Can New York’s Silicon Alley — or any other technology hub, for that matter — ever supplant Silicon Valley as the epicenter of the Internet world? Consider that some of the most exciting new start-ups of the past two years have been such companies as Foursquare, Etsy, Tumblr, Gilt Groupe, Boxee and Kickstarter, all of which got their start in New York. New York’s young creative class has started companies at an astonishing pace, transforming entire industries, from media to food to fashion to the arts.
Compare this with the Web boom of 10 years ago, when the big New York City start-ups tended to be me-too media companies started by guys in their 30s and 40s, not by people fresh out of school. Back then, the Wall Street money men — not the Silicon Alley venture capitalists — ran the game, and they were none too pleased to hand over their cash to twentysomethings with a funny-sounding Web site.
With the Great Downgrade, recent graduates have finally opened their eyes to the fact that a career in tech might be preferable to one on Wall Street. At the same time, smaller angel and venture capital investors have applied less pressure to start-ups to scale up and professionalize too quickly, giving young talent less reason to flee to the West Coast.
Even Mayor Michael Bloomberg has jumped in. In addition to supporting the creation of a “Road Map for the Digital City,” Bloomberg has invested the city’s money in making sure that the creative elite stick around, even if the market tanks. New York City has borrowed bits and pieces from the Silicon Valley model while keeping what is distinctly New York.
When social media became the buzzword of the day and Web 2.0 took hold in the public imagination, it was exactly New York’s concentration of media professionals, advertisers, publishers and designers that made it a natural fit for the next evolution of the Web. When fashion brands began to embrace the Web, it also made sense that the city’s concentration of design talent in the garment district would get in on the action.
The same story was repeated again and again, in every industry where New York had a competitive edge. Take the restaurant business, for example: The city’s incredible array of food options, combined with the rise of location-based networks, eventually led to Google’s acquiring review publisher Zagat — great content on top of a great technology platform. West Coast meets East Coast. Instead of being something forced on the city by big money investors, the Web is organically integrated into the daily rhythm of the city.
To what extent can the Silicon Alley model be replicated, not just across the nation but around the world? Silicon Valley unquestionably remains the role model. It is the place where foreign dignitaries visit when they want to export “innovation” back to the homeland. Yet, the New York model might be more flexible for European cities trying to become innovative hubs, especially if those cities have the type of urban density that makes something as simple as a “check-in” worthwhile. One thinks immediately of densely populated cities such as Mumbai and Shanghai.
New York essentially built on top of a technology platform created by Silicon Valley. New York will never be about designing computers and silicon chips and mobile devices. Instead, it is about what you can do with all of this hardware when smart minds in crowded urban cafes and downtown lofts get to work.
Basulto is a digital thinker at Electric Artists in New York. He contributes to Ideas@Innovations, a Washington Post blog that focuses on what’s next. To read more, go to www.washingtonpost.com/blogs/innovations.