New York: The Silicon Valley of the East

New York City, N.Y. is the place to be for young, innovative techies these days. Ten years after Silicon Valley’s dotcom bust, entrepreneurs and venture capitalists are popping up all over the Big Apple. And they’re not just popping up, they’re actually exploding.

The California Gold Rush of the mid 1800s drew people from east to west. The New York Internet Rush of the early 2010s is currently drawing people from west to east. Investors are flocking to support start-ups. In fact, some of the new companies are turning investors away because there are just too many.

Start-up entrepreneurs are leaving Wall Street and Madison Avenue to set up companies in New York-centric industries such as finance, media, fashion and retail.

Despite the recession that’s plaguing the United States and the World, many start-ups in New York are breaking through and growing rapidly. Many new gimmicks are being employed to woo customers.

One example of a company rising from the wake of the recession is Gilt Groupe, an online retailer that stages “flash” sales. They offer women’s, men’s and children’s designer apparel and accessories, high-end travel destinations at discounted prices and designer home goods. In order to view the sales, people have to become members of the Gilt Groupe. The sales typically start at noon, Eastern Standard Time, and last between 36 and 48 hours. The sales are also themed according to brand or a small group of brands. In addition to the “flash” sales, Gilt has expanded and now includes Gilt City and Gilt Taste.

Gilt City is a location-based discount service similar to Groupon and Living Social. It started in NYC and has now expanded to Boston, Chicago and Miami. Gilt has also permeated the global market with Gilt Groupe Japan launching Gilt City Japan as a location-based discount service.

Gilt Taste, another subsidiary of the Gilt Groupe, is a public gourmet food site, which gives patrons direct access to artisan products and ingredients. It also has an interactive magazine filled with original recipes from chefs. Food experts share their stories on the website.

Another start-up company that just took off in the New York area is Foursquare Labs, Inc. This member-based mobile networking platform allows people in certain cities to connect with one another and talk about issues, events and life in general. When members “check in” via their smartphones or short message service (SMS), they share their location with friends. At the same time, they are able to collect badges and points. Members are able to bookmark relevant information. Foursquare has been a hit for merchants and brands that leverage the platform by obtaining, engaging and retaining customers and audiences. As of April 2011, over 10 million members had signed up worldwide with over 500,000 businesses using the merchant platform.

It seems that a technology boom pulling entrepreneurs and investors to NYC would not be possible when the country is struggling through a recession. Investors, however, are saying that the mix of experienced business veterans and young programmers who have descended on the city, have created an interesting phenomenon in the state. Just in 2010, alone, $2.2 billion was pushed into New York by venture capitalists looking for the next big company to invest in and support. New York has now officially passed Boston as the second largest venture capital location in the country.

Perhaps nobody would have guessed that NYC and its surrounding area would be the place where a technology boom would exist but when the right people are in the right places, anything can happen.