Mark Zuckerberg didn’t leave Massachusetts because Boston bars close too early.
By his own account, he just wanted to spend a fun summer in California. While there, he met Napster cofounder Sean Parker, who connected Zuckerberg to the big cash kahunas in his Rolodex. Zuckerberg quickly got a commitment for $500,000 in seed money, and voila. The idea hatched by a Harvard undergrad was launched as a business in California’s Silicon Valley — where bars can serve alcohol until 2 a.m., just like Boston.
If Zuckerberg ever considers a Bay State return, as House Speaker Robert DeLeo recently suggested, the flow of cash, not Red Bull and vodka, will clinch the deal.
Some young Bostonians, organizing around a nonprofit called Future Boston Alliance, would love a city that is looser when it comes to regulating dance clubs and bar closing times. But what makes a city or region cool and hip to entrepreneurs has less to do with fun, and more to do with the access to capital, resources, and services.
During an appearance last fall at a Stanford University forum, Zuckerberg said if he had to do it over, he might have kept his online social network in Boston.
“If I were starting now, I would do it very differently, but I knew nothing back then,” he told the crowd. “Honestly, if I were starting now, I would have just stayed in Boston.”
Why? Because, as Zuckerberg explained it, Silicon Valley’s attention span lacks “long-term focus” and its culture doesn’t value commitment. “A lot of the companies that have been built outside of Silicon Valley seem to be on a longer-term cadence than the ones in Silicon Valley,” he said at Stanford.
That’s what policymakers should be pushing, and some are.
In an open letter to Zuckerberg — published on the Menlo Park Patch website before Facebook’s botched initial public offering — DeLeo argued that Massachusetts now offers innovation companies the kind of focus and commitment they desire.
In his letter, DeLeo cited the “Talent Pipeline,” which is part of a major economic development bill. Under it, Massachusetts would match, dollar for dollar, stipends for interns at tech and innovation start-ups. “This will help create links between our talent pool and employers even before these students graduate,” he wrote.
The House speaker also noted the creation of an “Innovation District” along Boston’s waterfront and more funding for city-state-private business partnerships.
DeLeo also references California’s crushing $16 billion budget deficit, which is “sure to mean massive cuts in service and increases in government revenues.” In contrast to the Golden State, the Bay State can fund such programs because of “the strong fiscal management we have exercised in recent years.” Massachusetts leaders, he wrote, “have passed budget after budget on-time and with no new taxes.”
The Bay State’s transformation from a place formerly known as “Taxachusetts” is more than a figment of Beacon Hill’s imagination. It gets some solid backup from the Beacon Hill Institute at Suffolk University; the Institute, which bills itself as a free-market think tank, recently ranked Massachusetts first in its annual state competitiveness report.
The Institute’s index is based on a set of 44 indicators, including government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness, and environmental policy. Bar closing time is not on the list. “Neither are high-end stylists and surfboard emporiums,” said David Tuerck, the Institute’s executive director.
Last year, Massachusetts ranked third on the index. It climbed to first place because of strengths in student achievement, technology, and business incubation, where the Bay State drew top ranking in terms of venture capital per capita. On the minus side, the index identified high energy costs and long commutes as persistent problems here.
Overall, it’s easy to see why Zuckerberg might have thoughts about a return to the Bay State, said Tuerck. “Massachusetts edges out California in areas including high tech employment, venture capital, and IPOs, where you might think California has a clear lead,” he said. “And it beats California badly in terms of the quality of the labor force, infrastructure, and government policy. Nowadays, California is the place to escape if you are an up-and-coming entrepreneur and Massachusetts, for all its shortcomings, continues to be the place where you want to go.”
Since 2005, more people have been moving out of California than into it. A bad economy is the ultimate last call.