On the State of the NYC Startup Scene...

via unionsquareventures.com

Fred Wilson.

When we caught up with Twitter co-founder Jack Dorsey during his visit to the city last month, he told us he had been meeting with venture capitalists and others in the local tech scene to get their input on launching a startup in New York.

As we reported at the time, Mr. Dorsey is strongly considering moving his new company out here. (Judging by his Tweets over the past few days, it also looks like his personal move back to New York is complete.)

He said he was gauging whether New York was conducive to fostering startups and that he was also concerned about the challenge of scaling a new company here.

One of the people from whom he sought advice about these issues was Fred Wilson of Union Square Ventures, who recalls his chat with Mr. Dorsey in a blog post today:

At dinner, Jack asked me about the ability to scale a tech company in NYC and I told him it can easily be done. I pointed to Doubleclick, Right Media, and a bunch of other tech companies that have scaled nicely here. And then I introduced him to Kevin Ryan and Dwight Merriman, co-founders of Doubleclick who have created the Alley Corp incubator that has produced, among other things, Gilt Groupe and our portfolio company 10Gen. Kevin and Dwight told Jack the same thing. NYC is a serious tech startup community with the talent to scale a large tech company.

Mr. Wilson points us to another recent blog post, titled "New York City is poised for a tech revival," by Hunch.com co-founder and personval investor Chris Dixon, who has equally confident feelings about the future of New York startups.

The 2003-2008 financial boom in banks and hedge funds, Mr. Dixon argues, sucked up all the East Coast's talent. But how things have changed!

This is why New York City now seems poised for a technology startup boom. The finance bubble has burst and the industry will hopefully return to its historical norm, about half its bubble size. The traditional advertising and media businesses are in disarray. The people who work in them will no doubt find new applications for their talents.

...

New York City has many of the same strengths as Silicon Valley – merit-driven capitalism, the embrace of newcomers and particularly immigrants, and a consistent willingness to reinvent itself. Silicon Valley will always be the mecca of technology, but now that people here are getting back to, as Obama says, making things, New York City has a shot at becoming relevant again in the tech world.

But Mr. Wilson takes issue with Mr. Dixon's assertion that the East Coast tech scene was "irrelevant" between 2003 and 2008. So too does nextNY founder Charlie O'Donnell, who also weighs in on his personal blog:

NYC is not the Valley, and I'm glad it isn't--but the local tech "revival" has been going on for several years now.  nextNY, a group of over 2,500 local tech and digital media folks, was founded in February 2006.  I joined Union Square Ventures a year earlier after the final close of its first fund.  First Round Capital started around the same time as well.  The NY Tech Meetup needed a venue as large as Cooper Union's Great Hall back in 2006.

The point...  If I were starting a company right now, I'd put New York right up there against any city--because good companies can attract talent and funding from anywhere.  Also, you're not going to wind up with crybaby Facebook engineers here who complain that their equity isn't worth anything after two years and need to be bought out before the company even exits.  Your quality of life will be extremely high--since NYC rents are pretty cheap now and transportation costs, unlike in the Valley, are near zero if you're biking to work like I am. 

So wake up people. The New York tech boom isn't new news!

Either way, Mr. Dorsey launching his new company here would certainly help build even more confidence in the city's startup landscape. So we're eager to hear the details!