Unfortunately for SmashFly and its CEO Mike Hennessy, their gambit in Boston is taking place just as industrial giant General Electric has announced that it’s moving its global headquarters to Boston from Stamford, Conn. And GE is making the move in part to underscore its intended transformation by CEO Jeffrey Immelt into as much of a force in the digital-tech realm as it has been in American manufacturing.
Does that make GE’s move a bad break for Hennessy and SmashFly? Not necessarily.
“The ‘war for talent’ is an apt term with GE moving in because candidates who are good in software development will have even more options,” he said. There’s always a supply issue.”
But, Hennessy said, “Boston is where you want to be if you are looking to get the best talent in engineering and software development. Living in the suburbs is a great location for our employees in Concord, but if you want to attract younger millennials who are living in Boston, you have to go to Boston. You get the networking effect and other benefits.”
Some other small and mid-market digital companies headquartered in the Boston suburbs, he said, have tried opening a second local office about halfway between their first locations and downtown Boston, such as in Waltham, Mass., “so people living in the suburbs don’t have to go all the way in.”
But Hennessy believes that SmashFly can compete with GE even though simply having a new office downtown “will only be table stakes.”
“We have to compete on multiple levels,” he said. “We have to differentiate ourselves with what our employees will be working on, for one thing.”
The key lesson here for all mid-market CEOs: location, not size, can be the winning factor. You simply have to go to where your market is; don’t make your market come to you.