in Ontario

The Paradox of Choice

Meagphone

Crowd at AccelerateMTL photo by Chris Arsenault

Photo by © 2011 Chris Arsenault

I love what is going on in Montreal.

It’s nice. It’s concise. It’s clean. There is choice but it’s not overwhelming. It feels like there is a consolidated effort to make Montreal the hub for startups and technology in Quebec. There are other activities and groups but there seems to be a core group of influencers, activities, and events where high tech entrepreneurs can go to find others like them, potential employees, potential investors, etc.

I look at Ontario and I am concerned. We have what should be the building blocks for a great entrepreneurial soup. And we’ve seen some spectacular successes (Bumptop, Sysomos, Pushlife among others). But there is a lot of noise. Efforts divided between regions.

Turning up the volume

Volume goes to 11 by John Watson

Photo by © John Watson

I’m not suggesting a “one ring to rule them all” strategy. There are grassroots efforts, there are provincial government efforts, there are local economic development efforts like:

It leads to the murky waters that are the entrepreneur community and support infrastructure in Ontario. There is no segmentation. There definitely isn’t self-selection. They use similar words to describe their activities: entrepreneurship, startups, technology, media, growth, etc. As entrepreneurs there is a paradox of choice about who to listen to, where to go for advice, support, mentorship and guidance.

We started StartupNorth as a way to document our experiences finding, using, evaluating other startups in Toronto and across Canada. It was a way to connect with others interested in startups, emerging technologies and business models, and to talk about the things in a context specific to Canada.

I realize that the Ontario Ministry of Research and Innovation (MRI) has added to the entities designed to enable entrepreneurs. They are trying to “spread innovation” through out the province via the university commercialization networks.  The  ONE network that has centres in Waterloo, KingstonGuelph, Halton RegionDurham Region, Hamilton, Toronto, St. Catherines, North Bay, Sudbury, Ottawa, Mississauga, London, Markham and Windsor. The program is separate but deeply tied to the collaboration between business and academia.

  • Waterloo = University of Waterloo + Wilfred Laurier University
  • Kingston = Queen’s University + Royal Military College
  • Guelph = University of Guelph
  • Halton Region = Sheridan Institute of Technology & Applied Learning
  • Durham Region = University of Ontario Institute of Technology
  • Hamilton = McMaster University
  • Toronto = University of Toronto +  Ryerson University + OCAD
  • St. Catherines = Brock University
  • Sault St. Marie = Algoma University
  • North Bay = Nipissing University
  • Sudbury = Laurentian University
  • Ottawa = University of Ottawa + Carleton University
  • Mississauga = University of Toronto Mississauga Campus
  • London = University of Western Ontario
  • Markham = York University + University of Toronto Scarborough Campus
  • Windsor = University of Windsor

It’s interesting that California with an estimated population that is 3.7 times larger [1] than Ontario[2] has less innovation hubs than Ontario (12 in California to 14 in Ontario). (Sure from a per capita GDP calculation, Ontario is higher (Cdn$43,847 vs US$38,956) but it’s probably not entirely a relevant metric unless you’re a politician which I am not).

Photo by postbear eater of worlds - Some rights reserved CC BY-NC-SA 2.0

I’m wondering if rather than satisfising constituents with perceiving innovation benefits for votes, that we need to look toward innovation, education and economic growth programs that benefit citizens. I keep wondering what we are missing because of the existing programs and repackaging of programs for Ontarios entrepreneurs. Look at the job creation from a single venture firm, Union Square Ventures has portfolio companies with over 557 open jobs around the globe (128 are in NYC + Brooklyn). This is job creation. It’s focused on creating new positions, in a variety of rolls, that hopefully will attract new talent to the location.

Everyone loves to hates Toronto

Let’s all hate Toronto. It’s not uncommon for Canadians to dislike Toronto. But I don’t hear the same disdain for Montreal or Vancouver. But maybe that’s because I don’t live with their large gravity well pulling me closer. I choose to live downtown in Toronto because it’s where I want to be. I understand the lifestyle choices that others make to live elsewhere. There are days when the traffic, the people, the crazy, all get to me, but I love the collision of people, cultures, and ideas (go read Richard Florida for more thoughts on the Creative Class).

Are we missing an opportunity to raise the profile of Ontario companies because we don’t want to embrace the fact that Toronto is one of the major technology/media hubs? Are we diluting efforts by spreading the love and effort across 16 regions?

  • http://twitter.com/karam_n Karamdeep Nijjar

    I grew up and went to school in Kitchener-Waterloo, spent some time in the Valley, started my professional career in Toronto, and recently moved to Montreal. I don’t proclaim to be an expert on any of these regions, but I can share my opinions and let you decide. I can tell you that the ecosystem in each is completely different, with separate guiding forces driving the entrepreneurial community in each.

    In K-W, there is a great blend of public and private partnerships, plus an exceptionally talent base of young engineers and experienced managers. I don’t think you can replicate the Communitech/Velocity model, because you can’t replicate RIM, OpenText, MKS, etc. and the University of Waterloo (not to mention guys like Iain Klugman).

    In the Valley, you have a 3-4 generations of entrepreneurs, venture capitalists and engineers who have gone through numerous cycles of boom and bust and come out stronger each time. You can’t replicate the accumulated knowledge base (and riches) of that population, plus the attractiveness of living in Northern California from a pure cultural and climactic standard (trust me, it makes a difference when pitching employees).

    In Montreal, you have a core of highly motivated individuals who have spent a better part of a decade to get the ecosystem off the ground and where it is today. They have forged deep personal relationships and have made it an absolute priority in their lives to give back to the community from where they came (I’m talking about people like Chris Arsenault, JS Cournoyer, Philippe Telio, Ben Yoskovitz, Jacques Bernier, Charles Sirois, etc.). You can’t replicate those relationships overnight.

    There is no way that you can take an approach that fits in one city and assume it will work in another. Toronto has to forge it’s own identity – and I think it’s well on its way. That is a very organic process, you can’t “spread it” via government programs. Toronto has so much going for it, it’s just a matter of connecting the right people with the right ideas. The guys at Extreme, Mantella, and Growthworks are doing a great deal of laying the groundwork for this. I’m constantly impressed by people like Sarah Prevette, Jonas Brandon, Mark Ruddock, etc. who act as evangelists for the local T.O. tech scene within the broader community. I think sometimes it’s hard to appreciate what you actually have until you’ve taken a step away from it. The quality of startups (and the teams behind them) that are coming out of Toronto, specifically in the Mobile and Digital Media sectors, is absolutely exceptional. I think a certain self selection will start to occur as these companies mature and start providing a feedback loop to other would-be entrepreneurs on which people and agencies have added value along the way. If I was looking to start a company in Toronto, I’d look to connect with the people behind Bumptop, Sysomos, Pushlife, etc. and ask them who they’d recommend approaching for guidance, investment, and connections. It’s better to learn from other people’s mistakes.

  • http://davidcrow.ca/ davidcrow

    Karamdeep,

    I’m glad you reiterated exactly my point. It’s a difficult situation. We have a consolidated 10+ year effort in Montreal. This will require 10+ years to replicate if at all.

    The goal isn’t to replicate Waterloo in Toronto. Waterloo has it’s own issues related to this nonsense in Ontario. The mindshare competition between Waterloo, Toronto, Ottawa and the others dilutes even the efforts that Iain and the Communitech team have done and will continue to do. If there is a question it is on the effectiveness of events like Canada 3.0 not the support infrastructure that Communitech has built.

    We didn’t even discuss the rapid iteration that is happening in BC. First there was Bootup. Now much of that crew is at BCIC and there is Wavefront. There is a consolidated effort of people including Brian Wong, A Thinking Ape, Indochino, HootSuite, and others raising money building successful companies. And the support infrastructure including W Media Ventures and others.

    PS should I be offended that you aren’t impressed by me or my random acts of evangelism?

  • Ian

    Nice post. This is an area of keen personal interest so I am happy to wade into the fray.

    I live in Ottawa and like Toronto. By the way you can tell spring will be coming soon because the Leafs are out. Go Habs go!

    IMHO the key differentiator between innovation in Ontario and Quebec is largely policy based. Quebec has chosen to facilitate innovation whereas Ontario has chosen to try and create innovation. Quebec has found ways to incent innovation in the private sector and Ontario has funded innovation in the public sector. The results tend to speak for themselves.

  • http://twitter.com/karam_n Karamdeep Nijjar

    Lol, take no offense – I just haven’t had the pleasure of sharing a brewski with you…that’s what I mean by “evangelism” ; )

    I don’t know how that mind share issue gets solved – on one hand, I think encouraging entrepreneurship everywhere is an overall positive for the country, but there comes a time where you’re better off doubling down on the winners versus diluting your overall returns with less realistic propositions. Egos and political agendas obviously enter into the mix at a level where it becomes an exercise in futility.

    Maybe the actual solution is to hear more about what does work – and try to channel people towards those programs. Hopefully the initiatives that are doing a good job will flourish, and those that don’t will fade away. Who are the programs or people you personally refer people to in Toronto? I’ll tell you (off the top of my head, so I hope no one takes offense) the guys I always go to are Amar Varma, Duncan Hill & Scott Pelton. In Waterloo, I use Communitech as a filter, keep an eye on what Velocity is doing, and consult Randall Howard from Verdexus. The more we share that kind of feedback, the better educated the community becomes, and the quicker it can start to evolve.

    A couple of other relevant posts:

    http://chronicle.com/article/A-Better-Formula-for-Economic/125441/
    http://inoviacapital.com/2011/01/entrepreneurship-is-a-passion-not-a-program/

  • Ian

    Karamdeep good links, you may also like: http://www.paulgraham.com/siliconvalley.html

  • http://startupcfo.ca/ Mark MacLeod

    Great post David. That sure does sound like a lot of enabling resources for one city. I would like to see more funding choices for entrepreneurs, but when it comes to supporting resources, less is more.

    And yes, everyone loves to hate TO. It’s because the military removed your snow. Statute of limitations has not passed on that yet.

  • http://davidcrow.ca/ davidcrow

    Check out by others:

    * Ideas to steal from Silicon Valley by @accordionguy http://www.joeydevilla.com/2008/02/16/ideas-to-steal-from-silicon-valley-and-seattle/
    * How to be Silicon Valley http://www.joeydevilla.com/2006/05/24/how-to-be-silicon-valley/ Parts 1 – 6

    And by me:

    * The revolution will be localized http://davidcrow.ca/article/7151/the-revolution-will-be-localized
    * Harnessing Hogtown’s Hominids for High-Tech Hijinks and Hubs http://davidcrow.ca/article/1858/harnessing-hogtowns-hominids-for-high-tech-hijinks-and-hubs
    * From out of the Ashes http://startupnorth.ca/2010/05/03/from-out-of-the-ashes/

    Lots of good stuff on how Toronto can build and leverage the assets and resources we have.

  • http://davidcrow.ca/ davidcrow

    Since we’ve never met, and I lay the blame on @chrisarsenault who was in my office this afternoon. You might consider reading:

    * From out of the Ashes http://startupnorth.ca/2010/05/03/from-out-of-the-ashes/
    * Incubators, Accelerators, Ignition http://davidcrow.ca/article/7135/incubators-accelerators-and-ignition

    Not my first time at the rodeo. There are lots of qualified folks for recommendations and referrals (hmmm, I wish someone was building this business).

    There have been lots of efforts over the past few years. My criticism is directly with the MRI investment dollars. Many (most) of the people outside of Communitech are not funded by MRI (to make it easy: Pelton not funded by MRI dollar; Axon & Hill – not funded by MRI dollars; EVP not funded by MRI dollars; Verdexus not funded by MRI dollars). My criticism is squarely aimed at taxpayer dollars heading to 16 “innovation” centres across the province without segmentation or differentiation beyond geography to really help entrepreneurs determine which programs, people or efforts to which they should pay attention.

  • http://www.jonasbrandon.com Jonas

    Nice post Dave. I too am in the less is more camp. This is not to say government should ignore opportunities to stimulate the economy, but the role should be limited to simple rules and broad based support. Picking winners is a terrible place for the government to be, with decisions made for all the wrong reasons. It is painfully obvious, setting up innovation hubs in the middle of corn fields is a total waste of energy. Density, pressure, focus… call it what you will, Ontario could use a dose to move things forward.

    Dan makes a couple great points: 1. more people should be ignoring the stimulus programs – that is for another post. 2. There are some great active angels, but more is always better!

  • http://context.io Bruno Morency

    Interesting to see a post praising Montreal’s startup community. It still feels very much like “in the making” as opposed to “made”. It will surely turn into a lasting hub if we can see some exits comparable to the ones you mentioned in Toronto (Bumptop, Pushlife, …).

    As for hating Toronto and not Montreal. It is indeed a question of living within the gravity well. There’s a fair share of Montreal bashing all over the province!

  • Dan Morel

    David – sour grapes article 8-)

    I feel like nobody from Toronto should look at Montreal and say “can’t we just be like them?”. Isn’t Montreal as unique and special as Silicon Valley to a certain extent (only place in the multiverse where governments are weirdly effective in fostering creative classes, innovation, etc?). I feel like its been going on for a lot longer than 10 years (I was at a startup called ObjectWorld that moved to Quebec from Ottawa in 98 because the funding situation was significantly better).

    But hey, lets stop pointing the finger at the poor old Ontario government. We are entrepreneurs. Entrepreneurs are categorically not supposed to line-up with their hands out for their daily bread from their local government bureaucrat. Thats not what we’re made of, we’re supposed to create the economy, not feed off of it like leeches!

    Lets put the blame back where it belongs – on the entrepreneurs… on us! Where are all the once or twice successful entrepreneurs in the startup community? I know a lot of folks in Toronto area who have been part of some winning companies who promptly sat on their asses and did nothing to help build the startup community here – (mentor, advise, be an angel investor, etc). There’s a dearth of folks who went to the Valley, were successful and came back to Toronto and have done nothing to further the community. For every helpful David Crowe, Howard Lindzon-esque figure I could think of 20 companies like say Redknee where the founders have contributed back very little. Where the heck are the swarths of folks who made some decent money in RIM? Why are they not angel investing or at least sharing all the acumen and knowledge of killing it for a decade with the rest of the community? I’ll stop before I start calling out people’s names directly.

  • Mark Skapinker

    Nice post David. I think it would be a useful piece of information to compare the amount of monies being invested by these different groups and then compare Toronto and Montreal. I don’t have numbers but I suspect Montreal will easily win. Maybe we have so many groups in Toronto because it is an “entrepreneurial”/service driven effort and not an investment driven effort.

  • John Arnott

    David,
    Yours is a familiar lament; a few years ago I and some colleagues attempted to start a national organization that would serve as a communications link between all the groups you list and more. Despite all the activity that seemingly is working to the same end, these organizations are essentially in competition for a. potentially successful ventures, and b. for government funding.
    There is also a dichotomy between the academic/science/engineering communities and reality. Their conventional wisdom is that technology will save society; the reality is that only 6% of new businesses are based on a new technology, another 6% use some technology. 88% use no new technology (not counting off-the-shelf. [OECD]) There needs to be better communication between the technology and non-tech groups if we are to stimulate more activity, and most of all, improve the appallingly low success rate.
    I would be happy to share the background material if you wish.
    John Arnott.

  • http://davidcrow.ca/ davidcrow

    Additional info with investment in CoralCEA http://www.coralcea.ca/coral-cea-revs-open-innovation-engine
    CoralCEA seems to be tied to Carelton and at least recognizes the communicatinons technology cluster that has emerged out of Nortel, JDSU, Mitel/Matthews “Fairchildren” that exist in Ottawa.

  • http://davidcrow.ca/ davidcrow

    Mark,

    You’ve hit my thoughts. When the investment “marketing” dollars are being used to support many of these activities it changes how events are run and their perception. There is a strong service provider leaning in Toronto. And this makes it a different landscape.

  • http://davidcrow.ca/ davidcrow

    Who is this “David Crowe” figure that you mention? he sounds like my “e” enabled (perhaps “e”vil) alter ego, maybe that’s @zombiecrow is really just @davidcrowe – e for Evil Edition.

    I am a big proponent of success breads success. And we haven’t had enough homeruns to justify anything yet. Hopefully as Sysomos and Bumptop are freed from their contractual obligations that the founders and early employees will choose to return to Toronto and deploy capital and start companies. In the meantime, you are 100% correct let’s get down to building crazy successful startups. How do we do that? Customer development, lean, emerging tech, etc, etc, etc.

    I’ve talked a lot about the “Fairchildren” http://davidcrow.ca/article/6935/where-are-the-rim-alumni

    It’s great that Terry Matthews built a culture of entrepreneurship at Mitel and the following companies. David Ossip built a different culture at Workbrain but Dayforce, Rypple and ilk are demonstrating the awesomesauce there.

    Why do Toronto entrepreneurs not feel compelled to give back? Is it because “fuck you money” to buy and retire to Muskoka is in the $10MM vs NYC where you need $100MM+ just to buy a swank pad in the city, never mind a summer home in Aspen ;-)

  • http://davidcrow.ca/ davidcrow

    Technically I lived in Austin, Texas during the snow removal. So it wasn’t my snow. In Texas I was allowed to shoot the snow if it was on my property.

  • http://davidcrow.ca/ davidcrow

    I figured this was the case. I spoke with Krista Jones at MaRS who is a Quebecer, and she updated me on the Montreal haters.

    But I love Montreal, which makes hard to believe that anyone could hate what’s going on. But I can see how it happens.

  • Nathan Rudyk

    Coral CEA does have roots at Carleton U/in Ottawa, but it’s important to understand that it’s set up to fund/work with software companies across Ontario, even ones in Toronto! An example, Coral CEA provided Coral CEA provided $30,000 in funding to PatientWay (http://www.patientway.com) to develop new voice-enabled technology for PatientWay called i-Vox. PatientWay co-invested $90,000 with Coral CEA to bring this new voice-enabled software to life. PatientWay’s sold its tech to hospitals across Ontario and is projecting 10-fold growth over the next three years. So check out http://coralcea.ca/

  • Copywryter

    I’d say that emulating Montreal’s model is much more realistic and desirable for Toronto. Waterloo has a unique and powerful ecosystem that spawned a number of successful companies 10-20 years ago, but it doesn’t have the cohesive grassroots startup community that it shows on the surface. Yes, everybody knows everybody, but the political undercurrents are strong there as a result. The presence of top-down, government-funded programs and university influence, plus the agendas of the RIMs and Open Texts, make the eddies swirl that much more.

    This is not an attack on the region, because hey, it clearly works. The Communitech Hub is making important connections happen, and Velocity and Communitech do much more good than evil, but it is not something that can be copied, and extra-regional collaboration is simply not going to happen.

    Montreal is doing well for the reasons you pointed out, and some Karamdeep added. The evangelists there are non-partisan champions of Montreal companies and their city. They put their resources and time where their hearts are. For all of its events and captains (like you, David) Toronto doesn’t have a news destination like NextMontreal, and it doesn’t have a cheerleader like Communitech. MaRS is too monolithic and opaque to wear that mantle, and it has obligations to the province and nation that would present a conflict of interest, anyway.

    Toronto’s tech community could use a grassroots, non-partisan (sorry, Sprouter), aggregator of news, resources and overall Toronto-centric propaganda, run by zealots and overseen by respected members of the tech community, with connections, but not fealty, to government and private sector funding groups.

    I don’t think Toronto has ever managed to make this happen. Perhaps because of self-interest, or disinterest, or perhaps even self-loathing (see “Let’s all hate Toronto”) and I’m not sure why. But I’d like to help change it.

  • http://startupnorth.ca Jevon
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  • http://engag.io/ William Mougayar

    Agreed 100% on everything you said. I was in Montreal 2 weeks ago partaking in the Accelerate Montreal and C-100 events among other things, and was totally impressed by the strength of their startup/VC community. I was in awe frankly, having totally witnessed what is actually brewing in Montreal.

    In my opinion, the issue in Ontario is not so much the multiplicity of the OCE’s, so I’ll leave the governmental entities outside of my comment. The issue in Ontario can be narrowed to the Toronto-KW corridor. (Ottawa is in a world of their own now, so I will leave them alone too). The issue is that- in Toronto/KW, the start-up/incubator/accelerator/VC community do not work well with each other, rather they compete with each other. Each little fiefdom wants to be the centre of whatever.

    In Montreal, each group complemented the other. They each knew their strengths and weaknesses, and they all contributed to making the whole greater than the sum. Inside Toronto, and between Toronto and KW, there is quiet bickering, disdain for one another, and an utter lack of true collaboration where one part completes the other. Inside KW, they work very well with each other, but they all know that Toronto is the competition for talent, location choice and funds.

    We need to fix two things in Ontario: 1) Get Toronto to work better within ourselves, 2) Cut the b-s between KW & Toronto animosity. The distance between Waterloo and Toronto is about the same as between San Jose and San Francisco. If we want to be a Silicon Valley in the North, let’s start by acting like one.

  • http://www.josephfung.ca Joseph Fung

    Good comments – I think part of the issue is that so many of the people that made money at RIM and the like have been pulled to philanthropic work rather than startup work. The personality of the leaders drives the culture of the initial team, and if you look at the culture of the Sr. Management team at RIM, it’s definitely leaning to philanthropic work. Rather, it’s the more junior employees that are leaving to do startups. Look at Ali from Well.ca for an example.

    It would be interesting to compare the Toronto and SanFran philanthropic scenes to see how the two areas compare on that front.

  • http://davidcrow.ca/ davidcrow

    You just want more pr0n. Admit it!

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