Three Ways to Help Vancouver Grassroots Tech
Score another victory for a Vancouver startup. The talented Romanian duo from Summify and their dev crew were acquired by Twitter and relocated to the Valley. While I couldn’t be happier for Cristian and Mircea (the stars of Startup Supernova2) there appears to be a pattern emmerging for the ‘successful’ Vancouver startup:
- Formulate and develop great product (Summify, PhoneGap etc.)
- Achieve product/market fit
- Accumulate thousands or millions of users
- Get acquired
- Relocate all or part of the team to the Valley
There are two different problems here:
1. “How do we get companies to the stage where there is interest from acquirers?”
2. “How do we get those companies to stay?”
How can we breed more Hootsuites?
You can not overestimate the challenge that Ryan at Hootsuite is taking on by being the flagship startup for Vancouver. With Hootsuite’s level of market penetration and traction, there has undoubtably been acquisition offers so big they could hurt people’s feelings. Yet Ryan maintains a commitment to becoming Vancouver’s first billion dollar startup and building a legacy in this community. I sincerely hope that he suceeds and is the Don of Vancouver’s version of the ‘Pay Pal Mafia’.
But what comes next? How can we grow beyond Mafiosa and turn:
It takes talent to grow.
Talent is the chicken that lays the product eggs. Investment and accelerators help to incubate those eggs and hatch some into chickens that go to market for a payday and/or lay their own eggs.
In sport terms: Owners, general managers, and coaches are important, but there is not a league in the world that can exist without the talent of its players.
Why else are athletes paid such salaries?
Community is Fabric
Overly dramatic tip of the hat to Collin Vine
An idea is a weight
Each individual is a thread
One tries to hold the weight alone. It snaps
Band together dozens. This is string
String breaks under modest weight
Weave together dozens of strings. This is fabric
The bigger and stronger fabric, the larger the weight it can support
Tighter string makes stronger fabric
Community is fabric
We are only limited by our capacity to work together and weave ourselves with the threads, strings and patches of fabric around us. We will never have more thread than the Valley or NYC, but we can compete by having tighter fabric.
How do we get them to stay?
In 2011, I helped organize over 40 tech events in Vancouver that were attended by over 1600 people. During those events I had a lot of conversations with a lot of entrepreneurs. Here are a couple of ideas that are aggregations of those conversations:
1. Bridge the Gap
Not completely on topic, but…. one of the most embarrassing stories of my university career and trust me, there are plenty:
One day in my Global Business class our esteemed professor Ralph H. asked our class of 70+ students why Silicon Valley was located in the Bay Area. As I put together my answer, my mind made several shaky leaps of logic.
Having never been to the Bay Area, I thought the primary purpose of Silicon Valley was to produce silicon chips. I had recently read that parts of silicon chips where made of glass and I had recently seen a show about how sand could be blown into glass. I knew there were lots of beaches (with sand!) in California. Dot A connected to Dot B which lead me to terrible Answer C. I put up my hand and asked “Is is because of the sand in California?”.
I am not exactly sure how to describe the look on Ralph’s face. Here is a man who had spent most of his professional career working at the World Bank and now was faced with my notable level of idiocracy. Ralph cocked his head a bit in case he had misheard me, then slowly shook his head with something approaching confusion in his eyes, “Silicon Valley is there because the schools are there. Stanford is there, Berkeley is there. Sand is everywhere.”
To me, the difference between Silicon Valley and the Fraser Valley is that the folks in Silicon have figured out a way to effectively bridge the gap between education and industry. The ties between the universities and tech companies are deeply rooted. Google was born at Stanford. Google hires extensively from Stanford. Top talent is attracted to Stanford because they know the connections and opportunities that will be available to them upon graduation. Stanford and industry have figured out a way to build a symbiotic relationship that fuels the Valley.
Lots of people are trying (4D Labs, e@ programs et al.) but its time for some fresh inputs and ideas as well. Walkabouts (NYC Version) and more student focused events will help. But we need original approaches on how to tighten the relationship between educational institutions and the local tech community.
This is a problem and not my area of expertise. Remember, I went with sand. How can we bridge the school/industry gap? If you are a student, please tell any member of our community how we can help.
2. #WeAreYVR
It still blows my mind how many people I talk to in Vancouver in the digital media space that have no idea Hootsuite is a Vancouver-based company. This number should be 0. Most local ‘techie’ people are at a loss to name even a handful of our local startups. Worse still, they don’t even know where to find that info.
Its time that we created a community wiki that showcased our people, companies and successes to Vancouver and the world at large a la WeAreNyTech. I am stoked to be talking with Joyce Lam and Jon Chui about this project. If you are interested in contributing in some way, please get in touch with any one of us.
3. Hack Hut
This is a big one. Out of everything I learned in 2011, this is the one single thing that will have the biggest impact on building grassroots startups in Vancouver in 2012.
Let's Get the Hack Hut Off the Ground!
There are literally 10s of millions of dollars being invested every year by government agencies in the technology communities of British Columbia. If we were to imagine ourselves as portfolio managers and approach the technology community as an investment portfolio, we would quickly realize that the current crop of programs are akin to bonds or shares in banks (ie. nice, safe investments). We have not taken the high risk/high reward flyers that a successful technology community itself is built upon. We openly lament that few in the community take risks and think big, and yet the programs tailored to support our local entrepreneurs are themselves structured to play it safe. Its in the DNA.
In sport terms, it feels like we are playing not to lose. Instead of trusting our Quarterback to risk that electrifying deep throw over the middle to break the game open, we are playing the investment equivalent of small ball. Conservatively trying to get a runner on base and then inch them closer to home.
Moneyball dictates that focusing on on-base percentage is a prudent strategy. That strategy has won games, even division titles for the Oakland A’s. But that strategy has yet to win a championship. And you can’t use the 2007 Red Sox. Their payroll was hardly prudent.
More importantly, the Moneyball strategy does not win the battle between sports. We are not just competing with other tech companies for talent, we are competing with other industries as well.
Think back to the last 15 years in baseball. Which memory sticks out to you personally…
Billy Beane’s Oakland A’s fielding a consistently good team?
Barry Bonds, Mark McGwire and Sammy Sosa crushing baseballs into adjacent timezones ?
Like it or not, home runs consistently lead-off sport highlight shows, put fans in seats and add zeros to the end of network tv deals. The end result is a growth in the sport and a growth in the economy surrounding that sport.
I am not saying we should forget about batting averages and on base percentages and start recommending steroids for all. Nor am I negating the efforts of the incredible people involved in existing programs. What I am saying is “lets open the playbook a bit and look at some alternatives”. Instead of launching yet another e@ program, lets take a page out of successful co-working spaces in San Francisco and New York and infuse our portfolio with a few novel investments.
I have joined with Ray Walia and Roger Patterson to help get one such alternative off the ground. The Hack Hut is a collaborative workspace for Hackers and Founders to share knowledge, insights and connections that further the tech community in the Lower Mainland. It is by entrepreneurs, for entrepreneurs. With the best programming and mentors in the Vancouver tech industry. We are going to be doing a Hack Hut info night on Feb 21st . If you are interested, come check it out.
Enough from me! What do you see that will make Vancouver a better tech community in 2012?
Hi Jesse:
Thanks for taking the time to write a long post like this. It is very valuable to bring these thoughts to the surface and have more people talking.
I wrote one post as a direct commentary to this post: http://blog.bmannconsulting.com/build-more-startups-in-vancouver
And also a related one on coworking / supporting the community directly: http://blog.bmannconsulting.com/i-want-to-vote-with-my-dollars-that-the-vanco
Keep up the good work — not enough people know your name, and more should.
Jesse some random thoughts – both Hootsuite and Vision Critical were formed out of web agencies similar to 37 Signals. Vancouver has more then its fair share of web agencies.. maybe if you could somehow bring web agencies together with tech startups..
In terms of what I like about Boston, New York, Seattle and the Valley is – smart people, people with high energy, willingness to try something out (risk taking) and Angels with varied enough backgrounds that you will find one who gives a shit about what you give a shit about.
Another thing that I note from these places is the opportunity to hear some awesome speakers.. I heard David Ascher from Mozilla the other day, it was good solid stuff merged with a strong value set.. i realized how much I missed that.
Startup weekends are the best way I think to find a new a co-founder, if you don’t have a college buddy. I have done two one in Vancouver and one Seattle.. there were some interesting cultural differences
Good luck with your new venture.
Great read, but even this article is missing an educational link. What about BCIT? We need to link education and industry, and BCIT is the most industry focused school in the Lower Mainland.
@Boris –> love your response post. Thanks for taking the time to write that. I think what I missed (and you correctly point out) is that it is key to get more companies started. And then moving them through the early stages.
@Eric –> You are on to something there. How do we take existing tech companies and tweak them around a product that can really scale their businesses? Ryan (Hootsuite) mentioned that in a talk, that one of the reasons they had early success is that they had spent 10,000 hours working together. What about 20% time on products in a services shop? Good tip, will look up David to do a talk for the Co-Founders group.
@Tim –> I had BCIT/Emily Carr, Capilano and Langara mentioned in an earlier edit of the post. You are entirely right, we need to engage all the schools not just the biggest.
When you speak to those involved in the early days of Silicon Valley you’ll often find the genesis of what made the valley special was very much a singularity type of event that caused an ecosystem to form that fostered entrepreneurship. With its strong counter-culture San Fransisco was already a magnet for those who thought a little differently. Combine that with lifestyle elements of surf and sun you can see why it became a place for like minded individuals to migrate to. Gov’ts often attempt to replicate what the valley represents but these efforts more often than not destroy the organic process that allows a community to take shape in the first place. If community becomes dependent on gov’t involvement it often quickly withers if source of stimulus is removed. Spending follows political cycles, it becomes a case of feast or famine for entrepreneurs in these environments.
Stanford, Berkeley and other universities in the bay area have an advantage not just in their proximity but in their willingness to work with the industry. Its a different mindset then you typically find at other institutions. There is no magic formula though, successful business leaders in this industry come from a variety of backgrounds, drop outs likely still outnumber academics.
Had Larry and Sergey landed at UBC and not Stanford would have seen a home grown version of Google evolve? Unfortunately I suspect not, the reason being you cannot discount the importance of visionary investors in the community (most of whom are/were entrepreneurs themselves). Even though Sergey and Larry realized they had something for a period of time they would have happily let Google go for a price under a million, abandoned the garage and simply gone back to academia. What did they have access to down there that made the difference? Investors willing to put 6 figure checks on the table with very favorable terms for a company that didn’t even exist. We have plenty of bootstrappers in BC working out of their homes, many of successful – what we lack is that infusion of capital necessary to take an idea to the next level. Often when it comes time to take that next step out of the garage the only viable choice is to leave.
Plenty of BC’ers have had success and would make ideal early stage investors. The problem is not lack of capital but rather the interference of capital in what should be a free market. When you have gov’t interests attempting to drive the ship picking winners and losers using public funds it forces healthy capital out of the environment. The two can’t mutually co-exist.
Unfortunately we have once again got things very wrong in BC and I fear we’ve run out of road to set things right. I started in this space before the 2000 tech bubble, I’ve seen this play out before more than once and I suspect I know how its going to end except its going to be worse than previous iterations. We are seeing the end of a very large gov’t spending cycle. Everyone in the industry needs to realize BC faces a serious fiscal deficit and its going to get worse. There is something very California-esque (circa 2006) about whats occurred in Vancouver real estate. All indicators point to a very dire picture for provincial finances for the foreseeable future, the tech community needs to start planning accordingly. Last time this happened the entire industry was thrown into serious disarray, the migration that occurred could only be described as a mass exodus.
Remaining in BC during the the next few years likely means going back to bootstrapping. Even if you have the dollars recruiting talent is difficult if independents get scared and feel they are better off leaving for greener, more stable pastures. If you aren’t a technical founder the environment can be very harsh & unforgiving.
Shared work spaces offer tantalizing advantages but I’m not sure the counterparty risk can be adequately mitigated if things go sideways. If you risk lawsuit from landlord because fellow tenants sharing a space are no longer able to commit its better to have the stability of a home office type of environment. Any space requiring gov’t funding cannot be trusted, at some point it will fold when funding commitments are withdrawn.
The writing is on the wall, Falcon has promised the province a balanced budget by 2013 – this means deep cuts in a left leaning province with powerful public unions, we should have no illusions what the result will be when push comes to shove. Various communities need to quickly learn how to rely on each other in the absence of gov’t funding (not as easy as it sounds if you look carefully at just how pervasive various schemes have become).
Don’t forget games! Some of us in the game space are start-ups too! And we are community building. Check out Vancouver Social Games community. We have over 400 members in our MeetUp and put on an event at least every month. http://www.meetup.com/Vancouver-Social-Games/
East Side Games, A Thinking Ape, Dimerocker, Silicon Sisters, EBG, Ayogo and more… huge space in social, mobile and casual game making things happen!
@Ben –> First off, thanks for putting the time into that comment. Great feedback.
I had not really thought about the coexistence of gov’t and private investment. Your point about the two of them being in competition makes a lot of sense. Hopefully an ebb in future gov’t funding will result in a flow of private investment. I guess time will tell.
I think your point about Larry and Sergey is moot. They would not have come to UBC in the first place.
I love you thought at the end about how a loss in gov’t funding could potentially be the galvanizing force this community needs. Nice silver lining.
@Tayber –> Great point, there is an active gaming community in Vancouver. How we can get more interaction between the gaming and web folks?
[...] of chatter locally about startups, startup culture and startup support in Vancouver. (See: Boris, Jesse, Allen, the twitters of @kaler & @igorskee for a quick round up). I’ve also been [...]
Having worked on not one but now two Venture competitions in Vancouver open exclusively to B.C. entrepreneurs- one for tech and now one for Vancity that supports student/alumni run businesses with a social purpose – I have been amazed by the amount of talent and great ideas percolating in this province and this city. I made the switch from another UK Twitter based dashboard to Hootsuite initially for the very reason that they were based here and often tell the story.
Yes – connect and create, and stay local, I look forward to seeing what’s out there.
P.S. Did I mention Vancity is giving away $90K to entrepreneurs that are current students or recent grads? And yes, we realize that not all great entrepreneurs come from universities and colleges, but we wanted to extend the runway for those with student and startup debt.
http://www.vancity.com/VentureChallenge
I see a bigger problem then just the schools. SFU and BCIT are very good schools for tech. The problem I see is a serious problem when it comes to finding investment dollars. Government policies and even laws are very counter productive and make it very difficult to crowd source investment dollars. IPO’s are another challenge, in Canada in general, since when you go public you have to pay someone a full time salary just to fill out all the paper work for every province to sell stocks on the stock exchange. Then there is the matter of BC not having a stock exchange anymore. Any stock listed on the Toronto stock exchange has to have ties to Ontario. Thats the policy of the TSE. Not Canada. Ontario.
You can see that these sorts of things make growth very difficult in BC. The tech industry is virtually ignored now in BC in favour of resources like mining and logging. Its no wonder so many people are moving to Alberta and businesses selling their companies to the valley.
There is another problem. Canada seems to lack the culture to make stars. Both in business and actual stars (entertainers). Most successful businesses and even entertainers wind up going to the US. It seems that for people to be recognized here they must first obtain success in the US. This country won’t recognize them until they do. It seems that a change in culture is necessary to help people succeed.