New York City aims to clone Silicon Valley's tech success

New York City has devised a plan aimed at stealing Silicon Valley’s startup thunder.

“Technology capacity is critical to our growth-and there is just not enough of it here,“New York City Mayor Michael Bloomberg said at a press conference. “During the 1980s and ’90s, Silicon Valley-not New York-became the world capital of technology start-ups. And that is still true today. But if I am right-and if we succeed in this mission-it won’t be true forever.”

To accomplish this mission, New York City will attempt to recreate the conditions that have made Silicon Valley a thriving tech hub known the world over.

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Tuesday’s initiative involved offering prime real estate at virtually zero cost, plus up to $100 million in infrastructure upgrades, to a university that agrees to build a science and engineering campus in the city. (Stanford and Cornell are apparently top contenders.)

It’s a savvy move. Bay Area universities like UC Berkeley and Stanford are widely regarded as engines of innovation.

The announcement is one step in a string of efforts by Bloomberg to bring tech dollars and jobs to the East Coast. But New York City has a lot of work ahead of it, according to a 2009 study by New York City think-tank Center for an Urban Future. Aside from nurturing research-oriented scholarship, the city also needs greater access to venture capital, along with a sheaf of policy changes at the local and state level.

But even if all goes according to plan-a new, world-class university campus is built; more money is pumped into local startups; and various new policies are adopted-there’s still little chance that New York will unseat Silicon Valley as the American capital of technological innovation.

[caption id=“attachment_45266” align=“alignleft” width=“380” caption=“Workers drive onto the campus at Google headquarters in Mountain View, California. Clay McLachlan/Reuters”]  [/caption]

Here’s why: Bloomberg’s focus on infrastructure, money, and regulations is ultimately a red herring.Silicon Valley isn’t merely an aggregation of brilliant people working near universities with access to venture capitalist dollars, though all of those things are necessary. What East Coast policymakers have failed to consider-and what they will ultimately need to replicate-is Silicon Valley’s je ne sais quoi.

Silicon Valley’s secret

The secret to Silicon Valley’s success, of course, is failure.

Steve Blank, a serial entrepreneur who teaches at UC Berkeley and Stanford, put it this way: “You know what we call a failed entrepreneur in Silicon Valley?” Blank said in an interview published on GigaOm. “Experienced. Nowhere else in the world do we say that. Anywhere else in the world if you failed, you embarrassed your family, your community, your state. Not here. Failure is accepted as experience. And that changes this culture.”

“Fail fast” has indeed become the mantra of every startup, and war wounds from having royally screwed up are worn as a badge of honor.”[T]he secret to the valley’s astounding multiple-decade boom is failure,” observed Stanford engineering professor Paul Saffo. “Failure is what fuels and renews this place. Failure is the foundation for innovation.”

Failure is even a networking opportunity. This October, the annual FailCon will be held in San Francisco’s Japantown, and technology entrepreneurs, investors, developers, and designers will gather to “study their own and others’ failures and prepare for success.”

But this undaunted spirit may not translate readily elsewhere, and there are indications that New Yorkers are more conservative than Californians when it comes to making-and admitting to-colossal professional blunders. (For the record, Bloomberg has been vocal about embracing failure, but then again, that’s why he’s Bloomberg.)

A New York City-sponsored summit on entrepreneurship held in 2005, for example, identified a fear of failure as one of the reasons holding people backfrom starting their own businesses.

The Center for an Urban Future study also found that New York City lacked its share of experienced entrepreneurs. “Most of the nation’s leading high-tech hubs boast a large number of executives who have gone through the trials and tribulations of running a start-up technology company and learned-often through initial failure-what it takes to succeed. … But New York hasn’t yet developed a sizable pool of experienced technology entrepreneurs,” the report said.

In other words, New York City, long stereotyped for being cut-throat and status-oriented, hasn’t done a good job of keeping enough failure-loving business leaders around.

Silicon Valley thrives because it consummately and routinely embraces entrepreneurial disasters, a quality that Bloomberg will need to import to New York City. But creating a local business culture that is fearless of failure isn’t something that any elected official can simply legislate. And yet, without it, Bloomberg’s initiative will surely flounder.

Then again, from where I sit, that might be a good thing.