As Y Combinator Ramps Up NY Presence, Rival Start-Up Incubator TechStars Claims Home Court Advantage

MR. TISCH FIRST raised the idea of a TechStars office in New York with the organization’s co-founder, David Cohen, about seven months ago, around the time he was starting to become a serious angel investor.

“I went up to Boston for this conference called Angel Boot Camp, and I saw David walking around by himself,” Mr. Tisch said. “My first question was, ‘Why aren’t you in New York?’ And he sort of blew me off and said, ‘I dunno, we look at a lot of opportunities to expand.’ We had a very quick conversation. I understood later, he was getting that question every day from other cities.”

The next day, Mr. Tisch spotted Mr. Cohen again, this time sitting quietly in a corner, and asked him about New York a second time.

“He said, ‘Well, we need someone to run the program.’ And so I immediately started shooting out ideas of people — not myself — to do it.”

When Mr. Cohen disclosed that someone had actually floated Mr. Tisch’s name for the job, the conversation shifted, and pretty soon the two of them were in Boulder discussing it.

It’s worth noting that Mr. Tisch was not a towering figure in the New York tech scene before he started in his current role in early September. A grandson of the Wall Street billionaire Laurence Tisch, he grew up in Scarsdale playing hockey and experimenting with his Apple IIGS, which he said he used to create a Mac version of AOL at the age of 15 before giving up on hacking. He studied American history at the University of Pennsylvania before heading to N.Y.U. for a law degree. He briefly considered going to work for the New England Patriots in their scouting department, but ended up instead joining Vornado Realty Trust in 2006 and spending a year doing real estate finance. It was halfway through that year that Mr. Tisch decided he wanted to head his own start-up, and began devotedly reading tech blogs and teaching himself the basics of the programming languages Ruby on Rails and Python so that he could speak more intelligently to technologists.

The service he tried to build as a founder was a “local social network group-buying platform,” he says now with a laugh. Within five months, it became clear that he had no idea what he was doing. “My view was, ‘I need to learn on somebody else’s money and time, and I need to learn from other people before I do it on my own.'” He went to work for the telecommunications giant KGB, where he was put in charge of a start-up project that ended in frustration after two and a half years.

“I left KGB and thought, ‘What do I do next?'” Mr. Tisch said. “I looked at raising a fund, I looked at starting an accelerator on my own, and I didn’t really love either of those options.”

It was shortly thereafter that Mr. Tisch met Mr. Cohen, who is moving to New York from Boulder temporarily in order to help run the TechStars program here during its first year. 

 

THE ARRIVAL OF TechStars in New York has been greeted with enthusiasm from the local innovation community in part because it suggests that the city has reached some benchmark as a center for technology. But more concretely, the accelerator program is a boon to the ecosystem here because it will provide an opportunity for young entrepreneurs to put down roots in New York and make it more likely that top talent will stick around instead of fleeing for the West Coast.

Which is why the fact that Y Combinator — by all accounts, the Coca-Cola of the accelerator space, if there is one — has ramped up its presence in New York with the hiring of Mr. Ohanian is making some people anxious. The tech scene here may be gaining traction, but it’s easy to imagine life in Silicon Valley being so sweet for a start-up that’s been funded by Y Combinator that coming back to New York, and thus voluntarily becoming an underdog again, will just not make sense.

“Start-ups in New York don’t have the broad support that they get in Silicon Valley,” said David Whittemore, who is applying to TechStars with his fashion start-up. “You go to a coffee shop in San Francisco and every single person in the room works at a start-up or at least in technology. Everybody understands everybody out there, much more so than in New York. We’ve got an amazing community here that’s building, but it’s still a small part of New York as a whole.”

As Mr. Tisch put it, “It’s a lot easier to stay in California once you’re there. Getting there is step one to staying there.”

Mr. Graham and Mr. Ohanian, for their part, both say New Yorkers shouldn’t worry.

“There’s a chance that some start-ups will choose to stay in the Bay Area,” Mr. Ohanian said in an interview. “But that said, I’m trying really, really hard to give them reasons to come back to New York.”

“The way we think about Y Combinator is, it’s like going away to college,” said Mr. Graham. “I could see why they’d be worried, because they have a bit of an inferiority complex compared to Silicon Valley and they think, ‘Boy, how’re you gonna keep the start-ups down on the farm once they’ve seen Paris?’ But in fact, they do go back, you know? We had, I believe, three or four start-ups in the most recent batch who were from New York, and they all went back to New York. People who are from New York are really attached to New York — it’s not somewhere you live by accident.”

lneyfakh@observer.com