Vancouver Internet start-ups need to network for success

In 1998, with the dot-com bubble under way, Maura Rodgers founded Spinway in Palo Alto, California. In just two years, the company became one of the fastest-growing Internet service providers in history, before shutting down and selling its assets to a Kmart subsidiary in 2000.

A year later, Rodgers moved to Vancouver. As she planned her next Internet start-up, the Massachusetts-born entrepreneur decided she wanted to launch it here, rather than return to the high-tech hub of Silicon Valley. In 2007, she cofounded Strutta, which released its on-line contest platform in December 2008.

“I wanted to do it here, and I think we have tons of great resources and tons of great entrepreneurs,” Rodgers told the Georgia Straight at her office in Gastown. “I think, over the last couple of years, you’ve seen more and more companies popping up.”

As executive director of the Bootup Entrepreneurial Society, Rodgers is also helping other Vancouver-based entrepreneurs launch their own Internet start-ups. Dedicated to making this city the next big hub for technology companies, the society regularly organizes social events such as Launch Party Vancouver and DemoCamp Vancouver. These events give tech developers a chance to meet and mingle with other developers, as well as, perhaps more importantly, investors.

Rodgers noted that the Silicon Valley “ecosystem is well honed to support start-ups”. She added that, in the Bay Area tech hub, “Not only do you know other entrepreneurs who are doing it or have done it, but also the entire infrastructure, like the legal and the accountants, are all there and have experience working with really early-stage companies.”

Despite some local successes—most notably photo-sharing site Flickr, which was bought by Internet giant Yahoo in 2005—Vancouver doesn’t have a reputation as a top-level tech community outside of the province, according to Boris Wertz, who’s been investing in Internet start-ups around the Pacific Northwest for the past two years and sits on Bootup’s board of directors.

The city is home to a growing number of Internet start-ups in various stages of development, but both Wertz and Rodgers said the infrastructure and investment required to make Vancouver a top high-tech hub have yet to be established. While nonprofit initiatives like Bootup, which also helps start-ups find legal and logistical aid, have been working to create a nurturing environment for start-ups, more may be needed to move Vancouver to the next level.

Bootup Labs is a start-up incubator modelled on similar outfits in the U.S. The company, which helps fund and shares office space with the similarly named society, invests in and helps develop a select group of local start-ups. Companies under Bootup Labs’ wing are provided with an initial investment, office space, and mentoring as they work on growing to the point where they can attract larger investors.

At Bootup Labs’ Gastown office, the company’s cofounder and executive director, Boris Mann, told the Straight that location is a big plus for those looking to build a tech company in Vancouver. “We’re two hours away from Silicon Valley by air,” he said. “It literally takes less time to fly to Silicon Valley than it does to take the ferry to Victoria.”

Mann also noted that Vancouver is one of the few places in the world where a high-tech development scene coexists with a video-game sector and a film and television industry. “Theoretically, we should have a good opportunity to bump into each other,” he said. “We just need to break down some barriers and have a little more mix in some of these things.”

Jason Joly, vice president of content for OverInteractive Media, agrees. “The great thing about Vancouver is that it’s one of the only places where film and video games are right on top of each other,” Joly told the Straight. “There’s real potential to go across the street and shake someone’s hand.”

One of the companies being incubated by Bootup Labs, OverInteractive is in the process of developing dimeRocker, a platform for Web-based social games.

“I came from a television and film—more of a traditional media—background, but I had a lot of frustration because I have always been an enthusiastic end user of the Web and video games and that kind of culture of the new,” Joly said.

The local population’s enthusiastic adoption of social-media applications like Twitter has also been a boon for Vancouver start-ups. Railtown-based Invoke Media launched the Twitter client HootSuite in November 2008. “In terms of getting our message out and getting adoption in the local Vancouver community, it’s helped out a lot,” Ryan Holmes, CEO of Invoke, told the Straight by phone.

After winning over local Twitterers, HootSuite is now being used by the Disney organization, The Economist, and the U.S. army. Being developed in Vancouver hasn’t been a hindrance to HootSuite. As Holmes pointed out, “The White House uses us, and if anybody is going to be pro-American, it’s going to be the White House.”

After 10 years abroad, Michael Cole returned to Vancouver and founded Vivity Labs, where he is now CEO. In 2008, his company launched Fit Brains, a site offering casual Web-based games that help players exercise their brains. In a telephone interview with the Straight, Cole said the wealth of game developers in the city, and the existence of major casual-gaming companies in Vancouver and Seattle, were factors in his decision to return.

Vivity Labs has received federal-government grants from Telefilm Canada’s New Media Fund and National Research Council Canada’s Industrial Research Assistance Program, which helped fund the initial development of Fit Brains.

“In the States, they don’t have these types of programs,” Cole said. “I think it’s useful to be able to get my product to a certain stage where I could illustrate to investors that we were onto something and they could visualize it and see the market potential. For me, those government sources of funding were very useful.”

But some in the start-up community think government should be doing more for Vancouver’s tech sector. “The B.C. government is doing a terrible job in terms of encouraging innovation, in comparison to Ontario and Quebec,” OverInteractive’s Joly said.

Mann argued that the province sees its job as “just make the conditions right and magically companies will flock here. Government programs tend not to be very good at talking to small businesses, never mind entrepreneurs.”

In addition to sitting on Bootup’s board, Wertz is the CEO of Vancouver-based venture-capital firm W Media Ventures, is a member of Vivity Labs’ board of advisers, and launched Twitter app maker Social Crowd Ventures earlier this year.

Wertz pointed out that Vancouver has no large Internet company, which would attract a stream of new developers and potential investors. Comparing the city with Seattle, just a few hours’ drive south, he noted, “They have Amazon, they have Microsoft, they have Expedia, they have Blue Nile. They have companies that train people, educate people, and spit them out, so that they can go and start their own companies.”

During an economic downturn, layoffs by larger companies can help start-ups flourish. Mann previously worked for Nortel in Ottawa. “You have far less control over your own fate,” Mann said. “One day, your project gets cancelled or your department gets moved somewhere else, and you’re done.”

Joly pointed out that most Internet start-ups have little overhead compared with large companies. “My office is my MacBook Pro and half the guys from my office are on MacBook Pros, and that’s what our company is,” Joly said. “Everything is out there in the cloud, which is pretty interesting if you think about it.”

Despite the many challenges they face, Vancouver’s Internet start-ups are optimistic about their chances of success. Rodgers believes the city’s Internet sector is on the verge of great things.

“The more wins we get, the more people will continue to innovate here and not take their ideas elsewhere and not feel like they have to go south to get funding,” Rodgers said. “I think we can do it here, and I think you’re going to see more of that. That’s my hope. That’s what I’m working on.”