UNION SQUARE: High tech and capital connect in ‘Digital District’

Fred Wilson of Union Square Ventures.

BY HILARY POTKEWITZ  |  Tech firms have been mushrooming around Union Square for more than a year, but don’t call it Silicon Alley. It upsets the natives.

“It’s a terrible term,” said Fred Wilson, head of the venture capital firm Union Square Ventures and a pioneer who brought his company to the neighborhood in 2003. He bristles at the idea that New York’s tech scene wants to imitate Silicon Valley.

“It’s a wannabe term, and I’ve been trying my hardest to get it removed from the vernacular,” he added.

Jennifer Falk, executive director of the Union Square Partnership, is trying to coin the term “Digital District” to describe the city’s burgeoning tech community, with her square at its center. At the same time, the neighborhood’s name already has a strong cachet.

“Union Square doesn’t need another name,” she said. “We’re very proud to be a brand unto itself.”

Regardless of what it’s called, the area has become a tech magnet.

Over the past year and a half, 19 technology companies have moved to the neighborhood, occupying 213,000 square feet of office space and bringing with them 910 jobs.

And businesses usually only move out for one reason — because they’ve outgrown their current digs. But there are a variety of reasons for a company to move in.

The newcomers most often cite the abundance of hip bars and restaurants, a critical mass of other tech companies, and Union Square’s transportation hub.

Some say that Apple Inc. validated the neighborhood when it moved its mobile advertising business iAd into offices near Union Square in 2011, taking up 10,000 square feet on Fifth Ave. between 15th and 16th Sts.

Around that same time Yelp Inc., the business-networking and ratings site, was getting fed up with its Flatiron cubicle. The San Francisco-based company started with a two-person outpost here in 2008, and decided to expand it into Yelp’s East Coast headquarters.

After scouting offices all over Manhattan, the company moved into the same building as Apple iAd last October, occupying 10,000 square feet. It now has 80 employees.

“Our business is all about connecting people with local businesses. So having an eclectic and diverse business neighborhood, with lots of bars and restaurants, really fits in with our culture,” said Chantelle Karl, Yelp’s communications manager.

Karl added that the team had gotten accustomed to having outdoor space — its old offices were near Madison Square Park — so Union Square Park was also a big draw.

Some companies had the good fortune of being conceived in the area and had no desire to wander. That was the case with JIBE Inc., a new social-media-based job search engine that took space on W. 17th St. between Fifth and Sixth Aves.

“When it came time to get new offices, a lot of start-ups had taken root in this area and that vibe was important,” said Suzanne Flynn Speece, a vice president at the company.

JIBE Inc.’s new building is just a few blocks away from where it was born at Dogpatch Labs, a collaborative workspace and de facto start-up incubator on 12th St. between University Place and Broadway.

And the big money is also moving in. Venture capital firm FirstMark Capital is relocating next month from its Midtown offices to a 10,000-square-foot space on Fifth Ave. at 15th Street — in the same building as Yelp, Net-a-Porter, Apple iAd and educational technology firm Knewton, which happens to be one of FirstMark’s ventures.

“We wanted to be down where most of our portfolio companies are located,” said Managing Director Amish Jani, explaining that he and his partners like to visit their companies on a weekly, or at least biweekly, basis.

The one complaint some tech firms have is that the old buildings in the area, while quaint and charming, often lack the internal infrastructure to support state-of-the-art network communications, adding to renovation costs. But as they say, everything’s a tradeoff.

Of course, industry leaders point out that Union Square isn’t the only growing tech hub in the city. Chelsea, Soho, Flatiron and the Meatpacking District in Manhattan, and DUMBO, Bushwick and Greenpoint in Brooklyn are also start-up enclaves. Brooklyn’s Gowanus and Red Hook are considered the next frontier. Underneath it all, however, there’s still a rivalry with the West Coast, and the Union Square digerati feel they have Silicon Valley beat.

“You can’t walk into a restaurant, bar or even the park without bumping into others from the industry, and that creates a very collaborative environment,” Jani said. “You’re never going to pull over and chat with someone while you’re stopped in traffic in Palo Alto.”

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One Response to UNION SQUARE: High tech and capital connect in ‘Digital District’

  1. Names for the tech district between Union & Madison Squares:
    ^ (squared)
    squared2 (with the 2 in the "squared" position)
    UnMad (= Happy!)
    NoUSoM North of Union South of Madison (nous sommes = we are in Fr.)
    SomNoU (so mnou = with me in Slovak)

    NYDD (New York DIgital District) already exists in DUMBO.

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