From froth to trough… my thoughts on the current state of Boston tech, the call to create now, and a future of 1,000 new Boston companies by EOY 2022.
The BLUF (Bottom Line Up Front): Boston. There is no better time to start a company than right now. We’ve been through up and down economies before, but this one is going to hurt more than you think it is. While we can double down on the Wayfair’s, PillPack’s, Drizly’s, and others of the city doing well right now… more Bostonians are going to have to START new companies. A new generation of entrepreneurs must step up to the plate and create. Why? Because, for Boston, the cost of not doing so is simply too high.
Our jobs and livelihoods depend on it.
As someone who connects with Boston Operators, Founders, and VC’s for a living, I wanted to share this. But more importantly, I wanted to give practical, actionable things you can do to help create the next dawn of Boston companies and change industries. If you have more ideas, include them here. I’ll report back on the results. This will be an ongoing dialogue.
The Problem
Marc Andreesen posted a great article this week called “It’s Time to Build.” Read it. It’s gold. His point: “We are going to have to build our way out of this” (paraphrasing).
This black swan event has Boston tech scrambling… and it’s soon to bring Boston tech to it’s knees. Layoffs have occured at dozens of tech companies. 10,000+ people within all disciplines have hit the open market within 30 days. Even engineers are being cut. Blasphemy! No department is safe.
Many companies in the B2B, travel, and restaurant space have hit concrete walls. Toast, EZCater, Hopper, and other’s IPO dreams are not shattered (they will ultimately be ok)… but almost certainly significantly delayed. They will push their teams to do more with less, stockpile cash for what could inevitably be a 2 to 3+ year turbulent time, and be much, much more cautious…
There’s a harsh reality that people who were recently laid off are starting to realize now: there are no jobs. Ok… ok… there are SOME jobs. But, I’ll put it another way: Across a list of 150 companies I regularly track, there are 20 candidates on the market for every one open role. Yes. 20 to 1…
Companies have roles posted, but ~25% of those roles are phantom roles…
Companies are in cash conservation mode and may cut deeper…
Many companies are NOT going to rehire at remotely the clip that they were.
Many will not hire at all. Like… at all… at all.
I’m a realistic-optimist by nature. Optimist because I believe you can create any new reality. And realist because dreams only become reality if you put in the work. And right now, no “we’re in this together” or COVID concert of hope is going to magically bring us back to a pre-COVID world, nor should it. Instead, let’s embrace this opportunity to create a thriving new world, better than the one before, and yes.. with COVID still in it. This is not passing anytime soon. Embrace it.
It’s not all doom and gloom. Other companies in the consumer space in ecommerce, e-learning, and insurance are seeing massive growth. People are upgrading their dusty office desks for new ones (Wayfair). They are having wine, beer, and liquor delivered for their virtual happy hours (Drizly). They are sending cards (Lovepop), buying meat (ButcherBox), getting pills (PillPack) and refinancing their homes (OwnUp). But even these companies, with 50% — 500+% YOY growth are going to count their chickens wisely, and often, making sure to not overextend themselves.
There will be winners. There will be losers. And there will be a massive amount of companies in the middle…
It certainly is a new world.
Solutions. What can we do?
“This is likely our country’s Sputnik moment of our lifetime.” said my friend Colby. The moment America’s investment in science and technology took off, in fear over the Russians dominating space. It left a lasting legacy in the world… It was the push we needed.
Looking back on this time, we’ll realize this was our generation’s kick-in-the-ass moment we needed. There may never be another time in our lives where so much opportunity exists to transform not just companies… but entire industries.
Commerce, the trades, healthcare, education, supply chain, video conferencing and remote work, on-demand, commercial real estate, residential real estate, automation, travel… planes, trains, automobiles… and more. These problems aren’t solved. These things aren’t fixed. In fact… many of them are breaking. Almost every industry has been changed by this. New habits are forming.
This is a call to arms to reinvent these industries, to solve the new problems that have been put right in front of your eyes.
Sure you could be thinking about the next pandemic tracker. But what about that childcare is too expensive? That we don’t have enough plumbers or electricians and gaining access is difficult? There are hundreds of ideas to tackle.
Practically speaking…
Here is a list of practical, actionable things you can do to help create the next dawn of Boston companies. If you have more ideas, include them here. I’m pulling together a heat map of all of these for the community, and I’ll report back on the results. This will be an ongoing dialogue.
- Yes, we need to think BIG like Andreesen writes, but we also need to leverage tech-people’s abilities in non-tech-heavy industries and the trades. If you’ve wanted to start something, whether unemployed or not, don’t “have an idea?”… Here’s 100 of them to start you off. My friend Mike sent me that link a while ago. These industries have killer experts, who a lot of times lack killer business people and killer tech.There are opportunities in the B2C, B2B, and B2B2C space. Here’s a snapshot from my brain and others: Smart home installation, special needs pet training, remote athlete coaching, mobile bike tuneups, chimney cleaning, graffiti removal, mold removal, hot tub wiring / installation, deck staining, fence installation, boat shrink wrapping, on-demand motorcycle testing, custom puzzle manufacturing, firepit installation, tree cutting, in-home bartending services, Christmas light installation. The list goes on and on. All ripe for change. All real problems. VC fundable? Some yes, many no. But, customer problems nonetheless… potential companies nonetheless. You don’t have to build the next Facebook or Google or Wayfair. Niraj and Steve of Wayfair started selling racks and stands online. Now they are on top of a $10 Billion growing empire. I challenge you to think of industries and ideas that are ripe for change. Take the leap.
- We have to encourage company alumni leaders from Wayfair, Hubspot, CarGurus, and others who have seen growth, to attack a customer problem and create something new. Those public companies printed thousands of smart, hard working, decisive, transparent, fast moving, killer employees. I can name many of them. Let’s engage these people and give them a little push. The Wayfund has a mission of supporting 100+ Wayfair alumni founders by EOY 2022, with 12 companies founded by former Wayfair employees already. If you’re from Hubspot, Rapid7, Trip, DataDog, or other company that has gone public, here’s a running start for you. What if Boston helped support 1,000+ new companies by EOY 2022. Impossible? Says who. And we have to engage our Operator angel & VC communities to not only fund these startups, but engage with advice and time. On the VC side, I’m challenging you to dive in deeper with new opportunities to fund and provide expertise. Example: Take a look at the Everyday Economy Accelorator initiative Nextview is taking right now. Unbelievably awesome. They get it. Take the leap.
- We have to encourage government to look out for first time entrepreneurs. People are encouraged to buy starter homes in America via Uncle Sam and the tax code. But are people encouraged to start their first company? Ummmm. Not really. When was the last time you felt MOTIVATED by the government to start a company. Likely never. Why? Sharktank encourages it every Friday night. Mark Cuban is championing entrepreneurs on CNBC, GMA, and Bloomberg weekly. How about the government bring that same type of enthusiasm?!?!? Sure the SBA is there (and visible right now), but what else? Governor Baker cares about making improvements here in Massachusetts. He and his cabinet are open to feedback. But, we need to push the agenda. I don’t have all the answers here, but with their support we can improve things. Submit your own ideas here. I’ll take them to the Governor and his team to give your feedback. Take the leap.
This is our Sputnik moment of the 21st century. That time that started the “space age,” chasing satellites, that inevitably pushed America to step up it’s game. A moment we needed to challenge ourselves to create a new future.
To all those people in Boston who have wanted to start something… now is your time. We are resilient. “This is our f’ing city” after all (thanks Big Papi). And I have confidence we can make this happen. Whether you create the next Uber, Airbnb, Slack (all of which started in the last recession btw), or create a new solution from the hundreds of ideas listed above… opportunity exists. Your highest likelihood of success, very well could be now, in this dark time. Don’t let it pass you by.
Many years from now, there will be a new generation of entrepreneurs who look back and see for themselves that they did it… they took the leap… and they changed the city and the world.
Take the leap.
It’s go time.
