NYC, New Tech Hub? (What This Means for Boston)
Around this time last week all anyone could read about was Tumblrs sale to Yahoo for $1.1 billion. There were stories detailing Tumblrs rise to prominence, stories pointing out the possible advantages for both parties, and stories reminding everyone that Yahoo has done this before and rather unsuccessfully at that. What got some what lost in the whole debate is the fact that Tumblr is the third New York based start-up to have been sold for over a billion dollars in the last year! The other two being Indeed, a job search website which was purchased for $1 billion by the Japanese company Recruit Co. Ltd., and Kayak, a travel website which was sold to Priceline for $1.8 billion. That's nearly $4 billion on three companies in one year.
Huge exits like this may lead some people to believe that New York isn't the right place for tech companies since they all keep leaving. However this is not the case, the sale of these companies brings in more capital to the area and can help spawn even more new start-ups. Tumblr itself came about when the company David Karp (CEO of Tumblr) used to worked for was purchased by CNET. This gave him the opportunity and the financial ability to create tumblr. As well as providing the area with some extra dollars to help entrepreneurs bring their ideas to life, the sale of these companies has brought more global attention to the area. It has also shown people that they don't need to pack all their things on to their wagon and head west. There are now over 900 tech companies that call New York home. New York is aiding in showing that the east coast is not behind the west in terms of innovation and technology but at the same time it is stealing all the glory. New York is one of the main reasons the stigma of setting up on the east coast is diminishing however it isn't the only one. Boston and New York have always had a fierce sporting rivalry but they are now beginning to compete in a different field.
Boston is already succeeding on the start-up front with companies like TripAdvisor and ZipCar however they have yet to have that billion dollar sale that will garner them global attention. If you take a step back and look at Boston you should quickly be able to see the clear benefits of a start-up setting their stall out here. It is of course home to Harvard and MIT which are two of the most highly regarded universities in the world, so there is no shortage of excellent graduates in the area. Boston is obviously a much cheaper place to live than New York and there has also been a recent shift in the business landscape in downtown Boston. While the financial industry continues to shrink there is more space available in downtown Boston at a cheaper rate than what is possible in New York. Landlords in Boston are also willing to rent out on relatively short term contracts, which gives start-ups the opportunity to grow their company and relocate easily if they outgrow their current location. This trend in Boston is beginning to gain more momentum as start-ups which have been developed in MIT & Harvard are beginning to branch out past the confines of the universities and in to the real world are migrating to areas in downtown Boston. Some people are beginning to see this new pattern emerging and have provisionally dubbed the new area the mobile district as many start-ups are in the area are mobiloe-centric.
The publicity that New York is receiving since the sale of Tumblr is letting people know that the east coast might just be the new Silicon Valley and Boston with its cheaper rent and huge amount of extremely talented graduates should be able to harness this publicity and drive this revolution even further. It's important to remember that just because you did something first doesn't mean that there isn't someone better than you out there, who can improve on what you have already done and knock you off your perch.