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The members of Manhattan Transfer.

With its critical mass of venture capital and talent, Silicon Valley is a huge draw for enterprising Canadians who, by current estimates, now number around 300,000. They flock there to work for companies such as Google or Apple – or to strike out on their own.

The original nickname for the region south of San Francisco, thanks to its pleasant orchards, was "Valley of Heart's Delight." The orchards have been replaced by some of the world's largest technology firms, and the Valley is now the source of a different kind of delight for successful business owners and their employees.

This week in Your Business , The Globe and Mail's home for entrepreneurs, we will profile a few Canadians who are making their mark in Silicon Valley, and examine the infrastructure in place to support them.

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Kamal Shah's voice bubbles with excitement as he describes his business, Fotobabble, which allows users to record their own audio to narrate photos.

The 43-year-old native of Guelph, Ont., and University of Toronto mechanical engineering graduate, has secured financial support for Fotobabble, which is now in use by big media companies such as NBC, and has being touted by Wired magazine and the Los Angeles Times. After building out the concept for most of 2010, including development of apps for use with iPads and smart phones, Mr. Shah says 2011 is "shaping up to be a very good year."

He conceived the idea in the fall of 2009, after receiving e-mailed photos from his sister of a family trip to the zoo, along with a long message on his answering machine, "personalizing the story with her own voice" by describing the images in detail.

"I was looking at the explosive growth of people sharing photos, especially on Facebook and other social media, and thought there would be something more interesting than just sharing photos. I thought it would be really cool for people to narrate their stories," Mr. Shah says. "The clincher was my sister's photos telling me about the day. I was like – that's it, right there."

Mr. Shah has been a resident of Silicon Valley since 1994, the early days of the web, first creating windows-based software, then working for Intervista, and finally starting his own firms, of which Fotobabble is the second.

"After I graduated with my Master's, I travelled overseas for about 18 months, and when I came back I realized that if I wanted to be in the software world, California and the Bay Area was the place to be.

"It was a fantastic time to move down here. It was just the start of the whole Internet boom, just before Netscape started … that was the time to come here as a young software engineer. I had the opportunity to work on a lot of interesting things."

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Mr. Shah says he knows many Canadians in Silicon Valley, often picking them out by their accents, adding that half of the people he meets in the Valley are non-American. Opportunity and having the world's top technology contacts within driving distance is what they all have in common, he adds.

"The culture is concentrated. Other people are doing the same, whether they be investors or entrepreneurs, or even businesses that support startup companies; they are bigger businesses that want to be using the latest, greatest thing, and will take a chance on a small startup company."

In such a ripe atmosphere, competition is fierce.

"It can be very challenging. You have to be doing something unique and you have to work really hard to get your voice heard. It's a lot easier for anyone to start a company, build applications and websites than it was 10 years ago because of advances in technology … so it takes a lot of work to get the attention of investors, the press, the end users and your customers," Mr. Shah explains.

But he says being well-established in Silicon Valley with the time to develop his contacts gave him an edge, which he has used to give Fotobabble a strong foothold.

"Having built a network of people, colleagues who are friends and friends who are colleagues, over all those years helped in getting people who can be key advisers," he says.

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Danny Robinson lived in Silicon Valley from the early 1990s until the crash led to the sale of his start-up and he moved to Vancouver in 2001. The Mississauga, Ont.-born entrepreneur stayed because he preferred Vancouver's quality of life.

Now the CEO of the British Columbia Centre for Innovation, a provincial government agency that develops entrepreneurial talent and commercializes technology through start-up companies and partnerships between industry and academia, Mr. Robinson says the entrepreneurial conditions in Silicon Valley could be established in Canada.

"I think we can get there. My goal is to build British Columbia to be the best place to start and grow a technology company in the world."

He recognizes the draw the Valley has for wannabe Internet entrepreneurs, and that there's a brain drain of Canadian talent. He says it is unlikely and undesirable to try to stop Canadians from going there, and that incentives and programs are not necessarily the way to keep people here.

"Those programs are very bad for innovation and entrepreneurs because it makes the environment here less 'real,'" he explains. "If people are going to stay here, it should be because people want to stay – because they have the best environment to start a company or build a technology company."

Dr. Debarshi Nandy, an assistant professor in finance at the Schulich School of Business at York University in Toronto, says Canadians going to Silicon Valley benefit from the agglomeration, a community with benefits obtained when companies locate near each other.

"In close proximity you have this set of firms that are similar, that have access to the same resources and human capital and a labour force with technical expertise. There is a lot of spillover in different ways that these firms benefit from," Dr. Nandy says.

"People tend to gravitate toward a location where, over time, there is a density of those firms."

The billion-dollar question is how this can be replicated in Canada, both for entrepreneurs and the venture capitalists who support them.

"Geographical proximity matters. Most VC investments are local investments. Even international investors would team up with a local investment group or open an office (in a place like Silicon Valley) to be close to their investment."

Mr. Shah, despite keeping close ties to Canada, is staying put.

"I still have very strong ties to Canada; I've kept my citizenship. But I am very excited to come down here and take advantage of what is on offer."

Special to The Globe and Mail

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