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by fiveo 5747 days ago
There are a few startups in Vancouver: HootSuite, Kashoo, AdHack, Indicee, EnergyPulse.

There are also a few acquired startups in the past 2-3 years. LayerBoom (Joyent), Smallthought (Twitter).

Some solid companies such as: ElasticPath, VisionCritical, etc.

Despite the list of startups and "solid" companies. I wouldn't bet on their balance sheet. I've been here since 2001 and while there are several key buyouts in the networking/hardware/embedded industry (in the range of hundreds of millions dollars) back then, things have been relatively slow and possibly in declining state.

There has been a few lay-off within 2 years. EA closed their downtown office and laid off 300. McKesson laid off 80 people. Nokia is full of management engineers, bottom-lines are either outsource of contractors. One game studio that shows big potential closed their door early 2009. A few mid-size companies that used to grow 4-5 years ago are in hiring freeze. A few small companies died quietly.

Most of my friends are leaving Vancouver to go to Ontario, Silicon Valley (or US in general), or to Asia where mobile and IT are booming like mad (if you know the channel).

Here's a few problems with Vancouver:

1) Laid back culture

Vancouverites are well-known for enjoying their life; rain or shine. They have the "let's do it tomorrow" or "it's almost 5 PM on Friday" attitude. This caused a hit on software quality. Almost anywhere you go in Vancouver, you'll meet huge pile of technical debts with no plan to pay them. There is even a health software company build their product around MS Access even until today.

2) SR&ED

SR&ED is a grant given by the government to hi-tech companies. The point of having this is to attract people to build hi-tech industry in Vancouver. So far it looks like it has been back-firing us: companies neither-living-nor-dead. Some of them rely heavily on this grant since their business model isn't strong or their sales are not hitting the target or a combination of both. Their balance sheet with SR&ED will look positive but we all know that they're lying to themselves. They should be toasted.

SR&ED also attracts the wrong kind of investors.

Because of this, workers aren't getting paid enough. I think in general, hi-tech workers in Vancouver might get paid 30% below the average (by skill, by age, by experience) compare to US or Ontario with no chance of increase or bonus at all.

3) Competition is getting tougher and the culture of technology for technology sake

It's hard to find a job in Vancouver without 4-5 years of .NET experience with WCF, WPF, HTML, AJAX, CSS, SQL-Server 2005. Or 7-10 years of Java experience with Oracle, XML, XQuery, XPath, XSLT, XSL, Spring, Struts2, Hibernate, JSF, Seam, JBoss, WebSphere. There's one more choice though: LAMP + HTML, CSS, jQuery but working for marketing companies. They too, usually are looking for someone who has 3-5 years of experience. To some people this might be a good sign: barrier to enter is high. But with code quality is so low, I can't and won't understand this particular situation. Shouldn't you get better software from senior/more experienced people? Apparently not.

4) The rise of Business Analyst

Instead of educating software developers/engineers in here, Vancouver rewards Business Analyst more than the implementors. Schools have been offering continuing studies toward BA diploma degree so they can be employable in some enterprise/corporate with better pay, less work, more politics, and quite possibly more vacations. This lure many people to join the wave.

5) Weather

While it's milder here but imagine 10 months of gloomy, raining, and cloudy. It can affect your mood (according to scientific research).

It's a vicious cycle in here and it looks like it'll be worse. Kudos for people who can be successful building and maintaining a solid company here.

3 comments

Nice summary but you didn't mention gambling companies. For some reason Vancouver has a ton of these and they are mostly filled with 20 somethings - the kind of people that would be in startups otherwise.

I have to agree with salaries being low compared to the US - but you would think that meant more people doing startups since you would be taking less of a hit. Maybe Canadians are just more risk averse.

"... attracts the wrong kind of investors ..." this refers to those online gambling companies who try every possible tricks in the book to avoid being shutdown by the government starting from splitting the software development, business, and HR/Accounting departments. Remember the debacle with Fiver media? (was Riptown, became Fiver, shut down, now become NZone media).

I don't know if they're filled with 20 somethings because the place I work for is filled with 30+ (some even almost 40). Unfortunately I just got in and I didn't know what I put myself into. I plan to stay only for 1 year before jetting off. If you think Enterprise software is full of unnecessary complexity, wait until you deal with Online gambling companies (especially the ones that provide Poker Networks and deal with Casinos and 100 different payment providers in which everybody has their own APIs and payment workflows).

People are doing startups here usually because they want to jump into the social media and mobile bandwagon (at least that was the case 2 years ago, until almost all of them died, quietly).

They're not doing it because of the low salaries, they did it because quite frankly, some of them can't get a job or used to be a freelance web-designer or a contract workers. And it's not about risk averse.

I think there are some crazies out there in Vancouver. They just don't have enough money and they rely on SR&ED grant year-by-year living off it.

It's really tough to have a startup in here. Networking is very minimum as well. You go to a launch party only to meet a handful of people who are in the same boat as you; that doesn't help much of your situation. Sometime these launch parties invite (or in another word, have to fly) people from outside Vancouver (e.g. people from Silicon Valley or Ontario).

I actually think that the gloomy weather makes you stay indoor a lot more to work on startup ideas... I don't think weather is an issue here. In addition, the weather in Seattle is very similar to that of Vancouver. BC's economy is mainly service-driven. There are just few software companies.
I used to think that if there are no options but to go to work when it rains/gloomy.

But look at the flip side, for a city that is well-known for 10 months of gloominess could be easily one of the reasons why people are not coming here or trying to leave. This minimize the talent pool however you read the situation.

Seattle, while having similar weather, has the advantage of being a "US" states. USA as a brand is huge. Given Vancouver vs Seattle, people would choose the latter quicker than the former. Hence there are more people in Seattle compare to Vancouver.

BC's economy is mainly service-driven because what else can they do with the lack of demand?

Do you think Toronto might be better for startups?
I think you might as well be asking about favourite hockey teams. I moved from the Greater Toronto Area to Vancouver for a startup and find the areas comparable, and I know a handful of my classmates out here. I found Toronto had a lot of small 10 year old companies masquerading as startups. "Startup Atmosphere!!!!"
In general, there are far more opportunities in places with more people. Toronto, Ottawa, Mississauga, and Waterloo area are quite ideal because you have a few good universities (such as UT and Waterloo), a few good companies (Google, RIM, etc), and what seemingly might be a good startup city (Ottawa) thanks to Nortell and a few big name hi-techs shut down.
I've always asked myself how come big companies like Google, IBM,etc are on the east side and not in Vancouver. I mean this clearly illustrates that there might be more tech workforce in Ontario. So for a startup this could be an advantage. It's just a educated guess and I don't have any facts yet.
On the other hand, there are tons of game companies in Vancouver ranging from online game, MMORPG, PS3, NintendoDS, to online gambling.

There's MS here but they are here to act as a buffer for their engineers pending H1-B.

Some hardware companies Broadcom, PMC-Sierra, Sierra Wireless.

There are IBM centers in Vancouver and Vancouver Island, but they do largely government projects (consulting) instead of R&D like the ones in Markham area.

Speaking about Google, they seem to acquire a handful startups in the Montreal to Ontario areas.