5 Reasons for NYC’s Explosive Startup Scene
Five years ago, New York City experienced a huge economic downturn as the financial crisis of 2008 left thousands of unemployed workers from Wall Street and the big industries supporting the financial sector. However, as few as five years later the city has a burgeoning tech scene and startup community; more than 450 startups have launched in New York over the last five years, bringing technology, investment, and some of the best innovations to the city.What attracted the large number of entrepreneurs, investors and professionals to the Big Apple? Five driving factors helped New York become the startup hub it is today.
1. New York is a Business City
New York has long been known as the international business hub of the United States – so why not use this as your launching point? The infrastructure for small businesses to succeed – a vibrant market, a large pool of investment capital, and the professionals needed for legal and accounting services – it has all been in New York for years and easily applied itself to the technology sector. 18 of the top 20 foreign-owned banks have their U.S. headquarters in NYC because they know it is the place to be for U.S. and international business. New York remained competitive in 2008, with new industries rebuilding the economy and attracting small businesses and entrepreneurs from around the globe.
2. New York has the Ecosystem Needed for Startups to Grow
It is one thing to have a great idea and to find the partners to start building your company – it is another to get it completely off the ground. In New York City, entrepreneurs will find the environment they need to get their business going from conception to launch.Startups need capital, and New York City’s vast venture capitalist environment is on hand to help out. From seed level funding to late stage boosts, venture capitalists ranging from Founders Collective to Union Square Ventures are nearby and always looking for promising investments.New York City is also home to a number of accelerator programs aimed at helping the next great startups. From the Entrepreneur Roundtable Accelerator (ERA) to NYC Venture Fellows, from the NYCEDC to NYU-Poly, the accelerators offer funding, office space, and mentors who have been entrepreneurs themselves and can give experienced advice. These accelerators help turn ideas into products, prep startups to approach venture capitalists, and negotiate acquisitions when the time comes.Other institutions are in place for entrepreneurial development. One such example is General Assembly (GA), which acts as a hub of innovation. GA gives entrepreneurs the chance to bounce ideas off of each other, take classes custom designed for entrepreneurs and build their network in the startup community.
3.The Government Wants to Help
Even before 2008, initiatives were in place to help small businesses and startups grow in New York, ranging from programs introduced by Mayor Bloomberg to other non-profits offering assistance in all five boroughs across a number of industries.One frequently mentioned institution is the New York City Economic Development Corporation. The NYCEDC offers a number of programs for startups and entrepreneurs. International entrepreneurs should take note of their international programs, including the NYC Venture Fellows and the World in NYC program. Industry-specific initiatives include the fashion industry, clean technology, biotechnology, and the emerging media technology. These initiatives help in the form of tax breaks, exposure opportunities and business development assistance.Another boost from the government? Mayor Bloomberg’s Five Borough Economic Opportunity Plan. Originally introduced in 2001, the Mayor’s plan mapped out strategies to create jobs, and to make all five boroughs livable for businesses and individuals alike. Through tax breaks, initiatives to connect professionals and entrepreneurs, and promotions to bring attention to specific industries, the Mayor’s plan continues to be a success.The tip for entrepreneurs: Check out the city’s Made in NY program.
4. The City Inherited Wall Street’s Talent
In a recent discussion with Quantum Media, John Axelrod, founder of the successful accelerator program ERA, summed up the talent pool in 2008 New York in this way:"You know what happened when Wall Street went down? Lots of talented people were out of jobs – and many of them opened companies."Analysts, programmers, and other professionals were suddenly without jobs in 2008 and eager to get involved with the next exciting project of their career, including launching their own businesses.Even if these individuals were not technological engineers, new startups are not as employee intensive as they once were. There is an extensive network that offers solutions for small businesses and entrepreneurs. From VOIP phone services to crowdsourcing – the solutions to many small business issues are available without hiring new people and certainly played a start in growing NYC’s startup scene.
5. People Want to Live in NYC
When you do need good people to help grow your business, it is much easier to attract and keep talent in New York City than other locations. It’s exciting, involving, is full of opportunities, and guarantees an experience like no other. Attracting talent from all over the country is much easier in NYC than in other cities. The New York Times noted that over the last five years, more than 250,000 people move to New York City, while only 230,000 leave the city – creating an even bigger Big Apple.Only adding to these professionals is the number of prestigious universities in the city, bringing students eager to be professionals in fields ranging from professional services to engineering skills. With a higher-education student population of nearly 500,000, these are some of the brightest young minds the country has to offer.Entrepreneurs take note: the talent you need is living in New York City.
The End Result
The tech scene in New York is much different today than it was five years ago – and two neighborhoods in New York City stand out as perfect examples.The Flatiron District’s Silicon Alley has emulated Silicon Valley with a number of startups, tech giants, and venture capitalists operating out of this neighborhood in Lower Manhattan. You’ll find Google in Flatiron, just steps away from General Assembly’s campus, among other startups, accelerators and incubator spaces.Brooklyn’s DUMBO has also become a hot spot of innovation and continues to attract accelerator programs and innovative ideas . Retail giant Etsy and a number of other notable tech companies, digital agencies and other startup businesses now call the district below the Brooklyn Bridge home.New York has also become the home to some of the world’s largest tech companies. Gilt Group, FourSquare, and Tumblr are native to New York and continue to operate out of the city. New York also has some of the most exciting up-and-coming startups. E-commerce startup Warby Parker operates out of Brooklyn while FreshDirect sets up shop in the Bronx. HowAboutWe?, a newly introduced and wildly popular dating site, also operates out of the city. From e-commerce to social networks, in New York, there is always an exciting new tech company opening up nearby.