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Scott Kirsner | Innovation Economy

In search of a ‘second city’ for New England startups

Manchester, N.H., is a leading candidate: It has had a startup, Dyn, acquired for more than half a billion dollars, and it’s home to a long-running research-and-development company, Dean Kamen’s DEKA Research.
Manchester, N.H., is a leading candidate: It has had a startup, Dyn, acquired for more than half a billion dollars, and it’s home to a long-running research-and-development company, Dean Kamen’s DEKA Research.(Salwan Georges/Washington Post/File 2018)

When it comes to startup activity, Boston is booming: The research firm Startup Genome put the city in fifth place globally this year, behind Beijing and just ahead of Tel Aviv. Not bad.

But Boston is also expensive, and the commutes can be intolerable.

I’d love to see a “second city” emerge in New England as an alternative place for businesses to form, get funding, hire, and grow. There are a lot of viable candidates, from Northampton to Portland to Providence to Manchester, N.H. But none of those cities seem to be chasing the opportunity.

One key test: Would a recent graduate of a school like Brown, UMass Amherst, or Tufts be willing to live there and spend a few years working to build a successful company — rather than be pulled to Boston or New York?

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Manchester is one of the best-positioned cities today: It has had a startup, Dyn, acquired for more than half a billion dollars, and it’s home to a long-running research-and-development company, Dean Kamen’s DEKA Research.

“Growing any ecosystem is about creating a sense of place and offering amenities for folks,” says Liz Hitchcock, a Dyn alumna who is now owner of a bookstore in Manchester and cofounder of a network security company called Minim. “Green spaces, cultural happenings, retail shops, and great authentic food are all pieces to that puzzle.”

Education, transportation options, and affordable housing are also key to making a community “a clear choice for startups,” Hitchcock says.

Charles Denault, an aviation entrepreneur in Portsmouth, N.H., says that low-cost, high-speed Internet access is an important part of the equation.

Interesting “pop-up” bars and restaurants would help add energy to a city, says Jesse Devitte, a founder of the Boston investment firm Building Ventures — and before that, one of the most active startup investors in New Hampshire.

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An all-electric vehicle-sharing program (think Zipcar, but with Teslas or Priuses) would add more appeal.

Devitte is also a proponent of using a hyperloop — electric trains operating in a special tube — to keep trips into Boston short. But he says that a dedicated bus lane would be a good near-term solution.

Angus Davis, who founded a restaurant-technology startup in Providence, says the biggest challenge was being able to hire the right people. “Every Rhode Island policy should be aimed at either bringing Massachusetts talent closer to Rhode Island (transit) or developing the workforce (education and training),” Davis writes via e-mail.

In Burlington, Vt., David Bradbury, president of the Vermont Center for Emerging Technologies, says that connectivity to Boston is key to growing a startup ecosystem there.

Subsidizing flights from Burlington to Boston would help, Bradbury says. He also recommends divesting some city-owned assets such as real estate and an electric utility to fund new kinds of infrastructure, like a campus innovation hub at the University of Vermont — similar to the Harvard Innovation Lab — or an accelerator program for climate-focused businesses.

And why not build an indoor wave park in Burlington, for year-round surfing with no risk of being nibbled by a great white?

My best idea is some kind of “golden ticket” program for entrepreneurs.

Providence or Portland could make an offer to a group of founders around the region — including Boston — every spring. Choose 10 or 12 ventures that have won university startup competitions or that have just graduated from an entrepreneurial “finishing school” like Techstars or MassChallenge.

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Give them two years of free work space.

Help them connect with local companies or community groups that might be willing beta-testers of their products.

Bring in another dozen startups the following year, and the year after that.

Promote the heck out of the program. Would 24 or 36 startups create enough of a core to make that city look like a “safe place” for other startups? Perhaps, and it would be a worthy experiment.

Abby Fichtner, a New Hampshire tech consultant and workshop leader, serves up two ideas that could support something like the “golden ticket” plan. The first would create tax incentives for businesses willing to help startups by providing anything from discounted marketing services to small-run manufacturing. Another of Fichtner’s ideas: Offer training for unemployed or underemployed local residents who want to learn the skills they need to get hired at one of the startups.

Derek Mitchell, executive director of the Lawrence Partnership, a nonprofit initiative that works to support the former mill city on the Merrimack River, says that one way to attract startups and help them grow is by offering “back office” support that would let the entrepreneurs focus on their businesses. How might a city simplify and streamline access to locally provided services like bookkeeping, health care coverage, legal advice, and loans, especially for fledgling companies?

Waldron Faulkner, a Maine resident who works for a Boston startup, has a different idea about who cities should try to support: immigrant entrepreneurs, including Africans who resettle in Maine.

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“If I’m building Portland as the second city to Boston, then, I’m focusing on this community,” Faulkner says. “They don’t have MIT technical training, they don’t have Harvard Business School networks, and they don’t have access to Boston venture money. But they probably only need seed-stage funding . . . They are exceptionally ambitious, hard-working, goal-oriented, and tenacious.”

Could we see a strong second city emerge in the next decade in New England? Or even a few?

“I one-hundred percent think that this kind of ecosystem could be set up outside of Boston,” says Mitchell at the Lawrence Partnership.

But, he says, it would require a coordinated state-city effort and would probably involve the participation of nonprofits or private companies. “Mayors’ and governors’ terms are often limited by terms that are too short to see a full vision like this to fruition,” Mitchell says, “as I think it would require a diligent five- to ten-year process.”

Russ Wilcox is also thinking long-term.

A venture capitalist and former entrepreneur who built a manufacturing facility in the Northampton area for his company, E Ink, he proposes a “diamond necklace” around Boston, with 10 cities like Worcester, Providence, Holyoke, and Manchester each focused on developing startups in a particular sector, such as 3-D printing or bio-engineered foods.

Cities and states might create a designated startup neighborhood and provide some small startup funding, or co-invest alongside private investors.

“Think of a project on par with the Big Dig,” Wilcox says. It would require roughly $10 billion, he reckons, “with $1 billion invested in each of 10 innovation districts, attracting investment and creating great jobs, which in turn would benefit and lift wages for everyone in the region.”

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So what would you do if you were trying to turn Northampton, Hartford, or Providence into a viable “second city” for New England startups? Post a comment below.


Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner.