Is Boston the New Silicon Valley? A Discussion with Local Startups

Earlier this month, Facebook founder and CEO Mark Zuckerberg made a surprising statement at a Stanford University forum.

“If I were starting now,’’ he said, “I would do it very differently, but I knew nothing back then. Honestly, if I were starting now I would have just stayed in Boston.’’

Even more interesting was Zuckerberg’s less-than-positive comments about Silicon Valley, the long-reigning mecca for technology startup companies.

“There’s a culture out here where people don’t commit to doing things, I feel like a lot of companies built outside of Silicon Valley seem to be focused on a longer-term,” he explains. “You don’t have to move out here to do this.”

In addition to Boston, many cities have prided themselves as Silicon Valley alternatives – notably New York City, Boulder, Seattle, Dallas and Los Angeles.

So does Zuckerberg’s Beantown endorsement signal a shift in prowess from Silicon Valley to Boston? It’s an interesting question that I pitched to local Boston startups.

“Cities are like different flavors,” says Andrew Sudbury, one of the founders of Abine, a Boston startup that provides Internet privacy solutions for consumers who want to control their personal privacy.

“New York City has a lot of advertising-related startups, San Francisco has consumer facing and Boston generally has security and data companies. We’re a blend — security and consumer facing in Boston,” says Sudbury.

Ditto, agrees Marek Olszewski, “chief scientist” at venture-backed big data startup Locu that was founded out of MIT to improve local search applications with big databases.

“It really depends on who you are,” says Olszewski. “New York City has a bit of a bigger community that can benefit from the variety of services and activities in the city, say, for instance with Fashion Week there’s ways local startups could get involved and benefit.”

Indeed, New York City is often toted as the East Coast rival to Silicon Valley, especially with Mayor Bloomberg’s unabashed initiative to overtake the Valley as the new tech startup capital of the world.

Notably, New York City has made a name for itself in the realm of social media with companies like foursquare, Tumblr and Etsy all founded in the Big Apple.

So what does Boston have to offer from its east coast counterparts?

“With TripAdvisor and Kayak in the area, Boston is great for transportation startups,” says Joost Ouwerkerk, co-founder and product chief at Hopper, a venturebacked startup originally from Montreal. Ouwerkerk’s company is also planning to open its office space for events and other engineers who want to experiment with some of Hopper’s technology.

“In particular the Boston community is close-knit, it’s easy to find and collaborate with others,” says Ouwerkerk.

This also makes Boston ideal for another factor: finding employees.

“Obviously the great schools around here, MIT and Harvard University among others, makes Boston a great place for gathering talent,” says Locu’s Olszewski.

Ouwerkerk agrees. “Competition for talent acquisition in the Valley is cut-throat,” he says. “There, we would be competing over engineers with Google and Facebook, and we just can’t compete with them.”

Zuckerberg seems to endorse this as well after taking a recruiting trip to MIT and Harvard University shortly after his visit to Stanford.

In addition to some of the nation’s coveted sources of new talent, Boston also boasts a number of factors that contribute to its startup-friendly environment.

This includes Boston’s slew of startup incubators, including TechStars Boston, MassChallenge, Y Combinator, Cambridge Co-working Center, Gen Y Capital Partners and the DartBoston Family Dinner.

Designed to accelerate the growth of local startups, incubators provide resources such as office space, mentorship and even getting rid of your student loan debt in the case of the recently announced Gen Y Capital Partners.

However, despite Boston’s many draws, a number of tech startups founded and initially funded in Boston have moved on to create their hubs elsewhere. The list includes companies like DropBox, GreenGoose and WePay.

Despite Boston’s extensive angel investing and venture capitalist networks, one of the primary draws elsewhere is money. During the second quarter of 2011 alone, Bay Area venture funding exceeded $3 billion.

While the allure of west coast investor networks is tempting, HubSpot’s Manager of People Operations Brian Rogers raises an important point. The Cambridge-based inbound marketing software company recently raised $32 million in a funding round with west coast investors including Google Ventures, Sequoia Partners, and

“It’s not impossible to get west coast money out here on the east coast,” says Rogers.

Do you work for a Boston-based tech startup? How does Boston compare? If not, how does your city compare as a Silicon Valley alternative?

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Ashlynn Arias

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