Is the Boston technology scene living in the past?(namesake.com)
namesake.com
Is the Boston technology scene living in the past?
http://namesake.com/conversation/906efafa-44f8-11e0-814c-12313f014066
28 comments
"In addition, a big part of the funding discussion is timeline to revenues, which is just completely ignored at this stage in the valley."
I'd be curious to see a long/medium term study on that - I wonder if the discipline of having thought out a "timeline to revenue" might prove to be a net positive to the odds of success.
While everybody can point at Twitter and Facebook as classic examples of "success" (at least in terms of market valuation) without early (or even current) clear plans of how exactly they're planning to make a profit from what they're doing - a "gut feel" suggests that startups with plans that include something like "we've found demographic X of size Y who're prepared to pay $Z/year for a service solving a problem we'll have in place by Q2 next year" are probably more likely to end up profitable that the team who've worked out a cloud-scalable-agile-web2.0-ruby-on-crack method of stealing all the underwear...
I'd be curious to see a long/medium term study on that - I wonder if the discipline of having thought out a "timeline to revenue" might prove to be a net positive to the odds of success.
While everybody can point at Twitter and Facebook as classic examples of "success" (at least in terms of market valuation) without early (or even current) clear plans of how exactly they're planning to make a profit from what they're doing - a "gut feel" suggests that startups with plans that include something like "we've found demographic X of size Y who're prepared to pay $Z/year for a service solving a problem we'll have in place by Q2 next year" are probably more likely to end up profitable that the team who've worked out a cloud-scalable-agile-web2.0-ruby-on-crack method of stealing all the underwear...
Consider an example of the revenue focus:
-- The valley has Dropbox (a Boston company with an awesome product that moved west)
-- People here cite Carbonite (which apparently makes a lot of $$ and is heading to IPO, but no tech person seems to use it, and they market to the Glenn Beck audience)
-- The valley has Dropbox (a Boston company with an awesome product that moved west)
-- People here cite Carbonite (which apparently makes a lot of $$ and is heading to IPO, but no tech person seems to use it, and they market to the Glenn Beck audience)
Your point about hiring's a good one, but there's certainly a developer drought here too -- sounds like it's worse over in Cali.
On the flip side I've found bootstrapping to be a viable option in Boston/Cambridge. There's enough demand for developers that it's reasonable to find good contracting gigs (light long-term or heavy short-term). A couple hours a week or a few packed weeks makes it so you can stay afloat without being at the mercy of Boston investors.
On the flip side I've found bootstrapping to be a viable option in Boston/Cambridge. There's enough demand for developers that it's reasonable to find good contracting gigs (light long-term or heavy short-term). A couple hours a week or a few packed weeks makes it so you can stay afloat without being at the mercy of Boston investors.
I raised two angel rounds for Crocodoc -- one in Boston, and one in SV. In Boston I wore business attire to every meeting and was generally asked for a 5-year pro formas. In SV I wore flip flops to coffee shops where I showed off prototypes and talked up our vision to bring down Adobe.
I love Boston, but most of the investors there are so conservative when it comes to web startups that it makes me cringe. There are of course some fantastic investors (e.g. Dharmesh Shah) and exciting new initiatives (e.g. Mass Challenge), but I hope for its own sake that Boston picks up the pace and slows the massive influx of entrepreneurs leaving there for SV.
(For reference I lived in Boston for ~6 years and now SV for ~1 year.)
I love Boston, but most of the investors there are so conservative when it comes to web startups that it makes me cringe. There are of course some fantastic investors (e.g. Dharmesh Shah) and exciting new initiatives (e.g. Mass Challenge), but I hope for its own sake that Boston picks up the pace and slows the massive influx of entrepreneurs leaving there for SV.
(For reference I lived in Boston for ~6 years and now SV for ~1 year.)
Definitely less consumer-focused than the west coast, but off the top of my head: Performable, Hubspot, DataXu, Quattro, Millenial, Enpocket, ThirdScreen, Jumptap, Nexage, Akamai, iRobot, Constant Contact, SCVNGR, Neteeza, Carbonite, Brightcove, Skyhook... what am I missing? They all seem to be pretty right now (or recentish exits).
Kayak-
I think the biggest difference is the funding environment. In a way, it's a networks effect problem.
There are consumer Internet companies that made it big in the valley, in the process, creating millionaires who "get" consumer Internet. They then go on to create or fund other consumer Internet companies.
Meanwhile, in Boston, there hasn't been a significant consumer Internet exit.. at all? (Wow, I can't think of one right now) So the promising consumer Internet businesses and talent in Boston, who can't find the seed funding or the mentorship, move out to the valley.
I think the biggest difference is the funding environment. In a way, it's a networks effect problem.
There are consumer Internet companies that made it big in the valley, in the process, creating millionaires who "get" consumer Internet. They then go on to create or fund other consumer Internet companies.
Meanwhile, in Boston, there hasn't been a significant consumer Internet exit.. at all? (Wow, I can't think of one right now) So the promising consumer Internet businesses and talent in Boston, who can't find the seed funding or the mentorship, move out to the valley.
Harmonix, Bluefin Robotics, Boston Dynamics...
What I see in SV is a lot of hype, douchebaggery, and exploration of the business model space with light agile startups. What I see in Boston is more academia- and government-connected activity, and high, high technology. Stuff that requires greater capital investment and time to develop a market. Both have their advantages and drawbacks, but if you like things like robotics or Lisp, you're probably better suited in the Boston area than SV.
What I see in SV is a lot of hype, douchebaggery, and exploration of the business model space with light agile startups. What I see in Boston is more academia- and government-connected activity, and high, high technology. Stuff that requires greater capital investment and time to develop a market. Both have their advantages and drawbacks, but if you like things like robotics or Lisp, you're probably better suited in the Boston area than SV.
emc, mathworks, nuance, avid, ITA, unica, sermo, aislebuyer, endeca, tripadvisor... reddit (started in somerville), and i'm skipping the entire biotech sector -- i think we're just more hardcore out here due to the shitty weather ;)
180 days of gray a year
300 gray days where I grew up in western PA.
+basho
You also got EMC in Hopkinton which is a little outside Boston.
ITA Software.
I think many of the people posting in defense of Boston are doing so without the benefit of history. In fact, the lack of any references to 128 pretty much guarantees it. Here's a little story:
In the mid-70s and 80s, if you wanted to do something new, you went to 128 or Silicon Valley. The 128 ring was huge, and you couldn't walk 20 feet without seeing a company that was building hardware, selling successfully, and making a lot of money. However, as the economy took bumps over the following decades, the sector contracted and consolidated. But it wasn't staying here, everything consolidated on the west coast.
When DEC became Compaq (became HP), it was a sad day. Not because DEC was doing anything particularly cool (the writing had been on the wall for Alpha and VMS for a while), but because it was the last 128 giant still standing. Boston.com still writes articles about it to this day:
http://www.boston.com/yourtown/cambridge/articles/2011/02/15...
Sure, companies are still doing things in MA (Boston, specifically). But what we have today are a few poster boys in the bio, chem, and robotics sectors that make the evening news and let us feel good about what's coming out of MA. I can almost guarantee that if you transplanted a 70s geek from Boston to the SV of today, they'd feel right at home (minus the lack of wood-paneled station wagons), but doing the reverse would yield nothing but utter horror. We are still a booming tech sector, but it's simply not a place for innovation (no offense to the other locals posting).
In the mid-70s and 80s, if you wanted to do something new, you went to 128 or Silicon Valley. The 128 ring was huge, and you couldn't walk 20 feet without seeing a company that was building hardware, selling successfully, and making a lot of money. However, as the economy took bumps over the following decades, the sector contracted and consolidated. But it wasn't staying here, everything consolidated on the west coast.
When DEC became Compaq (became HP), it was a sad day. Not because DEC was doing anything particularly cool (the writing had been on the wall for Alpha and VMS for a while), but because it was the last 128 giant still standing. Boston.com still writes articles about it to this day:
http://www.boston.com/yourtown/cambridge/articles/2011/02/15...
Sure, companies are still doing things in MA (Boston, specifically). But what we have today are a few poster boys in the bio, chem, and robotics sectors that make the evening news and let us feel good about what's coming out of MA. I can almost guarantee that if you transplanted a 70s geek from Boston to the SV of today, they'd feel right at home (minus the lack of wood-paneled station wagons), but doing the reverse would yield nothing but utter horror. We are still a booming tech sector, but it's simply not a place for innovation (no offense to the other locals posting).
I'm surprised no one has linked http://www.paulgraham.com/startuphubs.html yet.
I'd have thought PG would be better qualified than most to compare the two. This was written in 2007, when YC was still doing funding cycles in Boston.
Some key quotes:
And if, as nearly everyone who knows agrees, startups are better off in Silicon Valley than Boston, then they're better off in Silicon Valley than everywhere else too.
and
Silicon Valley investors are noticeably more aggressive than Boston ones. Over and over, I've seen startups we've funded snatched by west coast investors out from under the noses of Boston investors who saw them first but acted too slowly.
and
Boston investors are probably more conservative than Silicon Valley investors for the same reason Chicago investors are more conservative than Boston ones. They don't understand startups as well.
and
If there was going to be a comeuppance for the west coast investors, the bursting of the Bubble would have been it. But since then the west coast has just pulled further ahead.
I'd have thought PG would be better qualified than most to compare the two. This was written in 2007, when YC was still doing funding cycles in Boston.
Some key quotes:
And if, as nearly everyone who knows agrees, startups are better off in Silicon Valley than Boston, then they're better off in Silicon Valley than everywhere else too.
and
Silicon Valley investors are noticeably more aggressive than Boston ones. Over and over, I've seen startups we've funded snatched by west coast investors out from under the noses of Boston investors who saw them first but acted too slowly.
and
Boston investors are probably more conservative than Silicon Valley investors for the same reason Chicago investors are more conservative than Boston ones. They don't understand startups as well.
and
If there was going to be a comeuppance for the west coast investors, the bursting of the Bubble would have been it. But since then the west coast has just pulled further ahead.
Boston doesn't have the same level of self-congratulation. Which to my mind, is a good thing.
I thought there were concerns that the labor laws in MA were not as worker-friendly as those in CA. Making it hard to move between companies/startups, etc. Or, being (more) able to enforce non-competes.
As pointed out already, there is a thriving startup scene in the Boston area. I think some of the "knocks" Vivek Wadhwa makes about SV being "more failure-cherishing, more risk-taking, better capitalised" are either not good things or not really true. First off more failure-cherishing winds up meaning that more VC money is essentially wasted by people building things that have no business model or aren't even remotely useful. Failure isn't always a bad thing, but I wouldn't pride myself or the community I'm part of on being happy to fail. Second more risk-taking means the same enourmous sums of VC money wasted and it also means, in my opinion, that people are willing to overlook or can't see glaring issues with proposed businesses and invest anyway. Lastly, there are a large number of VCs here in the Boston area and I don't see that changing anytime soon.
Three other points. One, if Boston were so bad for the startup scene or tech in general then why is basically every big player here? Microsoft, google, vmware, akamai, IBM, cisco, juniper, emc, netapp, the list goes on. These companies aren't here because there isn't any talent or it's a bad place to be. Two, many of the companies on the list are companies that have been around for a while and are thriving, profitable and growing on their own. Last, and as has been pointed out, there is a huge biotech scene here, as well as a large amount of government/defense research related work (irobot, raytheon, mit, boston dynamics).
Three other points. One, if Boston were so bad for the startup scene or tech in general then why is basically every big player here? Microsoft, google, vmware, akamai, IBM, cisco, juniper, emc, netapp, the list goes on. These companies aren't here because there isn't any talent or it's a bad place to be. Two, many of the companies on the list are companies that have been around for a while and are thriving, profitable and growing on their own. Last, and as has been pointed out, there is a huge biotech scene here, as well as a large amount of government/defense research related work (irobot, raytheon, mit, boston dynamics).
can add BBN Technologies
Biotech is strong in Boston. The combination of MIT, Harvard, and Mass General Hospital is an extraordinarily fertile incubator for biotech.
Yeah, but for computer technology, the last contribution of Mass General Hospital was MUMPS.
What's the point? Is there more going on in Silicon Valley than here in Boston? Yes, of course. Does that mean nothing interesting happens in Boston? No, of course not.
For my money MIT is singularly the most interesting place on the planet (and I didn't even go there). Spend a half hour walking around the Media Lab and tell me Boston sucks. I dare you.
For my money MIT is singularly the most interesting place on the planet (and I didn't even go there). Spend a half hour walking around the Media Lab and tell me Boston sucks. I dare you.
I dare you.
I'd be curious to hear how many boostrappers are taking advantage of MA's healthcare system (everyone's in a group.)
There are both pro/cons of the startup ecosystem in Boston.
-- Its harder to raise funding in Boston compared to SV. In addition, a big part of the funding discussion is timeline to revenues, which is just completely ignored at this stage in the valley.
-- Given this higher bar, the startups that do rise in the Boston ecosystem are of generally higher quality. I was at the launch conference last week, and several companies in the demo pit were honestly just "me-too" class projects. GreenGoose (at Launch) was an example of a Boston startup.
-- Nonethless for consumer web/mobile, Boston startups tend to be inferior to the valley ones. The reasons for this are multifold. (a) The angel/adviser community seems less comfortable funding companies that don't have a clear path to revenues. (b) The entrepreneurs themselves are not the best at designing products / UX etc. (c) The better Boston consumer web/mobile companies move west anyways
-- Given the less "bubble" ness in Boston, hiring top-notch engineers from MIT, Harvard, Olin or other good technical schools is a real option for startups. I'm hearing horror stories on the west coast+ NYC of companies that are funded and can't find the right engineers.