Although many entrepreneurs have said that Boston is great for startups, a study released on Sept. 4 by the Ewig Marion Kauffman Foundation had Boston ranked outside of the top 20 cities for startups.
Cambridge, however, is in the top three with one of the highest densities of high-tech startups.
Dane Stangler, director of research and policy at the Kauffman Foundation and the author of the study, said although the two areas are close in proximity, Cambridge is a better place than Boston to build a startup.
“Boston is average … scoring 1.0 for the country, compared to the Cambridge-Newton-Framingham area which is third largest in the country for high-tech startup density,” he said.
Stangler said startups are important in metropolitan economies because they force business to evolve and to create new jobs, products and services.
“Startups create lots of jobs, but more importantly, they’re high-tech,” he said. “They’re responsible for innovation. They have a ripple effect because they force business to do better.”
Randall Ellis, an economics professor at Boston University, said while most startups do not make it more than a few months or years, the ones that do benefit the economy.
“Startups play a central role in innovation and job growth,” Ellis said. “Although the vast majority fail, those that succeed account for much of the new products, services and employment … even large firms grow heavily by purchasing small, startup firms.” Ellis said the rankings are not surprising, given that Cambridge has the best universities in the region.
“Cambridge has the top two universities and hence it is not surprising that it is especially strong,” he said. “But more importantly, Boston is a mix of high and low income areas, and with its high property taxes, it is not as attractive for startup firms.”
Many people who have created startups in Boston said the city has been supportive for them to start their company.
Healy Jones, vice president of marketing for the startup Boundless Learning, said Boston has been a good place for her company.
“We are fortunate to be an ecosystem that supports academia and technology, which Boundless brings together,” he said. “Boston’s tech and educational ecosystems have been instrumental in our success … the strong startup and tech community helped us reach investors who really believe in our vision.”
Jones said Boston has an unbelievable talent pool to find team members that come straight from academic institutions or area startups.
“We market for college students, so being in Boston is really the best place for us,” he said. “Here, we can get direct feedback from our users and adapt our product to meet their needs … being able to connect to local students has really helped.”
Alex Schiff, co-founder and CEO of Fetchnotes, said both recruiting and mentorship has been an important part of their startup in Boston.
“In recruiting, you have young talent being pumped out by universities every year, and veteran talent from large tech companies,” he said. “In mentorship, we have such a diverse ecosystem here that you can find A+ people to get advice on pretty much anything.”
Anthony Ciampa, a 2013 Northeastern University graduate, started his own tech company as a school project.
“I found Boston is extremely supportive of startups, especially those started by students,” he said. “We were offered free office space by a handful of startup incubators and given thousands of dollars in grants from Northeastern’s IDEA Venture Accelerator.”
Ciampa, now a copywriter for a startup in Texas, said Boston was superior to Austin, which was ranked 10th in the study, because of Boston’s prestigious colleges and universities.
“College students are taken seriously in Boston … if you have a great idea and you’re executing it well, nobody in Boston is going to discount you simply because of your age,” he said. “There’s a lot of money to go around and a lot of investors that are actively investing.”