“I think it’s partially the Wall Street mentality,” says Wilson. “This is a very merchant town, a very commercial town.” He points out that compared with Boston and Silicon Valley, New York still has relatively few early-stage venture-capital firms. “My partners and I make a decent living, but we manage $275 million. I have friends who are my same age who are partners at Goldman Sachs, or who are running their own hedge funds, who make ten to a hundred times more money than I make. I’m not upset about it, because I love what I do. But in New York, it’s about making money.”
The economic climate of the last couple of years has been a boon for start-ups. Costs, especially real estate, are lower, and it’s easier for entrepreneurs to hire engineering talent. “You’re seeing a lot of people who are very talented get laid off,” says Justin Smithline, 36, the co-founder and president of a music service called Instinctiv that’s sort of an enhanced iTunes Genius—it’s a mobile player that uses your musical taste to determine what you’d prefer to listen to and offers easy media synchronization and concert tickets—that’s received $1.6 million in financing.
“In the past eight years, the finance world sucked up all the technical talent. That’s stopped, so it’s rational again,” says Hunch’s Dixon. “In the past, you’d just get the idiosyncratic M.I.T. grads who happened to not want to make a million dollars on Wall Street or whatever. Now you can actually compete with them to some degree. And now you see kids coming out of college and just starting companies in New York.”
“Today, Amazon has their hosting platform, Amazon Web Services. Facebook has their identity platform, Facebook Connect,” says John Borthwick, co-founder of Betaworks, which builds and invests in start-ups. “If you want to build something now, you can build it on top of these building blocks. What it means is the cost of development goes down. The cost of entry goes down.”
And founders don’t necessarily have to be engineers, either. It’s easier than ever for someone without a hard-core engineering background to start a company—which bodes well for the development of more tech companies in New York. “The skill set required to build web technology is no longer an elitist skill,” says Boxee’s Zach Klein, co-founder of Vimeo.com.
Take SpeakerText, a company that links transcripts with videos that debuted at the NY Tech Meetup in January. If you copy and paste a section of a SpeakerText transcript onto your blog, the link will take people back to that exact portion of the video. It was founded by a 29-year-old Columbia grad, paramedic, and former journalist named Matt Mireles with no engineering background; the idea came to him because he thought it would be a better way to tell stories on the Internet. (Mireles is currently seeking funding.)
That being said, Betaworks won’t consider investing in a company unless at least one of its founders is an engineer, Borthwick says: “Three guys like me who are trained M.B.A.’s, they’re probably not going to get a meeting with us.”
“You ask yourself, is this guy a winner or not?” says Thrillist’s Lerer. “Is this guy going to figure out how to make this thing work, or isn’t he? It’s driven by people. I go from my gut. Do I really like this guy? Do I want to be partners with this guy?”
It’s this default use of the term guy that can grate for women in the scene. “Men refer men,” says 29-year-old Elizabeth Stark, a Brown and Harvard Law grad who teaches law and technology classes at Yale. “You have to directly address the problem, or you won’t change it. So if we just keep it status quo, for all the reasons defined in these self-reinforcing networks, they will stay self-reinforcing with the white, geeky, male, Stanford/Harvard-dropout types. And that’s who a lot of the V.C.’s are investing in. If I had a bunch of money, I would start a firm for women tomorrow.”
As a general rule—and there are exceptions, like tech investor and commentator Esther Dyson; Hunch’s Caterina Fake, who is also an angel investor in her own right (she sold the photo-sharing site Flickr to Yahoo in 2005 and was recently named one of the country’s top angel investors by BusinessWeek); Dina Kaplan, one of the co-founders of the web-TV distribution site, blip.tv; Emily Gannett of Klickable; Alexis Maybank and Alexandra Wilkis Wilson of sample-sale site Gilt Groupe; Jennifer Hyman and Jennifer Carter Fleiss of the Netflix-for-couture site Rent the Runway; Ann Baldinucci of the neighborhood-finder site NabeWise; and Brooke Moreland of fashion-advice site Fashism and Marissa Evans of the similar Go Try It On—the founders in the scene tend to be male. (I encouraged several single female friends to start going to tech meetups, promising them a ratio of approximately ten men to every woman.)