It’s no Silicon Valley, but Boston’s getting perkier for startups

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Credit: ReneS

The greater Boston-Cambridge area has no problem attracting bright young people from all over the world to its colleges and universities. But it has well-documented issues keeping the best-and-brightest local when they graduate (or don’t graduate as was the case for [company]Facebook[/company] founder Mark Zuckerberg and [company]Microsoft[/company] co-founder Bill Gates).

But things are looking up, according to local tech execs and venture capitalists. Witness the Innovation District, a shiny new tech hub that blossomed under the late and lamented Boston Mayor Thomas Menino. Located in what was once a sea of parking lots on prime harborside real estate, the area has exploded for tech startups in the past year. District Hall offers wi-fi and desks and meeting rooms for local entrepreneurs — and wandering journalists — who need a place to set up shop for a few hours. There’s more on Boston’s spot in the tech universe in this  Re/Code special report.

Boston Seaport District's District Hall

Boston Seaport District’s District Hall

The importance of mass transit

Expanded MBTA hours — the last trip of the day for key subway lines is now 1 a.m. on weeknights and 3:00 a.m. on Friday and Saturdays. The last trip used to be at 12:30 a.m. (Expanded hours are still in the experimental phase however, The Massachusetts Department of Transportation plans to revisit the issue later this year.)

Mass transit is a big issue for tech startups both in the Innovation District where many of the aforementioned parking lots are now construction sites — and Cambridge’s traffic-clogged Kendall Square.

Hubway, the short-term bike rental service also got shout-outs from local entrepreneurs who know that many young employees want to live within walking or mass transit reach of their jobs.

Colin Piepgras, VP of engineering and co-founder of Digital Lumens, is a big booster of the district, where his company now resides. The fact that the MBTA’s Silver, Red, and Orange Lines are all accessible as are North and South Stations “all glued together by Hubway” is a huge draw, he said via email. That means “easy access for employees regardless of where they’re coming from,” he said via email. Bonus points for the water taxis to Logan Airport — just across the harbor — and the commuter ferry to the Aquarium, in downtown Boston.

Chris Lynch, partner with [company]Atlas Ventures[/company] agreed with all of the above and also cited new facilities like Blade — which co-founds consumer technology startups and Hack/Reduce near Kendall Square, which promotes big data-focused talent and projects.

 

Hack/Reduce building.

Hack/Reduce building.

Some big IPOs help

A couple execs pointed to several recent successful IPOs over the past year — Wayfair, Care.com, and HubSpot — as proof that Boston-Cambridge can nurture startups from infancy to adulthood and not necessarily end up as acquisition bait for larger companies.

“The amazing thing about these IPOs is that they are not classic technology infrastructure companies — long Boston’s meat and potatoes,” said Andy Palmer, founder of KoaLabs, a co-working space in Harvard Square.

As [company]TripAdvisor[/company] (of Newton Mass.) and [company]Kayak[/company] (based in Norwalk, Conn. but which runs technology out of Concord, Mass.) already showed in the travel segment, “building consumer internet companies in Boston is not only possible, it’s also desirable due to the high quantity of engineering talent and the loyalty of that talent,” Palmer added.

Drafting off the big boys

Some locals decry the fact that promising local startups end up in the clutches of “outside” tech powers– [company]IBM[/company], [company]Oracle[/company], [company]Facebook[/company], [company]Google[/company][company] — have all purchased area startups. Others say this is a good thing. Ditto the fact that the computing giants from Silicon Valley — Google, Facebook, and VMware as well as Microsoft and Amazon — all have big facilities in Cambridge.

Palmer said Google’s new Cambridge office is particularly important as it makes Cambridge a core hub for startups globally — the internet search kingpin is pushing the Google Cloud Platform as a foundation for startups — taking on [company]Amazon[/company] Web Services.

Fighting non-competes

Massachusetts laws surrounding non-compete agreements —backed by EMC and some other local IT giants — still hinders startup activities in the state. Palmer clearly feels strongly about the laws which, in his view “radically constrained innovation and limited the expansion of our starup ecosystem relative to NYC or California.”

Silver lining is that the most attractive job candidates refuse to sign these documents. And that, he said, will force big companies to change — or go without the best people.

Summing up,the Innovation District and Kendall Square are able to lure top startups but may become a victim of their own success as rents skyrocket. If the region really wants to rival the San Francisco-East Bay-Silicon Valley tech nexus, there needs to be expansion beyond those two hot spots. That’s why burgeoning efforts to promote Roxbury’s Dudley Square and Allston-Brighton and Watertown west of the city as tech venues are key.

But the bigger point here is that the hub doesn’t really have to be another Silicon Valley to succeed, it just needs to get more hospitable to tech startups.

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Shawn Harris

To be seen if the recent IPOs creates a less risk adverse, accepting, angel community, or just more discreet wealthy people in Boston.

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