From the 6 to the 604
As a Toronto boy living in Vancouver, I often struggle with an internal tug of war. One side of me wants to try Quinoa and go for bike rides along the Stanley Park Seawall, and the other side of me always envisioned this more Mad Men, high-pressure/high-stakes scenario type of guy. After living in beautiful British Columbia for almost two years now, I’ve come to the realization that there’s a lot more to being a desirable city besides scenic viewpoints. As a millennial with insufficient funds for a unicorn frap, it’s difficult to ignore the opportunities that mega cities have to offer.
This was evident when I transferred to the University of British Columbia. When I told fellow classmates I transferred from a school in Ontario, they almost always asked me “why?” My initial response was “UBC is a great school,” but when I think about it, I didn’t decide to go to UBC for the education – it was to stay in Vancouver. Now when people ask me why I moved to Vancouver, I say because I believe in the city’s potential to develop some of the best technology-based companies in the world, and I want to be a part of that. However, there is a huge question mark for millennials entering the “real world.”
Is Vancouver really desirable?
When I speak to local CEO’s and Founders, it’s clear that the number one priority is around attracting and retaining top talent. That’s the case in every city and practically every industry but a huge advantage for mega cities is that they can offer a lot more to new graduates that a smaller city like Vancouver cannot. So I often chuckle when I see another article ranking Vancouver as the most desirable city in the world, because as a millennial just about to graduate from university, this might not be the way we view it.
Although I’ve been a bit pessimistic on the province thus far (and I haven’t even mentioned the rain), I want to attempt to make a case for why BC is a great place to start your career in. But before we dive into BC’s tech scene, I want to break up the success of the world’s biggest tech hubs into three main components (simplified): Local and Government Assistance, Economic Growth, and Success
- Local and Government Assistance with the objective of stimulating innovation by providing sponsored environments to assist in accelerating the commercialization of local technologies. Think accelerators, incubators, university involvement, government-funded R&D programs and the like.
- Economic Growth which may come in the form of the number of companies being established each year, trends in the level of employment, overall revenues or a combination of the three.
- Success. Eventually, there needs to be some validation that the programs in place, the network and everything involved is actually working – the ROI if you will. Nothing else matters except for meaningful progress. This could be in the form of IPO’s or high-profile exits which subsequently results in the greater availability of venture capital. For those cities that experience high levels of success, the virtuous cycle begins. Rinse and repeat.
So where does Vancouver fit in this?
With all the hype around real estate and construction, it might be surprising to hear that the BC tech sector continues to outpace the growth in the overall BC economy by nearly two to one. From a local and government assistance program standpoint, it’s clear that both Canada and BC are heavily invested in tech. Growing success can be attributed to the solid lineup of accelerators, incubators and university programs in the province. One that stands out is the successful launch of Creative Destruction Lab (CDL) – West from the University of Toronto in collaboration with the UBC Sauder School of Business. I’m a strong believer in CDL and what they do, but don’t just take my word for it, look at their track record.
Since its inception (2012), companies who have graduated from the program have gone on to create more than $1 billion (CDN) in equity value.
Along with the other programs in place, you can expect them to help drive BC’s tech scene forward over the next decade. We can already see signs that these programs are doing its job of promoting startups and innovation – with more startups per capita than any other city in Canada. Thanks to the 2016 BC Technology Report Card, we can already get a glimpse into the makeup of the current tech sector. Over 80% is composed of companies with less than 10 employees. It’ll be interesting to see how this breakdown evolves over the years.
While other markets in Canada like the Toronto-Waterloo Innovation Corridor are well-established in terms of this virtuous cycle, Vancouver isn’t that far behind. In my opinion, BC is just beginning to hit the Success phase with recent liquidity events and a strong pipeline of private companies well positioned for profitable exits. In the last three years, we’ve seen acquisitions of BC-based companies like PlentyOfFish to Match.com, TIO Networks to Paypal, Kabam, Coastal Contacts, and my personal favourite, Recon Instruments to Intel. On top of this, Bit Stew exited in 2016 for a cool $205m which was the largest Canadian VC-backed exit that year. I am 100% missing more companies with higher price tags but in aggregate, this comes out to just under $2.5 billion. It would be wise to keep tabs on other strong private companies in the pipeline for potential meaningful liquidity events including Hootsuite, Vision Critical, BuildDirect, Global Relay and Traction on Demand.
So while my friends plan on going to the 6 (Toronto) for all the things a huge city can offer, Vancouver is making it awfully difficult to stay away. There’s a lot to be excited on this side of the country. As an ambitious millennial, being a part of this next cycle of growth is something that’s hard to resist. While I’m not 100% convinced the puck is going this way, I have decided to launch a podcast called Maple Ventures with the objective of gaining meaningful insight from some of the top startup CEO’s, Founders, investors and anyone involved in driving the Canadian ecosystem forward, with a slight bias towards Western Canada. In addition to this, I’ll be looking to get out consistent data-driven posts around emerging trends in Canada’s startup ecosystem. It will be very interesting to hear about the developments in the BC’s startup scene, and how it contrasts with other well-known hubs like Toronto, Waterloo, and Montreal. With that, I invite you to tune in. Even if we can provide some meaningful insight to one person, it’s more than I can hope for.