Something Ventured: August 1, 1998
Insight For BC Technology Entrepreneurs
By Brent Holliday
Working In The Silicon Valley, Eh?
"So the people of the valley
Sent a message up the hill,
Asking for the buried treasure,
Tons of gold for which they'd kill." - Lambert-Potter, One Tin Soldier
I seem to have struck a nerve with the theme of my last two columns (June 29 - It's Not About The Money...Really and July 6 - Attracting High Tech Workers To BC). I received lots of feedback on what does and does not motivate technology workers in BC. I also got my first flames (see below). Being flamed helps get the juices going. It's not like a VC to love a good disagreement even if one of the dissenters was picking apart my grammar! I shot him back a dangling participle that would make Harbrace wince. But I digress.
I want to go back to the theme for one last week: The BIGGEST problem facing early stage technology companies in BC is finding and keeping top engineering/programming and management talent. We have been through the underlying specific issues around this problem. I even dared to suggest some short and long-term solutions that were not related to the taxation and salary issues (But for the love of God, could we do something about the loonie! It may be helping exports, but try bringing in a US worker his/her salary demands are going up by the minute).
I reflected on the situation as I returned to the self-professed center of the universe for a couple of weeks (Toronto, for those of you that are not from there). I was kept quite busy driving those breathtaking, scenic eight lane Ontario highways that all begin with "four-oh". Over a cup of Tim Horton's and a squishy donut, I decided that I needed to hear from some ex-pats in the Silicon Valley. Was the grass really greener down there? What would these Canadians working down in the real center of the technology universe think about these issues? Could we ever get them back?
I did a rather un-scientific poll of five Canadians working in technology companies in the Valley. Fortunately, they had read my columns and were prepared to shred some of my hypotheses. One is a CEO. Another is a VP equivalent. Two are project leaders and one is an experienced programmer/designer. The longest any of them have been there is 3 years, the shortest, only 1 month. Three have families and kids. Two are swinging single youngsters. I thought it was a good cross-section.
I asked them why they left Canadian high-tech jobs to go down there and I'm sad to report that each and every one of them said more money. Ouch. Of course, it's what I expected to hear, but I am afraid to say it too loudly. They all said that more opportunities for career advancement was a big draw. Three of the five specifically mentioned equity participation being a key factor. They all had experience in Canada where they felt that they were not getting enough of the pie. And lastly, to a man, they all gloated about the lower taxes, both income and sales.
The lure of the Valley is summed up with this quote: "I could claim that I had no intentions of leaving Canada, but after reading the 100th story of people getting rich in Silicon Valley, I knew it was only a matter of time."
Regarding the complete culture of technology and capitalism, "I keep hearing from different sources the oft repeated phrase "Capitalism Works". Whether it is in relation to employees receiving stock options or the reduced tax rates."
There seems to be a relentless focus on winning big with equity amongst most people in the Valley. "You work at one place build up experience and personal worth as an employee and move on. Each time moving up the ladder in terms of responsibility and remuneration. The goal of this game plan is to get your self into a position where you can get the biggest slice of the pie possible when the payoff comes."
The result of the prevailing mindset is this: "Everyone seems to change jobs every couple of years (I heard that there are 140,000 technology job vacancies in the Bay Area. That is more than the total number of unemployed people in Vancouver)."
Now for the bad news: I asked them what they don't like about living there. All of them were shocked by the differences in societal values. They all mentioned traffic as being horrendous. Some mentioned that the cost of living, especially real estate, almost negated the gains in salary. The biggest complainers (i.e. that had the most to say negatively) were the family men.
Regarding real estate, "The real estate market is out of this world and makes BC look affordable by comparison. The only option is to rent. Unlike most guys I am not single and have a family. So I have been looking for something with at least 2 bedrooms near a decent school. I am looking at paying close to half my monthly salary for rent."
From the "so-this-why-so-many-Americans-are-fat" file, "The only things that are cheaper here are fast food and generic liquor. So if I could figure out how to raise a family on a steady diet of Jack in The Box and No-Name White Rum I would be miles ahead."
But seriously, you have to consider observations like this one: "If I had a choice I would prefer not to live in Silicon Valley. There really is no sense of community. It would be an easy adjustment for someone from Richmond. It's all flat bedroom communities connected by freeways, expressways, mini-malls and factory outlets. There are no neighborhoods to speak of."
Crime is often cited as a reason to stay away from urban USA. Here is an anecdote from one respondent; "In my entire life in Canada I don't think I've ever seen someone having the police put handcuffs on them (well maybe outside some bar late at night). I've been here 16 months and have seen it happen, on the side of the road, 3 times. Somewhat disconcerting. And these have been in good parts of town. But I haven't been in a gun fight yet."
To summarize the common complaints: "I get up, go to work, come home, go to sleep, get up, go to work. The pace here is dramatic. You have to keep it up if I ever expect to get above the noise level. Replacing my home in Calgary would cost approximately $2M US here (it was $380k Cdn). I worry that my children will be exposed to violence and moral standards that I would prefer they weren't. I spend way too much time in traffic. THERE ARE PEOPLE EVERYWHERE."
So, I asked them what it would take to bring them back to Canada. Unfortunately, it appears that the negatives about living there do not outweigh the gold rush fever. Each of the respondents said that they wanted to see the opportunities develop first. Of course, if they don't get Green Cards, Uncle Sam may ask them to return.
Having said that he would stick it out, one felt that he needed to get up on a soap box about making BC more attractive a place to work: "There is nothing here intellectually or materially that is not available in BC. I don't think that people here are any smarter nor have any unique insights into doing business. It's just a matter of economics and attitude. Especially attitude."
I'd like to thank Greg, David, Bimal, Andrew and Rob for their participation and insight. Go ahead. Make a few million. Then bring it back here and help us change our "attitude".
I took a side trip to Ottawa while I was in Onterrible. I did notice something interesting in Ottawa. Really. Cadence (electronic design software leader) had a research facility there. Apparently some other Silicon Valley companies were doing the same. Hmmmm. Is this the equivalent of the TV and movie industry shooting more in Canada because of the cost savings?
I have always thought that a good way to keep talented engineers working in Canada would be to have research or design/development offices of big name companies here. You would get the benefits of remaining in Canada, be working on the cutting edge with US counterparts and get stock options with proven tech companies. There is no immediate benefit for me, the VC looking for the new companies. In the longer term, these people would take their experience out to new pastures and then I would hope they knock on my door.
Jesse Berst listed his top 10 jobs of the next century and 5 jobs to avoid at his web site While he states the obvious, he also gives some good links to tech career oriented sites.
Response From Last Week's Column:
I actually got a bit swamped. For those of you that sent requests for getting hired, please understand that I am not a placement professional. Sure, I know a few places with openings, but my world is with earlier stage companies. Try the employment pages on this site for job postings or call a recruiter.
Here is a quick selection of the more provocative responses:
I really enjoyed this column - though it also pushed the barb in my side a bit deeper. Imagine this: A director-level sales & marketing executive with ten years' experience in software & other high tech ventures, including European & U.S experience suddenly lands on BC's doorstep - relocated free-of-charge, thanks to spouse. Sound like an up and coming tech company's dream.
You would think so, but since the executive is American, firms get skittish about "immigration issues" and take a pass. Odd, considering NAFTA holds the door wide open. I don't believe they're xenophobic - just leery of any cost & time associated with involving an immigration lawyer.
I believe if BC tech firms truly want to grow, they're going to have to take that leap and open up to the outside - imagine how many talented ENGINEERS they could be missing out on. I've only been here a short time, but I don't see the support coming from provincial government to help smaller companies recruit this kind of talent hassle-free? Am I wrong?
- Aileen, assuming that you were a reasonable fit with some tech company, the immigration issue sounds lame. Most of the early stage companies that I work with are not leery of these issues and, in fact, take much more time and cost than I generally like them to when they go out and hire senior people. Perhaps you should call a local technology recruiter, like Corporate Recruiters, and see if they know of this problem. As for support from the provincial government for recruiting, do you count the highest personal tax rate in Canada as support?
Your challenge to business and govt is clear, and I completely agree with you. Found the article especially interesting since we're currently preparing a PR campaign to raise awareness of Glenayre in BC as our staffing needs reach record levels.
- Good luck Darren. Saw the TV bit on CBC featuring Glenayre, just last week. It had a nice little threat about leaving BC if the workers are not hereÖ
I am working with Russell and DuMoulin, not as a lawyer (because I am not) but as a business advisor helping the firm move forward with its technology practice. I founded and grew a software company in Ontario - we grew from 2 to 250 in seven years. Over that period we saw ever increasing difficulty hiring in the competitive market - which was not local but North America, and in fact Worldwide. The hot buttons, no matter the age group, were option plans and lifestyle. The option plan was a relatively easy one to match. On the lifestyle side we chose that wherever practical we would let the employee decide where they wanted to live, as long as they didn't mind travelling to wherever we needed them, when we needed them there. We opened an office in Florida just because we found 5 programmers there that didn't want to leave. We created a second development centre in Boston to capitalize on MIT. The oddest one we did was hire people from Nottingham England and move them to Toronto, and then move others from Toronto to an office we opened in Nottingham - all based on skill set and lifestyle desire. The moral of all this is flexibility will win the day. Technology offers us a tremendous opportunity to try new things in new ways. There are no borders anymore.
- I think that your example is instructive to some of the companies hiring here. You have to be creative. But working with teams spread all over the world is not for everyone. Some managers prefer to see their staff every day.
What Do You Think? Talk Back To Brent Holliday
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).
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