Startup Genome rated New York second in global ecosystem funding, with $8.3 billion in early-stage funding compared to the global average of $4.3 billion. It also rated the city third in global ecosystem talent, with an ecosystem value of $147 billion compared to the global average of $10.5 billion. These numbers in part reflect the city’s size; if it were its own country, the New York metro area would have the tenth-largest economy in the world. New York hosts 9,000+ startups, 22 unicorns, and 100+ accelerators, incubators, bootcamps, and coworking spaces. “New York is a major financial center, so if you’re a company looking to raise money, this is the place to be,” says Tom Morley, a regional director of the New York State Small Business Development Center. “New York is where the investors are.”
New York is particularly strong in artificial intelligence, big data and analytics, cybersecurity, and the life sciences. It has the most AI and machine learning positions of any metropolitan area in the US, and it compares favorably with the Bay Area and Boston in terms of venture capital funding growth for AI and big data. When it comes to cybersecurity, New York features Cyber NYC, a public-private initiative that offers startup accelerators, boot camps, and other resources for cybersecurity startups. There are also nine academic medical centers, more than 50 hospitals, more than 100 research foundations, and massive National Institutes of Health research and development grants for institutions that have helped startups raise more than $1 billion venture capital — all of which means it would be hard to find a more fertile ground for entrepreneurs in the life sciences space.
New York startups also do well in finance, real estate, tourism, and a number of other industries. “Fashion, media, advertising, you name it, they’re already headquartered here. That’s a really important driver of startup success, says Tech:NYC Executive Director Julie Samuels. “Many people who build companies here aren’t looking for the hard-core tech monoculture of Silicon Valley.” That said, the technology sector does very well in its own right. “Tech companies are doubling down on New York and really expanding their footprints,” she says. “People with technical talent are increasingly seeing New York as a place where they can build their careers.”
However, those aren’t the only reasons that New York is great for startups.
It would be hard to find a better proving ground for new products and services than New York. In a city of 8.5 million people from all walks of life and income levels, there’s a market for just about anything. Plus, the city is quite cosmopolitan. It’s home to 73 Fortune 500 companies, 2.3 million people with bachelor’s degrees (more than 1 million of which have degrees in fields related to science and engineering), and 410,000 women-owned businesses such as theSkimm, ClassPass, and Birchbox. It’s ethnically diverse as well, with nearly half of New York’s workers being born outside the US. The city has more than 381,000 self-employed minorities and more than 700,000 minority-owned businesses.
While some other cities are more business-friendly when it comes to taxes, New York has made an effort to attract companies — particularly small businesses — with its tax policies. For example, START-UP NY gives new and expanding businesses the opportunity to operate tax-free for 10 years on or near eligible university or college campuses in New York State. In addition, the New Markets Tax Credit Program provides investment capital for operating companies and real estate development projects in order to foster job creation and community development in low-income communities throughout New York State. There are also tax incentive programs for companies in various industries, as well as for employee training.
In an interview with The Verge, Zola co-founder and CEO Shan-Lyn Ma said she started her online wedding registry business in New York partly because of its access to top talent. “New York is now at a point where we’ve had multiple rounds of successful startups exit,” she said. “We’ve built up a critical mass of tech startup talent across engineering, product design, et cetera.” In addition to its wide and deep talent base, New York tech salaries — while certainly higher than in much of the rest of the country — are often lower than those in Silicon Valley.
Surrounding areas have lots of great people as well; New York attracts talent from nearby cities like Washington D.C. and Boston, for example. Perhaps that’s why Startup Genome ranked New York third in global ecosystem talent in 2020, and why 83% of New York City executives report confidence that their companies will be able to find the tech workers they need from within New York in 2021. “New York has quite the education system between public and private universities, and it’s producing a good number of very well-trained people,” Morley says. “New York has more graduate schools turning out MBAs than anyone else.” Many of these graduate schools are actually affordable for middle-class students. “These are folks that want to stay in the area, so you have more people available that are trained in marketing and engineering, etc.” he says.
A Supportive Community of Entrepreneurs
Lots of entrepreneurs, including Shan-Lyn Ma, have found New York’s startup community to be both thriving and extremely supportive. In other words, startup owners in the city don’t act as if they’re playing a zero-sum game.
"[T]here’s now a great ecosystem of founders and other entrepreneurs who really are supportive and want to see each other succeed," Ma told The Verge. "There are people that you’ll find at the same stage as you, as well as a few stages ahead who have been operating longer, so that you will be able to get advice from people who are really wanting to help because they’re really wanting to see this ecosystem win and thrive."
Moreover, the city abounds with resources for entrepreneurs, including mentorship programs. For example, the venture capital firm Oceans strives to help startup founders in a number of ways, such as teaching them how to recruit and retain the right talent, foster the corporate culture they’re striving for, and build strong foundations for their companies. And New York-based companies like BBG Ventures are specifically focused on helping female startup founders, and a recent study from Dell ranked New York the best city in the world for attracting and supporting female entrepreneurs.
Finally, New York is renowned for being a resilient city with residents who can recover from just about any setback — even a global pandemic.
“Times of crisis reveal the resilience of our innovators, and in New York’s case, our startups have continued to adapt while finding ways to serve the public,” Samuels told Startup Genome. “Even with COVID’s economic effects, there’s optimism in the NYC startup culture, ensured by our entrepreneurs’ ambition and underwritten by our investors’ confidence.”
About the Author
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.