This is the 26th article in a continuing series that examines the state of the ecosystem necessary to successfully bring technology to market. Based on dozens of interviews with entrepreneurs, venture capitalists, angel investors, business leaders, academics, tech-transfer experts and policy makers, this series looks at what is working and what can be improved in the go-to-market ecosystem in the United States, Canada and Britain. We invite your feedback.
When we spoke back in June with Jon Bradford of Springboard, he made the valid point that the vision and drive of a few dedicated people is more important to the success of a startup accelerator than its location. Ottawa entrepreneur and community champion Scott Annan lives and breathes this philosophy. The founder of Mercury Grove and Network Hippo has set out to prove that, while location doesn’t matter, Ottawa nonetheless has significant advantages that can be levered to its advantage.
Last week, we spoke with Scott about his efforts to launch in Ottawa this fall a startup accelerator with a number of other private and public sector stakeholders. He talked about what this program hopes to achieve, the unique strengths of the Ottawa market and how the accelerator’s “hyper-local” approach makes it unique. Today we conclude with his thoughts on how this kind of initiative benefits everyone involved, what else it needs to be successful, and the roles its various stakeholders must play.
How will the fund work? What benefit will startups gain from it and what return on investment will the fund’s supporters see?
There’s definitely a sharing in success with mentors and the broader community and just the benefit from having a stronger network here in Ottawa is huge … by creating a network that new entrepreneurs can benefit from, everyone within that network benefits. That’s a main objective of ours.
From an investor’s standpoint, there’s generally the same model as other accelerators where the benefit is they have the opportunity to be first in on a next round. They get the pick of the cream of the crop when companies finish the program and are looking to raise additional funding … often angels, but increasingly VCs, are saying they’re getting locked out on further rounds because they weren’t in early enough. It’s a fairly low-cost way for them to improve their deal flow. So I think everybody benefits from it.
The other thing that’s important … is that it’s not a black mark on you if you fail. What we’re giving is an opportunity for smart and talented people who are based in Ottawa to stay in Ottawa, learn a lot about entrepreneurship, build a great product and we also develop skills. It doesn’t mean that every one of them will be a billion-dollar company, but we’re helping people develop talent that can be leveraged in other types of businesses or in the government as well so there is a lower chance that people are just going to finish our program and leave Ottawa.
What do you think are the key ingredients any city must have to build a strong tech sector? What are the crucial roles that must be played by government and more seasoned entrepreneurs and executives?
For entrepreneurs and executives, being active in the community and supporting other entrepreneurs and programs that are happening is crucial. Really being able to develop that strong network and allocating time to share your thoughts and experience and expertise with other companies is critical. It helps not just the entrepreneurs, but creates an environment of collaboration. We’ve got to realize here in Ottawa that our opportunities from a client acquisition and business standpoint are largely outside of Ottawa and so there has to be less competition and more cooperation here. So, again, the idea of getting excited about all the different companies here and not being too myopic about our own businesses.
From a community standpoint there has to be access to capital. So that’s one of the critical things you’re seeing. Montreal is really growing right now because there’s access to funding … so having access to not just something like the accelerator, but to additional follow-on money, whether that’s local or not. Historically the difficulty has been that, where there is money in other areas, (those investors) felt that there isn’t a good strong local lead or a partner here that they can trust in order to watch over their investment. So the capital doesn’t necessarily need to be in Ottawa, but the entrepreneurs need to have access to capital …
From a government standpoint, I really think it is a partnership with private sector in being able to offer matching funds or ways of being able to support that access to funds, so I think they play a support role. What you are seeing with organizations such as BDC is that they’re trying to create an environment so that when the bigger funds like the Teachers fund and these bigger Canadian institutional investors come back to tech there’s going to be a landscape where they can play. The government doesn’t play a lead role in it, but a supportive role.
What would you say to other technology executives who could be, or should be, playing this role of incubator and champion for new venture creation?
I would say to give me a call, though there is a high likelihood that I have already called them. This is a community play, not a Mercury Grove play. My thought has been since the beginning that the only benefit for us is that a rising tide floats all ships. There is no financial gain in these kinds of programs for (the senior entrepreneurs and executives who take part). The benefit is creating an ecosystem in which everyone participates … just get more involved and participate in things that are going on around the city …
One question that always surprises me that no asks me, and you haven’t explicitly asked me either is “so why are you doing this? What’s in it for you?”
Ottawa is at a stage right now where we have the talent in the city, we’ve got some amazing growth companies, we’ve got access to extended networks in Montreal, Toronto, Vancouver and the Valley, and down in Boston and New York. If you take all of the entrepreneurs and active people in Ottawa we’ve got a pretty amazing extended network. There is this feeling in Ottawa that people are successful despite Ottawa and there’s no reason to have that kind of an attitude.
It’s an exciting time in Ottawa and I think it’s time to rally, not people in the tech sector but in the community as a whole … we should be proud of tech, we should get over this hangover from the late ’90s and 2000s or the feeling that we’re not Silicon Valley and you can’t build a business in Ottawa. It’s not true and there’s lots of examples to show that … the more that everyone pulls together and creates that ecosystem, the more that everybody benefits. It enables me to be able to live in as beautiful and awesome a place as Ottawa and still have a competitive and world-class business and I wish that for everybody who wants to build a great business – they don’t have to leave Ottawa in order to do it.
So the benefit to Mercury Grove and to me personally is that I get to spend more time, have more exposure, to world-class entrepreneurs, talented people who can help me lift my game and help me have the same energy I would have if I were living in San Francisco or the Valley.
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