Boston Startup Scene Presentation fall 2014 final

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<p>What Makes Bostons Technology Start-Up Scene Special</p> <p>What Makes Bostons Start-Up Scene Special?Jeff BussgangGeneral Partner, Flybridge Capital PartnersSenior Lecturer, Harvard Business SchoolFall 2014#--ConfidentialNote that when I refer to Boston, Im really referring to the Boston metro area, which includes all of MA and parts of New England.1Intellectual Capital academia, innovation, diverse industries and ideasAdvisors, Angels, Accelerators- seed $Venture Capital scale $, mentorshipSuccessful Companies to partner, poach and/or sell to</p> <p>Ingredients for a Vibrant Start-Up Ecosystem</p> <p>#--ConfidentialThe following four elements are the ingredients necessary for a vibrant Start-Up ecosystemHistorical Leadership</p> <p>#--Confidential31946: HBS Professor General Georges Doriot and the founding of VC industry in Bostons ARD1957: Olsen and Anderson founded Digital Equipment (DEC) with $70k from ARD (which resulted in a 528x return) and started minicomputer boom on Route 1283MIT Factory of Innovation</p> <p>33,600 companies, 300 each year, employ 3.3 million people, generate sales of $2 trillion, 300+ patents each year</p> <p>#--ConfidentialMIT, in particular, has been a start-up company factory33,600 companies founded by MIT affiliates; 25,800 are currently activeEmploy 3.3M people and generate $2T in sales250-300 new companies started each year by students and alumniEnduring giants: Campbell Soup, Gillette, Bose, HP, Intel, TI, Genentech, Raytheon, Qualcomm, iRobot, Akamai</p> <p>MIT Technology Licensing Office (TLO) 2011:305 patents filed, 199 issued20 companies started with VC or $50k of other funding$54M in revenues from royalties and equity</p> <p>4</p> <p>Harvard Is No Slouch</p> <p>#--ConfidentialHarvard University and Harvard Business School have also been factories for innovation.5Other Colleges and Universities</p> <p>74 colleges and universities in Boston-area, 265,000 students, 8 research universities pump $7 billion into economy, spending $1.5 billion on R&amp;D yearly, 264 patents, 280 commercial licenses.#--ConfidentialOn a per capita basis, Massachusetts has a significant advantage over other leading technology states, with 76 engineering degrees awarded per 100,000 residents, compared to 51 in Virginia.6Innovation Leadership: Patents</p> <p>Source: US Patent and Trademark Office#--Confidential7Innovation Leadership: #1 NIH FundingSource: NIH and Boston Redevelopment Authority (2013)</p> <p>#--ConfidentialEducation and university research leads to NIH funding with over $2 billion in NIH funding pouring into basic research into the region.8</p> <p>Innovation Economy is Densely ConcentratedPopulation: 640k Boston, 4.5m Greater Boston Area#--ConfidentialWhen you bump into someone on the kids soccer field, back to school night, or at a neighborhood block party, theres a very good chance theyre employed in the innovation economy.</p> <p>Geographic ClustersBenefits of High Concentration495 Corridor128 CorridorCambridge/Boston#--ConfidentialThere are three main geographic clusters: - 495 Corridor, where youll find data communications and networking companies, like EMC, Netezza, Glasshouse - 128 Corridor, where youll find a blend of enterprise software and Internet companies, like VistaPrint, Constant Contact and TripAdvisor- Cambridge/Boston Corridor, where youll find a blend of life sciences (Kendall Sq 2/3rds of the R&amp;D $ are here), energy (Kendall Sq) and Consumer Internet companies (Boston)</p> <p>Kendall Square Highest Density Cluster of Innovation on the Planet#--Confidential11</p> <p>Bostons Innovation District#--Confidential12</p> <p>Next Up: Harvard - Allston#--Confidential13Venture Capital: Regional Comparison</p> <p>California: $94BNew York: $20BMassachusetts: $33BTotal VC Capital Under ManagementSource: NVCA 2014 Yearbook76% of total VC $ in these 3 regions#--ConfidentialVC Investments are very, very concentrated in the US. 70% of all VC $ flows into 3 states.Massachusetts has always been a strong #2 to California. But when you look at the numbers on a per capita basis (which is what entrepreneurs care more about after all, its not very relevant how much capital is invested in China, whats relevant is how concentrated that capital is)</p> <p>California = 14,128.8M ; pg 14 on NVCA YearbookMass= 3,067.9M = $3BNew York = 1,856.8M = 1.8B14Venture Capital Per Capita</p> <p>California: $2.5k/personNew York: $1.0k/personMassachusetts: $4.9k/personVC Capital Under Management Per Capita 2013Source: NVCA 2014 Yearbook, US Census#--Confidentialyou can see that Boston is the top region of the three major markets. Per capita is, after all, a proxy for how capital is available PER ENTREPRENEUR</p> <p>California: 14.1B/38.3 M*= $368Massachusetts: 3.0B/6.6M = $454New York: 1.8B / 19.5M = $92</p> <p>*pulled population estimates from 2012 census</p> <p>15Proximity to NYC: A Huge Plus</p> <p>#--ConfidentialA quick shuttle ride or Acela ride away, you have New York, the worlds advertising and media headquarters3 of worlds top 6 advertising agencies have digital teams headquartered in BostonPublicis/Digitas, Aegis/Isobar, Havas DigitalHistorical media strength and customersEasy flow of talent and capital between Boston and New YorkBzzAgent, DigitalArbor, DataXu, ScanScout, Brightcove and other marketing and digital production portfolio companies, have CEOs in NYC weekly and local sales teamsBoston VCs investing in NY media companies Flybridge, Spark, General Catalyst16Leading Clusters: Life Sciences Leadership</p> <p>#--ConfidentialEvery major life sciences company is expanding in Boston and Cambridge.</p> <p>The gene mapping happened at the Broad Institute, which has expanded to a multi-hundred million dollar budget world-class research institute.</p> <p>Highlights of the PwC 2007 Life Sciences Survey include: Ninety-nine percent of respondents with R&amp;D in Massachusetts reported that they plan to maintain or increase their R&amp;D activities in the state over the next two years.Almost half of respondents with manufacturing operations have these operations in Massachusetts, and over half of those expanded their manufacturing over the past year. Nearly six out of ten (59%) expect to increase manufacturing activities in Massachusetts over the next two years.Two-fifths of respondents said their intellectual property was developed at a Massachusetts academic institution.</p> <p>Massachusetts Life Sciences Initiative, a ten year, $1 billion package of investment resources designed to foster continued growth in the Massachusetts Life Sciences Supercluster signed in 2008.</p> <p>Harvard Medical School and Massachusetts General Hospital doctor, Dr. Jack Szostak (SHAH'-stak), won Nobel Prize for 2009 for research into how chromosomes protect themselves from degrading when cells divide. </p> <p>Of the top 25 biotechnology research and development firms in Massachusetts, 14 are in Cambridge, and account for 2/3 or $1.175 billion--of R&amp;D spending by the top 25 biotechnology firms. </p> <p>17</p> <p>Leading Clusters: Bostons Energy Sector</p> <p>#--ConfidentialObama administration pledge $150B over next 10 years, says clean tech can generate 5 million new jobs.</p> <p>MA passed comprehensive energy bill in 2008 that placed it at forefront of clean energy in the US.Force utility companies to invest in home-grown energy that is cheaper in long-run.Encourage investment in renewable energy.Incentivizes businesses and individuals to invest in energy-saving products.</p> <p>NECEC New Englands Clean Energy Economy, brought together Clean Energy Roundtable and piloted Fellowship Program to transition entrepreneurs from other industries into clean energy</p> <p>GreatPoint Energy, Mascoma, Evergreen Solar, Agrivida, MITs Ignite Clean Energy CompetitionEnerNOC was named 2007 Top IPO in New England by ACG and Mass High Tech, for its $99MM IPO.18High Technology MicroClusters:For Example, Strength in Mobile</p> <p> Hundreds of iPhone developers in MA Over 50 VC-backed mobile start-ups Seven 9-figure exits: Crashlytics (Twitter) Enpocket (Nokia) Jumptap (Millenial Media) M-Qube (Verisign) Quattro (Apple) Third Screen (AOL) Where (PayPal) Other mobile leaders Adelphic Mobile Drizly Fiksu RunKeeper SavingStar SessionMiPhone developers using location API</p> <p>#--ConfidentialThere are more iPhone developers are using the Skyhook location API than in any other state, a rough proxy for all iPhone developers$100M+ exits in mobile:M-Qube, mobile billing company, acquired by VeriSign for $250MMMobile advertising company Enpocket bought by NokiaAOL acquired mobile advertising network Third Screen MediaStrong Boston mobile industry:10 VC-backed mobile companies in 2002 to 45 in 2008Quattro, Skyhook Wireless, Jumptap, vLingo</p> <p>19Other MicroClustersRobotics</p> <p>Cloud Computing</p> <p>Online VideoHealth ITE-CommerceMarketing Tech</p> <p>Education</p> <p>#--Confidentialrobotics: iRobot, Kiva Systems, Rethink Robotics, Robotics, Droid Workscloud computing:Netezza, Carbonite, Akamai, Nasuni, EMC, Akamionline video: Brightcove, Blackwave, Scanscout, Visible Measuresgaming: WorldWinner, Harmonix, Turbinee-commerce: RueLaLa, CSN Stores,, TripAdvisor, Vista Print, Cartera Commerce, Zoom Info, KarmaLoop, DemandWaremarketing technology: DataXu, HubSpot, Click Squared, Jingle, Constant Contact</p> <p>20Strong Community of Women Tech Leaders</p> <p> Gail GoodmanConstant Contact</p> <p>Abbie CelnikerEleven Biotherapeutics</p> <p>Nicole StataBoston Seed</p> <p>Michelle Dipp Ovascience</p> <p>C.A. WebbN.E.V.C.A</p> <p>Katie RaeProject II</p> <p>Helen GreinerCyPhy</p> <p>#--Confidential21</p> <p>IPOs (17)Market caps as of 9/16/2014 $276M$309M TBD TBD</p> <p>Tech</p> <p>BioTech</p> <p>$139M$27M$370M$312M$241M$426M$207M$336M$340M$80M$188M$739M$448M</p> <p>Boston-Based IPOs in 2014#--Confidential22 </p> <p>Market caps as of 09/5/2013M&amp;A &gt;$500M (5)</p> <p>$775M$700M$1.1B</p> <p>$500M</p> <p>$1.8B</p> <p>Recent Boston-Based Liquidity#--Confidential23 </p> <p>Market caps as of 9/16/2014</p> <p>$60B</p> <p>$38B</p> <p>$15B</p> <p>$14B</p> <p>$11B</p> <p>$5B</p> <p>$5B</p> <p>$77B</p> <p>$49B</p> <p>$22B</p> <p>$9B</p> <p>$5B</p> <p>$3B</p> <p>Boston-Based Platform CompaniesMarket Capitalization#--Confidential24</p> <p>Expansion of Major Tech Companies</p> <p>#--ConfidentialCisco:$3.5B on nine acquisitions of Boston-based companiesNew 5000-employee New England Development CenterMicrosoft:Boston Concept Development Center: research unit incubating new Internet businesses within companyCapacity to double current 550 MA employees by 2010Google:Rapid expansion of employment to 50 in Boston, with plans to double</p> <p>Boston as data networking center: Ericsson and Siemens also have headquarters in the city; Nokia has a big presence</p> <p>25Start-up Resources</p> <p>#--ConfidentialEvents:Mobile Monday Monthly meet-up of mobile and wireless startups, VCs, and tech execs.Open Coffee Open meeting for entrepreneurs every Thursday at Andala Coffee House in Cambridge.WebInno Venrock organized monthly meeting of 200 to 400 startup people, VCs, Angels and tech execs. Resources:BetaHouse Boston Co-working office space for entrepreneurs. Cambridge Innovation Center - Flexible office facility for growing technology and life sciences companies.DogPatch Labs - Polaris Venture Partners creation to connect entrepreneurs and help founders conceive and launch startups. Organizations:TechStars - A startup boot camp that provides $25K in funding with lots of mentorship, advice, introductions, and access to investors.Stay in MA is funded by Flybridge Capital Partners and is committed to providing as many scholarships as possible, to Massachusetts college students, up to a total of $10,000 total per calendar year. 26Investors and Entrepreneurs to FollowInvestorsBlog URLTwitterRob Go / Next Hazard / Rodriguez/ Sabet / Skok / Skok/ URLTwitterDavid Cancel/ Chang/ Hessan/Commun.@CommunispaceCEOJules Pieri/ Troiano/ Harvard Start-up ResourcesHBS EIRs2014</p> <p>Ajay AgarwalMarla Malcolm BlackStephen BonnerSam ClemensChuck DavisDavid HornikJanet KrausEric PaleyJules PieriRuben PinchanksiDiego RodriguezRudina SeseriJim SharpeSteven SinofskyJim SouthernRuss Wilcox</p> <p>Campus Resources</p> <p>NYC STARTUP TREKBostonTrek</p> <p>`#--Confidential28Conclusion: Boston Ranked #1 City of Global Innovation Economy </p> <p> #1 Boston</p> <p></p> <p>#--ConfidentialNamed by 2ThinkNow as the #1 most innovative city in the world and Under30CEO as the #1 city for young businesspeople, Boston has a rich heritage of start-ups, and is poised to continue with that heritage well into the 21st century. Its all here.29</p>