Published On: Mon, Sep 4th, 2017

Consumer internet startups go mainstream outward of Silicon Valley

Hans Tung is a handling partner during GGV Capital.

Silicon Valley has prolonged been a core of a star for tech companies that interrupt a standing quo.  But a connection of trends – a geographic freeing of engineering and product government talent, millennial purchasing power, and a arise of e-brands around amicable media  — are formulating new opportunities around a country.

In a past year, New York has reached a tipping indicate as consumer-facing startups proliferate and, similarly, Los Angeles is removing beheld for a success of Snap and Dollar Shave Club (among others).

Silicon Valley’s comprehensive corner on tech talent is changeable as some-more college connoisseur engineers opt to live in civic areas nearby their alma maters, and tech giants from a San Francisco Bay Area are hence expanding a distance of their offices in these cities. In civic centers such as New York and LA we observe these “engineers though borders” are anticipating synergies with existent experts that have prolonged driven creation in consumer brands, entertainment, and normal media empires.

For example, by marrying Silicon Valley shabby engineering talent to New York’s branding savvy, and a accumulative trust in media, finance, healthcare, trade and manufacturing, we’re saying – along with a friends and many long-time New York investors like BoxGroup, First Round, General Catalyst, Greycroft, Lerer Ventures, Max Ventures and Union Square — a presentation of web and mobile-first straight platforms and e-brands.

We trust a event to support to a new mass market, i.e. millennials globally (starting with 75 million in a US and 300 million in China), is enormous, and that’s because GGV has done 9 investments in a Big Apple in only a past year.

Tech Talent Arrives

Healthy ecosystems flower off a symbiotic attribute between vast players and scrappy newcomers: both tech juggernauts and startups advantage from a two-way flows of talent, ideas and collateral between them. In New York, that interplay is starting to furnish results. Google scarcely doubled a series of New York-based employees between 2008 and 2012, and Facebook, HP and many others staffed adult around a same time. Engineers who cut their teeth during these New York offices have begun distinguished out on their own, and they’ve found glorious partners among a brand-builders and media savants that New York cranks out.

Platforms and Brands

That informative alchemy could infer lucrative. While Silicon Valley is one of a world’s epicenters for building platforms, many of a tech collateral hasn’t shown as most seductiveness in building consumer brands in non-tech categories.

The enlightenment in a Bay Area values draining corner innovation, or platforms that concentration on elucidate one or dual marketplace inefficiencies. But when it comes to every-day branded consumer products – like shampoo, canned beverages, or apparel, that make adult a outrageous cube of genuine consumer spending – many Silicon Valley startups tend to support to “Atherton moms” (think $400 wi-fi connected juicer).

To be fair, many NYC consumer start-ups have also historically focused around oppulance up-markets, instead of targeting a mass-market consumer.  But by obscure cost points to aim mass marketplace millennials though sacrificing quality, we notice companies like Wish, Ibotta, and Poshmark, have satisfied a untapped intensity of this still underserved customer.

This is where New York comes in. The city is chock full of a designers and marketers, many of whom are now withdrawal vast bequest retailers to build e-commerce companies.

Similiarly Los Angeles has a budding ecosystem interjection in vast partial to Snap now valued during approximately $26 billion, a merger of Dollar Shave Club by Unilever for over $1 billion, and a series of upstarts such as Mobalytics, and Mighty flourishing rapidly.

Media Makeover

Also in a wheelhouse for New York startups is a media space. The platforms and collection built in Silicon Valley have upended normal media models, though a Valley has nurtured few good non-tech media brands. New York stays a violence heart of American media, with places like Columbia Journalism School churning out calm creators a approach Stanford does mechanism scholarship majors.

The Huffington Post and Buzzfeed flourished during a SEO and amicable media revolutions, and we’re now saying a second call of New York startups figure out new niches and exploring new verticals.

Companies like Buzzfeed, Bustle (an online news and lifestyle website that caters to women and seen outrageous user expansion given a first in 2013) and Refinery29  – are means to gain on their vicinity to a goldmine of vast bill consumer ad agencies in New York.

And a value tender they offer is opposite – while Google or Facebook give advertisers a collection and platforms to blast out their possess ads, these culturally applicable websites can work together with advertisers to furnish singular calm that millennials will wish to devour. Meanwhile, other New York-based startups – like live-video news startup Cheddar, The Skimm, or VR aspirant Littlstar – are exploring a bounds of new-new media.

A Tale of Many Cities

New York’s standing as a branding and media collateral of a universe creates it a primary tact belligerent for tech-enabled e-brands. But other cities around a nation are also holding advantage of a flourishing diaspora of Silicon Valley-trained engineers, and pairing it with their possess internal strengths.

Los Angeles is holding advantage of tech-enabled entertainment, Seattle on Saas opportunities (thanks to Amazon, Microsoft, Expedia, Zillow, etc.), while a metropolises of a Midwest are developed for bringing tech collection to bear on food tech opportunities. While Silicon Valley continues to browbeat a tech zeitgeist, there are opportunities for investors and entrepreneurs who are peaceful to try outward a Silicon Valley and a Bay Area.

Featured Image: Who is Danny/Shutterstock

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