Why It Will Take More than Money
My adopted hometown of Cambridge, Massachusetts, has perhaps the highest density of IQ anywhere in the world and a strong entrepreneurial spirit that helped create many great companies. It’s one of the best places in the US to nourish new Internet, info-tech and biotech companies.
What’s missing is a radically stronger founders culture that will attract and motivates the kind of entrepreneur who will found companies and work to keep them here. Multiple times. Silicon Valley has done a great job at this. Cambridge/Boston has not. I am not the first person to have said this - far from it.
In a recent Innovation Economy column, Scott Kirsner compared the paths of two companies – Brightcove and Facebook – that both got their starts in 2004 in Cambridge but followed clearly different paths to IPO. In analyzing why Boston let Facebook’s founders simply walk away, Spark Capital’s Todd Dagres cited a discomfort with unproven entrepreneurs, among other things.
But if we’re only willing to trust proven entrepreneurs and help them succeed, how will we attract the next wave of company founders?
My friend and trusted colleague Dave Girouard puts it the following way: “In Boston, they want somebody who has done it before. In the Valley, they want someone who could do it next.” Eight years ago, Dave made the decision to go to Google instead of moving back to his home town of Boston. He recently announced that he’s leaving Google to do a new start-up backed by Kleiner Perkins, NEA and Google Ventures – and his new company, Upstart – will be based in San Francisco. :(
It's Time to Lean Into Risk
We need to ensure that we’re starting the kind of companies and attracting the best talent to Boston on a regular basis. Let’s make it easy for potential recruits by leaning into risk and doing whatever it takes to attract the best and brightest entrepreneurial business talent to Cambridge.
Tim and his co-founders started EnerNOC from scratch in New England and located in Boston. They did all the unnatural acts required to start a company, took it public, and resisted temptations to sell out. EnerNOC is now an anchor of the energy cluster in Boston.
Money isn’t the problem. Venture capitalists invested $30 Billion in the US in 2011, so there’s plenty of money out there. About $3 Billion of this went to companies in Massachusetts.
If you're an entrepreneur, the question is whether you need to raise money, and on what terms is it worthwhile. Savvy entrepreneurs recognize that venture funding is just another form of capital – and it’s by far the most expensive form of capital. The partners and firms that you choose to work with have to make it worthwhile for you – the entrepreneur – the person with a portfolio of ONE.
Perhaps most importantly, you have to trust that those investors that you select as your partners will support you during the worst and the best of times – because doing start-ups is a guaranteed roller coaster. But as my friend Adelene Perkins at Infinity Pharmaceuticals says: “Things are never as good or as bad as you think they are in early-stage companies.”
Great start-ups and entrepreneurs can always raise money: by definition, they figure out how to get the capital they need to achieve their missions. What’s missing are the right kind of talent and support required to take ideas from their raw state to something that is Fundable regardless of whether they’re raising outside institutional funding or self-funding/bootstrapping.
The right kinds of talent and support will allow entrepreneurs to build companies that will generate huge value for shareholders by achieving an aspirational mission that has a significant positive impact on the world.
Let’s work together to make this happen. What are your ideas?