Subscribe for 50% off

Tech Hotbed: NYC

Wall Street may be taking its lumps, but tech is flourishing in the Big Apple.

This story appears in the February 2009 issue of Entrepreneur. Subscribe »

Recent economic developments hit hard, but the dramatic downturn on Wall Street might just lead to a flourishing upturn in tech . "As people lose their jobs, the ones who are entrepreneurial will want to [start businesses]," predicts Allen Stern, founder of CenterNetworks, a website that covers mainly New York City web and news. But even before the financial mess, New York City's tech startup culture had been gaining ground as a growing number of tech startups started choosing the Big Apple as their city of residence.

Entrepreneurs Riza Berkan and Pentti Kouri, 47 and 60, respectively, couldn't imagine being based anywhere else. In 2004, they founded Hakia, a general purpose semantic search engine covering the web and credible websites. To bring Hakia to life, Berkan relocated to New York City from the Washington, DC, area; the VC funding was in New York (they've received $21 million in funding thus far), the talent pool was huge and the climate presented advantageous B2B opportunities. Another draw: the city's mentality. "The mind-set is more short-term gain, short-term results," explains Berkan, who needed a more long-term approach to develop his sophisticated technology.

Stern credits the city's growing tech culture to organizations that bring people together, such as NextNY, a site that encourages creativity in the new startup environment, and various Meetup groups including the NY Tech Meetup and the NY Video 2.0 Meetup. Stern estimates these organizations bring together between 1,100 and 1,300 people a month. Plus, the increasing number of incubators helps tech-savvy entrepreneurs get off to a cost-efficient start.

Could New York City actually one day rival Silicon Valley? Possibly. But people need to start talking first. "What I find here is that startups don't want to talk about what they're doing until they're 100 percent ready to go," says Stern. "On the , you can sit in a Starbucks and in 10 minutes, someone will tell you their startup idea that they haven't even coded yet. A little more openness would probably foster even more community here than we have today."

Entrepreneur Editors' Picks