As New York’s Tech Scene Matures, Brooklyn Looks Ever More Attractive

The brand “Silicon Beach” never quite took off as a way to promote Brooklyn as a “creative space on the waterfront” for startups. At least, no one uses the term in “any reasonable context,” laughs Will Porteous, a general partner at RRE Ventures in Manhattan.

Turns out Brooklyn doesn’t need a gimmicky handle. New York’s most populous borough has already become the hottest spot to start a digital media company in New York.

That shouldn’t surprise, says Porteous, whose firm has eight Brooklyn-based startups in its portfolio, including the dating site HowAboutWe; MakerBot Industries, which produces open-source 3D printers; and the mobile advertising platform Pontiflex. (Two others, the file-sharing service and the location-based startup Hot Potato, sold to Facebook in 2010 in talent acquisitions.)

“Software development and entrepreneurship are creative endeavors, and Brooklyn is synonymous with creativity,” says Porteous. More, he notes, “The quality of life is incredibly high in Brooklyn, relative to what it costs to live [in Manhattan]. Certain kinds of basic, human needs are abundantly met over there” including “just the light alone.”

Says a nostalgic Porteous of Hot Potato’s former home in Brooklyn’s Williamsburg neighborhood: “I used to love to just go and work there. The light was beautiful; there were great new restaurants and creative, energetic people who I wanted to know all around.”

Charlie O’Donnell couldn’t agree more. In fact, when the former principal at First Round Capital decided to strike out on his own in January with a fund that’s targeting $10 million, he named his new firm Brooklyn Bridge Ventures. Says the Brooklyn native, who works out of Brooklyn-based NYU Poly and will begin writing checks at the end of this month: “I’m following the talent. More than 50 percent of people who work at venture-backed startups live in Brooklyn.”

O’Donnell points to Etsy, the online marketplace for handmade goods based in Brooklyn’s Dumbo neighborhood, 80 percent of whose employees live in Brooklyn. He also cites Docracy, an online service that offers users free legal documents. One founder lived on the lower East Side; another lived in Brooklyn. The company was moved from Manhattan to Dumbo. “It was a more natural fit,” says O’Donnell of the pair.

Indeed, he persuasively argues, as the digital media scene in New York grows and matures, Brooklyn is becoming even more appealing to many founders and their employees.

“I was 25 or so” when the scene in New York began taking off again in 2005, explains O’Donnell. “But my peers are now in their early 30s. People are doing the marriage and kids thing, and they’re moving into South Brooklyn, Prospect Park, Cobble Hill, Carol Gardens. [The neighborhoods] are far more affordable [than Manhattan], and they’re places that are conducive to family life, as opposed to [Manhattan], where you’re falling over each other to get your kids into private schools.”

Certainly, the New York City Council seems to believe that the growth bubbling out of Manhattan is more than anecdotal. Last fall, Speaker Christine Quinn – recently anointed “Mayor Presumptive” in a New Yorker article – began championing the development of a “tech triangle” that links downtown Brooklyn, Dumbo, and the Brooklyn Navy Yard. Now, the city is in the midst of a $100,000, 10-month-long study to determine how best to adapt the more than one million square feet of available commercial space between the three neighborhoods to meet the needs of startups, as well as how to improve transportation within them.

“The Speaker feels very passionately [about this project],” says Justin Goodman, a spokesman from her office. “She’s made it a priority.”

The help is undoubtedly welcome, considering the degree to which demand for office space in prime Brooklyn spots has begun to outstrip supply.

A recent report by The Real Deal, an outlet covering New York real estate, estimates that Dumbo’s office vacancy rate hovers around 2 percent. Meanwhile, the Navy Yard “has space and is pretty cool,” says O’Donnell, but there isn’t a subway stop anywhere nearby, and downtown Brooklyn features “a whole lot of space, but you need some anchor [tech] tenants. No one wants to be the only startup there.”

For his part, O’Donnell has some suggestions about the last. “I think it’d be a great place for Twitter or Facebook as they expand their engineering efforts.” While downtown Brooklyn might not have the allure of a Dumbo, it’s still better than some parts of Manhattan, he suggests. “Right now, Facebook is trying to grow its engineering team out of a sales office in a [drab] corporate office building in Midtown. It doesn’t strike me as a place where a developer would want to work.”

Image credit: Brooklyn Bridge reflecting in East River courtesy of Shutterstock

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