06 Nov From Startup Ethos to Startup Ecosystem
For as long as I can remember, the arrival of fall has always represented a new beginning. Maybe it’s the nostalgia of the start of a new school year, but there’s something about crisp autumn air that makes me think of starting fresh.
And with that in mind, it seemed fitting to me that this year we would celebrate Startup Week throughout Vancouver in the month of September. From September 21st to 26th, the tireless volunteers of Vancouver Startup Week hosted a cacophony of events, talks, awards and conferences designed to spotlight and celebrate the startup culture that is evident throughout Vancouver and British Columbia. Starting with the highly anticipated 2015 New Ventures BC awards and followed up by Startup open houses, The Canadian Tech Showcase, the 0 to 100 talks and the Closing Party at the Permanent, Startup Week brought together thousands of people from across BC, Canada, and even our neighbours south of the border.
If ever anyone doubted there was a vibrant startup scene in Vancouver, all that was laid to rest at the conclusion of Startup Week. The momentum didn’t stop there either; the following week, PlentyOfFish and RBC hosted “Level Up”, a panel and networking event looking at Vancouver as an emerging tech hub, and October welcomed more great events including STEM Talks to celebrate Ada Lovelace Day, and the BCTIA’s own TechBrew, showcasing 2015 Technology Impact Award Winners and Finalists. The desire to bring the ecosystem together is incredibly strong in Vancouver, as evidenced by a calendar that is never lacking in things to do.
Over the past few years, we’ve seen more startups formed in Vancouver and BC than in any other period in history. Startups can now be built for thousands of dollars rather than millions. The cost of computing power, programming tools, and product development have dropped by at least an order of magnitude in the past five years. The Economist refers to the explosive growth of startups as “A Cambrian Moment,” likening it to the rapid expansion and multiplication of life forms about 540 million years ago on Earth.
Startups have emerged in virtually every sector of the economy, challenging traditional business models and exploiting inefficiencies that have bolstered the competitiveness of firms who embrace new technology while simultaneously contributing to the decline of companies who fail to innovate.
|The democratization of entrepreneurship from Silicon Valley and from startup ecosystems all over the world is creating new strategies and structures for disruption and innovation. It is the strategy lessons from startups that will light the way for the massive restructuring of all corporate structures by the middle of this century. Only then will we look back and realize that we we’re just beginning the economic revolution of the wired world. – Steve Blank|
Vancouver and BC is replete with startups and entrepreneurs who see the opportunity to capitalize on this next economic wave. The numbers are there – and they’re rising.
But breeding more startups and having a successful startup ecosystem are not the same things.
Earlier this year, Compass.co (formerly Startup Genome), published The Global Startup Ecosystem Ranking 2015, a highly anticipated update to their original report in 2012. Vancouver dropped a precipitous 9 places from #9 to #18. As Alex suggests in his TechCrunch post, “Vancouver simply didn’t grow fast enough”.
Growth is possibly the single most important measure of success for any startup ecosystem. Without it, why bother?
In the 2015 Compass study, virtually all Canadian cities exhibited stagnant growth versus the rest of the world. Exit values did not grow at all in Canada, whereas US cities saw an average growth rate of 46%. Equally troubling was the fact that the essential fuel for driving growth (Venture Capital) increased by only 5% in 2013-2014 compared to a 98% increase in the other top 20 startup ecosystems.
For over twenty years, the BCTIA has had the privilege of serving as an ecosystem enabler, advocating for policies the support the growth of tech companies and working directly with companies to connect opportunities and provide expertise that accelerate their market opportunities.
The reality, however, is that the conditions necessary for a thriving startup ecosystem in Vancouver and in BC are still a work in progress.
The Compass report highlights several important factors when examining the potential of startup ecosystems.
A Full Spectrum of Investment. Successful ecosystems have access to sophisticated (and graduated levels) of financing that are attuned to stage. Successful early stage investors and angels invest in people, not just ideas and technology – therefore proximity and human connections matter. Investments at the earliest stages are founded on a network of trust and depend on catalysts like tech organizations, accelerators and community partners to curate platforms and gathering spaces to facilitate connections and investments.
Ready Access to Potential Customers. Successful ecosystems have a ready base of early customers, ready to help startups to prove out concepts, refine product designs and serve as references for broader market adoption.
Strong Base of Talent. Successful ecosystems have not only strong pools of technical talent, but also enough unique individuals who possess the rare quality to intuitively design a new process or product with truly broad appeal.
Ready Access to Mentors. Successful ecosystems have cultivated pools of talented mentors with strong startup experience. The 2012 Startup Genome Report found that entrepreneurs with mentors had three and a half times more growth and raised seven times more money than those without. In our most recent study of BCTIA Centre4Growth companies, we saw a median annual growth rate of 63%; almost four times the growth rate of most early stage tech companies.
|While it hasn’t yet been proven if a thriving ecosystem improves success rates of each startup individually, it does act as a giant factory, producing massive numbers of startups by lubricating every step of the process. After that it’s a numbers game. You produce enough startups and many of them are bound to be successful. Several of them even wildly successful.” (Compass, 2015)|
The Compass report highlights many of the areas that Vancouver needs to work on to improve its standing as a top startup ecosystem. We’ve often remarked that ecosystem building is a team sport and we’re fortunate to have many of the players needed to succeed.
We took additional steps in the right direction this past month, broadening our ‘team’ by announcing that the BCTIA was partnering with PayPal Canada to launch a formalized FinTech cluster in Vancouver. We are now in the process of working with current FinTech leaders who haved raised their hands to collaborate with us in building the programming that will truly help them move the needle. From mentors, to access to customers, to investment, we recognize the work these companies have been doing, mostly under the radar, and we want to shine a spotlight on it by supporting them with the right resources.
The BCTIA also opened its Innovation Hub to welcome Pangaea Ventures and host meetings between our member companies and multi-nationals like Nitto Denko, Samsung SDI, JSR Corporation, Mitsubishi Chemical Holdings, Evonik Industries and Solvay S.A. We also welcomed British Telecom for several days of meetings with our members, but we know this is just the beginning.
In the end, it’s about building a better farm team system – one that can catalyze our innate startup ethos into a successful startup ecosystem. We are on our way, and welcome to hearing your thoughts, ideas, and suggestions to help us move forward in this goal.
President & CEO
In the News:
Pangaea Connection Day: http://www.bctia.org/Blog/2015/10/22/Pangaea-Connection-Day
British Invasion: BT Tech Scouting Delegation Meets 30 High Potential BC Startups: http://www.bctia.org/Blog/2015/11/4/British-Telecom-Recap
The Voice: Election 2015 – Tallying the Results: http://www.bctia.org/Blog/2015/10/22/The-Voice
BCTIA Collaborates with PayPal Canada to Launch Vancouver FinTech Cluster: http://www.bctia.org/Resources/News/BCTIA-News/2015/10/23/BCTIA-PayPal-Canada
BCTIA Members Elect Board of Directors for 2015-2016: http://www.bctia.org/Resources/News/BCTIA-News/2015/10/28/BCTIA-Members-Elect-Board-of-Directors
TechPong Tournament of Startups Raises $72,000 for Refugee Crisis (via Techvibes): http://www.techvibes.com/blog/techpong-charity-2015-11-04
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