A Scorecard For Boston’s Innovation Economy

Over the past eighteen months I’ve gotten to know Bill Warner through my work with the Boston program of TechStars.  Bill was a well known entrepreneur when I lived in Boston between 1983 and 1995 – he’d founded Avid which is one of the famous MIT software companies to come out of the 1980’s and the subsequently founded Wildfire Communications with Rich Miner, now of Google Ventures and another great entrepreneur in Boston that I’ve gotten to know over the past year.

When I met Bill I was captivated by his deep desire to see the Boston entrepreneurial scene – especially around software and Internet – get re-energized.  He was clear that the history of Boston was rich with entrepreneurial success and was sick of all of the anti-Boston bias coming from folks, especially on the west coast.  I’ve watched Bill step up and take a huge leadership role in this effort and in one short year see it paying dividends already.

Yesterday, Bill wrote two great blog posts that should be required reading for anyone in the tech economy in Massachusetts and anyone in a city that aspires to have a long term growing innovation economy. 

I encourage you to go read them and then have dessert with Scott Kirsner’s article You can’t tell how the innovation economy is doing without a scorecard.  These guys just get it and are doing great things for the Boston innovation economy.

And – while you are thinking about entrepreneurial communities, take a look at the new article in the Fast Company series titled Why You Should Start a Company in… SeattleAndy Sack, an long time entrepreneur, partner in Founders Co-op as well as the Managing Director of the TechStars Seattle program, has a great interview up.

But wait, even though I’m not announcing a new tablet computer, there’s more – this time in Boulder.  Andrew Hyde announced Project Boulder Connect, a new initiative he’s putting together for a variety of user groups in Boulder.

It’s time to hop in the shower and then head over to do Community Hours at the Bunker.

  • It's great to have a guy like Bill investing his time here in Boston. My few interactions with him have had me walk away feeling very positive about…well…everything.

  • I have lived in Boston since attending Harvard and I think I am reasonably plugged into the entrepreneurial/startup scene. There are a billion proposals to make Boston/Route 128/Route 495 more economically competitive with Silicon Valley, and almost all of them have merit.

    But the fact of the matter is that the single most important factor is mindset: how people in a given community think and act. Mindset is why no country will ever come close to the entrepreneurial success of the United States, no matter how many schools they start and no matter how many enlightened government policies are enacted. (I am talking about a time frame of the next 50 years; I cannot predict the next 500 years). And mindset is why Boston will always (at least during my lifetime) be second place to Silicon Valley. You simply cannot change the parochialism, narrow mindedness and conservatism of so many Bostonians. And this is why I am leaving Boston this year, I am simply tired of it.

    James Mitchell

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  • Skip

    I've been on the Exec Mngt team of start ups in both the Boston area and in Silicon Valley. From my experience, the quality of the teams is substaintially similar. The mentality of investors anything but. I agree with James, there is an intrinsic adversity to risk with New England investors, or at least a lower appetite for it comared with SV. Investors here will tend to grind you down, while holding back capital, until – well, you don't need it anymore. Conversely startups here in my beloved Boston tend to be more vetted than SV. But the fun factor goes to Silicon Valley. I think waking up to a beautiful sunny day, everday, has something to do with the prevailing optimiism out there.

  • Mindset Matters… Yes!

    Skip is spot on – it's really more about mindset.. the tangible infrastructure is rarely the true limiting factor for entrepreneurial development; it's the intangibles, the cognitive infrastructure. That mindset needs to reasonable pervade the whole ecosystem, not just current & prospective entrepreneurs but the financing community, even politicians and the media. You see that in Boulder & SV, not so much where I live (Boise).

    However, that is hard as hell to actually measure… but it's worth the effort. (Measuring more tangible things is easier. ) I'm urging that we try to measure mindset here in Idaho. The Babson-based Global Entrepreneurship Monitor attempts this cross-nationally (http://www.gemconsortium.org) and it might be possible to persuade them to let us fund a state-level version…)

    Metrics are critical. What you measure really matters- those who control the metrics control the debate. (And when you realize that many states/cities pick metrics out of convenience… yikes!)

    Metrics 101 (if I may rant a bit – Brad, you may remember a past blog exchange of concern over data torturing – metrics like these are often the best place to find deeply tortured data, LOL)
    Question 1: When you pick metrics, are you trying to look good, to look bad (to get $) or actually trying understand the dynamics? The 1st 2 options are easy, LOL.
    Question 2: Do you want to asses the dynamics or willing to settle for a snapshot? (Trends are messier but carry more information, even if they also raise more questions.)
    Question 3: Do you realize that many easily available data are really not that great quality – or may be years behind reality? (The real question- are you willing to really take a tough look at where the data came from – and from whom? You don't have to have conscious bias to have blinders on.. And accurate, precise data is often not timely nor cheap.)

    Most of the data you see in states/cities' scorecards or those 'places rated' has NEVER been tested for validity, reliability, etc. let alone predictive power.

    Question 4: Do you want to look at where you've been (the usual) or do you want to identify scorecard items that predict where we're going? Not easy, but if you can find those leading indicators, you have a powerful policy tool!

    Question 5: Is there a strategic reason for any metric? Looping back to #1, our metrics need to be linked to the outcomes we desire AND are somewhat within our control. Obviously, it would be nice to have a well-defined strategy and then we can find the precise metrics to assess our progress. Absent that, it becomes all too easy to pick convenient metrics that prove our point. Getting all the 'players' in your ecosystem to agree on the right metrics is ideal, but that requires convergence on the strategic outcomes desired.

    Related to this are issues of context — one stat may be VERY misleading. Example: Idaho scores as #1 in startups per capita (yes!) but #37 in jobs created by our startups (ugh!) From the perspective of trying to grow a more entrepreneurial idaho (or Boston or…) the startups measure is highly misleading… our dearth of fast-growing firms is an issue. Idaho actually does pretty well at creating jobs through the growth of existing firms (cue Zoltan Acs' work here!) but could do much better. We can still applaud the #1 in startups p.c. but we need to focus policy efforts toward growth.

    And to bring this full circle – it's that hard-to-measure entrepreneurial mindset that is the limiting factor. The GEM studies suggest that the % of entrepreneurs who have significant growth aspirations is instructive – to build a scorecard around that might really pay off (especially if we also have metrics that assess what will facilitate intent into action…)

    n.b. Sorry for the length but this is a current issue of interest in Idaho. Thank you for the opportunity to crystallize my thoughts.

  • Gregg Lichtenstein

    Great discussion. One important dimension of the sports metaphor is missing; the key factor that drives performance – skills. While mindset is important, mindset that is not translated into skill and performance is worthless. Using the farm system as a guide in my coaching work, I segment entrepreneurs into Rookies, A’s, AA’s, AAA’s and Major Leaguers. Not only must one work with entrepreneurs at each skill level differently, I’ve found a 3 to 10X difference in performance between each level. Higher financial performance (home runs, grand slams, etc.) is achieved by helping them develop their skills to the next level. This requires systemically investing in entrepreneurs as human capital, just as we invest in their businesses. We need to do this not just with individual ventures, but on a regional basis to order to create an effective farm system that produces these outcomes.

    We can both assess and improve skills and skill levels, making it a powerful point of leverage for transforming our regional economies.

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