Venture Capitalist Eric Hippeau discusses the similarities and difference between New York City and Silicon Valley with regard to technology startups. Where California is currently home to tech world trendsetters, the Big Apple’s focus is on software development and application. That said, New York’s diverse collection of resources has the potential to make it the next major technology hub.
Eric Hippeau: My name is Eric Hippeau. I’m a venture capitalist. My firm is called Lerer Hippeau Ventures where it’s me plus three other partners. We are technology investors so we look for companies that use technology, primarily consumer technology. It doesn’t mean that they have to be consumer facing but the technology has to be based on the same technology that we all use day to day.
And so we’re looking for companies that use technology to either create large new marketplaces or large new businesses or who disrupt large businesses that are already in place. And New York is particularly well suited for this because there’s a lot of people with very diverse backgrounds, diverse domain knowledge. We have a lot of people in our educational system, a million kids, in our public school system, 600,000 college students. And technology today is primarily developed in large urban centers. So obviously New York is well positioned for that.
The difference between New York and Silicon Valley is in the kind of technology that we develop here as opposed to in Silicon Valley. First I think we should point out what the similarities are. And the similarities are that because technology today is transportable and rentable and relatively cheap to use, we in New York, but it could be anywhere – it could be Bombay, it could be Austin – have access to the same technology to develop new applications, new services than anybody in Silicon Valley. So everyone starts with the same level playing field. The technology is accessible through the Cloud. It’s rentable through the Cloud. Anybody can start a company with, you know, a couple of laptops and two or three people and a few thousand dollars literally and you can start a company and you can start a business. So it’s very different today than it was just a few years ago where a large part of the money that you raised actually went to the acquisition of the technology. You had to buy servers, you had to buy hardware, you had to buy expensive software licenses. And today you don’t have to do any of that. So that’s a big difference but we have in New York as anywhere else access to the same latest developments in technology than anybody in Silicon Valley. The big difference is that New York focuses more on the software layer, on the application and the services layer so that we’re really good at software in New York. We’re good at platforms. We’re good at consumer facing applications. We’re good at enterprise software, software as a service. We’re good at a variety of different domains.
Obviously the ones that you can think of, the traditional sectors such as advertising and media but also health care and, you know, a variety of different domains where you have people who have experience and expertise because, you know, some big companies are located here and big sectors of the economy are based here. What New York is probably not going to do is develop the next plumbing for the Internet. That’s more likely to be coming out of the West Coast but having said that we’re increasingly getting more and more advanced engineering talent in New York. In fact, on Roosevelt Island there’s going to be a Cornell University in conjunction with the big technology institute in Israel are building a campus which will be ready in two or three years. But the classes have already started in other locations. And this is all going to be advanced applied engineering. So who knows what’s going to develop in the future. Some hardware is already being developed in New York. We invested, for instance, in Makerbot, the 3D printer company that was sold recently to another 3D printer company. So there is a background in hardware and manufacturing in New York, but generally speaking it’s really software that’s the big thing as it were here in New York.
Directed / Produced by Jonathan Fowler, Elizabeth Rodd, or Dillon Fitton