Startups in Brooklyn

Brooklyn is home to many different types of people: the bearded hipsters who drink hand-poured iced coffee and ride handcrafted wooden bikes, the artists and artisans who design silver-plated carving knives and sell refurbished Smith Corona typewriters, and, most recently, the techies who are set on creating the next big thing.

With major tech giants emerging in Brooklyn’s backyard, it’s no surprise why upwards of 500 tech and creative companies have flocked to the Brooklyn Tech Triangle. The industrial Brooklyn Navy Yard, the incubator-friendly scene in DUMBO, and 17 million square feet of office space in Downtown Brooklyn all point to rapid business growth.

So what attracts companies to set up shop in Brooklyn instead of Manhattan?

Some tech-related companies were born and bred in the heart of Brooklyn during the dawn of the post-industrial age when giants like 3D printing company MakerBot, digital agency Huge, and education company Amplify set up shop between 2007 and 2012.

Led by CEO Aaron Shapiro, Huge was named the fastest-growing marketing agency in 2009. The company conducts business with major Fortune 500 brands all over the world. Huge is in a unique situation where it has more demand for jobs than employees to fill those roles. It’s not just looking to expand, but also to hire and retain employees.

“We chose DUMBO as Huge’s headquarters because the location allows us to focus on making groundbreaking work for our clients in a community of artists and designers like ourselves,” says Eric Moore, managing director at Huge, headquartered at 45 Main Street. “Over the years, a few other like-minded companies have followed, so today DUMBO is a thriving creative and technology community of its own.”

Other Brooklyn companies like Gimlet Media started on a smaller scale: when it was just the two of them, Alex Blumberg and Matt Lieber worked out of an apartment building. The year-old podcast company has grown to 19 people on its staff. The team chose Brooklyn as its headquarters because the company sees value in immersing itself in a startup culture.

“We’re looking to attract a certain tier of creative talent,” says Chris Giliberti, chief of staff at Gimlet Media, headquartered at 33 Flatbush Avenue. “Manhattan is mainstream. The counterculture is centered in Brooklyn. If you want to signal to employees and clients you’re not hierarchical or bureaucratic, and you’re creative, Brooklyn is the place to be.”

Just last year, the live-streaming video platform Livestream moved its 7,000-square-foot Chelsea headquarters into a 30,000-square foot space in Bushwick. CEO Max Haot considered this move to be an opportunity for Livestream to immerse in an entrepreneurial community that carries a positive, creative, and “maker” energy.

Startup culture and economic growth

The transformation of the borough, which was known in the 1890s as a manufacturing district filled with warehouses and factories, is astonishing. At least that’s what Tucker Reed, president of Downtown Brooklyn Partnership, says. For instance, the cardboard box was invented in the Robert Gair building on DUMBO’s Washington Street. Now it’s home to Etsy, a new-age ecommerce business platform that connects sellers of handmade and vintage goods to online buyers.

“When I first came to Brooklyn, it was a creative arts scene with galleries and artisans,” Reed says. “And then around 2008 and 2009, we started to see a clustering effect of technology and more digital branding media companies. More engineering, coding, and tech-based startups started to follow the creative economy that was growing here.”

These days, Brooklyn is still home to artists who have fostered a culturally unique vibe. But now, developers are pouring millions of dollars into the rehabilitation of old factories and abandoned warehouses for commercial use. Underneath the cranes, hardhats, and rubble, Brooklyn is slowly expanding its office footprint.

DUMBO is a leader in this effort. The neighborhood has close to 2 million square feet of office space. The place has several advantages that make it particularly attractive for entrepreneurs in the tech, design, and media industries. Not only is the location accessible by more than a dozen different subway and bus lines, but it’s also the stomping grounds of an assortment of creative companies like Etsy and Huge.

There are also plenty of co-working spaces to complement the growth of startups in the area. To couple the growth of the tech startup scene in DUMBO, WeWork has unveiled an eight-floor space at 81 Prospect Street.

“Showing our commitment to Brooklyn is to our advantage,” says Joshua Gaviria, WeWork’s expansion lead. “We know there’s a vibe there as well, and we want to make sure every part of New York is reached. We’re almost at full occupancy. We have lots of nonprofits, finance, marketing, and a lot of creative fields, such as photography, design, publishing, and video production companies as well as tech coming in.”

Teeming with businesses both big and small and co-working spaces aplenty, DUMBO is poised to outdo Manhattan, in terms of creating a tight-knit community of creative minds. DUMBO Startup Lab, located at 68 Jay Street, opened shop in Brooklyn three years ago. Since then, founder John Coghlan has been fostering a creative space for startups, accepting no more than 50 people at a time. About 80 to 85 percent of his members are entrepreneurs in the tech industry, focusing on software, web design, and mobile apps.

“Co-working is still a new concept, and we’re looking for creative ways to grow,” Coghlan says. “We want to evolve without losing our uniqueness. We intentionally keep the community small. We’re going for the inch-wide and mile-deep approach to building relationships within the community, instead of the mile-wide and inch-deep approach.”

Running a tight operation is just about right in a place like Brooklyn because space is limited, Reed says. The commercial vacancy rate diminished from 8 percent a few years ago to below 3.5 percent, sometimes even hovering near the 2 percent mark. The Brooklyn Tech Triangle is responsible for this initiative of fostering low turnover rates in order to maintain a high density of the tech population and encourage collaboration of startups.

A 2012 Urbanomics study commissioned by the Brooklyn Tech Triangle’s stakeholders found that local businesses had a $3 billion impact on the economy and created more than 9,600 jobs. By the end of the year, the area is expected to be home to 17,960 employees.

Just recently, Kushner Companies rehabilitated four buildings in Dumbo Heights that it purchased from the Jehovah’s Witnesses for $375 million. Major tenant Esty signed a lease to take up 200,000 square feet of the 1.1 million-square-foot building in the Watchtower building.

“This new move will allow them to expand their divisions and consolidate into one space,” Reed says.

Because of Brooklyn’s strong artistic and artisanal roots, its creative vibe is unmatched by any other borough in New York City. With constant innovations in technology and access to more than 60,000 students on 11 college campuses, the growth of industries depends on the future generation. Brooklyn’s selling point is opportunities to draw creative talent locally.

Photo credit: Barney Bishop/Flickr