Beyond Silicon Valley: Ron Conway and Fred Wilson Tout Tech Diversity

Veteran investors Ron Conway and Fred Wilson are excited by the new people and places coming into the industry.

Ron Conway and Fred Wilson claim more than 50 years of combined experience as technology venture capitalists and have invested in Google, PayPal, Twitter, Tumblr and Etsy.

For most of those years, Silicon Valley has been “Mecca,” according to Wilson, who was speaking with Conway at the Cornell Tech @ Bloomberg speaker series in midtown Manhattan. New York City has built its reputation as a tech hub in recent years, and now ranks second to the Valley. But now both men are looking beyond New York and the Bay Area at a handful of smaller U.S. cities for the next big thing.

“Venture capital is a geographically constrained business,” says Wilson, managing partner of Union Square Ventures. The limitation is not just how many cities investors can be in during a single year, but also in the scarcity of cities where there is a support net for emerging tech companies.

The geographic diversification of the tech industry comes as investors look for ways technology can disrupt industries such as finance, transportation and real estate. The trend has been aided by civic leaders who see technology as increasingly important as older industries like manufacturing continue to wane.

Today, Conway, founder and co-managing partner of SV Angel, says nearly 20 percent of the firm’s time is spent in New York, compared to 5 percent just a few years ago. Wilson says Union Square Ventures focuses on five to 10 cities in a given year, including Los Angeles, Austin, Seattle and Boston.

Strong local ecosystems spread knowledge and provide support networks, which can prove especially helpful with startups that challenge local regulations, like Uber and Airbnb have done in transportation and lodging.

“There’s not a state in the union that doesn’t have an obtuse or archaic law that didn’t see ride sharing or home sharing,” says Conway, who has invested in more than 750 companies over his career. “Tech as an industry has to be impatient. You can’t let innovation slow down. But on policy issues you have to be patient and have to see it through.”

The one commonality that tech hubs in the U.S. share is that they are all cities, and that is no coincidence. “If you’re going to build products for the world, you want to be where the world is, and that’s in cities,” Michael R. Bloomberg, founder of Bloomberg L.P. and former Mayor of New York City, told the crowd.

Conway agrees, noting that one of SV Angel’s current interests is on-demand services, such as Washio, DoorDash and Instacart, which mainly serve metropolitan areas. “There’s a new economy that’s the convenience economy,” he says. “We see it as a very early multi-billion dollar sector.”

U.S. startups still account for most venture capital dollars, but that is poised to change as entrepreneurship gets more global, says Wilson. “I think what’s interesting is entrepreneurs in China or Saudi Arabia starting companies,” says Wilson. “The story is the globalization of entrepreneurship and not the globalization of capital.”

Wilson and Conway are energized not only by the growing geographic diversity of the tech industry here and abroad, but also an increased focus of bringing people of different background into the industry, particularly through early education in STEM. Wilson is the founder and chairman of the New York City Foundation for Computer Science Education, which sponsors Computer Science For All, a program to teach coding to students in schools across all five boroughs.

Increasing fairness and diversity in entrepreneurship is the focus of several Bloomberg LP efforts. The company’s venture fund, Bloomberg Beta, runs a project called Future Founders, which uses software algorithms to find individuals in the Bay Area and New York – where Bloomberg has offices – whose education and work experience makes them good candidates for starting companies. Notably, the algorithm indicated that women should be company co-founders at a higher percentage than exists today, a trend that appears to be on the rise.

Wilson and Conway, speaking about their commitment to philanthropy and civic engagement, say they hope the progressive leadership of people like Mark Zuckerberg would also inspire a new generation of more diverse entrepreneurs to tackle a different set of problems.

“You can’t solve every problem,” says Wilson, “so you might focus on solving problems you know something about.”

You can view the entire interview here.