A quiet revolution has been brewing here in Boston.
Under our noses, and largely unnoticed, the story of the future of startups — and business in general — is being written by scores of entrepreneurs.
The narrative unfolding here is the polar opposite of the West Coast and New York-based “unicorn” ventures capturing the attention of the public, regulators, and journalists. No Theranos-style fraud. No jet-setting, vegan, pot-smoking execs like WeWork’s Adam Neumann. Few wildly-unprofitable, rule-breaking, growth-at-all-costs Ubers or Zenefitses.
Critics say the New England startup ecosystem is as barren and rocky as our soil. Conservative venture capitalists. Limited support. No Silicon Valley-style cheerleaders. But the reality is that a steady and unheralded stream of profitable, sustainable, and often unsexy businesses are laying out a roadmap for how technology and business can intersect to drive progress, growth, and employment.
New England has a long history of sturdy, sometimes slow-moving, but often quite important innovation. From public education to telephones. Political movements like abolition, women’s suffrage, and (less notably) temperance. More recently, gay marriage and universal healthcare. Microwave ovens and Marshmallow Fluff.
And as with our more recent (and possibly fleeting) success in professional sports, we’re not shy about letting people know where Boston punches above its weight.
But tech startups don’t occupy a prominent space in New England’s collective conscious, and maybe they should.
Meeting local founder David Cancel was an early clue that we breed a different sort of entrepreneur and business here. In 2014, Cancel sold his fourth startup to local marketing powerhouse Hubspot, and was on the verge of quitting to start his fifth marketing platform Drift. Cancel is soft-spoken, nerdy, and thoughtful. With an engineering background, he is what investors call a “product CEO,” the kind of entrepreneur who can roll up his sleeves and write code, as well as run and grow a company.
This guy is kind of like me, I thought, as we discussed an (ultimately unconsummated) partnership between Hubspot and my then-employer, DataXu.
As a veteran of the first dot-com boom, I had somehow formed the impression that an MBA and a degree of narcissism were both prerequisites to lead a startup. Cancel appeared to have neither.
The serial product CEO is a recurring theme in New England startups. Billion-dollar corporate catering giant EZCater is led by a pair of engineers — CEO Stefania Mallet and co-founder Briscoe Rogers. What’s more, EZCater is profitable when excluding acquisition costs — a remarkable contrast to the Ubers and WeWorks which dominate the nationwide startup conversation.
Not long after I met Cancel, local home goods retailer Wayfair had its initial public offering. The founders, Niraj Shah and Steven Conine, I was shocked to learn, still owned the majority of the company at the time of its market debut. Silicon Valley startups are famous for giving away the bulk of their equity to venture capital early on, often leaving founders with little cash to show for even the most successful and heralded exits.
A popular narrative about Boston startups holds that splashy, consumer-focused efforts flee to the West Coast. Certainly this is the case for Facebook and Reddit, both launched locally — and even for the well-known incubator, Y Combinator, which headed west for warmer weather and improved access to founders and capital.
But consumer startups can be found if you look for them, and not just Wayfair. DraftKings dominated popular attention not long ago while it was briefly the largest buyer of TV ads on the planet. Drizly has pioneered the booze-on-demand market. Roomba parent iRobot has led the slow march of autonomous machines into our homes for almost 30 years.
Sure, we lack some of the flashy, frivolous companies that California is famous for. There’s no local Snapchat or Instagram equivalent. No Lime or Bird cluttering the world with scooters. Ultimately, though, that will turn out to be for the best. When Snapchat eventually fades into a MySpace-like senescence, EZCater is likely to still be dishing out corporate lunch & learns by the thousands.
I asked Kyle York, CEO of York IE, a Manchester, N.H.-based startup investment firm that believes the Silicon Valley grow-at-all-cost model is broken, if he felt New England was redefining how to build a startup. He quickly rattled off a half dozen examples. “Newforma, SingleDigits, Scribe, Dyn, Flowtraq, and WhippleHill all did it their way. Startups here are efficient, effective, profitable or on a path to profitability, customer- or revenue-led, and the founders and employees retain value. It’s the polar opposite of the West Coast.”
Boston saw over $7 billion in merger and acquisition activity in late 2019 — an amazing outcome for any ecosystem, but particularly in a smaller city like Boston.
At the very least, we can say we punch above our weight. As the 10th largest metro area in the country, we compete neck and neck with Los Angeles and New York for the 2nd prize in venture investment, behind Silicon Valley.
On a per-capita basis, that’s nothing short of remarkable. But once the world takes notice — and it seems inevitable that they will — maybe New England will have another feather in its cap of world-class accomplishments.
Brian Dolan is the founder and CEO of WorkReduce, a technology enabled services platform for the advertising industry. Send comments about this story to email@example.com.