The Great Talent Dividend and NYC’s AI Opportunity

🌈 Abstract

The article discusses the "Great Talent Dividend" and the opportunity it presents for the AI ecosystem in New York City (NYC). It highlights the growing presence of AI companies and talent in NYC, and provides resources to help navigate the local AI ecosystem.

🙋 Q&A

[01] The Great Talent Dividend and NYC's AI Opportunity

1. What is the "Great Talent Dividend" and how is it creating opportunities for the NYC AI ecosystem?

• The "Great Talent Dividend" refers to the influx of highly talented and experienced employees looking for new opportunities, which is creating a favorable talent market for AI startups in NYC.
• Many AI companies have chosen to headquarter or establish a major presence in NYC, attracted by the city's lifestyle appeal, strong go-to-market capabilities, and presence of top universities and research labs.
• NYC has seen a significant increase in tech workers, gaining 1 in 7 tech workers between 2019-2023, while San Francisco saw a net loss.

2. What resources has the author introduced to support the NYC AI ecosystem?

• The NYC AI Map - a curated map of top AI companies and talent hubs in NYC.
• The NYC x AI Company Directory - a list of over 150 AI companies with a major presence in NYC.

3. How is the author positioning the role of a VC in supporting the NYC AI ecosystem?

• The author sees a VC's role as a "human capitalist" - identifying promising founders, connecting talent to companies, and facilitating partnerships.
• The author has observed a strong talent dividend in the NYC AI ecosystem and is aiming to help companies and talent navigate the opportunities.

[02] The State of AI

1. What are the author's views on the current state of AI and the hype cycles it has experienced?

• There have been several hype cycles in tech, with talent shifting between areas like fintech, crypto, enterprise SaaS, and now AI.
• While AI could follow a similar boom-and-bust pattern, the author believes this time is different due to the recent breakthroughs in large language models like ChatGPT.
• The potential market and talent demand for such AI technologies is seen as significant and real.

2. How has the retrenchment in enterprise SaaS affected the AI startup landscape?

• The sudden decline in enterprise SaaS valuations has eroded employee and investor morale, making future startup fundraising more difficult.
• This shift is driving talent to seek better prospects, which the author sees as an opportunity for AI startups.

[03] NYC's AI Opportunity

1. What factors contribute to NYC's growing AI ecosystem?

• NYC has a robust and growing community of AI, engineering, and dev tool talent, attracted by the city's lifestyle, go-to-market capabilities, and presence of top universities and research labs.
• The city has seen a major influx of tech workers, becoming a prioritized choice over other locations.
• NYC is home to 35 AI unicorns, and the city is second only to Silicon Valley in terms of AI venture capital investment.

2. How has the author's own AI portfolio companies observed talent trends in NYC?

• Among Lux's AI portfolio companies, 57 employees have moved to NYC out of a total of 179 who changed locations.
• The author has observed consistent trends of alumni from one company founding new startups together, as well as talent migration from tech incumbents' AI labs into startups.

[04] The NYC AI Talent Dividend

1. What resources has the author introduced to help navigate the NYC AI ecosystem?

• The NYC AI Map - a curated map of top AI companies and talent hubs in NYC.
• The NYC x AI Company Directory - a list of over 150 AI companies with a major presence in NYC.

2. What advice does the author provide for companies in AI and hard tech to take advantage of the talent dividend?

• Engage the community through in-person events and meetups.
• Create pathways for excellent technical talent to transition into new roles.
• Consider flexible office models to capture loose talent.
• Leverage resources like the NYC AI Map and Company Directory.

3. What advice does the author give to companies on the "negative side" of the Great Talent Dividend?

• Increase transparency and manage expectations.
• Re-incentivize employees, re-finance valuations, and provide a clear path to upside value.
• Avoid inauthentic "AI" labeling and instead focus on reimagining workflows with AI in mind.