Please Hammer, Don't Hurt 'Em

Hallelujah! Someone said what has needed to be said for years.

This town, its investors (sic), and its entrepreneurs (sic) all need a good bitch-slapping. Mediocre ideas, mediocre investors, and mediocre dollars will deliver mediocre results. The ASTONISHING thing is that people here expect anything else. Vancouver needs a top-down refurbishment of its technology industry.

If I meet another "Social Media Consultant" I swear to god I will punch him/her in the face -- it's just marketing! -- and if your only insight is showing otherwise clueless marketing hacks how to set up a Facebook Fan Page and Twitter their company BBQ, then sorry but your 15 minute long career is up. Go hang out at your ****camps, get the free dental as a barista at Starbucks on Commercial Drive, and shut the hell up.

Unfortunately, I have to agree. After being back in Vancouver from Silicon Valley for six months now, I'm extremely disappointed with the quality of what I see around town. That's not to say things can't change - but it's going to take a lot of work to change it.

I, too, had the opportunity to both work and raise capital in Silicon Valley. While I think every city has its fair share of bad, mediocre ideas (the Valley has lots too -- see MC Hammer's latest enterprise) I believe that the far more common theme here is ideas that are derivative, in which the best hope for success is a bunt, not a home-run.

Startups are supposed to swing for the fences, but there are too many startups here who fail to understand market limitations and try to boil the ocean. I spoke to a pair of entrepreneurs who honestly believed that they could replicate craigslist, zagat's, epicurious, citysearch, and about half-a-dozen other best-in-class sites with a few hundred thousand dollars and no technical skills between them. I was embarassed for them.

The opposite problem is also true here: people looking at a technology sector and deciding they want to be in that space, without a clear idea of what the product will look like. That too is the wrong approach.

The best services and products solve problems. I'm not suggesting that RosterBot is the end-all be-all of web services, but it's as successful as it is because it addresses a need, and I as an entrepreneur and athlete happened to experience that need so I was well-qualified to figure out how to solve it.

Is it the next Google? Obviously not... but it was built entirely without outside funding and without defocusing me from other career obligations and objectives -- and it's beating other "Social gaming" sites because it is laser-focused on addressing the real needs that teams have.

I too have experienced major frustration with investors in Vancouver. I have always been comfortable saying "I don't know" when, in fact, I don't know something. This always played well south-of-the-border, when used in good measure, but here investors are looking for any sign of weakness to exploit in an entrepreneur and immediately go for the jugular.

There is a lack of respect between entrepreneurs and investors in this city. For the most part, I think that disgust is earned by both parties. To fix it, you've got to start from the top.

Vancouver has no successful mid-size (in U.S. terms) venture-backed technology startups. You can't expect someone to go from junior individual contributor at a tiny aenemic startup to CEO of another aenemic startup in one step. With respect to many of the smart engineers I've met who are running small companies here, this is too often the case -- and because they've never managed others or driven strategy and marketing, the results are predictable.

The lack of an informal apprenticeship system for information technology, such as exists within the medium to large technology companies in Silicon Valley, means there is little opportunity for workers to credibly jump from junior engineer or marketer to senior management or company founder. Lots have, and with some success -- but I would submit that this is more due to happy accident and raw talent than anything else. So the catch-22 is that we need successful startups -- who can stand on their own two feet, and not flip to the lowest bidder -- in order to create more successful startups.

In the meantime, consider the following: we don't need capital sources that are Canadian in order to nurture executives and companies on the Vancouver technology scene... and in fact doing so is putting the cart before the horse.

The Film and Video Game industries in this city are examples of technology-centric businesses that have developed and flourished within Vancouver, creating tens of thousands of jobs each, with capital from outside the city.

What we need to do is nurture programs that make it advantageous to invest, and remove the red tape from investing, in Canadian (and BC) venture startups for foreign VCs, and work to lure them to our city and province. This will attract capital from south-of-the-border, where investors are more seasoned and better-connected -- and can bring more capital and greater exit opportunities to bear. These more seasoned investors will also act as a natural weeding mechanism to separate the wheat from the chaff in the local community, and they'll force local investors to be more competitive and to bring more value to the table if they wish to participate in the upside opportunities. Honestly I think local VCs would appreciate and welcome the help and wisdom of their bigger cousins.

Solve the capital problem, and the other problems will fall into line over time. You'll get mature, free-standing, profitable technology companies with seasoned entrepreneurs and middle management running them. We will all benefit.

The VSE/TSX-V (and unfortunately the OTC) culture is broad and deep in Vancouver with a long, long history here.

Canadians in general tend to be risk adverse and fiscally conservative. Look at the differences between Canadian and American consumer spending/debt etc. This translates to the finance and investment community in Canada as well and influences the VC community. Remember, in some regards, the VCs are entrepreneurs themselves and need to sell their fund offerings to the investment community in Canada (in many cases). Canadian VCs need to appeal to their audience and present a package that will get their buy-in. This in turn translates to their investment criteria.

Point being is this problem is bigger then simply trying to fix the VC sector. Its a cultural change. Perhaps more US influence would be a good catalyst. But getting those American VCs north is not easy when the best of the best usually end up in Silicon Valley anyway.

LC

You guys are funny. You sound like the weak minded, insecure, scared kid at school who makes himself feel better by kicking a little kid to the ground and laughing at him. Hopefully you're mature enough to realize that the true power to help change the situation is offering your hand to help him up.

It's time to STOP flapping your gums about how bad things are and start helping to make it better. If you're so smart, and you know all the problems, then FIX them, and stop beating on the people who are trying.

I too came up here from the Valley, which is the epicenter of bad ideas. (trust me, I know!) From a distance, it's easy to hold the valley up on a pedestal, but the only reason they have good companies to talk about is because they keep trying. As a community, we need to start supporting each other; give a hand where we can, and capitalize on the lessons we've learned from our failures by encouraging founders to try again.

Don't get me wrong, I'm not in denial. I understand your frustration. In fact, I may sound hypocritical a bit, because I too have bitched about the Vancouver tech scene, but there is a big difference. I choose to channel it differently. I never point out a problem without offering a solution, and executing on it.

So, again, the minute you *do* something to fix the problem, you have my respect, but until then, your words are worthless, demotivating and destructive. Stay away.

BTW, Who are you Kevin Curry? Don't think we've met, Hope to see you around town so we can continue the debate.

Hey, that was a cheap shot, Bob.

Where does all this animosity come from? If it will make you happy, I can put you in touch with a few folks who need someone to set up a Twitter account for them...

Oh, and would the real Kevin Curry please stand up? Tsk tsk, Techvibes. I expect better from you.

I think that this is a very healthy discussion - there are tons of things that we still need to improve but I also feel that the community has never been stronger to tackle the challenges. So Kevin Curry: join the team and let's kick some bud together!

I have been involved with a few Vancouver startups as an employee. I was shocked at the inability of the founders to admit that they don't know what they are doing sometimes. I like that quote by Feynman above and I wish that the pompous fools I've worked for would stop parading themselves and their companies, get humble, and learn from their mistakes and the success of others.

Danny, pointing out the problems IS part of the solution. The challenge needs to be widely understood and accepted before the solution can be undertaken.

Because someone chooses to expend their energy outside of a system, rather than work to change the system from within, is not an indicator of their weak-mindedness. In fact, one could argue that intelligent people shirking the system and ultimately causing it to collapse under its own failure is the smarter play. It's also simple Keynesian economics, or Economic Darwinism.

For us to invest in change requires a certain patriotism I suppose, in defiance of all resistance. But why bother shoring up a weak, cancerous investment community? The more companies we see like StrangeLoop networks (who will probably soon have raised $20M+ WITHOUT a single institutional investor) the more we will be able to show examples of why the system is broken.

Let's first just get to a place where everybody agrees on where we're at and diagnose the problem. Then we'll work on prescriptions. Otherwise it's ready, shoot, aim.

Triumphantly pointing out flaws in any system of character or economy is pathetically easy. I pictured the author strutting around in a diaper and goggles from burningman saying, "I worked in Silicon Valley. I embrace the attitude. Tell it like it is. "

What a childish, petulant, ignoble, froward, pointless and vapid piece of writing. Keep up the good work: I bet techvibes made at least $0.50 in Adsense earnings with all these comments.

6 years of valley experience here...

Vancouver ain't Silicon Valley. But then, neither is Seattle, Boston, Austin, etc. Actually, there's only one place that is Silicon Valley, if you think about it.

If you have a company that has one of the 1% of business ideas that can make money for a VC fund, it really doesn't matter where you are located. For really early stage unproven Palo Alto-style startups though, best to do that in California.

Silicon Valley "attitude" won't work here. Actually, it probably won't even work down there. :-)

Kevin, nice attention-getting post. Now time to introduce yourself?

It is very easy (and often funny, Kevin) to be a critic. Danny is right. It's much harder to offer real solutions and implement them. I have a lengthy tome on T-Net explaining the history from the investment side and then my thoughts on how to make things better. (www.bctechnology.com/statics/bh-aug0808.html)

I'll try not to muddle the sentiment with facts, but here it are some to ponder:

From 1999-2004, BC made more money in terms of shareholder return in technology companies on invested VC dollars than any other region in North America except Maryland. More than California. It's a simple ratio, dollars in over dollars out. We had much smaller dollars in than California, but we had much more dollars come out per dollar in than California. There is a published study by academics at UBC that shows this.

How is that possible? Why are we all agreeing with Kevin's sentiment if that is true...

1. California invests an awful lot of money in tech startups that don't work out.

2. BC has had less than its per capita VC investment for many year

3. BC's successful exits in that time frame (Sierra Wireless, Crystal Decisions, Abatis, Octiga Bay, Anormed, Angiotech, Datum Telegraphic, QLT, Pivotal, Xantrex, Creo, 360 Networks, Aspreva, Workfire, MDA, Xcert and ALI to name most of the exits over $60M) were not all VC backed... so the crummy amount of investment by VCs was not as relevant

In the end, we did that study because Ken Levy, Chairman and founder of Santa Clara based KLA-Tencor said to me, "Brent, I just want to know if I invest my money in Canada, I want to know that there is a good chance that it can make as much or more money vs investing it here in California." He simply wanted to see the exits.

Since 2004 we have seen fewer big exits, but Club Penguin was gigantic. My feeling (and hope) is that there will be some $100M plus M&A here soon in technology. I know of 4 or 5 private companies that could command that valuation.

Some of the folks you think are toiling at tier 2 companies are grinning reading your post because they are creating some mammoth value. Contrary to your sentiment, they are very excited to leave their yoga (Hmmm. Chip Wilson made a LOT of money from Yoga) and mountain bikes (The guys at Sugoi are happy we all mountain bike) to get to work.

I think you just haven't found the right idea or the right company yet.

As for the investors... money will follow success. It's just money. And there is lots of it around. It just might not be in the hands of VCs in Canada. The real value is in the innovation and execution by the people to make it a real business, with real revenue and, gosh, real profit.

There is no local scene. It's just the same 18 friends and co-workers meeting at a Waves to scoop some free wifi, trade MooCards and call it a camp.

"we see things not as they are, but as we are"

JL: Not true. I have 7 years of experience working for Silicon Valley companies and am co-founder of a tech company in Vancouver, and while there's nowhere near the amount of money sloshing around up here as in the valley, there are some very smart, hard-working people with good ideas... Not everything has to be done or funded in the valley.

Er...anyone here with something useful to say that actually created a start up and became very successful? While I know at least one person here that has been successful in creating viable start-up companies, I am not sure if anyone else has any real experience of being in the start-up trenches. "Working for" a start up is not the same as being the owner or founder of a start up. I have "worked for" a valley start up once too -- I was sent to be a "booth babe" at E3.

As the co-founder of a start up company based in Vancouver, I have had my share of criticisms. Being hammered and judged is naturally a part of the start up experience. Before we succeed, we are a bunch of fools, when we succeed, the people who criticized us become fools. I would rather be a fool now with the chance of having my "fool status" removed then someone who judges too early and become permanently labeled as a fool later...

May: Wading into a discussion where you don't understand the context and have no idea who the participants are, and blasting them all as poseurs is probably not the best way to have your "fool flag" revoked.

Congrats on being a booth babe! That was an entree into the tech industry that was sadly unavailable to me.

Hi Ian:

Quote from the original post:

"Richard Feyman said it best:

'...pompous fools drive me up the wall. Ordinary fools are all right; you can talk to them, and try to help them out. But pompous fools - guys who are fools and are covering it all over and impressing people as to how wonderful they are with all this hocus pocus - THAT, I CANNOT STAND! An ordinary fool isn't a faker; an honest fool is all right. But a dishonest fool is terrible!'"

I don't mind being an ordinary fool. If I was to remain a fool, I would like to be a wealthy one :D

Vancouver certainly isn't the Valley, trying to compare Vancouver to the Valley is futile. While we may focus on our share of mediocre companies, there are a lot of great companies here.

You are right that there are certain things I do not understand. My company went the bootstrapping route by choice and found great support in the local technology community so far.

I truly stand in the possibility of being a part of a great tech community here. If everyone simply focuses on addressing specific needs and creating great products / companies, I believe the investors will come. It is sad that most start-up companies spend their time trying to track down the money instead of being able to focus on implementing their visions/goals. There are really some great talent here, we just need to craft out a way of doing things that will serve this community.

Guy Kawasaki has a great book called "The Art of the Start" and it gives entreprenuers all sort of tips on how to bootstrap. Bottom line: it is better to bootstrap and come up with simple prototypes, a few users, some revenue to proof a concept before seeking investment. I found that once we had a prototype / demo, no matter how bad it looked at the time, we had people offering to invest (we didn't take the investment offers, and I wonder if I had shot myself in the foot).

Basically, I am suggesting for those people who used to work in the Valley, or want to compare Vancouver to the Valley = forget the valley. We have a chance of creating something new and exciting that works for us here in Vancouver.

As another vet of a Vancouver startup, I was continually frustrated at the amount of time it was taking to get VC money. Eventually we all had to leave for other pastures.

On the Vancouver community and tech scene, it's much more interesting and vibrant than Victoria (where I just moved from). I think Vancouver has a lot going for it and there are a ton of great and innovative things going on.

Let's face it, in any ecosystem of ideas and businesses there will be far more bad ideas than good ones. The secret is what do we do to learn from the bad ideas that don't pan out to make better ideas the next time.

Success is iterative, not instant.

i run laps around this circlejerk. mwah! ;)

Seriously who are you Kevin Curry? IMO you're just another hopeful valleywagger who moved to Vancouver with hopes and dreams of a glorified life in Canada! if this town ain't for you because no one want to hire your ass or give you attention, than perhaps it's time to execute your exit strategy and move on brother cos you're blowing your bridge to the north west coast..

If you want to look at serious business, you know my name.. from coffee shop start up to international agency in less just a few years and we are only getting started!

You say it as you see it. I'm blunt like a warhammer and i can't stand people taking down our town when they have not proven themselves to the community. Show me the money or shut your mouth! Look around, there are teams in this town that have done great things!

Perhaps you just don't hang in the right circles my friend!

Torn. I agree and disagree but am too busy helping build a business to be distracted by the conversation beyond a few minutes. There has to be more businesses like ours (speaking as a co-founder of a privately held 110+ person software company) that simply do not have a local focus. Quite frankly, we just don't participate in Vancouver tech events.

Maybe we should be more involved in the local tech community and helping nurture other would be entrepreneurs? A lot of these guys/gals do need a sanity check.

But - something I always try to keep in mind...

My version of success is very different from yours and it also has the right to evolve or devolve.

What we defined as success 6 years ago (a humble lifestyle business that let us be self-employed and hit the seawall at lunch) changed. Success for us is now ridiculous hockey stick growth and working with some of the most notable brands in the world. Even then, those measures would vary between our co-founders.

Bottom line. Vancouver start-ups do need help. Those of in the midst of our ventures don't have the time - so where are the guys/gals that have already been there, done that? Seems to me, they are the same ones complaining there are no good start ups.

Scales wrote...Look around, there are teams in this town that have done great things! Perhaps you just don't hang in the right circles my friend!

It is this type of arrogant mentality that is destroying the startup environment in Vancouver. As you pointed out Scales, if new startups are not "in your circle", then they are doomed?

The reason why having a startup in the Valley is very encouraging is because they support each other regardless of who they know. There are more emphasis on the product rather than which group you belong in.

This is a great article and it is interesting to note the defensiveness of people based on the comments here. it is a perfect time for improve and encourage startups in Vancouver and slowly eliminate the "groupie" attitude here in Vancouver.

@Jason What you're talking about is exactly what Bootup Labs is all about. Helping the good ideas get better and be successful

@Paul wow, nice twisting of words there. The point is that if you stop and look around there are a ton of great things going on. And no, they aren't all in Scales' circle of friends.

Again, yes, there are some pretty facile, derivative ideas out there without good business plans or real sense of purpose. There are also great ideas that need a solid push and mentoring. There are then the amazing ideas that are just going to rocket off. Now if we're really serious about doing cool things in the Vancouver tech scene, then we need to pay attention to ALL the ideas, good, bad, and ugly. You never know where the next big idea or source of inspiration is going to come from.

@Paul, not sure your background. I assume you're from the Valley since you're describing experiences as if you lived there and started a company there. I also lived there and started a company there in 1999. Also, my second company was started in Vancouver, but it was funded by 3 valley VCs and gradually moved it's head office to the valley.

I've had different experiences over the past 13 years than you. The valley is ALL about who you know. I think it's just too big to form any sense of community. But, I also didn't notice much of a cliquey culture either.

I live in Vancouver now and love it. I know Robert Scales and he is obviously not one to mince words. But he is also not one to exclude you from the "group"

Paul, I'm not aware of any "groupie" attitudes in the city. But if there are, I want to help break them up. We can't do it alone and we need everyone to understand that.

@Paul Obviously you've misunderstood my comment about "being in the right circle"! I was merely pointing out that Vancouver is indeed an easy and open community to reach out/in !

I know your background; you've been teaching forever: Cap college to UBC.. Perhaps you can use this wisdom to help the local community grow? I know i use my role at VFS to help my students blossom ! I'm sure you do too!

As for calling my comments and attitude arrogant! I can see how you would misinterpret "self esteem" for arrogance. My post was to clarify the fact on what I feel to be a misrepresentation of the Vancouver scene. To compare the Canadian Market with the US is a foolish game that only wasted fine folks' time as demonstrated above.

Perhaps it is not for lack of great innovations, but poor support from VC and a weak format for experienced mentors to work with startup! It may be that Vancouver has not yet reach it's full potential. But as pointed above, this is changing! From Lynda Brown's initiative with NMBC to Bootup labs, the community has been and continue to work together and it becoming more mature. I think most people that commented above are of this view, if you feel you have something to contribute. We'd love to see how your experience can augment ours!