New York’s Technology Future: Is It a Bubble or a Lasting Boom?

2/25/13Follow @jpruth

Amid the hullabaloo about New York’s growing innovation scene lurks a big question about the future. “Is New York’s rise in technology a combination of the mayor’s exuberant personality, things that are happening organically, and the overall growth of tech?” asked Steven Rosenbaum, CEO of Magnify.net. “Or is there a fundamental shift happening?”

Last Thursday during the many Social Media Week events happening across the city, he moderated a panel that included local entrepreneurs, representatives of Mayor Michael Bloomberg’s administration, and a pioneering venture capitalist who offered a few opinions on the matter. Rosenbaum’s company Magnify.net is a provider of cloud-based video curation service. He is also entrepreneur-at-large with the New York City Economic Development Corp. (NYCEDC).

Joining him in the discussion were Scott Anderson, chief strategy officer with the Control Group; Matthew Burnett, CEO of Maker’s Row; Alan Patricof, managing director with Greycroft Partners; Ann Li, managing director and executive vice president with the NYCEDC; and Jonathan Bowles, executive director with the Center for an Urban Future think-tank.

Rosenbaum wondered if a landmark IPO or other exit by a startup in New York could give the city real bragging rights in its rivalry with Boston over which region follows Silicon Valley in the list of top tech hubs.

New York to some extent is still waiting for a big win among its startups, according to Anderson of Control Group, a technology innovation strategy company, but he also cast doubt on the necessity of achieving such a milestone. “That doesn’t mean business isn’t happening or people aren’t making money,” he said. “Hanging our hats on that big win is a mistake.”

Matthew Burnett, CEO of Maker’s Row, listens to fellow panelists discuss the city's prospects.

Maker’s Row co-founder Burnett told Xconomy after the panel it is getting easier for some startups in the city to reach customers thanks to such e-commerce platforms as Etsy and Fab.com. “They are creating opportunities for entrepreneurs to create their own goods and run their own businesses,” he says. Maker’s Row is an online marketplace that connects small and midsize businesses with American manufacturers. Burnett previously founded fashion accessory company The Brooklyn Bakery. “[Fab.com] helped me be able to pay rent for so long as an entrepreneur,” he says.

The growth of the local startup community, according Greycroft’s Patricof, is not likely to halt anytime soon. “New York is like a meteor at the moment,” he said. “The momentum has been started; you can’t stop it now. This train is moving.” An early player in the private investment world, he was a founder and chairman of New York magazine and founded private equity firm Apax Partners, now based in London, prior to forming Greycroft.

Patricof said investments in the past focused largely on technology semiconductors and computers whereas today many deals are about the advertising industry and … Next Page »

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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  • http://www.freddestin.com Fred Destin

    What is it with many in New York that they need to do Boston bashing to tell their story ? Greycroft has built a great portfolio in NY = great ! To make comments like “Boston is a biotech environment” is demonstrating a pretty deep absence of knowledge of the local environment, as well as misunderstanding of how linked both regions are and feed off each other.

    To be more specific…

    Want a few notable exits : LogMeIn, Brightcove, DemandWare, Zipcar, Kayak ($1.8bn), TripAdvisor, ITA, Carbonite, AcmePackets ($2bn), Transcend ($300M), Vistaprint, Pixtronix, dynatrace, iRobot, Kiva Systems etc.

    Want a few notable startups: Hubspot, Veracode, bit9, dataxu, Acquia, Wayfair,grasshopper, Globoforce, SessionM, Nanigans, Actifio, Skyhook Wireless, Adelphic, Jumptap, Boundless, CustomMade, Runkeeper, RueLaLa, etc.

    I am getting cramps :-)

    • http://birch.co/ Mark Birch

      Whatever, Boston still sucks ;)

      • http://www.freddestin.com Fred Destin

        I forget you boys like a good fight :-)

    • realposter

      yeah – Yankees/Red Sox… Celtics/Knicks… Patriots/Jets or Giants.

      ironically though biotech is where the bigger dollars are. NY is making a push to be a bigger player in biotech. They realize it doesn’t make sense to get all that NIH money every year for all the research that goes on – with little commercialization to show. An article on this site pointed out before that most of the major pharma companies are headquartered in the city and its suburbs (mainly New Jersey now) – but they make most of their investments in Boston, San Fran, San Diego. We’ll see what happens.

      • http://www.freddestin.com Fred Destin

        My understanding is that unfort. lot of the biotech campuses in NJ are legacy and as you point out investment activity is migration to Boston, Singapore, SF

        • realposter

          yeah – Pfizer and Roche started putting money back into the city itself – though it’s a trickly it might signal future change.

  • http://twitter.com/wfrick Walt Frick

    Yeah I agree with Fred, this is a shame to hear and not in touch with reality. The big difference between the two ecosystems is that NYC is more narrowly concentrated on internet/mobile and Boston is more balanced (not saying either is better or worse.) http://bostinno.com/2012/11/20/new-york-edges-out-boston-in-startup-study-heres-the-fine-print/ As Fred also points out, the better way to think about these two communities is as complements to one another. Thinking of the Boston-NYC-DC corridor as one of the world’s most significant economic mega-regions is, in my view, more productive http://bostinno.com/2012/08/27/2-maps-to-make-you-stop-comparing-boston-to-nyc-or-silicon-valley/

    • realposter

      it’s a rivalry that goes back to the colonies of New Amsterdam and New England. it’s handed down from generation to generation – lol.

      yeah – you are right – that whole corridor is one of – if not the most significant economic region in the world.