Maybe it’s something in the water.
Because no matter how much hype is showered on New York City’s startups, they almost never deliver on their promise. We were reminded of that sad state of affairs in the wake of Etsy’s successful IPO yesterday, the all-too-rare win for a city that has struggled to fulfill its dreams of being a startup hotspot.
The Wall Street Journal ran some of the numbers on NYC’s startup scene and called the Etsy IPO a “milestone for New York City, which has seen few startups, backed by venture capital, in recent years go public or sell for large amounts.”
Besides Etsy, you’ve got Tumblr selling to Yahoo for $1 billion in 2013. And then, um, er…
Even the Tumblr sale was a mixed blessing. It was a good payoff for sure, but one that dashed the dream of having a big, independent startup that might become NYC’s own Facebook or Google or Twitter. Being a glorified division of Silicon Valley’s Yahoo isn’t quite the same thing.
And the buyout definitely was not the “iconic” IPO that Benchmark’s Bill Gurley told the Journal that NYC needs.
More often, what the city produces are shooting stars that burn across the sky in a blizzard of New York-based-media-hype-wishful-thinking and then fizzle just as fast. Hello, Fab.com (raised $336 million in venture funding, sold for crumbs). Remember Foursquare (raised $163 million in venture funding, and today is, well, still alive, still in search of a new focus.)?
So, Etsy is like the Episode IV of this NYC startup saga: A New Hope.
The $267 million raised by the Etsy IPO was the most ever for a NYC IPO, said the Journal. And NYC has five more unicorns, according to the Journal: AppNexus, Gilt Groupe, MongoDB, Sprinklr, and WeWork. Gurley told the Journal he hopes the IPO is “infectious.”
Maybe. For now, though, don’t expect the hype around the city’s startups to subside. Hopefully, one day, the reality will match it.