Something Ventured: April 6th
Insight for BC's Technology Entrepreneurs
Putting BC's Economic Future On The Back Of Ballard
"Flyin' Mother Nature's silver seat to
a new home..." - Neil Young, After The Gold Rush
I have had professors, colleagues and various technology insiders tell me that they
key to creating a fertile knowledge economy in BC is having an "anchor"
technology company. The popular thinking goes like this: Once attaining this lofty
status, the company should spin-out companies in a related field and have smart,
energetic people leave to start their own new companies.
This attracts capital, lawyers and other frightening but necessary
people in suits. The multiplier effects benefit the community as a whole and next
thing you know, you have become the next Silicon Valley. Sounds rather utopian, doesn't
What exactly does "anchor" mean? Well, for starters, the company must be
very big, and have its core technology and management expertise based here. The popular
thinking is that such a company spins out newer companies from its own strategic
decisions and from smart employees leaving to do something new. Large technology
companies do spin out new companies in Ottawa, Toronto and Seattle. And the economy
has perceptibly shifted towards knowledge type work in those places.
But in order to fundamentally change a place like Vancouver from
a wood and rocks economy to a technopolis requires a revolutionary company and a
subsequent gold rush. If you can't get entrepreneurs and technology leaders to pack
up and move to where the action is with dreams of great riches, fugedaboudit. BC's
technology scene has grown impressively over the years and it will continue to do
so. But, there just may be a chance to start the gold rush now... and in this case,
the gold is hydrogen.
We have a unique chance to ride the back of Ballard's popularity and create a huge
local industry that sets the pace for the rest of the world's alternative energy
needs. Ballard has the market cornered on hydrogen fuel cell technology and scientists.
With the help of some car manufacturers, the world is buying into the idea that this
isn't science fiction (why just this evening I saw a TV ad by Ford touting the dawn
of a new fuel age, featuring fuel cells).
The recent Fortune article on Ballard and a quick peek at
the stock price, will get many people seeing green. When a new industry is being
born, there are many opportunities for existing companies to provide materials and
infrastructure. Brand new companies will manufacture, sell and service new fuel cells
for a variety of uses.
A new use for fuel cells most certainly has not been thought of
yet. Perhaps the company that comes up with that form factor or special design improvement
may in fact become much bigger than Ballard. In the same way that Intel was born
of Fairchild, which in turn was born of Shockley Semiconductor down San Jose way,
a future entity may in fact be the big winner.
"We have a unique chance to ride the back
of Ballard's popularity and create a huge local industry that sets the pace for the
rest of the world's alternative energy needs...."
How can we ensure that the new companies are here in BC? Mike Brown and his comrades
at Ventures West have been beating this drum for a while now. Ventures West and BDC
Venture Capital invested in Ballard 10 years ago for the first time. Ballard became
one of those big hits that venture capitalists dream about. But, to Mike's credit,
he has seen this as just the beginning and is trying on a variety of fronts to create
many more Ballards in the alternative energy sector.
There are 3 main ingredients to support the fuel cell gold rush: brains, bucks and
a damn good reason to set up shop here versus any other place on the planet. The
brains in fuel cell technology are presently in Ballard and a handful of research
facilities around the globe. To try and centralize some of the research efforts in
BC, a concerted effort is underway to create a federally funded fuel cell/alternative
energy centre of excellence. This is a good role for government. Supporting basic
research in alternative energy is too expensive for any company.
As for the bucks to start businesses, there is more venture capital
in this province than there has ever been. All stages of financing are covered, including
the Western Technology
Seed Investment Fund for bare bones start-ups (Hey, one
shameless plug is allowed, OK?). With the experience of sitting on the board of Ballard,
the local VC's are tuned to the industry and offer a great network to the automotive,
electronic and utility industries.
Which brings us to the final point. What more can we do to ensure
the entrepreneurs land here? Are you listening Glen Clark? By itself, any measurable
tax break or additional research credit wouldn't make a difference. But, combining
tax incentives, both corporate and personal, with the attraction of brainpower and
generous supply of knowledgeable investment money would certainly be a powerful mix.
Add a world conference on alternative fuel (in the shiny new trade
and convention centre... oh there isn't one yet, but I digress) and some "salmon
dispute" chutzpah as part of a well-planned publicity effort and we might just
get the gold rush started. After all, you co-opted Ballard as a job creation effort
in some recent advertising...
I believe that this is too big an opportunity to miss. Please add
your thoughts to the discussion by clicking
Random Thoughts: Price Waterhouse has done a remarkable
job on a BC Technology Map that many of you have seen. For those that haven't, call
PW and get one. It offers a snapshot into the history of technology companies in
this province and how they have evolved from the universities and other companies....
Nancy Harrison, a vice-president and partner at Ventures West was
featured as one of Canada's Top Forty Under Forty in the March issue. Quite an honour
and well deserved....
Speaking of FP, did anyone notice the Branham top software company
list in last monthís magazine? Did you notice that the paper had a story on
Vancouver's booming (?) software industry that featured, among others, Pivotal Software
and Maximizer Technologies? So, let's see, the paper goes on about how these companies
are doing well (and each is doing north of $10 million in revenue) and the Branham
list of top Canadian software companies doesn't include them? Nice work, Branham,
whoever you are....
If you are interested in learning more about venture capital, I
have created an on-line guide of must see web sites and stories
that will definitely lend some insight into my business and the business of creating
companies... I also carry the link to the latest issue of The VC, a self-depreciating
comic strip poking fun at the venture capital community. http://www.upside.com/thevc/
Something Ventured is a bi-weekly column designed to supplement
the T-Net British Columbia web site with some timely, relevant and possibly irreverent
insight into the industry. I hope to share some of the perspective and trends that
I see in my role as a VC. The column is always followed by feedback (if its positive
or constructive. I'll keep the flames to myself, thanks).
What Do You Think? Talk Back To Brent