8 ways Boston can nurture — and keep — more startups

Boston techies like to point to Cambridge’s jam-packed Kendall Square and  the seaport’s Innovation District as proof that the area is startup friendly. But they also say we need to do better. Startup execs tell me they can find cheaper office space in  San Francisco than they can in Kendall Square and that’s a problem for a locality that is sick of seeing promising entrepreneurs graduate from Harvard or MIT and head west to start their dream companies.

Harvard Business School, Spangler HallHere are some things that would encourage more startups to stick around:

1: Get more mobile

Having the country’s oldest subway line is a dubious distinction. Aging transportation infrastructure and limited reach of rail services hinders startups that might otherwise set up shop in less congested and cheaper neighborhoods.  Kudos to the state for quietly putting together a plan for new light rail service connecting the Seaport/Innovation district and Back Bay. That could help mitigate the gridlock every weekday afternoon.

A new commuter rail line stop in Allston — near WGBH and a big New Balance headquarters construction site, could drive startup traction out there, a few miles west of downtown Boston.

2: Offer cheaper digs

Oracle(s orcl), Microsoft(s msft), Google(s goog), Amazon(s amzn) and VMware(s vmw) have sucked most of the air (and square footage) out of Kendall Square, so we need more space like the new startup-friendly development coming to Watertown. Word has it that part of the big New Balance headquarters project in Allston will also include startup space.  Ironically, there may be some deals to be had in Boston’s Downtown Crossing area, as companies flee to the hipper, restaurant-rich seaport area. Stackdriver, for example, has a sweet space on Summer Street just up from South Station. (Note: here’s an update on the AthenaHealth Watertown project.)

3: Raise the fun quotient

Social life means more than meetups. Boston/Cambridge needs to liven up night life so that young employees who work late can party later. Things don’t close up as early as they used to, when Chinatown was the only late-night option, but at 10 or 11 p.m., there are still precious few places to go hang.  “We need to encourage a fun vibe. If you’re at a startup you work long hours and then want to maybe watch a west coast game, or go hear music; we have to make that possible,” said Michael Skok, partner at North Bridge Venture Partners.

4:  Provide longer-term nurturing 

Boston has lots of incubators and accelerators. What it lacks is a good way to nurture startups beyond their early stages through their A and B funding rounds and beyond, Skok said. More mentorship tracks for that later part of the lifecycle is key.

“Boston needs more Godfathers and Godmothers,” agreed Sravish Sridhar, CEO of Kinvey, a Boston-based mobile platform company. “Successful entrepreneurs need to take a few startups under their wings and mentor them.”

5: Build  more and deeper academic partnerships

Harvard iLab and Northeastern’s IDEA programs are a start, but there are a lot more universities and colleges packed into a relatively small geography that could be used better. Besides MIT and Harvard, there’s Brandeis, Boston College, Boston University, Emerson College and Olin College — all with great resources, and potential alumni advisors, to offer. The new Experiment Fund over at Harvard is one example of an academic-VC partnership.

6: Invite more of the big boys in

Dan Belcher, co-founder of StackDriver, thinks the more huge tech companies converge locally the better. While some argue the mega-companies — IBM, Oracle, Microsoft, et al — soak up too many resources and too many recent graduates, Belcher argues, they also throw off a lot of engineers who put in a few years at an established company, then catch the bug to do their own thing.

7: Go big yourself

Entrepreneurs need to feel emboldened to start “big vision” companies, and feel that there are investors who will back them even if they don’t play it safe with “just another variation of an already established idea,” Sridhar said.

8: Lose the software and service tax

I’m surprised none of the entrepreneurs or VCs I contacted for this story mentioned the much-reviled software and services tax enacted by the Massachusetts Legislature in July, which has now been labeled “political kryptonite.” The tax, at 6.25 percent of the value of the software and services sold, is the highest in the nation, according to the Massachusetts Taxpayer Foundation. A move to repeal the tax, which applies only to sales within Mass.,  gets underway Monday.