Sorry, Boston: New York Is Now the Silicon Valley of the East

Where will it be?
Dec. 10 2013 1:24 PM

New Tech City

How New York became the Silicon Valley of the East.

Shutterstock founder and CEO Jon Oringer.
Shutterstock's Jon Oringer celebrates his company's initial public offering on the floor of the New York Stock Exchange on Oct. 11, 2012.

Photo by Brendan McDermid/Reuters

America’s biggest monthly meeting of techies, entrepreneurs, engineers, and hangers-on around the startup scene is not in Silicon Valley. It’s in Greenwich Village.

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer.

It’s called the New York Tech Meetup, and tickets sell out within minutes every time they go on sale. The venue is a glossy performing-arts center on the New York University campus that holds 800; stop by on the first Tuesday evening of the month, and you might find people scalping tickets on the sidewalks outside.

Inside, the atmosphere borders on raucous: two hours of demos by local startups hoping to hit it big, followed by a beer-slicked networking marathon masquerading as an afterparty. During the event, audience members pepper the startup founders with questions, but one question is out of bounds: “What’s your business model?” Ask it, and boos will rain down from the balcony.

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Boston, with its proximity to Harvard University and the Massachusetts Institute of Technology, has long been the second city of America’s technology industry, the East Coast’s humble answer to Silicon Valley. In just the past five years, though, the buzz surrounding Boston’s startup scene has been matched—and now, perhaps, surpassed—by what’s unfolding down the coast in New York.

It’s a shift few would have expected 10 years ago, when the first New York Tech Meetup drew four people, including the two co-founders. Back then, the city’s tech scene was a punch line. The 1990s dot-com boom in Silicon Valley had been accompanied by an even frothier and less-substantive boomlet in Lower Manhattan, dubbed “Silicon Alley.” When the air went out of the balloon, the Bay Area fell back on its stalwarts—the Oracles, Intels, and HPs—and began to regroup. But in New York, the whole scene just vaporized. Without a top-ranked engineering school or cutting-edge corporate anchors, it seemed like New York simply wasn’t cut out to be a tech hub.

Yet as Google and Facebook boomed in the second half of the 2000s, media and advertising began to move online, destroying old business models and birthing new ones. New Yorkers had no choice but to take notice. In 2003, the young entrepreneur Jon Oringer saw a need for cheap stock photography for websites and blogs and founded Shutterstock.com. He seeded the site by snapping 30,000 pictures on his own Canon Rebel in that first year. The same year, Nick Denton launched the blog network Gawker Media from his SoHo apartment.

At first, they were like lonely pioneers resettling a wasteland. In an interview last week at his Financial District office, Shutterstock’s Oringer recalled people asking him why on Earth he was building a startup in New York—everyone knew you had to move to Silicon Valley to be successful. Oringer, a Westchester native and graduate of the State University of New York at Stony Brook, replied that he couldn’t fathom living anywhere else.

Besides, he reasoned, New York had more advantages as a startup hub than people gave it credit for. It was teeming with young, smart, and hungry workers. Many were multilingual, a plus for any company aiming at a global market. The billionaire entrepreneur Michael Bloomberg, then in his first term as mayor, was bent on reclaiming the city’s cutting-edge mantle. And the proximity of Madison Avenue and the Midtown media empires made it easy for digital-media upstarts to court clients and form partnerships. In a break from his Silicon Alley predecessors, Oringer shunned venture capital, preferring to balance his budget with revenues from the beginning.

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