8 Things We Learned This Summer About the Boston Tech Scene

Before you head out for the long holiday weekend—well, some of you—I wanted to remind you of one thing. Boston innovation scene, I am watching you.

I am watching you because you are changing before my eyes. Some of it is surprising, some of it isn’t. Some of it is of local interest, but most of it speaks to Boston’s prominence as a national innovation hub—and the global impact of its people, organizations, and industries.

Here are eight of the biggest trends I’m seeing:

1. The IPO market is holding steady. The IPOs of Kayak, Exa, Demandware, and Brightcove have been modest, but they add to a growing list of recently-gone-public tech companies that also includes Carbonite, Zipcar, and TripAdvisor. And the newly public companies’ stock prices have done better, relatively, than giants like Facebook, Groupon, and Zynga this summer. (The three Boston-area biotech companies that have gone public this year—Merrimack Pharmaceuticals, Verastem, and Tesaro—have seen their stock prices hold steady too.) Note: Boston compares favorably to New York in this regard.

2. Startup schools are in session. Boston is a great town for education. It’s not surprising, then, that several organizations have popped up to fill the instructional gaps between universities, startups, and big companies. Among them is Boston Startup School, which graduated its first class this month. Meanwhile, Intelligent.ly is going strong with its own blend of mentorship and collaboration. Both programs offer tutorials in areas like marketing, product design and management, strategy and leadership, and software development. (Also, General Assembly has been expanding from New York to Boston and a bunch of other cities.)

3. Innovation real estate mojo is moving from Cambridge to Boston. This is probably a cyclical thing. Zipcar is the latest high-profile company to confirm it is moving across the river to Boston proper. (Brightcove, SCVNGR, and Jumptap are a few recent ones that come to mind.) You can hardly drink at a bar without hearing an entrepreneur complain about rent prices in Cambridge (especially Kendall Square). All of that—coupled with the expansion of PayPal in downtown Boston and the rise of the nearby Innovation District—means the pendulum of popularity has swung. But don’t worry, Cambridge isn’t going anywhere.

4. The venture capital landscape has changed. Some big VC firms in town are going through transitions. Various partners have left, and those remaining (or new) are hustling for investments in a more transparent world. Fundraising is tough but doable. Newer, smaller firms—anyone call them micro-VC anymore?—are quietly plugging away. Like many fields, venture seems to be getting more specialized—there are funds for big data, or built around one or two partners. One exception would be General Catalyst, known more for its tech portfolio, now moving prominently into healthcare. Which brings me to…

5. Health IT has come of age. With Rock Health and Healthbox joining TechStars, MassChallenge, and university incubators around town, there is a groundswell of health-tech innovation happening at many levels. The Boston area has anchors in the field such as Athenahealth, PatientsLikeMe, and Sermo (WorldOne), plus a huge clinical and medical research community, plus tons of talented engineers and business people looking to try something new. And broader tech companies like iRobot and Vecna (to say nothing of giants like Microsoft and IBM) are focusing specifically on health applications. The ubiquity of broadband Internet, Wi-Fi, smartphones, tablets, and data analysis software, coupled with policy developments, adds up to one thing: look for this sector to go mainstream in the coming year.

6. Robotics is about to explode. Meanwhile, a longtime strength of the Boston area is looking to pay off commercially with a number of companies making big strides. In addition to the latest advances from iRobot and Vecna, look for Rethink Robotics to unveil its manufacturing robots to the world in the coming weeks. Harvest Automation is also making plenty of progress in manual labor, starting with its agricultural robots. Boston Dynamics continues to impress with its running military robots and software. Meanwhile, how is Kiva Systems doing in its big integration with Amazon? One overarching issue in the field: experts see a battle shaping up over robotic operating systems and software, with the future of value creation at stake.

7. Tech talent is flowing from bigger companies to startups. I haven’t done an exhaustive study, but plenty of anecdotal evidence suggests startups—especially those on the cusp of going big—are successfully recruiting high-level talent from bigger, established companies, including Google, Apple, Akamai, HP, Oracle, PayPal, and TripAdvisor. Part of this is the mainstreaming of startup culture, but part of it is also that growing startups have money to spend. Which leads me to…

8. Money is flowing to a batch of startups looking to go big. In July, I examined 11 area tech companies that have raised more than $50 million in venture funding—such as Gemvara, HubSpot, Rapid7, and Wayfair. By this month the number has grown to at least 13—see Visible Measures, and I should have counted Care.com—with a few others knocking on the door (Plexxi, Gazelle).

An update: This week HubSpot has been in the news for its Inbound 2012 conference in Boston, and a big release of its revamped marketing software, aimed at personalization and moving up-market. So, to the question of whether this iconic tech company will IPO or get acquired, my current answer is, who cares? When you have $50 million in yearly revenue, just keep growing, baby.

Gregory T. Huang is Xconomy's Editor in Chief. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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