a hotbed for media startups and investment.  If your goal is to start a company that plans to make money from advertising, why wouldn’t NY be on your shortlist of cities to found it in?  In fact, this is probably the single biggest reason why the Big Apple has attracted so many investment dollars.  New York is where a lot of the talent and customers are in an industry that is undergoing massive disruption.  

    Seattle is and will continue to be a great place to start a company.  There is world class talent here in the games, mobile, e-commerce, enterprise software, and ad technology verticals.  I absolutely agree that as a community we can and need to do a lot more to support the people and teams taking huge risks and building the next way of killer companies here.

    • johnhcook

      You make some good points Ben, and while New York may have a bigger share of media-oriented startups, I am not convinced they take more money to get off the ground. Cloud computing is absolutely a revolution, and some of the biggest players in the world are based right in Seattle. Mobile is the same deal. 
      If Seattle is a hub for solving big technology problems — something that Isilon’s Sujal Patel touched on during his remarks yesterday — then shouldn’t the area be getting a bigger share of VC dollars? My calculus: Bigger tech problems = Need for more capital. I actually think Chris McCoy in the comment above is on to something, and it is something I’ve touched on in the past and Glenn Kelman and Andy Sack talked about as well: There needs to be a better support system for the super bright, young engineers who want to be entrepreneurs. 

      • Dave

        Really big problems take larger anticipated sums of capital, which is a struggle in this enviroment. Even getting the startup capital is hard because angels know there is so much capital–which =’s dilution–and time needed prior to an exit.  Much easier in the current environment to start media and other companies that can gain some traction off of small amounts of capital. That also starts a perception that feeds on itself because all of the sudden NY has a lot of startup companies, even though most don’t employ very many people but it really starts the flywheel turning.

        I think NY really started to succeed when it realized that it is not Silicon Valley and doesn’t try to be. The startups there are generally pursuing a different angle than SV companies.  Plus, NY appears to have developed a broader, better array of angel and early stage investors than exist in Seattle (Fred Wilson, Chris Dixon, etc.). Some of that may just be that they are more vocal than Seattle VC’s and angels, but the number of active angels in Seattle seems very small. Surprising since NY’s market is generally thought of as much newer than Seattle’s technology market.  

      • http://twitter.com/bstraley Ben Straley

        Good points John and I do not disagree with any of them.  The point of my earlier post was to suggest that a big reason why so much is happening in NYC is due to its built-in advantages in what is arguably one of the hottest investment categories – media technology and services.  Investment dollars follow opportunity and there are big business opportunities in media right now.  That’s what we are chasing at Meteor.  

        I do agree that the government, education system, and business community in Seattle needs to do more to provide a platform for people to build all types of different businesses.  There is no good reason why we’re not a top-tier destination for 20-somethings to start companies or join startups.  Seattle has a large and vibrant arts and music scene, we’ve got a critical mass of global corporations that are doing very well which provide a relatively stable economy and produce management talent, we’ve got a lower cost of living than either the Bay Area or NYC, the region has cranked out its share of world changing artists and entrepreneurs, and we’ve got a top-tier research institution producing exceptional undergrad and graduate students that can hold there own against any other region in the US.

      • http://twitter.com/bstraley Ben Straley

        Good points John and I do not disagree with any of them.  The point of my earlier post was to suggest that a big reason why so much is happening in NYC is due to its built-in advantages in what is arguably one of the hottest investment categories – media technology and services.  Investment dollars follow opportunity and there are big business opportunities in media right now.  That’s what we are chasing at Meteor.  

        I do agree that the government, education system, and business community in Seattle needs to do more to provide a platform for people to build all types of different businesses.  There is no good reason why we’re not a top-tier destination for 20-somethings to start companies or join startups.  Seattle has a large and vibrant arts and music scene, we’ve got a critical mass of global corporations that are doing very well which provide a relatively stable economy and produce management talent, we’ve got a lower cost of living than either the Bay Area or NYC, the region has cranked out its share of world changing artists and entrepreneurs, and we’ve got a top-tier research institution producing exceptional undergrad and graduate students that can hold there own against any other region in the US.

      • Anonymous

        Hear, hear on supporting young entrepreneurs!  How about the 15-year old phenoms Daniil Kulchenko (http://www.geekwire.com/2011/rewind-meet-15yearold-sold-tech-startup) and Jeannette Yu (http://www.geekwire.com/2011/meet-15yearold-game-developer-wowed-crowd-projectfun), the first selling his cloud-computing company to ActiveState, and the second wowing her cohort at Digipen. 
        Not to mention will.i.am stepping up to support FIRST’s robotics competition for teens (http://www.usfirst.org/aboutus/vision), founded by Dean Kamen, and rapidly expanding in Washington state. Way to make geeky chic!
        So what happens next for talented youth in this region?  Panelist Cavens talked about an 18-year old blowing other interviewees out of the water, and Savitt noted she employs 8 staff under the age of 22 (aka, Lockerz target market).  

        From yesterday’s talk, I felt the strongest call-to-action was to support tomorrow’s entrepreneurs, today. 

      • Anonymous

        Hear, hear on supporting young entrepreneurs!  How about the 15-year old phenoms Daniil Kulchenko (http://www.geekwire.com/2011/rewind-meet-15yearold-sold-tech-startup) and Jeannette Yu (http://www.geekwire.com/2011/meet-15yearold-game-developer-wowed-crowd-projectfun), the first selling his cloud-computing company to ActiveState, and the second wowing her cohort at Digipen. 
        Not to mention will.i.am stepping up to support FIRST’s robotics competition for teens (http://www.usfirst.org/aboutus/vision), founded by Dean Kamen, and rapidly expanding in Washington state. Way to make geeky chic!
        So what happens next for talented youth in this region?  Panelist Cavens talked about an 18-year old blowing other interviewees out of the water, and Savitt noted she employs 8 staff under the age of 22 (aka, Lockerz target market).  

        From yesterday’s talk, I felt the strongest call-to-action was to support tomorrow’s entrepreneurs, today. 

  • Thomas R.

    I think the biggest problem here in Seattle is that the most successful entrepreneurs don’t end up becoming the Angels and VCs that invest in and nurture the next generation. Of the people named on the panel Kathy, Glenn, John or any of the successful companies, Zillow, PopCap, when was the last time you saw them dedicate time (besides large conference panels) to sit down with up and coming entrepreneurs? Sure haven’t heard of them doing any investing either. 

    (And this is a random hypothesis, but these people are also older. Maybe that makes a difference? How can they connect with teens or recent college grads who want to start a company? Maybe there’s a culture gap. I think the average age of founders in the valley is lower, might be something to research.)Andy Sack has done an amazing job in both trying to help entrepreneurs and most importantly be accessible. He’s one of the few guys in Seattle that actually tries to make himself accessible for entrepreneurs. He holds Open Coffee, started TechStars here and also has Founder’s Co-op.I hate to bring up the valley again, but the VCs there are mostly former entrepreneurs who want to give back and help grow great companies. They hold office hours regularly and work in the same offices as the companies they invest in. Sadly, Seattle VCs are mostly corporate MBAs who have never started a company. They’re money managers, look at their bios. 

    • johnhcook

      I do think there’s a problem in successful entrepreneurs/senior tech execs in Seattle recycling capital back into the startup ecosystem, a problem that was well documented by Chris DeVore at Founder’s Co-op. 

      http://www.geekwire.com/2011/seattle-angel-rich-microsoft-amazon-alumni-duffs-start-investing-startups

      But there are examples of people getting engaged and helping out, including Dave Schappell at TeachStreet and, as you note, Andy Sack at Founder’s Co-op. Also, I see Greg Gottesman from Madrona at nearly every startup event in town, and The Startup Weekend folks are making things happen. In terms of angels, it may just be too early for that money to flow out of the Isilons, PopCaps and Zillows of the world. 

      I do hold out more hope for the folks coming out of those types of companies, since they’ve tasted entrepreneurial success more recently. And to your point of Zillow, let me just offer a shameless plug for the GeekWire Meetup on Oct. 27th. Zillow co-founder Rich Barton — also an angel investor in Avvo, King of the Web, Trover, RealSelf, etc. — will be talking about startups. Details here:

      http://geekwire.eventbrite.com/

  • http://www.digitalquarters.net Ben Elowitz

    Good to read this from… New York.

  • http://www.digitalquarters.net Ben Elowitz

    Good to read this from… New York.

  • Jeff Schrock

    Interesting discussion.  While I tend to agree with those in the “Overdone. Counter productive” camp, my partners and I at Union Bay Capital have closed investments in both Washington State and NY city in the last year and thought our perspective might be useful.

    First, NY has almost always been a bigger geographical market for VC than Washington or Pacific NW.  (Best stats are MoneyTree #’s at http://www.nvca.org/index.php?option=com_content&view=article&id=78&Itemid=102 )  Using 2007 as an anchor reference is a bit misleading since this happened to be a good year for Wash / Pac NW with many capital intensive telecom and biotech deals.  

    More recently, NY has gotten a lot of buzz and may have grown a bit faster in terms of VC activity than Pac NW but stats and media hype aside, both areas are great places to build and grow companies.  And both areas are great places to invest. It depends on the type of company, though. 

    NY is loaded with media and finance talent but doesn’t produce many enterprise sw companies, for example.  And operationally it’s challenging – real estate, compensation and recruiting are areas which all seem to be disadvantaged compared to Seattle. 

    Seattle is clearly advantaged in sectors like e-commerce, gaming and cloud computing with the presence of anchors like Amazon and Microsoft and the rich heritage of sw engineering talent.  Seattle also seems to have a more vibrant academic and tech research community than NYC.  As an investor, we’ve also noticed that software businesses which reach scale (or become market standards) tend to be much more durable than digital media companies.

    Regardless of the relative geographic merits, both are great places to innovate and to invest.

  • Jeff Schrock

    Interesting discussion.  While I tend to agree with those in the “Overdone. Counter productive” camp, my partners and I at Union Bay Capital have closed investments in both Washington State and NY city in the last year and thought our perspective might be useful.

    First, NY has almost always been a bigger geographical market for VC than Washington or Pacific NW.  (Best stats are MoneyTree #’s at http://www.nvca.org/index.php?option=com_content&view=article&id=78&Itemid=102 )  Using 2007 as an anchor reference is a bit misleading since this happened to be a good year for Wash / Pac NW with many capital intensive telecom and biotech deals.  

    More recently, NY has gotten a lot of buzz and may have grown a bit faster in terms of VC activity than Pac NW but stats and media hype aside, both areas are great places to build and grow companies.  And both areas are great places to invest. It depends on the type of company, though. 

    NY is loaded with media and finance talent but doesn’t produce many enterprise sw companies, for example.  And operationally it’s challenging – real estate, compensation and recruiting are areas which all seem to be disadvantaged compared to Seattle. 

    Seattle is clearly advantaged in sectors like e-commerce, gaming and cloud computing with the presence of anchors like Amazon and Microsoft and the rich heritage of sw engineering talent.  Seattle also seems to have a more vibrant academic and tech research community than NYC.  As an investor, we’ve also noticed that software businesses which reach scale (or become market standards) tend to be much more durable than digital media companies.

    Regardless of the relative geographic merits, both are great places to innovate and to invest.

  • http://twitter.com/paulbz Paul Murphy

    Great article.  As someone that recently moved from Seattle to NYC, I can relate to many of these reasons.  Something not mentioned is the efficiency of NYC.  You can literally meet with *everyone* here – from captains of industry, investors, scientists, engineers, incubators, entrepreneurs – it’s all here and super accessible.  This does wonders for startups looking to branch out to get customers and partners. On top of that, there is an interesting “sense of urgency” in NYC that I never felt in the time I spent in Seattle.

    All that said, the NYC startup scene has many of the same challenge as Seattle – there aren’t a ton of engineers (yet, it’s starting to get better), and there are some very attractive industries competing for high IQ talent.  In SF/Bay Area, everyone wants to be in a tech startup.  That’s just not the case in NYC yet, although it is getting much better.

  • http://twitter.com/paulbz Paul Murphy

    Great article.  As someone that recently moved from Seattle to NYC, I can relate to many of these reasons.  Something not mentioned is the efficiency of NYC.  You can literally meet with *everyone* here – from captains of industry, investors, scientists, engineers, incubators, entrepreneurs – it’s all here and super accessible.  This does wonders for startups looking to branch out to get customers and partners. On top of that, there is an interesting “sense of urgency” in NYC that I never felt in the time I spent in Seattle.

    All that said, the NYC startup scene has many of the same challenge as Seattle – there aren’t a ton of engineers (yet, it’s starting to get better), and there are some very attractive industries competing for high IQ talent.  In SF/Bay Area, everyone wants to be in a tech startup.  That’s just not the case in NYC yet, although it is getting much better.

  • http://twitter.com/AndySack Andy Sack

    Thanks for hosting the panel and for inviting me to participate. As you know I’m super passionate about — and on the front lines of building the seattle entrepreneurial ecosystem everyday.  I want to see the pie grow — I’m looking toward my other panelists as well as some of the commenters ont his thread to grow big companies, exit, and re-invest in the next generation of entrepreneurs locally.  
    I know it may be necessary but I’m tired of the debate of Seattle versus anyone.  Let’s be ourselves. Grow companies as fiercely and successfully as Jeff Bezos and Howard Schultz and Rich Barton have. 

    And one more thing — John — go to NY and eat a slice of pizza there. It’ll help your reporting :-) 

  • http://twitter.com/AndySack Andy Sack

    Thanks for hosting the panel and for inviting me to participate. As you know I’m super passionate about — and on the front lines of building the seattle entrepreneurial ecosystem everyday.  I want to see the pie grow — I’m looking toward my other panelists as well as some of the commenters ont his thread to grow big companies, exit, and re-invest in the next generation of entrepreneurs locally.  
    I know it may be necessary but I’m tired of the debate of Seattle versus anyone.  Let’s be ourselves. Grow companies as fiercely and successfully as Jeff Bezos and Howard Schultz and Rich Barton have. 

    And one more thing — John — go to NY and eat a slice of pizza there. It’ll help your reporting :-) 

  • Anonymous

    I completely agree with the mentions of Seattle’s risk averse personality. NY has fast paced hustlers (The HBO show “how to make it in america” is a fun depiction of this)

    Seattle loves job security too much, especially at a young age. I continue to fall back on the fact that Seattle’s big companies HURT the entrepreneurial community by snatching up the regions talented young engineers. I continue to see the profile “worked at Microsoft since I was 22, have a family now, can’t take the risk of starting a company.” 

  • http://twitter.com/lunarmobiscuit Michael ‘Luni’ Libes

    I believe the story you’ve laid out John.  Given its
    size and media ties, NYC should really be a technology center too. 
    However, the recipe for such a center supposedly includes a tech-centric
    research university and feeder companies.  Does NYC get a bye on those due
    to its position as center of the universe?

    In addition, note that the VC stats have always been flawed when it comes to geographics. 
    First, there are effects wherein the outbound funds get counted wherever the VC
    fund has its HQ, e.g. everything Bill Bryant does here for DFJ gets counted as
    CA money.  Second, the inbound funds are counted wherever the company is
    based, regardless of those companies having multiple offices, e.g. Series A for
    Ground Truth counted for WA, but post-merger our HQ is in fact in NYC and thus
    the latest $8MM counts toward that NYC growth.

    • johnhcook

      Not sure I follow that logic on the venture funds, and that’s not actually how it works. If a fund from California invests in a Washington company — say Kleiner Perkins’ investment in Inrix — that gets counted toward Washington’s total for the quarter. Check out the CB Insights’ methodology, but that’s how the other reports work too.

      When Bill Bryant invests as part of DFJ in a company in Seattle, that dollar amount is counted for Washington state, not California. Also, it seems to make sense that VC dollars get counted for where the company is headquartered, not where they have branch offices. Should Zynga and Facebook be counted in Washington dollar totals since they have branch offices here? I don’t think so. 

      If Ground Truth had made the acquisition of Umber and chosen Seattle for the HQ rather than NYC, then I think it would have been fair to count the recent VC round as a Seattle deal. 

    • johnhcook

      Not sure I follow that logic on the venture funds, and that’s not actually how it works. If a fund from California invests in a Washington company — say Kleiner Perkins’ investment in Inrix — that gets counted toward Washington’s total for the quarter. Check out the CB Insights’ methodology, but that’s how the other reports work too.

      When Bill Bryant invests as part of DFJ in a company in Seattle, that dollar amount is counted for Washington state, not California. Also, it seems to make sense that VC dollars get counted for where the company is headquartered, not where they have branch offices. Should Zynga and Facebook be counted in Washington dollar totals since they have branch offices here? I don’t think so. 

      If Ground Truth had made the acquisition of Umber and chosen Seattle for the HQ rather than NYC, then I think it would have been fair to count the recent VC round as a Seattle deal. 

  • http://twitter.com/lunarmobiscuit Michael ‘Luni’ Libes

    I believe the story you’ve laid out John.  Given its
    size and media ties, NYC should really be a technology center too. 
    However, the recipe for such a center supposedly includes a tech-centric
    research university and feeder companies.  Does NYC get a bye on those due
    to its position as center of the universe?

    In addition, note that the VC stats have always been flawed when it comes to geographics. 
    First, there are effects wherein the outbound funds get counted wherever the VC
    fund has its HQ, e.g. everything Bill Bryant does here for DFJ gets counted as
    CA money.  Second, the inbound funds are counted wherever the company is
    based, regardless of those companies having multiple offices, e.g. Series A for
    Ground Truth counted for WA, but post-merger our HQ is in fact in NYC and thus
    the latest $8MM counts toward that NYC growth.

  • Guest

    Playing catchup is really hard. It takes time to build something great, and Seattle’s had no leadership on this front for a decade at least. Great to see people starting to talk about improving things.

    One area where an individual can really make a difference is in angel investing. I’d love to see investors with passion for supporting entrepreneurs get vocal here. Especially if a local angel build relationships with top-tier venture from SV, that’s a huge win and a great incentive to keep a company here. 

    There’s a huge bias towards youth right now; maybe there also needs to be a bias towards new investors. Get some new blood to step up and change the culture, and shake it up. Maybe the old guard simply doesn’t get it; they had their chance, and blew it. 

    Question is – who will step up?

  • http://twitter.com/RedRussak ‘Red’ Russak

    Just curious…who’s going to fill the role as “coach”? A lot of great mentors out there, but who above all will take the role as guiding voice. Who in NYC would you consider the coach and who do we have to compare with out here?

  • http://twitter.com/JonathanMPaul Jonathan Paul

    I’m a bit late to the party, but thought I’d offer my two cents as a recent addition to seattle from the bay area. I’m a bit surprised no one has cited the financial crisis as a big reason for the uptick in NYC startup scene. A flood of engineers and tech talent flowed into Wall Street over the past decade with the promise of huge salaries, however, with the onset of the crisis many engineers left Wall Street in pursuit of startup ventures and many had the potential to bootstrap their own companies. 

    I’m originally from the Seattle area and moved back here for the summer after leaving Google and launching a failed startup attempt. From what I’ve learned about the Seattle startup scene, there is a huge amount of potential but all of the pieces haven’t fallen into place. I don’t think you can blame any one party, the city needs a comprehensive initiative (like we’re seeing in NYC) to drive the startup scene to the next level. Everyone (VCs, angels, TechStars, AMZN, MSFT, Univ of Washington, Mayor McGinn, entrepreneurs, students) needs to do their part to encourage and foster the startup community. Seattle has world class creative, technical and business talent. Getting everyone on the same page is the starting point. I love TechStars & Founder Co-Op, but how does this city only have two core incubators / accelerators / tech co-working spaces? Creating more space where a wide range of talent can gather, work and collaborate is a great way to improve the ecosystem.

    I’ve been accepted to UW-Foster’s MBA program starting this fall and see a huge opportunity to drive collaboration across programs, something Chris nailed in his post. I was shocked to hear how little collaboration there was across engineering, entrepreneurship and MBA programs on campus. There is a huge opportunity to have a big impact at UW and while I’ve been accepted to a few higher ranked programs, UW (and Seattle) is ripe for disruption and change. 

    Seattle needs a Digital Initiative just like Mayor Bloomberg launched in NYC. As Ben mentioned in his post, Seattle has the great talent in the gaming, mobile, ecommerce, cloud & enterprise verticals. Any effort should be focused on these categories and identify new verticals where Seattle area entrepreneurs can develop big, game changing companies. 

    As a recent recent transplant, I’d love to meet and chat with folks in the startup and investment communities. Feel free to reach out to me on Twitter / LinkedIn. 

    Cheers.