Startups in Downtown Boston Are Thriving—Here’s Why

Posted May 31, 2013 by Scott Kearnan in Business

I’m not looking to start an East Side versus West Side war. (Mainly because this is a blog post, not a 1990s rap song. I only wish I could write one of those.) But thanks to an increasing number of startups in downtown Boston, the competition is heating up over which side of the Charles River is the more popular turf for innovative young businesses. Cambridge has deservedly enjoyed a reputation as a hotbed of cutting-edge companies for a while now, but other companies are seeing an allure in downtown that rivals, say, Kendall Square.

In fact, feast your eyes on this map from Kinvey, a company that works with mobile app developers. It lists dozens of other Boston startups, the majority of which are clustered downtown and in Fort Point Channel’s neighboring Innovation District. Kinvey moved from Kendall to Downtown Crossing in March as part of a wave of new startups in the area. But why the sea change? Let us count the ways: Here are six reasons why you’re seeing more startups in downtown Boston.

The Almighty Dollar

If you’re a newly launching business in need of space, downtown Boston offers more bang for your buck. According to this report from the Boston Globe, companies such as Mobee (another mobile app startup) are finding rents downtown that are about half the cost of similar space in Kendall Square. Plus, downtown landlords are more flexible with leases, offering one- or two-year plans, whereas Cambridge landlords frequently want longer commitments.

Cambridge seems to be responding to the competition. In April, the city approved a new zoning law that will require new commercial construction to reserve 5 percent of its space for startups. Any action that fosters more startups deserves a big thumbs-up! But some experts—including a former planning officer for MIT, a school that has had enormous influence in launching Kendall’s startup culture—remain skeptical that the new law will curb the migration from Cambridge to more cost-effective areas like downtown Boston.

Incubators Are Heating Up

Even if they’re not yet in the position to have their own office, startups in downtown Boston are finding plenty of space to set up shop. There is the “co-working” space Workbar, where members (including solo freelancers) can access all the amenities of a larger office. Then there are the larger incubator and accelerator programs that offer space or mentorship to startup businesses. Among the newer offerings downtown: Future Boston Alliance, a nonprofit stimulating innovation and creative economy, ran its first startup accelerator programs out of a downtown office. This week FBA also threw a huge party celebrating its one-year anniversary at downtown hotspot GEM.

When online moolah-exchange service PayPal opened a new Boston office in February, its 65,000-square-feet space in the Financial District included a “Start Tank” that provides free space for about a dozen local startups. And in June, the first batch of businesses will move into Bolt on Chauncy Street, an intensive six-month accelerator program for hardware startups.

Workbar Space

Workbar packs in small startups and freelancers. Photo courtesy of Workbar.

Size Matters

Not to give Kendall Square entrepreneur envy, but the world’s largest startup accelerator, MassChallenge, just so happens to be in Fort Point Channel. MassChallenge is a breeding ground for innovation and takes in about 100 startups every year. That kind of energy bleeds over into the surrounding area—the Financial District, Ladder District, and Downtown Crossing—erasing boundaries and giving the entire neighborhood a big sense of startup culture.

Happier Hours

Kendall Square’s food and beverage scene has exploded in recent years, thanks in large part to that ‘hood’s startup scene. West Bridge, Area Four, and the appropriately named Catalyst are all relatively new, great restaurants that probably couldn’t have flourished there without them. At the end of the day, though, there are just more offerings in downtown Boston—from new rock-star establishments like jm Curley to old favorites like Good Life—that are perfect for the young crowd that tends to make up the startup culture. Plus, Kendall Square can sometimes feel isolated among industrial surroundings; downtown is well connected to other neighborhoods that are just as bustling, so there’s always the option of enjoying post-conference celebratory draughts in spots further afield as well.



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