When Nicolas Perkin was brainstorming his new online trading company last year, he considered launching it in New York or San Francisco.
Instead, he went with an unlikely choice: New Orleans. Using $1 million of their own cash, Perkin and partner Justin Brownhill this summer set up the New Orleans Exchange, a virtual marketplace for companies that buy and sell accounts receivable, invoices and other assets used as collateral for business loans.
Their reasons: comparatively low rents, low salaries and a steady stream of qualified graduates from local universities, such as Tulane and Loyola. The city's rebuilding fervor was also a hook, Perkin, 36, said.
"The whole city is in start-up mode," he said. "You walk to work, and you hear hammers and drills all the way. And you're thinking, 'They're building the city, I'm building the business.' The entire experience lends itself to start-ups."
While more than 4,000 businesses in New Orleans and surrounding parishes scattered or closed after Hurricane Katrina in 2005, firms are now moving in, particularly in the media and Internet-technology fields. Nearly all the 420 member companies of the Louisiana Technology Council fled after the storm, said Mark Lewis, the council's president. But since Katrina, the non-profit group has signed 340 members, a quarter of which are new, he said.
Unlike manufacturing or retail firms that may fear losing assets in future floods, tech companies are highly mobile and could continue operating even in repeat storms, Lewis said. "I'm very encouraged by the activity we're seeing in the technology sector," he said.
Construction and travel still remain the biggest industries in the area, said Loren Scott, a Baton Rouge economist and retired Louisiana State University professor. But post-Katrina incentives, such as tax breaks and research-and-development grants, will likely draw more IT companies, he said.
"They're clean, white-collar, mobile," Scott said. "And certainly if they come here, they're going to get all the incentives they want."
Part of the rebuilding
The area still has its challenges, including troubled schools, crime and high insurance costs, state officials said. But New Orleans is also drawing entrepreneurs willing to rough the bumps to be part of the city's $100 billion rebuilding effort, said Barbara Johnson of Greater New Orleans Inc., a public-private economic development agency. "We're seeing this region re-emerge as the new entrepreneurial frontier," she said. "New market niches are emerging."
Emerging markets are not new to Perkin. Originally from Manhattan, Perkin got his first taste of New Orleans while at Tulane University, where he graduated in 1994 with an English degree. He worked as a trader for Smith Barney in New York but got bored within six months and moved to Hong Kong to work as a freelance writer, he said.
In 1995, he helped start a magazine, Velvet, in Prague, the Czech Republic, just as the former Soviet satellite was entering the free market. When the magazine failed to make money, Perkin moved to New York City and worked through a variety of high-power positions, including investment banking and consulting start-ups.