Most cities would kill for a meeting place as magical as the open brick courtyard behind the Charles Hotel. It’s a simple enough spot: benches and planters, a portal leading to Harvard Square, and two restaurants with patios, Legal Seafoods and Henrietta’s Table.
But it’s the place where fast-growing startups like Recorded Future, which helps businesses anticipate cyberattacks, and Formlabs, which makes a 3D printer, first connected with investors. The travel site Kayak was born over a lunch at Legal’s, the two founders agreeing to put in a million bucks each and toasting with gin and tonics. In the spring of 2004, two Harvard undergrads, Eduardo Saverin and Mark Zuckerberg, ate breakfast at an outdoor table at Henrietta’s and talked to a junior venture capitalist about their month-old startup, Thefacebook. His Waltham firm, Battery Ventures, passed.
Los Angeles has Hollywood & Highland, Manhattan has the Crossroads of the World, and Boston has the courtyard at the Charles Square complex. It’s a place that holds a mirror to what we’re good at, and how we could get even better.
Sitting on a bench in the courtyard on a recent Friday morning, checking my e-mail, I was greeted by venture capitalist Jo Tango. He told me about a lunch at Henrietta’s that led to the formation of Vertica, a database software company acquired by Hewlett-Packard for $350 million in 2011. As we were talking, we noticed Paul Sagan, the former chief executive of Akamai Technologies and a member of the board of directors of EMC and VMware, crossing the plaza.
“Being open to possibility” is important as an investor, says Tango, who was coming from a meeting at General Catalyst Partners, a venture capital firm located in the complex. “Some of my best deals have come from serendipity.”
Paul English had a meeting at General Catalyst in December 2003, and afterward, one of the partners there introduced him to Steve Hafner, a co-founder of the travel site Orbitz who was working on a new idea. English and Hafner had lunch at Legal’s. “Within 45 minutes, we agreed to become 50/50 partners” in the business that would become Kayak, English recalls. The company went public in 2012, and was acquired later that year by Priceline for $1.8 billion.
My favorite story about the courtyard involves another meal at Legal’s. Mitch Kapor, the venture capitalist and founder of Lotus Development Corp., the company that popularized spreadsheets and collaboration software, was having dinner in 2011. At a table nearby, a pair of newly minted MIT grads were pitching a new 3-D printer to an executive from BestBuy’s venture capital arm. Kapor tweeted, “Overhearing 2 entrepreneurs pitching low-end 3D printer to a VC.”
After noticing the tweet, entrepreneurs David Cranor and Max Lobovsky arranged to meet Kapor. He eventually put money into their startup, Formlabs. (BestBuy didn’t.) The company now employs 105 people.
More recently, in 2013, former Zipcar CEO Scott Griffith had breakfast at Henrietta’s – egg whites and wheat toast – with Jon McNeill, chief executive of the Needham software startup Enservio. The two decided to form Censio, a startup developing software that will run on mobile phones to monitor driving, and reward safer drivers with lower insurance rates. This week, Boston-based Censio announced its first $10 million in funding.
On a sunny fall morning, everything can seem perfect. But that’s if you block out the elephant in the courtyard – missing Facebook.
“No one knew how to invest in college kids,” says Larry Cheng, the venture capitalist who invited the founders to breakfast. His analysis of the fledgling company was that if everything went right, a social network for young people might be worth a few hundred million bucks to a company like Yahoo or AOL. His firm, Battery Ventures, already invested in a social network called Friendster, opted not to put money into Facebook.
The resident venture capital firm in the complex, General Catalyst, has shifted its focus to New York and California in recent years. Of the dozen companies it showcases on its website, just two are headquartered in Boston. And why wouldn’t you brag about putting money into Snapchat, Airbnb, and Warby Parker, the online specs merchant?
Where does that leave Boston? “We have great businesses here,” says Cheng, now managing partner at Boston-based Volition Capital. “You could make an argument that pound-for-pound, our companies have more substance than many companies in other cities. But that doesn’t create headlines. This is a great town for innovation and investment — other towns would love to have what we have.”
I concur. But we still have a lot of work to do to create truly world-class clusters, make sure people outside of Boston know that they’re world-class, and ensure that founders have the support they need to build great companies.
In life sciences, “we just are the center of that universe now, and you don’t need to evangelize it,” says Andy Palmer, an entrepreneur and investor who lives in a condo at Charles Square, and eats breakfast every morning at Henrietta’s.
But in areas like robotics and digital health care, “a little effort and evangelism there would go a long way,” he says. In those areas, plus 3-D printing and design, big data and analytics, and cyber-security, we can do more to trumpet what’s happening here.
I’d love to see a group of our most promising companies go on the offensive, organizing a recruiting trip to Silicon Valley or New York, highlighting the more reasonable cost of living and better public schools here. Palmer says our greatest deficiency is “big, independent pillar companies, built by entrepreneurs” – think Amazon, Google, or EMC, the Hopkinton data storage company (possibly about to be gobbled up by Dell). Those companies serve as role models to the next generation, Palmer says, sending the message that you, too, can build something big if you take a leap.
We’re very good at starting things, taking ideas out of the lab, and sculpting them into companies. The scaling up, the drive to really dominate an industry sector over the long haul, is something we can get better at.
Scott Kirsner writes the Innovation Economy column every Sunday in the Boston Globe, in which he tracks entrepreneurship, investment, and big company activities around New England.
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