COMMENTS
Doesn't surprise me...I grew up and went to school in Mass. The state values education and puts its money where its mouth is. There are tons of colleges up there, which doesn't hurt.
Regarding Maryland, most of those stats are probably boosted by the DC metro area. I-270 is a high-tech corridor, with lots of big (and small) government contractors. Northern VA isn't doing too bad, either.
Linux is a piece of shit
I've spent multiple years each in Boston, DC, and SJC.
SJC was hands down much better in activity, funding, and attitude. Whoever did the study obviously had no dirt under their fingernails.
I second JP's response. I lived in DC before moving to Mountain View, CA last year. There are so many more resources and opportunities out here for entrepreneurs.
Im not surprised, many colleges in Mass. have a strong entrepreneurial focus. For instance; Babson, Harvard, and MIT are ranked as the best schools for entrepreneurship in the world.
This isn't surprising. New England places a big priority on education. Many people live in rural small towns where a sense of entrepeneurship and self-reliance is needed in order to survive in such a high-tax state.
This has more to do with difference between in size of the two states. A more fair comparison would be to compare the Bay Area to the greater Boston metro area. Boston is going to have a much larger influence on metrics for the state of Massachusetts than the Bay Area on the state of California, just do to the relative size differences.
I agree with Sam above from the perspective of someone new to Boston. The metro area here is definitely smaller, but that really does help foster a closer, more tight knit VC and entrepreneur community. More people get to know each other and everyone is somehow connected whether it's the through the VC, entrepreneurs, grad students, or high tech companies and startups. (I lived in the valley for 8 months as well, and it just seemed a little too big....)
So, I went to school in the Boston and the Bay Area (Stanford & MIT) and started two companies (one on each coast). First thing I have to say is that both Boston and the Bay Area are phenomenal places with tremendous amounts of energy and intellectual depth. And each has its advantages.
I felt that the biggest upside of being at MIT/Boston (esp being a risk-loving startup type) is that there are more untapped opportunities - ex. many professors funded by DARPA who are sitting on world-changing technologies and not thinking about doing startups.
The biggest differentiator of the Bay Area in my opinion is attitude. This is a big generalization, obviously, but the Bay Area is infused with an enthusiasm and openness that is just not present in the old boy's club that is the East Coast. When I was starting a company in Boston, all the industry veterans were stumbling over each other to tell me that I was stupid for trying to start something in an industry that I hadn't spent the previous 20 years working in. In the Bay Area, by and large, people seemed to stumble over themselves to give me advice and share contacts. Again, this is a major generalization, but the attitude is different and it does matter.
All this being said, I can say that hands down, I'd rather be in the Bay Area. But again, that is a matter of personal style.
Now, the big question is whether anyone involved with creating this big study ever started a company - I always found it humorous to be taught about entrepreneurship by people who didn't start companies - it's like sex-ed being taught by a nun.
Lies, damn lies, and statistics.
Massachusetts has a lot of people who graduated from first-rate colleges with long histories. The MD/VA/DC area has a lot of people working for the military industrial complex (which these days, involves a lot of computers). Washington state exports a lot of goods (you know, Boeing airplanes full of operating systems).
What does that have to do with innovation? With success-rates in the "New Economy"? Right -- nothing.
Successful new companies are overwhelmingly more likely to be started by college dropouts. The economy of Maryland is disproportionately connected to a free-spending wartime Congress -- possibly the oldest economy in the country. Measurable export of goods seems decreasingly relevant in the world of an always-on international network. And we're somehow supposed to believe that the percentage of college graduates working as managers in the IT department of non-IT sector companies in the Inc 500 is somehow a reasonable metric for predicting a state's success in the New Economy? Please.
If you look at the methodology of this study (the whole, unedited study is available as a PDF <a href="
http://www.kauffman.org/pdf/2007_State_Index.pdf">here</a>.), and compare it to your practical understanding of how tech entrepreneurship works. This study just doesn't pass the sniff test. It reads like something that the old boys in the Massachusetts chamber of commerce asked someone to write.
This study sounds a bit wacked to me. Vermont #1 in entrepreneurial activity? Not by any reasonable measure I can imagine. And MA #1 overall? Doesn't seem right to me. If education is the driving factor, then maybe, but by sheer dollar value of venture investments, CA and the Bay area are eating our lunch by a factor of 4:1 - and the gap is growing, not shrinking.
I'd agree with Ravelous and others about attitude. Boston entrepreneurs are entrepreneurs in a futsy New England-y way - relatively closed, pretty careful and conservative. Sort of the workmanlike model for entrepreneurship vs. a more free wheeling model on the west coast. More of a focus here on minimizing downside risk vs. maximizing upside potential.
I also think Bostonians stick to their knitting in a way other regions maybe don't so much. If you aren't focused in areas like B2B IT solutions, biotech, and medical devices where Boston has pretty strong ecosystems, then you pretty much might as well be in Iowa.
Perhaps someone reading this in Boston will make the short trip to NYC Oct 22-23 for Sun Microsystem's free Startup Camp. I'm going and I'm from Cleveland!
www.startupcamp.org