As some of you know, I have experienced some recent [ahem] frustration while trying to build a technology business in Vancouver.
I experienced some catharsis last night reading Kevin Curry’s (is he a real person?) comments on the Vancouver startup scene over at TechVibes. You should really follow the link and participate in the discussion @ TechVibes, but I have pasted my thoughts and response below as well, for posterity:
I, too, had the opportunity to both work and raise capital in Silicon Valley. While I think every city has its fair share of bad, mediocre ideas (the Valley has lots too — see MC Hammer’s latest enterprise) I believe that the far more common theme here is ideas that are derivative, in which the best hope for success is a bunt, not a home-run.
Startups are supposed to swing for the fences, but there are too many startups here who fail to understand market limitations and try to boil the ocean. I spoke to a pair of entrepreneurs who honestly believed that they could replicate craigslist, zagat’s, epicurious, citysearch, and about half-a-dozen other best-in-class sites with a few hundred thousand dollars and no technical skills between them. I was embarassed for them.
The opposite problem is also true here: people looking at a technology sector and deciding they want to be in that space, without a clear idea of what the product will look like. That too is the wrong approach.
The best services and products solve problems. I’m not suggesting that RosterBot is the end-all be-all of web services, but it’s as successful as it is because it addresses a need, and I as an entrepreneur and athlete happened to experience that need so I was well-qualified to figure out how to solve it. It solves an obvious problem with some effectiveness, and it was built within the parameters, opportunities, and limitations that govern it.
Is it the next Google? Obviously not… but it was built entirely without outside funding and without defocusing me from other career obligations and objectives — and it’s beating other “Social gaming” sites because it is laser-focused on addressing the real needs that teams have.
I too have experienced major frustration with investors in Vancouver. I have always been comfortable saying “I don’t know” when, in fact, I don’t know something. This always played well south-of-the-border, when used in good measure, but here investors are looking for any sign of weakness to exploit in an entrepreneur and immediately go for the jugular.
There is a lack of respect between entrepreneurs and investors in this city. For the most part, I think that disgust is earned by both parties. To fix it, you’ve got to start from the top.
Vancouver has no successful mid-size (in U.S. terms) venture-backed technology startups. You can’t expect someone to go from junior individual contributor at a tiny aenemic startup to CEO of another aenemic startup in one step. With respect to many of the smart engineers I’ve met who are running small companies here, this is too often the case — and because they’ve never managed others or driven strategy and marketing, the results are predictable.
The lack of an informal apprenticeship system for information technology, such as exists within the medium to large technology companies in Silicon Valley, means there is little opportunity for workers to gracefully climb the ladder from junior engineer or marketer to senior management or company founder. Lots of folks have skipped this, and with some success — but I would submit that this is more due to happy accident and raw talent than anything else. So the catch-22 is that we need successful startups — who can stand on their own two feet, and not flip to the lowest bidder — in order to create more successful startups.
In the meantime, consider the following: we don’t need capital sources that are Canadian in order to nurture executives and companies on the Vancouver technology scene… and in fact doing so is putting the cart before the horse.
The Film and Video Game industries in this city are examples of technology-centric businesses that have developed and flourished within Vancouver, creating tens of thousands of jobs each, with capital from outside the city.
What we need to do is nurture programs that make it advantageous to invest, and remove the red tape from investing, in Canadian (and BC) venture startups for foreign VCs, and work to lure them to our city and province. This will attract capital from south-of-the-border, where investors are more seasoned and better-connected — and can bring more capital and greater exit opportunities to bear. These more seasoned investors will also act as a natural weeding mechanism to separate the wheat from the chaff in the local community, and they’ll force local investors to be more competitive and to bring more value to the table if they wish to participate in the upside opportunities. Honestly I think local VCs would appreciate and welcome the help and wisdom of their bigger cousins.
Solve the capital problem, and the other problems will fall into line over time. You’ll get mature, free-standing, profitable technology companies with seasoned entrepreneurs and middle management running them. We will all benefit.
Hoping to lite a fire under new businesses by providing opportunities is essential. Places like Bootup Labs and the Launch HQ are great sources of fuel for interested entrepreneurs. Also to do a little promoting Vancouver is going to have it’s first startup weekend in October from the 8th to 2010.
..you had me up to the point where you started talking about “luring” money and VCs to the city. If you have a good product, and hence a good/viable business, you can find money for it. When the attitude is, “I want a lot of money around (smart or not) so it’ll be easier to get it,” a red flag in me is raised and it makes me think of greed and schemes. The cornerstone is a set of great ideas and *then* the money will follow–locally sourced or not.
Ian, you’re right on about the need to have a culture of mentorship. I’m in Silicon Valley now, and the willingness of more experiences entrepreneurs and even fellow company founders to help out is tremendous. There’s a lot of resources out there today, but much of startup success can’t be learned from a book.
As a UBC Alumni & passionate entrepreneur who has finally come out of the bubble known as university, I have to say that the Vancouver Startup Scene is a really niche, cool place! A big part has been due to Bootup labs, and what the kind of innovation they are helping to foster down in Gastown, but others like the Network Hub are also really helping young, budding entrepreneurs.
However, I think one key ingredient that’s missing from what has been said, and what you find evident in the Valley and Waterloo, are the direct involvement with passionate, energetic, raw-talented students. (I actually just wrote about it here) Students in those bustling startup regions either a) have their fingers on the pulse of the startups, or b) are creating those startups themselves!!
In my limited experience, students in Vancouver (and specifically UBC) are quite disconnected from the current startup scene! (maybe 1 of 5 “entrepreneurial” students I talk to are familiar with the recent Bootup Labs, for example)
I think students need to start playing a bigger role, and this can only be done if
a) they stop trying to do their own silos or overlapping efforts and collaborate
b) startup companies begin to look to these students, and leverage the raw talent & passion they have
We’re actually in the middle of bringing the clubs together and have both UBC’s VSEA and SFU’s SIFE on board and excited. Now, we just need to hear from the startups in Vancouver!
This is all just my 2 cents of course.
Hah, just bumped into this article when we were trying to figure out where we would move as a startup if we had to cross the ocean. Everyone agreed Canada always seemed cool from our Finnish perspective and Vancouver was suggested. So maybe not such a good idea after all? 😉
you forgot the part about Vancouver investment scene being full of pump-and-dump stock promoter snakes with a long legacy of mining, gambling, and porn scam deals. is it any surprise that the credibility of the local markets is still healing?
much love and big ups to all my friends and colleagues working hard to make it a better place…
Ian… you put the BELL in embellish.
This article provides some food to nourish much more interesting, healthy and useful conversation than the one that sparked your writing. Thank you!
JR… you haven’t put a puck past me since 1999. Compared to you I’m Ovechkin. Or, at least, Walt Pdubney.
Hey Rob, I too believe that Kevin is a real person, but not sure it’s his real name! As Jordan just pointed out, if He’s such an expert on the Internet, why does he not exist anywhere when we try to google him.
Great post Ian – Kevin has assured me that he in fact is a real person.
Great post, Ian.
I often wonder what would have happened locally if Flickr had stayed – not that they’re a large company, but in that their successful founders and crew could have created a nucleus of development for Vancouver.
Some excellent points Ian. I agree with most except the part where you claim to be an athlete.
JR
PS. Good article. Where does it go from here?