Looking For Tech Legends: Is Boston Not Thinking Big Enough?

About This Blog

This site is for  entrepreneurs.  A full RSS feed to the articles is available.  Please subscribe so we know you're out there.  If you need more convincing, learn more about the site.

Community

Google+

And, you can find me on Google+

Connect on Twitter

Get Articles By Email

Your email:

Google

Blog Navigator

Navigate By : 
[Article Index]

Questions about startups?

If you have questions about startups, you can find me and a bunch of other startup fanatics on the free Q&A website:

Answers.OnStartups.com

Subscribe to Updates

 

30,000+ subscribers can't all be wrong.  Subscribe to the OnStartups.com RSS feed.

Follow me on LinkedIn

OnStartups

Current Articles | RSS Feed RSS Feed

Looking For Tech Legends: Is Boston Not Thinking Big Enough?

 

Last night, I attended an invitation-only event called "Thinking Big". It was organized by Scott Kirsner who is a Boston Globe journallist and also authors a blog called "Innovation Economy".

Update:  Podcast Is Available Here 


As an introvert, I usually don't like going to these social events (even if they're business/entrepreneurship focused). This one promised to be different because it was much smaller attendance (not the hundreds of people that were at the TechCrunch event held recently) and had at least some structure to the conversation. Besides, I like Scott and think he's doing a really good job drawing out an interesting mix of people at various types of smallish events. This is the second of his events of his that I've gone to (and I really enjoyed the first one, which was a small intimate dinner with a bunch of cool tech/entrepreneurship people).

Here's an overview of the "Thinking Big" session, as described by the organizers:

Are New England's most promising companies getting sold before they have a chance to get really big and really influential? If we're selling our seed corn, as Highland Capital co-founder Paul Maeder suggested recently, how can we cultivate a new generation of companies like DEC, Lotus, EMC, Akamai, Google, and eBay...companies that create entirely new business sectors, grow like crazy, and serve as the hub of new ecosystems?

Scott moderated a mini-panel with Paul Maeder (from Highland Capital Partners) and Michael Greeley (from IDG Ventures). I know and have met both of these gentlemen before -- they're smart and articulate. There's going to be a podcast of the event posted (recorded by none other than the software legend Dan Bricklin who I met for the second time). Dan's cool and very unassuming.

I'm not going to get into the heart of the discussion in this article (too much was said, and the podcast is likely to do a better job). But, will provide some of my thoughts and reactions:

1. Though I think Paul Maeder and Michael Greeley are both very smart and very articulate, they're both currently VCs. It would have been nice to have a current entrepreneur on the panel. But, there was sufficient interaction amongst the rest of the group, so this wasn't a problem.

2. The thesis for the discussion was that we are selling companies too early and that particularly the VCs should take a longer-term view and encourage entrepreneurs to hold on to promising opportunities longer so as to create big, significant businesses here in Massachussetts. I somewhat disagree. Though it would be great to have successful companies here in the area that *don't* sell out too early (particularly to West coast firms), that may not be the best thing for the entrepreneur. If you are a first-time entrepreneur (as I once was) and you have all your net worth tied up into a single company (which you likely do) than even a $100MM or even a $50MM exit is going to be attractive. It's easier for VCs to push for the "big, swing for the fences" type outcomes -- but they have a different risk profile. They have a portfolio of companies to spread their risk. They do this for a living. They've already (in most cases) made their money. Many times, entrepreneurs have not. More to come on this topic later: The point is, in order to encourage entrepreneurs to grow their ideas into billion dollar companies, some changes to the VC/entrepreneurial relationship would help.

3. It's possible that too many promising young companies are being sold too early. The data that the panel shared certainly seemed to indicate that. However, I don't think we're talking enough yet about the potential loss of stellar early-stage entrepreneurs that *leave* the area and migrate to the West coast. before even starting their companies. I've seen this personally happen on a few occasions. This data is much harder to track. We can look at the big, billion dollar West Coast companies and trace them back to see where they came from. But it's hard to track the companies that *should* have been founded/seeded here, but weren't.

4. Frank Moss, the head of the MIT Media Lab challenged the group to better help commercialize the technology and invention that is coming out of MIT. I could not agree with Frank more. MIT produces an amazing amount of intellectual property, much of which never gets used in a meaningful way. Frank asked that investors stop trying to "graze" MIT for the best IP, and instead participate in the risk of R&D to get the best returns. He called for every investor to take 0.1% annually of their fund and invest it in MIT for research and development. Interesting idea. I'd need to know more about the structure that was being considered.

That's about all we have room for. A lot more can be written about the topic. I'll update this article once the podcast goes up somewhere for those that want to hear the discussions. My thanks to Scott and for all the event sponsors. I was humbled by the level of talent in the room. Some really big names in entrepreneurship and technology from the Boston area spending some quality time.

Posted by Dharmesh Shah on Thu, Nov 29, 2007

COMMENTS

Boston and others need to stop having Silicon Valley envy and find their own niche / focus / big thinking. So far everything I am hearing is only how can we be as good as the valley.

posted on Thursday, November 29, 2007 at 12:07 PM by Mukund Mohan


Sounds like a great place to meet bright minds and learn! Wish I was there!

posted on Thursday, November 29, 2007 at 3:56 PM by Harsha Raghavan


Dharmesh, First I wish this comment text box was bigger. :-) You brought up in important point in #2, one that I don't see getting talked enough about. Although oddly enough Andy Payne, a fellow Boston entrepreneur, blogged about it today as well. http://blog.payne.org/ There are 2 things that we RARELY see here on the East Coast: 1. Venture guys letting Founders take "money off the table". This is something that is more common in the Valley. i.e. Would Facebook still be a private company if Mark hadn't been allowed to take money off the table? 2. Venture guys being "ok" with founders creating their own portfolio strategy by founding or being involved in multiple startups concurrently. i.e. Kevin Rose & Jay Adelsen with Digg + Revision3 + Pownce (Kevin only). Without at least 1 of these being feasible in Boston why would a founder being willing to hold out for a "grand slam" homerun when a $100m offer shows up on your doorstep?

posted on Thursday, November 29, 2007 at 7:20 PM by David Cancel


I enjoyed your take. Two items stood out to me: 1. The lack of an entrepreneur in attendance does matter. There wan't a person in attendance there who wil have anything to do with starting the next great start-up in Boston. VCs (and I say this as an early stage venture investor) are fundamentally on a different page from the entrepreneurs (and they have to be). They/We aren't partners or buddies or any of the bs thats in the press materials. VCs are focused on returns not innovation or economic development or anything of the sort. The second one as, "Frank Moss, the head of the MIT Media Lab challenged the group to better help commercialize the technology and invention that is coming out of MIT." The media lab especially is a huge disappointment as the ignition point of great start-ups and its not from lack of attention or resources that's for sure. A great example is the $99 laptop --that even though its basically a toy -- cost more than decent laptops you get from Walmart. Oh it makes everyone feel good, but its a typical Ivory tower boondoogle. And boobdoogle's have been what MIT's Media Lab has specialized in the past 5+ years. MIT indeed has many great technologies coming out of it, but Frank's take is self serving at an obscene level. The fact remains that great companies are and could pop out of any of the area universities. And when you get to B2C plays, MIT is no Stanford. Its barely a Suffolk. Technology is great -- but the best technology is not what great start-ups are about (Microsoft, AOL, etc etc etc). CUring pain, ideas, business acumen, revenues, and risk taking (hands-off) investors are what successful start-ups are made of.

posted on Sunday, December 02, 2007 at 12:17 PM by Mark


This is complex issue. I sympathize with the temptation to take a sure exit early even if you're leaving potential on the table. At the same time, I'm concerned about what the proponderence of early exist mean for tech, especially software. 10 years from now will their only be 3 tech companies (IBM, Oracle and Google)? We need more.

Perhaps private equity has a role to play here. They can take over VCs' positions and give the entrepreneurs fresh runway (more years to build out).

One final comment: I think part of the "blame" here lies in the dependence on outside capital in the 1st place. Companies that get to cash-flow positive sooner give up less of their equity and control the shots more.

posted on Tuesday, December 11, 2007 at 1:27 PM by Mark MacLeod


My sense of the scene is that Boston as a whole is not ambitious enough/too conservative for the global scale marets which are now readily addressable. So ironically it is that Boston prudence which which leads to the early cashing-ins by entrepreneurs.
And if someone has a very very big idea, they may not even bother trying to get it started in Boston as otehrs note, since the Boston VCs are looking for a string of singles, and less willing than California to swing for the fences. So the homerun ideas aren;t even pitched seriously in Boston.

posted on Sunday, December 23, 2007 at 3:35 PM by Lee McKnight


I feel like Boston has a ton of talent chasing buzz words that simply are not the right fit. For example, I was awed to find one startup called Cover4Me throwing out terms like "web 2.0" "facebook application" and the rest without any supporting evidence that they had any idea what these things are! Upon further investigation, I discovered that the entrepreneur behind the project was a former VC from Intel Capital who was trying to create her own hot startup. It was disappointing to say the least, as I walked away feeling like it is this type of project out chasing funding (and sadly probably getting it) that taints the Boston reputation.

posted on Monday, January 21, 2008 at 12:48 AM by Seth


Comments have been closed for this article.