My overcrowded calendar in March had me attending a tech conference in San Francisco, dining in Manhattan with people who run “accelerator’’ programs for start-ups, meeting entrepreneurs and MBA students in Istanbul, and, back in Boston, speaking with trade representatives from Spain’s Catalonia region.
Leaving the neighborhood and collecting perspectives from other places is one good way to take the measure of the innovation economy here. So where does Massachusetts stand in 2012, as it tries to maintain - and build upon - its track record as a center of innovation in an increasingly competitive world?
I’m more optimist than pessimist, so here are six reasons to be proud, and four things to worry about.
1. We can legitimately claim to be the world’s leading cluster of life sciences innovation, from start-ups developing medical devices to industry giants like Pfizer building research centers to hospitals where clinical trials of promising treatments are conducted. Could we do a better job of trumpeting that fact? Absolutely.
2. Boston is already home to MassChallenge, an entrepreneurship competition that attracts more than 100 fledgling companies from the United States and abroad and awards $1 million in prize money with no strings attached. And several new programs are getting started this year, including Bolt, which will focus on entrepreneurs trying to design physical products (as opposed to mobile apps or websites), and Rock Health, for teams interested in devising health-care-oriented software. There’s also Boston Startup School, taking place for the first time this summer, which aims to make recent college grads more appealing hires for young tech companies.
3. When I asked entrepreneurs in Istanbul where they go to hang out with other entrepreneurs, they didn’t have an answer. The city doesn’t yet have enough start-up density for company creators to have claimed a cafe or bar as their own. Part of what makes Boston great is that there are lots of spots where founders (and investors) collide: Voltage Coffee, the Venture Cafe, the lunch trucks on Carleton Street in Kendall Square, and Lucky’s Lounge in Fort Point Channel. The compactness of neighborhoods like Kendall, the Longwood Medical Area, Fort Point, and the Leather District make them appealing for two-person ventures, as well as bigger players like Amazon.com and Merck. There’s always someone new to meet, or someone you trust to bounce ideas off.
4. We’ve started to see a few big companies contributing to the ecosystem in significant ways. Fidelity Investments helped launch the TEDxBoston conference in 2009, which offers a stage to the city’s leading scientists, artists, and entrepreneurs. Microsoft created a clubhouse for techies at its Kendall Square office, with free space for conferences, meet-ups, and cocktail parties. Raytheon and iRobot both run programs to get more students interested in learning about math and engineering. It would be nice to see others following their lead.
5. For decades, MIT has far outperformed everyone else when it comes to spinning out new businesses. But other schools are starting to get competitive: Several student ventures at Harvard’s new Innovation Lab have already received seed funding from investors, and this week will see student start-up showcases taking place at Northeastern and Boston College. Last week, a Boston University start-up, KontrolTV, won the school’s New Venture Competition; earlier, the company, which is developing an app that would turn your mobile phone into a TV remote, raised $500,000 in funding from Dallas Mavericks owner Mark Cuban.
6. Terrafugia. If our environment can support two first-time entrepreneurs in building a flying car, that sends a signal that you can do just about anything here. While the Woburn start-up has at times scrambled to raise money, it was at the New York International Auto Show last week, touting 100 orders for an airplane with folding wings, which cruises the skies at 105 miles per hour and gets 35 miles per gallon on the road.
Now, on to the worries . . .
1. We aren’t building enough “pillar’’ companies in Massachusetts. These are companies that go public, create thousands of jobs, and set the agenda in their industries. I see them as vital, in part because they bring talent to the region and often serve as “prep schools’’ for leaders who will one day start or run companies of their own. Could the shortage of pillar companies be due to entrepreneurs who are eager to cash out as soon the first wealthy acquirer comes along? Investors unwilling to back really revolutionary ideas? It may be a little of both. We need to try to change the dynamics.
2. Our ecosystem turns a cold shoulder to a lot of consumer-oriented ideas. Yet so much incredible growth in the last five years has been about social networking, online video, mobile apps, and digital discounts. Are we really OK telling entrepreneurs who want to build products and services for consumers to go somewhere else? Boston is home to some nationally renowned advertising agencies and a handful of companies like TripAdvisor, Bose, and Keurig that really understand how to design and market products for consumers. How could we unlock some of that expertise?
3. One of the things we’ve been doing exceptionally well in Massachusetts since 1636 is taking smart young people and making them smarter. But once they’ve earned degrees here, we let too many of them scatter to the winds. We can do a much better job of exposing college students to interesting job opportunities here or supporting their start-up ideas. And if those students are from foreign countries, we ought to make it easier for them to remain in the United States. Massachusetts educators, elected officials, and business people ought to be leading the charge in Washington to remake immigration policy and helping more recent grads get visas.
4. We’ve seen a handful of initial public offerings in the past year, including companies like Brightcove, Zipcar, and Merrimack Pharmaceuticals. But the forthcoming Facebook IPO will dwarf them all. Why is that a big deal? The IPOs of companies like Facebook, LinkedIn, and Zynga will create dozens, if not hundreds, of new “angel’’ investors in Silicon Valley, who sprinkle small amounts of money onto new crops of start-ups. Angels often support companies that seem too risky to venture capitalists (they put money into Zipcar years before the venture capitalists did, for instance). We just aren’t minting enough new angel investors in Massachusetts.
What are you proud of - or concerned about? Drop me a note.