Late last month, Techopia sat down with three local entrepreneurs to hear their views of the past year in Ottawa tech, how they feel the city’s industry is doing today and what challenges and opportunities lie ahead. Asking the questions were Techopia publisher Michael Curran and Steele Campbell, relationship manager with Techopia partner TD Bank.
Here's a condensed and edited version of our Techopia roundtable:
Q: There’s a general positive feeling, an exuberance around tech in Ottawa these days. Is that hype or is it warranted?
Vallée: I’m certainly more optimistic than I have been.
When I first got started in tech, tech in Ottawa really meant optical. Really meant JDS and Nortel, and the challenge with that kind of tech is that it’s very, very big business tech. Super capital-intensive technology businesses.
That meant there was a small number of very heavily capitalized, big players. That is a very home run-dependent industry. I don’t think we have home run dependency anymore. We have some home runs, Shopify being a great example of such, but I don’t think we have home run dependency anymore. That’s partly because of just how the industry has changed in general, but it’s certainly affected us here and that’s a good thing.
The reality is that I do believe the tech boom is sustainable in Ottawa and in other places as well.
Richards: Twenty years ago, it feels like everything was a lot more siloed. I’d say even five years ago. We have this ecosystem now where everybody’s sharing information, people are extremely generous, it seems like we’re no longer as fussed about trade secrets and we’re more looking around to work together and share and celebrate in each other’s successes. So people are learning from experience, and learning from others’ experiences.
Wille: We’ve been in business for a long time now too, we started in 2001. In 2001, kids coming out of school, there wasn’t as much of an entrepreneurial drive back then. And I think that’s definitely increased over the past five to 10 years. I think there’s much more of a want to not just be a hobbyist when you graduate, but actually start a business.
Q: What’s one thing you’re most optimistic about for your own company in the coming year?
Richards: What’s so exciting to me is that everybody now, when they’re launching a business, is already attuned to the concept of having a CFO at their founder table. That is phenomenal for me, because this is what I do, and the business that we’ve built out is all-around management accounting. That’s the piece that’s been missing for people. They understand bookkeeping, they understand audit and tax, but they never really understood that there’s this thing called management accounting which could take the data and help them make business decisions by looking at what the key performance indicators are.
Q: Ottawa always seems obsessed to figure out where we place in Canada, or where we place across the U.S. in terms of a tech sector. Is that important?
Vallée: If we think of ourselves in a race against Kitchener-Waterloo, or Toronto or Montreal, then we have to think of ourselves as losers in that race. I think, realistically, that’s where we stand right now.
Richards: It’s important for us to build upon this as a city. We don’t want to be seen as lesser.
Vallée: OK, then we are going to need some direct flights somewhere. Because we are at a place where (American investors) are struggling to find a chief executive who is willing to join boards because of the pain of even getting here.
Richards: But the reason that you end up getting things like new infrastructure into an area is when you pull that together and you become bigger than the companies.
The reality is Shopify is our star today. Ten years ago, Shopify was not the story. There’ll be another story. These stories will change about the companies but what will stay constant is Ottawa will be here.
Wille: But I see that more as a Canadian thing. What does Canada need to do from a tax point of view, from a Canadian investment point of view, an attractiveness point of view, a labour markets point of view, so that we can have more, more and more Shopifys and Kinaxises and all the rest. Because when I talk to investors, it’s not, “Oh! Ottawa! That’s where all the cool stuff is happening.” It’s, “Oh, that’s where Shopify is, right?” Y’know, we need more of those.
Q: What is the gut feeling about access to capital within the market?
Wille: I think it’s really improved over the past few years. Again, I think it’s twofold. I think Canada has, as a whole, as a country, become more attractive. And I think the efficiencies are better than in Silicon Valley, I think the employee loyalty is better than in Silicon Valley. I think we are building a bit of a brand that we have the universities and the talent.
On the flip side, I think there’s so much money available that they need to find places where they can invest. I think we’re seeing more, predominantly U.S. firms, set up shops in India, set up shops in Israel and make more investments in Canada. So I think we’re definitely getting more access.
Richards: I think what I’ll maybe focus on is the smaller businesses. So, the majority of businesses that are, as they’re launching, able to get angel money pretty easily here in Ottawa to get off the ground. But when they reach that 50-100K MRR, there’s a void there. Right now, it’s difficult for a number of great Ottawa companies to be able to access capital to be able to keep their businesses growing.
Q: How important will the Innovation Centre at Bayview Yards be going forward?
Wille: I do think it’s good. I know there’s a lot of folks that I know who are involved in the incubator. I think the concentration of thinking that is happening there, the information sharing, I think this is all good stuff.
I’m also hopeful that we can transition Invest Ottawa into, and take this word as you wish, more of a modern, software-friendly organization. Trade missions, to me, put me to sleep. I don’t think we should be doing any of that anymore. That’s not our world. We’re not selling tractors, you know, to other countries in the world.
To me, I think there’s an opportunity to take what IO is doing and work with the various levels of government to simplify and try to have more of a modern type of approach to what software companies and even the current hardware and traditional companies are doing in Ottawa.
Q: Was it the right choice for Ottawa to bid for Amazon HQ2?
Vallée: I guess it depends. I’m not privy to the inner workings of the strategy behind deciding to put in this bid. I can tell you that, we three and everybody here, including the (Ottawa Business Journal), has been working really hard for our entire careers at creating this ecosystem that we’re celebrating in this conversation.
I think it’s on a solid footing. I don’t think it’s that fragile. It would be broken if we won.
This community cannot suddenly have 10,000 new jobs in tech and think that it is not going to ruin every small company in the city as they attempt to compete for talent with a well-funded major company like that.
I like the mayor, I support the mayor, I voted for the mayor, I’m going to vote for the mayor again, I like Jim Watson, but the mayor obviously has a responsibility to all of the citizens of Ottawa and 10,000 or more new jobs in the city would be an incredible thing. I appreciate that, I really do. But it would break what we’ve been working on. It would lay waste to a lot of our lives’ work.
So I don’t support the bid. I hope we don’t win. If the strategy was just to increase our visibility and get on some radar that we’re not on and we don’t hope that we win, great. But it would break my heart to go through millions and millions of dollars of inducements and tax credits in order to attract a giant into the city that would end up breaking the backs of all of the entrepreneurs here, hundreds of them that are trying to establish themselves. That’s how I feel about it.
Richards: What I’d just like to highlight is the effort that came together to put up this bid, I think, is unprecedented. There was tremendous investment and volunteer time from a variety of stakeholders throughout the region that I think the output of it is tremendous and reusable.
When you are able to see the result, the video that’s circulated and gone viral, that’s something that just doesn’t come together unless there’s something enormous like this that presents itself to you.