
Boston-area startups are on pace to overtake NYC venture totals - e1ven
https://techcrunch.com/2018/08/04/boston-area-startups-are-on-pace-to-overtake-nyc-venture-totals/
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aaavl2821
The article sort of buries the real reason for this: the large amounts of
biotech VC funding. Boston is the world-center of biotech startups and VC, and
biotech VC funding is on pace to be $15-20B this year. As recently as 2013
__total__ VC activity was just $29B

The amount of money being invested (and made) in biotech today, and the level
of technological advancement in the field, is disproportionately higher than
mainstream awareness of the field

~~~
ghaff
The greater Boston area gets overlooked a lot of the time because it’s
relatively light on the web/social/mobile software businesses that SV thinks
of as tech because that’s what SV majors on.

As you say Boston is strong in a lot of tech areas but they’re often different
from SV tech.

~~~
EE84M3i
Boston also has lower mobility for tech workers, because in California non-
competes are unenforceable but in Massachusetts they are.

~~~
sidr
From what I hear, the lower mobility is endemic to biotech culture. The only
folks who are able to run significant research programs are junior faculty
poached from the nearby medical schools. If you are a fresh PhD or postdocs
you have a low ceiling on growth potential and starting salary. This is
probably due to a glut of cheap highly educated (PhD+) labor in the life
sciences - way more so than CS. Also, at these biotechs, the
software/informatics/stats folks are just playing support roles and are
treating accordingly in terms of autonomy and compensation.

This is mostly heresay from folks I know from my PhD days in a computational
life science field in Boston. The other computational folks I know have either
tried to stick it through in academia or have left for greener pastures in
software. The wet lab people who joined biotechs are not thrilled.

~~~
aaavl2821
I've heard the same thing. Biopharma does a pretty bad job developing young
talent. Too many smart young scientists and not enough jobs, and the
scientists are used to less than stellar compensation and treatment in
academia

From what I've heard this is a bit worse in Boston than the Bay Area. There
seems to be more hierarchy and ageism in Boston and some of the VCs are very
vocal in their preference for older employees. Bay Area is a bit better, some
tech VCs are trying to get into biotech by supporting young scientists but
there's still a long way to go

~~~
ghaff
Funny you use ageism in that context. It usually refers to preferring younger
workers. I don’t know about biotech specifically but anecdotally the Boston
area is probably more generally often to older workers because of things like
embedded, other kernel level stuff, and other tasks that require traditional
engineering disciplines and people with experience from a Boston-area computer
companies.

~~~
aaavl2821
"Reverse ageism" is actually a fairly controversial topic in biotech. After a
Twitter debate, a top VC (and one of the only biotech VCs who blogs) wrote
this post about why he likes older entrepreneurs [0]

IMO he has valid points, but there are all kinds of issues with his analysis,
but bottom line is there isn't enough data to prove either sides point, so
there's a lot of opinions presented as facts

[0] [https://lifescivc.com/2018/02/grey-hair-c-suite-
experience-a...](https://lifescivc.com/2018/02/grey-hair-c-suite-experience-
age-ipos-biotech/)

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swampthinker
Some of SV's biggest tech companies and institutions started in Boston. Reddit
was in Davis, Drew started Dropbox while he was still at Bit9, Zuckerberg was
in his Harvard dorm with staff meetings at Pinocchio's pizza. Hell I used to
live next to the original YC office in Cambridge.

The talent exodus and missed deals was a huge wake-up call for Boston VC's to
take more risk, and I think we're finally seeing the results.

~~~
Roritharr
Interesting take, do Boston VCs think that locally? In Germany I get the
feeling the VCs invest wherever globally it makes sense.

~~~
swampthinker
It was almost as if PG and Jessica set out to prove the Boston/NYC status quo
of VC wrong. If you wanted funding around here pre-2005, you had to be an
experienced exec w/ a strong team of MBA's and senior engineers. Once YC + FB
left and saw huge success, there was a scramble to figure out what went wrong.

Check out this meetup that a local VC set up back in 2005 [1]. Justin Kan,
Emmett Shear, and Reddit's co-founders (Along with many other notables!)
attended. All of them left for the West Coast.

[1][http://worcester.typepad.com/pc4media/2005/11/boston_web_inn...](http://worcester.typepad.com/pc4media/2005/11/boston_web_inno.html)

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replicatorblog
Boston has had at least one $1B+ tech IPO (not including bio) every year for
the last decade. There have been as many High nine-figure, billion-plus
acquisitions in the same period.

Boston doesn't get much in the way of national PR, but it's arguably the 2nd
best city in tech, measured by liquidity over the last decade, in the country.

And not just in boring security/B2B areas. Wayfair is a top 10 ecommerce
player. CarGurus has thoroughly beat TrueCar. DraftKings created its category.

~~~
asmithmd1
A little over a month ago Boston founded Simplisafe sold to a private equity
firm for $1B

[https://www.bostonglobe.com/business/2018/06/29/simplisafe/x...](https://www.bostonglobe.com/business/2018/06/29/simplisafe/xQQ9Rb55kf3WOcrFql5R3K/story.html)

~~~
jforman
Boston-founded by an HBS-grad engineer who made early units himself, and
bootstrapped until raising from Sequoia's growth fund. An amazing story that
got almost no coverage in the tech press.

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throwaway2016a
Key word being Boston-"area"

I think Boston is often taken to be a very large geographic area. For example,
PillPack (one of the flagship examples in this article) was actually founded
-- and still headquartered I think -- in New Hampshire. But to put that in
perspective, Manchester and Nashua New Hampshire (the two largest cities in
the state) are both less than an hour drive from Boston.

To be fair PullPack does have a Boston presence as well but I feel I need to
point it out because I don't think New Hampshire often gets enough credit. It
has a disproportionately high tech population for a state its size.

I also don't think Boston gets enough credit. The shear amount of innovation
and academia happening in Boston and Cambridge, MA is astounding.

~~~
cowsandmilk
PillPack started by two people meeting at a hackathon at MIT and the company's
headquarters were in Davis Square in Somerville. They have a large operation
in New Hampshire, but the positions there always seemed to be related to
shipping and preparation of prescriptions (i.e. pharmacists, data entry techs)
vs. the engineering, designing, HR positions in Boston.

~~~
mackey
Pillpack moved out of Davis last year, into a new office also in somerville.

[https://www.americaninno.com/boston/office-envy/office-
envy-...](https://www.americaninno.com/boston/office-envy/office-envy-inside-
pillpacks-new-vintage-style-somerville-hq-which-has-a-full-bar/)

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swalsh
As a Boston resident, but former midwesterner, I wish the story was "Midwest
competitive with East and West Coast for venture totals". I think it's a real
problem that venture capital is highly concentrated in just a few places.

~~~
lotsofpulp
Terrible weather, flat terrain, socially conservative populace, lower
probabilities of meeting important or rich people to create network. These
qualities don't seem like they would appeal for those with money or in
tech/science oriented fields.

~~~
pretendscholar
Why is flat terrain an negative trait?

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RandallBrown
Flat terrain is one of the biggest reasons why I never plan to move back to my
home state of Michigan.

Skiing, hiking, and climbing are 3 important things to me that the midwest
simply doesn't have in any meaningful way.

~~~
ensignavenger
There are plenty of hiking trails throughout the midwest, and Arkansas has
some of the finest rock climbing in the nation. Plenty of climbing in other
Midwestern states as well. Snow skiing, not so much.

~~~
RandallBrown
The hiking in the midwest is hardly comparable to the hiking in the rockies
and west coast. It's hardly even comparable to the hiking on the east coast.

There's some good rock climbing sure, but there's no alpine climbing.

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gumby
I thought Boston and NY traded back and forth for #2. But looking at the
latest MoneyTree report, it doesn't look that way at all
([https://www.pwc.com/us/en/moneytree-
report/MoneyTree%20Repor...](https://www.pwc.com/us/en/moneytree-
report/MoneyTree%20Report%202018%20Q2%20-%20Final_F.pdf))

Now that MT splits out SF and SV differently, you can see a secular split: the
(mostly) consumer-facing online businesses in SF (5.6B) and NY (2.8B) take in
a lot more money than the more technology-oriented businesses of SV (3.9B) and
BOS (3B). I assume that's due to risk profile; wonder what the return rate is?

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DoofusOfDeath
I'll be curious to see how Boston-area software-developer compensation changes
over time.

My impression is that dev compensation in SF is higher than in Boston, but SF
also has higher property prices AFAICT.

~~~
duwahahahah
We are currently in a weird place where, while compensation is growing, it's
not growing fast enough to keep up with the rising property prices. There's
been a huge surge to build luxury apartments in the downtown areas, but
outside of that, available land is at a standstill and we are starting to see
the same problem that SF has. Nothing is affordable anymore, and no one in the
state/city government is really putting in an effort to slow things down.

~~~
dsfyu404ed
MA, particularly the Boston area has spent just shy of 400yr embracing micro-
managerial busybody government at every level (several other New England
states exist because living in MA was too onerous for various groups). Local
governments have a lot of power. They use this power to implement self-serving
bylaws and zoning rules that cause the cost of living to skyrocket relative to
cities/towns that have more of a "you want to have an adult entertainment
store two blocks from a high-school, ok fine, just don't forget to pay your
taxes" attitude. It's a tragedy of the commons situation. Everyone wants to
zone the strip mall, the lumber supplier, the mechanic and the big box store
out of existence or relegate them to some small commercial area. Every town
thinks their a special snowflake that should be able to embody picturesque New
England town in Yankee magazine. Well actions have consequences and all those
things all have to go somewhere and if every town makes doing business (or at
least the kind of business that doesn't fit their vision) hard and expensive
those costs get passed on down.

You can still be a homeowner, buy good groceries and keep your fridge full of
beer on a single entry level tech salary in MA. The catch is you just have to
do it in one of those "bad" cities like Worcester, Fall River or Fitchburg.

I welcome the SF problems in the Boston area.. You reap what you sew.

~~~
anomatopoeia
I have long believed that the real solution to Boston's housing crunch is high
speed transit to Worcester, Fall River, Lowell, New Bedford etc.

Build HSR out to these areas and drop in lower cost high density density
housing. Essentially use these old mill towns as Boston's Brooklyn -as none of
the closer in cities are willing to take on the role.

~~~
cbm-vic-20
You already have an example of a city with HSR to Boston: Providence. Amtrak
does this run in 38 minutes, Acela a few minutes faster. Providence is seeing
a recent uptake in tech activity; GE Digital is hiring downcity, and other
companies like Virgin Pulse and a small startup scene. Still, there are a lot
of people who ride the rails between Boston and Providence every day.

~~~
my_username_is_
It's 38 minutes to the 128 station, which is hardly Boston proper. It's an
hour between Providence and Boston (South station), and the cost difference
between the commuter rail or even Amtrak regional with the Acela is crazy. $12
MBTA train vs $16 Amtrak regional vs $50-$80 or more for the Acela. For what
amounts to a 5-10 minute savings.

~~~
cbm-vic-20
Looks like it depends on direction. Southbound trips are scheduled for 38
minutes from S. Station to Providence, but around an hour going north. MBTA is
currently $11.50 each way. Amtrak is $.50 more if you buy two weeks in
advance.

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dmode
An interesting comparison would be comparison Boston to NYC without WeWork's
massive funding. I think that single company has probably distorted NYC VC
raise for the last couple of years.

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syntaxing
I've been definitely seeing more and more startups popping up (or maybe I hear
them in the news more) coming from Boston. But I'm not entirely sure if Tech
Crunch's conclusion is sound. You can see from the past five year data graph
that NYC's investment is quite high but all of sudden there is a dip this
year. Boston-area startups is "overtaking" the pace of NYC not because of a
boom in Boston but rather a dull in NYC.

~~~
kevincennis
The 2018 numbers are YTD though. Both cities seem like they're on track to do
as well or better than they did in 2017 assuming that funding doesn't tend to
be significantly front-loaded toward the beginning of the year (which might be
the case – I honestly don't know).

