Monday, September 10, 2007

Let's Fix What's Not Working

Usually, when I do fireside chat conversations at events, I'm the interviewer. Yesterday, at the Vilna Shul on Beacon Hill, I was the interviewee and Doug Levin, CEO of Black Duck Software, was flinging the questions.

One thing he focused on, given the subject matter of yesterday morning's column ("Why Facebook Went West") was the differences between the tech economies here and in Silicon Valley.

I know that there's a feeling that we should stop obsessing about this... every time I make an East-West comparison in print or on this blog, I get e-mails and comments. To which I say, if you're not #1, and you've got a competitive spirit, it's natural to think about what you can be doing better.

Two people who were in the audience yesterday, David Aronoff of IDG Ventures and Chris Herot of Zingdom, posted some thoughts about the issue. (Dan Bricklin also has a post and a podcast recording of the event.)

As I see it, there are five things that aren't working:

    1. Our big companies locally don't seem to spawn enough start-ups.
    2. Boston doesn't yet have a truly vibrant blogosphere that can help bring attention to new products/companies
    3. Investors here can have blinders on when it comes to consumer-focused technologies, or anything that seems wacky at first (let's start a Web site that provides free hosting for videos, and has no business model, and let's call it YouTube)
    4. Graduating students (or drop-outs like Facebook founder Mark Zuckerberg) sometimes don't feel like there's enough of a vibrant community here that will support their ideas/start-ups
    5. We don't have any big consumer device or consumer Internet companies locally.

Problem #1 will get solved, in part, if we get rid of non-compete agreements in Massachusetts. Let's make it as easy as possible for a smart person with a great idea to leave EMC, Analog Devices, Akamai, or Nuance and start a new company.

Problem #2 is getting solved -- slowly. But I'd challenge more entrepreneurs, VCs, and big company executives to start blogging (even if it's just once a week) about what you're interested in, cool companies you've seen, or new products you're playing with. In the Valley, one thing that can give new companies momentum is bloggers talking about, experimenting with, and evaluating their new sites or products. I don't think Flickr or Twitter would've been successful were it not for blogger support.

Problem #3 is hard to solve. We do have some VC firms and angel investors making risky bets. If they blogged about their riskiest deals, their most out-there bets, I think that'd be a positive thing (and it'd help with Problem #2). So I'm giving VCs permission to crow about the edgiest stuff they're doing. This does not mean explaining to us why your new enterprise software company is really a Web 2.0 company in disguise.

Problem #4 is getting solved; Chris, in his post, lists a bunch of new events that have been started in the past year or two, most of which are extremely open to anyone who wants to come. But there's more we could do. So two challenges to you:

    1. If your company benefits from having a vibrant innovation economy in our region, you ought to host (or co-host/sponsor/support) at least one event a year that is open to anybody, and will help foster connections and conversations about innovation. It might be a gathering about how the Internet is changing PR (which I suggested last week to my friends at Schwartz PR) or an unconference about video or a breakfast panel about reputation systems in e-commerce. But it needs to be open and free. Think about the BU student or recent MIT grad who is starting a company that you'd like to do business with at some point, and make it possible for them to attend. Publicize the event on sites like Mark's Guide or Upcoming.

    2. Established entrepreneurs, investors, attorneys, PR folks need to make themselves accessible to younger, less-established entrepreneurs. This might mean giving talks at local universities...judging business plan competitions...attending conferences on campus. This next generation of entrepreneurs needs your help, and the benefit of your connections.

Problem #5 will get solved if we work on Problems #1-#4.

So let's start working, shall we?

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Anonymous Andrew said...

This post is spot on!

September 10, 2007 11:38 PM  
Anonymous Melisa LaBancz-Bleasdale said...

I was interested in your suggestions for PR folks. One of the biggest mistake I see, and I see this ALL the time with fresh, young, firms, is that they are convinced (and sometimes pressured by VCs) to hire big PR companies with inflated PR mindsets and end up breaking the bank in their attempt to get noticed. Having assisted several start-ups grow to Fortune 50 global names, I can personaly attest to the low ROI and high stress a big firm earns a small company.

I personally feel very comfortable guiding young companies through the basic PR "must haves" and have donated many hours of time for businesses I believe in. A big firm would never do this. In fact, big firms (such as Schwartz, Ogilvy, Waggener Edstrom, etc.) charge in increments of time. I have been both in-agency and in-house and prefer in-house any day of the week. I never felt comfortable billing our newly minted start-ups in 15 minute increments. I often went above and beyond to get them connected in the media and analyst communities. This wasn't looked upon kindly by the firm I worked for.

If, as a young and innovative firm, you want to get noticed, you need to look far beyond the big box PR firms for someone imaginative, creative, and dynamic and give them the flexibility to make you into what you want to be. The formula that works best (and this will be very unpopular to the big PR firms) is to fire the big expensive firm, hire someone internally, build the critical relationships with magazines and analysts (who'd rather hear from someone internal than a PR firm if you ask them directly) and then, if necessary, sign month to month deals with the PR firms that are directly tied to their results and performance.

This strategy works amazingly well for the firm that fired their big firm (and hired me) as evidenced by the tremendous jump in coverage from Q1 to now.

It may seem like a tough-love approach but a VC funded firm has a wealth of press just waiting to happen and is usually a fantastically easy sell to publications. It's when you're big, stale, and plodding along that you need a different sort of magic.

September 11, 2007 5:16 PM  

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