Which grass is greener on who’s side?

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moonlight donkeys
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A recent story in the Boston Globe discusses steps Massachusetts can take to cultivate and keep a new generation of billion-dollar companies (“pillar companies”).

What struck me is that many of the concerns and problems they are wrestling with, and even the solutions they’re proposing, sound very similar to what is heard in our own VC community in Ontario: the inability to produce pillar companies, attract talent and retain recent graduates. Much like the landscape in Ontario, author Kirsner describes Massachusetts as having “lots of saplings, but very few oaks.” The challenge “is how to ensure that the state remains a big-league competitor in the global economy – not just a productive farm team.”

Sound familiar? Many of our most promising companies depart for, or are acquired by those in greener pastures.

Kirsner’s solution: “a high energy approach to investing, mentorship, infrastructure, government responsiveness, salesmanship, and – toughest of all – encouraging companies to stay independent rather than selling out.â€?

The challenge of trying to develop these pillar companies, with all the alluring exit opportunities, he compares to “promoting abstinence to teenagers.” But without these pillar companies, the industry eco-system becomes unhealthy. A line once used to describe what we’re trying to do here at MaRS speaks to the same point: “we’re trying to grow a rainforest, not plant a field.” We’re trying to ensure that we have diversity both in type of industries here, as well as in size of participants in those industries. MaRS and other institutions, as well as the Ontario Government have committed significant energy into these same solutions, providing investing, mentorship, infrastructure to foster innovation.

From reading the article, it seems like our government might even be ahead of the curve in its aggressive promotion of research and innovation.

In a response to the article, Dan Primack of Thomson Financial has suggestions of his own.

• In his experience, and he provides a great anecdote to exemplify it, Boston-area VCs lead with their head, while Bay Area-VCs lead with their gut.
• Bay Areas VCs and tech entrepreneurs regularly mingle at networking socials and other such venues, while Boston-Area VCs and techies just go home after work. The issue of bringing our communities together is something we also struggle with (read Veronika’s blog on the subject here).
• Maybe the leverageable pillars that should be the focus are not the Boston Scientifics and Fidelitys, but the Harvards and MITs. What I take from this is that institutions like this should play a greater role in the life of the companies, even after they have vacated their ivory towers.

While we live with our own unique challenges here in Ontario, such as our smaller venture funds and our companies being kicked out of institutions too soon to name only two, it is interesting to see that an area with such a rich history in private equity, and one that many here would aspire to be, is wrestling with many of the same issues we face in Ontario. Certainly there is a lot we can learn from the perceived deficiencies of other areas, or maybe the grass is just always greener on the other side.