Boston Tech’s Inferiority Complex: “It’s a F***ing Waste of Time”

6/20/13Follow @curtwoodward

With the federal trial of mobster Whitey Bulger lighting up the headlines, Scott Savitz drew more than a few chuckles Wednesday when he pointed out that the Boston area has “some really good mafias.”

But he wasn’t joking. Savitz, the founder of Shoebuy and Data Point Capital, was making the case that veterans of some big technology acquisitions in recent years are cycling back into the industry, bringing credibility and experience that will help build the Boston-area technology industry in the future.

It was part of a lively discussion at XSITE 2013, our fifth annual innovation summit, held at Babson College. Savitz and several other speakers tried to topple the seemingly endless tech-industry parlor game that happens everywhere outside the San Francisco Bay Area: How come we’re not more like the Valley?

“Stop talking about whether we’re inferior or not,” pleaded Dave Balter, founder of BzzAgent. “I don’t even have the discussion anymore. It’s a fucking waste of time.”

Sure, it’s part of these guys’ job to be excited about their town and its tech scene—after all, they’re experienced founders, executives, and investors who are doing business here. But there was more than Chamber of Commerce-style cheerleading in their message.

The overall point was to stop worrying how Boston stacks up against the San Francisco scene, or other second-tier regions like New York or Seattle, and focus on improving and growing a larger, better version of what Boston has going for it. As Galen Moore of the Boston Business Journal so aptly put it earlier this year, “You’re comparing Boston to Silicon Valley. Stop it. It’s boring.”

“One of the great mysteries of the world to me is Boston’s inferiority complex,” said Bob Brennan, CEO of Veracode.

One example: When Boston-area tech companies get acquired by other big names in their industry, the reaction often includes a measure of hand-wringing about how yet another local company has disappeared, screwing up another chance to establish a big brand name around Boston.

Savitz says he’s heard that more than a few times directed toward entrepreneurs like Steve Papa, co-founder of Endeca, and Andy Ory, co-founder of Acme Packet—companies that were scooped up by Oracle.

“People actually give them little nudges, like `I can’t believe you sold.’ I will tell you that I 100 percent disagree. If you have a company that you’re going to build to a billion dollars and sell it, I won’t criticize you. Come see me and I’ll probably invest in you,” Savitz said.

“To say that a company that sells for $2.1 billion, like Acme Packet, or a billion dollars, like Endeca, is a travesty—I think it’s just a waste,” he added.

You can’t discount the fact that big, name-brand company headquarters do attract people and strengthen a local economy, said Jean Hammond, an angel investor and founder of ed-tech nonprofit LearnLaunch.

But not all acquisitions mean the crew is shipped away—witness Twitter’s new Boston-area office, fueled by two acquisitions of around $100 million, or Amazon’s $775 million purchase of warehouse-robotics company Kiva Systems, which is still in the region and part of a big hiring push by Amazon.

“The leadership in robotics is staying here. So we’re able to see the impact of a cluster—to see those senior executives can go start the next company, to see that we’ve trained the slow-learning part of the ecosystem, the investors,” she said. “And we’ve got a story going on.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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  • Mike Volpe

    It would be nice to have a multi-billion dollar leader in the tech world headquartered here. The level of PR, investment and hiring would be higher.

    • curtwoodward

      That is the big truth. Of course there are huge companies here – EMC has a $51B market cap (!), TripAdvisor $8.6B, Akamai $7.2B, Nuance $5.9B. But Google/Microsoft/Facebook/Amazon/Apple are another thing altogether.
      I will say, having lived in Seattle (with MSFT and AMZN), that a “big name” company or two also won’t make it all come together on their own. There’s much less startup investment activity in Seattle than Boston, for instance.

      • Mike Volpe

        Those are good market caps, but I would classify a lot of them as “old school” (EMC and Nuance especially) in terms of how they play the game. They have really different perspectives even from Salesforce and NetSuite never mind Facebook and Google.

        I really hope that Acquia, HubSpot, Nanigans, Wayfair, etc can bust into the $5-10B market cap range in the future.