Boston offers a world of advantages for startup founders

Good afternoon everyone I'm Ron Miller I Write about the Antichrist for TechCrunch and this afternoon I'm Interviewing Kate brummy who is CEO at Mass challenge a boston-based zero Equity incubator that helps startups Launch gives them space or build space Equity for a little bit of equity for uh With no expectations of return and Introduces them to the right people in The community to help them survive and Thrive as a business and get off the Ground welcome Kate thank you Ron for Having me excited to be here Yeah well we're here to discuss why Boston is a great place to launch a Startup and obviously that's something That you have expertise in given you Know your company and what you do Um I I wanted to start up talking about The universities and colleges that kind Of act as a driver to Um you know start a community in Boston New business however there's MIT there's Northeastern there's UMass there's Tufts Just a lot of world-class colleges and Universities all in the Metro Boston Area and I'm wondering why you think That helps drive this Boston startup System that we have Sure yeah Ron I think you you Dove right Into one of the often cited highlights Of the Boston startup ecosystem and it It supports our our unique uh

Environment in a couple different ways One is Babson Harvard MIT Tufts each Spin out incredible companies each year From undergrad from graduate from their PHD program directly feeding into our uh Into our ecosystem and second they Support incredible talent and talent Density in our area so that companies Who are looking for full-time uh interns What have you have sort of direct access To this incredible pool of talent and I Think those two Powers combined much Less the incredible research that's Happening in Labs uh make uh our University system a really unique and Potent contributor to our startup uh Community here How closely does your firm work with you Know the different University and College incubators because there's so Many of them for sure I mean as closely As you can as as you mentioned Mass Challenge we like to think of ourselves As a Global Network of innovators we're Headquartered in Boston we have 13 years Of working with high impact high Potential companies helping them launch And grow uh for no equity at no cost That model makes us a really friendly First home for many Founders who are Coming out of labs into first Commercialization and or for students Who are looking to enter into uh into The world with their with their startup

Baby so we have formal relationships in Place with many of the University Systems that enable students to move Senior seamlessly from their University Support system for example to mass Challenge and informal relationships With as many as we can You know I've talked to Startup Founders Who came out of the college system in The Boston area and when you talk to Phds especially once we're doing lab Work one of the things they've said to Me is that once their PHD is over you Know they have lost access to all this Very expensive equipment that they often Need to use to do their experiments and To kind of create the things that will Drive their business creation how does Having that kind of post graduate Um you know system of labs and and Workspaces help kind of Drive the Ecosystem oh sure I mean for sure coming From a university system where you have Not only access to lab equipment but a Robust Community maybe free food a whole Shebang I mean that's a cushy life and Then you enter the real world uh you at Mass challenge we uh provide space for Our Founders and in fact for the broader Community and are very focused also on Providing a community of innovators Around them and we work in close concert With an amazing array of Partners across The Massachusetts ecosystem that provide

Access to lab space equipment testing Facilities so Mass robotics uh is the World's largest incubator for robotic Companies Greentown Labs the largest uh Now for climate and cream clean tech you Have Forge who specifically supports Hardware companies Lab Central and life Science and so our our powers combine if You would provide a really unique Support system for Founders from Community Through To equipment So you know I was thinking about it Before I got on this call and some Pretty famous you know Founders started In Boston but then didn't stay here you Know you think of Bill Gates moving Microsoft to Seattle or Mark Zuckerberg Moving um Facebook to Palo Alto you know When When I'm a startup founder and I come Out of these Boston Schools there are a Lot of different places I could go to I Could go to Miami it's great weather I Could go to New York it's got you know The glitz and the glamor and it's got Fortune 500 companies at my doorstep or I could go you know out to San Francisco Like Zuckerberg did Um because you know it's it's the Startup Center you know it's considered Like the kind of tour de force of Startups right Um so so why why should I stay in Boston Why should I launch my startup here what

What does Boston have to offer that Would be you know make me want to stay Here and start a business yeah that's Great and certainly highlighting the Ones that Got Away make us super Reflective also of like our of our Journey and what we do well and and what We don't do as well uh because I think You know all ecosystems are unique Couple of things that we always Highlight and that Founders highlight Back to us first is Boston is a very Dense ecosystem uh which makes it uh Easy to navigate a lot of Cross-pollination of talent and Companies and even investment firms Which is very attractive to many Companies second highly collaborative I Think this comes from in many ways our DNA and sort of problem solving first Company building second and so you find An ecosystem that's welcoming Um as I mentioned collaborative Um and really focused on supporting Founders that are working on on hard Problems third is Talent we started with The University Systems as sort of one Great example but uh talent coming out Of companies that are that much farther Ahead also extremely valuable for Companies that are just getting started And or scaling up And the last is well we may not be quite Uh as as large in absolute dollars of

Silicon Valley we have a high density of Venture capital and particularly Eventual Capital with deep expertise and Specialization in certain areas that are Very attractive to our startup Founders And so you know collectively it makes Mass challenge a really Unique Home Particularly for Founders that are Working on complex problems you know With our DNA and like science and Enterprise technology growing in Robotics Advanced Materials we're you Know a really unique home for many Founders in those areas So you know we we talked about the Universities but Boston has in the Boston areas more than that right it has World-class hospitals it it's got Financial Services Fidelity is is based Here and and other financial services Companies Um you know there's Insurance there's There's a lot of different types of um Of companies how do those kind of Established companies uh you know work With you and work with Venture Capitalists and others in the area and The universities to kind of you know Intend I mean like you talked about the Collaborative stuff Um you know how do they all work Together to you know to help build start How startups build their companies here For sure and I'll also highlight you

Know we have industry but also public Sector Partners who are very engaged in Innovation have a long history of Supporting even startup-led Innovation So whether it's miter or Draper or Lincoln Laboratories Um deep expertise and you know unique Technology development uh through to Commercialization and so you know we um I think that Health Tech fintech dual Use Safety and Security are three great Examples of where Boston is uh we think Really in the lead at uh leveraging our Industry and corporate landscape to help Startups both do faster customer Discovery or research pilot uh and Co-create opportunities and then ideally Get to scale at math challenge we we in Fact launched our fintech and our Digital Health practice almost five or Six years ago now with support from the Private sector and the public sector who Wanted to see Massachusetts better Support Mason companies in these really Critical categories Leverage The Best of Our Legacy Industries to get to Market Faster and so our digital Health our Fintech programs are designed to do Exactly that match small startup Companies with incumbents like Mass Mutual like citizens who have interest In being close to innovators and are Willing to help them you know pilot test And scale where it works yeah so how

Does that work in practice I mean you Know I'm a startup founder I have this Idea that maybe can help uh you know Like a Citizens or a Fidelity or you Know one of the hospitals become you Know more modern or give them an edge That maybe they wouldn't have on their Own as a you know kind of an incumbent Player how does all that work together And how do how do they not suffocate the Startups because sometimes working with Large companies you can have this you Know like huge entity kind of taking Over the development and you know Pushing them in directions maybe that Isn't you know widely commercial or Something like that oh absolutely I've Heard it really well described as a Startup is like an acorn under a big oak Tree and with the proper love care Sunlight it'll grow grow and hopefully One day Um be as compelling but the risk is that In the meantime it gets squashed by The Roots doesn't get sun Etc and so I'll Highlight a couple things about the way The industry works and then maybe how Mass challenge challenges engaged within Boston to try and you know make it even More effective we're lucky in Boston That many of these large teams have Their scouting or r d functions based in Boston and their mandate is to go out Into the world knowing the problems that

Uh say children's hospital or Mass Mutual is trying to solve and identify Early stage companies that could be Compelling fits against these either Short-term or longer term challenges And then provide you know more of a safe Haven for early validation and testing And piloting to see if there is a strong Mutually beneficial fit before you know Moving them into a deployment phase But we know at Mass challenge is that's Easier said than done it's actually Really challenging for early stage Companies to know what challenges or Problem sets these big companies have It's really hard to find the right Person inside to navigate procurement uh And then to move from Pilot to scale up And so you know with uh the co-creation Of our corporate Partners we've built a Program that's intended to help Megaphone out to the world what are the Challenges that these companies face so That startups can match to those Challenges and then we have the Architecture to help them mutually Determine whether there's a good fit and Then if so move forward but as you say It's it's uh it's hard work and it Requires both parties to adapt uh in uh In ways that it feel less natural What is your own network I mean your own Network of you know companies that have Come through the mass challenge

Incubator help in that regard because They can probably direct you know Founders and guide them in ways that you Know based on their experience how they Were able to kind of make that work Sure and I'll I'll speak about Mass Channel I'll say that I think uh our Example is also what makes Boston great Because we have many many Founders who Have gone through various stages and are Willing to turn around and give back of Their time their expertise and in many Cases uh their own Capital to support The generation of Founders behind them And so certainly at Mass challenge uh The best scenario for us are when alumni Who've gone through the programs are Willing to and do in fact come back to To speak provide you know their Experience to other Founders we have an Increasing number of alumni who actively Mentor and Coach uh our our startups uh And then also to help them uh break open Doors whether it's with new customers or Other partners Etc and so you're you're Absolutely right that sort of Collaborative uh give back ethos uh that We Inspire to instill in our partners is Important and part of the Boston Ecosystem too you know um as I Was Preparing for this I looked at some Pitchbook data about the growth of Boston's venture capital investment and It's really exploded you know in in

Recent years it went from I think 17 Billion in in Um 2020 to 34 billion in 21 before Dropping off a bit in 22 and I think Everybody everywhere dropped off but why Do you how does how does this Venture Capital system that's been really you Know growing and developing over the Last 20 or 30 years in Boston how does That help you know these companies as They they kind of come out of your Um you know space you know kind of safe Space and get out in the world and they Need more money to go to market Yeah the so we're we're excited to see Not only that Boston has sort of grown With the growth of the Venture Capital Space but in in many areas Um uh has outpaced the gross of venture Capital elsewhere uh and particularly I Think we see a couple Um uh exciting areas life science has Always been sort of a a really large Life science and biotech large part but We see a large number of firms growing Firms in the early stage space which we Cheer on we know that uh Boston has a Legacy of Angel Investors but more in The pre-seed seed space are hugely Beneficial to supporting a really Healthy pipeline in addition to Specialized funds in uh digital Health Bio convergence artificial intelligence Um as well over time and so certainly

What we know from our Founders is that They want to raise capital in Boston and Build teams in Boston and so the growth Of venture capital here enables that can Compared to feeling like you have to go To Silicon Valley So you talked about the angel investment System and I think you know that's That's something that has happened over The last I don't know 20 or 30 years as Companies have developed and you know Gone public or been acquired and created This wealth among startup Founders and You see it with Wayfair you see it with HubSpot Um you know Carbon black got acquired For a billion dollars a 1.2 billion Dollars acquia for a billion dollars so There's been some big exits um there's Been some big IPOs how does that kind of Help you know Drive what you're trying To do in your firm as well as you know This system at Large For sure so one is we are extremely Fortunate that uh some of those Individuals give back to organizations Like ours were nonprofit and so we we Have to say thank you always uh for that Support but more importantly for the for The ecosystem I think we see Um one is a deep commitment by Individuals who have had entrepreneurial Success often to give back both with Their capital and at their time and that

Absolutely creates positive Ripple Effects to the vibrancy and the growth Of an ecosystem and you also see that in The spin out of talent and that may be Talent talented individuals Executives Who similarly share to the upside and so Are giving back of their time and Treasures but often are choosing to then Go on to found additional companies Within the ecosystem Etc so we think That the sort of spawning of positive Seeds is uh something that um is super Healthy is visible in Boston and is Something that we hope we'll see even More of So you talked about um life sciences and The strength of Boston and it certainly Is Boston and Cambridge have this year Of Biotech companies Um you know moderna of course you know Became famous Um because of its ability to come up With a coveted vaccine so quickly um After the the pandemic started Um what other areas what other Strengths uh you know what other kinds Of startups are you know best suited to The Boston area sure so you know life Science biotech obviously a legacy Strength and continues to be a leading Um category for Boston in addition to Sort of some of the infrastructure and Enterprise technology well Boston is not Often as recognized for this compared to

Silicon Valley many of our uh top Performing companies also are in the Consumer and fintech categories as well And those are both areas where we see Significant opportunity uh we're really Excited about a couple emerging Categories one is as I mentioned Robotics and climate these are areas we Think play to Boston's strength being Often based in really technical Um Solutions or inventions that are Focused on big problems and I think That's enabled by organizations not just Like Mass challenge but Greentown Um uh Mass robotics uh the engine to Name just a few uh we the state has put Significant emphasis around digital Health and fintech and we've seen growth Of companies Um in both of those categories and we Think we'll continue to see those given Also as you mentioned uh the incredible Legacy institutions here who are Committed not only to their own Advancement but to supporting uh Innovation here in Massachusetts and Mass challenge we've been active in the Dual use space it's an area we're Excited about these are companies that Have both commercial uh and uh Government uh use and with MIT and Draper labs and miter uh to name just a Few in addition to the UMass system We're seeing a really exciting uh growth

Of companies in this in this category as Well So when we spoke a couple weeks ago one Of the things that kind of I thought was Interesting and exciting is you talked About bio convergence which is like Combining computer science and and Biology can you talk a little bit about That and who's doing that Sure so this is certainly it within the University Systems I think we see Intentional investment in departments Coming together so bringing the uh those Into computer science and those uh uh in Say the biology space coming together to Think about how can we solve problems With those Powers combined and uh it's An area that we think is still emerging Obviously you have a more complexity When you're when you're looking at both Solutions that touch both biology and Computer science but we think could be Really powerful and really exciting and Also Um sort of deeply connected to other Areas of expertise around the world We're active in Israel and this is an Area of focus there as well So um we only have a few minutes left so I wanted to talk to you about kind of The challenging Environment that we've been in for the Last several years I mean starting with The pandemic lockdown and then I mean we

Had a little bit of a a rise in 21 but Then we had the economic challenges that We're seeing in 22 and 23. how has that Impacted the startup environment and how Does the other startups kind of navigate And how do you work with studs to Navigate these kind of challenging times That we found ourselves in yeah I mean It has been an extraordinary couple of Years uh and uh certainly as you think About the stress and the challenges that Founders face all the more so when You're building a company in uh a within The environment of covet and you can't Actually get in front of customers the Way you've been trained to uh or today When there's a major pullback in funding After 10 years of extraordinary Capital Flow so so this is this is a challenging Time Um I'll answer it optimistically though Which is uh entrepreneurs are extremely Resilient uh beings they see problems They persevere uh with uh incredible Ambition and optimism uh and are willing And trained and ready to Pivot through Challenges and so I think what we've Seen Even in these extraordinary time is Entrepreneurs rise to the occasion Whether that was the acceleration of Digital Health Solutions during covid Where there was finally an opening and An openness to uh um virtual care and

Treatment for example or whether that uh Is um in the response today around the Potential of artificial intelligence to Uh accelerate uh Solutions into the Field so it's a hard environment for Fundraising uh that is for that is Definitively the case but what we know Is in from past recessions that some of The best companies come out of the Hardest times so we expect uh we expect To see an amazing next generation of Companies come through in the next Couple of years So a lot of folks have actually never Lived through a downturn right I mean You know as certainly as you know adults Running a business Um you know if it's been it's been since 2008. Um you know we've had a pretty good run Um so so like when you when you talk to Especially young startup Founders who Haven't experienced this kind of Environment like what kind of Um advice are they looking for having Not been through this and I mean Obviously they have to be resilient or They don't survive right but you know They're they're trying to navigate Something that is foreign to them and I'm wondering how you talk to them about That Yeah I think there are um two simple Points one is

Um it can get worse than you expect and So as you plan your downside uh Have a broader Continuum it will allow You to plan more resiliently and uh Encourage you to make harder decisions Than if you think you can speedboat your Way your way through and that certainly I was a stock analyst in 2008 and let's Just say the downside scenarios we're Not the downside scenarios and I and so I think that that comes from my personal Learnings there but as we think about How do companies extend their Runway get To profitability right size hiring Patterns it's really important that uh They uh reflect on what the full Potential is and the second is to take Care of yourself Um this is a marathon not a Sprint uh The company is dependent often it's the Smaller the company is the even more Dependent they are on the founder and uh It's really important to take care of Your mental health as a Founder when the Stresses of the outside are so Extraordinary in addition to this Stresses of building a company even Under the best of circumstances All right well we're out of time but I Want to thank you so much for um you Know coming in and talking to us this Afternoon about you know why Boston is a Great place to launch a startup thank You thank you Ron for letting us make

The case this was fun [Music]


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