Ron Conway (SV Angel Founder) – Bloomberg Cornell Tech Series (Jun 2016)

Chapters

Abstract

“New York City’s Tech Renaissance: Insights from Industry Titans and the Quest for Innovation, Diversity, and Global Influence”

In a sweeping narrative of New York City’s burgeoning tech scene, industry giants Ron Conway, Fred Wilson, and Julie Samuels paint a vivid picture of a city on the cusp of a technological revolution. Conway’s SV Angel firmly roots in the Big Apple’s fertile ground for tech startups, while Wilson recounts the city’s remarkable tech evolution over three decades, emphasizing a self-sustaining ecosystem driving exponential startup growth. Geography’s critical role in venture capital, highlighted by both, points to New York’s rising prominence alongside Silicon Valley. Challenges such as regulatory hurdles and the pressing need for diversity in tech are candidly addressed. This article dives deep into their insights, exploring the multifaceted dynamics of New York City’s tech ascendancy, the global expansion of entrepreneurship, and the vital balance between innovation and social responsibility.

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New York City’s Growing Tech Scene

Ron Conway, through his venture capital firm SV Angel, underscores New York City’s emerging status as a tech hub. The firm’s substantial investment portfolio in the city reflects its growing appeal for tech startups, marking a significant shift in the industry’s geographical focus. New York’s tech industry has become self-sustaining, generating enough local activity to thrive even without external funding. Other industries, such as real estate and finance, are increasingly adopting technology and investing in tech companies, further contributing to the city’s tech growth.

The Evolution of New York’s Tech Industry

Fred Wilson chronicles the dramatic transformation of New York’s tech sector over the past 30 years. From its nascent stages, the city has witnessed a surge in startups, fostering a robust ecosystem where success breeds further innovation and venture creation. Wilson notes that the tech sector has significantly contributed to job creation in New York.

The Significance of Geography in Venture Capital

Highlighting the importance of location, Wilson explains that early-stage investors are geographically constrained, making New York an essential destination alongside Silicon Valley. This trend underscores the city’s ascending importance in the global tech landscape. Additionally, other cities like Los Angeles, Boston, and Seattle are also emerging as major tech hubs, attracting investment and innovation.

Silicon Valley Investors in New York

Conway elaborates on the benefits of Silicon Valley’s involvement in New York, particularly in offering vital connections and access to resources crucial for startups in the city, enhancing the cross-pollination of ideas and opportunities.

* On-demand services like Postmates, Instacart, and DoorDash are categorized as the convenience economy. These services mainly cater to busy individuals in metropolitan areas who need convenient access to services. Software plays a crucial role in the success of these on-demand services.

* Silicon Valley investors bring their extensive network and connections to New York startups, providing access to senior management contacts at major tech companies like Google, Twitter, Facebook, and Apple. This access can be crucial for New York companies seeking partnerships or collaboration.

Regulatory Challenges in Tech Expansion

Both Conway and Wilson acknowledge the regulatory complexities facing tech companies, particularly in new markets like New York. Regulations exist in various states and cities, hindering innovation and consumer adoption. New York’s large market attracts companies, but regulatory pushback may be encountered sooner than in other locations. However, they note the general consumer support for innovation and the need for advocacy within the tech community. TechNYC, led by Julie Samuels, aims to provide support and guidance to tech companies navigating regulatory challenges.

Welcoming Tech Companies to New York

Julie Samuels, from TechNYC, emphasizes creating a conducive environment for tech firms in New York City. Her organization plays a pivotal role in offering support to companies facing regulatory and other challenges, ensuring the city’s attractiveness to both startups and established tech businesses.

* Tech NYC aims to be proactive in building relationships with stakeholders. The goal is to prevent overreactions and negative situations, like those experienced in San Francisco, by fostering consensus and understanding.

* TechNYC is dedicated to creating a welcoming environment for tech companies in New York, mobilizing the tech community, and addressing issues that hinder growth and innovation. The goal is to ensure that New York remains an attractive destination for startups and established tech companies.

Machine Learning as a Service

Wilson and Conway express keen interest in machine learning and artificial intelligence, advocating for its accessibility to smaller companies through APIs and developer tools, potentially democratizing this cutting-edge technology.

* Machine learning as a service, provided via API and developer tools, can level the playing field for small companies, giving them access to the same technology as large companies.

Focus on Internet Software

Conway highlights SV Angel’s long-standing focus on internet software investment, a testament to the ever-expanding and evolving role of the internet across various industries.

* The early days of the internet are still ongoing, and software continues to transform various industries.

Changing Entrepreneurial Landscape

Wilson observes a shift in the entrepreneurial landscape, with founders increasingly capable of building products themselves, marking a transition from financially-driven to skill-centric entrepreneurship.

* Entrepreneurs are increasingly building things themselves, rather than relying solely on business plans. Skills like software engineering and making in general have become more democratized, enabling entrepreneurs to create products and services with fewer resources.

* Entrepreneurs are more skilled at making things with just one or two colleagues, compared to the past where they needed a whole team.

Agile Founders and Civic Engagement

Conway praises founders’ growing agility, fostered by platforms like Y Combinator, and underscores the importance of civic and philanthropic involvement in the tech community, using Mark Zuckerberg as a prime example.

* Mark Zuckerberg’s early civic and philanthropic engagement sets a positive example for entrepreneurs.

Audience Question on On-Demand Services

In response to an audience query, Conway reiterates his enthusiasm for the burgeoning field of on-demand services, a sector revolutionized by software and showing immense potential in metropolitan areas.

* Globalization of capital vs entrepreneurship: Fred Wilson believes that the globalization of entrepreneurship is more significant than the globalization of capital. He cites China’s success in startups as an example of how entrepreneurship can flourish globally. Wilson emphasizes the importance of entrepreneurs starting companies in their own countries rather than just investing in foreign companies.

Globalization of Entrepreneurship

Wilson emphasizes the global nature of entrepreneurship, particularly in emerging regions like China, distinguishing it from the globalization of capital and pointing to China’s startup success as a leading example.

Proactive Approach in NYC

Conway advises a proactive stance in New York City, learning from San Francisco’s experiences to build bridges with stakeholders and prevent potential overreactions.

B Corps and Public Benefit Corporations

Wilson voices support for B Corps and public benefit corporations, balancing mission-driven goals with profitability, as evidenced by Union Square Ventures’ portfolio companies.

Diversity in Tech

The final discussion centers on the crucial need for diversity in tech companies, both among founders and employees, highlighting the necessity for inclusive and diverse startups.

Challenges to Diversity in the Founder Community

The speakers identify barriers to diversity, such as the lack of technical skills among diverse individuals and investor biases, particularly towards women entrepreneurs.

Solutions to Promote Diversity

Proposed solutions include emphasizing computer science education from a young age, diversifying the investor community, and encouraging individuals, especially women, to pursue entrepreneurial ventures.

* How to increase diversity in the founder community:

* Improve computer science education in K-12 to increase the number of people with the necessary technical skills.

* Encourage more diversity in the investor community to reduce bias and increase investment opportunities for entrepreneurs from diverse backgrounds.

* Educate and encourage individuals, especially women, to recognize their entrepreneurial potential and break down perceived barriers to entrepreneurship.

* Mayor Bloomberg’s entrepreneurial journey and advice:

* Mayor Bloomberg emphasizes the importance of embracing challenges and adapting to technological advancements.

* He shares his experience of building a hardware company before the invention of PCs and transitioning to PCs when they became available.

* He highlights the significance of constructing their internet infrastructure and implementing a centralized data processing system, which eventually evolved into the concept of the cloud.

* Mayor Bloomberg emphasizes the value of learning from mistakes and perseverance in entrepreneurship. He stresses that revenue exceeding expenses is crucial for success.

* He reflects on the changing job market, noting that individuals can now pursue multiple careers throughout their lives, unlike in the past when a single job was expected to last a lifetime.

Notes by: Simurgh