The cluster is at risk of crumbling. And COVID-19 is the cause.
Let’s not take on the bigger question of whether people will still want to live in cities. I want to focus just on the “cluster effect” that benefits places like Boston. Clusters get created when a group of people with experience in a particular field — software, biotech, financial services, sustainability — decide to stick around in a particular city and grow companies.
That kind of critical mass is what keeps housing prices and office rents high. It’s what supports restaurants, cafés, and bars. It provides business for law firms, accountants, and marketing agencies.
Boston, up until four months ago, had a gravitational pull working in its favor. On any given week, you could go to three networking events a night to help find your next job, a cofounder for your startup, or an investor. If you planted yourself at the A4 Café or La Colombe for an hour or two, you’d see others who worked in your field, and hear about what company was doing well, as well as which one had just fired a key executive and might need some help. There was information flow. If you needed to hire (or find interns), you might go to a university career fair and pitch your company to students.
When is the next time we could envision a couple hundred people cramming into the same room to talk with each other about prospective jobs? Spring 2022? Spring 2023? Keep going?
When you go into Boston these days, as I’ve done a few times in July, it feels like a surreal dream in which you return to a childhood home. The house hasn’t been sold to someone else; all the familiar furniture is still in place. But only one of your siblings still resides there. They’re wearing a mask and keeping their distance. Where’s everyone else? They’re OK, but they’re just not there. And all the neighbors you knew have vanished, too.
When I went into the Seaport to meet with a startup and see a demo of their technology earlier this month, I parked my car (easily) in a free spot. I realized that I would have a little extra time after my meeting, and my mind went to where it usually does: what other company nearby might I drop in on, who might I grab an impromptu coffee with? I was close to the massive Innovation & Design Building, home to Reebok, Gingko Bioworks, and the MassChallenge startup program. On a typical July day, I’d be able to visit 100-plus startups from around the world that come to Boston to participate in MassChallenge. But the program is operating virtually this year.
Last year, the startups that won cash awards at the end of the three-month program came to Boston from Slovakia, Nova Scotia, Utah, North Carolina. This year, they can stay in those places and participate. That is what a loss of gravitational pull looks like.
After my meeting, I sat in my car for a few minutes and realized that there was no one I could text or call to visit. It’s a tough spot for a columnist who always wants to know what’s new, and needs to keep tabs on companies through their ups and downs. Later that day, I posted a tweet: “How do you feel when you are out and about in Boston these days?”
Among the responses: “Sad.” “Lonely.” “Kind of like Will Smith in ‘I Am Legend.’” “Heartbreaking but hopeful.” “Glad to hear it’s still there.” “Feel like I am in the belly of the beast and can’t wait to leave.” One person who said they’re not going into Boston at all posted the hash tag “#stillathome.”
If you’re optimistic that we’ll have the coronavirus pandemic under control by sometime next year, you might say that those sentiments will vanish. People will once again go out to lunch with a new connection without thinking about the risks. (Maybe we will ask to see proof of negative test results before making the reservation.) There will again be after-work panel discussions in crowded rooms, or “demo days” where startups present their ideas to a few hundred people. In that scenario, the cluster is just on hiatus, not crumbling.
But what if all of 2021 is another plague year? How many companies will let leases in Boston and Cambridge lapse, and decide to start hiring the best people they can find in India, Israel, and Indiana — not just people who happen to live in Greater Boston? How many entrepreneurs will decide that if their companies can be built using Zoom, Google Docs, and Slack, why wouldn’t you do it from a condo in Telluride or a boat in Fort Lauderdale? As venture capitalists get more comfortable investing in companies after a few videoconference presentations, and attending board meetings that way, the old preferences around proximity start to erode. If you can’t be in the same room with entrepreneurs you’ve chosen to back in Cambridge, why shouldn’t your next investment be in a promising team in Kansas? If you’re a seasoned entrepreneur in Boston, mentoring younger founders in Google Hangouts instead of while hanging out in a café, why wouldn’t you mentor an up-and-coming founder from anywhere in the world?
I remember going to a conference in Camden, Maine, in 1997. The premise was that the Internet was going to let all of us live wherever we wanted — like beautiful, inexpensive midcoast Maine — and do whatever kind of work we wanted to do. That didn’t quite come to pass, because of the powerful startup clusters that already existed in places like San Francisco, Cambridge, or Tel Aviv — and those that formed in other cities, like New York and London. You could start companies in other places, but in many ways, it was like riding a bike uphill, on a dirt road, into a headwind.
It’s possible, of course, that Boston’s cluster effect remains in effect for only certain kinds of companies: a robotics startup where everyone needs to be in the same room trying to perfect Prototype #1, or a biotech where you’ve got scientists all studying the same molecule, trying to turn it into a potent drug. But even large parts of those creative processes can be performed thousands of miles from the workshop or lab, by contributors who never lay hands on a robot or assay plate.
The cluster in Boston has been a powerful force at least since World War II; we had venture capital firms in the late 1940s, and startups like Digital Equipment formed in the 1950s.
And I am worried that the cluster is crumbling.