Digital Divide?

This story appears in the December 2000 issue of Startups. Subscribe »

It could be the Match of the Millennium: In one corner is Silicon Valley, lauded for decades as the high-tech capital of the world. In the other corner: Silicon Alley, a relative newcomer to the high-tech terrain and an underdog in the struggle for dotcom dominance (albeit the world leader in just about everything else). The bell has sounded; the gloves are on! Who will prevail in this exciting interface-off? And more important, who cares?

In other words, is this so-called rivalry for real, or is it just a case of a few media types trying to stir up a bit of dotcommotion? That depends on what you read and who you talk to.

The tension seemed to reach new levels this past spring, at least in the media. This was spurred on by a spate of articles by East Coast journalists from such publications as The New York Times and Harper's Bazaar, which, upon learning that the Silicon Valley has 36 percent more men than women, decided to essentially reduce the region to a mecca for date-challenged millionaire geeks and the gold-digging women who want their money. In response, West Coast publications like San Francisco-based Web site Salon.com questioned the motivation of these East Coast scribes in perpetuating these pernicious myths. Salon's story concluded with a theory by San Francisco-based SFGirl.com's founder, Patty Beron, that "New York is jealous."

But while the media may be doing a lot more bicoastal mudslinging than muckraking, true denizens of dotcom culture question whether this coastal clash is all it's cracked up to be. "I do think it's overplayed in the media," says Mark Oldman, 31, co-founder of Vault.com, a New York City site that provides an insider's view of working in a variety of corporations from coast to coast. Oldman, a Stanford University graduate, spent 10 years in the Valley before moving back to the East Coast to start his Alley business. "There really isn't a Hatfield-McCoy situation between the two coasts," he says. "When you work at an Internet company here, there just isn't much time to care about the cultural differences on the other side of the country."

Even SFGirl.com's Beron, 33, whose Web site follows the Internet culture throughout the Bay area and beyond, has second thoughts about some of her comments in Salon. "I'm not sure why I said that about New York being jealous," she admits, trying to recall the context in which she was speaking. At the time of the interview, she explains, she was primarily annoyed about the implication that Silicon Valley women are all out looking for dotcom millionaires, when in truth, many are dotcom millionaires themselves.

"The main point I was trying to get across was that women are making lots of money in [San Francisco] and they aren't out looking for rich guys," she says. "It's so insulting to say we're out gold-digging and looking for husbands, when really, we're all thinking 'Forget that! I'm going to take care of myself and make my own money.'"

Rama Chiruvolu, 27, co-founder of New York City networking site THESQUARE.com, recently moved to San Francisco to set up an office on the West Coast. She says that, as a New Yorker, she believed there was truth to the Silicon Valley gold-digger stereotypes, but now that she's moved, she's found the image to be false. She's now one of the women focusing on raking in the millions herself.

Chiruvolu used to think there was a competition between the two areas but has found that Valley people don't often think about the Alley. "When I was in New York, I definitely felt we could go toe-to-toe with Silicon Valley, but since I've been out here, I don't even get the sense New York is on the radar."

That may be the sense in the venture capital arena as well. According to a survey by Pricewater-houseCoopers, the Alley only brought in about $2.5 billion in venture capital last year, while Valley start-ups attracted more than $13.4 billion. Murem Sharpe, founder of Bloomfield Hills, Michigan, start-up strategy incubator 24x2 LLC, points out that Silicon Valley has been a tech center for decades.

Oldman believes this is starting to change though, particularly with more VCs, like Redwood City, California, VC firm Draper Fisher Jurvetson planning to open offices in New York. "Years ago, there was funding envy," says Oldman. "You'd hear: 'Why don't we [move] to Silicon Valley? All the VCs are there.' I no longer [hear that]."

Two Cultures

While the rivalry may have been blown out of proportion, differences between the two cultures do exist. Avoiding stereotypes, understanding the differences and recognizing the strengths of start-ups in each area may help you leverage these distinctions to your advantage. A little cultural sensitivity may be your key to forming bicoastal relationships with other businesses that can introduce you to a whole new world of opportunities.

In pointing out the relative strengths of the different regions, most entrepreneurs and experts characterize Silicon Valley as a true technology center, unparalleled in software, hardware and a host of other computer-oriented innovations. (Think of tech titans like Hewlett-Packard, Sun Microsystems and Apple Computer). New York, on the other hand, excels in content, online advertising, marketing and e-commerce. (Think DoubleClick, iVillage and the slew of New York media giants that have put their publications online.) Janet Stites, publisher and co-founder of AlleyCat News in Silicon Alley, notes, "There's more of a media flavor here than a geeky computer flavor."

Distinct Styles of Office Dress

Another oft-mentioned distinction is the relative informality of the West Coast workplace, in both dress and attitude. "I do think the [origin] of workplace informality is Silicon Valley," observes Oldman, alluding to not only the ripped jeans, shorts and T-shirt ensembles that populate the Silicon Valley workplace, but also to other symbols of free expression, like Supersoaker water guns, meeting rooms with quirky names and odd working hours. "In New York, there still isn't universal comfort with coming to work in your shorts or working from 4 p.m. to midnight," Oldman adds.

Sharpe says this issue can sometimes pose problems. She recalls the time she had to gulp when a vice president of sales from a West Coast company showed up at an important New York Fortune 500 company to which she was introducing him, wearing "something just north of a Hawaiian shirt."

Conversely, in West Coast start-ups, the level of informality may be a way of identifying who holds the power in the company. "People here have this joke that the person who's the most casual in the room is the most successful," says Chiruvolu. "It's the people trying to get there who dress to impress."

Oldman believes the Alley and Valley embrace two different styles. Valley techies took Bill Gates style and made it fashion. Alley techies are more apt to adopt and update a traditional New York look and attitude. "In the Valley, you have geek chic," quips Oldman. "In New York, you have chic geeks."

Other Differences

Work styles and employee expectations may also differ from coast to coast. In spite of former stereotypes about West Coasters being more laid back, Chiruvolu was impressed by how quickly West Coast entrepreneurs work: "New York people work more hours, but West coast people have a better network and are able to accomplish more."

At the same time, while Western employees may also move fast and work long hours, they're also less likely to remain loyal to their companies, primarily because the competition for technical staff is far more stiff in the Valley than in the Alley. "The packages are more aggressive in Silicon Valley because it's a fierce recruiting environment," says Dimitri Boylan, COO of HotJobs.com Ltd. in New York City.

Candidates from the two regions are also looking for different kinds of packages, says Boylan. West Coast candidates are likely to demand options from companies they assume will make them rich. East Coast job seekers, on the other hand, are more focused on high salaries. He says this is partly because people on the West Coast can see the wealth that such options have brought to many area residents, which is not as evident in the East.

Fitting the Lifestyle

While the dotcom industry in Silicon Alley may be in its nascent stages, it's growing fast. Another Pricewaterhouse-Coopers survey shows that new media businesses in the New York City metro area have increased by 75 percent since 1997, with most of these focusing on content, development and e-commerce. And while much has been made of tech talent flocking to the West Coast in search of power and riches, the survey shows that 20 percent of respondents moved to New York from other locations. Many of these hailed from high-tech areas, with 17 percent of relocating respondents coming from Silicon Valley.

Still, most dotcommers you talk to from either coast will tell you they like where they are and aren't planning to move. "I think the press likes to talk about [envy], but no one really cares," says Stites. "People who live in New York really like living here, and I'm sure people who live in San Francisco like living there. You've got two cities that are very expensive to live in; if you weren't happy living in either one, you probably wouldn't make the sacrifices to live there."