

Boston VCs don’t want to let another big one get away - helwr
http://www.washingtonpost.com/business/boston-venture-capitalists-dont-want-to-let-another-big-one-get-away/2011/07/07/gIQA3Wck5H_story.html

======
pg
Unfortunately for the Boston VCs, they can only fix part of the problem.
Boston VCs have in the past been timid and unimaginative, and they may be able
to fix that by making a conscious effort to be more aggressive. But the
biggest problem with Boston may be the weakness of the angel community. It's
true that VCs are starting to make more angel type investments, but it seems
unlikely they can completely replace angels.

~~~
whirlycott1
Two years ago, I would have agreed with you about the angel situation - it was
pretty dorky and very clumsy. But something big has changed here very recently
and the energy is unlike anything you saw when you lived in Cambridge, Paul. I
assure you, there is a substantive tangible energy in the air around town
these days.

Whether that translates into anything big still remains to be seen.

~~~
SwellJoe
Energy does not replace early stage money. Angels, of which there are
thousands in the valley, provide early stage money.

------
dlevine
Having moved to the Bay Area from Boston when I started doing startups, I can
say that the problem is more of a structural issue than just "not letting the
next big one get away."

Whenever we talked to East Coast VCs, they wanted our startup (pre-revenue and
basically pre-product) to have a clearly defined business model and revenue
strategy. In doing that, they do somewhat reduce the downside, but they also
eliminate the very top of the bell curve.

West Coast VCs seem to have much more of a shoot for the moon mentality. While
the latter does lead to a lot of flops, it seems like it also yields some huge
winners that the more conservative approach may miss.

~~~
divtxt
Exactly! Nothing captures this structural difference like this search:

<http://www.google.com/search?q=silicon+valley+failure>

edit: you can't invest in "the next big one" without investing in 90 failures
and 9 small or medium ones.

------
anamax
The "VCs let Facebook get away" theory seems to imply that Facebook could have
been built in Mass.

Could facebook have been built in MA?

In SV, Facebook could poach from Google's mothership and the alums, not to
mention Yahoo, etc. Are there enough comparable people in Mass?

And, even if there are, are they available? Doesn't Mass have enforceable
fairly-general non-competes? Do the Mass companies that currently employ the
folks that Facebook would have hired use them?

~~~
kragen
Agreed.

Also, California has this lovely law that guarantees that your employer
doesn't own what you develop on your own time without using company equipment
in areas that aren't the company's business. Which means that in California,
an awful lot of people who would otherwise have continued working for HP,
Shockley, IBM, Apple, and so on, went out and started companies — the
companies that have, over the last 30 years, brought the people that Facebook
needed to hire to California. Not to Massachusetts.

------
ilamont
I can't speak to the VC environment in Boston, but I do think there are lots
of support resources for tech entrepreneurs in the Boston area, through events
(TechStars, Lean Startup Challenge, etc.), meetups, support groups, startup
spaces (such as the Cambridge Innovation Center) and educational networks
fostered by MIT, Harvard, and other schools (even BU offers a mentoring
service, modeled roughly on a program that MIT started).

There is also a small but strong media cohort that helps spread the word. It's
nothing like Wired/TC/VentureBeat/assorted blogs/MSM bureaus in the Bay Area,
but people like Scott Kirsner (Innovation Economy, a column in the Boston
Globe), and the staff of the MIT Technology Review, Xconomy, and some of the
IDG publications write frequently about local startup activity.

------
hughesdan
Boston is certainly no Silicon Valley (and perhaps never will be), but I'd
argue it's still a great place to start a company. Through MassChallenge I had
an opportunity to really connect with the community up there and can say from
experience that it's a vibrant and helpful one that is turning out some great
companies. The article is probably correct in the way it characterizes Boston
VCs. But the local VCs are only one small part of what makes a city startup-
friendly.

------
localhost3000
Part of the problem with Boston is that it isn't hip to be doing a startup
here like it is in SV (this is getting better. A few years ago it was awful).
Boston is an old-fashioned town that values aristocratic careers (Lawyer,
banker, doctor) and name-brands (John Hancock) far more than pave-your-own-way
careers. This sounds a bit trite but it is a significant cultural barrier for
a 22-year-old to overcome. You'll be far more accepted if you move west, so
most do.

------
rokhayakebe
_Facebook — turned down by Battery Ventures and MetroPCS — is valued at $82.4
billion on SharesPost, a secondary exchange for shares of private firms._

This is like passing on Lady Gaga in High School because she was, well, odd.
It has to be hurtful.

------
thinkcomp
The degree to which the premise of this story (which has been printed
elsewhere) is absolutely ridiculous, is pretty astounding.

The premise, of course, is that Mark somehow "got away" from Boston and was
always destined to be more "successful" [your definition here] than any other
founder. So there are really two main points: that this proves Boston needs to
catch up with the Valley, and that there's another Mark lurking out there
somewhere that must have been missed.

Let's start with the first part. Boston has needed to catch up with the Valley
since the decline of Digital Equipment Corporation, if not before. That was,
if I've got my facts straight, in 1992. So it's been nineteen years that
Boston's tech scene has been dying. When I was at Harvard trying to get
undergraduates excited about technology entrepreneurship in 2003, the club
ended up electing me President because only eight people showed up and half of
them were my friends. Apparently things have gotten better since then, but I'm
still on the Harvard entrepreneurs mailing list and there's not much going on.

As for Mark, I've said plenty in the past. The key points are A) that people
like Mark don't innovate; they copy; and B) if as much money was poured into
another company as has been poured into Facebook, then we'd all be talking
about that company and founder instead. (Twitter, anyone?)

If VCs are just looking to fund copycats, that explains an awful lot, but they
should just admit it and stop pretending that they exist to support
entrepreneurs. In the meantime, their returns will continue to decline as they
ignore people who actually do come up with novel approaches to problem solving
in favor of the coy and disingenuous who can convince millions to waste their
time in a uniform manner.

There are a lot of bad ideas in Silicon Valley and a lot of bad ideas in
Boston. But there are definitely some good ones, too. If VCs can't distinguish
between them, they should either just fund everything in the hope that they'll
just get lucky, or step aside and get out of the way.

~~~
rdl
> The key point is that people like Mark don't innovate.

James and Orville Wright didn't invent the airplane. Henry Ford didn't invent
the automobile. Thomas Edison didn't invent the lightbulb. Ray Croc didn't
"invent" McDonald's. James Walton didn't invent EDI or data-driven retailing.
etc.

But as an investor, you sure wouldn't go broke investing in them. That's the
kind of person you want to set up shop in your town if you care about the
economic benefits, not necessarily another PhD developing technology years
before its time. ("MIT graduates develop technology. Harvard graduates hire
MIT graduates and build businesses." was the old saying.)

I think Boston's non-life-sciences tech scene is doomed for a variety of
reasons, but thinking everyone needs to invent one amazing new _scientific_
advance ("idea") to build a world-changing business, vs. lots of correct,
incremental decisions along the way ("execution"), is a major reason.

~~~
thinkcomp
I didn't say "invent." I said "innovate." All of the people you have listed at
least created products of unambiguous value to society.

~~~
DavidAdams
And your point is that Facebook isn't a product "of unambiguous value to
society" I suppose? And that Zuckerberg's supposed lack of "innovation" is the
cause of this deficiency?

Facebook may not be your thing, but I'd have to say the fact that tens of
millions of people enjoy the benefits that Facebook brings to their lives,
enough to visit the site multiple times a day pretty much proves its value to
society.

And I believe pretty strongly that taking ideas that were innovated by other
people and improving upon them counts as innovation in its own right. Facebook
may not have done anything earth-shatteringly new, but what it did do, it did
better.

~~~
joshu
<http://www.nytimes.com/2007/09/01/technology/01facebook.html>

------
suking
New England VCs have been some of the most difficult people I've talked with.
SV and regional VCs have been much friendlier/easier/helpful. So saying they
won't let another big one get away... they need to change their attitude for
the most part. (IMO).

