In 2009, the Massachusetts economy was still sputtering, struggling to rebound after a global recession. But hardship often gives rise to invention, so it seemed like the perfect time for consultants John Harthorne and Akhil Nigam to launch a program designed to nurture new businesses and kick-start innovation.
Now in its fifth year, MassChallenge, the program they founded, is the world’s largest startup accelerator. Anchored in Boston’s Innovation District, MassChallenge cultivated 128 fledgling companies this year that someday hope to make it big. Two weeks ago, the program awarded $1.75 million in funding to 21 companies alone. So it seemed fitting that the group’s awards ceremony featured talks by Google board chairman Eric Schmidt and Travis Kalanick, the founder and chief executive of Uber. It was also fitting that Harthorne announced the creation of a new award: The Deval L. Patrick Commonwealth Innovation Award — which, appropriately enough, went to Governor Deval Patrick.
The incubator’s track record of delivering results is impressive: 617 companies have gone through the program, with 85 percent of them still active. Better yet, many of those active startups have remained in Massachusetts, accounting for the creation of about 3,000 jobs.
But there’s a larger lesson in the MassChallenge model itself. It is not only a case study of how government can help foster innovation, but also a robust example of the power of mentorship and collaboration in a tech sector that has sometimes been fragmented by competition. Patrick’s support was critical in the early days, as was a $100,000 grant from the Massachusetts Tech Collaborative. Another $225,000 came from the private sector.
MassChallenge’s mission — words like “creative” and “renaissance” figure prominently on the program’s website — has infused the companies it has helped nurture, and has helped reshape the image of the Seaport area itself. When the group opened its new space in a 26,000-square-foot warehouse in the decidedly old-school Marine Industrial Park in June, it was a symbol of new forces driving Boston’s economy. It is also a significant draw for entrepreneurs who want to be near the action and energy — and hotels, restaurants, and coffee shops are popping up in order to serve them.
Boston has changed, and very much for the better, for entrepreneurs, says Harthorne. The level of cooperation and collaboration — needed to compete with Silicon Valley for talent — is changing. “Massachusetts is the best place in the world to launch a company,” he says bluntly.
That’s good news, because MassChallenge isn’t stopping in Boston. The nonprofit established MassChallenge Israel in Tel Aviv last year and will be launching in London in 2015 . Harthorne says he and his colleagues are also looking at Switzerland, Germany, Colombia, Mexico, and Brazil. Benefits will accrue to Boston as these entrepreneurs develop businesses that will want to tap the best talent when it’s time to access the US market.
MassChallenge’s mission is not completely about helping to build game-changing companies. One of this year’s $100,000 winners is a startup called Catie’s Closet, which provides like-new clothes for children from poor households. With programs like this, and with a global vision and a strong track record of nurturing real businesses, MassChallenge is burnishing the profile of the Commonwealth as an innovation engine.