The New York digital scene has had a major renaissance in recent years.
We’ve written a lot about this, as well as the differences between New York and the Valley and the reasons many entrepreneurs have foregone the west coast and instead launched their startups here.
And now it’s time to focus on the companies themselves.
In the past few weeks, we’ve consulted with New York VCs, entrepreneurs, and tech journalists, and compiled a list of NYC’s current rising stars.
You won’t see the richest, most established startups here — companies like Associated Content and Gilt have already “graduated” for our purposes. But each of the following 20 companies is doing something which has the people we spoke to excited, wondering if they could be the next big name in tech.
Click here to check out the most promising New York City startups →
While a number of the people who helped compile this list have expressed their desire to remain nameless, we would like to thank Chris Dixon, Fred Wilson, Albert Wenger, Mark Murphy, and Brendan McManus of Startup Digest. Antonina Jedrzejczak and Greg White contributed additional reporting.
Founder: Perry Chen, Yancey Strickler, and Charles Adler
What it does: Kickstarter lets artists and other creators fund projects without giving up an equity stake in their products. Creators outline their projects, set fundraising goals, and offer specific rewards to users who pledge to put up some tiny fraction of the total sum. No one is charged anything unless the full goal is met.
How it's going to make money: Kickstarter takes a 5% cut of all successful funding drives.
Investors: No disclosed funding.
Founders: Robert Kalin, Jared Tarbell, Chris Maguire, Haim Schoppik
What it does: Etsy is a marketplace for users to buy and sell homemade goods, vintage goods, and art supplies. Someone maintains a blog dedicated to how much they hate Etsy, which means they're doing something very right.
How it's going to make money: Etsy charges a small flat fee for listings and takes a commission on every sale.
Investors: Caterina Fake, Stewart Butterfield, Joshua Schachter, Albert Wenger, Union Square Ventures, Accel Partners, Hubert Burda Media ($31.6 million)
Founders: Dennis Crowley and Naveen Selvadurai
What it does: Foursquare lets people 'check-in' to venues like bars and restaurants from their mobile phones, letting their friends know where they are and who they're with. See exactly how it works here.
How it's going to make money: Foursquare -- like its main competitors -- is just starting to work out its revenue model, and will be playing with a lot of ideas in the coming months. So far, the major source of revenue looks to be promotional deals with venues, as well as more general in-app advertising.
Investors: Union Square Ventures, O'Reilly AlphaTech Ventures, Jack Dorsey, Kevin Rose, Alex Rainert, Ron Conway, Joshua Schachter, Chad Stoller, Sergio Salvatore, and Daniel Levine ($1.35 million)
Founders: Brian O'Kelley
What it does: AppNexus is a gateway for online ad purchases that lets advertisers monitor and alter their campaigns on the fly.
How it's going to make money: Creating yet another layer between advertisers and content publishers might seem crazy, but this level of flexibility is worth paying for. The talent and funds flowing in are a testament to how impressed people are with the company.
Investors: First Round Capital, Khosla Ventures, Marc Andreessen, Ron Conway, Ben Horowitz, Kodiak Venture Partners, Venrock ($15.5 million)
Founder: Barry Silbert
What it does: SecondMarket is a trading platform for illiquid assets. It has markets for all of the fun securities made famous in the recent meltdown -- CDOs, mortgage-backed securities, bankruptcy claims, etc. -- as well as stock in private companies, most notably Facebook. See how buying private company stock works here.
How it's going to make money: SecondMarket makes all of its money by taking a percentage of transactions.
Investors: FirstMark Capital, Li Ka-shing, Temasek
Founders: Seth Goldstein, Billy Chasen
What it does: Stickybits is a mobile app that lets people associate media with physical objects via bar codes. Users can scan any bar code using their iPhones or Android phones and 'attach' text, audio, or video to that bar code's file on Stickybits. When other users scan the code, they see that media.
How it's going to make money: To start with, Stickybits is selling stickers with bar codes on them. The margins there are obviously great, but down the line, Stickybits expects to make most of its money elsewhere, perhaps through licensing use of its platform to businesses.
Investors: Polaris Venture Partners, Mitch Kapor ($300,000)
Founders: Chris Dixon and Caterina Fake
What it does: Hunch is a recommendations service premised on the idea that traditional recommendation algorithms focus on data sets that are far too narrow. Whereas, say, Netflix, uses information about your taste in movies to guess what other movies you might like, Hunch asks you questions on just about any topic you can think of, and uses all the data it has to make its recommendations in any particular sphere.
How it's going to make money: Right now, Hunch is a shopping search engine. But its backend technology could power recommendation engines for third-party vendors. Also, Hunch knows so much about its users, it could power some very well-targeting brand advertising campaigns.
Investors: General Catalyst Partners, Bessemer Venture Partners, SV Angel, Khosla Ventures ($19.2 million)
Founder: Justin Shaffer
What it does: Hot Potato is a forum for realtime discussions of live events. It's like Twitter with channels, each dedicated to a specific, timely topic.
How it's going to make money: There are a number of possibilities, but the most obvious thing would be to build in advertising. The platform is very well suited to targeting ads.
Investors: First Round Capital, RRE Ventures, Scott Banister, Ken Lerer, Betaworks
How it's going to make money: Distributors will be able to sell videos over Boxee starting sometime this summer.
Investors: Spark Capital, Union Square Ventures, General Catalyst Partners ($10 million)
Founders: Carlos Bhola, Andreas Ruehrig, and Gerald Kropitz.
What it does: Kikin makes software that -- built-in to your browser -- dramatically customises your web experience based on locally stored preferences.
Whenever you search for something, Kikin brings in related results from your favourite websites, highlights any relevant reviews from your Facebook friends, and so on.
How it's going to make money: Kikin will make its money through revenue sharing from its content partners.
Investors: Management has put up most of the money thus far. Kikin also has a number of undisclosed angel investors.
Founders: Terry Jones
What it does: Terry wants his database, Fluiddb, to 'make the world writable.' The database is meant to be on the scale of web itself, so that anything -- people, companies, locations, products, etc. -- can have an entry. As in Wikipedia, all entries are editable by anyone, but there are user controls on which fields each user can edit. So anyone can attach their own opinion of something to its entry in Fluiddb.
How it's going to make money: Fluiddb is designed to be accessed by third party applications. Terry says he wants to keep everything as open as possible at first, but eventually sees charging for large-scale commercial use of the database as a major source of revenue.
Investors: Fluidinfo is currently finalising the details of a funding round with a New York venture firm. Until now, Terry has been running the company from Barcelona, but he will be New York based from here on out, and plans to announce some hires within the next few weeks. Esther Dyson is already involved as a seed investor.
Founders: Skiddy von Stade
What it does: OneWire is a novel take on job networks, focused on the finance industry. OneWire is entirely recruiter facing, and uses structured data and a referral incentive system that allow it to guarantee filling any vacancy in finance within a few days. Read more about how OneWire works here.
How it's going to make money: OneWire charges recruiters $15,000 per licence.
Investors: 67 individual investors ($17 million)
Founders: Jack Dorsey, Jim McKelvey
What it does: Square lets its users accept payments on their phones from physical credit cards with a tiny reader that connects via the headphone jack.
How it's going to make money: Square expects to make its money on transaction fees. Users won't want to pay much, and Square will have to pay its own fees to the credit card companies, so margins could be very tight.
Investors: Khosla Ventures, Greg Yaitanes, Marissa Mayer, Dennis Crowley, Kevin Rose, First Round Capital, Ron Conway, Biz Stone, Joshua Schachter, Shawn Fanning, Zachary Bogue, Andrew Rasiej, David Lee, Esther Dyson, Robin Chan, Fritz Lanman, Brian Pokorny ($10 million)
Founders: Helene Monat, Kent Wakeford, and Will Luttrelle
What it does: AdSafe protects online advertisers from having their ads appear next to offensive or inappropriate content. Most of the companies in this business audit ad-placement after the fact, but AdSafe does it in realtime. Its business is reportedly growing very rapidly.
How it's going to make money: No mystery here, this is the sort of service you charge for.
Investors: No disclosed funding.
Founders: Apar Kothari and Gil Moran
What it does: MyNines aggregates offerings from sample sale sites. That's a rapidly growing market that's ripe for aggregation if they can get the sites on board. So far, they appear to be doing a pretty good job.
How it's going to make money: A lot of money is being spent in this area now. On the other hand, it's not exactly a business known for its fat margins, so there is some room for concern in adding another intermediary.
Investors: No disclosed funding.
Founder: Charles Forman
What it does: OMGPOP is a casual gaming site.
How it's going to make money: OMGPOP brings in revenue from ads, in game sales, and premium accounts.
Investors: Kevin Rose, Brian Pokorny, Spark Capital, Baseline Ventures, Marc Andreessen, Betaworks, Bessemer Venture Partners, Ken Lerer ($6.5 million)
Founder: Jonah Peretti, John S. Johnson, Ken Lerer
What it does: BuzzFeed is a trends aggregator which uses a combination of algorithmic and human sifting to pick out popular web content.
How it's going to make money: BuzzFeed has a 'viral advertising platform' for distributing branded content.
Investors: Softbank Capital and Hearst Interactive
Founders: Jeff Atwood and Joel Spolsky
What it does: Stackoverflow is a 'collaboratively edited question and answer site for programmers.' One VC we asked about it said: 'ask any programmer, they will tell you it's become their #1 resource.' So we asked our resident programmer, who said that that was going too far, but that it was definitely 'a quality site'.
How it's going to make money: Stackoverflow is entirely ad-supported.
Investors: No disclosed funding.
Founders: Bre Pettis, Adam Mayer, and Zach Smith
What it does: MakerBot makes '3D printers'. You design or download a 3D object, and your MakerBot 'prints' it in plastic. People can upload their designs, and others all over the world can download the specs and create copies of the object with their MakerBots. It's really, really cool. Check out a video of it here.
How it's going to make money: MakerBots cost $750.
Investors: Adrian Bowyer, other undisclosed investors.
Founders: Matt Mireles and Bjorn Liljequist
What it does: SpeakerText creates transcripts of YouTube clips that are fully integrated in the video content. You can search the text to find that exact moment in the video, and create links to the part of the video you're interested in.
How it's going to make money: Matt says that SpeakerText's business model 'is a bit unusual in the startup world as it involves SpeakerText customers paying us actual cash money in exchange for a premium version of our services.' There is no advertising involved.
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