Why so many Silicon Valley companies are moving to Vancouver

In the past 12 months, a concentration of Bay Area businesses have started looking north for new headquarters

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      When Amazon announced its expansion into Vancouver in April 2018, an almost imperceptible shift happened in the local tech ecosystem. With the exclusion of Microsoft’s move into the city in 2016 to establish a two-floor, 750-person office, the technology landscape has been dominated almost entirely by small, 50-employee-or-less startups. While breakout local successes like Hootsuite, Avigilon, and Slack have made a name for themselves in Silicon Valley, few Bay Area companies and Seattle giants would have considered the locale to be a noteworthy tech hub.

      Over the past year and a half, that perception has changed. Amazon may have been one of the first to look northwards for a new Canadian expansion, locking down a residency in the Canada Post building and bringing 4,000 new technical jobs to the city, but it’s far from the last. In less than 12 months, a concentration of Bay Area businesses have turned to Vancouver to set up new headquarters or hire new employees.

      These companies range from some of the largest names in Silicon Valley to scrappy up-and-comers. Work management software Asana and delivery specialists PostMates are each valued at over $1.5 billion USD, making them bona fide tech unicorns. Both are currently hiring in the city. The $23 billion Lyft, too, is advertising for technical positions in the lower mainland. Gmail project management suite Streak, Bluetooth finding-device Tile, HR management platform Zenefits, data collection company Segment, virtual environment creator Parallel Domain, and mobile marketing platform Swrve are just a few of the other Valley businesses now looking for staff in Vancouver.

      That micro trend is not a coincidence. In the view of Raghwa Gopal, president and CEO of Innovate BC—a Crown agency that funds entrepreneurial support programs—the arrival of these Bay Area companies is only the first roll of the snowball.

      “I think it’s just the beginning,” he tells the Georgia Straight on the line from his downtown office. “Companies tend to form clusters, right? It’s very difficult to do anything until somebody gets started. This will be the starting point. You just get one or two that make that move, and then you’ll see another three or four, and eventually it just becomes the place to be. Once people see that Lyft is hiring or starting to set up shop over here, or Streak, or Asana, I think a lot more companies will start to feel comfortable about doing that. So we’re in the very early stage, but all of this time while we’re looking at these companies, that’s a great indication that we’re starting to get that attention.”

      CJ Prober, CEO of Bay Area darling Tile, is inclined to agree. Hailing from Winnipeg, the University of Manitoba and McGill grad made the leap down to California at the height of the dotcom boom. After stints at McKinsey, Electronic Arts, and GoPro, he was recruited to the Tile board before taking over as CEO last September. One of his first moves was look back at Canada to find the perfect place to open the new headquarters of the company—and to do so, he needed to find the city that could supply the talent for the company’s diverse requirements.

      Tile’s product helps people find the things that they’ve misplaced—anything from wallet and keys to luggage, headphones, or even pets. By attaching the small square to an item, users are able locate it using an app on their phone that fires out a Bluetooth signal and connects with the chip. If an item is out of range, the Tile app will call upon its network of users. As soon as someone running the software comes within range of the lost item, it will automatically send a message to the owner letting them know where it is.

      As a result, Tile’s finding platform has to deal with around one billion location updates a day—no small feat. To coordinate all its users, the company must maintain a watertight cloud service: a task that requires highly specialized knowledge. And because it primarily sells products from its website, Tile has to operate a seamless direct-to-consumer ecommerce platform. With that variety, the company’s new office required a number of highly trained engineers to grow and maintain its services.

      CJ Prober, CEO of Tile, chose Vancouver after auditioning a number of Canadian cities.

      “Throughout my career, I’ve had teams in Vancouver, the Toronto area, and Montreal, and I’ve always had really great success building engineering teams, in particular up in Canada,” he tells the Georgia Straight from the boardroom of Herschel, the Vancouver-based luggage company and partner of Tile. “When I joined as CEO in September, one of the first things I told the teams is that we’ll need to grow more quickly, and we’ll need to expand our talent base, so let’s look at Canada as an engineering hub for us.”

      Prober’s exploration led to a thorough evaluation of Canada’s largest cities. Montreal, Calgary, Toronto, and Vancouver were each vetted for what they could offer. In the end, Tile settled in Vancouver because of its rich talent base. The city’s location was an added bonus for the company: operating on the same time zone and reachable by a direct two-and-a-half hour flight, Vancouver is the most accessible jump-off point for the Bay Area.  Add to that the city’s cultural similarities to West Coast America—think left-leaning progressives with a love of nature—Prober was confident that setting up a second headquarters in the city was the strongest choice of the four. The office was officially announced at the end of May.

      “Right out the gate, we’re going to hire 20-plus people, but really the sky’s the limit on how big the team grows here,” Prober says. “We’re continuing to grow our team in the Bay Area too, so it’s not like we’re shifting people—it’s just lifting all boats. We want to build up a new team here. We’re hired a leader for the office, and he’s already hired a couple of people, so we’re racing to build our pipeline.”

      Asana, one of the world’s premier work management tools, saw similar potential in the city. Well known for both its paid and free offerings, the company counts Airbnb, Uber, Sony, Disney, NASA, and 60,000 others as loyal customers. Currently entering another growth phase—the business is looking to expand from 500 employees to 700 by the end of the year—Asana needed to increase its footprint internationally, and found Vancouver to be a perfect fit.

      “To hit that [hiring] goal we designed a process to look at different geographies…to really identify what the different spaces were and what was right for us,” Vancouver site lead Niranjan Ravichandran tells the Georgia Straight by phone. “Some of the really salient things that stuck with us for Vancouver was that there’s a really strong market and talent quota. There are such a lot of startups with a strong entrepreneurial spirit. There are also really good schools, and there are lots of engineering graduates from those schools, like SFU, UBC, and BCIT. Those were our primary drivers.”

      Asana's new Vancouver team is currently hiring in the city, and believes that the location is a great place for talent because of its highly rated universities.

      Asana executives made the decision to set up a Vancouver  office late last year, and when the posting came up, Ravichandran jumped at the chance to move to the city. Prior to heading north, the engineer had spent his entire career in California, first working for LinkedIn on mobile-related projects before joining Asana when its headcount was less than 50. Seven years later, he’s enthusiastic to experience the culture that the city has to offer.

      “I didn’t have any affiliation with Vancouver before moving here,” he says. “I had friends who were from the area, but that’s basically it. So no direct relation. I was excited when this role came up because there were a lot of advantages to having a team move up there to set up the office for success.…It’s a super exciting market, a super exciting opportunity, and that’s why I’m here. I definitely love the city so far—I’ve been here for just a few months, but I’m really liking it.”

      Asana’s Vancouver team has been established to take advantage of the city’s access to talent. Primarily a development office, its employees are dedicated to working on the entire product, including engineering, product management, and design. To help make the transition to the Canadian city seamless, Asana moved three people from its San Francisco office (including Ravichandran) to ensure that the brand remained consistent. Since being here, the Vancouver site lead has noticed a number of Valley businesses setting up shop in the city.

      “I definitely have seen a few companies at least in the vicinity of where we’re located,” he says. “I’m curious to see how this trend continues and how it plays out…I think more Valley companies moving here is exciting because it will help the ecosystem develop. I think, in general, more opportunity is great for engineers—and for anyone in general, it’s better to have more opportunities.”

      While Ravichandran is positive about the effect of Valley companies moving into Vancouver, others in the industry have some reservations. Dominated by startups, the city’s tech industry hosts a deep pool of highly qualified professionals that are paid significantly less than their U.S. counterparts. When large companies arrive with deep pockets, smaller businesses worry that their top talent will be lured away and they will struggle to compete.

      Concerns, too, have been raised about big tech increasing the unaffordability crisis. After Amazon and Microsoft’s arrival in the Seattle area, for instance, almost 20 percent of the prime office real estate was scooped up by the companies, leaving little for smaller businesses. As more individuals moved to the city chasing tech jobs, traffic became significantly more congested, and as people became better paid, housing and rent costs shot up faster than any other major American urban centre over the past two years. Seattle’s cost of living is now 49 percent higher than the U.S. average.

      Innovate BC’s Gopal, however, thinks that as more Silicon Valley companies choose Vancouver, the benefits will overcome any issues. In particular, he believes that the arrival of new businesses will force local companies to pay workers more across the board, helping all tech sector employees.

      Innovate BC president and CEO Raghwa Gopal believes the Bay Area companies that have established a presence in Vancouver are the first of many.

      “[At the moment], there’s a lot of negative talk about the cost of living [in Vancouver], high house prices, stuff like that,” he says. “And if we continue to keep wages at the same scale that they are today, we’ll always have that issue. By some of these companies coming in here and hoping to elevate the earning power a little bit, it will definitely help to close the gap. So it may not sound like it on day one or year one, but overall it definitely has a positive impact. [When] earning power increases, [and the] cost of living doesn’t continue to rise exactly at the same pace, then it closes the gap. Over the years, in the longer term, it think it will be a good thing for the city.”

      Because each of the offices being established are under 50 employees, Gopal believes poaching, too, shouldn’t be too much of an issue, and Vancouver will not face the same issues currently plaguing Seattle. Instead, he sees the increased call for talent as a huge opportunity for the graduates coming out of the lower mainland’s educational establishments.

       “[We] hav[e] some great institutions that continue to produce some pretty high-skilled workers,” he says. “Immigration is another avenue for us to bring high-skilled workers—and this new trial of the PNP [provincial nominee program], where employers can get approval within 14 working days, is helping to get more talent. So I wouldn’t say that there won’t be some poaching. But I think all those benefits outweigh that particular concern.”

      As the Vancouver ecosystem becomes increasingly attractive to international companies, the tech network will start to shift away from small, home-grown startups to a chequerboard of local and big brand businesses.

      “I think this is going to grow into something really big,” says Gopal. “This is just the starting point.” 

      Kate Wilson is the Technology Editor at the Georgia Straight. Follow her on Twitter @KateWilsonSays

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