Why Silicon Alley's Spat With the City Is Actually Good News

In recent months, New York’s City’s Economic Development Corporation has become increasingly involved in the booming New York tech scene.

The city greatly expanded its second annual Big Apps competition, Deputy Mayor Robert K. Steele stopped by Google’s offices to announce that the city is wooing a top-flight engineering school, and the EDC even hosted a mixer, Startup Exchange, where founders and VCs mingled with folks from city government.

These efforts, however, have been met with increasingly loud cries of frustration and cynicism. Many in the tech community feel the EDC is big-footing the natives, throwing city dollars behind unnecessarily bureaucratic solutions instead of supporting the grassroots organizations already in place. The fight recently became public with a long post on NY Convergence, a site dedicated to covering tech in the tri-state area, which called the city’s efforts a largely symbolic, heavy-handed exercise that is out of step with the community.

“I keep my finger on the pulse of what’s going on, and if there are real initiatives from the city, I haven’t heard about it and none of my cohorts have heard about it either,” Reece Pacheco, founder of Overtime Media, wrote in an email thread in which members of the nextNY group criticized the EDC.

Anil Dash, recently elected as one of the first community board members at the 16,000 strong NY Tech Meetup, feels the city needs to try a less traditional approach. “They seem to be starting from the side of the usual economic development machinery and trying to ‘tech-ify’ it, if you’ll pardon the expression. Will that work? I don’t know. But it seems like it must be at least a little less efficient than it could be. Seems like a lot more could be done, beginning by engaging with infrastructure like the NY Tech Meetup that already exists.”

The city’s proposal for a new engineering campus in New York is emblematic to many of what’s wrong with its approach. “They’re taking answers from the very institutions that have failed to educate enough technical innovators in the first place. And then they’re going to stick them in a big building somewhere,” wrote Charlie O’Donnell, a partner at First Round Capital and one of the most active presences on the NY tech scene.

EDC spokesperson Julie Wood thinks O’Donnell is way off the mark. “We are talking about an initiative in which, it was reported, the LC/City is prepared to invest $100 million. That’s a very, very big number in today’s fiscal environment. This is a major initiative that is designed to transform the City’s place in the world of applied sciences—not ‘stick people in a building somewhere.'”

The city’s track record in the past few years is certainly more than symbolic. Its Big Apps competition made more city data available for public consumption and development than any municipality in the nation. And the winner of the inaugural effort, MyCityWay, went on to receive funding from the NYC Entrepreneurial Fund, a $22 million investment partnership between the EDC and private venture capital, the only city sponsored investment fund outside of Silicon Valley.

Check Out Some of the City’s Recent Tech Initiatives >>

The EDC has also backed incubators like NYU-Poly Varick Street Incubator and The Hive at 55, helping numerous startups get a foothold in a high-cost environment. “Initiatives they support like the NYU-Poly incubator are of great importance to the long term viability of NYC as a world-class technology center,” wrote Evan Korth, community board member at the NY Tech Meetup and co-founder of hackNY, a program that connects students with internships at tech companies.

Wood says accusations that the EDC has ignored the grassroots tech organizations are ridiculous. “City officials and EDC representatives have presented information about the Big Apps competition at many Meetup events, and two Deputy Mayors–Robert Steel, the deputy mayor for economic development, and Stephen Goldsmith, the deputy mayor for operations, both have presented to Tech Meetup–proof that we are not only interested in, but do actively take advantage of the existing community.”

To some, these efforts have come across as tone-deaf. “Sending out e-mail blasts and having high level people speak for five minutes at a couple of Meetups here and there is not relationship building, nor is it the kind of participation we’re looking for,” said Charlie O’Donnell. “That’s what some of the EDC folks I’ve met fail to understand.”

But Jacob Brody, founder and CEO of Standard Start, says the tech community has to meet the city halfway.

“There is a fundamental disconnect, because people in the tech community expect things to work the way they do in the VC world,” he said. “Except the government doesn’t make risky investments, have Twitter conversations or pivot on a dime. Their plan for an engineering school, for example, is a big, expensive, long-term play, and the tech community should recognize that there is value in that, which is different from what a great, grassroots organization like hackNY can provide.”

In the end the friction between the city and the tech community is actually a sign of progress. “We wouldn’t have been having this conversation five years ago, because the city wasn’t at the table,” said Jonathan Bowles, Director of the Center for the Urban Future. “In the last two years there has been a big shift, with the city really trying to get behind the local tech industry. Do they always get everything right? Of course not, this is government. But that doesn’t mean we should get mad at them for showing up late to the party.”

Check Out Some of the City’s Recent Tech Initiatives >>

bpopper [at] observer.com | @benpopper

Why Silicon Alley's Spat With the City Is Actually Good News