Vancouver Startup Hackathon Oct 8-10: cperciva & A Thinking Ape (YC W08)
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In America, as pointed out time and again by the upper echelon in the Vancouver startup circles, people actually take these forward looking risks because the payoff is just too sweet if it comes through. Bootup is notable for pushing the boulder up the hill, Danny R and Co. are a scrappy fighters thats for sure.
For instance, even a SR&ED/IRAP intensive startup with a potential BIG idea (which is a stunning program @fiveo from the standpoint of the unemotional-observational economist) meets the common phrases that investors in Vancouver rely on to skate away. "its too early" "i need to see a working prototype making profit with tons of traction" "its not scalable". And kudos to them, they worked damn hard to build a life(style) here and don't want to burn their precious money into cinders.
As a proven and skilled technician, I can say that I have met many talented PhD's and engineers in Vancouver, now in Palo Alto. Someone with 2-5 years success in technology is worth about 90k a year, and that wage is nigh unachievable in B.C. Too often we leave for the states, myself included, because their are too many tagalongs who don't actually understand the minutiae involved in how specific technologies create value across international markets. Too many evangelists and mentors, not enough mature engineers who work with tenacity, intensity ,focus and audacity.
Perhaps this type of discussion can be better studied by a thought experiment. How would you start a company like the awesome Palantir Inc in Vancouver? Give us a thoughtful, unbiased analysis that spells out to investors the reduction of risk and the chance to make a 10X exit in a tough hostile and messy business environment. This is a good case study for MBA types.
We wanted to do it the week before but the schedules didn't work out for the people helping, the space, etc. Shoot me an email (m@mikeyur.com) if you just want to drop in on one of the days.
I wont be able to make it due to family commitments for Thanksgiving, but there will be a bunch of people there and I hear they're making a turkey! If you're in the same boat as me, let us know, and maybe we'll coordinate another weekend where more of us can be available. - I've been hackin Ruby on Heroku, and would like to show it off, so I'm in for sure.
Of course, there are advantages to working together, but it's not necessary. The more of these events that happen the better and stronger our community is.
"Plug and Play Tech Center" is opening an incubator here, and the Grow Conference happened over the summer at the new conference centre which housed the media during the Olympics.
Still plenty of dopey heavily-government-subsidized green tech, but I have hope for the future.
I think a lot of the complaints I see here are fixable, and I think it would do a lot more good to focus on the value these types of events can bring to the culture in Van, rather than pointing out what's wrong all the time. It seems like a subset of the community is really downtrodden and negative, and they seem to be the most vocal, especially online.
I think money people like Boris Wertz and Jason Bailey are putting forth enormous efforts to jump start the scene right now. GROW was successful, and increasing we founders are talking with the influencers in the Valley and around the US. Hootsuite is one of a few potential success stories and I think that will be followed with a handful more from the younger companies.
Again yeah, I'm biased, but we're working as hard as anyone up here in Vancouver, and I see tons of potential.
On a more serious note, I think the event is an awesome idea and would like to see event more startups in Vancouver. I think we've got the right culture and city to do it in. Also, VHS (Vancouver Hackspace)does a hack night on Tuesdays if anyone is interested. http://vancouver.hackspace.ca/wp/
There are also a few acquired startups in the past 2-3 years. LayerBoom (Joyent), Smallthought (Twitter).
Some solid companies such as: ElasticPath, VisionCritical, etc.
Despite the list of startups and "solid" companies. I wouldn't bet on their balance sheet. I've been here since 2001 and while there are several key buyouts in the networking/hardware/embedded industry (in the range of hundreds of millions dollars) back then, things have been relatively slow and possibly in declining state.
There has been a few lay-off within 2 years. EA closed their downtown office and laid off 300. McKesson laid off 80 people. Nokia is full of management engineers, bottom-lines are either outsource of contractors. One game studio that shows big potential closed their door early 2009. A few mid-size companies that used to grow 4-5 years ago are in hiring freeze. A few small companies died quietly.
Most of my friends are leaving Vancouver to go to Ontario, Silicon Valley (or US in general), or to Asia where mobile and IT are booming like mad (if you know the channel).
Here's a few problems with Vancouver:
1) Laid back culture
Vancouverites are well-known for enjoying their life; rain or shine. They have the "let's do it tomorrow" or "it's almost 5 PM on Friday" attitude. This caused a hit on software quality. Almost anywhere you go in Vancouver, you'll meet huge pile of technical debts with no plan to pay them. There is even a health software company build their product around MS Access even until today.
2) SR&ED
SR&ED is a grant given by the government to hi-tech companies. The point of having this is to attract people to build hi-tech industry in Vancouver. So far it looks like it has been back-firing us: companies neither-living-nor-dead. Some of them rely heavily on this grant since their business model isn't strong or their sales are not hitting the target or a combination of both. Their balance sheet with SR&ED will look positive but we all know that they're lying to themselves. They should be toasted.
SR&ED also attracts the wrong kind of investors.
Because of this, workers aren't getting paid enough. I think in general, hi-tech workers in Vancouver might get paid 30% below the average (by skill, by age, by experience) compare to US or Ontario with no chance of increase or bonus at all.
3) Competition is getting tougher and the culture of technology for technology sake
It's hard to find a job in Vancouver without 4-5 years of .NET experience with WCF, WPF, HTML, AJAX, CSS, SQL-Server 2005. Or 7-10 years of Java experience with Oracle, XML, XQuery, XPath, XSLT, XSL, Spring, Struts2, Hibernate, JSF, Seam, JBoss, WebSphere. There's one more choice though: LAMP + HTML, CSS, jQuery but working for marketing companies. They too, usually are looking for someone who has 3-5 years of experience. To some people this might be a good sign: barrier to enter is high. But with code quality is so low, I can't and won't understand this particular situation. Shouldn't you get better software from senior/more experienced people? Apparently not.
4) The rise of Business Analyst
Instead of educating software developers/engineers in here, Vancouver rewards Business Analyst more than the implementors. Schools have been offering continuing studies toward BA diploma degree so they can be employable in some enterprise/corporate with better pay, less work, more politics, and quite possibly more vacations. This lure many people to join the wave.
5) Weather
While it's milder here but imagine 10 months of gloomy, raining, and cloudy. It can affect your mood (according to scientific research).
It's a vicious cycle in here and it looks like it'll be worse. Kudos for people who can be successful building and maintaining a solid company here.
I have to agree with salaries being low compared to the US - but you would think that meant more people doing startups since you would be taking less of a hit. Maybe Canadians are just more risk averse.
I don't know if they're filled with 20 somethings because the place I work for is filled with 30+ (some even almost 40). Unfortunately I just got in and I didn't know what I put myself into. I plan to stay only for 1 year before jetting off. If you think Enterprise software is full of unnecessary complexity, wait until you deal with Online gambling companies (especially the ones that provide Poker Networks and deal with Casinos and 100 different payment providers in which everybody has their own APIs and payment workflows).
People are doing startups here usually because they want to jump into the social media and mobile bandwagon (at least that was the case 2 years ago, until almost all of them died, quietly).
They're not doing it because of the low salaries, they did it because quite frankly, some of them can't get a job or used to be a freelance web-designer or a contract workers. And it's not about risk averse.
I think there are some crazies out there in Vancouver. They just don't have enough money and they rely on SR&ED grant year-by-year living off it.
It's really tough to have a startup in here. Networking is very minimum as well. You go to a launch party only to meet a handful of people who are in the same boat as you; that doesn't help much of your situation. Sometime these launch parties invite (or in another word, have to fly) people from outside Vancouver (e.g. people from Silicon Valley or Ontario).
There's MS here but they are here to act as a buffer for their engineers pending H1-B.
Some hardware companies Broadcom, PMC-Sierra, Sierra Wireless.
There are IBM centers in Vancouver and Vancouver Island, but they do largely government projects (consulting) instead of R&D like the ones in Markham area.
Speaking about Google, they seem to acquire a handful startups in the Montreal to Ontario areas.
But look at the flip side, for a city that is well-known for 10 months of gloominess could be easily one of the reasons why people are not coming here or trying to leave. This minimize the talent pool however you read the situation.
Seattle, while having similar weather, has the advantage of being a "US" states. USA as a brand is huge. Given Vancouver vs Seattle, people would choose the latter quicker than the former. Hence there are more people in Seattle compare to Vancouver.
BC's economy is mainly service-driven because what else can they do with the lack of demand?
In all seriousness, though, Tarsnap doesn't really come out of Vancouver. It happens to be located here, but that's just because I'm here; I certainly can't point to anything and say "if Tarsnap wasn't in Vancouver, I wouldn't have had access to X and it wouldn't have succeeded".
I hope we can develop more of a startup community here, but so far all I've seen is hordes of MBAs and a distinct lack of technical people.
As for the hoards of MBA's, I've seen a couple startups run by muggles who just contract out the initial coding (Bootup labs sponsored included) then look for a tech lead much later, if at all. There are also odd things like local democamps where the "no powerpoint" rule is cast aside and few of the speakers actually have software to demo. To their credit, a thinking ape was at the last democamp with a demo, unlike the act that went up after them: guys pitching a TV show about iPhone apps.
It's hard to find "technical people" who are in a position to take the financial risk of starting a company. We're working hard (and I mean hard) to fix that by making more money available to them. Bootup's minimum criteria is, and has been for some time, that at least one co-founder has to be highly technical, but preferably both. But ideally, balanced in that the other would be heavy on design and user experience, HTML5/CSS.
Mozzilla Thunderbird is developed in Vancouver Stewart Butterfield's TinySpeck is half here and half in SFO. Facebook has a bunch of employees here Apple has a bunch employees here. Microsoft Entertainment SuperRewards, sold to AdKnowledge LayerBoom, sold to Joyent DabbleDB/Trendly - now Twitter NowPublic, sold to Clarity Digital Matt from Flippa, 99designs PlentyOfFish Elastic Path Vision Critical Indicee Club Penguin (not Vancouver, but still notable) Metro lyrics Hootsuite CouterPath - makers of the famous X-Lite Voip client. Strutta Unbounce Mobify Deqq Mingleverse Jostle Fundrazr Rouxbe theKiwiCollection Sitemasher Bookriff CityMax Grooster Fotki Nitobi Sosido Networks GeoToko IQ Metrics Thinking Ape Carrotlines Contractually (Bootup) AdHack (Bootup) DimeRocker (Bootup) Summify (Bootup) Compass engine (Bootup) FoodTree (Bootup)
Microsoft has a game studio in here, not sure how long before they absorb and move everyone down south of the border. So it's not the whole MS Entertainment division is here.
Some of the companies that got bought by bigger companies are either move to USA (Flickr, DabbleDB) or ended up in here with a possible more pressure to do more sales from the HQ; basically they have to prove that they worth and the goals being set by their big mothership is usually far more ambitious than their initial startup goals. By the way, gone is all the goodies that they offer to their employees; HQ wants some cost-cutting in-place pronto (I'm not making this up, go ask any companies that got bought, including those who got bought by Intel, Ericsson, Nokia, EA, BO/SAP, etc).
99Designs is based in Australia. Flippa, not sure. Yes, Matt is local in Vancouver, but what about the rest of his crews? Matt is also in the web design business, which, coincidentally, what Vancouver is more known of: lots of web-designers. It's hard to convince engineers to mingle with web-designers when the designers are leading the company.
Jostle: http://www.jostleme.com/?p=788 (after 6 years now they're out of Stealth mode?)
Sitemasher: http://www.techvibes.com/blog/sitemasher-sold-and-winding-do... (this was back in June 2010, no more info after that, website is down). I'm not sure how they fit with Salesforce.com if the rumors are true.
BookRiff is based in Quebec.
Grooster is in the same space with Groupon.
Fotki is somewhere out there on the edge of the map (Maple Ridge). Ditto with Club Penguin, like 4 hours outside Vancouver.
CounterPath has been around since 2002, current stock price: $1.35. We have lots of companies like this around Vancouver: been around for a while, stock price flat between tenth of cents to less than 2 dollars.
NowPublic, a drupal based website, lay-off 8 out of 11 after being sold: http://www.techvibes.com/blog/nowpublic-lays-off-staff-and-l...
Nitobi is in the JavaScript widget business (and consulting as well)
CarrotLines: go check their website and judge them yourself.
Apple in Vancouver: unsure what they do (mixed of iTunes Store, a bit of Apple iWork) , plus it's a very small branch, Apple can close it down very quickly and ask the engineers to move to Cupertino
DabbleDB really got lucky. I don't know if they're even profitable back then. They seem to just slowly eating the investor money with no clear business vision.
PlentyOfFish is Marcus baby with lots of ASP.NET hacked together quickly. He keeps all the money (like 10 millions of them?) and hire a Senior Software Engineer after a couple of profitable years (probably to fix the mess). I'm not suggesting that's a bad move, but by no means that make Vancouver a good thriving place for hiring talents when the owners are like that.
I don't mean to sound negative or trying to air the dirty laundry at Vancouver. This is the culture we have right now and it's driving the engineering talents out to the east or south of the border.
I've seen a lot of "social media" companies that were startups 2 years ago and died not too long ago. I've seen shady companies with no clear goal/business models. I've seen consulting companies betting their business in Drupal and Wordpress!. RainCity is going down hard.
I've seen plenty people jumping to the iPhone bandwaggon and suddenly they're a startup with good business models? in Silicon Valley they might, but not in Vancouver. You can't pull that thing up here.
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