Boston's Deterioration as a VC Hub

I have been fascinated with this story for a while. Boston used to be the only place other than Silicon Valley that had a strong critical mass of startup activity no matter what. It seems that's been deteriorating quarter-after-quarter for a while now. See video on the jump for more. I posed this to the panel, but it hasn't really been answered yet: What does this mean for the balance of power in bi-coastal firms? Any thoughts on this please comment away.

Comments

[fred wilson]

boston still has a vital startup culture but they took a hit from their reliance on comm equipment and enterprise software.

silicon valley jumped on the media business model and boston was much slower to do that

i think NY has gained at Boston's loss a bit

in fact, our biggest competition for deals in NY are the top Boston VCs

[sarah lacy]

really interesting feedback, fred. i plan to spend some more time in both places this year, as i'm fascinated by the shift culturally. thanks for reading and commenting!! you were great on TT a while back!

[Chuck T]

The strange thing about this debate is that most tech startups bank on the idea that companies are global and the workforce wants anywhere, anytime access.

Doesn't that mean that innovation can happen anywhere? Why the focus on geography?

[sarah lacy]

@chuck t:

it's the age old question. and a good one. or at least decades old (since the web has made it theoretically possible.) but logic-be-damned, if you look at actual statistics, almost all of the $1 billion-plus companies originate in the valley. everyone has their own theory why, but the general thinking seems to be that starting a company is hard enough. if moving to the valley takes away some risk. why wouldn't you?

there's clearly something cultural at work here, that i've become obsessed with-- hence a lot of my traveling this year. and if boston is somehow losing some of that, it's a problem. still you gotta watch this for cycles. because hot spots for innovation can flare up and then die down. boston and the valley have literally been the only two significant ones that have lasted, cycle after cycle, according to pure statistics. hope that helps to answer an unanswerable question! thanks for reading!

s