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California dreaming

‘Lone wolf’ Canadians in Silicon Valley heed compulsion to congregate

Mark Anderson The Ottawa Citizen

At first glance, it appears to be just another sunny Saturday at the track — this time, the Bay Meadows Racecourse in San Mateo, California. And if the men and women gathered at the Club House patio look like they would be more comfortable in front of a computer terminal than a betting window, so what? This is, after all, the heart of Silicon Valley.

It’s only when the race-goers speak, peppering their language with “ehs” and “aboots” and the other cliched hallmarks of Canadian accent and idiom, that it becomes apparent this isn’t a typical California gathering.

The All Canadian Day at the Races, is one of maybe three events the Queen’s University Northern California Alumni Association will sponsor over the course of the year, in order to give the 500-plus Queen’s grads living in the Bay Area a place to gather, compare notes and have fun.

Race day was the brainchild of alumni association officer and seven-year Valley resident Colin Finn, and for the first time, invitations included not only Queen’s grads, but all Canadians. “It was like a virus,” says Mr. Finn, who runs a high-tech startup based in San Jose and Ottawa. “I just put out an e-mail saying ‘invite all your Canadian friends.’ We were expecting maybe 20 people to attend, and ended up with 75.”

So what are all these Canadians doing in California? Living out the American dream, of course.

“You hear a lot about high taxes in Canada, but in the big picture it’s not that significant,” says Mr. Finn, watching his wife put a $2 bet on a horse that will come in dead last. “It’s not the main reason Canadians are coming down to California. They’re coming here for the opportunity. They’re coming because in Canada people are conditioned to be conservative … whereas here in the U.S. people are rewarded for taking a risk.”

And how do timid Canadians fair in the hyper-aggressive Silicon Valley? “There are lots of examples of Canadian companies and individuals who are as dynamic and aggressive and risk-taking as any American,” he says. “The more conservative ones just don’t end up down here.”

Mr. Finn took his own risk last year, quitting his job with Ottawa’s Enterprise Planning Systems (now WebPlan), and joining Pelyco Systems as chief executive. His strategy is to grow the tiny Internet software company from 12 to 60 people within a year. “That’s the dream, to get it big enough that we can cash it out or find someone who wants to take it away from us.”

Indeed, the lure of high-tech dollars seems to be driving everyone who comes to Silicon Valley. “I’d say the people arriving from Canada now have those expectation,” he adds. “They want to stake their claim in a ‘dot-com’ company, and that’s not going to make them well off, it’s going to make them wealthy beyond their wildest dreams.”

Indeed, the names Kimbal Musk and Zip2 are on the lips of several of the Canadians at the track. In the mid-1990s, Mr. Musk, along with his brother Elon and another Queen’s grad, Greg Kouri, attempted to raise money in Canada for an online route-planning company that would tell people how to get from, say, Niagara Falls to Toronto. After being shut out by the Canadian venture capital establishment, they flew down to Silicon Valley, got funded by tier 1 VC Mohr Davidow, and this spring sold the company, Zip2 — now a full-fledged creator of online city guides — to Compaq Computer for $307 million U.S.

The availability of venture capital is one of the main differences between Canada and the U.S. “If you can spell ‘Web’ in the Bay Area today, someone will throw $5 million at you,” Mr. Finn jokes. “The Ottawa VC community, on the other hand, is a beg-for-money game. You go to them with an idea and ask for $2 million, and the response is: ‘Here’s $500,000, you boys take that and come back to me in 18 months and let me know how you did.’

“If you do that in the Bay Area, if you ask someone for $2 million, they say ‘you guys aren’t serious.'”

Of course, not all Canadians are in California for the high-tech opportunities. Native Torontonian Sareena Ghulati arrived in the fall of 1996, in order to attend grad school at Stanford. Two years later, armed with an MBA and MA in education, she joined Score Educational Centres, a Bay Area company specializing in after-school learning centres.

Ms. Ghulati almost didn’t attend Race Day, but decided at the last minute to shift her schedule to make room for the event. “I will work a little hard to go to these kinds of activities, just to be part of a community,” she says. “If I randomly meet a Canadian (in California), I’ll get really excited. There’s an immediate bond there.”

Other than the general politicization of America — “there’s nothing here that’s not political, there’s no issue” — she has little negative to say about life in the Bay Area. “Living in a city is important to me, and San Francisco’s relatively diverse, with lots of young people, lots of places to go at night, and everywhere’s just kind of fun.”

If Canadian high-tech centres hope to compete with the Valley on “quality of life” issues, they have their work cut out, Ms. Ghulati hints. “You don’t want to be working any weekends, ever. You want to be outside biking or running, or the mountains are not far away for skiing, or the ocean for wind surfing. There’s just so much around here — try to enjoy as much of that as you can.”

Would she ever consider going back to Canada? “I think about moving back often,” she says. “One compelling reason is my family. I’m the only one away from home, so moving closer to them is an issue.”

As for taxes, “I don’t think about it. I feel I make enough (money) that even after taxes I’ll be fine. But it’s hard to know if I came home and 50 per cent of my income was being taxed, what my reaction would be then.”

Brian Gaunce is another odd-man-out in Silicon Valley’s high-tech gold rush. Having graduated from Queen’s in civil engineering in 1982 — just in time for a nation-wide recession — he left for California in 1984, where he’s been working ever since.

Today he runs his own own construction company, BDB Structures, putting up the buildings that will house the latest crop of high-tech startups, and watching as wet-behind-the-ears electrical engineers — kids 15 years his junior — grow rich on stock options and initial public offerings (IPOs).

“It’s a little demoralizing, because the business we’re in, in the simplest sense, is a nuts and bolts, been-around-since-the-pyramids kind of business. So it’s tough when you work as hard as you do, to not get a little bit down about folks who come to California and (strike it rich on Internet stocks).

“But you quickly realize that working for those companies is not the only way you can participate,” he adds. “You make a little bit of money and stick it in some of those (high-tech stocks), and maybe one of them can come home for you. It’s the same risk as being employed.”

Nor would Mr. Gaunce, who describes himself as “still pretty hard-core Canadian” discourage fellow Canadians from coming down to the Valley to try their luck. “It’s just a tremendously exciting time. I think for people who are looking for employment, finding it in the technology sector should be very painless.”

And who knows, he says, maybe some of that American-bred entrepreneurial spirit will rub off and find its way back to Canada. “We don’t need to become Americans, but the Canadian psyche of being extremely conservative and all that would benefit from shifting a little bit.”

At a particularly crowded corner of the patio, placing his beer order with a waitress, is Brian Cox, senior trade commissioner with the Canadian Consulate Trade Office in San Jose. For the past three years, Mr. Cox has met with dozens of Canadian entrepreneurs who have come to California to make their mark on the high-tech landscape. One of the major changes, he says, has to do with the type of people showing up at his door, looking for introductions to venture capitalists, customers, corporate partners or mentors.

“Three years ago I was dealing mostly with engineers. Now you have a lot more people who are not technical people, but are in high-tech from the marketing side, because the Internet play these days is not so much about technology as it is about marketing.”

Another change he’s noticed is that few Canadians seem interested in running high-tech companies — only starting them and selling them. “A lot of that is because of the hype that surrounds the IPOs and the acquisitions.”

And is the hype justified? Is the unbridled enthusiasm of the young Canadians flooding the Valley justified? In other words, is the dream real?

“If you have that kind of ambition, and you’re willing to put in the hours, I think you can do it. I’m absolutely not jaded by those kind of people. I wouldn’t bet against them at all.

“By and large,” he adds, “the guys I meet down here are very much inclined towards that entrepreneurial thing. That’s where the real brain drain is happening … we’re losing our entrepreneurial brains.”

The racetrack party is at least partly in Mr. Cox’s honour: He’s retiring at the end of the year and moving back to the Niagara region. Looking over the Race Day crowd, he says the Canadian contingent in Silicon Valley is doing fine, and should continue to do fine in his absence.

“I would say most people are pretty happy to be down here. The professional level of activity is so great and so interesting. I have yet to meet anyone who has complained bitterly about being here — except for some of the NAFTA wives who can’t work, and that’s a different matter.”

Parting advice?

“The way the tech economy is going, I think you have an excellent opportunity to go out and do the things you want to do. If you try to start your own company, there’s a good chance you can do it, and a good chance you can make money at it.

“That’s what I would really encourage them to do — maybe a year or two at a Nortel, but after that, get out there and get your feet wet in the world of young business.”

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