Hailed as the World’s Innovation Capital, Silicon Valley is often top of mind when a startup founder begins contemplating an expansion into the United States of America to add scale to their business. Operating in the Valley does lend a startup a certain degree of prestige – after all, it has birthed some of the world most iconic companies. However, it is by no means the only gateway to the US. In fact, founders who buy into hype risk overlooking a potentially more suitable place to scale up their business.
According to Trena Blair, the Founder and CEO of FD Global Connections, which assists businesses to successfully navigate US expansion, New York City should definitely be on the radar of Australian startup founders seeking to tackle the US market. That said, she advised founders to choose a home-base that plays to the strengths and focus of their business. This exercise, she added, must involve an analysis of the fundamental differences between the different startup scenes.
“Each company is different and, as such, there is no golden rule,” Blair told Dynamic Business. “However, factors such as where VCs and clients are located and the cost of doing business must play a role in determining where to launch in the US. Innovation is taking place right across the country. Boston and Seattle continue to attract strong interest but cities such as Washington DC, Austin, Minneapolis, Atlanta are flourishing and providing significant incentives for companies to set up shop and thrive. That being said, New York City and Silicon Valley still reign supreme.
“Silicon Valley is the original and most established innovation ecosystem globally with the major focus being tech startups. It has launched many unicorns, and collaborations between universities, government, entrepreneurs and enterprise are well-established. Being a community of serial (or professional) entrepreneurs, the Valley is a fast-paced environment with an accepted culture of risk-taking.
“Meanwhile, New York is the financial capital of the world and, over the past ten to fifteen years, it has become a hive of innovation with major capital injections from local government through to venture capital firms. When tech entrepreneur Michael Bloomberg was appointed NY Mayor, there was a surge in interest, investment and collaboration across the city.
“New York City is now the world’s second largest ecosystem, behind only Silicon Valley. The startup scene is thriving, with significant collaboration between local government, corporates, universities and entrepreneurs. Plus, global corporates and tech companies such as Google and MasterCard have established innovation hubs. The city has established itself as an entrepreneurial megacity, with a focus on FinTech, Ed Tech, Media/Advertising, City Planning, Professional Services and hospitality. NYC unicorns include WeWork, Kickstarter, Etsy and Buzzfeed. Many successful West Coast entrepreneurs, investors and tech experts are even transferring to the Big Apple, not only because of the excitement surrounding the city but due to social issues in Silicon Valley.”
Asked what advantages New York City has over Silicon Valley, Blair said it not only has a higher concentration of potential customers, which has attracted the world’s biggest brands, but also provides more support for women entrepreneurs.
“For the past two years, the Big Apple has been ranked #1 globally for supporting women by the Dell Women Entrepreneur Cities Index,” she said. “In fact, the NYC Mayor’s Office and the Small Business Services Department actively develop programs and initiatives to support both and minority business owners. Although Silicon Valley remains the beacon for entrepreneurs globally and access to capital, in general terms, is higher than it is in NYC, the level of capital available to women entrepreneurs and the unconscious bias in the Valley have been well documented.”
Blair advised startups wanting to scale-up in New York to gain an understanding of the local market as well as the regulatory environment and the city’s unique culture, including the way of doing business.
“Networking, pitching and engaging prospects in New York City is very different to doing so in Australia,” She said. “In New York, confidence, belief, passion, authenticity and boundless energy are all traits necessary for the success of an Aussie startup. Receiving coaching on how to pitch to VCS and how to conduct business development is critical.
“Likewise, it’s important to have a ‘guide’ who knows the New York landscape, and has the network and experience that comes with living and working in the city. Arriving in New York without expert pre-planning and advice is often where foreign companies go wrong and is wasteful in terms of time, energy and cost. Working with a “guide” who has network of trusted VCs, prospects, and those critical professional service advisors is essential and a key factor to their success. Of course, startups need to be patient because success in New York takes time. Aussie companies that have successfully launched in New York include Inlogik (FinTech) and EnigmaFIT (Professional Services).”