Internet Week NY 2014: Reasons to Start a Startup in New York: Immigration and Education Are Vital
New York City is known as a mecca for businesses, large and small, yet California seems to be the main grounds for technology companies.
At Internet Week NY 2014, a session on why New York City can house the next big startup was discussed with education, immigration, and finance being vital components of the conversation. Moderated by Business Insider's Technology Reporter Megan Dickey, Lerer Ventures' Partner Eric Hippeau spoke about the "migration" occurring, with west coast businesses headed to the east coast.
Hippeau stated San Francisco is a "low city" and therefore "doesn't allow the building of high rises", like those seen in New York City.
"Tech workers have been displaced due to not enough housing," Hippeau said. "Although it can happen in New York City, it isn't a big of an issue."
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New York's diversity is a major advantage for startups and tech companies. The Lerer Ventures partner added that immigrants "are important" to New York City, and they are "major entrepreneurs." In addition, a lot of "big companies" are already located in New York.
Due to diversity of domains and backgrounds, consumer software has leaned to favor New York. As a further result, New York is "great" at enterprise software.
The topic of education was discussed as well. Hippeau mentioned his daughter's recent graduation at Columbia University and noted that there are over 600,000 college students in New York, and these students will "drive" the economy. Hippeau, however, stated a problem seen with graduates: many return back to their homelands due to visas expiring and other immigration-related problems.
"We educate them, and then they basically go back home," said Hippeau, adding that immigration reform is needed for these students to utilize what they have learned within the U.S.
"We need more immigrants," he continued, noting many immigrants are educated and ready to start when a business door opens.
For younger students, Hippeau stated it's important to understand "code", saying that it should be taught to students as if it were a different language class.
"We need to teach them how to code, since it's the language of the future," he added.
According to the Lerer Ventures partner, students should be taught code as early as the ages of 11 to 13. When asked why specifically 11, 12, and 13 year olds, Hippeau stated that students are "mature to assimilate information" by those ages and have received the fundamentals of math. In regards to why code is not currently taught in the classroom, he believes other priorities have impeded it from happening; The U.S. education system's focus on other matters like the "Common Core" curriculum might have teachers looking away from coding.
"Go for it," he added.
Further benefits for New York include the fact that the city has been in the "forefront" of developing infrastructure: Education and broadband technology in particular are important for businesses. However, he admitted broadband technology is "lacking and slow" in the city, but credited former Mayor Michael Bloomberg and current Mayor Bill de Blasio for helping expand broadband.
Startups should understand that investing money is "trivial" and "readily available," said Hippeau. The important aspect is "who's supporting you" and being close to your companies and investors. For Hippeau, he seeks a startups that have a "disruptive idea."
"Ideas are important," he added.
"We focus on the entrepreneurs," he continued, stating investors invest in teams, and not just individuals. Furthermore, having someone with a technology background is important. Anonymous investors also might not be helpful, again emphasizing the need to familiarize with your investors.
Moving forward, Hippeau stated what excites him the most if the "procession of young people" who come to see investors and other people.
Hippeau said, "They come in greater numbers and the tide is rising with brilliant ideas, with fearlessness, and no desire to work for 'the man' such as Wall Street or IBM, (even though they are a good company)."
Despite the challenges that remain, overall, Hippeau was optimistic that New York City is becoming the next place for fresh ideas and, possibly, the next breakout company in our 21st century economy.
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