This September, the University of Waterloo and Communitech will partner to deliver the 2015 Waterloo Innovation Summit. The University’s DAVID FRANSEN, recently returned from a role as Canadian Consul General to Los Angeles, works closely with IAIN KLUGMAN, president and CEO of Communitech, to shape the high-impact agenda.
THE RISE (AND RISE) OF WATERLOO’S INNOVATION ECOSYSTEM
start me up 18
There’s something going on here that’s really powerful. It has become pervasive. In L.A., it’s in the air — and I get the feeling it’s like that here, too, now. DAVID FRANSEN, Chair, Waterloo Innovation Summit
It wasn’t so long ago when innovation was a dirty
Fransen calls Waterloo’s culture of entrepreneurship
word — and innovators themselves, if not quite persecuted,
a collaboration of “attractive, magnetic forces” —
were ridiculed as troublemakers and mocked as fools.
the cool downtown space in Kitchener being a great example — that gives bright young minds reason to
Today, of course, innovation is embraced and revered. The brightest minds with the best ideas are not only being heard, they’re being handed the keys to the kingdom.
take their great idea and build a life around it right here.
The startup revolution has extended far beyond Silicon
He points to the University’s hugely successful co-operative
Valley — long considered the entrepreneurial heartland —
education program, its intellectual property policy,
to create a playing field more level than ever before.
rapidly expanding Velocity programs and Communitech as key contributors to the success of young entrepreneurs.
Waterloo’s own modern-day innovators are going head-tohead with the world’s best.
As chair of the Waterloo Innovation Summit, taking place from September 16 to 18, Fransen will help
David Fransen, chair of the Waterloo Innovation Summit,
convene a group that includes some of the world’s
describes the region’s ecosystem as an organic, dynamic,
leading thinkers on successful innovation ecosystems.
living whole and a chaotic interaction of elements that brings to bear the intellectual horsepower of the University
The region is living proof that geography and size
of Waterloo, a well-functioning governance system and a
matter less than you might think.
robust “mini-ecosystem” of incubators and accelerators.
Big fish, big pond
Fransen, who was appointed Canada’s Consul General in
In fact, when the Startup Genome team (now known
Los Angeles in 2008 and returned to the region in early
as Startup Compass) compiled a list of the world’s
2014 after retiring from government, is energized by
top 20 startup environments in 2012, Waterloo was
what he sees.
ranked 16th. A new list is set to be released soon — and
“There’s something going on here that’s really powerful
the expectation is that Waterloo will almost certainly
and it’s really different than it was six years ago when
have climbed higher, perhaps even into the top 10.
I left,” he says. “This entrepreneurship did not exist to the same extent. It has become pervasive. In L.A., it’s in the
Stacked against some of the biggest hotshots on the
air — and I get the feeling it’s like that here, too, now.”
list — Silicon Valley, Los Angeles, London, New York — Waterloo is a minnow by comparison. And yet
Although the University has always generated incredible
considering the accomplishments of its many
talent, many young superstars — with a few notable exceptions — felt like they had to leave Waterloo Region to
economic superstars, it is a very big fish indeed.
make their mark, whereas now the conditions are ripe for
According to Avvey Peters, vice-president External
them to stay, says Fransen, who served as executive director
Relations at Communitech, Waterloo’s global standing
of the Institute for Quantum Computing and associate vice-
comes from a willingness to do it all.
president (Strategic Relations) at the University of Waterloo before moving to Los Angeles.
“The reason we’ve been successful as an innovation ecosystem is that we pull together,” Peters says.
“Now we’ve got a system that reaches out to students and
“It’s bigger than any one company or organization.
says, ‘You can have your own company,’ ” he says. “If you’ve
It means everybody is doing everything they can to
got a great idea, we’ll nurture you, we’ll mentor you, we’ll
support innovation and entrepreneurship. It’s about
create the conditions for you to succeed.”
building more, better, stronger, faster tech companies. »
TEXT NANCY HARPER | PHOTOGRAPHY JONATHAN BIELASKI
19
It’s hard work to build and grow a company. Any help that we can give in terms of filling in the gaps and helping them avoid key early mistakes is so useful. PAUL SALVINI, CEO, Accelerator Centre and associate vice-president Research Commercialization, University of Waterlo
“And our view is you have to do it all. It’s not just about
After the Second World War, business leaders in the
cool technology. It’s about solving a problem and making
Waterloo region knew that if they wanted to drive local
money with that solution.
prosperity, they’d have to take a big gamble. They decided
“We put entrepreneurs at the centre of the ecosystem, but we need the University to produce that great talent,” she says. “We need people who aren’t afraid to take risks. We need capital providers to put money into those [ventures.]
would train engineers to be ready to work in their factories. The University of Waterloo was founded in 1957, with the Faculty of Engineering at its core. With co-operative education — also known as work-integrated learning —
“We need law and accounting firms to give great
as a defining piece of that experience, the University took
professional advice, and we need governments to create
some big bets that ended up transforming the region.
great policy that helps the efforts of entrepreneurs.”
“The University is at the core of why this has evolved into
Quite simply, a region like Waterloo has a competitive
what it is today,” says Justin McFadden, executive director
advantage because it understands the power of
of Economic Development for the City of Waterloo.
innovation and has the good sense to nurture it.
“We’re the only one of the 20 [startup communities] that
“You can’t just focus on the startups,” Peters says. “Communitech works with companies at all stages of their life cycle. We have a strong program for early-stage companies and we work with about 500 new companies a year, but we also work with the small-and medium-sized enterprises and the big enterprises as well. “We’re the ultimate connector. We have networks provincially, nationally and internationally, and we can connect [entrepreneurs] to the resources and expertise they need.” As for the young guns coming out of the University with great business ideas, being able to lean on a team of executive mentors — tech entrepreneurs and former CEOs who provide their services free of charge — certainly helps. “We convene people who have experience with those who don’t, and in that sense, the ecosystem mentors itself,” Peters says.
has a population of less than one million. We’re certainly [punching] above our weight class compared to those other startup ecosystems.”
“A little startup called RIM” McFadden himself came to Waterloo in 1999 to work for what he jokingly refers to as “an up-and-coming little startup called RIM.” That would be smartphone manufacturer Research In Motion, now known as BlackBerry. “I was drawn here purely for opportunity,” he says. “The startup scene really hadn’t begun at the time. But the bottom line is that a number of tech companies were very successful — and by working directly with the University, these leaders recognized the need to reinvest and set an example and make sure it was a sustainable ecosystem going forward. “What’s interesting about this community is that people are willing to reinvest. I’m not sure that exists in other
An entrepreneurial spirit, with academia at its core
places. It could go back to that Mennonite barn-raising
So what exactly is an “innovation ecosystem?”
The outcomes speak for themselves. The failure rate in
In essence, it combines material resources (funding, equipment, facilities and the like) with human capital (drawn from business and engineering schools, academic
20
a different kind of university was in order — one that
culture where everybody is willing to help.”
a typical startup ecosystem is 85 per cent, McFadden says. But between 80 and 85 per cent of startups in the Waterloo ecosystem are still operating after 18 months.
researchers, entrepreneurs, venture capitalists, private
“The one thing that’s interesting about the startup
sector scientists, centres of excellence, funding agencies,
community here is that because there is such a support
policy-makers and others) to drive the progress of science
system, a lot of the mistakes are filtered out before
and technology.
the products are actually launched,” McFadden says.
WHAT DOES THE FUTURE HOLD? Waterloo’s innovation ecosystem isn’t just about the startups anymore. In fact, a gradual awakening and shift in the
“They learn so many things about how to run a business, how to
mindset of large corporations is one of the
find investors, how to filter out bad ideas and focus on the good
biggest reasons the ecosystem will flourish even
ones. The system here helps increase the ultimate success rate.”
more in the coming years.
Outsiders may only know Waterloo because of BlackBerry,
“We’re seeing large enterprises wanting to
McFadden says, but that association obscures the fact that the
engage with the innovation ecosystem to
economic base here is actually quite diverse. With the universities,
do a better job inside their own company,”
the manufacturing sector and the enormous insurance industry —
Communitech’s Avvey Peters explains.
in addition to the tech sector — Waterloo’s diversity is the key
“As an example we have Canadian Tire, TD Bank
to ensuring that innovation remains a fundamental source of wealth generation.
What it means for the average Joe So what about all those Waterloo region folks who don’t work within the ecosystem? What does it actually do for them?
and Manulife Financial here with us in the hub, and ordinarily we wouldn’t think of them as tech companies. They’re here because they’re seeing something in the innovation ecosystem that suggests they better figure out how to innovate internally, to shift the mindset to be more
According to Rod Regier, executive director of Economic
entrepreneurial, to take some more risk.
Development for the City of Kitchener, the ecosystem is for
“They’re really interested in the talent coming
everyone — and the concept of innovation represents not only our past and our present, but our future. “In a nutshell, it is what creates hope for the future,” Regier says. “Our region has for the last 150 years been about innovation. It’s been about people creating new opportunities, first through the industrial revolution and then through technology. “If you go back to the great industrial companies of the region —
out of the universities and the college, and the talent running startups. They want to learn and that’s a good thing for Canada. If we can make sure Canadian Tire is a huge success, that’s a lot of jobs across Canada. We don’t want them to be second to Amazon as an e-retailer. We want them to be first.”
Electrohome, Schneiders, Kaufman, Krug Furniture and so on — you can go back literally 150 years to see how innovation has been fundamental to our ability to make things, create new ideas and products and sell them to the world. “The whole economy that we’ve got right now is founded on the concept of innovation. It underpins all the jobs that exist here. Even our institutions like the University of Waterloo have been created to support that ecosystem by the industrial leaders of our past. “The fact that we still have a thriving innovation ecosystem here means we’re able to help create the future, not just simply be victims of it. That means that we’ll continue to produce high-value jobs into the future.” Regier points to the fact that even with the structural adjustments at BlackBerry over the past three years or so — and the shedding of thousands of local jobs — employment in the region has actually grown to its highest level ever. “That cascades right down through the whole economy, into our housing market, our service industries and so on,” Regier says. “Really, everybody in the Waterloo Region has a stake in our ability to adapt to and help shape the future.”
Accelerator Centre puts the pedal to the metal The Accelerator Centre is another major player in Waterloo’s complex ecosystem, providing mentoring and support to about 40 companies looking to become the next startup success story. »
Our view is you have to do it all. It’s not just about cool technology. It’s about solving a problem and making money with that solution. AVVEY PETERS, vice-president External Relations, Communitech
Start me up
21
“The important thing is that within our community we
Salvini also sees cause for optimism in the way the
have such a robust ecosystem for entrepreneurs that we’re
workforce has bounced back from very significant
able to give them every chance to succeed and to grow,”
job losses.
says Paul Salvini, Accelerator Centre CEO and associate
“In terms of some of the hiccups we’ve had in the tech
vice-president of Research Commercialization at the
sector, it’s allowed some people to create another
University of Waterloo. “It’s hard work to build and grow
generation of companies that are even more diversified
a company. Any help we can give in terms of filling in the gaps and helping them avoid key early mistakes is so useful.” Salvini points to some of the region’s early startup successes like Miovision and Clearpath Robotics as having the perfect recipe of great idea, inspired talent and targeted support. He believes Waterloo’s standing among global startup communities is only going up — and the growth of University of Waterloo undergraduate entrepreneurship programs like Velocity is one of the clearest indicators.
with just as much potential to grow. I really think that’s helping our economy and strengthening the economic potential.” Adds Fransen: “This has always been a communityoriented place where there were good people. What was lacking, perhaps, was a sense of energy and optimism. What I’m really struck by now is that sense of energy, the feeling that something is being built here. It’s still a work in progress, but the fact that these
“Velocity is looking to inspire the next generation of
talented young people who are starting companies are
students and get them thinking about starting a business
deciding to stay — there’s been a magnetic attraction
for themselves,” Salvini says. “We’re doing a really good
for them to do that and then that will become the
job of preparing the next generation to participate in
magnetic attraction for everything around it. People
the startup economy.”
will start investing in it.”
WHAT DRIVES LEADING INNOVATION ECOSYSTEMS
Hear from those who know
SEPT 16 - 18 | 2015 WATERLOO, CANADA
Join top academic, business and policy decision-makers in one of the world’s leading innovation ecosystems. Hear from influencers, share best practices and experience first hand what it takes to lift regions into global contention. Registration opens May 25. Sign up for information and updates at waterlooinnovationsummit.com
KEYNOTE SPEAKER STEVE BLANK
©Eric Millette
Steve Blank rarely leaves Silicon Valley, but this year, he’s coming to Waterloo. Blank, who has inspired a generation of startup founders, shares insights into how great entrepreneurs — and great entrepreneurial communities — are made.
C007807
PRESENTED BY:
22