Wayfair IPO marks the start of a new era for the Boston tech community

Niraj Shah and Steve Conine of Wayfair - Photo via NYSE
Niraj Shah and Steve Conine of Wayfair - Photo via NYSE

When Wayfair’s founders rang the New York Stock Exchange bell Thursday morning, they didn’t just announce the company’s arrival on the public market—they rang in a new era for the Greater Boston technology and innovation ecosystem.

Raising $304 million in its initial public offering (the company actually traded higher than expected starting at $35.25 this morning), the IPO is one of the biggest for a Boston-area technology company.

It also signals a historic shift for the local tech community.

During the golden age of the “Massachusetts Miracle” driven by innovators coming out of Harvard and MIT, the zone between Needham, Waltham, and Burlington on Route 128 was the epicenter of tech activity in this state, and to some degree the nation.

In the 1990s, Oracle, Intuit, and Microsoft joined other tech giants IBM, Digital Equipment, Wang Laboratories, Polaroid, and others, setting up major Boston offices along the Route 128 corridor.

Waltham, for instance, is still home to companies like Actifio, Bit9, and Constant Contact. But today, very few technology companies remain there and many of the venture capital firms that once populated the hills above the Cambridge Reservoir have moved into the city.

Wayfair, however, was born in co-founder Steve Conine’s nursery in a brownstone in the South End. It hasn’t moved more than a half mile from its first “office.”

Currently, Wayfair has about 1,200 employees split between three buildings in Copley Square, which is as close to the heart of Boston as you can get.

With Wayfair in Boston and HubSpot well-anchored in Cambridge, two of the areas biggest Internet companies (with TripAdvisor in Newton being another) are in the city, close to the T, near bars and restaurants, and filled with employees who live in Boston.

“Being in the city lets you really be attractive to grab hold of a lot of the talent that gets educated in Boston,” co-founder and chief executive Niraj Shah said.

Shah added that the city is much more vibrant than the suburbs. “You have an ecosystem and there are a lot of people nearby rather than in the remote office parks where you might not feel connected to the next campus over.”

Wayfair didn’t start the trend, but more and more tech and innovation companies are leaving the suburbs for the Seaport, Downtown Crossing and the Financial District, Cambridge, and Somerville. Autodesk is looking to escape Waltham for the city, while more and more VCs and service providers, like law firm Gunderson Dettmer, are relocating closer to downtown.

“It’s the start of another cycle,” Conine, Wayfair’s co-founder and chief technology officer, said.

There’s also another way in which Wayfair breaks the mold of what “traditional” Boston-area tech companies look like. Conine and Shah started building companies while taking entrepreneurial courses at Cornell, and continued for twenty years, bootstrapping what became Wayfair until they took venture funding just a few years ago.

Did you catch that? Something out of the norm?

No Harvard Business School connections, no MIT or Sloan School of Business roots—Shah and Conine are Cornell grads.

This might seem like it’s not extraordinary. But consider how large a swath of Boston technology companies have strong connections to Harvard, MIT, and their business schools. I’ve heard more than one startup founder gripe that investment funding flows more easily between fellow HBS and Sloan alums than “outsiders.”

Well, one thing is for sure, the outsiders and city folk that run Wayfair aren’t slowing down. The company’s stock was up 23 percent in early trading.

Dennis Keohane was a Senior Staff Writer for BetaBoston.
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