Update: I emphasize students in this post because there is a lot of talent in Boston’s horde of schools; students have a special significance here. Graduation is a defining transition for many. But this post is really about the “zero stage” community and new entrepreneurs in the area (which were likely once students). Recent graduates that are in the entrepreneurial arena likely got entrepreneurship on their radar somehow. See Jason Evanish’s comments below.
- Image via Wikipedia
Back in early March, I wrote an op-ed piece for Xconomy called “An Entrepreneur’s First Co-Founder: The Community.” The article makes two key points: 1) startups are a product of the entrepreneurial ecosystem that they emerge from and 2) to do great work, you need to have a strong connection to your working community (frequent communication with your community, as well as a feeling of connectedness).
Right now, there is a lot of talk about improving the Boston entrepreneurial ecosystem. Here’s the main problem: brain drain. (which adds to the problem of drain in the “zero stage” community in general). The flows of talented college students are fueling Wall Street, consulting firms, large companies, and to a much smaller extent, Silicon Valley. Boston needs these flows to fuel entrepreneurship. The zero stage community is also small and consequently often isolated.
Changing this changes everything.
Why does this problem exist?
It’s largely cultural. The major chunk of available and superb talent gets mopped up by finance, consulting, etc. Students mainly know people working (and making good money) in these types of avenues–not in startups. If you don’t know anyone that’s tried to start a company in Boston or working in a startup, you’re very unlikely to do it. This situation also makes students much more risk averse: “I can make good money in a comfortable job.” Younger people are generally the most willing and able to run through walls for a big, crazy idea. That’s exactly what a startup ecosystem needs.
Some also blame the investor culture–not a lot of angel investors, investors are more hesitant; on the Left Coast, money is apparently free and flows like water. Investor culture may be problematic, but it is also an easy gripe that I think is unwarranted. If you build real value, you’ll get what you need. Furthermore, web, mobile, and even some hardware startups don’t require much money beyond living expenses. And if you’re resourceful enough, you can live cheaply anywhere.
So here’s the situation for a student soon to graduate: “my friends are all getting jobs that pay, there’s a lot I don’t know about building a business, I don’t know enough people to find the right co-founders, and I don’t know how I’m going to eat if I tried to start my own company here.” These pains need to be alleviated in order for a young entrepreneur to get started.
Where does a young/new entrepreneur get started?
A very, very small minority is gritty enough to just find a cheap living situation and start figuring things out. In Boston’s culture, doing so seems absolutely ludicrous. Most people, and especially students, need some level of support and connection to other people doing the same thing. And it takes a long time to figure out the entrepreneurial landscape and find your place in the community.
Incubator programs are one great channel, but TechStars Boston isn’t really filling the void. They don’t fund a whole lot of companies. They also have a major incentive to fund more developed companies and older entrepreneurs. They want to make the best bets possible. And since TechStars has a lot of respect, later stage companies and more experienced entrepreneurs become interested in being involved in the program. It’s an indicator. Techstars is great, and they’re doing exactly what they should be doing. But, it’s a different part of the puzzle.
Another problem rests within the nature of the “zero stage” startup community: if you nave no income, and very little resources, it seems unwise to pay for any sort of workspace. Consequently, the zero stage community (the community students would also be a part of) is splintered apart and sprinkled across Boston, taking refuge in their apartments. This is a major drain for the individuals–you need the energy and attention of the community in the same situation as you are. Shared experience is powerful. Students and zero stage entrepreneurs could vastly benefit from having a home, a closer-knit community that’s there day-in and day-out. A close-knit community is a source of ideas, energy, support, and knowledge.
Having events to go to is important, but you’re not putting your hard hat on every day with these people.
A Solution (Another Piece to the Puzzle)
GreenHornConnect and DartBoston (and others) are helping to alleviate many of these issues by really fueling the community. And they’re doing great work.
But this is only part of the puzzle, and there are still pain points left. In fact, students and zero stage startups still have a pounding migraine–a lot of which will be around no matter what, that’s the nature of the game–, but let’s take it down to a manageable level.
Here’s what I propose (/what I’m working on):
- Put together rent-free workspace. The minimal feature set of the physical space: space, desks, quiet space to take a phone call, great internet, roof, refrigerator, whiteboards, security (can leave stuff there), and great accessibility. Anything beyond these things would be nice, but unnecessary. (You also don’t want it to be too nice.)
- Recruit in great people–phenomenal people. The prerequisite: the strong desire and ability to do great work. (There’s of course a lot that goes into this: grit, tenacity, etc.) Don’t necessarily need an idea. Just desire and ability (and interpersonal skills of course.) There’s a lot of entrepreneurial potential in Boston swimming in darkness right now. Find them and give them a home. Entrepreneurship is a disease, let it spread.
- Promote two key values: community and accountability. Members must (and will) fall in love with the community. They must also be accountable to the community. This place must produce to survive. Members are a part of a team that’s counting on them.
- Setup services that can remove unnecessary drag. It’s not supposed to be easy, and it won’t be. But, there are simple things that a more formalized community is capable of doing: maintaining key external connections, utilizing communal knowledge, providing mentorship, helping the entrepreneurs pick up side jobs to help cover living expenses, and marketing the community and it’s startups (which also markets Boston).
- Make it a for-profit venture. Ultimately, this is the only source of sustainability and making sure it produces as much value as possible.
- Make it novel. Tell a great story. Sure it’ll have characteristics of other incubator-type spaces and funding sources. The CCC, Beta House, WorkBar, and others are working in the space and are very important. But there’s plenty of room for something special in Boston. Boston should and is implementing good ideas and best practices found elsewhere. But, ultimately, Boston is in the market for talented companies/people. And in a competitive market, you need to differentiate yourself, offer something special and unique. You can’t rely on loyalty to the region. Entrepreneurs should do what’s best for them.
You put this together, and you’ve got magic on your hands. Absolute magic. You’ve got the ability to produce a lot of value. It’s also something special.
This is key to making it sustainable. You likely have many questions about financing this venture and making it sustainable. We’ll leave those issues on the side for now (but discuss if you wish). It can be done. One step at a time, and the first step is properly formulating the solution.
What do you think? Is this a problem that needs to be focused on? Is this a good solution? Are the assumptions off-base? Can you help? Put down your thoughts, and pass this along to other members of the community. Let’s get the discussion started and get moving.
Leave a comment. Tweet about it. Or shoot me an email at KVogelsang11 at gmail.com If you’re interested in these issues I’d love to meet you and talk more about it.
-Kevin
3.30.2010
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