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Why I'm Bullish on a Startup Renaissance in Massachusetts
2/23/2010

I’m convinced we are poised for a major startup renaissance with its epicenter in Massachusetts & New England.

Some people think I’m crazy. I disagree. Here’s why.

We find ourselves in the latter half of a major economic recession in which multiple industries are experiencing major crises: media, healthcare delivery, real estate, automobile manufacturing, energy generation, desktop software …  the list goes on.

Why so many crises, and how does this relates to renaissance?  

There’s no single cause, but many of these crises are catalyzed by rapid technology advances, which are challenging the business models on which these industries are based. Why pay for newspaper delivery to get day old news on my doorstep when I can get news instantly on my laptop or cell phone? Why pay for desktop software when universal connectivity enables me to store my data and preferences in the cloud for seamless access on multiple devices wherever I want? This process is not new. Innovative technology always challenges business models predicated on old technology – but the scale and scope of theses challenges are greater than we have seen in decades.

So where’s the renaissance?  

So far, we have mostly seen the new wave of technology weakening and destroying old business models, but over the next several years we will witness an acceleration of startups whose business models are explicitly based on the availability of new technology. The horse and buggy industry has shown weakness – here comes the Ford assembly line.

We are already seeing the emergence of game-changing technology. Like online media distribution, renewable clean tech, hybrid non-profit business models serving key social needs. This next wave will produce dozens of high-growth, game changing startups across multiple industries. That’s the renaissance. And it is upon us.

So why Massachusetts?

These game-changing innovations will occur in a broad set of industries and will require lots of talented, hard-working young people. Massachusetts has one of the most diverse startup environments on the planet. We are strong in virtually all sectors of every major industry: not just healthcare generally, but also specifically in telemedicine and biotechnology; not just energy generally, but also specifically in thin film solar technology and hyper-efficient battery technology; not just hardware, but robotics and other cutting-edge technology areas … you get the idea. We’re really good at technology.

We also have the most and best universities of pretty much any region on the planet. Yes, historically we have lost many of these young people to California and elsewhere upon graduation, but right now Massachusetts is better positioned economically to capture this wave of growth and I am convinced we can attract and retain the brilliant minds that will usher in this renaissance.

There has been a lot of reassuring activity organized for and by young innovators in Massachusetts lately. WebInno, MassInno, DartBoston, Greenhorn Connect, Techstars, the proliferation of co-working centers, the ever-expanding Cambridge Innovation Center, Boston World Partnerships, the Microsoft NERD Center … plus dozens of great entrepreneurial university programs.

So that’s how I see it. Crisis is giving way to opportunity. That opportunity will require smart, well-educated, passionate young people. We have a lot of them right here, and they appear to be readying themselves rapidly. I have never been more bullish on Massachusetts. We are on the verge of a period of great innovation and growth, the likes of which we haven’t seen perhaps since the industrial revolution.

What do you think? Do you agree or am I just crazy?

 

By: John Harthorne

John Harthorne is the CEO and Founder of MassChallenge. Click here for John's bio.

Business, Entrepreneurship, Massachusetts, Renaissance, Startup > 4 Comments
Drinking Beer to Save the World
2/12/2010

I can’t resist commenting on this post as it combines two of my favorite things in life, renewable energy and beer. Eric Fitch of PurposeEnergy has found a way reduce and reuse waste streams created in the beer production process. While the approach of reducing waste in a production process is not new, Eric has found a market that produces organic waste that can be transformed into clean energy and even help fuel the production process. This is similar to the model Brazil uses to produce sugar ethanol for cars (which you technically can also drink). In Brazil, the stalks and waste from the sugar fields are used to fuel the ethanol production, which is one reason it is cheaper and has a better carbon footprint than US produced corn ethanol. Let’s hope that more breweries realize the benefits PurposeEnergy can provide, giving us all just one more excuse to drink beer, “I’m saving the environment!”

… Fitch’s aim is for his company, Arlington, MA-based PurposeEnergy, to excel in the beer market, and then let its first customers become the startup’s loudest advocates as it expands into other industries.

Brewing and bottling beer creates organic byproducts at almost every step of the process, from spent grain and yeast to protein deposits. The resulting waste is mostly water with a high concentration of solids, which companies have to pay to transport offsite to treatment facilities that charge by the pound to make the water safe enough for disposal.

PurposeEnergy, incorporated in 2007, has come up with system that uses a process called anaerobic digestion to turn the byproducts from brewing into renewable fuels. Installed on-site at a brewery, the “PurposeEnergy Biogas Facility” would convert much of the organic waste into methane, the main component of the natural gas that most breweries use to fuel their plants. In doing so, it would cut costs for energy and byproduct remediation by about 40 percent at its first brewery partner, according to Fitch, PurposeEnergy’s CEO. Fitch developed the technique as a hybrid of a few different anaerobic digester methods mostly used in farming, a world that Fitch is familiar with, having grown up in Wyoming….  (for full article see http://bit.ly/aMMnL6)

 

Energy & Clean Tech > 0 Comments
HBO Show on Entrepreneurship Highlights Interesting Questions
2/11/2010

HBO’s new show ‘How to Make it in America’ is pretty good. Doesn’t make the life of an entrepreneur look glamorous by any means but its set in New York so it makes it look pretty cool. We’re introduced to our two main characters Ben and Cam. From what we can gather, Ben is an aspiring artist who often gets pulled into Cam’s scams. We see Ben’s apartment full of skateboards and then find out Cam owes his cousin $5K. So Ben and Cam buy some bootleg leather jackets and borrow the rest of the money from a guy from Ben’s highschool who has a hedge fund. I like the interaction between Cam and their friend GiGi’s dad the most. There is a scene in which Cam starts pitching ideas to Gigi’s dad that goes like this.

Cam: “It’s Cold Stone Creamery but for donuts. I call it Build a Nut.”

Gigi’s Dad: “No Cam.”

Cam: “You pick your own toppings. Caramel frosted for the dudes. And strawberry flavored high heel sprinkles for the ladies.”

Gigi’s Dad: “Nooo. You keep coming to me with these crazy ideas and maybe some of them might be good. But everybody’s got ideas. Nobody wants to put in the work. Don’t tell me what you are going to do. Show me what you’ve done and then maybe finally I’ll write you that check.”

Cam: “How many zeroes on that check?”

I think that one scene sums up what I’ve seen from the last few months since I’ve ventured into the entrepreneurial community. VCs, Angels, everyone wants to be shown what you’ve done. How much of your own time and money have you invested? One of the most important questions entrepreneurs are asked is how much they have already committed to their idea, i.e. have you quit your job? How long have you worked without pay on this? For how long are you willing to work without pay? Ultimately, it’s about passion and sincerity — why should an investor or mentor care enough about your idea to take a risk on it if you haven’t?

The pilot of “How to Make it in America” is on YouTube. If you’ve seen it, what do you think? Do you think they could have set the show in Boston? Cambridge?

General > 0 Comments
5 Common Misconceptions about MassChallenge
2/10/2010

1. MassChallenge is a government program. FALSE

Actually, MassChallenge is an independent non-profit that is using both public and private funding. Our initial funding came from the Mass Tech Collaborative’s John Adams Innovation Institute, the Deshpande Foundation, the Kauffman Foundation, and Microsoft. We will announce more partnerships and support soon … please contact us if you are interested in joining this exclusive group.

2. MassChallenge is a venture fund. FALSE

We had originally proposed including a MassChallenge investment fund alongside our other offerings because we thought this would help promote other investments and ultimately benefit entrepreneurs. Having spoken with thousands of stakeholders, including some of the areas biggest investors and top lawyers, we realized that we will be more effective without a separate investment fund, especially since a fund would significantly complicate our status as a non-profit. So, no, we do not offer investments directly — instead we provide grants and we partner with dozens of outside investors eager to deploy their capital in high-growth firms.

3. MassChallenge has lots of strings attached and requires winners to headquarter in Massachusetts. FALSE

Anyone can enter MassChallenge, from anywhere on the planet, with any idea. There are no strings attached — you don’t have to give up any equity, and you can headquarter your company wherever you like. We love Massachusetts. It is an amazing place to launch your business, and we will certainly help you get set up here if that’s what you want, but there are no requirements to headquarter or operate in Massachusetts following the competition. The only entry requirement is that you promise to engage in the competition processes up until the final ceremony — that requires you to be physically present for 2-3 months over the late Summer / early Fall. We’ll do our best to help you get situated in Massachusetts.

4. MassChallenge is “just another business plan competition”. FALSE

We partner and collaborate with lots of university-based business plan competitions, including the MIT $100K, but we are later stage than these competitions. Our goal is to produce fundable startups that launch and succeed either during or immediately following our competition. We are a startup creation machine, not an educational event. If you were a recent finalist or winner of a university based competition, you are likely a strong potential entrant for MassChallenge. You could also be a professional who has recently left work and is looking to realize a life-long dream by launching a startup based on your extensive knowledge and experience.

5. MassChallenge doesn’t need any volunteers. FALSE

Actually, this wasn’t a misconception. We’re just using this opportunity to remind you that we encourage all types of volunteers to help us empower entrepreneurs and catalyze a startup renaissance in Massachusetts and beyond. Please sign up for our newsletter and social media feeds if you are interested — we’ll be making an announcement soon about how you can get involved. Thanks!

If you have any other questions please join us for a MassChallenge Info Session either

Today at 12:30pm in Cambridge Innovation Center 5th Floor Training Room OR

Tuesday, February 16th at 5:30pm in the Venture Development Center at UMASS Boston OR

Tuesday, February 23rd at 12:30pm at CIC.

We look forward to seeing you there!

MassChallenge > 0 Comments
ARPA-E Spurring Innovation and Funding
2/5/2010

Xconomy reported that 1366 Technologies Wrapped Up $5.2M

1366 Technologies, a Lexington, MA-based company developing more efficient photovoltaic panels, has raised a $5.2 million Series B round from North Bridge Venture Partners and Polaris Venture Partners, says company president Frank van Mierlo. An SEC filing puts the total offering amount for the round at $6.2 million, but van Mierlo says the round closed at $5.2 million, with $5 million coming from the venture firms and the remainder coming from investments by 1366 management. He says investors were spurred by funding 1366 received from the U.S. Department of Energy Advanced Projects Research Agency – Energy (ARPA-E) program, which looks to fund innovations in energy efficiency.

While that is great for 1366, what is more exciting for MA as a whole is that the ARPA-E grants are spurring follow-on funding. Often it is said that government initiatives are not compatible with promoting innovation, in part due to the conservative and slow nature of government spending, as compared to the quicker, riskier VC-funding. Since the recession hit, it seems that bit of a role reversal has happened. What is great for MA is that of the ARPA-E grants awarded in October ‘09, MA captured 22% of the total money. If this trend continues, there will be continued investment in the MA clean energy space and may make it the center for the country’s cleantech innovation. Keep your eye on this trend.

Energy & Clean Tech > 0 Comments