NYC Startups

Fred Wilson has a typically insightful post about starting a tech/internet company in New York City. He argues a somewhat contrarian view that despite the higher human capital costs, there are advantages to starting companies in New York.

Fred nails the argument on the head:

What I am suggesting is that entrepreneurs should start businesses where they want to work and then organize the company according to what works best for them. The whole company, particularly development, does not need to be in one location anymore.

At TheLadders.com, we have the entire team in New York. In my limited experience, it's proved incredibly valuable
(mostly contrary to Fred's point actually) to be able to get everyone -- Tech, Product, Sales, Marketing -- in the same room and hammer out issues. I know that I've learned a ton more about our product and the online industry in general by having our tech team 20 feet away, not 20 miles, or 20 hours away. Could we add a few more developers if we were outsourcing everything to India or Romania? Probably. But there's a tradeoff -- start-up teams, in my limited experience, function best when everyone is working together in the same office. There are a ton of options for virtual communication that can work in many situations. But for a company that often makes decisions one minute and is banging away on a keyboard the next, being on the same floor is a competitive advantage.

I also think there is something to be said for the non-tech talent pool in New York. Our Marketing team is top-notch. There's a very deep, talented, and hungry pool of entry-level talent. And we can pick and choose new employees from both Fortune 500 companies and start-ups in our backyard.