sstream of consciousness

Business community in Ottawa-Gatineau region likes to refer to their region as Silicon Valley North (or Canadian Silicon Valley). At the same it is recognized that National Capital Region has an awful lot to achieve to be at least comparable to venerable Silicon Valley near San Francisco. If I could get a buck or two every time local business press like Ottawa Business Journal has an article on the topic, that would be a nice chunk of a pocket change. The truth is: nobody here really has any sustainable ideas on how to make dreams come true. The latest idea I read about was to lure some big chip manufacturer with tax breaks and incentives to build a fab here.

Paul Graham recently wrote a great essay How to be a Silicon Valley. I encourage you to read it in full - it is worth it (as almost any Paul's essay), but basically it boils down to following: there should be a university (or a number of them) that produces nerds. The environment should be nerd-friendly. There should be rich people that are willing to invest into startups. A discussion on slashdot highlights few other factors that I think are relevant but omitted by Paul.

Let's see how Ottawa fares.

First of all, I believe that weather/climate is a very important (and probably most basic) ingredient of the brew. Neither rich people, nor nerds like to live in swampy, foggy, cold or chilly or otherwise uncomfortable climate. Ok, this is not entirely true, as there are historical places that may not have a great weather but are financial centers by tradition (Moscow, London) or large academic centers forcefully created by government (Novosibirsk in Russia). Now, remember that joke about Great White North? "In Canada there are ten months of great weather in a year, and for remaining two months you cannot play a hockey". In Ottawa, at least, this is not that bad. One problem is that we do have winter. If you are into skiing, skating, snowboarding, there are plenty of rinks, ice fields, ski trails in region itself and rather good hills within couple of hours driving distance. If you are not into that, you do not get outside too often - maybe only to fuel your car and quickly cross a parking lot. However spring, summer and autumn in Ottawa region are lovely. Though weather is a little bit too unstable sometimes, when it is bad - it is tolerable, but when it is good, it is really, really good.

And there are tons of things to do in non-winter seasons: cycling, jogging, canoing, kayaking, kite surfing, volleyball, hiking, camping. Lots of ball parks, bike trails, hiking trails, provincial parks around Ottawa-Gatineau region, uncountable lakes and rivers with rapids is just a Heaven on Earth for an active type. And nerds, contrary to popular belief, do belong to that active type.

Another, and probably most important factor is a presence of world-class academic institutions. Do not get me wrong, University of Ottawa and Carleton University are both good, but they are just not good enough to re-create Silicon Valley or anything similar. This is the first gap that has to be fixed to make Canadian Silicon Whatever a reality. How? Frankly, I do not know. But the first step would be to lure world-class professors to these university, by money, or by immigration incentives. Proponents of Ottawa technology cluster boast a that Ottawa is a home of many research institutions and laboratories. But most of these are financed by government. And government workers in Canada (actually everywhere, but especially in Canada) are extremely risk-averse. Students without families and responsibility burden are able to create startups. Government workers - umm, no.

It's not that there are little nerds here. I see a lot of smart and hard-working tech people, but probably concentration is not enough. Besides, being smart and hard-working does not mean that you are able to do a scientific research. The role of academia cannot be overestimated.

Now let's talk about availability of money. It is not a big secret that canadian venture capitalists are relatively cash-strapped. So canadian start-ups usually raid Boston VCs for money. As Paul Graham noted, VCs like hold tabs on things and invest into companies within 1 hour driving distance or so. While Boston is certainly closer to Ottawa than Sand Hill road, this is definitely not even as close as desired. Given a choice of a rather good Startup in Boston Area and somewhat better startup in Ottawa, Boston VC inevitably ends up funding bostonian startup. Besides, Boston is everything that Silicon Valley is not and vice versa. Boston's priorities in business are: process, serivce, stable sales figures, contracts. Silicon Valley, on the other hand emphasizes innovation, coolness, explosive growth, and risk taking.

Canadian tax law is horrendous and pretty unfriendly to venture capital. And government course here seems to be very chaotic (just search the net for "Labour Sponsored Venture Funds" to get an idea). Plus, United States have Nevada and Delaware, what does Canada have?

There are many little things that may look unimportant at first glance but it all adds up. For example, it is a common practice to include employment contract clauses, claiming everything employee creates an employer property, even if it is done outside of work hours and company premises. California law explicitly forbids that.

So here is a verdict. So you want to have a Silicon Valley in Ottawa, eh. Ok, G-d gave us a great weather and nature, and municipality done a good job, developing infrastructure. Now roll up the sleeves and get to work on everything else that is needed: academia, legislation and money!

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