As the tech entrepreneur community in New York City continues to grow and gain visibility, discussion has gravitated to the comparison of the New York ecosystem, now popularly known as “Silicon Alley”, with California’s long established “Silicon Valley”. Jeremy Levine, partner in the venture capital firm Bessemer Venture Partners, was interviewed on this topic by Erin Griffith of Fortune Magazine at the Northside Festival held in Brooklyn last month, June 7-12.
Levine has been at Bessemer Venture Partners since 2001 and is on the board of companies such as Pinterest, Yelp, and Shopify. He also led his firm’s original investment in LinkedIn. His involvement in such prominent startup success stories, straddling both the east and west ecosystems, has given Levine perspective to weigh in on this topic.
“The way I’ve described the New York tech scene is that it was on an index scale, something like a one, and it grew to a two. In percentage terms, it is amazing growth in a community, so much larger and more robust than before. But if you want to compare that to California, the state is about 100.”
Levine foresees almost another decade before the Alley could truly be compared to the Valley. Importantly, he now sees the potential and the momentum in the New York community to get there. Levine also noted a critical element that exists out west that has yet to solidly emerge in New York.
“Everyone’s an entrepreneur in California,” he explained. The density of entrepreneurs and the ubiquitous entrepreneurial mindset in the Valley contributes to the ecosystem, providing greater support among and for entrepreneurs.
“It’s harder to build a company [in New York]. It takes enormous staying power, persistence, courage, and if you have to do that in an environment where everyone is also socially looking at you like you’re kind of nuts, it’s hard to do,” Levine added.
While the growth of the New York community may eventually lead to a point where entrepreneurship is better understood and valued, at the current time it is missed. A culture not accepting the travails of an entrepreneur is an additional challenge to entrepreneurs. Silicon Valley’s entrepreneur friendly culture is one additional reason why entrepreneurs favor it, according to Levine.
“The startup ecosystem [in New York] ultimately needs more successes, more attempts, and more trials. In the Valley, failure is almost a badge of honor whereas in many other parts of the world it’s more a badge of disgrace, and we have to flip it as much as we can,” Levine said.
Levine also posed that a startup that has the potential to scale to “hundreds of millions of users”, may find New York limiting in important resources when that critical pivot into rapid growth occurs. This is not black and white for all startups, but rather tied to a number of other factors. Levine, who lives in New York, suggests that the entrepreneur’s personal needs may make New York an attractive alternative to the Valley.
“If you don’t have a great initial team of five, 10 or 15 people, you have no chance of getting there anyway. So, I think a lot of it comes down to personal preference. I would argue that you optimize around life and where you want to live, as opposed to living where you might have a 20 percent better chance of succeeding,” summed up Levine.
