You Know What’s Cool? $1 Billion in Revenue…and Still Run by the Founder

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As 2016 comes to a close, one local company here in Boston is about to cross $1 billion in revenue: athenahealth. Going from zero to $1 billion in revenue is an extraordinary achievement, particularly for a company that is also very profitable (which athenahealth is).

Here is something even more extraordinary – the company is still run by its founder and CEO, Jonathan Bush. In fact, the number two executive in the company, COO Ed Park, is also a founder and is just now stepping down after nearly two decades running the company.

And here is something even more extraordinary still:  look around Boston, and you find that four of our emerging anchor companies have also just recently crossed $1 billion in revenue, are very profitable (except for Wayfair, who is free cash flow positive) and are still being run by their founders. Put this list on one chart, and it’s pretty remarkable:

Company Founder/CEO 2015 Revenue ($M) 2015 Adj EBITDA ($M) MarketCap ($B)
Akamai Tom Leighton 2,197 897 11.3
athenahealth Jonathan Bush 925 184 3.8
TripAdvisor Steve Kaufer 1,492 466 7.2
Wayfair Niraj Shah 2,250 -16 3.2

As 2016 comes to a close, it is worth celebrating the extraordinary achievement of these four tenacious and talented entrepreneurs. At a time when there is a lot of cynicism regarding unicorns and paper-based valuations in Startupland, it is refreshing to see four founders who not only took their company from zero to IPO, but continue to lead their companies to over $1 billion in revenue and beyond.

For more about the stories of three of these companies, you can see a few mini-case studies that I wrote a few years ago here:

Again, hats off to each of these four founder/CEOs. Their stories are definitely worth studying!

To Hack.Diversity, We Need to Come Together

Last January, I read a Bloomberg BusinessWeek cover story, Why Doesn’t Silicon Valley Hire Black Coders. I was struck by it because it went to the heart of an issue that has bothered me for years.

The innovation economy has two fundamental, related problems threatening its growth and sustainability: (1) a severe lack of technical talent, leading to a persistent hiring shortage; and (2) a severe lack of diversity, leading to a monolithic perspective.

For some reason, and despite generally good intentions, the demand for talent and the supply of diverse talent has not corrected itself naturally. My conclusion, after reading the article and talking to many experts in the area, is that tech’s diversity problem is a market failure due to a fragmented talent pool of diverse candidates, under-resourced recruiting functions at startups, cultural friction and social networks that don’t naturally overlap. This problem was one that needed an intentional, strategic solution.

Inspired to address this complicated issue, a group of private and public sector leaders in Boston has been meeting over the course of this year. Today, we are pleased to announce the launch of Hack.Diversity, an initiative to increase the breadth of talent into our innovation economy. The program will be managed by the New England Venture Capital Association, which seemed an appropriate place given its role as a hub in the innovation ecosystem (and Hack.Diversity is similar to the student internship program, TechGen).

Hack.Diversity is bridging the gap between Boston’s innovation economy and communities of color. The program will recruit, train, and mentor Black and Latino computer science and engineering graduates throughout Massachusetts, and create a pipeline of opportunity into the innovation economy, while also coaching our companies on diversity and inclusion. The goal is to address both the severe lack of diversity in the technical ranks of our top, innovation companies and help students of color find attractive career opportunities in technology. Our first talent partners are Bunker Hill Community College, Resilient Coders, UMass Boston, WPI and Year Up. Our first employer partners are Carbonite, DataXu, Hubspot and Vertex Pharmaceuticals. In addition, we are building a mentorship network of dozens of executives of color in the Boston tech sector to link up one on one with each intern to help coach their pathway to career success.

A few articles written about the initiative can be found here:

If you’re interested in being a part of the program — as a mentor, employer, donor or aspiring participant, check out the website:

If we can bring the two Bostons together to address the inequality and divisiveness in our community, we can create a shining example for others throughout the country.

Why Liberal Arts Majors Make Great Product Managers

There is a canard rampant in Startup Land that you need to have a computer science or engineering degree to be a great startup product manager. As a computer science major whose first job in tech was as a product manager, and as someone who has worked with (as both an entrepreneur and venture capitalist) and taught (as a professor at Harvard Business School) hundreds of product managers, I can tell you that this line of thinking is simply bull. And it may be leading to perpetuating the industry’s gender imbalance.

Let me explain by first focusing on what the product manager job requires.

What Is The Job?

An effective product manager is an entrepreneur, strategist, technical visionary, cross-functional team leader, and customer advocate all rolled into one. They try to understand what it means to walk in the shoes of the customer — what their problems are, what their environments are like, what they read, who they talk to, who they listen to, what their worries are in life. And then they try to extrapolate those insights into personas they can use as an anchor for product design decisions.

At a high level, product managers have three primary responsibilities:

1. Defining the product to be built — whether a new product or an evolution of an existing product — through a customer discovery process.

2. Negotiating and securing the resources to direct towards product development, or prioritizing the already allocated resources

3. Managing product development, launch, and ongoing improvement by leading a cross-functional team — the team members report directly to someone other than the PM, however, so while the PM has considerable responsibility, you might also have little formal authority over other staff members.

The product manager role is a general management position, so product managers tend to be generalists rather than functional specialists. Some of the best product managers are simply great communicators. They’re clear thinkers who have strong interpersonal skills and good judgment. It’s more about character and makeup and the broad skills you develop either in a professional or graduate environment, where you learn to be an effective communicator, a good writer, and a good interpersonal communicator. Where you learn to make decisions crisply. Where you learn to handle ambiguity.

Guess what? Those skills are all consistent with a liberal arts education. As Fareed Zakaria puts it in his book, In Defense of a Liberal Arts Education:

A liberal education teaches you how to write, how to speak your mind, and how to learn — immensely valuable tools no matter your profession. Technology and globalization are actually making these skills even more valuable as routine mechanical and even computing tasks can be done by machines or workers in low-wage countries. More than just a path to a career, a liberal education is an exercise in freedom.

Yes, it helps to be technically proficient, but for that, take an online class or two at our portfolio company, Codecademy. Great product managers need to know how to talk to engineering, but that’s communication not coding. They need to be effective in evaluating decisions and drawing on business judgment, but that’s analytical thinking not analytical programming.

A Few Profiles

Let me share a few profiles of amazing senior product leaders that I know by way of example:

  • Yasi Baiani, a senior product leader at Fitbit, the wearables leader that has a market capitalization of $3 billion. On the side, Yasi is about to embark on teaching entrepreneurship and product management at her alma mater, Berkeley. She majored in business.
  • Melody Koh is head of products at BlueApron, one of the hottest private companies in NYC, a revered unicorn, and rumored to preparing for a 2017 IPO. She studied commerce and economics at the University of Virginia before entering Startup Land.
  • Adam Medros is head of products at TripAdvisor, where he has been for over twelve years, helping lead them to a nearly $10 billion market capitalization. Adam’s major before joining Startup Land? Economics and German at Dartmouth.

Guess what each of these product leaders has in common? Spectacular communication skills, leadership ability, product passion and business judgment.

Why This Matters

In addition to making sure startups are open to hiring and training the very best, I am drawn to this topic because I think it results in a subtle barrier for women to become entrepreneurs and venture capitalists. The prevailing wisdom is that the best entrepreneurs are former product leaders. And there is a prevailing wisdom that former entrepreneurs make the venture capitalists. Therefore, if you accept the prevailing wisdom to be that only former coders can become great product leaders, you are limiting your entrepreneur and venture capital funnel to a narrow pool of candidates, with 88% of engineers being men. That’s bad policy on many, many dimensions.

But I am passionate about this topic for another reason. I love the product management function — it is where I started my own career — and want to see the discipline be an excellent opportunity for everyone. That is why I continue to teach about it, write about it and talk to my portfolio companies about it.

So stop telling folks they need to be former engineers or computer science graduates to become product managers. Hell, hire a Symbolic Systems major and watch what magic can happen.

A VC Perspective on AngelList


I have long been a fan of AngelList, an innovative online platform for startup funding and recruiting. I have watched the rise of the platform with great interest and enjoyed playing with it around the edges.

Over the last few years, individual angels and even some firms have used AngelList to create investment clubs to invest in individual startups in what are known as syndicates. More recently, funds have used AngelList to create special purposes vehicles (SPVs) for follow-on investments in portfolio companies.

My Flybridge partners and I decided we would try a new twist on the model by creating a small fund on AngelList as a platform to make seed investments centered around a particular community and theme. To that end, a few months ago, we created something we call The Graduate Syndicate fund, a $2.4 million seed fund. BostInno wrote a bit about it here.

The Graduate Syndicate will invest $100,000 in compelling startups founded by recent Harvard graduates, particularly out of Harvard Business School (HBS). As a faculty member in the Entrepreneurship Department over the last six years, I have had the opportunity to teach hundreds of brilliant, enterprising students. Flybridge has invested in a few of them, but many of the recent graduates (and only graduates, in compliance with Harvard’s conflict of interest policy) are at such an early stage — pre-seed or seed — that they are pre-institutional at the time that I am advising them. As with our other investments, our goal is to back outstanding entrepreneurs who are pursuing large, disruptive opportunities that we think can generate outstanding returns. But by operating more like an angel — we don’t price the deals or take board seats, we don’t require partner meetings but instead make decisions after a few meetings given we already know these entrepreneurs well — we can be more flexible with regard to process, stage, sector and geography.

The other thing we decided to do in creating the fund is to invite some of our friends to invest alongside us who are from the Harvard community. So, in addition to Flybridge IV (our fourth fund, which we are currently investing out of), the LPs in The Graduate Syndicate are a handful of HBS professors and alumni who are excited to support the young entrepreneurs, many of whom they had in their classes or have been advising as Entrepreneurs in Residence (EIRs). We also assembled a group of recent alumni entrepreneurs as advisors to be available to coach the founders through the ups and downs, particularly in the early years before they have more formal advisors or boards.

The benefits of The Graduate Syndicate to entrepreneurs are compelling: pre-seed money from a trusted advisor, a network of amazing LPs and experienced entrepreneurs available to them, and inclusion in the broader Flybridge network of nearly 100 portfolio companies. Since creating The Graduate Syndicate a few months ago, we have made eight investments:  Amartha, Baroo, Camino Financial, Digital Outposts, Fitzroy Toys, Funding Societies, Getaway and Robin Health. The website lists them all, but the plan is to run the experiment for the next year or two and then assess the results.

Having created this new model on AngelList, I thought I would share a few observations as a venture capitalist working with the platform:

  1. Smooth Back Office. Although we have our own, crack finance team, when you are investing on AngelList, you are benefiting from a very experienced back office team, with existing contracts and processes. Collecting and tracking numerous small dollar investors has an overhead attached to it. The AngelList team has been absolutely first rate to work with.
  2. Brand/Reputation. Like many leading platforms, there is a brand and reputation benefit to working with AngelList. LPs who knew it (although many did not) were immediately comfortable with jumping on the platform and investing through it. Similarly, the startups we have invested in are all listed on AngelList and were comfortable with the flow of agreements and money. Over time, I would expect more investors to jump on the platform, making it even easier to work with.
  3. Capital. In theory, AngelList also brings capital. We haven’t utilized this feature for The Graduate Syndicate because we are a closed fund (that is, for the first fund, we only allowed LPs who we knew well and trusted to participate). But for our startups, we expect to see funds like CSC (who committed $400m to AngelList companies last year) and others become sources of available capital.
  4. Work in Process. We were breaking new ground with AngelList and the team has been outstanding in working through the issues, but there are still some rough edges. For example, although we don’t charge any fees for The Graduate Syndicate, there needs to be a fee mechanism in place before other funds will jump on to the platform. AngelList is working on adding this feature and many others.

All in all, creating a fund on AngelList has been a very positive experience. If anyone would like to learn more from our experience, let me know!

A Guide to the Boston Startup Scene – Fall 2016

Every fall, I deliver a presentation at Harvard’s iLab, open to the community, on what makes the Boston startup scene so special. It has become a nice opportunity to step back and appreciate all the rich resources entrepreneurs have at their fingertips in the Boston community. Here is this year’s version (which I’m delivering this afternoon), complete with a lot of updated content and data on our local tech hub:


Retaining Talent – Where Do Alums Go?

Written in partnership with Phil Strazzulla of NextWave Hire, an HBS student of mine who stayed in Boston!

Massachusetts is the land of colleges with over 114 high education institutions, and nearly 250,000 students calling it home.  These students represent an extraordinary talent pool that gets exposed to the local innovation ecosystem. Ideally, many of these students will stay in the greater Boston area upon graduation to pursue further education, their careers, and build their lives.

However, there are also many students who leave, namely for opportunities in other attractive locales, such as New York and San Francisco.  Because the flow of students in and out of Massachusetts is such a strategic issue for the state, we wanted to take a deeper look into which schools did the best job of retaining students as a way to understand how the region generally can retain its valued, young talent.

In the past, it was difficult to get access to reliable data on this issue. But, today, LinkedIn (soon to be Microsoft LinkedIn!) is a nearly universal professional directory and has an accessible API from which to pull data. Thus, we used LinkedIn’s API to look at some of the better known and largest of the Massachusetts-based schools to see where graduates were locating post-graduation. Here’s what we learned.

Bentley Rules, With Northeastern a Close Second

In the chart below, you can see what our analysis showed across a range of thirteen of the more popular schools in the state. We analyzed the percentage of graduates from each institution who are currently living in the Greater Boston Area, a data set that includes over 1.1 million professionals.

As you can see, the school on this list that retains the most graduates was Bentley University, where 59 percent of recent alumni are in the greater Boston, followed closely by Northeastern.  At the other end of the spectrum are Williams and Amherst, who both actually see higher numbers of alumni in NYC than Boston.  Williams and Amherst have 22 percent and 24 percent of alumni in NYC, respectively, as compared to only 13 percent in Boston.

Bentley is an interesting case study; it draws a national and international student population, perhaps because it performs so highly on many major rankings. Bentley was ranked No. 5 in the U.S. by The Economist for value (defined as median earnings as compared to expected earnings based on a wide range of factors) and No. 10 for undergraduate business schools by Bloomberg.

Why would some schools be better at retaining their graduates in state than others? One obvious driver for this discrepancy between schools is where the students originate from.  If a school has more Massachusetts-based incoming freshman, they will probably have more people who stick around over time.  Again, thanks to the LinkedIn API, we ran those numbers too using the same data set of 1.1 million alumni. Here’s what we found.

Northeastern Rules on a Relative Basis, UMass Amherst Is a Negative Outlier

This next chart measures the percentage of students who come from in state minus the percentage of alumni living in the Boston area.

Looking at the numbers on a relative basis, Northeastern is the stronger contributor to the state’s talent pool. At Bentley, 45 percent of students come from in state, and 59 percent of alumni are in Boston currently, which means that the school provides a net contribution of talent to the state of 14 percent.

UMass Amherst is a massive outlier – although the vast majority of their students come from in state, nearly half their alumni find from in state currently find themselves living outside of Boston.

It is interesting to see that nearly every single school on this list is a net contributor to the collective Massachusetts ecosystem.  In other words, putting aside UMass, nearly every school sees more students stick around Boston then grew up here.  MIT draws from only 10% in state students yet nearly 21 percent of MIT alumni are currently living here in Boston, thus a gain of 11 percent of their 117,000 alumni – a talented cohort that makes a substantial contributor to the local economy.

Why else might a school be a more positive contributor to the local economy? Recruiting patterns and school ranking could also be a factor.  Students from world-renowned universities like Harvard and MIT attract global employers. The graduating students are thus sought out by companies from all over the world who are willing to go to great lengths to recruit these students (e.g., Google and Facebook are particularly aggressive recruiters at those two schools).

Overall, Boston is a great place to get an education, and a great place to stay to build your professional career.  It’s clear that the ecosystem of colleges and universities contributes by bringing in great talent who stay after graduation.  While these numbers are encouraging in the aggregate, we hope they will allow individual institutions to set higher targets and provide greater transparency.  If each school were open in sharing their data (perhaps a statewide version of what the Obama administration has emphasized with their Open Data Initiative, College Scorecard), we could monitor this over time. As many undergraduate business school students know, paraphrasing management guru Peter Drucker, what gets measured gets done.

Immigration Reform – A Stubborn Issue

I’ve written a lot in the past about our country’s need for immigration reform. As the son of an immigrant entrepreneur, it’s an issue I care deeply about. That is why I’ve partnered with business and civic leaders to try to do something about it through the creation of the Global EIR program: a public-private partnership where universities can sponsor H1-B visas for immigrant entrepreneurs, avoiding the luck-of-the-draw annual lottery system.

It’s also why I’m calling attention to the Partnership for a New American Economy’s (NAE) Reason for Reform campaign, which launches today. NAE, of which I’m a member, is a bipartisan coalition of over 500 civic and business leaders from across the country who support common-sense immigration reforms that will support and create American jobs. They’ve marked today as a National Day of Action with events in all 50 states and the release of new, state-specific research highlighting the economic contributions of immigrants in each state—as well as Washington, DC—and the costs borne in the absence of reform.

The Reason for Reform campaign invites all those affected by our broken immigration system—including farmers, faith leaders, business owners, students, tech leaders, and others—to record a brief, 30-second clip of themselves from their phones or computers giving their reason for immigration reform. These videos will be immediately sent to Congress and can be shared through social media to encourage others to join the movement. Visit now to add your voice to this national effort. Our elected leaders have stalled enough. It’s time for all of us to make it known that we demand real action on immigration.

Each day we wait, we lose out on what could be tomorrow’s next big innovation. Our nation was built as a land of immigrants. Think about all the products and services we’d miss out on were it not for ambitious immigrants who came to America to turn their visions into realities. Companies like Google, eBay, AT&T, and Kraft. Today, 40 percent of Fortune 500 firms were founded by immigrants or their children, and foreign-born entrepreneurs are behind 51 percent of America’s billion-dollar startups. Here in Massachusetts, at least one in every five entrepreneurs was born in another country. These innovators are helping to ensure that America remains a global business leader and a top destination for talent from around the world.

Our elected leaders need to know just how frustrated we are with our current system. This isn’t an immigration system that can respond to today’s business landscape and market realities. We demand a revised system that allows business opportunities to flourish and creates jobs for more Americans.

Please join me in the fight by recording your Reason for Reform now. Congress needs to hear all of our voices demanding real change. The economic future of the United States depends on it.