While many New Yorkers are dreading the day Amazon moves into its new “headquarters” in the Long Island City neighborhood of Queens and crowds the subway with 25,000 new workers, there’s one group of people welcoming the company with open arms: Executives at other tech firms.
It may seem counter-intuitive that smaller tech companies are eager for a large potential rival to move onto their turf. But New York-based recruiters and tech leaders say they’re using a different playbook from Amazon. They theorize Amazon’s presence will bring in new tech talent that might not otherwise come to New York.
That could mean those new workers will eventually move on to smaller tech companies or come up with ideas for startups on their own, spurring interest from venture capitalists in the area.
According to interviews with 15 New York-based entrepreneurs, tech executives and venture capitalists, Amazon’s move to NYC will lift up the local tech sector across the board, though some warn that it could also make it harder for smaller tech firms to compete for talent in the event of an economic downturn.
“We play the long game when it comes to talent,” said Melissa Enbar, VP of People and Culture at Birchbox, an online subscription service for beauty products.
Enbar said people are attracted to smaller firms for different reasons than large ones, like the opportunity to have more exposure and responsibility early on. She said she expects Amazon’s move will bring a wave of new talent to the city that a smaller company like Birchbox couldn’t afford to relocate on its own.
“Maybe their second job, like after they’re done with Amazon, is Birchbox,” Enbar said.
Amazon’s arrival in New York will certainly mark a significant moment for a city already considered to be the tech hub of the East Coast. Executives and investors said the move reinforces the city as an important place for tech and will help infuse it with venture capital and elite talent.
But what’s yet to be seen is how that talent and money will be distributed across the existing tech companies in the city in an already-tight labor market. While New York tech executives are hopeful that Amazon’s presence will spread the prosperity around, it may only last as long as the economy remains stable, some warn.
“In my experience in the past, when there’s been recessions, there’s always been a flight to safety from tech startups to larger companies that can provide more cash and more security,” said Dan Finnigan, president and CEO of recruitment platform Jobvite. For Amazon, that means “they could be timing it perfectly.”
Still, Finnigan and other tech leaders said Amazon’s move will be a net positive for the city’s startups. At the very least, they said, it won’t change much about the way they’re already competing for tech talent.
“To be honest, this is like the fifth time this has happened,” said Dennis Crowley, co-founder and executive chairman of Foursquare. Facebook and Google both have major offices in New York, with Google planning to invest another $1 billion in its new Hudson Square campus, following a $2.4 billion purchase of shopping and office complex Chelsea Market earlier this year. Between the two investments, Google said it could double its New York workforce of 7,000 over the next 10 years.
Amazon’s impact in New York is largely dependent on the types of jobs it ends up bringing there. Warren Lee, an independent New York-based investor who most recently worked for Canaan Partners, said that Google and Facebook would likely remain the chief rivals for engineering and product talent if Amazon opts to establish less technical projects in New York. Amazon did not respond to requests for comment.
On the other hand, Lee said, Amazon could pose a serious threat to AdTech companies in the city if it builds its advertising arm there, as many suspect was a key motivator to select the marketing mecca. In that case, AdTech companies would have to consider upping their pay and benefits to keep their niche talent, he said. Amazon said it will pay employees an average salary of $150,000 at its Long Island City office.