Jeff Glass on Bain Capital Ventures’ New Innovation Center, the Startup Ecosystem, and the Future of Group Buying
Venture capitalists are getting back to their roots. Amid the smaller exit markets, some contraction in the VC industry, and a general reset of investments to a lower level than two or three years ago, venture firms are making some key changes. Some are moving toward earlier-stage investments, while others are making more later-stage deals—and many are doing both. But one overarching theme is emerging, or should I say, re-emerging: the need to stay close to entrepreneurs.
It’s against this backdrop that Bain Capital Ventures announced last week a new outreach and resource site for early-stage entrepreneurs. The BCV Innovation Center is apparently the first site of its kind run by a major venture firm in Boston. It is open to any and all entrepreneurs who want to network, build their teams, get introductions to Bain-affiliated partners and service providers, find local events, and attend office hours with Bain VCs (every Friday afternoon). Other venture firms around Boston and elsewhere have made similar efforts—holding office hours, networking events, and so forth—but no one else that we know of has put it all together in one place online.
To learn more about the firm’s motivation and hear Bain’s perspective on startups, I talked with Jeff Glass, a managing director at BCV who is helping to lead the virtual innovation center. Glass is a former tech and multimedia entrepreneur himself who was the CEO of m-Qube, and has led BCV’s investments in companies such as blip.tv and, more recently, BuyWithMe.
Glass was refreshingly modest about Bain’s new center. “What we’re doing here is not meant to be the end-all, be-all of early stage resources and support,” he said. “While I’d love to tell you this is going to change the face of the Boston entrepreneur universe, that’s not the goal.”
Instead, Glass said, it’s just about Bain doing its part to support the local startup ecosystem. “We’ve got a huge team [33 people at BCV], and the Bain Capital platform behind us. We should do more,” he said. “Something you hear is that VCs and networking are more accessible out West than around Boston…We don’t want this to be exclusive. We want this to be one of many things. As a result of that, our goal is to make it more open than closed…and to link to other sites and other partners.”
Of course, the virtual center could also be seen as an effort by Bain to connect more deeply with top entrepreneurial talent in a tough economy. “That’s less so what drove it for us,” Glass said. “We thought a lot about what it was like to start up our first company, and we separately spend lots of time with entrepreneurs…We really tried to build this thing putting entrepreneur shoes on. If we go back in time to starting our first business, what are all the pieces? What resources existed?”
I asked Glass for the one piece of advice he would give to early-stage tech entrepreneurs at this moment. He wanted to give 20 things (all of them important), but in the end he settled on “build the right team.” Having the right people together to go after an opportunity, he said, involves having the right mix of skill sets, the right culture, and aligned goals.
Glass also had some thoughts on how to stay ahead of the curve from an investor’s perspective. The first part goes back to the overarching theme of venture capital these days: “Stay close to the entrepreneur community,” he said. Great ideas come from entrepreneurs “because you’re brilliant, or you worked inside an industry and saw an opportunity that you could go after,” he said. The second part has to do “working within areas where you’ve got some domain expertise.”
Nothing too surprising there, but for Glass, domain expertise means the intersection of where media and marketing meet the Internet and wireless technologies. He said the biggest trend he’s seeing in all his portfolio companies right now is “the enormous power of social media.”
Lastly, I asked Glass for his thoughts on the competitive landscape in online group buying and daily shopping deals, which has really exploded in the past year with the emergence of sites like Groupon, LivingSocial, BuyWithMe, Tippr, DealPop, and many others. Bain Capital Ventures recently led a $16 million Series B investment in BuyWithMe, which was founded in Boston last year.
Glass thinks the sector will see a bit of a shake-out. “The market will start to organize itself—people will start going after different segments,” he said. “There will be a handful of truly national players of scale and some smaller, really good companies that picked off a niche that will have very good businesses.” Naturally, he thinks BuyWithMe has the right formula, thanks to its highly analytical approach. As he puts it, the company is focused on the urban female demographic, and making online deals “increasingly personalized to the consumer and [that] really help the local merchant manage their business better.”
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