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No money and no customers in Ottawa?

My friend Peter Childs is asking some pretty fundamental questions about the Ottawa startup scene.  Twenty months ago, Peter, Ross Macleod, Craig Fitzpatrick, and David Keys imported the BarCamp idea to Ottawa and set in motion a series of unconference events across the city, which ultimately knit the Ottawa startup scene together into a community.  It was a great thing.

But as Peter points out, while we all know each other better, and are sharing more and better information among each other, Ottawa still faces challenges:

  • Our local businesses are less likely to buy from startups.  Let’s face it, the big Kahuna locally is the federal government.  If your organization can’t (a) support a few hundred thousand customers in a demanding IT environment and (b) survive the RFP and competition process, then the Feds aren’t a good customer for you. 
  • A drought of venture financing.  Ottawa’s early stage venture funds are mostly all defunct, and while angels are stepping in to fill the gaps, their pockets are simply not as large as institutional investors.  Peter observes that this is a problem everywhere, not just Ottawa.  It’s true.

We’re not Silicon Valley, despite the local conceit of describing ourselves as Silicon Valley North.  Today we’re more like the Route 128 community than Silicon Valley.  Route 128 was the heart of the American tech community in the 1960’s and 70’s, before the focus and money shifted to Silicon Valley.  Now, with its rich history of innovation and abundant local tech talent, Route 128 is busy trying to reinvent itself.  We have to do the same. 

The Camp movement is a catalyst for that renewal.  By bringing entrepreneurs together to share best practices it creates a nexus in the city where innovators can be found on a regular basis.  That draws in all of the other players at the periphery.  It’s working too!  Our camps continue to draw ever larger crowds, and are starting to engage the local financial community, for example.  I’ve seen Skypoint’s Leo Lax, and Ventures West’s Robin Axon at several of them.  Moreover, the recent venture summit in Gatineau featured a camp event in the evening for the VC community. I’m also aware of one venture fund that has recently fully invested their first fund, and are looking to raise a second fund focused on the application space (where our camps have been focused), rather than network equipment.  

This is a virtuous circle.  More participation and a bigger community leads to more successful startups and more participation and a bigger community.  As we grow, it leads to customers and a thriving financial community as well. What we need to do is to continue to network among ourselves and our compatriots in Toronto and Montreal, share best practices, and continue to build on what we’ve started.  Things will change.

And on a personal note, I’ve been largely absent from the last few Ottawa camp events.  Thank you Peter for your indirect kick in the pants.  It reminds me that I need to spend a little more time outside my office and in my community this year. 

{ 5 comments… add one }

  • Andrew October 2, 2007, 9:14 am

    Techcrunch lists daily startups getting funded, sold, merged etc., and I just don't see those type of companies in Canada, maybe I am not looking in the right place, but if you are an internet startup and your success is predicated on selling to local business, I think you have already missed the boat.

    What was the last Canadian Web 2.0 company that had millions of users from around the globe that was sold to Google? or eBay (partially invented here I realize) or Nokia? We just don't seem to be into the AJAX RoR mantra. (BubbleShare noted, it was slick)

    I blame this on our garages. They are really really cold for 9 months – this is not the situation in SV. :)

  • Steve October 2, 2007, 10:04 am

    Q – "What was the last Canadian Web 2.0 company that had millions of users from around the globe that was sold to Google?"
    A – Adscape Media… bootstrapped in Ottawa, became viable business with only one angel investor, didn't get the time of day from our local VCs, secured late-stage US VC where the founder controlled the terms, purchased by Google in Feb 2007 (terms of sale not disclosed). What do they do? They develop software tools for online gaming vendors to sell real world advertising in the virtual gaming environment. What is Google doing with this? The rumor is that the combination of Google's Maps, Directions, Business Directory, Streetscape, Sketchup and other applications are building the pieces for a virtual version of the real world where Google owns all the advertising space… every billboard, every truck that goes by, and local retailers do their online commerce through Goog. OK they were a web2 infrastructure play not a pretty interface or user brand, but nonetheless pretty darn cool local startup story IMO.

  • Andrew October 2, 2007, 12:15 pm

    @ Steve – very good, never heard of them – but I should have, which partially illustrates my point. Are there more? We need a directory/page of successful CDN startups in the Web 2.0 space, middle ware or otherwise.

  • David October 3, 2007, 4:39 am

    You can always look for projects on the RFP Database to bid on… there are even a number of Canadian projects listed at the moment. (sorry if that sounded condescending, but most of the projects are in the U.S.)

  • Steve October 3, 2007, 8:31 am

    Hi Andrew,

    I first heard about Adscape the old fashioned way, word of mouth from a colleague Ian Graham (http://klondikeconsulting.com/blog) who volunteers with me for the Ottawa eBusiness Cluster (ebusinesscluster.com). Dan Willis, founder of Adscape, presented at the Cluster last March on in-game advertising… within days of being bought.

    Another intersting web2 startup I could mention is TravelPod (bootstrap + one angel) which was acquired by Expedia in May (2 time presenter at the cluster). Travelpod was founded in 1997 as a blog, before the term was coined) for recreational and adventure travelers to keep friends & family updated. Talking with an OBJ reported at a local TiE event in August led to TravelPod getting some local media attention. As of August, TravelPod's travel IQ game was the most popular game on
    Facebook's application platform (http://www.ottawabusinessjournal.com/313095017845610.php).

    Ian also runs DemoCamp (http://barcamp.pbwiki.com/DemoCampOttawa6) which has proven itself to be a very reliable source of interesting startup activity.

    So, no single source, just local real-world social networking and a bit of cheer-leading.

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