Boston Vs. San Francisco: Two Cultures of Innovation

Xconomy National — 

Let’s say you’re an ambitious, creative professional or entrepreneur working in the United States. You’re interested in technology, you have the luxury of mobility, and you want to be close to the center of things. Which city should you choose as your home?

If you’re attracted to a specific sub-field, the answer may be obvious. For finance, advertising, traditional media, or fashion, it’s New York. For government, it’s Washington, DC. For entertainment, it’s Los Angeles.

But for almost any other area of technology or its related industries, Boston and San Francisco should be high on your list. Both are top-tier innovation hubs. How are you supposed to choose between them?

It’s the kind of question that sparks endless debate on forums like Quora or Reddit. Personally, I’m madly, unconditionally in love with San Francisco, to the point where I don’t feel completely comfortable living anywhere else. That’s mostly a matter of aesthetic taste: there’s something about the bracing air, the dramatic views, and the golden light in San Francisco that no other city can match. But I’ve spent enough time studying and working in each place—15 years in and around Boston, 13 years in the San Francisco Bay Area—to have a balanced sense of their pluses and minuses as entrepreneurial base camps.

My own take, based on observing the personalities and operating styles of hundreds of active entrepreneurs in each location, is that both Boston and San Francisco boast incredibly strong innovation cultures. But they’re not the same, of course. Broadly speaking, their entrepreneurs draw energy and inspiration from different sources, and prioritize different goals. It’s a case of contrasting preferences or tendencies, like left-handedness or right-handedness. Neither is better, and each has its advantages.

I’m stereotyping a bit here, but innovators in Boston look to tradition and the patterns of history. They’re good at identifying gaps in existing industries and filling them in. Meanwhile, innovators in San Francisco (which includes Silicon Valley, for purposes of this discussion) prefer to start fresh where possible. The pattern of “disruptive” innovation—in which younger, smaller firms steal business from established leaders by offering cheaper products based on new, initially inferior, but fast-evolving technologies—was first identified in Boston, by Harvard Business School professor Clayton Christensen. But it plays out far more often in San Francisco.

For an example of the contrast, just look at Zipcar and Uber. Both offer alternatives to the world of individual automobile ownership.

Boston-born Zipcar added something new to the traditional rental-car model by offering easy online and mobile scheduling, highly distributed fleets, and a sophisticated logistics backend that allows rentals by the hour. It’s not designed to replace the rental-car business (in fact, renting a Zipcar vehicle for a whole day would be more expensive than going to Hertz or Avis); rather, Zipcar offers very-short-term mobility to otherwise carless urban residents.

San Francisco-born Uber is far more radical. It’s out to disrupt the taxi industry by offering a new, cheaper product—a software-driven network—that gives passengers and drivers a new way to connect, bypassing traditional cab companies and dispatchers (not to mention traditional regulations and pricing schemes).

Or choose another sector: travel. TripAdvisor is a classic Boston company. It built an archive of consumer hotel and restaurant reviews that padded out an existing ecosystem of online travel search and reservations; arguably, it also popularized the whole notion of user reviews in the travel business. Airbnb, by contrast, is a classic San Francisco company. It’s upending the hotel industry by bringing an entirely new class of accommodations into being.

Turning to styles of thought and aspiration, I’d assert that creators in Boston are generally more enchanted by ideas, academic frameworks, and intellectual debates, while creators in San Francisco are more motivated by action, competition for competition’s sake, and the prospect of vast wealth for the winners.

That’s why it’s common to see ideas being conceived or incubated in Boston but then executed at scale in Silicon Valley—think Facebook, Dropbox, and Y Combinator. That’s why some of Boston’s largest and most successful venture firms have moved all or most of their operations to the Bay Area—think Greylock Partners and Charles River Ventures. And that’s why Harvard and MIT are the second- and third-largest suppliers of founders for Series-A-funded tech startups in Silicon Valley, after first-place Stanford, according to the findings of a 2013 Reuters survey.

There is no shame in this for Boston. … Next Page »

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16 responses to “Boston Vs. San Francisco: Two Cultures of Innovation”

  1. Vinit NijhawanVinit Nijhawan says:

    First welcome back to Boston, Wade! A really thoughtful article. My 25 yol son has been in SV for 6 months at the Draper Accelerator working on a nutrition startup and I asked him the same question. His answer: Boston has a mix of startup and non-startup intellectual activities but everyone he meet in SV seems to be focused on making money via a startup. Your observation on Boston being Ideas-driven and SF being money-driven appears to be the most significant of the attributes listed. Vinit Nijhawan (Boston University)

  2. blackylawless says:

    What an extraordinarily limited view of the Bay Area, and overly upbeat view of Boston—and East/West partnership—we find in this article.

    Wow, where do we start? Let’s review the attribute overview, focusing on items in which the Bay Area purportedly is lacking, except for the last one (a Bay Area attribute) which is a low blow.

    History-oriented: We don’t go as far back to the Gold-rush as we do to colonial times? Don’t get it. Come on. Quit the history canard. Computer History museum in Mountain View? Oldest startups? Veteran VC’s. The problem with Boston, is that it’s dead history (DEC), versus historical institutions that are still alive and kicking, though some more than others (Intel or HP).

    Respect for tradition: There’s always things to build on and from which to learn. Happens in both places, but I suspect one side is more stodgy than the other (that would be Boston).

    Looking East Toward Europe: SAP bases U.S. labs in Palo Alto, not Boston. Heck, the Sharks play in SAP arena; the Boston Bruins play in TD Garden. This, alone, indicates far deeper connections to Europe by those in the Bay Area.
    Prioritizes experience: You play into SOMA/Facebook stereotypes propounded by media. All experience levels used in Bay Area.

    Idea-driven: Seems as though most of the great, durable, and sustained tech ideas originate in the Bay Area, and if you mean to suggests the more enduring, ivy laden institutions (idea generating institutions) residing in Boston, well, this isn’t the case either. UCSF, UC Berkeley, Lawrence Livermore, Lawrence Berkeley, Stanford, SLAC, NASA Ames, Xerox PARC, IBM Almaden, and SRI for starters offer magnitudes more of the essential raw material of ideas than Lincoln Lab, MIT, and Harvard.

    Prone to testing and debate: Problem solving always involves evaluation and a dialectic. I don’t think this can be distinguished in the context of cultural geography.

    Friendly veneer, shallow interior: Friendly veneer, sure, but shallow interior? There is nothing shallow about one’s commitment do doing what is best, given their view of a line of argument or a technology. That kind of intellectual passion is much more vibrant in the Bay Area and anything but shallow. It does, admittedly, get in the way of loyalty, as it should, in order to ensure that the best ideas have the best outlet for realization.

    Oh, and money driven? What about purpose driven? Anyway, better purposes lead to more money (Apple –S Jobs), and, of course, I could ask, who isn’t driven by money. Well, many. To that, where is Wikipedia, Long Now, and a whole host of quasi-hippie tech idealism institutions: the Bay Area.

    • Garth says:

      Hit a nerve?


      • blackylawless says:

        You’ve got friends in lowww places.

        • NE-PNW VoorTrekker says:

          Insecure? Relax buddy. Boston firms are blowing away SF right now in biotech. (pharma., fuels, and fine chemicals) and data science. Robots are being designed and manufactured. Meanwhile, you guys just cranked out another mobile device app. for which to launch advertising from. TD (Toronto Dominion) Bank is a Canadian connection = hockey, and Canada is also New England’s largest trading partner. Your SF-Europe connection is a huge stretch. Whenever a European (chemical or biological) high tech. instrument maker needs to put an office in the States, it is usually in Greater Boston from my experience. Novartis moved huge amounts of R&D from Switzerland to Cambridge, MA and shut down Chiron in the Bay area. Shire (UK) built their giant first-in-class single-use biologics manufacturing facility in Lexington, NA, not the Bay Area. Don’t forget the honest to goodness European (F.O.B.) neighborhoods in Boston: Albanians in South Boston, Irish in South Boston/Dorchester, Polish in Dorchester/South Boston, Italians, Greeks, & Azorians all over the place, huge Bastille Day parties all over the city in countless French restaurants via French ex-pats., and also a giant British ex-pat. community.

          • blackylawless says:

            I am actually relaxin’, thank you New England is no longer in the rear view, now many laps behind, while the SF/SJ Bay Area is getting farther ahead. Last qtr stats indicate that Bay Area firms took on %55 of US venture capital, while New England firms took %10. 20 yr averages place it at around %39 to %12 in the Bay Area’s favor.

            All other data indicators of tech/biz progress show the Bay Area to be on top–including the industry segments you suggests are in Boston’s favor. You may have had a case for those 10 years or prior, but no longer. I now relax.

          • NE-PNW VoorTrekker says:

            So a bunch of rich guys blowing their money on speculation is your metric for why you think SF (and that dreaded sprawl known as SV) are on top? Sure, they are needed to create businesses, but that’s like a doctor bragging about making $500k/y and all of his patients die on the operating table.

            Provide this data you speak of. I’ve been in biotechnology for 17 years- you clearly are not following this industry right now. And If the “Bay Area” (A cute name people in the Sprawl use to associate themselves with the city of SF) is on top in general, then by how much? 5%?

            This is an older article and things have only tillted more in the favor of Boston Biotech since.

            You have not addressed your Europe statement yet either. SAP? Are you kidding me? I forgot how groundbreaking Field Glass was.

          • blackylawless says:

            Not only are you (a proxy for New England) not even in the rear view mirror, your engine is sputtering, as your comment indicates thusly.

          • NE-PNW VoorTrekker says:

            Thanks for the data! I rest my case.

          • blackylawless says:

            Sputtering engines do need rest. Night night…

          • blackylawless says:

            Minor correction. More granular q2 2014 venture stats breakout Boston metro vc activity from overall New England vc activity. Boston area businesses took on $.79B in venture deals, while Bay Area firms had $7.40B in deals, yielding a deal valuation 9.37 times that of the Boston region. I apologize that I was a bit too generous in my earlier assessment of Boston area vc deal activity.

            Anyway….shhh….gotta leave quietly. NE-PNW is asleep.

  3. yermom72 says:

    Oh great, now they’ll ruin Boston too.

  4. Michael Hebert says:

    Good write-up…was just talking about this last night in a presentation. You went deeper though. For those locked on the east coast it interesting to note that SV is a very different vibe then SF which is only just a few miles north. I wasn’t prepared for that when I visited.

  5. jenz104 says:

    All the companies in this article compare starts from the 2000 decade, Zipcar and TripAdvisor to things created in the last 3 years … uber and AirBnb — silly.
    Boston rules in biotech, big data for inbound marketing, other big data (such as life sciences), robotics and edtech.

  6. Freebie says:

    Another consideration here is that MA allows for non-compete clauses, which sends many smaller startups coming out of MIT and Harvard to the Bay Area where they can recruit much more easily.

  7. Joe Cassara says:

    I’ve been to both the Bay Area and Boston, and I prefer the relaxed, mature intellectual environment of the latter to the arrogance and hotheadedness of the former.