My original post reacting to Jeff Bussgang’s thoughts on why Boston doesn’t have any great consumer hits argued that it is primarily due to culture. The West Coast general psyche is more comfortable with taking big risks for big rewards, whereas the East Coast frame of mind steers towards calculated, formulated risks.
There were two articles in the Boston Globe earlier this week, both here and here, that speak to the differences in venture capital investing cultures between the two tech centers. If you have an interest in this coastal comparison, you should read both articles, especially to hear quoted perspectives on the issue from a number of VCs.
The second article from Robert Weisman states,
“While many trends can be seen on both coasts, Silicon Valley venture capitalists who spend time in Boston see some differences: a venture industry in the Valley that invests more than twice as many dollars as New England, the nation’s second-largest venture market; a less clubby environment here in the West, with more tolerance for failure; a greater emphasis on consumer-oriented investments, from digital media to personalized medicine…”
But as I’ve argued previously, this situation – especially with respect to digital media and consumer-facing technologies – needs to change. Weisman continues,
“[The] focus on consumers, stand[s] in contrast to the 1990s, where the most profitable niches in California and New England were selling software and telecommunications gear to corporate data centers. But those niches are being squeezed today, with businesses cutting back on spending.”
That assessment is absolutely correct. The continued demand for consumer-centered technologies (including the infrastructure to support them) will force the Boston entrepreneurial community to at least partially shift its focus away from enterprise information technology and towards what has been traditionally West Coast territory.