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Friday, May 8, 2009
Inside California & New England Rivalry
Massachusetts innovation vs. Silicon Valley tech culture
By Dann Anthony Maurno, Special to Mass High Tech
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With its famous brain trust, Massachusetts feels it should be the next Silicon Valley for startup tech companies. Brains, though, are only part of the equation, and perhaps not even the most important part.
“After 40 years worth of tech startups in the Bay Area, there is a real ecosystem around taking companies from startup through Fortune 50 status,” says Jeff Selman of Nixon Peabody LLP. The Global 100 law firm has 17 offices worldwide, including one in Boston and another in Silicon Valley, where Selman is a partner.
Silicon Valley is more alike in atmosphere to Hollywood than Boston; it is a hyper-focused “industry town” of power players. “If you walk down the street or go to your kid’s soccer game, you’ll run into people who are in or about the tech economy,” says Selman. “There is a mix of people living, breathing, and thinking the same way, for better or worse.”
Besides the size of the industry, the valley is different in the way it connects, observes Selman. “You could easily do breakfast, lunch and dinner seven days a week at networking events. There’s a huge network to play off.”
True, says tech marketer Tom Lewis of new media marketing consultancy Needlemine, who began his career in Silicon Valley and moved to Pittsfield in western Massachusetts. Lewis marketed for several startups during the dot-com bubble and for Massachusetts startup Atalasoft Inc. in Easthampton. “Throughout Silicon Valley, everyone knows everyone,” said Lewis. “People are competitive, and very interested in being the best and being the first.”
A third difference is, surprisingly, the college system. The Valley is built around Stanford University. From its ranks in the 1930s emerged the founders of Varian Associates — which eventually broke into several companies under the Varian name — and Hewlett-Packard Co. “Stanford is one of the rare research universities that has figured out how to be a pre-eminent research university and inculcate in its faculty and students that you can take things and develop them into thriving businesses,” said Selman.
MIT and Harvard University have done the same, but “so do the community colleges and day schools in the Bay Area,” said Lewis. “There’s the constant exposure, putting students in startups who realize, ‘yes, I can do this myself.’”
Until recently a presence on both coasts, Paul Graham a partner with Y Combinator in Mountain View, Calif., noted, “What makes startups succeed is not some magical insight that others don’t have. It’s because they work super hard and they’re relentless.” Y Combinator, which provides seed capital for startups, used to split its time between Cambridge and The Valley, but in January, declared it would remain in The Valley.
After Silicon Valley and Massachusetts, other tech hubs include Seattle, Austin, Boulder and New York. But none of the contenders have risen through the ranks to match the startup activity of those two. Even California itself cannot replicate the Silicon Valley model, although it continues to try. In the last year Gov. Arnold Schwarzenegger has met with economic development consultants, aiming to recreate the Silicon Valley formula in San Diego and Orange County.
There’s no place like Boston, either.
Silicon Valley’s strength is the art of the deal; Boston’s strength is the art of innovation, according to observers.
“I’m looking out my window into Cambridge, where Kendall Square is a true global cluster of impressive biotechs, like Genzyme, Novartis and Millennium, says Jason Kravitz, a practice group leader in Nixon Peabody’s Boston office. “We haven’t duplicated the unparalleled success of Silicon Valley, but MIT is an enormous drawing card for companies looking to align themselves with thought leaders. There is a constant stream of talented, energetic young people entering the workforce in Boston.”
It also offers a deep chest of university endowments, and Nixon Peabody’s Selman observes that “People in Silicon Valley have to cross the country to get that money.” The universities, too, have created a first-rate network of health care institutions, which has helped to anchor biotech to the region.
Finally, Boston offers the advantage of proximity to the capital markets of New York and London; this enables Boston to support New York, where advertising and publishers require digital media technology. So believes Kiki Mills, executive director of the Massachusetts Innovation & Technology Exchange, or MITX.
Regarding the Valley, Mills advises that Boston must neither compare nor compete with Silicon Valley. “It’s less about competition than it is about playing our strengths. I feel strongly about that — focus on what we do great, and make our own path.”
If Stanford laid the groundwork for Silicon Valley more than 80 years ago, what groundwork has Boston set down?
“I think in 10 years we’re going to be a very thriving center for entrepreneurism, marketing and interactive media,” said Mills. She points to a strong movement among organizations like MITX and the Massachusetts High Tech Council to keep the intellectual capital here. “We’re all very passionate about this region, and truly believe it’s a center of innovation, and can be a center of marketing and media, if we start the work to do that. I believe we can only grow.”
Dann Anthony Maurno is a freelance writer in Salem.
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