Vancouver: Canada’s Greatest Start-Up City? (27)
This is a guest post by Victoria Revay, who works as an editor at NowPublic.com. NowPublic publishes crowdsourced news. The Vancouver-based company received last week $10 million funding from New York-based Rho Ventures — along with its Canadian affiliate, which is based in Montreal — as well as Canadian venture groups Brightspark and GrowthWorks Capital, both of which were early investors in NowPublic
Most of us associate Vancouver with its beauty, coffee shops and a casual West Coast lifestyle. However, as I came to find out in my research, Vancouver is currently the place to be for anyone wanting to be involved in a booming startup and tech scene. After interviewing many in British Columbia’s technology industry, there emerged a consensus of reasons why this is so. Primarily, it had to do with investor confidence. Next, many agreed that Vancouver offers unique educational programs that produces a talented pool of staff that is unrivaled anywhere else. Lastly, Vancouver is a desirable city to live in, not only because of it’s beauty, but also because of its proximity to Silicon Valley.
A key reason that was sited for Vancouver’s success as a city that fosters great startups, by people like David Raffa, a predominant VC in Vancouver and Jim Charlton of Growthworks was that investors get a high return on their dollar with a relatively low risk of failure. Raffa says that often companies in British Columbia can be built faster on less and operators can “run a leaner ship, because of tax incentives and lower salary demands.” This allows startups to have a chance of staying in the game longer, which often leads to investors getting a high return on their dollar. Chartlon of Growthworks also pointed out that in 2006, $43 million was invested in British Columbia based businesses, which not only displays investor confidence, but as well reinforces the success rates of local startups.
Entrepreneurs like Andre Charland of Nitobi, Dick Hardt of Sxip Identity, and Thierry Levasseur of Email2 would all agree that another reason Vancouver is a great place to start a tech company is because we have a unique mixture of schools in technology and arts that produce a pool of innovative, creative and educated graduates. Charland says schools like the Vancouver Film School, Emily Carr, BCIT, SFU and UBC all offer technology and engineering programs that “provide a great training ground for people with the skills to build great technologies.” Not only that, but the universities themselves spit out new technologies and this becomes a combination for a win-win scenario. Kris Krug of Bryght also mentions that there is a real bona fide feeling of community when it comes to the Vancouver Web 2.0 movement, which in his opinion contributes to the ongoing success tech startups enjoy. Krug says open-sourced social events like Democamp, Barcamp and Northern Voice help build the “geek tech identity” and strengthen this voice. He also says the super creative energy of that exact community fosters spaces like Workspace, which is what propels our city as “a pillar in the Web 2.0 movement.”
Lastly, Vancouver is constantly named one of the top cities to live for quality of life.(Monocle named it #15 in the world.) The air quality is great, we have some of the world’s most prime real estate in development, the arts and restaurant scene is thriving, the natural scenery is captivating and Whistler, host of the 2010 Olympic Games is only a few hours away. Naturally, the best of the best want to come live here. And being on the same time zone and in close proximity to Silicon Valley also helps.
Here are some of Vancouver HEADQUARTERS people are watching..
NowPublic.com was just named one of TIME’s 50 best websites of 2007 and the company also announced a $10.6 million round of financing early last week. Co-founder and CEO Leonard Brody’s vision of building the largest news organization in the world where anyone with a cell phone can make the news is fast becoming a reality.
Club Penguin is actually Kelowna based, but we’ll pool it with the Vancouver crew of cool startups. This virtual playground for kids was just acquired by Disney for $700 million. Lane Merrifield, Dave Krysko and Lance Priebe’s startup did well.
DabbleDB lets you crate and share a database and then build an application on top of it.
The platform is innovative, with a simple point-and-click interface.
Bryght builds online dynamic communities and interactive websites and best of all “Bryght sites are flexible, secure and search engine optimized out of the box.”
Plenty of Fish is the world’s largest online dating website that generates over “500,000 relationships a year. Markus Frind still runs the site out of his Vancouver apartment with no employees.
Email2 is a courier of email. Thierry Levasseur’s company delivers mall & medium sized businesses as a service, email2 seamlessly integrates with your existing email infrastructure.
Sxip Identity is Dick Hardt’s identity 2.0 that works on new identity models for the digital world.
ElasticPath is an ecommerce platform that maximizes sales with little time and effort. It also has the most powerful AJAX single screen check out available.
Vancouver’s startup technology scene is hot. Happy investors, talented staffers, superb educational institutions and a thriving “geek” community all help to foster ingenuity and a broad array of focuses in technology that could potentially make Vancouver one of Canada’s greatest startup city.
This finishes the cover about Vancouver startup scene. There was previously on Montreal Tech Watch a similar report about Ottawa
a few comments
- vancouver VCs and startup funding is doing well, and I am unable to spot if there are Vancouver-specific differences that Montreal don’t have. Maybe the “tax incentives” has something to do with that
- Montreal also has democamps and barcamps and more. Vancouver has workspace though.
- saying that clubpenguing is doing well is the understatement of the week for me :-)
- top city to live in: i think Montreal is on par with what Victoria is describing. would have to check the survey though. If I remember well, Montreal just comes after Ottawa for quality of living.
I would say Vancouver is doing very well. Montreal has 3 times more population, and still Vancouver is doing better in some areas.
not sure what air quality has to do with it. but vancouver is pretty great. and high tech is awesome, what could be better than a job where you wear shorts. sure beats my job at a bank.
Great post Victoria. I started Peerflix here and am starting my next venture “Strutta” here too. Over the past 6 months or so, I’ve met many entrepreneurs, angel investors and VCs in the city and I’ve seen their tone change from pretty cynical to farily proud, and on the way to being overly enthusiastic about the Vancouver tech scene.
I’m here to stay!!
Can you wear shorts in vandouver? I am just curious - is it not too cold :)
[...] oppressive climate if a dealmaker is willing to travel to the west coast of Canada. Check out this post from Montreal Tech Watch, which provides a run down of hot Vancouver, British Columbia, startups, [...]
For sure I love it here and it is a great place for startups. But don’t let Montreal feel left out. You have better tax incentives, more VC selection, same or more level of universities and art schools, and culture that can’t be beat. Now if we can fix the winter weather and the brutal employment law, Montreal is a winner.
Something you didn’t talk about is the diversity of businesses in Vancouver - huge biotech scene, gaming here is massive, and all the cleantech stuff that started here in the late 80’s with Ballard.
Both great cities, plus they mean you don’t have to live in Toronto!
[...] Victoria Revay jumps into the spirit of things with a passionate post on why Vancouver’s tech scene is [...]
I work in both Vancouver and Seattle. The amount of capital south of the border is phenomenal. The difference is an order of magnitude. If only Vancouver had the VC firms, Seattle has, it would be Silicon Valley North.
Gotta love it that even on an article about the startup scene in Vancouver, David finds a way to bash Toronto, especially when the company he seems to represent has offices there…Geesh, people, it’s one great national scene — the stronger every area is the better it is for everyone!
Geez, people are sensitive. I’ve lived in both Montreal and Vancouver and a fun bond between the two is Toronto bashing. It’s just fun, I’m not actually saying Toronto is a bad place. Seriously thin skin …
david: it’s the second time I see someone mentionning the weather, and this is a novelty for me. I thought weather has nothing to do with entrepreneurship, otherwise, all southern hemisphere countries would be more advanced and more innovative than northern, which isnt the case. There are a few exceptions, like Singapore, which is doing great with technology and innovation, but it’s a small country compared to its neighbours.
about the brutal employement law, i can’t say much about it. BC is more corporate-friendly, what can i say.
thank for the comments btw
Creative Financing: ok, Seattle has Microsoft, Boeing, Amazon.com. Bill Gates is giving away money, Jeff Bezos is an active investor etc… Seattle is also 6 times bigger than Vancouver. So It’s normal you see more activity in Seattle.
by the way, i find your point of view very limited. VC money is important, but it’s not enough and sometimes not necessary (clubpenguin worth $700million with no VC funding). there are much more factors into play.
[...] She succinctly sums up what it great about Vancouver’s active technology community and her entire guest post is worth a read. Entrepreneurs like Andre Charland of Nitobi, Dick Hardt of Sxip Identity, and [...]
The thing about Vancouver IT-scene is that they pay lower than the US equivalent position. Entry Level at Accenture is only $30k CAD while entry level at Microsoft is $75k USD at least. MDA, the place where young people work overtime, only pays $40k. That is an insult.
The low salary in big places like Accenture really force people to get out and make their own startup. Be a CEO, get funded, give yourself $50k USD salary; that beats working at Accenture.
I can’t wait until Microsoft opens the R&D center in Richmond and push the salary to a very competitive level.
It’s nice to see company like Flickr and Clubpenguin made it. But there is a painful behind-the-scene stories that never been told: high turnover-rate, unsatisfied workers, etc.
This is getting worse lately as big companies from Silicon Valley start to recruit people straight from UBC and SFU, leaving Vancouver with BCIT students. (No Offense BCIT).
David, I hear ya. Ok, ok, maybe my comment did come out sounding a bit “thin skinned”. ;) I’ve lived in all 3 and have heard it all, for sure…Just that sometimes it gets tired is all, especially when, with some people, in one direction it’s “fun” but in the other direction it’s being pompous and receives the typical centre-of-the- universe comment. Now, the important question is which of the 3 do I like best?? Well, I hear that Winnipeg can be pretty nice. :)
-P
I think it’s the people here (community). With the only exception being San Francisco, I have never seen a city with the talent, enthusiasm, energy and spirit of sharing (Bryght.com) like the people of Vancouver! Vancity Rocks the web!
Random Factioids, answers, and opinions:
Seattle is about 1.5x the size of Seattle.
In Q2, Washington companies raised ~US$300M, BC companies raised C$112. Seattle definitely has more VCs of size - and they are all private, no tax incented money. The funny thing when I talk to entrepreneurs in Washington is they all complain the Seattle VCs want to invest in the Valley, and not in Seattle.
All talk of “Silicon Valley North”, in any context or location is bunk. There is nothing close to Silicon Valley, from a venture or startup perspective, anywhere else in the world. Clusters, yes, good places, yes, Silicon Valley 2.0, no.
I think weather is a surprisingly important factor. One of the keys to growing great businesses is hiring, in particular, hiring seasoned, top-tier talent. Those folks go where they want, and lifestyle/weather has an impact. Recently I’ve been seeing lots of Canadian senior-execs who’ve been working in the Valley for 10+ years want to move back to Canada due to family reasons. Most want Vancouver because it is the only place they’re willing to live in Canada after living in California for so long. Good weather doesn’t create good entrpreneurs, but it is an important soft factor in recruiting which can make or break some companies.
On the pay front, ugh, didn’t realize Accenture was that bad. The BOBJ (formerly Crystal guys) are in the $55-65k range for top-tier new grads. EA pays well as well. Fundamental problem in Vancouver, not many “big” companies to go work for as a new grad programmer. On the flip side, CA-track new grad commerce types are being fought over - who’d have thunk it. MSFT will be good for new grad pay, but bad for startups in the short term. Anything that puts the hurt on the junior and intermediate job market for programmers makes things harder for early stage companies who need to hire. Long term should be good as people with some solid corporate training flee to do startups.
Winnipeg is cool (literally), but what about the mosquitos! ;) For VC, Toronto is the centre of the Canadian universe. Same for anything financial, head office (non resource), and big company software. Vancouver has clean tech, biotech, gaming, and some interesting startups in software/media. Montreal is pretty similar (my perception).
When I describe what I love about Vancouver as a VC to other VCs I say Vancouver is home of the “weird deal”. If I want a copy of a Valley deal I look in Toronto, if I want to find something quirky that often makes no sense, but is certainly unique, I look in Vancouver. I don’t know Montreal’s software scene well enough to comment on it realtive to these two.
A whole lot more than you asked for, and probably worth less than $0.02, but there it is …
[...] Vancouver: Canada’s Greatest Start-Up City? | Montreal Tech Watch Great post about Vancouver and lots more in comments about other great Candian cities in whic to start-up your next venture - including a discussion about the weather! (tags: canada vc venturecapital finance startups entrepreneurship funding) [...]
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