Earlier this month, my colleague Sarah King and I attended BostInno’s 3rd Annual State of Innovation 2015 event. We heard some great panels where Boston’s civic and business leaders discussed what’s working and what’s next for Boston’s innovation economy. And, one topic that seemed to come up often was the comparison for startups, funding and VCs between the East and West coasts.
While it was noted that the West cost doesn’t dedicate nearly as much time discussing the East coast as we do the West, as we fight for ‘Silicon Valley of the East’ status, the theme drew a lot of engaged conversation.
In his keynote, Jason Robins, co-founder and CEO of DraftKings, noted there was a lot of pressure for him to move his company to the West coast when he was first starting up. But, three things reinforced his confidence in keeping his Boston-based headquarters: (1) the East coast is not known for consumer tech, so Jason felt there’d be an advantage being a big fish in a small pond, (2) the West coast felt more like a mercenary culture where everyone was out for personal gain and making money, even at the expense of fostering a good culture, and (3) the East coast felt much more devoted to visonary ideas, especially when it came to Draft Kings’ core area of sports.
Much of this was echoed in the Angels Panel, featuring Walt Doyle, venture partner at Highland Capital Partners; Jonah Lopin, co-founder and CEO of Crayon; Jennifer Lum, co-founder of Adelphic Mobile; Vinayak Ranade, founder of Drafted; and moderated by Jon Karlen, founder of FKA (formerly known as Atlas Venture).
In particular, Jonah mentioned that there seems to be a mismatch in raw enthusiasm for products between the East and West coasts in that the West is more inclined to sign up and try them out, but tune out on the business model, whereas the East is more focused on the market opportunity and how to grow the company as a whole.
Jennifer also noted that the West coast has a higher density of people obsessed with startups and Walt agreed that the East coast is more balanced when it comes to investments in startups versus other companies
And, in terms of invesments themselves, when companies seek funding on the West coast, the consensus was that the West often thinks company funding requests are too small to fly, whereas the East coast often thinks companies are asking for too much. Therefore, it’s very challenging for startups to strike a balance across the two coasts.
But, whether you agree or disagree with these perceived differences between the West and East coasts, there’s no denying 2014 was a great year for venture capital funding in Boston. As BostInno noted, the city saw $4.2 billion raised last year, and a 61 percent increase from 2013 to 2014 for the tech sector alone! Combined with the large, Boston-based IPOs and acquisitions, it’s clear Boston is becoming an innovation economy to be reckoned with.