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Why I'm Bullish on a Startup Renaissance in Massachusetts

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I’m convinced we are poised for a major startup renaissance with its epicenter in Massachusetts & New England.

Some people think I’m crazy. I disagree. Here’s why.

We find ourselves in the latter half of a major economic recession in which multiple industries are experiencing major crises: media, healthcare delivery, real estate, automobile manufacturing, energy generation, desktop software …  the list goes on.

Why so many crises, and how does this relates to renaissance?  

There’s no single cause, but many of these crises are catalyzed by rapid technology advances, which are challenging the business models on which these industries are based. Why pay for newspaper delivery to get day old news on my doorstep when I can get news instantly on my laptop or cell phone? Why pay for desktop software when universal connectivity enables me to store my data and preferences in the cloud for seamless access on multiple devices wherever I want? This process is not new. Innovative technology always challenges business models predicated on old technology – but the scale and scope of theses challenges are greater than we have seen in decades.

So where’s the renaissance?  

So far, we have mostly seen the new wave of technology weakening and destroying old business models, but over the next several years we will witness an acceleration of startups whose business models are explicitly based on the availability of new technology. The horse and buggy industry has shown weakness – here comes the Ford assembly line.

We are already seeing the emergence of game-changing technology. Like online media distribution, renewable clean tech, hybrid non-profit business models serving key social needs. This next wave will produce dozens of high-growth, game changing startups across multiple industries. That’s the renaissance. And it is upon us.

So why Massachusetts?

These game-changing innovations will occur in a broad set of industries and will require lots of talented, hard-working young people. Massachusetts has one of the most diverse startup environments on the planet. We are strong in virtually all sectors of every major industry: not just healthcare generally, but also specifically in telemedicine and biotechnology; not just energy generally, but also specifically in thin film solar technology and hyper-efficient battery technology; not just hardware, but robotics and other cutting-edge technology areas … you get the idea. We’re really good at technology.

We also have the most and best universities of pretty much any region on the planet. Yes, historically we have lost many of these young people to California and elsewhere upon graduation, but right now Massachusetts is better positioned economically to capture this wave of growth and I am convinced we can attract and retain the brilliant minds that will usher in this renaissance.

There has been a lot of reassuring activity organized for and by young innovators in Massachusetts lately. WebInno, MassInno, DartBoston, Greenhorn Connect, Techstars, the proliferation of co-working centers, the ever-expanding Cambridge Innovation Center, Boston World Partnerships, the Microsoft NERD Center … plus dozens of great entrepreneurial university programs.

So that’s how I see it. Crisis is giving way to opportunity. That opportunity will require smart, well-educated, passionate young people. We have a lot of them right here, and they appear to be readying themselves rapidly. I have never been more bullish on Massachusetts. We are on the verge of a period of great innovation and growth, the likes of which we haven’t seen perhaps since the industrial revolution.

What do you think? Do you agree or am I just crazy?

 

By: John Harthorne

John Harthorne is the CEO and Founder of MassChallenge. Click here for John's bio.

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awesome cultural shift

Submitted by Anonymous on Thu, 02/25/2010 - 11:33.

John:

great post and thanks for the shout-out for Boston World Partnerships. We are constantly inspired by all the folks you mention - and many more. It really feels like a cultural phenomenon that is happening here as helpfulness and a kinship around ideas and entrepreneurship have increasingly become the norm across this community. The BWP Connectors are the example I'm most familiar with. Amazing group of professionals across a whole range of sectors and cultural backgrounds, all joined together in this spirit of sharing information about economic assets and opportunities in the region, AND (and this is the really cool part) using their personal networks to help peers access those resources.

At our first anniversary event (March 16), we're going to publish our white paper on year one performance data and case studies. The benefits of the Connectors' efforts include more than 200 jobs retained/created with a combined salary of more than $10M. That's a powerful outcome - and it's entirely built on a spirit of engagement and helpfulness that these Connectors embody. We've even got case studies where the Connectors are doing this across oceans - essentially international biz dev for Greater Boston - helping foreign entrepreneurs plug in over here so that their ventures can advance and the local economy can benefit. We're psyched to watch how Mass Challenge does the same thing once the competition ramps up - and of course to help in any way we can!

Dave McLaughlin
http://www.twitter.com/connectorsRus

What about funding?

Submitted by Anonymous on Thu, 02/25/2010 - 02:18.

The general sentiment I've encountered lately is that while we may have technical talent, the money to engage that talent is drifting the West coast. Do you agree with this sentiment or have you a different perspective on this component?

Jesse

Like taking out your own appendix ...

Submitted by john on Wed, 03/03/2010 - 15:59.

Raising money sucks anywhere I think but, yes, that is commonly cited as the key missing ingredient here on the east coast. There is definitely enough capital here (Massachusetts has more investors per capita than California), but it isn't entirely clear whether that capital is accessible to first-time entrepreneurs.

At MassChallenge, we believe we can unlever capital for new entrepreneurs by identifying and strengthening high-potential startups, and by showcasing them to investors throughout that process. We are best connected locally and would expect the greatest involvement from local investors. Fortunately, though, capital is mobile so investors don't need to be from here to invest in startups passing through MassChallenge -- they just need to feel confident in the business and the team behind it.

At the end of our first year, that will be one of our key questions ... did we help catalyze investments? Obviously, I don't know the answer yet, but I can assure you that I wouldn't be investing 100 hour weeks into a startup non-profit if I didn't think we had a good chance of creating a major impact in the region .... I could genuinely be crazy though -- kind of remains to be seen.

Thanks for the question -- I would welcome ideas from you and others on how we can maximize the availability of capital locally for relatively new entrepreneurs.

Thanks for doing this, I hope

Submitted by Anonymous on Tue, 02/23/2010 - 17:05.

Thanks for doing this, I hope the competition will provide the little extra boost to pull some would-be entrepreneurs out of the woodwork.

I went to the shindig today. Does anyone happen to have the text of Gov. Deval Patrick's speech? I liked the line with the word "yeasty" in it. I would love to get a quote of that line.

Thanks,
- Alex Aminoff
BaseSpace.net