The Region of Waterloo is undergoing a major public works project that will place Light Rail Transit along the core of two of the major municipalities in the Region: Kitchener and Waterloo. This ambitious project is being sold as an important infrastructure project for the future of a rapidly growing and exciting place to live. I support the idea of it. I see the long term benefits and I think it will help build a better city.
Sadly, even after a decision was made the debate goes on. It will be a highlight of the upcoming municipal election which I fear could get some people elected based on the public’s feeling on a particular issue that will be oversimplified and placed into sound bites. LRT is so much bigger than an election cycle or two.
I think there is complex set of reasons why this argument will not end but these are my three big ones:
- Population density and how/why people use their cars is a big risk that is being brushed over. The “field of dreams” argument (build it and they will come) can not be a suitable response! Explain it to people in how they get around now and how it will be better. If you can’t there is a problem! Figure out how to manage the problem.
- If you oppose it or question it openly you are shouted down as being against “the future.” When a young community leader spoke up at council they tried to discredit him instead of discussing his main point that people won’t switch to transit from cars. What are they so worried about? Engage these people and their different views. Adapt! It will make it better.
- A very dynamic and flexible leadership group is needed to ensure the plan can adapt to future realities. One example, it might make more sense to place the GO train in Cambridge. The LRT doesn’t get there and a transportation hub is planned for Kitchener — what if you can’t likely have a 1 hour train on that line for 20 years but you can next year in Cambridge?
There needs to be less storytelling and more practicality in the discussions. Good leadership tells it like it is and deals with issues head on. This community needs to take on the issues like the crippled transportation infrastructure with Toronto and not sweep potential risks out of view with idealistic statements of what they hope will happen. Also, there needs to be a larger theme of a walkable city that isn’t just about tech startups but involves the future of recreation, manufacturing jobs (because the discussion can’t ignore the largest employment sector in the region), research, and retail. Make this future more inclusive.
Lets talk big. Talk positive. Include the young leaders and diverse economy into the discussion!
Otherwise, I fear, something that could be so positive for the Region, the Province, and the country might not become a reality.
There is no doubt in my mind that when we are talking about tech in Canada and the future of the economy, Toronto and Waterloo will play a big role. It is one big ecosystem and it’s growing. There are some limitations to this growth and the big scary one is the relative lack of transportation infrastructure west of the Halton Region. This problem is making people choose between communities which isn’t good for growth.
A recent Huffington Post article where I was featured highlights the problem for technology (and just about any sector really) jobs. For myself I work in Toronto where there is a much larger concentration of research (17 000 grad students, $1.2B in research at UofT alone) which is important for me as I am constantly looking for founders with the potential to build scalable companies. With four kids the quality of life that I would like for my kids would be hard to provide in Toronto.
The quality of life issue is something that can be overcome by living in a lot of different communities outside of Toronto. You can have better access to and from Toronto to areas that have a similar quality of life as Waterloo in almost every direction away from Toronto but not west of Halton Region. Those other communities are 45-60 min train ride which is just another 15-30 min over the average commute if you live in Toronto.
The discussion on tech ecosystems has shifted from Waterloo or Toronto to a larger technology cluster of Toronto AND Waterloo — which is great! The problem, I think, is that only talking about Waterloo and Toronto for technology is limiting the stories being told of the amazing technology companies that exist in a broader cluster around Toronto.
If you are going to talk about a Technology cluster in Ontario it can’t be just about Waterloo, it must include the QEW corridor down to Niagara and it should put more emphasis on Hamilton. This area includes the regional municipalities of Halton, Hamilton, and Niagara (could also include Woodstock, Brant county, and Brantford). Combined they account for roughly 1.6 million people — nearly half the population is in Hamilton and it has the largest urban centre outside of Toronto in the south of the province.
The conversation has to expand as I think it limits the economic growth by cutting off the story telling in the broader ‘technology’ sector. If all we talk about is Waterloo or Toronto we are distracting people from all the opportunity in a very broad area. Research, Software, and Hardware will be sprinkled around seeding growth everywhere. We also need to talk about and support the next evolution of technology manufacturing otherwise this resource rich country will keep exporting raw materials and be reliant on other countries to build our products.
This is not a zero-sum game.
It is that time of year again when all the accelerators start recruiting heavily for their new cohorts. Out they go looking for some great founders that ideally have some momentum already and the accelerator can take 5-10% of your company for $25-50k. They will market you, they will promote you, you will meet dozens of well intentioned people trying to help, and they will make you feel special.
But here’s the thing the accelerators won’t tell you… you can get all of that for free. What you have to do: build your company, focus on growth, and earn access to a trusted network that can apprentice under along your journey.
It will take 2-5 years to build your company.
You will hate it and love it.
It’s lonely building something even though you are surrounded by passionate people.
You don’t think you can do that on your own? You don’t know where to start? Start with customers. Start with reaching out to founders of similar companies that have exited or are doing something else. Don’t ask for money, ask for their time. Prove to them you can be coached and can move. Amazing things will happen next.
Only apply to an accelerator if it is a strategic move. It is crazy to give up that much equity unless you are absolutely sure you will get a return on that investment.
Remember: getting funded is not validation, getting accepted to an accelerator is not validation, and winning some prize is not validation. There is a lot to be said for natural growth. Customers paying for your product or service are. Focus on that instead of all the applications that will be tempting you over the next 6 months.
There is a rapidly growing number of support groups and organizations that fit into the category of accelerator or incubator. What is the value one of the core metrics many accelerators use today ‘Alumni’ success and what does success mean? That success metric can be a funding event, exit, or some other significant milestone that has been made public. Each has a different value but the purpose is to say something positive about the accelerator which is, for many, a key ‘metric’ used to report back to those that back the program.
Why is it a metric at all? After all, shouldn’t accelerator/incubators be focused on making money? The role of accelerators in Canada according to Mark MacLoed:
…these programs are not meant to help investors discover the next giant. They are there to help investors and mentors identify, nurture and develop talent. In smaller markets like Canada’s, we are sorely lacking in proven, been there, got the t-shirt talent.
I generally agree with Mark as the purpose of all these programs is to build a funnel of qualified talent which has a value to those that back the accelerator. That could include investors and/or the government (the tax payer). I will add that what happens with all this support is self guided experiential ’business education’ but that is another blog post.
When an accelerator releases something that states “congrats to cohort company x on raising money from y” how should future applicants weigh those releases when the company is an alumni of more than one program? How should the people that support these organizations value those announcements?
As a recruiting and reporting tool I can certainly see the value in getting the organizations name out there. The problem is that it starts to sound like a ‘party round’ where so many people have been involved in some way it is impossible to say who made the difference. The truth is they all helped. The value for any one organization is not as high as it would be if the company only worked within a tiny controlled system. That simply isn’t happening and that is a good thing. It takes an early stage business ecosystem to build more frequent and bigger success which includes all points between here and the valley.
This is something very similar to the education system where every school at all stages of education can share in celebrating success of their alumni. If a higher concentration of success is coming from a particular school then that won’t go unnoticed and it should be supported and enhanced.
What I hope will happen peacefully and relatively unnoticed by the entrepreneur is that the organizations that have more success grow, those that low success fail, and new ideas are injected into the process as everyone keeps learning.
I spent a little time at StartupWeekendHamilton3 in April as a mentor and was talking to one young founder that proclaimed that there was one great accelerator in Canada. Who he said it was surprised me a little and got me thinking, what makes an accelerator “the best” and why should an eager founder care? The baseline in my mind is Y-Combinator. No one can argue it is the best seed stage accelerator based on its results. What is difficult for everyone to agree upon is what does it do to achieve those results or even harder, what defines success?
In my opinion the key things it does:
- Social Capital via Paul Graham – how he teaches founders and the hacker culture he has built provides entrepreneurs with access to the very best social capital that exists for anyone starting a technology based company.
- Peer mentorship – the structure of the 12 weeks enables peers to hold each other accountable. This competition amongst comrades is powerful as it turns around the human nature of playing to our own strengths and pushes founders to “keep up with the Jones’s.”
- Hungry founders – funding is minimal. After a bit of a bump it has since been decreased and I would bet if you look at the successes out of YC the biggest ones started off with the least amount of financial resources.
There is some striking similarity to what YC does and the thinking/observations behind the Goldmine Effect by Rasmus Ankerson (watch it, it is interesting). The basic point is that if you can find the talent that has the potential vs the talent that already been refined you will get a better result. Money and facilities do not make a difference, identifying underdeveloped talent does. I think there are three core factors that go into determining the quality of a given program.
- Where is the program located? Are there companies in the immediate area just a stage or two ahead that can help you grow?
- Who is backing the program and what did they invest to make it happen? Do they get involved in the companies they invest in or do they “spray and pray” with their investment?
- What type of companies have been successful in the accelerator in the past? Who gets funding afterwards? Are the B2B or B2C, SaaS or something else, etc.
What is less important:
- Demo Day: The rock show nature of Demo Days is not a good environment for investors but you need to take advantage of the intros and the social capital on offer to build those connects yourself.
- Money: Funding amounts from the accelerator should not influence your decision to go there. Good companies will get funding, build a good company and spend as little as possible doing it.
- Mentor walls: In Canada there is a relatively small pool of people with both time and capital but there are a lot of people that can help you move the needle in different ways.
Right away some might say that the above “less important” items are what builds momentum and if you look at the YC companies momentum being 3x that of TechStars then how can I say that is less important? These things have the greatest effect after the startup object is already in motion, in my opinion. The less important items are used all too often as *the* way to get the startup object moving.
A simple score card to find out who’s best for you
If a score card was set up to measure a program it should look something like this:
- The program is located near companies that I am interested in working with
- 1 – none that I know of
- 3 – some interesting founders
- 5 – who we would exit to and/our would like on our advisory board are within walking distance
- Investors in successful companies that have been in the program are
- 1 – Not involved in investments
- 3 – one of 12 investors in the companies that graduate
- 5 – take a board seat and/or a significant position in the financing round following completion of the program.
- Companies that have been successful in the program in the past are
- 1 – nothing like us, we are B2B SaaS and all the successful companies are gaming companies
- 3 – some are similar to us, there is no particular pattern to the type of company
- 5 – just like us, we are a hardware company and everyone that has done well post-program are hardware companies
- Funding we receive from the accelerator program is enough to
- 1 – we can go 6-12 months no problem, its great to not have to raise or find revenue right away
- 3 – it is ok but in 6 months if we don’t have revenue or financing we are done.
- 5 – we can pay rent while in the program but we have to move and stay lean to survive.
This is by no means research quality metrics but it does start to assign some way to weight rankings… for you. If I was going to score YC I would give them a 5, 3, 4, and 5 which would total at 17/20.
What else should be on this scorecard?