Championship: Don’t count Ottawa out

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This is the 25th 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.

By Francis Moran and Leo Valiquette

Scott Annan is no stranger to the Ottawa startup community. The founder of software development and web consultancy Mercury Grove and social utility Network Hippo fits the mould of what we describe as a champion. In addition to his regular involvement with various organizations and events around town that help nascent entrepreneurs get their technology to market, he hosts DemoCamp and opens up Mercury Grove’s HQ as a co-working space.

A couple of weeks ago, Scott announced that he and a host of other stakeholders in the Ottawa technology community will launch this fall a new incubator and accelerator fund that will provide up to $25,000 in seed financing to eligible participants. Five to 10 startups will be accepted into the first intake of the four-month program, which will operate out of the Mercury Grove office.

The accelerator is taking its inspiration from similar initiatives, such as Year One Labs in Montreal, Y Combinator in Silicon Valley and TechStars.( A few weeks back we got great insight into what makes TechStars tick in an interview with Nicole Glaros.) However, what makes this accelerator unique, according to Scott, is its “hyper local focus” in which participants must be located in this region.

We recently caught up with Scott to talk about why he is doing this, why Ottawa needs it and how the city once touted as Silicon Valley North has a lot more going for it than some might think.

What will you be doing with this new accelerator fund?

We’re creating a local accelerator fund where we’ll be providing mentorship, a strong network, seed funding and office space for eight to 10 startups per year. We’ll provide funding of up to $25,000 for startups in order to help them develop a minimum viable product or prototype that can be taken to market. The program lasts four months.

Mercury Grove has already been active in supporting the startup community. What made you decide to take it to this next level?

There were a couple of different things. First, we wanted to formalize some of the things we were already doing within the city. Second, there’re a lot of talented entrepreneurs, post-entrepreneurs in this city and we really wanted to create a strong local network where they can support each other as well as up-and-coming talent. Ottawa’s got a heritage of bootstrapping web and mobile startups and we think if we can get the rest of the larger community involved we can accelerate that initial process in order to take companies to, if not profitability, then the next stage a lot faster.

How did you go about validating this idea to ensure it was needed and will work in the Ottawa market?

I think it’s important to note that this isn’t a zero sum game. The more people who are doing anything for entrepreneurs is a benefit. So this isn’t a question of other things not working or there not already being a strong community …

There’s a terrible perception that we are not creating great products or companies in Ottawa, which just isn’t true, but there are islands of entrepreneurs in lots of different areas … we are seeing a large appetite for entrepreneurship within the city and that’s evidenced by things like DemoCamp, Fresh Founders, Gen Y, the Ottawa Network and OCRI. So this isn’t a question of saying there’s latent or nascent opportunity, but that there’s lots of energy right now and with a focus in this space I think we can have a really successful accelerator program.

We’ve got TechStars and Y Combinator, which has been around for a long time, and a number of other accelerators in North America as well as Europe and … all have a model similar to the one we’re proposing. The key difference is that we’re focusing exclusively on the Ottawa market. What you see with a lot of accelerators is more of a university model, where people are choosing the university they want to go to for their accelerated training. What we can attest to is that Ottawa has a very strong software heritage, a lot of experience in building world-class businesses and software in this city …. in a smaller ecosystem we have a lot of the things that other cities just don’t have.

So we are looking at more of a hyper-local model and saying you don’t have to leave Ottawa in order to get the same kinds of training and play on the world stage … so this is really a local play …

Entrepreneurs are not all born, they’re made and when you look at Silicon Valley, they’ve got an ecosystem that supports entrepreneurs, that supports entrepreneurship. People get excited about entrepreneurship and I think a lot of that success comes from that community. If we create that same kind of community here in Ottawa I think it can generate a lot more successes. It doesn’t mean that we have to be exporting our technology and our entrepreneurs.

I know you are not yet ready to name your partners, but can you tell me in general terms where the support for this is coming from?

We’ve got two different sides. From an involvement and making the program a success as far as operating it, finding the talent, supporting the talent, it’s strong with entrepreneurs and the service sector – people who are already actively involved in the community and they’re really excited to help ensure the program is successful.

From a financial standpoint, it’s a cross mix of large institutional, VC, angel, private and some government as well. That mix is important, not just for the funds to be successful, but for the investors; they want to see that it is not too strongly swayed in any one direction. The institutional and public want to see private investors and vice versa.

We’ll conclude next week with thoughts on why this kind of initiate benefits everyone involved, what are the key ingredients for it to be successful, and what roles various private and public sector stakeholders must play.

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