A challenge in starting a technology company in New York City
Fred Wilson, a prominent New York City based venture capitalist, wrote about the size of the New York City technology sector in terms of number of jobs.
I couldn’t help but think about a major issue about New York’s technology sector compared to other markets — the competition for talent with money coming from banking, finance, media, etc.
While some people love working in start-ups and would never do otherwise, the lure of high pay from other sectors pulls great talent away from young start-ups.
I’ve heard this series of statements too many times:
First: “I love your project. I’ve been looking for something I can commit sweat equity to that I care about. I want to be a part of it from the ground up. I want to partner with you and we’ll work out an equity deal.”
Followed a few weeks or months later by: “I have to keep some paying work to pay the rent. I can commit Tuesdays and Thursdays to our venture.”
Followed a few weeks or months later by: “I can’t make next Tuesday. I hope you understand, it’s for a paying client.”
Followed a few weeks or months later by: “I just haven’t been able to commit resources to our project. I hope you understand I have to take paying work and can’t work with it any longer. Good luck.”
Of course those are the challenges of starting people without pay, but it affects people who genuinely want to co-found, pre-revenue. I call it an empathy gap, feeling capable when they commit, not realizing how they’ll feel later under stress. Still, I don’t think it happens as much outside New York City.
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