What does it mean to be a “Boston-based” company these days?
With lots of startups giving up office leases, hiring people in other states, and even having top leaders move away during the pandemic, the very notion of a company with a home office or headquarters is starting to seem antiquated.
Take a company such as EverTrue, which helps universities communicate with alumni to persuade them to donate. I met the founder, Brent Grinna, in 2010, just after he’d earned a degree at Harvard Business School and was starting the company. He went through the Techstars Boston and MassChallenge “accelerator” programs, designed to help companies polish their products, attract investors — and ideally, put down roots in Boston. EverTrue raised money from Bain Capital Ventures, a Boston investment firm, and before long, it had an office in the Seaport with 37 employees.
Clearly, a Boston company.
But when EverTrue’s office lease expires in January, Grinna doesn’t plan to renew it. Amidst the pandemic, Grinna and his family moved to Narragansett, R.I. — about a 90-minute drive from the office. “When we started the company, our first 30 or so hires were all in the Boston metro area,” Grinna says. But of the 23 people he has hired since COVID shut down offices last March, just three live in or near Boston. “We’ve also supported three employees who’ve relocated from Boston to Maine, Colorado, and Rhode Island — me,” Grinna says.
“It’s hard to imagine going back to a world where we care how close to the Boston Seaport a candidate lives,” or whether they will move here, he adds.
EverTrue is not a one-off. Josh Walker co-founded Sports Innovation Lab, a research firm that focuses on trends in the world of pro sports and that had office space in a WeWork building near the TD Garden. He and his wife, who works for another Boston startup, decided to move to Manchester, Vt., last summer, in part so that their children could attend school in person. He sees the company likely convening in Boston for all-hands gatherings, but says, “I cannot imagine putting monthly rent and multiyear leases back on our books anytime soon.”
And Eric Groves, CEO of the startup Alignable, says his company also gave up its Boston lease at the end of 2020 — and about half of its new hires this year live outside of Massachusetts. “Most everyone is enjoying the two hours each day of their lives they got back” from their commute, he says. “We are doing a lot of small in-person meetings and also are planning twice-a-year full team off-sites.”
Alignable recently held the first one of these at a corporate retreat center in southern New Hampshire. (Groves now lives on Cape Cod full time; before the pandemic, he also owned a home in the Boston area.) The company runs a website that helps small businesses refer customers to one another.
Yes, these are small and medium-sized startups, and not giant employers like a State Street, Wayfair, or Blue Cross Blue Shield. But startups are often quicker to make decisions about where they’re willing to hire people, and often have shorter-term leases, than the behemoths. Even if these fast-growing businesses feel they need half the office space they did before the pandemic, and will do half of their hiring outside of Massachusetts, that seems like a trend that will, over time, affect the local employment scene, office space, and even home prices and the tax base. (Some indicators already suggest more people are leaving Boston than moving here.)
What happens to the notion of an ecosystem — that there’s an advantage to startups located in the same city when it comes to finding investors and employees, or just sharing advice or learning about a new technology? Some of this created a gravitational pull that gave companies a reason to pay a premium to be in Boston rather than Nashua or Providence.
A lot of that activity now takes place — where else? — on Zoom.
“I remember those days” of in-person conferences and networking events, says Jonah Lopin, CEO of Crayon, which sells software to help companies understand what competitors are doing. “That organic, community, ecosystem-y stuff is not happening right now.” Some of it may return as tech workers with kids at home get them vaccinated, he predicts. “But you can hop on a Zoom with someone from San Francisco and get advice about a challenge you’re facing. The community is becoming a little more disaggregated.”
Before the pandemic, Crayon had 16,000 square feet of office space in the Seaport. It now has half that. In May, the company brought in $22 million in additional funding. “Normally, we’d be building out an office, and we’ve got the budget set aside for it,” Lopin says. “But with 10 or 20 people coming into the office every day, we’re not doing that now.” Since his kids haven’t yet been vaccinated, Lopin has been working from home in Newton.
At a moment when more tech companies are willing to hire people working from anywhere, “the pressure is on companies and cities to create an attractive place to live and work,” says venture capitalist Rob Go, whose firm still has an office near South Station. “Cities need to compete based on how exciting it is for the talent to be there,” as opposed to assuming that people will move there, or stay after college, in order to land a job, he says.
From his home office in Rhode Island, Grinna notes that it will get tougher to track exactly where in the world venture capital money is flowing and which cities have thriving entrepreneurial scenes.
Life is also getting more complicated for journalists. I used to occasionally drop by the office of a company rumored to be in trouble, to see if the lights were still on. You can’t do that anymore — and even when a company’s former office goes on the market as a sublease, that could just mean they’ve opted to go fully remote.
And when people pitch me — and other Globe writers — on companies we should cover, there are lots of questions about whether they truly qualify as “Boston-based.”
Take Invicti Security, for example. It has the hallmarks of a company worth watching. Its product helps companies and government agencies test software applications that will run on the web to ensure they’re safe from hackers. It raised $625 million last month, and the primary investor is a Boston firm, Summit Partners. Its new chief executive, Michael George, is based in Boston, as are a handful of other key leaders, including chief product officer Sonali Shah.
But Invicti’s offices are in Austin, Istanbul, and Malta. The bulk of the jobs on its website are tagged as “allows remote.” Of those few postings that require an employee to be based near a particular office, none specify Boston.
Is that a Boston company? Who knows?