A friend just sent me a link to a story by E. Douglas Banks entitled “Enough already: Get over the West Coast envy”. I agree with him: Bostonians feeling bad about “losing” to Silicon Valley have gone way overboard. Banks is responding to an interview with Henry McCance of Greylock Partners, a venture capital firm that moved from the Boston area to Silicon Valley. I want to amplify Banks’s comments.
Banks’s first two paragraphs are dead-on right. I have heard that story over and over again, at many gatherings. Usually, the comparison is between Silicon Valley and the Boston area. The good part is, after talking about how Silicon Valley is doing so well compared to the Boston area, the speaker goes on to the positive part: a call to action, for all of us to work together to improve the Boston startup and tech ecosystem. Henry McCance’s statement is largely lukewarm or worse about Boston. And, as Banks point out, McCance pits the entire West coast, including the whole Seattle area, against Boston alone. From now on, I’ll just say “here” to mean the Boston area, and “there” to mean Silicon Valley.
I don’t know, but I’ve been told: investors here are different from investor there. But I’d use the word “careful” rather than “risk-averse”. It’s not the same. There is more and more seed funding around Boston. Seed funding is very risky. It’s just that you’re risking less money. So startups can fail at the correct point, having not used up so much capital that providers of capital will be scared off. If our VC’s and angel groups were reckless, they’d just all fail, and then where would we be?
Yes, there are a few very wealthy “super-angel” investors who evidently toss off cash with very little scrutiny of a startup, and that might also describe some wealthy high-tech founders. It’s true that there are more there than here. They have a larger “ecosystem”, and centers of high-tech are created by ecosystem’s positive feedback. Being smaller isn’t all bad. For example, we have a higher degree of interconnection. But I would not claim that smaller is better.
McCance talks about Boston being poor at “spawning and sustaining great companies.” What, exactly, is this criterion?
He disparages the minicomputer companies, but look how long they lasted: Prime (20 years), Data General (31 years), Digital Equipment (41 years), and so on. If these are supposed to be failures, how long does a company have to live to be a success? 50 years? 100 years?
Compare this with Google (12 years so far), Yahoo! (15 years but being overtaken), CNET (not the same kind of company), Facebook (6 years so far), MySpace (7 years so far and in decline, YouTube (5 years so far, no longer even exists as a company), LinkedIn (7 years so far) — you get the idea. How sure can anyone be that they’ll last 50 or 100 years? The industry changes even faster now than it used to. All things must pass.
Banks mentioned Harmonix, Zipcar, iRobot, Carbonite, LogMeIn, Monster, Bose, and Staples.com. In a comment, Scott Kirsner added A123 Systems, Akamai, Starent, ITA Software, EnerNOC, GlycoFi, Sirtris, and EqualLogic.
I’d immediately add two hugely successful companies: Cognex, the world leader in machine vision, going very strong for 29 years and MathWorks, going strong for 26 years.
Also: Ab Initio, Active Endpoints, Akiban, Apperian, Automation, CloudSwitch, Daily Grommet, Droid Works, Expressor, GateRocket, GenArts, Goby, Harvest Automation, Heartland Robotics, Hocoma, InterSystems, Kayak, Netezza, Nimbit, Progress Software, Rational (now part of IBM), Skyhook Wireless, Streambase, Timetrade Systems, Vela Systems, Vertica, VoltDB, and Xconomy. This is just off the top of my head, so I apologize if I missed any of my friends’ companies!
I’m an M.I.T. alumnus, and, as the Engineers Drinking Song says of the “small liberal arts college down the river”: “MIT was MIT when Harvard was a pup/And MIT will be MIT when Harvard’s time is up”. But the Boston area get great engineers and entrepreneurs from Worcester Polytechnic, Rensselaer Polytechnic, Rochester Institute of Technology, Babson College, Bentley College, Boston University, and so on.
There are also many tech incubators such as TechStars, and several working spaces such as Betahouse and the Cambridge Innovation Center, where entrepreneurs can get office space and interact with other.
And everybody is working together to grow the ecosystem, help promote entrepreneurship, and establish even more “sustaining great companies”. Silicon Valley, just you wait!