NYC DNA Helps Spur New Kind Of Tech Hub

It was over a dinner with venture capitalists that an executive from IBM and a well-known angel investor chatted up the idea of the company getting involved in a public-private partnership that looks to feed New York's $125 billion tech ecosystem.

Sandy Carter, general manager of IBM Ecosystems and Social Business evangelism, and David Rose, founder and CEO of the early-stage investor and entrepreneur hub Gust, batted around how IBM could get involved in a partnership that's created an online tech hub being billed as the first of its kind.

October's been a big month so far for New York's tech scene with the launch of the city's Digital.NYC platform, powered by IBM's Bluemix Platform-as-a-Service, to provide entrepreneurs, established businesses, investors and anyone else interested in information on the tech ecosystem. And IBM itself signaled its own commitment to the city's tech startup scene Wednesday with the official headquarters opening of its Watson division at 51 Astor Place, which houses a tech incubator.

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Carter cited an IBM study that looked at some 1,500 companies and the top entrepreneurs to identify their keys to success, and creative partnerships and the formation of communities were some of the core findings.

But creating a sense of community involved multiple players.

"In order to do that appropriately and effectively it couldn't just be done by IBM," Carter said. "It couldn't be done by just one venture capital firm, and it couldn't be done by just the city. It really required that public-private partnership to meet the needs of the entrepreneurs."

The Digital.NYC site contains entrepreneur profiles along with information on how to get funding, jobs and educational courses.

Work on the platform began in February, although there have been different iterations of it in the past, said Eric Gertler, executive vice president of the New York City Economic Development Corp. (NYEDC). This latest version, however, includes a more diverse group of stakeholders, Gertler said.

"It serves as a way to connect the entire tech ecosystem," he said. "It is entrepreneurs. It is investors. It is students who want to be part of the tech ecosystem. It is connecting in the fullest sense of the word and it's also … highly functional. It'll help investors invest. It'll help companies find real estate, and because of that it both helps those in the tech ecosystem and is just another program that helps to serve as a shining light to move [here]."

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New York is one of the top markets for venture capital, according to New York-based research firm CB Insights. The city is second only to San Francisco for the most tech acquisitions since 2012, according to CB Insights.

"It really is an ecosystem that is not just growing year after year but starting to create important companies in a whole diverse set of industry-related areas, so we're starting to see companies that, from a tech standpoint, have influenced the fashion sector, the media sector, the ad tech sector, the financial sector," Gertler said. "One of the great things about New York is you can walk through all five boroughs and be exposed to leading companies in all these industries, and that has been a real boon to the tech ecosystem."

The growth of New York's tech ecosystem has attracted buzz more recently by some who have pegged it Silicon Valley of the East and Silicon Alley. But the excitement also has led to some eye rolls and sound-offs that the New York tech scene compares very little to that of the Valley -- a point the NYEDC would be the first to point out, said its Vice President of Public Affairs Kate Blumm.

There are "fundamental differences between us and Silicon Valley," she said, and ones they're not afraid of pointing out.

"I think, at this point, all of those references while interesting plays or fun to read about," Gertler said, "the fact of the matter is that the New York tech ecosystem is substantial. It is growing. It is producing great companies and there is a diverse set of New Yorkers that are helping to lead that ecosystem. For whatever references are made, it's really hard to deny the facts of what's happening in New York City."

It's the diversity of tech-related business ranging from health care and finance to fashion and advertising the city wants to use to position its tech ecosystem, and it's also what Gertler said is causing the growth.

"It's certainly a number of different [drivers] but at the top of the list, I would put not just the talent, but the diversity of the talent within New York City, and the idea that you've got many individuals from all different areas," he said. "Don't forget the DNA of this city is a merchant town. It's a city of commerce."

PUBLISHED OCT. 9, 2014