At the cafés in the San Francisco Bay Area, where I live, you get used to seeing older men dressed in business-casual taking meetings with younger men dressed in casual-casual. At one time, these younger men would have been seeking something—preferment, a reference, a job—from the elder. But as often as not in these topsy-turvy times, the younger man (and it’s generally a man) has something the older man wants: an “in” to a tech business that just might scale—go global at the astonishing pace that a well-executed idea now can. And so, after the pleasantries end, it’s the young guy asking the questions: Why do I need your business acumen, your legal expertise, even your money, when I could just as easily get it somewhere else?
There must be something in the water here. A significant bunch of this rising generation’s best and brightest are choosing to become entrepreneurs—a rational choice when conventional jobs are so scarce for young people. But that’s not it, not entirely: Even some highly employable people are opting for a life in the risky world of tech entrepreneurship. They love that line in The Social Network, delivered by Napster founder Sean Parker (played by a suave Justin Timberlake): “A million dollars isn’t cool. You know what’s cool? A billion dollars.” They want their work to touch not hundreds, or even thousands, of individuals, but millions—and technology (along with hard work and a bit of luck) has put that possibility within reach.
Not just in the Valley, but here in Canada, too. Ontario is home to the second-largest cluster of IT companies in North America. Last year, Toronto-Waterloo welcomed more than 1,700 new start-ups—many of them working out of the region’s incubators and accelerators. And the influential research organization Startup Genome recently named Toronto—home to an estimated 178,000 tech workers—the world’s eighth-best place to start a tech business. That’s thanks, in part, to local universities like the University of Toronto, Ryerson and the University of Waterloo that produce graduates ready to seize tech opportunities. Credit is also due to the federal and Ontario governments for supportive initiatives over the past decade. (Most recently, the feds have been lauded for the introduction of visas for internationals who plan to start tech ventures here. The so-called Start-Up Visa is the first of its kind in the world, and something the Valley’s leaders have long been asking President Barack Obama to introduce.)
BlackBerry’s presence in Waterloo, where roughly 6,000 employees occupy 24 buildings, looms large in the start-up boom, too. Many insiders suspected, until recently, that the Toronto-Waterloo scene would tank if BlackBerry went the way of Canada’s previous flagship tech company, Nortel. The end to the BlackBerry story is, of course, still unknown. But even with the company down to a 3% share of the international smartphone market and shedding staff, it continues to fuel one of the continent’s most vibrant start-up scenes.
Back in Ontario this summer, I visited the incubators and accelerators of Toronto and Waterloo, and spoke to 15 young entrepreneurs (and one outlier—a 64-year-old social media tycoon). Some are in the early stages of turning an idea into a potentially viable business; others have found their niche and, with serious backers from Canada and abroad, are experiencing explosive growth.
I also spoke with 15 of the scene’s mentors and investors. Most of these guys (and again, they are mostly men) did well in Internet 1.0 and are now seeking to make even more money off Internet 2.0—and, through their connections to this new generation of founders, to stay in the game.
Herewith, a portrait of a start-up boom born from a decade of dominance by a single company. What rises as BlackBerry falls, or at least as it reinvents? For now, it’s this—this sphere of hackathons, demos and boot camps, of seed and Series A funds, of never-ending (never-ending) pitching. Everyone dreams, if all goes well, of a major exit, of that cool billion.
Welcome to the Trough of Sorrow
I’m lying on a big beanbag in a high-ceilinged old office. The headquarters of Vidyard takes up the entire top floor of a four-storey building on Kitchener’s seen-better-days main drag. There’s a guy in a tricorne hat working at a high table (at least, it looks high from this vantage point) and a mural on an exposed-brick wall of a robot driving four horses through the stars. Two go-carts sit idle, waiting for any of the start-up’s 31 staffers who want to blow off steam.