‘Secret sauce’ behind Waterloo’s success (National Post)

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How do you build a more entrepreneurial culture in a semi-colonial, don’t-rockthe-boat country such as Canada?

That’s the question being tackled by the founders of Startup Canada, an Ottawa-based volunteer movement launched three weeks ago. They’re undertaking a cross-country tour to sound out business owners on how best to unleash Canadians’ entrepreneurial potential.

Last week, co-founders Victoria Lennox and Cyprian Szalankiewicz took their tour to what some consider the epicentre of Canadian entrepreneurship and innovation: Waterloo, Ont. As an occasional advisor to the group, I joined them for the day, eager to learn the “secret sauce” that makes the region so successful, and how it can be replicated across Canada.

First stop was a little off-mission: the official opening of the Agfa Healthcare R&D centre in the University of Waterloo’s David Johnston Research & Technology Park. While not exactly a startup, Agfa is an innovator: In 1898, it created the first X-ray plates. With this opening, the Belgian firm has consolidated 23 global R&D centres into a single $170-million investment in Waterloo.

The launch provided the first hint of Waterloo’s secret sauce. What attracted Agfa to the region was not just adjacency to one of Canada’s premier research universities, but the tireless lobbying of David Johnston, the former UW president who championed technology and entrepreneurship before he became governor-general. Lesson: Building an entrepreneurial ecosystem takes a full-court press, starting at the top.

The next stop was the Conrad Business, Entrepreneurship and Technology Centre, just a block away (concentration of force is also part of building a culture). The centre’s new academic offering, a Master’s program in Business, Entrepreneurship and Technology, aims to produce disruptive visionaries who spot opportunities and squeeze them into existing organizations. The program handles 50 students a year, half of them from outside Canada.

Then we zoomed another two blocks to the new Institute for Quantum Computing, a $100-million bet on applied research, one electron at a time. When local hero Mike Lazaridis, founder of Research In Motion Ltd., donated $100-million-plus to create Perimeter Institute for Theoretical Physics, some people suggested Waterloo’s tradition of applied learning might have been better served by a more practical gift. Result: Lazaridis endowed the IQC, which will spin out myriads of entrepreneurial opportunities – in cryptography, supercomputing and disciplines we can’t imagine. (The lesson: Never be afraid to ask for more.)

Then we toured the Accelerator Centre, an incubator for promising high-tech firms that provides not just cut-rate space but mentoring, networking and free kitchen privileges. Andrew Jackson, director of business services, shared some impressive metrics: 48 current Accelerator clients; 20 startups “graduated” to independent company status; $79-million in funding received by client companies; $43-million in revenue generated by client companies; 15,000 hours of mentorship; and more than 600 jobs created.

Walk around the bright, airy Accelerator lounge and you’ll see millionaire entrepreneurs in golf shirts “giving back” by sharing coffee and war stories with eager startup leaders. (Lesson: Good people want to collaborate; make it easy.)

At lunch, Startup Canada met with an all-star academic team: Feridun Hamdullahpur, president of the University of Waterloo, George Dixon, vice-president in research, and Tim Jackson, newly named vice-president university relations (Andrew’s brother). As a founder of venture capital firm Tech Capital Partners and a co-founder of PixStream, the iconic Waterloo tech firm snapped up by Cisco in 2001 for $369-million, Jackson could be doing other things. But the university has given him a rather broad job description: “Link the university with the social, cultural and economic development of the community, province, country and the world.” (Lesson: Act local, think big.)

Trying to parse Waterloo’s entrepreneurial roots, this brains trust offered more explanations:

Kitchener-Waterloo’s unique status as one of Ontario’s most “inland” settlements, a disadvantage that forced early settlers to be more selfreliant and innovative;

The university’s founding decision to let academics retain all rights to their inventions – attracting swarms of entrepreneurially minded academics from the get-go;

A local community spirit that sees people wanting to help each other “just because.”

The afternoon continued with visits to more hives of innovation, from UW’s VeloCity residence (a “dormcubator”), designed for students who want to build businesses between classes, to the Communitech Hub, a 30,000square-foot accelerator for digitalmedia startups in downtown Kitchener. Ian Klugman, Communitech president, told us Waterloo region welcomes three new startups a day.

One Hub resident, Michael Litt, Vidyard.com chief executive, raised capital in Silicon Valley and employs 12 people. Yet all sit happily in the Hub, cheek by jowl with two-person teams just starting out. Asked why they haven’t “graduated” yet, Litt, 25, says he enjoys meeting and mentoring eager, younger entrepreneurs. (Lesson: Entrepreneurial cultures are tough to build, but they pay back.)

Rick Spence, Financial Post · May 22, 2012

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