Here's Why This Latest Wave Of New York Startups Is Just The Beginning

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Once again, there is a renewed sense of enthusiasm about the New York City startup community.

Today we are seeing a major influx of high-quality entrepreneurs moving here – or back here. The quality of company formation has never been higher, and there are a variety of reasons for this.

Perhaps most obvious is that New York City has always been a place where people want to live, and today is no exception. Two additional factors are now driving New York’s increasing popularity among aspiring, sophisticated entrepreneurs. First, the general trend toward capital efficiency, and second, what I call the horizontalization of information technology.

Capital efficiency means that more companies can afford to move to New York if they choose. A variety of dramatic cost-reducing realities have lowered the fixed-cost of building a software or web startup by an order of magnitude. At the top of the list are the rapidly advancing technologies of open-source software and cloud computing. As a result, some of the hardware and support-system costs (such as large staffs of IT personnel and extensive real-estate footprints) once associated with operating in New York simply do not apply in this new environment.

Horizontalization is more nuanced. The technology industry has been a standalone industry throughout most of its history, a vertical that stood alongside other large industries. Today, technology is becoming more of an integrated portion of the existing stacks -- or the distinct components of hardware, middleware and software required to operate entire IT infrastructures -- within businesses rather than a separate vertical industry. As a result, essentially all industries – including the seven industries headquartered in new York -- are increasingly able to make use of the lower-cost, better-integrated information technology that open-source software, cloud computing and related innovations are enabling.

With this evolution comes a striking change in calculating the optimal location for technology businesses. It is simply no longer true that technology companies must be located near technology centers. Today, the optimum strategy often puts these companies near business centers, where the customers are. Few business centers in the world are as central as New York City. No matter where something is invented or produced, it is sold here.

Outsiders may see this accelerating startup activity in New York as a new phenomenon, but those of us who have been active within the local startup community since its revitalization in the early 1990's have a different view. I regard this latest surge in activity as yet another wave in an impressive chain of entrepreneurship that is rooted in the long history of New York City.

New York’s place as a fountain of entrepreneurial activity -- and why it appears to hold even more potential today -- cannot be properly understood without a fundamental appreciation of the region's rich tradition of entrepreneurship and commerce. A look at the past can provide important clues that help make sense of the present. Moreover, I believe that this 400-year history provides vital context for informing the conversation now taking place about the technology community in New York today, and for further building the entrepreneurial ecosystems to nourish it.

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So why is New York so well-positioned this time around? The key factors are: 1) the industries anchored here; 2) the tectonic shifts occurring within those industries, based largely on technological advances; 3) personnel dislocations; and 4) the propensity of the companies within those industries to spend aggressively on technology. For example, global IT spending within financial services is around $550 billion, annually. Communication spending on IT is about $400 billion. Retail’s share is around $150 billion. And so on. In total, companies within these and other industries are projected to make spending decisions on close to $1 trillion in technology – every year – for the next decade or two. Of course, the majority of deployments generated by these purchases will not occur within the New York area; most happen across the decentralized global organizations of major corporations, and the varied locations of smaller businesses. Yet many of the decisions will be made here. And many of the decision-makers will be impacted by the entrepreneurial class, whether in developing and procuring new products and services, or by being recruited into start-ups.

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New York remains one of the world’s greatest and most livable cultural centers. It has a diverse core of seven global industries competing aggressively, increasingly through technology. A new set of lower-cost economics is enabling technology providers to operate closer than ever to business centers such as New York. And New York is attracting a widening pool of talent for start-ups that is highly motivated. This latest wave in the long, storied history of entrepreneurship in New York is only getting started.

http://www.businessinsider.com/why-this-latest-wave-of-new-york-startups-is-just-getting-started-2010-6

[mawilson 2,133]

[luckytxn 2,265]

Very nice and then after they get up and running and be successful then we can reap the benefits when they move awat to get out from under the crushing taxes, cost of living, quality of life problems, graft, high crime, etc.