How “Place” Matters in Innovation


There has been a lively debate following Scott Kirsner’s Innovation Economy blog “Why Waltham Doesn’t Matter.” One of the threads is whether it matters if entrepreneurs and VCs are physically concentrated close to each other.

It should not matter where a VC’s offices are located. Good VCs and entrepreneurs will find each other. Andrew Perlman, who co-founded several local big successes, including Coatue, Sirtris, and GreatPoint Energy, in my observation is almost never in his office. He is out meeting investors and other potential collaborators wherever they may be. On any given day someone like Andrew may be found in his Cambridge office, or at a coal mine in the midwest, or in a place like Novosibirsk, Russia’s science city, where he acquired some of the core technology for Coatue.

This can be true for VCs as well. Based on how often I see Bob Metcalfe outside of his Polaris Venture Partners office, I’m not convinced he has one. Celebrated West Coast VC Vinod Khosla has had no trouble investing in young companies in the Cambridge area, such as iSkoot, Mascoma, and GreatPoint Energy.

But these are our superstars. Many of the rest of us find it hard to make connections. This is particularly true for newcomers, such as the roughly 3,000 new arrivals at MIT each year. They may be amongst the smartest people in the world, but they don’t know anybody and they often have limited social skills. How has this group of people consistently pumped out some of the world’s most important technology companies?

This is where the density of Cambridge kicks in. People working and studying in and around Kendall Square meet constantly and informally: at myriad talks at MIT where you are likely to run into a Nobel Laureate, at gatherings we can walk to after work before heading home, in the hallways of our tightly clustered buildings of powerhouses like Google, Microsoft, Akamai, Genzyme, Novartis, and Biogen Idec, at local watering holes like the Muddy Charles, and at loosely structured meetups, such as those at Bijan Sabet and Nabeel Hyatt’s OpenCoffee Club at Café Andala in Central Square. These chance meetings are where a bright kid from Israel gets urged to start a company, how a new entrepreneur first “clicks” with an investor, how an investor helps find a great CFO for that entrepreneur, and how a lawyer offers to kick in the time to get it all incorporated. Stuff happens here, and this is why Cambridge matters.

We tend to take this for granted, and we miss its importance. Anyone who has spent time in other science and technology regions, such as Cambridge (England), Shanghai, or Silicon Valley knows that those places are spread out and broken up. Key labs, companies, and universities are so far apart that getting together may mean a two-hour car drive.

How do we make the most of this unique structural advantage? There are many great role models out there. Joost Bonsen, another Xconomist, helped create MIT’s $100K business plan competition, which galvanized current students at MIT to think about startups, and created a movement which spread to many other universities. He also helped create TechLink, a group that organizes mixers between different departments at MIT, and which helped MIT become a better collaborating university at the student level. Desh Deshpande created the Deshpande Center for Technological Innovation at MIT, getting capital and help to individuals with exceptional nascent ideas. The British Consulate, and later and on a grander scale, Microsoft, opened beautiful meeting facilities next to MIT where networking groups were welcome to hold their events. Jeff Bussgang and his colleagues at Flybridge Capital Partners created Stay In MA, which helps students cover the costs of attending local professional conferences. Some of us are working on a project called Venture Café, which seeks to create a different type of ‘center’ in the center of Kendall Square.

Coming back to Scott’s blog post, I don’t believe it matters if you are a VC in Boston, Cambridge, or Waltham, or if you are a company, a city government, a university, or simply an individual who cares about innovation. The way to matter is to contribute to building and strengthening your community in the ways you can. Pick an initiative and run with it. If it doesn’t work, try something else. You will make a difference, and at the very least, perhaps Scott Kirsner won’t get on your case.

Xconomist Tim Rowe is Founder and CEO of Cambridge Innovation Center. Follow @rowe

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12 responses to “How “Place” Matters in Innovation”

  1. Tim, Someday I am going to lead the committee to get a bronze statue of you (no–actually terra cotta, salvaged materials, or stainless steel would be cooler) erected in Kendall Square. You’ll be surrounded by images and names of companies and people you’ve helped by virtue of your boundless creativity, energy, and hard work. Thank you. Meanwhile, keep up the good fight. You are too young to memorialize just yet.

  2. Great piece, Tim. But I don’t see it offering many examples of how folks in Waltham (aside from Bob Metcalfe, who lives in Back Bay and spends lots of time at MIT) are contributing to the vibrant new culture of entrepreneurship in our city. Maybe folks who benefit from the urban cluster feel more motivated to give back to it, and get the flywheel spinning even faster?

    (I do agree with your point that the best VCs travel constantly to learn about the world and do deals.)

  3. I have to say, if I were a VC I would not be up in Waltham, which I find kind of sterile. But at the same, I agree with Tim and don’t see having a Waltham office as any impediment to fostering innovation and entrepreneurship. For one thing, there are benefits to having so many VCs so concentrated—it can be easier for entrepreneurs to schedule appointments close together, for instance. Such proximity can also help spur competition for deals (VCs can see an entrepreneur they just spoke do walk to the firm next door), which helps entrepreneurs, and it can help breed the familiarity and trust that leads different VC firms to work together on deals, which also helps entrepreneurs. It’s very much like Sand Hill Road in CA.

    But more to the point, I run into Waltham VCs in Cambridge and Boston all the time, and not just Bob Metcalfe. They are prowling the halls at MIT, meeting folks for lunch or coffee in Kendall Square, having breakfast with entrepreneurs at Henriettas, or roaming Rogers Street, where Xconomy is based. And, of course, Waltham VCs have made many, many investments in Cambridge and Boston startups. They are an integral part of the scene, and the culture.

  4. Gus Weber says:

    As always, great comments Tim! I too agree that the rockstar VC’s & innovators are already engaged in the community, and that opencoffee (along with a myriad of other events) is a great way for students to meet a select few folks that may be able to help them in their quest. But in order to take advantage students first have to know that it exists,and chances are that if you’re on the otherside of the river at NEU, you may never know.

    I think that we need something that scales…that brings the action to the students, that crosses university boundaries and that really allows studetns to become engrained in the innovation community and culture in Boston. Ideally, we’d offer them opportunities to learn, engage with the folks that will be able help them, and to understand where the opportunites exist — on a regular rythym at times and places that are convenient to their schedules.

    In short, think opencoffee meets webinno…with a twist of education.

  5. Bob – I agree that being in Waltham is not an *impediment* to fostering entrepreneurship… but why are we all at a loss to note anything the Waltham crowd is actually *doing* to foster entrepreneurship? Anyone???

  6. Hi Scott,

    I’m not at a loss. I have served on MIT committees about innovation with VC members from Waltham (as well as from Cambridge and Boston), and I routinely see reps of Waltham firms taking part in, and sponsoring, entrepreneurship events and activities at MIT and Harvard, BU, and more. I’ve been to private dinners for entrepreneurs on leading-edge trends put on by two Waltham firms. I’ve been to a retreat for entrepreneurs put on by another Waltham firm. And these examples are off the top of my head, I’m sure there are many more.

    And more to the point, I see investing in local firms as fostering entrepreneurship–don’t you? Just a quick look at the data on new VC investments in Boston-area companies in June and July shows 14 times that Waltham-based VC firms ponied up for local companies. The number for Boston- and Cambridge-based VCs is about half that.

  7. I do see Waltham firms investing in start-ups, which is great. I just argue that the new center of gravity for VC in our area is Boston & Cambridge. See the original post:

  8. Bob: I think the better headline would have been “How ‘proximity’ matters in innovation.” There was a great story on NPR this morning about how proximity and shared past are the two most powerful forces in forming relationships. How true, but simple. You have to meet people to get to know them and have some type of bond. Not quite rocket science.

  9. Tim RoweTim Rowe says:

    Jules: Ummm… thanks?

    Scott: If it is true as Bob B. says that Waltham VCs are doing more deals in Boston/Cambridge than the VCs in Boston/ Cambridge, then that’s probably the best argument for what they are doing. But I think your point is that to “matter” you have to do more than invest, you also have to contribute to building the community (not just reap, but also sow). No disagreement there.

    Gus: These are good ideas, and you within Microsoft are really taking the lead in a bunch of these areas. I look forward to seeing the fruits of your many efforts to work with students and to help them find internships at firms in the area.

    James: Your suggestion is better. The original title was “How to get off S.K.’s S**t list”, but I didn’t think that would survive editorial review.

  10. Tom Summit says:

    What I took away from the “Why Waltham Doesn’t Matter” post was not about the actual place Waltham and Mount Money, but that the way of conducting the VC business has changed.
    The old school “Waltham” approach is giving way to more openness, entrepreneurial community involvement and connectedness.

    So as I see it, Tim is agreeing with Scott. His examples above, speak of the new culture of collaboration, giving back to the community and openness that is growing here in theHub.

    James- RE: proximity – I believe a study was published recently that showed the further away from your VC you are, the better your returns.

  11. Tom: yes, that HBS study released in June made somewhat of a counter point, but didn’t make the point that local or close proximity was bad, just that distance could enhance returns. There could be many reasons why, including better investment discipline. There also was a recent study in Sloan Management Review about how that teams work best when they are immediately proximiate (eg., same floor of a building) and far away (eg. across town or across the country). Teams on different floors of the same building performed worse, likely because they take proximity for granted but don’t really get the benefits from it. (

    Building on your point, we shouldn’t think proximity is a panacea. You have to make a conscious effort to the most of it. At the same time, distance isn’t a terrible barrier as long as you consciously make an effort to overcome it. My point above was just that you have to at least start with a way to rub shoulders and get to know each other.

    The most important thing entrepreneurs and venture capitalists are selling to each other is trust. Clearly from the energy around the topic of entrepreneur-investor relationships there’s a lot of room for improvement.