Who You Calling a Jesse?

The transit isolation of Waterloo Region

The Waterloo Region (Guelph too) have had huge gains economically and in population in the last 20 years but it is still a region relatively isolated from the main economic driver of the province, Toronto. I think this isolation has allowed the region to build it’s own identity but as the 401 becomes slower and slower the option for two income families to stay in the region will no longer exist.

The lack of viable commuter options to and from the Waterloo Region also discourages people that enjoy being connected to and more likely live in the increasingly vibrant and young downtown (labeled Creative Class but if you don’t like the label, I think it is the next generation of professional people/families) core of a city like Toronto. Those people are of the professional class companies in the Region desperately need to keep being successful or even grow past the startup stage. This isolation limits the success of the region and I would go so far as to say provides an opportunity for Hamilton to be the place to start and grow a company (and a family) over the longer term (20 years or so) where there are constantly improving and robust transit system (and easy access to Buffalo airport).

Public transit is a big issue to some in Canada at the moment. Rail is just a part of it but the rail system mess in Waterloo Region is a symptom of the larger problem. Something as simple as reliable, cost effective, frequent, and fast (same time as driving or better) should not be that difficult given it exists in Brantford.

The rail system that isn’t as good as Brantford

The communities of Waterloo Region and Brantford + Brant County offer a fairly good comparison:

• Waterloo Region is roughly a 110 km drive to downtown Toronto, Google maps says it is a 1hr 24min drive but I don’t know a time during daylight hours that it is possible in under 2 hrs.
  • Population of the Waterloo Region is closing on 520k
• Brantford is roughly a 105 km drive to downtown Toronto, Google maps says it is a 1hr 20min drive
  • Population of Brant County + Brantford is roughly 130k

These two places are basically the same distance with the big difference being Waterloo Region’s economy and population. Both are West of Toronto and Brantford sits in the bottom left corner of a map between Waterloo Region and Hamilton Region. Related is this research on Canada and how suburban it is, very cool maps and information to gain some perspective. When we look at rail access to Toronto though there are huge differences.

For example, Monday November 12th, 2012 as the travel date:

Waterloo

• VIA Rail’s trains take 1hr 40min
  • leave at 9am
  • return trip leaves Toronto at 5:40pm
  • Commuter pass works out to just under $30 a round trip
• GO train takes 2 hrs <- 2 HOURS!
  • leaves KW at 5:50am and 7am
  • return trip leaves Toronto at 4:45 and 5:45 pm (so no evening events for you!)
  • just under $30 a round trip

Brantford

• VIA Rail’s trains take 1hr 10min
  • leave at 7:30am and 8:50am
  • return trip leaves Toronto at 4:30, 5:30, 6:30, or 7pm
  • Commuter pass works out to just over $30 a round trip
• No GO service

To cover roughly the same amount of ground takes 30 min longer from Waterloo Region. Round trip that is 1hr more out of your day but VIA has recently cancelled the commuter train from Waterloo Region along with the late train. They put GO train on their site as an alternative, it takes nearly an additional 30 min longer to get back on seats not designed for that length of time. That adds almost 2 hrs of commuting time in one day from Kitchener over Brantford which are the same distance to downtown Toronto by road!

Both places lack flexibility for commuters to the Region from the east and returning in the later evening if you were to just go in for a dinner/date night or need to come back later from work. The workaround for commuters in both Waterloo (63km drive, 1hr drive) and Brantford (46km drive, 30 min drive) is Aldershot Station ($16 return GO train ride). The difference in drive times makes it not much of an option for Waterloo folks unless it is a daily commute. There is no workaround for those going to the region of Waterloo from the east.

The 401 is an ever increasing mess and that isn’t going to change

It is no secret that Toronto has a traffic problem. Transit is starting to improve but even Toronto politicians seem incapable of planning for the future around transit despite the continued suburbanization of the city. This exacerbates the issue for Waterloo as it puts pressure on the professionals that are couples (or not) to choose downtown living or living near rail corridors in order to avoid the carmageddon on the highways. My bet is that Waterloo Region is not an option for most of them at the moment.

Waterloo needs to fix its growing islotion from Toronto (both downtown and Pearson airport) that will become an increasingly dire problem for economic growth. I don’t believe that the traffic problems in Toronto will drive employers out of the core of the city to the suburbs, I think it will move them to the core of another city that has an increasingly active airport, is closer to the border with the US (and Buffalo Airport), and tight transit corridor with Toronto – Hamilton.

The train issues shouldn’t be issues but they are because there is no political champion in Waterloo Region that seems to be legitimately concerned that it can take 3-6 hours out of someone’s day to pick someone up at the airport never mind go downtown Toronto for a meeting.

Step 1 is simple, get a train service that is at least on par with a small town just south of the region. The only people that can do it are our politicians, someone needs to show some leadership.

Early stage companies don’t need money, they need customers

The popular belief in Canada is that the tech startup world has been fairly light on investment dollars relative to other industries in Canada. Because there is such a disparity in seed or angel round investment size in Canada vs the US people tend to point to that as a reason people go south. The perceived result of the funding problem (and likely the weather) is that there are 350 000 Canadians in the Valley. No one can argue the talent to build global calibre tech companies exists in Canada (or at least has Canadian passports) but you can certainly argue Canada lacks that certain something to keep them here.

Five years ago Paul Graham observed that the total cost to get a tech startup started had dropped dramatically and will continue to do so.

So my first prediction about the future of web startups is pretty straightforward: there will be a lot of them. When starting a startup was expensive, you had to get the permission of investors to do it. Now the only threshold is courage. – Paul Graham, 2007

There is a lot of attention around getting young people money but does that help them? Does that keep them in Canada? I would argue that the ones that do need and can use capital don’t pull up stakes and leave town for the investment. They leave town (or the country) because they are missing something more valuable than money — customers, mentorship that helps them get customers, and a network of peers.

Know thy stage

The problem with comparing funding deal levels in Canada and the US is that it ignores the stage the company is in relative to the stage of US startups raising money for the first time. The Startup Genome report 01 and the Startup Genome Compass offers startups an excellent way to measure themselves against a benchmark of over 3 000 startups. In the report there is a table (shown below) that gives you some overall averages for all startups.

From the Startup Genome Report 01.

In last seven years of being involved in the Canadian startup community (mostly in Waterloo) and in the last three years leading what is arguably the best student focused incubator in Canada while founding my own startup. I saw dozens of companies peek into the Discovery phase, a few move on through to the Validation phase.

What I have seen happen before the discovery phase:

• Talk of raising money is used to pull in a large group of talent.
• Focus is not on customers, it is on technology or raising money.
• There is little help by way of mentorship that takes the time to understand the dynamic of the group.
• Mentors focus on finding a way to get them money so they can work full time.

Startups need to focus more on customer acquisition and growth in Canada, enough talk about raising money

There are so many business plan and pitch competitions one could make a career out of attending them. This gives a false sense of success because the ‘winner’ is determined on a lot of factors except their ability to actually get customers. The game becomes about (and has been it feels like) how to put together a report on an idea (business plan) and present in a way that makes you look confident.

The game is really about getting lots of people to give you their money because you provide value to them. What makes you better than others is that you are chasing a much bigger problem that will provide value to a full percentage of the world’s population. Bonus points if you change the world.

OMG the RIM is falling

If you didn’t think RIM was in trouble before one of the co-CEO’s had a meltdown on BBC you certainly started to wonder once that happened. For someone at that level to crack on TV in such a way they must be under immense pressure, now we know what it was. The company has hit a bad time. When that interview happened he must have known the Playbook just wasn’t ready and they had sacrificed the timing on the next model of the Blackberry (and how many great devs) to get that thing out fast. The delays are something they couldn’t afford with Apple’s profits soaring and Android making a whole bunch of different hardware decent to use. The media reaction is visceral, the talk of layoffs is the big news but lacks perspective and certainly is going to do some damage to their stock price (down to ~$25 from $45). Look at their basic numbers though, they are still OK with a lot of cash in the bank but they can’t afford business as usual. It is time to wake up.

There is a lot of talk about what they need to do or if they could be sold. I won’t pretend to have any idea on that. What I do know is that the culture there is broken — no I don’t work there but I have enough friends there and hear enough Office Space-esque stories that you know something is wrong. I know they love cubicles. I know they do nothing like what Google or Desire2Learn does locally for their employees. I know the office environment resembles an insurance company in the 1990′s (for most staff). I know they completely ignore Silicon Valley. RIM is competing with Apple, Google, and Microsoft on devices but on the culture side they don’t come close. Could they be “too Canadian?” By that I mean too boring, too risk adverse, too safe in how they behave, and very conservative in what they allow their employees to do or act in the workplace.

Here is how I would fix RIM: make it fun.

How do you do that? I have no idea with 17000 people. A guess? They have to let go of all the rules they have for themselves. They have to let go of their products. They have to let go of their OS. None of that means throw everything out but take away all their staff’s Blackberries and get them iPhone’s and Android powered phones. Use them. Fall in love with them like everyone else. Then find the flaws, the real flaws, not just the spec sheet ones (Do not sell me on “real multitasking” on the playbook, who the heck watches a movie AND plays a game on the same 7 inch screen?) and make the Blackberry better.

By the way you already have iCloud at RIM and I bet it works way better than iCloud will for the next 8 months. It is called BES and BBM but no one there seems to see the oppertunity there.

Disclaimer: I have never owned a Blackberry because I have never been impressed with their products.

An insane young startup guy handed me a cheque for $1 million USD and…

…life in Waterloo just got a lot more interesting. StartupNorth calls Ted insane in the best sort of way and I agree. He managed to build a great little startup, attracting some top tier VCs and then orchestrates a brilliant deal to not alienate some great investors. Then he does something nuts to pretty much everyone, he empties a big part of his bank account and asks me (and VeloCity) to do something awesome with it. I am blown away.

Talking with people today was really interesting. Students had a hard time getting their heads around the fact that Ted has no influence over that money once that cheque is cashed. He doesn’t get equity, we aren’t naming a room after him or a building, he doesn’t gain in any way that people seemed to think he would. He does, however, hope that what we can do at VeloCity is help fill a big gap in Waterloo (and Canada) for support, education, and risk taking funding to support young people as they really go for it.

Besides the cash part I think the most important thing here is that students get an entrepreneur to look up to that is:

• just ahead of them in age
• thinking really big, $1 million isn’t cool enough
• a really nice guy willing to open up his newly established networks to his fellow Waterloo students

Over the next few weeks some big plans for VeloCity will start to take shape. So very exciting. Thanks Ted.

What is the hot topic in Canadian Higher Education?

I have the pleasure of working with Melissa on her amazing PSEWEB conference in the roll of being an email instigator. Recently a discussion has been going around the advisory group on the keynote and in true committee fashion we are throwing some great thoughts out there but not helping get things done My latest ramble (slightly edited) was the following list:

• Distance education and part-time masters are only now coming to fruition (in established academic/research schools)
• Student experience sucks, focus on ‘student success’ and overall student experience is becoming more intentional — example, creation of the Student Success office at the University of Waterloo
• Other than uwaterloo and maybe some colleges (that have a little potential budget surplus), most schools budgets are in bad shape (are there some that aren’t? Please comment)
• Canadian’s time spent online is higher than the US yet we don’t engage our students that way very well (or do we?)
• Entrepreneurship is the buzz word of our Federal government and looking to education and commercial partnerships is important to all levels of government
• A University President just became Governor General of Canada
• Very little cuts to Canadian research and education when compared to the rest of the G20 countries
• Grade schools are full (to busting) with kids… at least in soem parts of southern ontario, however demographics say student numbers coming from Canada may slow down (some schools have seen that) which means more focus on international recruitment. Can we even predict this?
• Branding madness… sweet f is it irrational. A unified brand across something as diverse as a University seems to be a crusade on a visual level that runs on 5-10 yr cycles when what I think all we really need is a raised level of professionalism across all marketing and communications.

I certainly don’t claim any of those is steadfastly factual besides the Governor General being David Johnston. Any of those points above is a blog post explaining the problem in detail and a lot of them are where a raised awareness of branding and marketing in Canada’s business culture has spilled over into Post-Secondary education. From my perspective as a Past-President of one of the larger staff groups in Post-Secondary education and someone that entered the workforce right as Canadian institutions in Ontario welcomed a ‘double cohort’ of younger first year students with less high school education, I see a (one of at least a few) fundamental challenge in Higher Ed as the following:

The demands for professional organizational management and productivity along with the increasingly specialized focus of academics, renewed expectations placed on academic research being tied to commercialization, along with a long standing (but ignored) issue surrounding student experience in Canada points to Canadian (and maybe global in some respects) Post-Secondary Education being at a crossroads.

I see the marketing and web technology solutions being caught up in the turmoil but it is a big part of the solution. If an institution can deploy a strategy effectively it likely has organizational issues either sorted out or in check. I personally look to startup culture for some solutions and I see many things we could try in higher ed.

What are the hot topics though? Is it measuring the effectiveness of marketing (measuring anything in higher ed is a new thing)? Is it using marketing communications as part of a larger effort to enhance student experience? Is it international branding? Do I even have a grasp on reality with what I see as a (one of many) fundamental challenges in higher ed?

Just to throw this out there was well… I see the University of Waterloo as being in a position to be a major disruptor and really shake up Higher Ed in Canada like it did in its first 25 years with co-op, Math, Engineering, etc. We are getting the right people in the right places across both staff and faculty, all I think we need is the right President that won’t just walk in David Johnston’s foot prints but help lead us down the path that David showed us exists.