Elon Boms
Managing Director, LaunchCapital, LLC
A comparison of New Haven and Palo Alto may not be as ridiculous as it sounds. On the surface, both cities appear to have little in common aside from top-tier university programs. Unlike New Haven, Palo Alto has warm weather, average salaries greater than $100K, billions of dollars of capital, Fortune 50 technology companies and a vibrant start-up community. Palo Alto’s success is partly due to an infrastructure of talent that draws new people, fresh ideas and forward-thinking companies that spin off products, services and philosophies, in an effort to fuel the local economy and create self-perpetuating growth for the city.
However, the core ingredients (and history) of this infrastructure – the flavor of the city, if you will – look very similar to the distinct components of New Haven. These ingredients include but are not limited to:
Ingredient 1: Smart people with an incentive to stay
New Haven is a breeding ground for smart people, with a number of public and private universities within an hour’s drive of the city (Yale, Quinnipiac, Southern, UCONN, Trinity, Wesleyan, Conn College, etc.). Students who graduate from these schools, however, often leave for more attractive cities that offer more opportunities for career advancement, financial gains, and the chance to live in a “hip” community.
New Haven is changing, though. Some recent informal polling of graduate students from Yale (friends, mostly) indicates that the city has become more desirable as a long-term residence. My own experience has shown me that many Yale graduates, especially more recent ones, reminisce fondly about their time in New Haven – and could be convinced to move back to the city for the right opportunity. I contend that with the right jobs locally, New Haven would offer a compelling environment to retain the top talent that leaves for “greener pastures.”
Ingredient 2: Capital
New Haven is situated between two of the most prominent capital centers in the world. NYC and Boston are less then two hours away and rank #2 and #11 in the top 15 richest cities by GDP (ahead of San Francisco at #15), and they are in the top 15 fastest-growing cities through 20201. Granted, the picture was much brighter before the financial crisis and economic meltdown, but these cities are known for financial innovation, as well as the large amounts of capital flowing through the funds and companies that exist there. Attracting capital from these locales, as well as Connecticut sources, should be a top priority for New Haven’s entrepreneurial development.
Ingredient 3: Strong Industry
Connecticut has long been known for its strength in attracting insurance companies into the Hartford area, but insurance is not the only thriving industry in the state. According to Manta.com, over 250 pharmaceutical, biotechnology and medical device companies have offices in Connecticut. Industry leaders such as Pfizer, Becton Dickinson and Bristol Myers Squibb have research and/or manufacturing facilities within 45 minutes of downtown New Haven. Plus, Yale Medical School was ranked in the top 10 medical schools overall for research, while UCONN landed in the top 752.
Ingredient 4: Large Companies Actively Promoting Start-Ups
The opportunity for acquisitions in Connecticut is growing, due to Connecticut’s strong presence in the pharmaceutical market and the fact that the industry as a whole is restructuring its development model. Taking a page out of Palo Alto’s history, acquisitions beget more acquisitions, which cause people to become more interested in starting companies that will ultimately be acquired. In fact, any activity in the entrepreneurial ecosystem begets activities that help the whole – whether it is a new fund launching in the community, a start-up getting funded, or a successful exit.
This dynamic is, perhaps, the most important aspect of Silicon Valley’s success. It is a self-perpetuating model of innovation. Tapping into the strategic dollars of the pharmaceutical industry is critical to gaining traction for an entrepreneurial-driven New Haven.
Ingredient 5: Government and Local Leaders with a Desire to See the City Prosper
After four years of exposure to the New Haven business community, it is my opinion that the residents of this area are more dedicated and excited than those in any other city I have lived in, especially with regard to the future prospects of the region (note: I have lived in Washington, DC, Danbury, Atlanta, Chicago, Boston). The atmosphere is exciting, the people are motivated and the local universities and government officials are on board. The proof can be seen many times over: the support for the restoration of downtown New Haven, Connecticut Innovations’ investment activity (vis-à-vis other state funds), the support of the CTech business accelerator and Yale’s support for the Yale Entrepreneurial Institute.
My hope is that LaunchCapital’s involvement in the community – and our investment in six local start-ups over the past 12 months – will help provide the impetus to make New Haven’s entrepreneurial community as strong as Palo Alto’s. The actions of LaunchCapital demonstrate the confidence that I have in New Haven’s future as a top-tier city for start-ups to succeed.
1www.citymayors.com 2US News and World Reports Rankings (2009)
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Posted under Tech Community / VC World
This post was written by admin on June 12, 2009
