What's going on in Toronto tech?
An exciting time for Toronto in the press this year, yes NBA championship city, and of course the annual TIFF (Toronto International Film Festival going on right now!), but this blog post is about the popularity of Toronto Canada as a tech centre (Silicon Valley North?).
“The start-up scene in Toronto is booming. Since 2013, VC funding and investment in start-ups has increased by over 150%, with over 4,100 tech start-ups currently active in the Greater Toronto Area. Across Canada, 2018 was a record year for investment, with VC funding reaching an all-time high at US$2.7 billion.
Canada is home to Shopify, HootSuite, Wattpad, Kik, 500px, Element AI and Cloudflare, to name a small few of the unicorns and massive start-up” successes that have come from the Great White North.” https://medium.com/@WebSummitHQ/is-toronto-the-new-silicon-valley-3b8047ce32e3
The CBRE’s 2018 North American Scoring Tech Talent report they referred to tells how Toronto added 82,100 hi-tech jobs between 2012 and 2017, highest among North American cities, growing the talent pool by 50% to 240,000.
Toronto is experiencing a “brain gain” in the past few years, during my early career I watched the opposite as a “brain drain” had talent leaving the area. The graduate supply of technical talent is lower than the job demand. The CBRE 2018 report also shows how Toronto is one of the highest talent city areas combined with low labour costs for North America (see the full CBRE’s chart directly) which enhances the attraction.
Word is getting out, there is a lot of international press about the Toronto situation, including new investments to make parts of Toronto a trial on new city-living technologies. See these links to the Financial Times, Bloomberg,… and innovation growth isn’t without traditional governance growing pains as Google is finding out CNN.
I’d suggest the nitrous oxide boost/accelerant for Toronto is tied to Artificial Intelligence breakthroughs and Machine Learning capabilities all centred on Toronto. Toronto has developed and attracted top computer scientists in AI/ML (deep learning). Obviously there’s Doctor Geoffrey Hinton, the “godfather of deep learning,” who is well known as the pioneer of neural nets, and currently Emeritus Professor at the University of Toronto and an Engineering Fellow at Google. See the Wired 100 list of global influencers. Fascinating that his PhD and expertise came from Psychology which made the breakthrough when applied to AI just as the AI world seemed stuck.
In my past 7 years at TD Bank, an interesting thing happened related to start-ups. TD acquired Layer 6 in January 2018, but some of the founders (including some from The Vector Institute) left earlier this year to reform their own VC (venture capital) organization; many of them studied under Dr. Hinton. They've created a $471MM AI venture fund backed by TD Bank, CPPIB, PSP Investments, and Wittington Investments (run by Canada’s George Weston family). The head is Jordan Jacobs who is reforming "Radical Ventures", he brought Benji Sucher as his partner and they attracted a super resource to help them-- Salim Teja (I worked as the IT Director in one of Salim’s earliest dot.com companies after I had left Oracle Corp). Salim had been running chunks of Toronto's incubator "MaRS Discovery District" for the past 6 years or so, he's now Radical's partner and general manager. Another fascinating TD "inner circle" is that former TD Bank CEO Ed Clark joined Radical as a Partner.
If you haven't purchased a condo in the core of downtown Toronto, you may want to get one soon before even more of the tech community shows up! (especially if you can get one on, or close to, the Toronto P.A.T.H.)
The Start-up Experience
If you haven't experienced a startup (dot.com), it can be very exciting, but you must be adaptable (the only constant is constant change and learning). My first day on the job at Salim's original company Mobshop (they had achieved $45MM third round VC funding), the test was to build a brand new Ikea file drawer system on wheels/casters – while most everyone watched to see if you could handle it (and timed it). It became your file drawers, and your desk (as everyone's) was a plain wooden door laying across 2 wooden work horses – I must admit it gave a lot of desk space! The truly amazing thing was the strange co-workers who wanted so very badly to be Silicon Valley San Francisco-like that even in the middle of winter most of them wore sandals and cut-offs within the office in cold Toronto. It didn't matter to them at out in San Francisco they didn't wear that in winter. Mobshop met all the criteria for a dot.com, we had a San Francisco head quarters zip code (the business leaders were there), the tech development group was in Toronto, and we used Sun Microsystems and Oracle technologies. Yes, we had the start-up perks such as food provided and games room etc etc. and best of all - minimal office politics! In the end I had to recruit over 70 developers in Toronto within a few months, get Oracle ERP spec'd – procured – and core financials up and running within 90 days to differentiate our dot.com with an industrial-grade ERP transaction back-end, and get more Sun Microsystems servers up and running in a co-location data centre.
Great fun, Mobshop had Marc Andreessen as a funder and board member (he's the co-founder of Netscape, and had co-authored the Mosaic web browser) and we were up against a dot-com start-up funded by Paul Allen (the Microsoft co-founder) mercata.com.
What I learned following a start-up experience can be summed up by quoting Rupert Murdoch (News Corp), "Build a reputation for openness, honesty, and good ethics in a company. You must have that and do everything you can to stamp out any politics that might be going on behind you."
More next week (Fridays) about the Toronto start-up and Venture Capital environment and their founders and drivers…