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.