Where do good startups go to get better? Apparently, to Massachusetts.
In the heart of Boston's new Innovation District, 56 startup companies from around the globe are spending five months incubating their ideas at†MassChallenge. At last night's Startup Showcase, each team had one minute to pitch their company and explain to the over 500 entrepreneurs, seed stage investors, and other supporters in the house why their new business is poised to change the world.
Maternova is helping reduce worldwide deaths associated with childbirth, while Driveway's mobile app tracks users' driving habits to help insurance companies better recognize good drivers. Day2Night Convertible Heels and Casa Couture are revolutionizing the comfort and functionality of women's shoes. Pintley and Drync†let tipplers imbibe with software-optimized satisfaction.
Sure, they all have different definitions of the phrase "change the world," but they're all gathering each day in cubicles and desk clusters on the same floor of the same building to chase their dreams -- and, almost en masse, they're succeeding.†Day2Night Convertible Heels raised over $16,000 on Kickstarter in July. Pintley, which recently filed a new app with the Apple App Store, has attracted 45,000 craft beer-loving users, and Driveway has been downloaded 30,000 times by safe drivers who want to make themselves known. Other companies spoke of filing patents, completing clinical trials, and, yes, generating tangible revenues.
The entrepreneurs behind these startups aren't all n00bs either.†Vsnap†founder and CEO Dave McLaughlin has some experience as a high-tech first-mover already: The last company he led, a mobile payment platform similar to Google Wallet called Fig, sold to eBay five months ago. He's already back at it, and despite his experience, he said applying to MassChallenge was a no-brainer.
"What's inherent in running a lean startup with a few other people is that you won't cover every need as a company. The staff [at MassChallenge], the other competitors, everyone here is working together to help one another address these gaps," McLaughlin said. "These markets take shape fast. Startups have to be good at so many things, and there's so little room for error, so being a part of something like MassChallenge is critical."
The state government-supported non-profit dedicated to "helping entrepreneurs win" showcased the selection of pitches last night as a teaser to its Oct. 24th awards ceremony, at which, for the second year in a row, MassChallenge will spread $1 million in seed funding around to the very best of the class.
In 2010, MassChallenge's first go-around, the incubator had 450 applicants and graduated 111 startups, which collectively went on to raise over $90 million in funding and create over 500 jobs in Massachusetts in a year's time. This year, the pool grew to over 730 applicants, representing 24 countries and 38 states. Virtually every vertical of fundable startup was represented, and MassChallenge's pool of independent competition judges had the pick of the litter in selecting the top 125. The upcoming awards ceremony promises steep competition.
"About 50 percent of the startups are high-tech, and then health care, social impact, and general retail are roughly balanced at around 14 percent each, with energy making up the last 8-or-so percent," said John Harthorne, co-founder and CEO of MassChallenge. He agrees that the sense of community is what's creating so much success, both for the startups and for the incubator housing them.
"The theory is simple: By binding together and helping one another out, we no longer have to squabble over pieces of the pie, because new businesses actually create more pie," Harthorne said. "If you attract the best startups, the problems solve themselves. Entrepreneurs are natural problem solvers."
The MassChallenge community is clamoring to help Boston's business community as well, by delivering cutting-edge technology to the city.†Repeat Receipt, one of last night's pitchers, is already serving over 350 Boston-area merchants with their mobile app, which turns photographs of receipts into a 10% discount on patrons' next purchases.
"We are taking your receipts and turning them into a cash-back reward," said Jake Radzevich, one of three co-founders working on business at MassChallenge. "After you take a picture of your receipt with your phone, our app calculates 10% of the purchase and notifies the merchant of your credit." The company makes revenue by charging a fee of a few cents to the customer pre-purchasing the credit.
The MassChallenge community has gained so much steam that, in a way, it's even helping those who supported it in its infancy, coming full-circle. For example, McLaughlin helped MassChallenge find a donor for its office through a startup he co-founded with Boston Mayor Thomas Menino. That startup, Boston World Partnerships, is another non-profit startup supporter, not unlike MassChallenge, that provides networking and referral resources to Boston businesses, including doing things like helping them find office space.
"It's sort of poetic," McLaughlin said. "A year and a half later, when I was starting a new company, I realized I wanted to be a part of the MassChallenge ecosystem. I wanted to apply and see if my new company merited participation. That I'm benefitting from something that, in a small way, I helped support early on, I think that's great."
Of course, Vsnap was selected as a finalist in MassChallenge by the same impartial judges that selected the other 124 teams competing. This is business, after all. And MassChallenge is about finding companies that will win in the real world.
"When the entrepreneurs in the program ask me what they can do to help MassChallenge, I tell them the best thing they can do is make it," said Harthorne. "That's what it's all about, that first billion-dollar IPO."
By Kyle Psaty -- I'm obsessed with what's next, especially when it involves truly helping people live better, more fulfilling lives. I believe this is where creativity and creation become innovation. The founding editor of the online publication BostInnovation and a former staff writer for the New England Patriots, I'm lucky to now spend my days building a brighter future for consumer banking at PerkStreet Financial, where I also manage a daily blog. Follow me on Twitter @KylePs80.
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