Perhaps even more difficult for startups than finding helpful investors is attracting and retaining talented employees. New York has the largest consolidated workforce in the country, yet, like any other city, has challenges matching candidates with companies that can fully leverage employees’ skills. Also, Silicon Valley has long been a draw for the best engineering talent because that is where the startups were. However, as Fred Wilson of Union Square Ventures likes to half-joke, “nobody graduating in the top of his or her class from MIT, Carnegie Mellon, or Columbia actually wants to move into the California suburbs at age 22, buy a car, and commute every day to a nondescript office park. These kids would much rather enjoy the New York lifestyle of living in Williamsburg and hopping on the subway to code in an airy loft/office in SoHo.” As a result, the tide of this “westward migration” of technical talent is starting to turn due in large part to changing practices at New York’s schools as well as altered attitudes about the financial services sector.
Workforce challenges and New York City is a strange pairing to see in print. The implication is that Columbia graduates are heading to Silicon Valley (and other tech hot spots) instead of sticking around Manhattan. The drain of talent has discouraged venture capital. Premium investments opportunities are elsewhere.
That geography is changing. Instead of talent coming to the money, the money is starting to chase the talent. Richard Florida has been touting this phenomenon for quite some time. But we are just beginning to figure out what that might mean for the future.
Spinning all of this from a Pittsburgh perspective, I've noticed a strong connection between budding entrepreneurs from CMU and New York City. The two start-up markets are evolving in parallel. I think that locally produced talent will stay in the Northeast with increasing frequency as the opportunities become more apparent. The regional churn should be viewed as a win for all cities.
More importantly, amenities-rich Pittsburgh can compete with the gravity of Silicon Valley. Graduates from MIT and Columbia might prefer Rust Belt Chic to nondescript (and expensive) Californian suburb. Pittsburgh is the cheap alternative to New York City. Perhaps venture capital is already on the scent.