Julia Scott

Posts Tagged ‘brain drain’

How Canadians Took Silicon Valley… And Never Owned the Win

Tuesday, June 12th, 2018

[Original story here: https://thelogic.co/news/the-big-read/origin-story-canadians-in-silicon-valley/]

Lars Leckie knew C100 had arrived when he was walking down the street in downtown Toronto a few years ago, crossing an intersection while wearing his C100 jacket. A young entrepreneur stopped him mid-stride, and introduced himself. “‘It’s so great to meet someone from the C100!’” Leckie recounts the man telling him. “And I’m like, ‘I’m just in downtown Toronto, I’m not at an office where you expect to see startups,’” says Leckie. “It was pretty cool.”

Bay Area venture capitalists like Leckie, managing director at Hummer Winblad Venture Partners, rarely get that kind of open-mouthed rock-star treatment in Silicon Valley, although they are a key part of its mystique—the golden-robed men and women who, like ancient Roman emperors in the Colosseum, control pollice verso the fate of companies and the circulation of economy-altering sums of money.

But together, the charter members of C100 have inspired their own mystique, a coveted stamp of approval. C100 is a small, member-driven non-profit that connects Canadian tech entrepreneurs with the Valley’s top Canadians in the industry. Hundreds of companies apply for 48 Hours in the Valley, its signature program, each year. Only 20 are selected. The pitch session trainings and mentorship that CEOs receive—not to mention introductions to funders—have contributed to the growth of companies like Clearbanc, Frank And Oak, Kik, Wealthsimple, Tulip and Well.ca.

All told, more than $3 billion in venture capital was invested in Canada in 2017, and another $3.2 billion the year before that. C100 estimates that the funds companies with a C100 connection since 2010 easily stretches into the billions. Yet the story of Canadian excellence in the Valley is fraught—and not just by conversations at home about “brain drain,” even as Canadian entrepreneurs continue to derive a net benefit from the training they get from U.S. universities and tech jobs. The other issue is the hidden history of Canadian success itself.

In its reluctance to acknowledge the realities of the modern tech diaspora, Canadians—or the Canadian press, at any rate—have inadvertently overlooked the names and diminished the achievements of generations of Canadians who handed the baton to the tech workers transforming our digital economy.

The resulting lacuna may seem benign, but it has had real consequences for today’s tech talent, according to Canadians I spoke to in the Valley. It’s fostered a hesitation for Canada to celebrate its wins—and has affected Canadian entrepreneurs’ tendencies to see themselves playing a bigger role on the world stage.

“Americans are so good at telling the entrepreneurial story and Canadians need to improve. In the mythology of Silicon Valley, we are surrounded by the Elon Musks, the Steve Jobses. Who are those people in Canada? Most kids in high school don’t even know who Tobi Lütke is,” says Anthony Lee, a managing director at Altos Ventures and co-founder of C100, referring to the founder of Canadian e-commerce behemoth, Shopify.

People here like to say that the longer you live outside Canada, the more fiercely Canadian you become. The charter members of C100—a Who’s Who of Canadian technorati—pay for the privilege of participating in events and volunteering their time, not the other way around. Leckie defines the job as “making sure that people know Canada is kicking ass.”

He meets me at his office—a bright, wood-beamed space whose windows overlook San Francisco’s Pier 33, where tourists queue up along the ferry dock to Alcatraz. In a previous life, before attending Stanford University, Leckie was a member of the Canadian Sailing Team, who represented his home country at the Pan American Games. But the plaque he keeps in his office has nothing to do with sailing competitions. He excuses himself and comes back a minute later to show it to me: a hockey puck mounted on a trophy base, presented to Leckie by C100 to thank him for his work as an inaugural co-chair of the organization.

Yet judging by how Canadians back home perceive the diaspora, people like Leckie—not to mention Lee and his C100 co-founder Chris Albinson—could represent the face of the “brain drain” as much as any of the young engineering grads migrating down from the University of Waterloo or the University of Toronto today. They had intended to come to the Bay Area for a year or two before returning home, but ended up staying. They are giving their time (and, sometimes, money) to help Canadian companies succeed. But they are agnostic on the question of where Canadians should locate their startups, at least in the beginning stages.

“We think people ought to be in the ecosystem here, to be a part of it. If you want to be a giant in tech, you have to spend some time down here. But you don’t have to stay here,” says Lee.

Albinson cringes at “brain drain.” “It’s a term I find horrifically bad for the country,” he says. “No, we’ve always been about supporting Canadian entrepreneurs. But if you’re only doing Canadian entrepreneurship in Canada, that gets away from this idea of flow. There should be no barrier for capital, people or information.”

Some of the people I interviewed for this story live in the Bay Area, while some have returned home to Canada. But none of them say their career trajectories would have been possible had they stayed in Canada, rather than coming to the U.S. for work experience. That’s changing now, but there is too much precedent to think it will end any time soon.

The early 1990s saw a wave of Canadians pouring into the Valley on the crest of the telecom boom. Two cohorts preceded them, but their names and stories are not widely known. This is where the details get sketchy, owing to a lack of published materials. It’s hard to piece together a narrative from the paucity of recorded histories: unlike the volumes of work on Americans (including American immigrants) and their successive technologies, the body of information on Canadian tech achievers is, for the most part, paper-thin.

I’m not the only one who’s noticed, either. “I’ve not come across an historian of Canadian technology. If you find said person, please share their name with me,” John Stackhouse tells me. The former editor-in-chief of The Globe and Mail now works for RBC, and is writing a book on the Canadian diaspora. He helped a bit with the following history.

Canadians at U.S. engineering schools in the ‘40s and ‘50s undertook advanced studies and research as part of the Cold War nuclear academic arms race. Starting in the ‘60s, Canadians are thought to have worked at companies like Fairchild Semiconductor, one of the early chipmakers that helped Silicon Valley get its name.

In subsequent years, Canadians were among the engineers who developed software programs, modems and routers at companies on both sides of the border. The University of Waterloo’s computer science program was established in 1964, soon becoming one of the biggest of its kind in the world, catching the eye of companies like IBM. Around that time, U.S. companies started hiring Waterloo grads, a tradition that continues today.

Some important names come up in conversations that track the origin story of Canadians in the Valley—people of Canadian descent whom some of today’s tech cohort have claimed as their forebears. Cecil Green, co-founder of Texas Instruments, was born in England and raised in Vancouver, where he studied at the University of British Columbia in the ‘20s. His financial gift helped build the university’s Green College and a visiting professorship program. Gururaj “Desh” Deshpande is an Indian immigrant who studied at the University of New Brunswick (UNB) and Queen’s University in the late ‘70s. He worked at a Motorola subsidiary in Toronto and later co-founded Sycamore Networks, one of the biggest IPOs of the telecoms era, and endowed an innovation centre at UNB. And then there’s James Gosling, the father of the Java computing language, who was born and raised in Calgary and worked at Sun Microsystems for nearly three decades before moving on to Oracle, Google and Amazon Web Services.

By the ‘90s, Canadians were thick on the ground in early computer software, graphic design, telecoms and mobile. And then they started climbing the masts of the Silicon Valley flagships: Shaan Pruden at Apple, Jeff Skoll at eBay, Don Listwin and Rob Lloyd at Cisco, Jeff Mallett at Yahoo, Doug Roseborough at Oracle and Rob Burgess at Macromedia (now Adobe). The list really does go on—and that’s before you get to today’s top Canadians who occupy the upper ranks at marquee companies like Facebook, Dropbox, Uber, Google, Salesforce, Zynga and Slack.

Silicon Valley Canadians of the late ‘90s and early aughts didn’t have a lot of ways to find each other. There was—and still is—the delightfully-named Digital Moose Lounge, which hosts social gatherings like Canada Day events. Aside from that, people were mostly dispersed, ending up camouflaged among American colleagues at work. Later, when LinkedIn came along, Leckie created a “Canadians in the Bay Area” LinkedIn group, and Canadians started self-identifying. That helped form the basis for C100’s early outreach.

The Canadian ability to blend in has made it surprisingly difficult to pin a number on the population of expats in the Bay Area; various estimates peg it at somewhere between 250,000 and 350,000. Not even Rana Sarkar, consul general of Canada in San Francisco and Silicon Valley, knows for sure. He says, “A good chunk may have dual passports and…are inadvertent Canadians: either their parents are Canadian, or they moved down here at a young age or they’re laying low and have married an American.”

But the central question of what constitutes a Canadian is an interesting one, he reckons. What about people like Deshpande and Musk, who passed through Canada and occasionally reference their maple-leaf roots? “If someone’s mom or dad is a Canadian and they’ve only visited the country a few times, does that mean they’re a Canadian of interest?” Sarkar asks. If the answer is yes, the narrative of the Canadian diaspora will need to be expanded—and many in the Valley think Canada will the better for it.

There’s an expression Albinson, the C100 co-founder, uses often: “When the United States catches a cold, Canada catches the flu.” In 2008, Canada’s tech sector had a bad flu in the midst of the financial crisis. “Canada, as an innovation economy, was on death’s door,” he recalls. “There was no venture capital. There was no angel money. And all over the country, entrepreneurs were losing their companies. Nortel was dead, Research in Motion [known as BlackBerry] was wobbly.”

It took a crisis for Canadians of the Valley to see themselves as a collective asset.

In addition to co-founding C100, Albinson is co-founder of Founders Circle and Panorama Capital. A Kingston boy, he was always intrigued by a painting of the Golden Gate Bridge that his grandmother brought home from a trip to San Francisco. He dislikes hierarchy and the East Coast. And he loves the weather and beauty of his adopted home of Larkspur, a little town in Marin County, Calif., where he meets me in the garden patio of a restaurant with fountains and birdsong.

Back in 2002, when he was a venture capitalist at JP Morgan Partners, Albinson was part of a trip to India designed to showcase the country’s goal of becoming a technology leader by 2020. In Delhi, he witnessed the benefits of viewing Indian expatriates not as a lost liability but rather as an asset. The Indus Entrepreneurs (TiE) is a Silicon Valley-based non-profit that connects entrepreneurs with South Asian roots around the world with funding, networking, education and mentorship. Founded in 1992, TiE became a model for C100 to emulate in building its own support ecosystem for expats.

By contrast, in 2008, Canada had few startup incubators. And it had a tax law requirement that made foreign venture funding of Canadian startups so difficult that investors were skipping the country altogether—Crunchbase called it “a leper colony for tech entrepreneurs.” Canada eliminated the tax section in 2010, after lobbying by stakeholders like C100, says Albinson.

“We realized the Canadian environment was very fractured,” says Albinson. “One of the reasons why Canada wasn’t having that much success wasn’t that the entrepreneurs weren’t good, but because the ecosystem around them was a mess.”

Albinson and Lee hatched C100 together just minutes after first meeting at an event in Palo Alto sponsored by the Canadian government. The consul general wanted to recruit them to a business advisory board to stimulate industry connections, but they had a better idea.

In January 2009, Albinson stood in front of the 85 most successful Canadians in a conference room on Sand Hill Road, the so-called “Wall Street of the West” in Menlo Park, Calif.. He cleared his throat and issued a call to action on behalf of their homeland. “I looked them in the eye and said, ‘You’ve had the privilege of a passport, you’ve had an amazing education. Because you’re in this room, you’ve had a lot of success down here. You have a responsibility. We want to start this. You owe it to these entrepreneurs to do this.’”

Lee says they felt inspired by Own the Podium, the national campaign (now a non-profit) to invest in Canadian winter sports that helped make Canada the top gold-medal finisher at the 2010 Vancouver Olympics. “It was very un-Canadian to say, ‘We’re going to win,’” says Lee, “and I think it was kind of a turning point for the Canadian psyche” (Later, C100 created its own video homage to Own the Podium with a Silicon Valley twist: “It’s about claiming the podium as ours, painting it red and white, crushing it and sprinkling the dust into the eyes of our competitors”).

Albinson and Lee weren’t sure if their pitch would work. It was a novel ask, and people inside the room had no reason to contribute, other than their patriotism. “What I didn’t know was, did the thing that burns inside me about being Canadian, was that in everybody?” says Albinson.

Nearly everyone took out a pen and wrote a cheque for US$850.

What a difference a decade makes. As Canada’s tech sector gains traction, government support and major venture capital from south of the border, the freshly-laid infrastructure convinces top Canadians in the Valley that the growth trend will accelerate. It’s when someone like Montreal native Patrick Pichette moves on from his role as CFO at Google and turns venture capitalist, joining iNovia with the express purpose of elevating Canada’s best startups. Or when homegrown Hootsuite hero Ryan Holmes uses his success to build a national entrepreneurship accelerator to help youth in Canada launch the next big thing.

In 2017, Canadian companies comprised 14 per cent of the Deloitte Technology Fast 500, which tracks the fastest-growing tech companies in North America, up roughly three per cent from the year before.

Today, it’s U.S. venture firms that are working to get in front of Canadian entrepreneurs. Andrew D’Souza, co-founder and CEO of fintech service company Clearbanc, says he personally hears from at least one U.S. venture capitalist a week, usually from San Francisco or New York, asking him for advice on whom they ought to be meeting with in Toronto. “People are starting to wake up and realize there’s great talent and great companies built here,” he says.

It’s no longer strictly a requirement for Canadian entrepreneurs to knock on Silicon Valley doors for Series A funding, or even to base their companies in the Bay Area, says D’Souza. But you do need a “good connection” in the Valley, if only to level-set with the competition. “In Canada it’s very easy to be a big deal before you’ve accomplished very much. You can get in The Globe and Mail and you can get on TV…. It’s helpful to be able to look up and realize you’re actually competing on a global scale.” He co-founded Clearbanc in San Francisco in 2015, but a year later, it was clear the conditions were right for a move to Toronto. Now he recruits from both countries.

Albinson talks about being Canadian as though it were a superpower. “You tell people, ‘I’m Canadian,’ and suddenly you’re into three levels of trust. You need to be very, very careful with that. That’s one of the things I tell the C100 folks: we have this amplification that we’ve been entrusted with, whether we know it or not.”

More than a decade after Canada’s telecoms era sputtered, the country’s tech economy has all the ingredients it needs to dominate. What’s missing right now may not be something C100 can provide.

“It’s almost just a matter of confidence,” says Lee. “One thing I’ve noticed is that Canadians working in any industry will pay more attention to Canadians outside the country. Canadians have always needed outside validation. It’s always been part of the culture.”

He pauses. “Part of what we’re trying to say is, ‘Stop it, already.’”

Americans don’t need to name their success stories constantly because they’re all sewn into the mythology. They’ve managed to make all their disparate stories into American ones—to give them an inevitability. But in this case, history is being made in real time by Canadians at home and abroad in an industry that has little narrative of its own.

Canadians will recall getting intermittent history lessons on TV in the ‘90s by way of “Heritage Minutes”— those iconic national video clips depicting important Canadian moments. They’re how we learned about Canada’s contributions to basketball, Superman and even the real-life bear that was said to have inspired Winnie the Pooh. But why not the father of Java?

“I grew up during the Canadian iconography era,” says Leckie, referring to those film clips. “It’s always been my goal that Canadian tech would have that moment in the sun.”

If that happens, it will need to include the Silicon Valley diaspora.

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