Israeli startups beginning to see benefits of New York

A decade ago, it seemed like a no-brainer for a startup to move to Silicon Valley. It was both an inspirational and practical choice for founders to build their startup and aim for world domination. After all, it gave birth to giants such as: Google, Facebook, Uber, Airbnb and so on. Moving to Silicon Valley not only gave startups access to venture capitalists and unparalleled networking opportunities, it also fueled their dreams. A dream to not only stand on the shoulder of the giants, but to become giants themselves.

With this startup dream, it seemed inconceivable for founders to move or stay in New York. In fact, years ago, startups would leave New York as soon as salaries and rent became too high and funds started running low.

In 2003, when Jon Oringer founder of Shutterstock.com decided to stay in New York, it was taken as a surprise to many since moving to Silicon Valley was such a consensus. Oringer was interviewed at the time and explained that New York has everything a startup needs. He is considered to be one of the “pioneers” who made the bold move to stay in New York and forego Silicon Valley.

Today, there appears to be a shift in the general approach. It’s no longer crazy to choose New York. As a matter of fact, these Israeli startups – Siemplify, Semperis, and OwnBackup – chose NYC, a decision that turned to be a smart move that gave the companies the leverage they needed.

Amos Stern, chief executive and co-founder of Siemplify, left Israel for New York after securing a $4 million seed funding round (the company had later secured an additional $10 million round A funding). After Stern had considered many factors, his final decision was undoubted: “Siemplify’s first users were in NYC and it was therefore the best location for the company, and still is.” Siemplify ThreatNexus is a leading security orchestration and incident response platform designed to manage, investigate, and automate threat response from a single pane of glass.

“It was important for us to be close to our first customers and strengthen our position in the local financial market that turned out to be early adopters of cyber protection technologies as they were greatly exposed to attacks as well as limited by strict regulation,” Stern said.

For Semperis CEO, Mickey Bresman, leaving the beach shores of Israel in favor of the Big Apple was done for a similar reason. “We decided to establish an NYC office in 2015 in order to get closer to our customers, which is one of our top priorities. This decision has allowed us to interact with them directly, gather feedback, provide better support options and reach a product market fit faster.”

Semperis’ Directory Services Protection Platform ensures that the enterprise IT environment is secure, operational and compliant through early detection and remediation of threats that compromise Active Directory.

“The NY marketplace is robust in terms of customers.” says Sam Gutmann, OwnBackup CEO, when asked why he decided to make the move from Israel to New York instead of choosing the Valley. “I really wouldn’t consider SF. It is more expensive and even harder to find talent. The local scene is more competitive,” he added.

OwnBackup is a leading cloud-tocloud backup & restore vendor – and along with Siemplify and Semperis – is a Microsoft Accelerator (MA) alum. The company provides secure, automated, daily backups of SaaS & PaaS data as well as sophisticated data compare & restore tools for disaster recovery.

With Stern, Bresnan, and Gutmann’s “customer first” principle, NYC is the perfect place to further cultivate this strategy.

When asked what advice to give to startups considering the move to NY on the same grounds, Stern replied, “Moving to NYC may seem like a brave step, but ultimately the ability and speed with which we were able to develop as well as sell and distribute our products, has accelerated. Our decision paved the path to where we are today. I highly recommend it to other start-ups who have local customers or are focused on the US market.”

Bresman enthusiastically agrees with his peer, “Do it! And sooner rather than later. You will gain a lot of insights that are very hard to get without moving closer to your customers. Your proximity to customers will have a tremendous impact on your business and the personal experience itself, of living in such a vibrant and exciting city, is a win-win situation.”

For these Israeli start-ups, moving to New York allowed them to be closer to their customers while at the same time remain close to their teams back home – with its strategic location for overlapping working hours and international flights. Ultimately, moving to New York propelled the growth of their teams, customers, and revenue.

With more and more start-ups moving to New York and reaping the benefits, the Valley is no longer the “holy grail” for start-up destination. New York has become a great alternative. While New York and the Valley may be worlds apart – in terms of its climate and general culture – it has all the resources that a startup needs in order to grow and succeed.

The writer is the Managing Director of Microsoft Accelerator Israel.