Sequoia Capital’s Greg McAdoo on Consumer Web and Cleantech Trends, Boston Vs. New York, and Recruiting at MIT
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to get the caliber of engineer that you may or may not be able to get there. You can rent them, if you will, by buying services from the cloud.
X: So how does that bode for Boston’s startup future? And how does it compare with New York, say?
GM: To the extent that density matters, New York will have a bit of an unfair advantage. In theory, Boston will have perhaps easier access to talent. Not that there aren’t lots of smart technologists in New York, but you have demand for them from lots of big hirers, whereas in Boston you have some demand but not nearly the same. To the extent that Boston may or may not have been a center for consumer services, it has an opportunity to matriculate into that now that it probably didn’t have 10 years ago.
New York’s a special case—we’re in 10gen and a couple other companies there. The density of early-stage companies justifies spending a little more time there right now.
X: We’re starting to see a lot more VCs spending time in New York, as well as founders moving to New York from Boston.
GM: That’s a new thing. When I was here last year, we talked to founders. [Some] said, “Cambridge isn’t really where I want to put my startup.” I asked, where do you want to put it? Invariably it was somewhere in Silicon Valley. Maybe a few people said, “We’re looking at New York.” But now it’s anecdotally 50-50 [New York and Silicon Valley].
X: What’s driving that? And from a Boston-centric view, how do we keep our best startups here?
GM: Some of it is just PR. You’ve got some really great startups, and oh, by the way, over the last 20 years you’ve built some really great companies here. I think the folks at Akamai would argue they built a pretty good team. Part of it is an education process. The other part of it is, a lot of the ecosystem in the Valley is almost accidental just because of density, but not all of it. You do have stakeholders in that community who proactively cultivate advisors and the rest of the ecosystem to make it easier. I don’t like to use the word “incubator,” because I don’t know what that even means anymore, but this idea of providing very early mentorship to companies—having something like that in the Cambridge area and doing a little PR around the fact that, hey, there’s existence proof, you can do it here, could go a long way towards keeping people here.
X: Let’s talk about the connections between Sequoia Capital and MIT…
GM: There’s a long history of MIT grads being part of Sequoia portfolio companies. What’s interesting about it is that you’d think the preponderance of those companies would be the hard tech companies that come in narrow verticals. To be sure, there are some—a couple in stealth that I can’t talk about. But Dropbox, while it’s a very hardcore technology company, is more of a consumer services company. So clearly there’s something in the gene pool at MIT where there are consumer services sensibilities. Kayak, obviously, is a consumer company as well.
X: What is Sequoia doing proactively to reach MIT students and entrepreneurs? What else besides things like being part of Startup Bootcamp here?
GM: Well, this is an important part of what we do. One of my partners or I will come out at least once a year and we’ll do a meetup like we did last night. And we’ll get several dozen of the area entrepreneurs, or people who are curious about getting companies started, and we’ll answer questions. Nothing’s off-limits. The idea is twofold. At some level we’re introducing ourselves to a community that may not know as much about us, even in the Internet age. But even more importantly, it gives us an opportunity to speak very candidly about what it means to get a company off the ground and to give a 360-degree view of that from the perspective of guys who, many of us, have started and run companies—and some have been successful and some have not, so we can talk very candidly. It’s a lot of hard work and it doesn’t always work.
On a partner level, we have some MIT grads, and we have connections that are informal to various profs within MIT. On an institutional level, I don’t think we have anything formal, but I can’t think of any institution, even Stanford, where we have a [formal relationship]. We get requests to come out here and speak from time to time. Oftentimes we talk to professors about students of theirs that are thinking of starting companies that are looking for coaching. Usually that’s an informal conversation.
X: So what’s your advice for entrepreneurs? What are you looking for, and what are you telling them about how to stand out from all the early-stage noise right now?
GM: A couple of things. It’s kind of like what folks tell writers if they want to be great writers. You want to write about something you have some connection to. You want to start a company that you have some connection to. The tension is that you don’t want to be so much from the market you’re participating in that you’re tainted by the biases and limiting beliefs in that market. We love folks who … Next Page »