Here Comes Everybody<\/em> (2008) \u2013 a book that outlines how technology allows us to organise without the need for formal organisations \u2013 is also mentor to countless aspiring web entrepreneurs. ITP graduates have gone on to found or work for hundreds of startups in the area. Dennis Crowley, Foursquare\u2019s founder, co-created the first draft of the location-based social network \u2013 a service called Dodgeball, eventually sold to Google \u2013 while he was still a student at ITP in 2000. My two early collaborators on outside.in, John Geraci and Cory Forsyth, had both been at ITP.<\/p>\nThe physical density of the city also encourages innovation. Many start-ups, both now and during the first, late-1990s internet boom, share offices. This creates informal networks of influence, where ideas can pass from one company to the other over casual conversation at the espresso machine or water cooler. When we started outside.in, we shared a Brooklyn office with a documentary film company for its first year of existence. Today, our much larger office in Manhattan also houses three other smaller start-ups working on unrelated projects. By crowding together, we increase the likelihood of interesting ideas or talents crossing the companies\u2019 borders. The proximity also helps to counter the natural volatility of start-ups: in outside.in\u2019s early days, we \u201cborrowed\u201d a few talented employees from the documentary film company, which was temporarily downsizing. When the projects picked up again, some of those employees moved back. Others had found a new calling in the web world and stayed with us.<\/p>\n
Economists have a telling phrase for the kind of sharing that happens in these densely populated environments: \u201cinformation spillover.\u201d When you share a civic culture with millions of people, good ideas have a tendency to flow from mind to mind, even when their creators try to keep them secret.<\/p>\n
All of these spaces \u2013 the graduate schools, the co-working offices, the media environments \u2013 exhibit the final trait that has been key to New York\u2019s technological success: its diversity. A number of studies have established an essential connection between diversity and innovation. One such study, by the Stanford Business School professor Martin Ruef, interviewed 766 graduates of the school who had gone on to have entrepreneurial careers. Ruef was interested in the diversity of professions and disciplines, not of race or sexual orientation. He created an elaborate system for scoring innovation based on a combination of factors: the introduction of new products, say, or the filing of trademarks and patents. Then he tracked each graduate\u2019s social network \u2013 not just the number of acquaintances but the kind of acquaintances they had. Some graduates had large social networks that were clustered within their organisation; others had small insular groups dominated by friends and family. Some had wide-ranging connections outside their inner circle of friends and colleagues.<\/p>\n
Ruef discovered that the most creative individuals consistently had broad social networks that extended outside their organisation and involved people from various fields of expertise. In groups united by shared values and long-term familiarity, conformity and convention tended to dampen any potential creative sparks. The limited reach of the network meant that concepts from the outside rarely entered the entrepreneur\u2019s consciousness. But the entrepreneurs who built bridges outside their \u201cislands,\u201d as Ruef called them, were able to borrow or co-opt new ideas from these external environments.<\/p>\n
As a diverse city that supports countless industries and maverick interests, New York excels at creating those eclectic networks. Subcultures and small businesses generate ideas and skills that inevitably diffuse through society, influencing other groups. As the sociologist Claude Fischer put it in an influential essay on subcultures published in 1975, \u201cThe larger the town, the more likely it is to contain, in meaningful numbers and unity, drug addicts, radicals, intellectuals, \u2018swingers\u2019, health-food faddists, or whatever; and the more likely they are to influence (as well as offend) the conventional center of the society.\u201d<\/p>\n
Those unusual influences leak out into the business world, and shape the ideas \u2013 and the personnel \u2013 of startups. The same pattern can be found in the last great flowering of high-tech scenius in Silicon Valley, which was shaped as much by the counterculture that thrived in the San Francisco Bay Area as it was by the engineering prowess of Stanford University.<\/p>\n
That diversity shows in the kinds of technology companies New York has produced. They are not just tech-for-tech\u2019s-sake projects. Instead, they use software to enhance other passions: parenting, crafts, gossip, gameplay, health, and so on. They use technology in clever ways, but they are fundamentally about something else. I think that quality derives from their metropolitan roots, from the scenius of a big city. It is no accident that the slogan of Meetup, the\u00a0\u00e9minence grise<\/em> of New York start-ups, which allows groups of people with shared interests to organise face-to-face meetings, is \u201cusing the Internet to get off the Internet\u201d. You can\u2019t stay at home, staring at a screen all night, when there\u2019s so much happening on your doorstep.<\/p>\nWe hear a great deal about the social virtues of diversity and multiculturalism; we\u2019re reminded constantly that we\u2019ll be better and more tolerant human beings if we open ourselves up to different perspectives. But approaching the virtues of diversity from this perspective of its impact on business innovation suggests that exposing yourself to a wide range of perspectives and fields of expertise, and creating environments where those different perspectives can clash and share resources, creates as much economic value as it does social or aesthetic value.<\/p>\n
This is related to the essential argument that sociologist Richard Florida makes for the economic importance of cultural creatives, most notably in his 2002 book,\u00a0The Rise Of The Creative Class<\/em>. Vibrant music scenes or poetry salons doesn\u2019t just make your city more colourful and quirky; they create economic capital as well as cultural capital, precisely because the diversity of views and expressions shapes the minds of entrepreneurs and investors. Good ideas need marketplaces and investors to support their growth into mature businesses, but they also need environments that help trigger those original ideas in the first place.<\/p>\nLiving in a society where we encounter different backgrounds and professions in our daily routines makes for a more tolerant society; it also makes us smarter, more original in the ideas we have \u2013 and in the companies we create.<\/p>\n
\u2018Where Good Ideas Come From: The Natural History of Innovation\u2019 (Allen Lane, \u00a320), by Steven Johnson, was published earlier this month. Johnson will be giving a free public lecture at the LSE on Tuesday November 2 at 6.30pm. Details at <\/em>www.lse.ac.uk<\/a>.