The Impact of Major Cities on Technology

I relocated from the Bay Area to #Atlanta in 2012, where I soon founded Partpic. Choosing to locate a promising computer vision (AI!) startup in Atlanta over Silicon Valley was considered a risky bet. Now in 2024, it finally feels like the bet on Atlanta is paying off. For the first time, all the key players are in sync and moving forward in the same direction. This is a sea change from the disjointed landscape I encountered when I was starting up. I'm encouraged by the progress. A few notable updates: 1. The City of Atlanta has adopted a forward-thinking approach to innovation, led by visionary leaders. Mayor Andre Dickens, aptly nicknamed the "Tech Mayor," made a great choice appointing Donnie Beamer Jr., CFA, to spearhead the newly created Office of Technology and Innovation. In one year, Donnie and team have made notable strides, including partnering on a comprehensive analysis led by Parmeet Grover of BCG, outlining Atlanta's status and trajectory toward becoming a Top 5 Tech Hub. The study offers valuable insights here: https://lnkd.in/eA82mZXX 2. The magic of Atlanta Tech Village is now extending to South Downtown, thanks to David Cummings. I recently toured the area with David, Jon Birdsong, Aly Merritt, and April Stammel and was amazed by the project's scale and potential. It represents a significant opportunity to foster innovation in Atlanta for years to come. My sincerest hope for the development is that inclusion is part of its DNA from the start. Maynard Jackson gifted Atlanta the blueprint on how to do developments of this magnitude with economic equity at the center, and I am hopeful the Atlanta Ventures team will follow his example. King Williams wrote an excellent overview of the project's history and potential here: https://lnkd.in/e2jrMEFG 3. An increasing number of startup founders are scaling their businesses successfully. Although the number of unicorns remains modest (7), local entrepreneurs are redefining success—focusing less on fundraising and more on revenue, profitability, and ownership. Embracing and multiplying these types of businesses is crucial, as it insulates our ecosystem from the volatility of VC and ensures that when these companies exit, a larger portion of the value remains local, benefiting the community. We are focused on influencing entrepreneurs in our portfolio to adopt this mindset as are many ESOs like Endeavor Atlanta, Russell Innovation Center for Entrepreneurs, and Goodie Nation. These developments are a testament to Atlanta's evolution as a thriving hub for tech innovation and entrepreneurship, making it an exciting time to be part of this vibrant community. While there is still much work to be done (more on this later), I'm heartened at the earnest #collaboration happening toward a shared vision of accelerating inclusive entrepreneurship in Atlanta.

New York City is now the second strongest tech hub in the world. It’s home to over 10,000 tech companies and startups, and over $10 billion in early-stage funding annually. Just over a year ago, Index Ventures opened our office here. By then, we already had 20 portfolio companies in the city, but it was time to do more. NYC sits squarely in the middle of a ten-hour timezone that captures 70% of the world’s top 30 most vibrant startup ecosystems. And like Index, New York is inherently international. Nearly half of the city’s tech workers were born overseas and immigrants make up 46% of the overall workforce. One year later, with a new office and a team of 12 in the city - it’s time to take stock. Here are a few things that stand out: Density creates serendipity (and speed). To give one example: closing a recent deal, we spent time with the founding team every day for an entire week. At each other’s offices, at soccer games, bumping into each other at the gym or on the street. That’s what happens when you all live and work within a 10-block radius. NYC is the ultimate 15-minute city. In a way it reminds me of Paris more so than London. Healthcare is hot. Every quarter, 20-25% of early stage deals in NYC are happening in the healthcare sector (excl. biotech). Many of the fastest growing companies are healthcare-related. We used to think of NYC as the capital of financial services and fintech. But it’s also becoming the capital of healthcare IT and services, and we’ve been spending a lot of time meeting entrepreneurs building in the space - if you are one of them, please reach out! The Transatlantic hub. More and more entrepreneurs from across the pond are choosing NYC as their first port of call. And it’s producing a real cluster effect. I created a community of venture-backed European entrepreneurs in NYC to help each other out. We’re 150+-strong and growing, so please reach out if you’re planning to move here. There is now a well-trodden path where one of the company’s cofounders moves to the city as soon as a Series A is closed. Just over the past year, Index portfolio companies incident.io, Sylvera, Taktile and Causaly have all made the move or at least kicked off the process. NYC as an internal bridge. We’ve experienced the power of NYC’s location internally - the team here can be on calls with Europe in the morning and with the West Coast in the afternoon. It allows us to share best practices, context and competitive dynamics and form a comprehensive view of the transatlantic venture market. NYC is also the natural mid-way point for members of our three investment offices to meet in person. This is what makes it such a convenient place for people who want to run a business that spans from Tel Aviv to San Francisco. In short, this first year has been a blast and we want to thank all the founders, investors and the rest of the ecosystem for welcoming us so warmly - you’ve really made us feel at home. Onto year 2!

The "tech talent tectonic shift" - Silicon Valley, Manhattan, and others no longer monopolize the market for tech talent. Let's dive in. 🔍 Great reporting from The Wall Street Journal points out a phenomenon we already intuitively know - the exodus of workers out of cities like San Francisco and New York City. Due to many factors, including how some cities handled the pandemic, emerging technology ecosystems across the U.S. and the growing employment of tech workers in non-tech industries have created more geographic competition. 🏙️ The Shrinking Share Lightcast, a labor-market analytics firm, in collaboration with The Brookings Institution, highlights that cities traditionally synonymous with technology are not just losing their proportionate share of U.S. tech labor; they're experiencing an absolute decline in their tech workforce. For instance, Silicon Valley saw a reduction of nearly 1,400 tech workers up to 2023, a trend likely exacerbated by layoffs at tech giants. Contrastingly, areas like Denver, Salt Lake City, Miami, Nashville, and particularly Texas cities - Dallas, Austin, and Houston - are becoming new tech hotspots. These cities have witnessed significant tech workforce growth, with the Dallas-Fort Worth metro area alone adding 30,000 tech jobs in two years. 🌱 Growth Drivers: Local Ecosystems and Diverse Employment - Local Tech Ecosystems: New tech clusters are forming, fueled by both local and external investments. These ecosystems are self-sustaining, with new tech firms attracting more talent and fostering additional tech startups. - Broad-based Tech Employment: About 60% of tech workers in the U.S. and Canada are now employed in traditionally non-tech industries like healthcare and education. This diversification in employment opportunities is decentralizing the tech workforce. 📊 Case Study: Cart.com's Location Dynamics Cart.com's journey exemplifies this trend. Initially founded in Houston, then moved to Austin, and eventually returning to Houston, the company's location strategy reflects the need for diverse talent pools that cities like Houston offer, beyond just software development expertise. 📈 Future Outlook: Decentralizing Innovation While certain areas will continue to lead in specific tech domains (e.g., AI in the Bay Area, biotech in Boston), the overall nature of tech jobs is evolving. More cities are now equipped to support "new collar" tech jobs focused on implementing innovative technologies rather than solely creating them. This evolution suggests a continued dispersion of tech jobs across various U.S. cities, reshaping the traditional concept of tech hubs - good to have more geographic competition! Read more - link in comments. #TechTalent #SiliconValley #InnovationMigration #TechHubs #FutureOfWork

Yes, we all know that the "the Bay Area is big" when it comes to venture capital. However, recent data from Pitchbook shows that other startup hubs are now positioning themselves as thriving alternatives to the Bay Area. Instead of a broad boom across the country, venture funding in 2025 is concentrating into a few specific regions and sectors. Capital is flowing toward markets that either dominate a clear specialty or offer a truly different value proposition compared to Silicon Valley. Bay Area: Fewer Bets, Bigger Ambitions The Bay Area pulled in nearly $60 billion in Q1 2025, up from about $48 billion the previous quarter. Deal counts are down slightly, but check sizes are growing. Insight: The Bay Area is about backing a few world-changing bets, not funding every startup. New York: Steady, but Lacking Breakouts New York remains the second-largest hub, with $5 billion to $7 billion in deal value and 400 to 500 deals per quarter. Fintech and SaaS remain strong, but there are no massive breakout rounds. Insight: New York needs new category-defining companies to stay competitive. Los Angeles: Carving Out Creative Tech Los Angeles is building a distinct identity in entertainment tech, AI-driven media, and gaming. It edged past Boston in deal value, showing investors are betting on its creative potential Insight: LA is thriving by playing to its strengths rather than mimicking Silicon Valley. Boston: Deep Tech Stronghold Boston continues to dominate biotech and health tech, but remains narrow in its focus. It trails LA in overall venture dollars but maintains leadership in highly technical, defensible industries. Insight: Boston’s specialization is both a strength and a ceiling. Austin: Graduating to a Major Player Austin is producing bigger companies with fewer deals. Despite only about 100 deals in Q1 2025, total deal value surpassed Boston, led by enterprise software, cybersecurity, and logistics startups. Insight: Austin is evolving from a startup hub to a scale-up hub. In 2025, venture capital is about conviction. Fewer companies are getting funded, but those that do are raising bigger rounds. The Bay Area remains dominant, but regions like Austin, Los Angeles, and others are carving real alternatives. In today’s market, being different is no longer optional, it is essential.

Over the last year, I've met with hundreds of AI operators globally. Here's what I learned: Where you live actually matters. It can dramatically accelerate or dampen your trajectory in AI. A virtual coffee will never replace the magic of an in-person meeting. I get that we're in a remote-first world. I've only worked remotely since 2019. However, the most transformative partnerships, deals, and innovations often spark from a casual cup of coffee. San Francisco Bay Area (my home for 30 years): You'll find the densest concentration of AI labs, startups, and talent on the planet with places like Stanford University, Berkeley Artificial Intelligence Research, Meta, Google, and LinkedIn a short drive away. New York City: The densest city in the country with an emerging hub of talent, startups, and venture firms earning its SoHo Valley nickname for a reason thanks to organizations like Primary Venture Partners, Zero Capital, Arthur, Hebbia and so much more. Paris: With the likes of Hugging Face and MongoDB with an established presence along with emerging offices from OpenAI and H Company. No offense to my friends in New Mexico, but there is no way someone in Albuquerque is going to have the same luck-surface area as someone in these cities. These aren't all of them. London is Google DeepMind's backyard Boston is where academia meets industry Seattle where nature and big tech intermingle Toronto is Cohere's playground These hubs offer the perfect trifecta of capital, talent, and problems worth solving. And no, you don't have to uproot your life for your job. BUT - if you're serious about your impact in AI, I recommend you planning to visit one of these hubs in 2025. The good thing about building a global AI network, you'll find a likeminded friend who's down for a coffee or a pint in any of these hubs at AI Circle.

***Silicon Desert: How Phoenix Became Tech's Hottest New Hub*** -Phoenix, traditionally known for its sun-soaked retirement communities and MLB spring training, is silently transforming into America's next major tech hub. -The desert metropolis has become a powerhouse for cutting-edge innovation, anchored by TSMC's massive $65 billion chip manufacturing investment. Beyond semiconductors, Phoenix's perfect grid layout and consistent weather have made it a prime testing ground for autonomous vehicles. Waymo's robotaxis now covers 315 square miles, and Lucid Motors' massive manufacturing facility is just south of Phoenix. Even Amazon has chosen the city for its ambitious Prime Air drone delivery program. Industry experts point to Phoenix's winning formula: business-friendly policies, strong university partnerships, a growing talent pool, and a thriving tech ecosystem—proving that innovation can flourish even in the desert heat. #silicondesert #amazon #waymo #tsmc #lucidmotors #engineers #ai #manufacturingengineering #semiconductors

Move Over: Here’s #Bellevue - The Sophisticated Counterpart to #SiliconValley in the Pacific Northwest. The tech hub on the #Eastside is booming what was just once merely always "on the rise". The #EASTSIDE, more famous for the globally better-known #Redmond of Microsoft, is now anchored by #Bellevue, Washington, an adjacent suburb. Bellevue has emerged in its own right as a powerhouse in the tech industry. Only to novices, does it draw comparisons to its more famous California counterpart. Why? Bellevue is rapidly becoming the epicenter for tech giants and innovative startups. Here are some possible reasons on why: 1. Major Tech Presence: Microsoft, Amazon, Meta, and T-Mobile all have significant offices here, creating a vibrant ecosystem.   2. Innovative History: Bellevue’s proximity to Seattle, next door to Boeing, roots in the defense industry and the 1962 World's Fair laid a strong foundation for its culture of innovation. 3. Quality of Life: Walkable neighborhoods and great public transit make Bellevue an attractive place for top tech talent. 4. Top Talent: The area attracts professionals from other tech hubs, enhancing its reputation as a thriving tech scene. Every top person I meet at national conferences from around the country has a child in the region working at these companies. 5. Growth Space: Bellevue's office market thrives with lower vacancy rates compared to Seattle, supporting new businesses and startups. 6. Expansions by Tech Giants: Amazon and TikTok are expanding in Bellevue, with TikTok establishing a new e-commerce hub. 7. Healthy Office Market: Bellevue's office availability rate is 21%, compared to Seattle's 31%, highlighting its robust market dynamics. Huge shout out to the reporting of Alex Halverson of The Seattle Times: “Seattle area leads the world in big new tech office leases” 8. Significant Leases: Companies like The Pokémon Company International and Snowflake signing major leases exemplify the strong demand for office space in Bellevue. The political scene is also clean. No Tammany Hall shenanigans here. Credit to Mayor Dr. Lynne Robinson. As Professor Margaret O'Mara, a historian at the University of Washington, notes, "There's probably quite a bit that Silicon Valley can – and should – learn from Bellevue."  The future of innovation, is fueled by endless lates from Starbucks, unfolding in the Pacific Northwest is changing the world. What makes Bellevue an attractive hub to you? Share your thoughts! #TechHub #Bellevue #Innovation #FutureOfTech

NYC tech is eating the world. Fifteen years ago, raising a New York seed round meant booking a flight to San Francisco. Today the numbers run the other way: • +64 % tech-job growth (2014-24). 4× faster than the city’s private-sector average. • 41 % of all post-pandemic hiring came from tech, even as other industries treaded water. • 25,337 AI job postings in 2024. Beating SF by 10K listings and every other city in the country. • NYC founders pulled 30% of all U.S. fintech capital last year, up from 23% in 2020. Health-tech, AI, e-commerce, fintech, and prop-tech. Each has 300+ funded startups and growing. The talent flow has flipped too. One company I know just lured 7 of its last 23 hires from the West Coast. The fly in the ointment 1. Housing. We need more of it. An engineer making >$200k spends more >50% that paycheck on rent / living expenses. 2. Career ladders. We're seeing tech jobs hollow out in the middle. Senior positions are staying in NY, but the low to mid-level positions are being sent to lower-cost areas. 3. Policy friction. Many state and city leaders still don't seem to grasp tech's importance to our economy (despite good intentions). What we’re doing about it ↓ Flybridge just doubled down with Next Wave NYC, a pre-seed fund run by operators who built companies like Bowery, Chief, and OpenAI. Our goal is to back 50+ founders who represent the city they serve across AI, climate, fintech, and everything in between. If you’ve got the next outlier company, my DMs are open.

“In the last 25 years, #venturecapital investments have had the highest average annual return of all asset classes (17.2% vs. 13.9% return from the S&P500) and cities fostering #entrepreneurship have enjoyed resulting boosts and increased resilience in the local #economy, increased job opportunities, and improved #diversity in the tech #workforce. Cities embracing and driving entrepreneurship are seeing a new kind of benefit compared to traditional job-growth activities. The U.S. Small Business Administration credits small businesses with 44% of GDP and 2/3 of net-new job creation in the nation. While #startups do not contribute a majority of GDP in the US, as companies grow and mature, they become vital and more integral to the economy. Within Atlanta, companies with entrepreneurial starts, specifically, Mailchimp (Intuit Mailchimp), OneTrust, and Spanx now generate sizeable #impact on the local economy, with over $1.5B in revenue, collectively. From 2019-2022, 94% of Series A VC funding was awarded to the demographic majority in Atlanta, despite an above-average BIPOC population; the ecosystem must invest in this population to build an equitable #opportunity for success for all potential entrepreneurs. Atlanta brought in $1.9B in VC funds during 2022, a large figure but a 40%+ decline from 2021. Likely due to this drop in available VC #funding, 2022 also saw a decrease in number of companies founded in Atlanta, with only 158 startups launched in 2022, down from 183 in 2021 and its high of 444 in 2017. To unlock the ‘flywheel effect’ for growth, we believe Atlanta must establish itself in the top 5 cities for entrepreneurship as measured by VC funding, corresponding to roughly 2K startups launched on an annual basis, a 6X increase from recent years.” All excerpts #data & images below from Boston Consulting Group (BCG) report by Parmeet Grover Ayash Basu Malik Ben-Yousef here: https://lnkd.in/eK_rCcGe H/T Seth Cohen for the tag on this! “1 in 4 tech workers in the Atlanta metropolitan area are African-American, significantly more than San Jose, California, where 2.5% of the tech workforce is black, & San Francisco, where 6.4% of the tech workforce is black, according to a The Brookings Institution study on black and Hispanic under-representation in the industry.” Excerpt by Jessica Guynn & Nicquel Terry Ellis in USA TODAY https://lnkd.in/e6yanC4r Jasmine Crowe-Houston Shila Nieves Burney 🇵🇷 Arian Simone Ayana Parsons Dr. Maxine Cain Christine de Wendel Stacey Abrams Erin Hendrick Jen Hidinger-Kendrick Anita Hsu Katie Kirkpatrick Jamie Lackey Jewel Burks Solomon Kathryn Finney Sheena Allen Lauren Maillian Paul Judge Rodney Sampson Marcellus Haynes Morgan DeBaun Ryan Wilson #investing #assetmanagement #leadership #business #innovation #money #cultureofmoney

I am speaking four times at events during SXSW about the history of Austin tech. Our community has grown from the 25th largest city in the United States to the 10th largest city since I moved here in 1991. That is a lot of growth and most of that is because the city morphed from a university/government town to becoming a leading innovation center / tech hub in just a few decades. If you have things to add, please leave a comment or send me a message (I am always thrilled to learn new points of view that I can add to my speech). The Ten Pillars of Austin's Tech Success: 1.     The University of Texas at Austin and Dr. George Kozmetsky – Beginning in the 1970s the stage was set to attract talent, research and innovation. The combined effort of UT, the city, state, and the local business community was intentional to create a diverse tech business community in Austin. 2.     Central Location in the USA and (Mostly) Good Weather- Accessible and strategically positioned for business, easy access to travel, and a good climate made Austin a great place to live. 3.     Affordability – Historically, Austin offered a lower cost of living and doing business compared to other tech hubs. 4.     Connected/Networked Business and Tech Community - From the very early days our tech scene, business and tech leaders were active in community and their willingness to mentor young entrepreneurs was paramount to Austin’s success. 5.     Robust Business Ecosystem for Large Companies and Startups - The Chamber of Commerce and Opportunity Austin worked to promote/market Austin as a place for Big Tech to open offices and relocate corporate headquarters. And organizations like Austin Technology Incubator, Capital Factory, etc… created support for the growth of entrepreneurship and startups. 6.     Artsy Culture, Music Scene, and the "Keep Austin Weird" Vibe – Austin had a unique cultural identity that attracted diverse talent and made the city a welcoming place for everyone. 7.     Young Educated Workforce – For decades Austin has had a demographic conducive to innovation and startups. These young and ambitious tech workers are from both our local universities (UT, St Eds, ACC, etc…) and the top talent that relocated to Austin. 8.     Angel Investors/VC Capital and Tech Focused Service Providers– Beginning in the late 1990s and 2000s the essential funding that fuels the startup and growth phases of companies became available locally.  Additionally, the seasoned lawyers, accountants, bankers, etc... who help advise tech companies are present in Austin and help drive success. 9.     Government and Policy Support - Pro-business policies, low business taxes, no personal income tax, and incentives that attract and retain companies have historically made Austin a great place to do business. 10.  SXSW – The SXSW Interactive Conference helped highlight Austin on the international stage by brining the world to Texas beginning in the 1990s and continuing through today.