They say success breeds success.
I agree, and Boston’s tech scene captures this notion perfectly. Locally-born businesses like HubSpot, Demandware, Trip Advisor, and Wayfair have energized the community and paved the way for others.
My position provides an ongoing interesting vantage point into Boston’s tech ecosystem and has also helped me better understand startup founders.
One commonality: they’re all busy running their business. There’s an overload of content out there —, especially with new year prognostications. With that in mind, here’s a version of Boston tech 2020 for the existing community or founders considering Boston as a place to set up shop. A confluence of several key factors has and continues to fuel the ecosystem:
Access to capital
Over the past decade, a lot of money has been allocated to private equity, and it’s been a great (not to say necessarily easy) time for startups in Boston to get access to venture or growth capital. Over 58 Boston startups raised more than $624 million just in October.
Access to talent
The labor market is tight right now and Boston startups need to compete for talent. The big advantage is access to graduates coming out of MIT, Harvard and other top schools, but importantly, also to seasoned executives with experience scaling tech companies. When we invest in a company, building out the management team is a top priority, and Boston has a deep talent pool to draw from.
Access to a strong support system
Boston founders have access to an extensive system of networking groups, events and the support of a robust online community. This isn’t unique to Boston, but every tech hub in the U.S. generally attracts founders cut from a similar cloth. Anecdotally, I see an inherent pragmatism and loyalty with Boston area startup founders and employees.
While the Boston tech scene is strong, but it’s not a good idea to only look at things through rose-colored glasses. Here are some things I see shifting in 2020 and how founders can embrace this change:
We’re in year 10 of a bull market run and there’s an entire generation of entrepreneurs and investors that haven’t lived in a down market. If things shift in 2020, access to capital may tighten. Those companies that have focused on capital efficiency, sound fundamentals, and delivering value to customers will have the best chances for continued access to venture or growth capital even if the market turns. These are the types of companies we look to invest in based on a deliberate approach to growth.
A shift in local sector growth
Boston’s historically strong sectors for tech startups have been biotech and pharmaceuticals. This isn’t necessarily changing, but we’re also seeing a lot of innovation around B2B data analytics. There’s a lot of space and opportunity for companies like Tracelink that bring data analytics to the already strong healthcare sector and GRAX (both are Volition Capital portfolio companies) focused on marrying data analytics and traditional workflow software. Established software founders should look to all of the data they’ve accumulated over the years and explore ways to repackage it to provide customers with incremental value.
It’s a great time for Boston
The city has a “best of both worlds” entrepreneurial innovation of Silicon Valley and big-city amenities of NYC. For local businesses and founders or those looking to relocate a tech startup in Boston, The Massachusetts Technology Collaborative is an excellent resource. I look forward to watching Boston’s tech ecosystem evolve and discovering new and innovative companies over the next 10 years.