The Most Entrepreneurial Place on Earth

East Cambridge, MA is booming, sparked by fast-growing local computer software and biotech industries.

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What it's like to build a business in East Cambridge, Mass.

I think you get hooked on the adrenaline. And terror is part of what makes the adrenaline flow."

The speaker is C. David Seuss, chief executive officer of Spinnaker Software Corp., a producer of inexpensive office and education programs for personal computers. Adrenaline? Terror? Founded in 1982, Spinnaker blossomed through 1984, contracted by more than half, expanded again this year. All of which is normal for any ambitious fledgling except for one factor: the company is based in East Cambridge, Mass., a tiny neighborhood that is perhaps the most entrepreneurial place on earth. And that, say the people who build businesses there, makes the highs higher -- and the lows more devastating.

Bordered by the Massachusetts Institute of Technology, just across the Charles River from Boston, East Cambridge covers less than a square mile. A decade ago it was a wasteland, its streets crowded with gargantuan old factories, some still reeking of the soap once manufactured there. The industrial canal on the neighborhood's northwest corner was a storage area for highway salt.

Today those same streets are brushed clean and lined with sidewalk cafés and trendy shops, many of them renovated to look smartly old-fashioned; the canal has become a focal point for a polished new office-and-condo development. But the change may be even more dramatic behind the facades.

* Roughly 10% of Massachusetts's software companies make their home in East Cambridge. Nearly one-quarter of the state's 140 biotechnology companies do too. In all, says David L. Birch of Cognetics Inc., some 17,000 new jobs have been created in East Cambridge over the past eight years.

* Roughly 3.5 million square feet of new office space have been added to a base of 2.2 million square feet over that same eight-year period, according to the real-estate firm of Spaulding & Slye. Metropolitan Boston may be suffering from cutbacks in the defense and computer industries. East Cambridge has scarcely noticed.

* At the American Twine Office Park, in the middle of East Cambridge, developers had expected to lure law firms attracted by the nearby courthouse and big companies desperate for presentable office space. What they got instead were tiny businesses such as Inscribe Inc. (which computerized Ronald Reagan's signature) and Funk Software Inc. (which turned the unwieldy Lotus 1-2-3 spreadsheet right side up).

"The building wasn't intended to be a high-tech incubator," says Mitchell Roberts, marketing and leasing manager for the developers. "That came as a surprise." Some 50 to 60 young companies have been based at American Twine since it opened in 1983.

And what is it like for an entrepreneur to do business in a place so jam-packed with compatriots? At Spinnaker, what Seuss calls the adrenaline and the terror coexist with more pedestrian factors. Spinnaker's proximity to MIT makes it easy to recruit programmers, and to take advantage of the pool of students seeking part-time work. The company has also been able to expand and contract without difficulty; with so many fast-growing companies looking for space, says Seuss, you can sublet yours when you're on a downward spiral and rent someone else's when you begin growing again.

Then there's the onslaught of professional-service firms: Big Eight accountants; slick public-relations outfits; tony consultants like Alliance Consulting Group, spun off from Boston Consulting Group -- even a day-care center, Bright Horizons. All offer help, albeit at a price. "That phone will ring, and you'll have no idea what question will come over the line," says Joseph S. Tibbetts Jr., the Price Waterhouse partner who founded the firm's Entrepreneurial Service Center three years ago. "A guy will say, ' I want to fire my chief financial officer -- how do I do it?' " Robert Johnson, a venture capitalist, launched Founders Capital Partners two years ago to bridge the gap between good idea and start-up; he helps entrepreneurial hopefuls get their acts together. "East Cambridge is sort of a primordial soup," he says. "You have to be down in the weeds to catch something new."

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