Why Paul Graham is wrong about New York City
thisisgoingtobebig.com
thisisgoingtobebig.com
On the west coasts, startups compete with other startups and employees bounce around making similar amounts of money. In New York, startups compete with financial institutions which can and do throw enormous amounts of cash at employees without a second thought, hence the startups can't compete.
I have to agree with the echo chamber part of things though, startups in NYC are doing different things than startups on the west coast, but maybe that's because there's just fewer startups here that there's more ideas to go around...
If you know you can quit and -- within a few months -- be earning a great living writing trading algorithms in C++ or reporting systems in Java, a startup is a much saner risk. This also applies to quants and physics majors: many smart folks are lured into the private sector, but many many more smart people can consider a Physics PhD because of the money they can make (if they need it).
That cuts both ways, though: it's too easy to bail at the first hint of trouble at a startup, which is why there are relatively few great startup stories out of NY.
I personally wish it were easier for physicists to spend just a few years in finance to find out whether they like it, and/or to save up some money.
NYC has an agency mindset which doesn't work in a startup environment. So you hire people from razorfish, digitas, r/ga, etc. but they're expecting the same 9-5 lifestyle and have a hard time adjusting.
My experience is that a lot of agency people have a lot of problems coping in environments without a lot of process, nor are they inclined to feel ownership.
There is no sense of equal quality when comparing the lifestyle of a startup to that of working at an agency (of which I have 10+ years experience working in). At an agency, there are people above you and people below you and despite whatever flaws in the process that the agency has, it at least has one.
Figure that most early stages are typically 3-4 people. Process isn't as important as this stage as getting stuff done and getting stuff out. In fact, an intricate involved process at this point would do more damage than good.
At 5-10 people, process starts becoming important, but that process must be devised amongst the people in the company. Most agency people we've had come work at Massify during this period had a hard time adjusting as we attempt to soothe the chaos. It takes a fairly rare blend of ambition and drive to succeed in a startup at this point.
And, btw, if you're handing out equity, they sure as shit better love it or they should really move on. They needn't love it as much as I do, nor do I expect that from them, but they better have some affection for it or they should hit the road. When things get grim, it's this certain love or passion for the product that carries you through.
I've also worked in companies of 3-4 people (including me) that had basic processes (source control, requirements management, etc), and the results were FAR better. We ended up spending MORE time doing our job, not less. We also spent a LOT less time cleaning up messes and wondering why we acquired 15 build errors every time we synced the code from source control.
Though I agree that a small group doesn't require a lot of process, chaos is counter productive.
Also, it may be an Alchian-Allen thing: if you're paying a fixed cost just to live in the city, luxury is comparably less of an indulgence. See: http://www.nationalpost.com/loveandsex/story.html?id=296085
In NYC, a 1BR apartment that you live in by yourself is a status symbol. The average monthly rent is north of $2,500. Spending $2k+ on rent just to live in the city, maybe that's more about ego than it is about money..
While rent is "extreme" for people who don't live here, you should also consider that we generally don't have the same expenses as people in the burbs or elsewhere. We don't own cars, we don't buy gas, etc. That right there knocks $500-750 off your living expenses. Furthermore, you need to consider rent in NYC as a culture tax because no where else in the world will you find anything remotely similar in terms of fashion, design, art, food, etc. You might think you're approximating it with the Olive Garden in suburbia, but you aren't even close.
PS. I pay $2550 for a 3 bedroom with a backyard in the second nicest neighborhood in Brooklyn.
Re: Olive Garden - I escaped the suburbs to live in a major city but it doesn't compare to NYC of course. Where else will you have 5k restaurants and night-life at 3am (Paris, maybe..)
I go up to NYC quite often because I have family there. I was in Brooklyn recently. Nice to hear that there is a startup scene there. Saw lots of new loft construction going up everywhere near Grand. Sadly the Brooklyn Brewery was closed. BTW - Highly recommend Lily Thai (restaurant)
"The Housing Virgins of NYC" http://www.nytimes.com/2006/08/24/garden/24new.html?_r=1&...
Rent-stabilization on the UWS [http://en.wikipedia.org/wiki/Mitchell-Lama].
The rent is lower and the people are just nicer, in DUMBO where our startup is based there's atleast 5 other startups in a 10 block radius. Which, while not SoMa is still pretty good :)
If one is resourceful(and most starving artists/actors/entrepreneurs are) you can find apartment shares in plenty of neighborhoods for under $800/month. It's not luxurious but living in those circumstances is no less worthwhile.
I would say it's about being willing to pay a premium to live in a dense, vibrant city with all that goes along with it.
From the essay:
"There are other messages too, of course. You should be hipper. You should be better looking. But the clearest message is that you should be richer."
So right... if you have spent your whole life in NYC, went to college there, and spent a year working at one of the most well known East coast VC firms (like Charlie has), then yes, Paul Graham is completely wrong about doing your start up in NYC. But what about the kid who just graduated from college and is deciding where to do his startup? Charlie's New York is not the same New York that a newcomer will experience.
I live in NY and love the city, but I agree with PG on this if your only goal in life is the success of your startup. If you have other goals though - like having interesting and diverse friends, or great experiences, and don't mind having to overcome more challenges than you would face in the Valley - then NYC is a great place for you.
You get to disagree about the menubar color at 250+ karma.
Read this as well http://shripriya.com/blog/2008/05/29/new-yorks-message-have-...
Edit: on this topic, I believe reddit started in brooklyn and later relocated. Can anyone confirm?
I'll second that.
Someone I met was throwing around the idea of a language agnostic hacker meetup with a simple programming/logic puzzle as the barrier to entry. Much better idea than tech-meetup!
PS. See http://news.ycombinator.com/item?id=240529 for our new ruby meetup :) Sorry about the self-promotion...
jdennis@gmail.com
Whoever is interested, please email me. I'll send out a message with all the email addresses I receive to coordinate. And ya'll can pass it around accordingly.
I'm down for NYC YC gatherings.
So, yes, NYC to a certain point is more about money than anything else.
I have seen it even in dating, when you see so many good looking girls, just dating around so they can have the "Sex and the City" glam life, that they couldn't afford themselves. And this "dinner whore" term (sorry if I am being rude), originated in the east coast.
In SF people seem to be a lot less interested on how much money you make, at least when it comes to dating.
Rent might be expensive here, but the west coast is hardly the cheapest place to live either. Just look at prices in LA for example.
True, if you want to live in the middle of one of the most expensive cities in the world, its going to be expensive. But if you move out of the center of Manhattan and into the rest of the city, it's not as expensive at all.
This line scares me.
Yes anyone can have an idea. In fact everyone has ideas. The catch is that they range from disastrously false to powerfully true.
A place that:
1. Values ideas in the abstract (and not just their shiny tangible fruits), and
2. Is skilled in the art of investigating the truthfulness of a proposition (dialectic),
will arrive at truer and therefore more powerful beliefs, faster. If Cambridge offers more of that to people than elsewhere, then PG is right. Since the rebuttal doesn't seem to comprehend this, it serves for me as one more data point that PG is right.
Pay attention in case you missed it - PG taps out an article in Cambridge about how ideas are valued there more than anywhere else, and someone not in Cambridge writes a rebuttal that seems to hurriedly elbow right past the big idea, about ideas.
Now, as far as why the idea capital and the startup capital aren't (currently) one in the same. Well, have you ever noticed that not all ideas are about startups? And some very powerful ones at that. Like...
- ideas about the limits of human potential, technically and ethically.
- ideas about how to properly wield rationalism and empiricism
- ideas about what is good (to be sure, if your idea here isn't just an incremental advancement but a disruptive one, it can result in your imprisonment and execution rather than your IPO).
- maybe a few trillion others
So you can see why it will be hard for the capital of ideas to be the predominate home of any single occupation. Add to this, that powerful ideas tend to motivate people who manage to believe in them to the point of conviction. So if an idea motivates someone to execute their plan - their plan to reform education, their plan to work with the poor, their plan to save the whales for god sakes not just their plan for another effing startup, am i clear? - then they won't always be executing there in Cambridge. That doesn't mean that ideas are antithetical to execution.
But I would still buy this man a beer, because PG's article seemed true, but brutally so. And if such a thing had been said about my mother and she had heard it, it would be right to rise indignantly to say, "Scoundrel, take that back!" Of course the honest thing would be to later educate her on the truthfulness of those very same points, but in a more gentle and loving way.
So Charlie, I reject your reasoning but applaud your chivalry.
Cambridge may be more about ideas than anywhere else, but it also seemed home, more than anywhere else, to people doing scholarship for scholarship sake and to people who had subjugated significant ideas to serve their little ideas.
Again and again I ran into people studying great thinkers and great thoughts for no greater reason than that they had never been out of academia, didn't want to leave, and were using these thinkers and thoughts as fodder for their thesis (job application) in order to get a professorship that would shield them from the outside world forever.
Encountering those sickly sorts will leave any results oriented person, like Charlie, wary.
Paul figured out a way to quantify something (fussiness about appearance) that seems completely squishy. That's a good skill to develop, by the way.
The radical reduction in startup cost for technology companies is THE technology-business event of the last twenty years. It absolutely decentralizes tech startups by making VCs much less important. Yes, the Valley still has an edge in terms of people, but if you're used to being the center of the universe, having an edge isn't the same.
This explains local startup scenes, and makes it obvious they'll become more important in future, not less. Paul Graham isn't just wrong for the obvious reasons - because anybody who says NY is about any one thing is smoking crack, for instance, or because of the Valley's echo chamber, or because there must be something in Boston's relative non-entity-ness despite its incredible programmer population, etc., etc., etc. - he's also wrong because he's ignoring the ginormous sea change in startup capital requirements that his own business revolves around, and which he himself first identified in one of his essays years before anyone in the Valley ever blogged about it.
He's ignored his own discoveries.
Your average startup founder in Seattle is in his mid-to-late 30's, and has just come off of an N-year (N >= 10) successful career at Microsoft or Amazon. He's financially comfortable, and the decision to jump into a startup was probably driven as much by boredom (with the 9-to-5) as ambition. Moreover, without outside help, young founders rarely get the time of day from local investors (after all, everyone knows that you need to work at Microsoft for a while to gain experience before you can start a company!)
All of this could be viewed as good or bad, but in my opinion, it's not as vibrant, energetic or varied as the scene in the bay area. Here, young founders have an uphill climb to prove themselves -- in the bay, it's almost the opposite.
Nor is it about the fact that today's abundance of great free tech enables many towns to simultaneously produce work of top quality, making the whole concept of "number one" meaningless.
Nor is it about the fact that so many towns and non-towns can produce great tech that towns become irrelevant too.
Actually, by yes, I mean no.
I think I've read nearly everything you've published. I was aware of the quote when I wrote the criticism, and I think the quote fails to address any substantive part of it. I think if you want to address any criticism I make, you'll need to write something new, or dig up something obscure which I haven't read.
New York will be an awesome place to live after the real estate crash. I will be so happy to see that happen.