There is so much happening in the Boston startup scene - but where do you start if your new and figuring out you're footing on how to best start and scale your startup in the Greater Boston Area this year? Startup Boston partnered up with the City of Boston for an event on January 3rd, 2024, where we dove into exactly that!
During this panel, we discussed what resources were available to founders in Boston, best options for recruiting top talent, and what the funding landscape was looking like for 2024.
We heard from four incredible speakers during this event who know the Boston startup scene inside-and-out:
Shari Worthington, Ph.D - Associate Director, Center for Entrepreneurship, Suffolk University
Daniel Acheampong - General Partner, Visible Hands VC
Parker McKee - Principal, Pillar VC
Kat Lawlor - Executive Director, EforAll
Ignacio Castro - Managing Partner, 128vc
We pulled together some of the highlights in this blog and you can always watch (or listen to!) the full recording directly below.
Shari: What are the most effective ways for Boston visionary with new ideas to find development partners for design, software development or production?
Ignacio: I’m going to start with a very different way to answer this question, which is what not to do. My vantage point here is more from technology and focusing on when you need to build technology and when you need to find developers - there are different ways to look at this from a nontechnical or technical perspective.
From a nontechnical standpoint, I think what you need to avoid is to go right away and try to find a firm that is going to build your product, that might have a negative consequence down the road. Instead, I think the better way to do this is really focusing on finding your co-founder.
If you’re a non-technical founder, find a technical founder and vice versa. And it could not necessarily be a co-founder, it could be an advisor - I think that’s another way to look at this and many times, undervalued. Find people that can advise you and can make the introductions and referrals for you that can help you in building that founding team, which is key for whatever you need to do.
The same applies if you’re a technical person. I mean, that’s even more tricky because you’re a technical person so it’s easier to go and build, which is what we typically see. But take advantage and find those non technical people and start building your team, your company.
Daniel: I agree with Ignacio, that starting from some of the first principles of building - sometimes people are really quick to immediately jump and build, but there are even things you have to do to really prove if there is a customer base for your idea out there.
Before you build, think about if you have gone through the customer validation process to show that there's a willingness to pay for the product you’re building.
Sometimes when I speak with founders and ask if they have a sense of the customer they want to sell to, they'll come back and say, I did a survey and 100 people responded and they all want this thing I want to build. And then I’ll ask, “who did you survey?”
And they'll say, “oh, I sent it to my friends and then they sent it to their friends.” Well those friends may not necessarily be your customer. So it’s important to go through the validation process prior to building.
And to Ignacio's point, before you go and spend all of the money and resources on a development team, you just wanna go and at least make sure you take a step back and figure if there’s a paying customer base out there before you go in this direction and put resources and time into building it out.
Shari: People generally think Silicon Valley is the place for startups, especially in tech. What kind of startup community has Boston built over the years?
Parker: Silicon Valley is super productive, right? But there are a lot of places in the world that are super productive and, you know, Boston is damn near #2 to San Francisco in producing tech companies - and there’s nothing wrong with that.
You can look at SF and look backwards and say, “Why was that the case?” Well SF really nailed social and mobile. So you had companies like Meta and Uber that built huge, huge, huge masses of talent, and then that talent propagated around the ecosystem, and that resulted in lots of angel investment dollars, lots of people that wanna go start new companies, lots of people that saw a growth story, saw success.
Those people saw how it's done, and then they wanna go do it on their own. And so you most importantly, had a culture. You had a culture of people that wanted to go build. They wanted to build fast. They wanted to build something scrappy. And so SF, I would say, won the social mobile war and that culture continues to propagate.
But that's okay because Boston's won a bunch of other wars.
We have an incredible biotech ecosystem here with an incredible hardware ecosystem here. We have eight of the best universities in the world, right here in our backyard.
And as a result, there's a continuous flywheel of talent that just keeps growing and growing and growing and pushing out new innovations. As a result of that, you see startup success.
And so is it #1 in producing, you know, market value in the software space? No.
I believe it's #2 but as I said, that's okay. And it's just we're just gonna keep churning out wins and building a robust ecosystem behind it.
So I don't think it has to be this binary #1 or bust. I think being #2 behind SF is okay - and all the resources exist to build a monster company here in town.
Ignacio: We are really lucky to be in Boston and have all the resources that we have in Boston. It's a very strong ecosystem and when you compare it with others, there's a lot to be proud of. Boston is very supportive.
I like to say that we have a very healthy level of skepticism and a community that likes to pay it forward.
So, it's a really great place to build a company. One thing that I think about is how can we make our system better?
One example that I always like to go back to is that when you have a company that is building hard tech, it’s really hard to do in Boston. In Boston, you typically see someone go down the route of, “I have to go to the FD and to this the right way” while in Silicon Valley they sometimes try to bypass all of it and go more directly to the customer, right? So I think Boston can get a bit more creative in how we kick off different ventures and taking some of the Silicon Valley mentality could potentially make our ecosystem even better.
Shari: I agree. It's interesting. I think we have a more balanced mindset here in Boston versus the insanity and the burnout that I see in Silicon Valley, which is not healthy - and really not good for a long term sustainable organization. Up next, what kind of resources does Boston not have that it should have to best serve our startup community?
Daniel: I wouldn't necessarily even consider it as resources, but one of the challenges is the high cost of living in Boston. I don't think that's necessarily unique to Boston, New York and SF are also pretty expensive.
Additionally, when people think about Boston, they think about it as being mainly focused on industries such as biotech, health, tech, and education. So some of the other sectors may not have necessarily received as many investment opportunities - such as manufacturing or or consumer goods - but we are seeing progress in those areas. You know, we have companies such as Whoop here, for example. Legos also is moving their headquarters here, so you know, the infrastructure to promote some of these businesses is really strong here.
And then the other thing that also comes to mind, and I think this is, you know, something that Boston faces as a criticism, are the issues of social diversity and inclusivity. I think that over the years, we have been seeing more work and more attention within that space. And I think the mayor's office and the governor's office are doing a fantastic job in ensuring that we're elevating leadership. We're bringing more programs and resources to acknowledge inclusivity and the great work that's happening in Boston.
Lastly, Boston is a hub of educating some of the best minds in the world - so if we're cultivating great minds here, then how do we keep the great minds and the talent in Boston?
I think that's something that is a great resource in Boston and not necessarily allowing them to just leave after coming through here.
So those are some of the key things that come to mind.
Shari: Where can entrepreneurs go for women’s specific resources?
Kat: I can jump in on that. The company I work for, EforAll, supports women, people of color and immigrants, so definitely check us out. The Center for Women and Enterprise is another great resource for women. And I’d like to give a huge shout-out to Scroobious, they are a pitch education and investor platform that focuses on founders and women.
Additionally for women, the Eforum - a bit about them, I was previously the Executive Director of the Capital Network, and one of our flagship programs was the Fellowship for Female Founders, so the Eforum has since adopted that program - so if you’re a female founder and looking to raise your first round, check it out. It’s a great community, you are part of a cohort, and you get to learn about due diligence and how to pitch to investors.
Shari: And to expand that to all minorities, do we have specific areas for people to go?
Daniel: I’m going to plug Visible Hands, that’s an important area for us to both identify and support great founders who are building a venture scalable technology business. And in fact, the majority of our portfolio companies are mostly women-led companies.
Additionally, the Boston Impact Initiative, they're doing great work. Hack Diversity, Startup Boston with Stephanie and the rest of the team bringing people together. Those are some of the additional things that also came to mind
Kat: 100%. Boston Impact Initiative invests in social enterprises, owned by people of color. And they're an amazing resource in Boston right now. And I was also going to say The Black Economic Council of Massachusetts, it’s an amazing community and resource for founders of color.
Shari: Let me jump over to fundraising because Kat, you brought that up. So can you expand a little bit on what the funding path in Boston looks like for social entrepreneurs or not-for-profits?
Kat: Well, for non-profits, which is my expertise, there are a lot of government grants that you can apply for - foundation grants, individual donors, and corporate sponsors. For social entrepreneurs, one resource to check out is the Boston Impact Initiative.
Shari: For grants, where do you start? That can be a complicated picture.
Kat: You would go to a government website, such as the City of Boston, or your local city, many of them have grants listed directly on their website.
Additionally, the SBA launched some amazing grants and they just did a great grant for organizations focused on women and people of color. The SBA is where a lot of the larger grants come from.
Shari: Let me do a bigger picture one here, Ignacio, what do you think the fundraising landscape will look like here in Boston in 2024?
Ignacio: 2023 has been very tough - and I think 2024 is gonna continue to be tough.
We're starting to see a little bit of light at the end of the tunnel with the stock market getting better, inflation getting in control, and things like that, but, I think at least for the next 12 months it's gonna continue to be tough.
So as you approach investors, you have to be prepared to face much more scrutiny and be able to address tough questions on your background, why you’re the best person to build this company, your team, your business model, your market share, etc.
At the end of the day, I think if you focus on a big problem and try to figure out the solution for that big problem, fundraising will be a lot better.
The other thing to think about, is how to keep your burn rate low - because it may have to last you longer than prior
Parker: I would just say I think that the point of emphasis is, yes, it's hard. But at the same time, the capital market window is open.
If you just read the media headlines, you'd think that no companies are getting funded. But the reality is there are lots of firms here in town that have funds that they're looking to deploy - so companies are getting funded every week.
I know Abigail Risse here in town puts out a newsletter on Substack, it’s a weekly funding roundup that's great. Every week I open it and I’m blown away by the number of companies that are getting started and funded.
There is activity, there is money out there. Don't leave this chat thinking, oh my gosh, there's no money. There's money in town. The great companies are getting funded. They're getting built. People are raising plenty of capital across all stages, specifically at inception; there's a lot of early-stage funds.
I think it's hard if you're, you know, you had growth plans, you missed those growth plans.
That's tough. That's probably the hardest part of the capital market right now. Trying to raise a bridge around.
But people are actively deploying.
Shari: Parker, give us some tips on how our founders should approach raising money in 2024.
Parker: First off, simplify, simplify, simplify.
I think the most common mistake we see is people feel like in the first 30 minutes, you need to get every bit of detail about the business out. The reality is you just wanna get the person excited on the edge of their seat. So in 10 minutes, know, what are the key takeaways that you wanna leave someone with?
The second is that people get obsessed with the story and forget that it's a business and the finances and the numbers matter. So don't show up to a pitch without that level of detail. You want to own your entire financial model and know the significance of every single piece of it.
And then I think the last is to be targeted in your outreach. There's nothing more deflating than going and picking up 15 nos - you might just be getting nos because you're pitching the wrong people. Go on Crunchbase, go on Pitchbook, look at the prior companies that those people specifically have funded, and make sure they seem like the same stage as yours, that they’re in the same industry, and they have similar business models.
Shari: We're getting a lot of questions about marketing strategy. So maybe can we talk a little bit about free or low-cost resources in the Boston area that can help people with marketing and PR strategies?
Kat: One resource that comes to mind is SCORE. Score is free and you apply on their website and they'll connect you with a free mentor that you can meet with, in any specific area of business that you need.
Parker: This is not Boston-specific, but I would encourage everyone to go down the rabbit hole on all the new AI tools available around marketing, ad generation, optimization, and sales.
We've seen more and more companies in the portfolio that show up to the board meeting, and they're like, “Hey, we didn't think this would work, but we tried this AI outreach tool at a pretty low cost and the conversion is quite high.”
And so I don't think that's your whole strategy, but try some AI-generated ads. Try an autonomous optimization engine, try an AI autodialer, go give all the tools a shot and I think you may be surprised. And they're all quite cheap.
Shari: What industries or sectors in Boston will show the most growth in 2024?
Parker: I think the intersection of tech and biology, specifically computation and biology, will continue to explode. Boston's uniquely positioned there. There's so much activity around AI right now. So I see that as a growth area.
Additionally, I think robotics is going to continue to grow and grow. There's a lot of large ecosystem talent in town - you've got Boston Dynamics, Amazon Robotics, Righthand Robotics and Pickle Robots, and Verve Motion. And I think a lot of those companies are reaching the point where you'll have early VPs and directors that start spinning out and start new companies in town. A lot of the work going on in AI right now is making the programming of robots and still casting environments easier and easier.
Daniel: Another space that I'm excited about and paying close attention to is health care. As you know, there's been some chats here and about AI. And I do think that there are some interesting innovations within this space, particularly for health care, and Boston has a strong infrastructure and ecosystem for this.
I also really find that fintech is also pretty interesting. On the blockchain side, the tech that's coming out, and for me, there are specifically some areas within fintech that I find intriguing in how we optimize, unbanked or the underbanked, and how we can use creative tools to support that.
Shari: So where to find startup events in Boston - where's the best place to mingle?
Daniel: I’d encourage people to check out InnoCrew that's led by Kylie. They have, I believe, monthly events that bring people together. Also, a lot of the WeWorks of the world host events and Boston does a very good job in creating disciplined platforms to meet other entrepreneurs, other investors.
Parker: I’ll build on that. I mean, I think around each university there's often a bunch of public events, around specific topics. For example, the Martin Trust Center at MIT hosts something called Pitch2Match a couple of times this semester, they'll let anyone attend.
I mean, it's many students, but anyone can show up, walk up on stage in front of 100-plus people, and share your elevator pitch for an idea.
Just looking at the Eventbrite open page. You know, sometimes if I'm bored and I wanna go meet a bunch of people, I'll just go on Eventbrite and type in startup, pitch event, showcase, some of those keywords. There are events hosted all around town.
There’s Venture Cafe at the CIC and a lot of venue firms host events, certainly, follow us at Pillar, we host a lot of events. Founder Collective and Underscore host many events as well.
Kat: Networking is so important for entrepreneurs and, even if you don't join an accelerator program, accelerator programs host free networking events all year long, such as EforAll, Innovation Studios, MassChallenge , and Techstars. So even if you don’t join an accelerator, join the community so you can meet other entrepreneurs, investors, and partners.
Ignacio: So I will give a shout. I mean, I think you are already in one of the best places in Boston, which is the Startup Boston community. And Stephanie does a magnificent job at curating and looking at everything that's happening in Boston and they share it on social. If you're not, actually, Stephanie's been doing some videos kinda with all the things that are happening in Boston that are great.
The other thing that I would say is Boston is one of those most active cities in the startup space, so just be mindful and intentional about what you are trying to accomplish with your networking and have a goal. Go with a goal. And after you go to the event, go back and say, “Was this a good event? Was it worth my time? Is this something that I want to continue doing?”