Silicon Island

There’s a new trend going around, still below the radar but becoming much more trendy in the coming years. Lately, the world seems to have fallen into some incredulous, nefarious and almost puerile fascination with Silicon Valley success. Not that its unwarranted. Practically the entire American economy seems to be floating on two big banana boats named Apple and Google. Fine. No problem here. But I can remember when both of these “titans” of the digital age were either fledgling or floundering. As always, we of the media like to sensationalize success by acting like there is no such thing as failure. In truth there can never be any success without failure. But thats not what I want to discuss right now.

I’m more interested in what will happen when the luster wears off and these two “giants” of industry become the US Steele and General Electric of the 21st century. Yes, 100 years ago it was these two powerhouse corporations that were leading the world into the 20th century! They were the Wall Street darlings and the flagships for US of A world dominance. Of course, neither had reached their full potential, and were greatly overshadowed by the downfall of Standard Oil, but these two young but ambitious companies were ready to lead the industrial charge into an ever changing, ever more competitive world. After a catastrophic war, they emerged as the new titans in an over exuberant, overly optimistic world. The rich and poor alike valued their future according to how much stock they owned in either company or both.
“Bethlehem Steel stock rose from a pre-war average of $25 to $700 in 1916“. Sound familiar? As of this writing, US Steel stock prices are around $28 per share and GE around $25. Both considered very “affordable” stocks.

Well, we all know what eventually happened and there’s no reason to assume there will be more wars and depressions in the 21st century (though, unfortunately, they can’t be ruled out either). But the point I’m trying to make is simple. What may shine brightly now, will not last forever. Not that Apple and Google won’t continue to be the technical giants that they are, but the world, especially in technology, is always changing, always evolving, and these days at breakneck speed. Silicon
Valley was not always Silicon Valley. Before the geniuses of innovation rose to acclaim in San Jose and San Mateo, the east dominated the digital landscape. Areas like Route 128 in Massachusetts and the Beltway in the Washington D.C. metropolitan area were the places to be for nerds and capitalists alike. Anyone remember AOL? But that was the age of proprietary hardware and shrink wrap software. Practically prehistoric by today’s standards. But that’s the point. Silicon Valley didn’t become Silicon Valley because California has a propensity to grow technical genius the way it produces oranges. No. It was an early exponent of open systems, open source, and embraced technologies like unix while the rest of the world clung to proprietary, licensed and very expensive operating systems. In short, California techies were simply in the right place at the right time. Granted, it was the Jobs and Gates of the world that knew how to take advantage of it, but the world is a mighty big place.

We are now living in a digital world where communication is the new Bessemer process and the Internet the new electric grid. The Carnegies and J.P. Morgans were the “visionaries” of their day too. But because we are where we are technically, financially and, more importantly, culturally, new visionaries will arise once again on the east coast of the U.S. and, especially one place in particular. The next rival to Apple will be nothing less than the Big Apple. The time has come. Every millennial in the greater New York area has been weaned on the concept, notion, and inevitability of entrepreneurship. No one believes in getting rich by working for a corporation, in fact, to them thats giving up all hope of any future at all. We’ll talk about that in a later article. But you also don’t have to run off for Silicon Valley to make your fortune either. Silicon Alley is growing and growing fast. And this time we’re not looking at an east coast Libertarian society of elitist white males congratulating themselves on their own cleverness (well, at least not in the long run) but a polyglot of cultures, races and creeds, male and female, doing what New Yorkers have been doing since they opened the Erie Canal. Everyone from hard-core street kids to pampered socialites will be pitching, hustling and, most importantly, BUILDING their technical dreams.

True, the first success stories will come from FlatIron and Brooklyn’s Dumbo, but by the 2020’s, they will be in East Harlem, China Town and Hell’s Kitchen. They will be on the Grand Concourse and Roosevelt Ave. The big Apple hasn’t exploited the enormous technical and entrepreneural talent that has always been here because cultures, like bad habits, die hard. For years New York’s media, finance and banking, and, above all, advertising industries have confused high tech with “IT”. They’re the wonky guys with pencil holders and horn-rimmed glassed people talk to when they can’t get their email or a print out. But now those “IT” guys are developing minds of their own and a whole new culture to go with it. The allure and mystique of entrepreneurship has been seeded by the Larry Pages, Mark Zuckerbergs and, of course, the god of all techie gods, the late Steve Jobs. Nerds are no longer just nerds, but “visionaries” eagerly sought after by the capital markets of the world. And where are the best capital markets you ask? Why, of course, the financial center of America…good old NYC!

Although the “glamour” VCs may still be clustered in the “Valley”, growing ever wealthier on the Elon Musks and Peter Thiels of the world. The older, savvier and more aggressive old school VCs of lower Manhattan are slowly awakening to the infinite potential of “hi-tech”. Venmo, MongoDB, and Etsy don’t flow as freely off the tongue as Google, Facebook and Apple… but eventually the sheer number of startups will create its own center of gravity inside the Empire State. State based incentives meant to encourage innovation, growth and investment that haven’t been seen since the Great Depression will assure a long lasting and earnest desire for entrepreneurs to start, build and sell companies here like it nobody’s business. But unlike the cool, aloof libertarian with their narrow viewpoints and open collars, the New York entrepreneur will be tough, gritty and determined. They will be anxious and open-minded, tenacious and resourceful…in short, true New Yoikers! It may take a decade or two, but Manhattan is destined to be the next Silicon Island, perhaps, once again, the financial and technical pearl of the world.