5 Reasons Why New York Beats the Valley for Enterprise Software


I was recently interviewed for an article about New York’s startup scene and how entrepreneurs like myself are coming to Manhattan while raising money from Bay Area investors. As part of the interview I was asked why I left Silicon Valley to start my second company, ActionIQ, in New York. After all the Valley seems to be the obvious choice, especially if you have already established a dense professional network on which to lean on.

The short answer is that at this moment New York is one of the best places in the world for building a new Enterprise Software company. The longer answer is that New York brings several advantages that the Valley can’t currently offer. What are those?

1. More enterprise customers. New York is home to more Fortune 500 companies than any other state, or city, in the U.S. From my anecdotal experience, the Northeast (centered around New York) is the top revenue producing area in North America for many enterprise software companies. Placing your headquarters in the area that is most densely populated by your customers (and prospects) is advantageous on multiple levels:

  • Your engineering and product teams can easily visit these customers – in person! The product insight that comes out of these non-virtual meetings is invaluable. In fact, for the first 9 months of ActionIQ’s life we actually worked out of one of our customer’s offices. The immediate feedback we got while being there was critical to our company’s trajectory and foundation.
  • In New York you can spend much more time building your customer base around headquarters before being forced to expand to other geographic regions. This means less time and money spent on marketing and sales, and more capital spent on talent and engineering—the bloodline of any tech startup. Days feel (and are!) much more productive when you spend less time on the road.
  • As software moves to eat the world, access to acumen from existing industries is needed to complement technical talent and ideas. Since almost all industries are exceptionally well-represented here, the opportunities for cross-pollination of expertise from traditional spaces into tech are plenty.

2.The right early adopters.
In the Bay Area it’s almost too easy to sell to your friends and acquaintances that work in other startups. That is for good reason: startups move fast and are early adopters of technology themselves. The trouble is, these friends don’t pay much, they may be doing you a favor (versus having a sincere challenge that absolutely requires your solution), and they don’t look much like your future customers outside the Valley. In enterprise startups early customers define the product in profound ways, so this is a lot worse than just a few wasted sales motions.

3. Plurality. New York is too big to be dominated by tech. This diversity makes the Big Apple a very creative environment, with interactions and ideas freely flowing in from disciplines such as arts & design, finance, retail, health, fashion, etc. I am a big believer in the opportunities that hide in the intersection of disciplines; at ActionIQ, for instance, we live in the intersection of engineering, design, data & business.

4. Lifestyle. Building a company is hard, and it occupies most of your life. So you want to make the most out of the limited time you have outside the office and your family. Nothing beats New York in terms of the sheer number of options for spending your free time: arts, food, events and festivals, sports and outdoors – everything is here, powered by the huge scale that is New York. And these options are 24/7. You’re done with work after a long day at 9pm? No problem. Plenty of places are just getting started and your friends are a quick subway ride away from you.

5. A triple layered thriving tech ecosystem:

  • Talent: Google, Facebook, Twitter and many other major tech companies have had offices in New York for several years now. As a result, they have been nurturing a strong foundation of great engineers, often sourced from the top universities located in the Northeast (Columbia, NYU, MIT etc). At the same time the growing startup community is also attracting and developing engineers. Consequently, the talent supply has been growing quickly.
  • Investors: while capital from legendary investors in the Bay Area and Boston is always available for the most promising companies, New York has top-tier emerging native venture firms that truly “get” the enterprise world, including, for example our own investors FirstMark Capital and Bowery Capital.
  • Community: there’s a strong feeling of community in enterprise tech in New York, fostered in part by particularly active players such as Work-Bench (and their NY Enterprise Technology Meetup) and, again, FirstMark (and their very large Data Driven NYC event). The number of enterprise software startups, although still relatively small, is currently growing at a fast rate (according to data from the National Venture Capital Association, New York is the #2 place in the US by VC funding size).


Of course this is not about New York being better than the Valley, or vice versa. Since my days at the Computer Science PhD program at Stanford 10 years ago, working under legendary Professor David Cheriton, I have gotten a first-hand look on how unique the Valley ecosystem is. But that doesn’t mean that Silicon Valley is the right answer for all startups and their employees. New York is becoming a real alternative, and for the companies that can appreciate its strengths it can be a knock-out competitive advantage.

Florian Delval
Florian Delval
Director, Technical PMM
For the last decade, Florian’s mission has been to empower enterprise organizations in their digital transformation process via the definition and deployment of a strong Customer Experience Stack. Florian educates enterprise organizations to increase the value of their technology investments in a complex and ever changing environment. Find him on LinkedIn.
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