Problems With the Boston Startup Scene

Boston has a great potential for the tech industry. Some of the people like Bill Gates and Mark Zuckerberg, who brought fascinating disruptive technologies to the world, have spent some time here. Greater Boston area has fabulous universities that produce amazing talents in a wide variety of fields. However, even though Boston seems to be a fantastic place for a development of disruptive technologies, it is still falling behind other hubs such as Silicon Valley, New York or even Seattle. People who studied here and came up with ideas are usually choosing to relocate in search for better opportunities. Boston is lacking something that is necessary for a striving start up location.

Now, as General Electric has moved into Boston’s Seaport District, expectations about technology industry’s growth are rising. There are not many big players located here that would attract smaller ones, and this is an issue many hope GE will be able to help to solve. 

Besides big players located here, there are other obstacles that might be preventing Greater Boston area from developing into a great startup hub. Namely, those are the issues of Early-stage funding, attitude, the lack of experience, and the lack of publicity. 

Early-Stage Funding

Probably the weakest point in the Boston’s startup scene is early-stage funding. The city did not participate much in the recent technology boom of minicomputers, cloud technology and so on. Well, it did participate by educating people who run those companies (take a look at DropBox as an example), but it failed at nesting those companies and making them stay. 

When a startup is in its early stage of development, founders often move to a location where funding is. The lack of an early-stage funding spooks companies with great potential away from Boston as they simply cannot find enough money. 

This is the main problem to fix. If more angel investors, incubators or even VCs would be interested in contributing to tech startups on early stages, the climate would improve and be suitable for retaining brains, and hopefully attracting new ones. The progress is visible already, new venture capital firms like NextView Ventures, Assemble.VC and some others are emerging, which gives us hope for the progress. 

Attitude

It seems strange that a city like Boston with its great universities, laboratories and skilled labor is not on the top of innovation. Well, appears it used to be a few decades ago. The city’s innovation culture is in place, but what differentiates the city with Silicon Valley or New York is that there people are not afraid to try new things. Boston is a conservative city in many aspects, and technology, unfortunately, is one of them. If entrepreneurs and (probably more importantly) investors would be riskier, the innovation pace could be faster. 

Lack of Experience

In order to develop a good startup scene, skilled people who would be able to advise startups should be in place. And as Boston did not have an experience with recent tech waves, it has a lot to gain. The most natural way to do it is to let new startups have successful exits. People from these companies along with VCs will eventually gain the necessary experience by the time their startups' exit. The knowledge will contribute to the further development. That’s the way it is done in Silicon Valley and in other new developing hubs like Austin. After working for some startups, experienced people will move to the next ones, and it will keep the cycle running. Alternatively, for now, Boston can use some help from people from Silicon Valley and other hubs who could be either relocating completely or paying frequent visits to Boston in order to pass knowledge to the new generation about the tech industry. 

Lack of Publicity

If you look deeper into Greater Boston’s startup scene, you can see some interesting projects getting decent results. The problem for the most of them is that nobody knows about it. Probably it is also a part of a conservative culture, but Boston should start speaking out loud for itself, so that the rest of the country could hear. We need to let people know, that there are things besides fantasy sports happening in this city.