The mysterious origins of the term Silicon Alley revealed

November 4, 2015

Silicon Alley

Photo: Songquan Deng / Shutterstock.com

 

What does the term ‘Silicon Alley’ actually refer to?

These days, the tech startup scene in New York stretches to the four corners of all five boroughs, into New Jersey and far beyond any one alley.

Some say the old 'Silicon Alley' died with the dot com crash in the early 2000s and many don’t like the term associated with the current NYC tech boom, yet the term still persists.

The moniker ‘Silicon Alley’ first emerged in the mid-1990s as a way to group the wave of new media tech startups that were located around the Flatiron neighborhood of Manhattan near Madison Square Park. The physical alley refers to the corridor that connects Midtown to Lower Manhattan, running past the Flatiron building at Madison Square Park and Union Square towards Soho. At the heart of these companies were digital advertising platforms like Razorfish and Doubleclick (which was later acquired by Google).

While the phrase was derived from ‘Silicon Valley’ as New York’s answer to the northern Californian tech boom, it’s difficult to say for certain who coined the phrase. Credit is sometimes given to recruiter Jason Denmark, who was trying to attract developers from California to come to New York to work for this new wave of media companies. In Feb. 1995, Denmark made a job posting on an early ‘usenet’ platform, which was big with developers at the time, with the title "Subject: NYC - silicon ALLEY."

A few months later @NY, the first online publication to write about tech in New York, was founded by Tom Watson and Jason Chervokas. By 1996 there was a publication bearing the name when Jason Calcanis started the Silicon Alley Reporter. That same year Fred Wilson, now of Union Square Ventures, founded Flatiron Ventures which became the primary source of venture capital for this new breed of tech companies.

The new media startups were known for their brashness. Razorfish’s blue haired founder, Craig Kanarick, famously rode around town on a Harley Davidson and their first office was located at 580 Broadway toward the southern end of the ‘Alley’. Aggressive sales and infamous nightly parties have been immortalized in a number of books including Michael Indergaard’s Silicon Alley: The Rise and Fall of a New Media District.

Even in 1995 the tech scene was outgrowing its ‘Alley’ roots. City Hall, with the help of some big real estate developers like William Rudin, were trying to attract new media companies downtown to the financial district, where office space had been in over supply since the economic crash of the 1980s. Rudin built a high tech media center at 55 Broad Street, complete with satellite hookups, teleconferencing facilities and fiber optic cables. A campaign called Plug N Go extended the wired office to 13 more downtown buildings with low rent and short term leases. The advertising campaign for ‘Plug N Go’ featured a young executive surfing down the Hudson on a keyboard with his tie flung over his shoulder with the tagline for the new buildings saying that they were located in “Downtown New York’s new technology center — at the heart of Silicon Alley.”

The roaring parties came to a sudden halt in the early 2000s as the dot com crash meant layoffs were more likely than expansion. As Internet companies folded, so too did the publications bearing the ‘Alley’ name. Silicon Alley was rebranded as Venture Reporter and sold to Dow Jones in 2001 and AlleyCat news closed shop the same year.

When the New York tech scene began a revival around 2003, it didn’t grow up around the same location, but was spread throughout the city. This is why some consider 'Silicon Alley' to be an obsolete term that only refers to the initial pre dot com boom.

While many of the startups from that era are long forgotten, the catchy moniker still persists and is often used in the tech media and beyond to describe the New York tech startup environment. There is no physical alley anymore, and you're as likely to see a tech startup in Harlem, Brooklyn or the Financial District these days as you are in the Flatiron neighborhood. But the name is sticky and even as the New York tech scene grows and begins to rival Silicon Valley in terms of number of startups and dollar investments, it seems it will forever be "Silicon Alley" to some.  

Know a 'Silicon Alley' startup that you feel deserves coverage? Email us at tips@builtin.com

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