Box.net co-founder Levie

Call it the one that got away. That’s how I felt after reading a detailed profile of Box.net today, the fast-growing storage and online collaboration service which just landed a huge deal with Procter & Gamble and is on track to raise another round of cash at a whopping $500 million valuation. The 240-person company is bursting at the seams, with Business Insider noting that it plans to move into a new headquarters in order to keep up with the momentum.

Sounds great, doesn’t it? Well, here’s the problem: Box.net was actually started by two guys from Seattle.

Aaron Levie and Dylan Smith attended Mercer Island High School, and started the company in 2004 when they were still in college. They spent some of the early months working on Box.net from Seattle, but in 2006 they picked up and moved to San Francisco Bay Area to work out of the home of a relative.

Why?

At the time, Levie told me that the Bay Area just had more young folks who wanted to build companies.

“Seattle is a very exciting place right now, but I wouldn’t exactly call it a hot spot for people in our age range,” he said.

Ouch.

The Box.net story is a reminder of the need to support young talent

But Levie has a point. Seattle is a young city for sure, but with only one major research institution here it doesn’t pump out as many young brains as Boston or the Bay Area.

And for all of the luck that goes into the making of an innovation hub — think Jeff Bezos’ decision to pick the Seattle area for Amazon’s headquarters or Bill Gates and Paul Allen relocating Microsoft from Albuquerque — there are stories like this one of Levie and Smith taking their ideas elsewhere. (I am sure the Boston area is still smarting over losing Mark Zuckerberg and Facebook).

Now 26, Levie and crew are taking direct aim at Microsoft’s SharePoint. It is probably too late to get the entrepreneurs back (unless Microsoft or Amazon acquires them, and that won’t likely bring the 240 jobs with them).

But are there actual lessons from the Box.net move? I think there are. And here’s my quick takeaway:

The Seattle region needs to do everything it can to foster young entrepreneurial talent, the kids who are tinkering on new ideas in their garages or college dorm rooms. (Folks like this). The University of Washington is kicking around some programs to help throw some fuel on the young entrepreneurial fire, but it will take a community-wide effort to make sure that the region does everything it can to hold onto the best and brightest.

Would the Box.net founders have left for the Bay Area anyway? Maybe. There’s certainly the draw of money, talent and buzz.

But, then again, if Box.net had a strong group of entrepreneurial peers, supportive angels/venture backers and the right access to tech talent, who knows what could have happened.

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews and Facebook.

Latest News

Comments

  • Guest

    You overlooked one other element that draws people to the Bay Area vs. here:  better weather

    • johnhcook

      Maybe we can put Bill Gates and Nathan Myhrvold on the ‘weather problem’ since they are trying to figure out ways to to stop hurricanes. 

      http://www.geekwire.com/2011/weird-wacky-pursuits-rich-tech-moguls

      (What’s wrong: Didn’t you enjoy your summer this past weekend?)

      • http://blog.CascadeSoft.net @CascadeRam

        “The coldest winter I ever spent was a summer in San Francisco”  – an apocryphal quote from Mark Twain.

    • Anonymous

      I don’t think I have ever expressed support of Seattle weather, but I was in SF the last two weeks and the fog makes you feel like you are in Seattle in late November.

  • Michael Brian Bentley

    I’m not sure what age range has to do with anything.

    • johnhcook

      I think it does matter, at least in technology where some of the most disruptive companies have been created by folks in their 20s or early 30s. (Microsoft, Amazon, Isilon, Groupon, Facebook, etc.)

  • http://www.facebook.com/people/Jonathan-Sposato/786250122 Jonathan Sposato

    great post john.  and i couldn’t agree with you more wrt seattle’s need to support young entrepreneurial talent.   since 2006 i’ve come to know aaron levie via picnik (picnik has an integration partnership with box.net, where you can edit photos uploaded to box.net with picnik) and was really impressed with aaron and his colleagues.  they were a pleasure to work with and refreshing in how fast they ‘got it’ wrt picnik’s value to their audience.  i too believe that they were the canonical ‘young smart startup’ that could have gone either way (stay in hometown or go down to valley). i think in their case, it was also an issue of timing.  back in 2006, there weren’t things like techstars, startup weekend, and frankly geekwire that give new startups such direct visibility across the community.    fresh out of college in 2006, your default is to go to the valley as your startup frontier.   another pull for them seemed to be facebook.  when FB was emerging and creating development communities around themselves via F8, it was just simply easier to be there to hear the latest developments.   again, i think the keys to retaining (and attracting) more startup tech talent to our region is predicated on;

    1.  more infrastructure components like techstars, startup weekends, geekwires, etc..  so as with doritos, let’s make more.

    2.  the existence of magnet companies that define wholly new ecosystems that new startups have to pay attention to (like FB)

    on a scale of 1 to 10, the first is still at a 5 or 6 IMO

    and the second thing is non-existent.  so that’s another work item for all of us : )  i am HIGHLY bullish on the fact that the talent exists here for both #1 and #2 to exist at the 10 levels.

  • http://blog.redfin.com GlennKelman

    I often hear about Box.net from one of Redfin’s investors, and think the same thoughts you have laid out here John. But the problem isn’t the scene: there are money and events galore here. The problem is talent. We need great research universities competing with one another to produce the best engineers, like Harvard and MIT, Berkeley and Stanford. And, as I’ve said many times before, we need lots and lots of ambition.

  • Anonymous

    I agree with Glenn. UW is a wonderful university that produces quality engineers, but doesn’t seem to produce the unique, risk taking individuals who go on to create compelling companies. From my limited knowledge, it seems that the big Seattle companies, in some way HURT the Seattle startup scene. UW seems to point CS grads toward a risk averse path of Amazon, Microsoft, Expedia similar to how accounting grads are pointed toward the big 4. For SF schools, founding a company out of college is much more acceptable and isn’t seen as such a risky career path.

    Being a 23 yr. old starting a company in Seattle myself, I still struggle to connect with a large number of young entrepreneurs like I would in SF. At times it seemed like htere was nobody like us. It wasn’t until a techstars event that my co-founder and I found like minded 19-24 year olds. 

    It would be interesting to see the turnout if a successful young Seattle entrepreneur put together a meetup targeted at that age range. 

    • johnhcook

      This is an interesting perspective, and I think more can be done to foster this sort of innovative spirit in Seattle among the “youngsters” who have the ambition/drive to try to change the world. These folks are out there in Seattle, more just needs to be done to raise the awareness level around them and support them. (GeekWire is committed to telling their stories, for one, and I know folks at the UW like Emer Dooley and Connie Bourassa-Shaw are trying to lead the charge too).

      In terms of your comment about the big companies, I think they have a role to play here too in terms of their support for the startup ecosystem, something that Ignition’s Frank Artale stressed in our Q&A last week. (final question)

      http://www.geekwire.com/2011/qa-ignitions-frank-artale-busy-vc

      • Anonymous

        Definitely, but I think large cap companies will naturally be more interested in hiring the best and brightest 22 yr olds than fostering an environment for them to build a startup. Quick story from my experience- A 23 yr old new Amazon employee won’t leave to co-found, but a 26 yr old Expedia employee who has put in his 4 years will.

        I think large cap NW companies are doing a great job of scooping up the best and brightest, and that’s a reason why most Seattle entrepreneurs are 26+.

        I think sharing a story of someone who went the startup route at 22, failed, but is now working at a big company would be valuable. (This may be me in a year :)) But among friends I hear a myth that it would doom your career because that first job sets the tone.

        • tobint

          Do either of you participate in the startup community events around the area? http://www.seattle20.com/startupday/

          • Anonymous

            Of course. And I think they speak to my point a little… dominated by big company employees looking to make the leap.

            StartupDay looks awesome, but I’m not interested in mingling w/ “pre-entrepreneurs”. Plus, I can only fit in <$50 events into my startup budget :(

          • Guest

            sorry but attending startup events is not starting a startup unless your customers are startups.

  • http://www.facebook.com/people/Bryan-Starbuck/500012914 Bryan Starbuck

    I agree with this article.  We need to make sure the next 200+ companies grow out in Seattle.  It is great that we have Zillow, RedFin, Whitepages and others.  We just want them to be created systematically

  • http://www.wac6.typepad.com William Carleton

    John, I love the editorial bend on this reporting and analysis. From strength to strength! Nice work.

  • http://www.facebook.com/efrizor Buntu Redempter

    Mr. John, you are 100% right!

  • http://www.tatango.com/blog Derek Johnson

    UW is the problem in my opinion. When I was denied entrance to the business school, even after getting into the main school, I packed up and left for a more entrepreneurial school in Texas… Texas had a more entrepreneurial school than the birthplace of Microsoft and Amazon, ridiculous. UW needs to start embracing entrepreneurship or talent will quickly move away.

    • CJ

      Whoa, just because you didn’t get into the business school doesn’t mean UW doesn’t have a rock solid entrepreneurial program.  It does.  You just didn’t get to experience it.

  • Guest

    I left Seattle (not for the Bay Area) back in 2008 because I couldn’t find a company I wanted to work for. Plenty of jobs, but not much diversity in the kind of company. Lots of internet/social networking/cloud-type startups. I couldn’t find a company that had a big idea that I could believe in.

    Don’t get me wrong, I know they are there in Seattle, but after spending a year at a job I disliked looking for that right job, I gave up and left the area.

    The Bay Area (and other areas) have a wider diversity of jobs that attract a wider base of talent. Seattle is primarily a web startup city.

    All that said, I loved the Seattle weather (shocking, I know) and the Seattle scene and look forward to the day I can come back.

  • Guest

    I left Seattle (not for the Bay Area) back in 2008 because I couldn’t find a company I wanted to work for. Plenty of jobs, but not much diversity in the kind of company. Lots of internet/social networking/cloud-type startups. I couldn’t find a company that had a big idea that I could believe in.

    Don’t get me wrong, I know they are there in Seattle, but after spending a year at a job I disliked looking for that right job, I gave up and left the area.

    The Bay Area (and other areas) have a wider diversity of jobs that attract a wider base of talent. Seattle is primarily a web startup city.

    All that said, I loved the Seattle weather (shocking, I know) and the Seattle scene and look forward to the day I can come back.

  • Guest

    I left Seattle (not for the Bay Area) back in 2008 because I couldn’t find a company I wanted to work for. Plenty of jobs, but not much diversity in the kind of company. Lots of internet/social networking/cloud-type startups. I couldn’t find a company that had a big idea that I could believe in.

    Don’t get me wrong, I know they are there in Seattle, but after spending a year at a job I disliked looking for that right job, I gave up and left the area.

    The Bay Area (and other areas) have a wider diversity of jobs that attract a wider base of talent. Seattle is primarily a web startup city.

    All that said, I loved the Seattle weather (shocking, I know) and the Seattle scene and look forward to the day I can come back.

  • Matt W.

    The Seattle needs to have more of an incubator culture, and one that targets young entrepreneurs in particular. TechDwellers is a great example and a good start, but one incubator does not a culture make.

  • Guest

    Then again, some of us love our freedom to much to move into the People’s Republic of California.

  • Janism

    Another one that got away is LinkedIn. Do people know that Konstantin who founded LinkedIn tried to get it started in Seattle but found the funding for it in the Bay area. Much more receptivity to a big idea with no business model. Andy they figured one out with the right smart people around the table.

  • Clive Boulton

    Another one gone to the Bay Area is Drawn to Scale http://drawntoscalehq.com/

  • http://twitter.com/chrisamccoy Chris McCoy

    More attention should be paid to younger entrepreneurs in Seattle. Risk profile is perfect to build world-changing businesses. Also, less attention on transactions and A LOT more attention (and patience) on data-driven businesses is needed–primarily social data businesses. 

  • Kilogram

    As a current UW tech-related student (interaction design) I am afraid I’ll be forced to leave the area if I want to dive deep into the young-disruptive-start-up culture that interests me. It’s so easy to just get snatched up by Microsoft/Amazon and call it a day.

    • johnhcook

      Before you do that, you should meet with some of the technology entrepreneurs, angels and VCs who are looking to help startups get off the ground here.

      • http://profiles.google.com/clive.boulton clive boulton

        Angels and VCs seem to be hiding unlike the Bay Area where forums like Orricks Total Access breakfast, bring everyone together (for free). Hope Orrick brings the event to Seattle soon.

  • 5Media FRT

    Box.net has gotten a good deal of attention in the technology world in recent months, but the decision to turn down half a billion dollars may raise some eyebrows.Turning down a $500 million acquisition offer isn’t necessarily a bad move for a hot company like Box.net, because it could suggest the company is desirable and attract other, richer offers. Read what critics have to say http://cloudtechsite.com/blogposts/leading-cloud-storage-provider-box-net-turns-down-a-500-million-offer.html

Job Listings on GeekWork