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Something Ventured:
Dec 10th


Insight For BC Technology Entrepreneurs

By Brent Holliday

And I Feel Fine

"It's the end of the world as we know it...
 And I feel fine".-
REM, The End of The World

Since my next column is due Christmas Eve (an unlikely time to get published), I thought I might not have another chance to publish in this millennium.  So I racked my brain to come up with a worthy column that would match the magnitude and significance of a thousand years of human struggle and advances that have brought us from the Dark Ages to the world of instant worldwide communication, leaving us on the dawn of a new and wondrous thousand years of human progress.  And I think I pulled something.  I got a real bad headache.

Instead, you get a short column with a couple of loosely associated observations because my head really does hurt and I’ve got to get up in 6 hours and talk to the Vancouver Board of Trade.

Actually, the millennium does kind of give me the chills.  It’s only a date.  Nothing really changes.  That’s why I have a gas generator and lots of canned tuna.  (More on the Y2K thing in a minute).  If you get a bit sentimental and start to really think of the significance, it really is a great time to be alive.  I remember calculating how old I’d be on Jan 1, 2000 when I was little.  It’s always kind of stuck in my mind as the end of one calendar and the beginning of another.

In trying to appreciate the speed at which we have advanced technology over the last 1000 years, the only analogy I could come up with is the THX sound effect at the beginning of the movie.  You, know the one where the sound is imperceptible and it slowly grows and grows until it is shaking your seat with the final rib rattling tone. The noise is incredible in technology now and the geometric progression of technical advances continues unabated.  I don’t want to get all Star Trek on you, but what happens over the next 20 years?  Does it slow?  Or do we just keep going until we all become robots or some other Arthur C. Clarke ending?  Thankfully, for you and for me, I’m not going to make predictions.  I am just a fan of all of this technology and where it might take us.  I am incredibly excited about what happens next.

I spent the entire year avoiding the Y2K bug topic because just about everybody else was talking about it.  Depending on who you are and what you believe, the Y2K bug is one of three things:

A computer glitch that can cause havoc in everything from ATMs to electrical power to nuclear missiles

A great excuse to go out and blow up some transmission stations because you are a sociopath or a terrorist, causing real power outages and looting etc.

The end of the world as prophesied by your religious beliefs

Now, I have a big problem with 3.  You know the e-mail that circulates this time of year, written by an engineer, that calculates that Santa would be a molten pile of goo from the heat of the air friction he would endure delivering all of the gifts, yada, yada, yada…  Well, how, exactly, are the Four Horsemen of the Apocalypse going to deal with the time zone issue.  When do they torch the earth, leaving only the good people behind to live in utopian splendor because they believed?  Is it Greenwich Mean time?  Or do they get us in Vancouver while we are still eating breakfast on the 31st, because it’s 2000 in New Zealand?  I’m actually looking forward to having CNN on all day on the 31st, so that we here in the far west can watch if any Y2K horror breaks out due to computer glitches or religious fire and brimstone anywhere else on the Earth. At least we can run for the shelters in time.

The ironic thing about being a smart ass about Y2K on an on-line news site is that if any of 1,2 or 3 affects us direly in a few weeks, my column will simply disappear.  Gone.  Poof!  What column?  Of course I took this thing seriously!

Speaking of seriously, you should all make sure that your computer survives the date change before the stores close on the 31st.  All of the major computer brands have web sites that tell you if there are any problems.  Other than that, I believe that we will all wake up on Jan 1, 2000 and start dealing with our lives like we are in December 1999.  It might be a new calendar and a new millennium, but we are still carrying a lot of baggage from the previous one. 

As for Vancouver and technology here, I am bullish.  Despite the rants and the call to action (read below), I am really looking forward to 2000 and beyond in this area.  I’ll say it again, it’s a great time to be alive.

Responses From Last Column:

There was an overwhelming torrent of responses (OK, half a dozen) to my rant, “Get IT or Get Out” aimed at showing the Canadian governments that Sweden and Australia, two countries in a similar state to Canada economically, have made great pains to embrace the new economy.  Our guys are asleep at the switch.

I have printed some excellent responses below and tried to address the questions.  One theme, mentioned in the second letter below, was, “Who can I e-mail or fax or mail to complain?”  I used to write the government once a month with a little environmental group in North Vancouver called 20/20 Vision.  I have response letters from Brian Mulroney, Marcel Masse and Jean Chretien (How much could I get for them on eBay?).  It’s a neat experience to actually feel like they listened to you, if only for the length of time it took to wave their pen over you letter. Before we get to the letters, here are some addresses:

House of Commons
Parliament Buildings
Ottawa, Ontario
K1A 0A6  

(You can address any Member of Parliament and mail it free to the address above.  Yup, the government and Santa Claus don’t require a stamp.  Oh, and don’t forget to put Rt. Honorable in front of Jean and Honorable in front of any cabinet minister’s name.  The snooty SOBs would probably ignore you if you didn’t address them properly!  One last thing… as passionate as you may be, it’s not a good idea to mention guns, bombs or Eskimo carvings in the letter.)

E-mail is not their preferred route I’ve been told.  See how long they take to respond:
PM@pm.gc.ca  {E-mail the big guy!  Tell him to re-think running again.  Tell him that you beg to differ with his “Brain Drain is a Myth” statement.}

Copps.S@parl.gc.ca {Give her a piece of your mind about culture and Canadian heritage and its relevance in a wired world, but first butter her up with the fact that the Ti-cats won the Grey Cup}}

Manley.J@parl.gc.ca  {John is a programmer.  He should have a clue.  Tell him to GET OUT of the investing business and start promoting Canadian tech around the world, effectively} 

Martin.P@parl.gc.ca  {Paul is not sure if meaningful tax cuts should be in the next budget}

Locally:

Chan.R@parl.gc.ca  Raymond Chan is Richmond Cummins.J@parl.gc.ca  John Cummins is Delta and South Richmond

Davies.L@parl.gc.ca Libby Davies is Vancouver East
(613) 995-2962 is Herb Dhaliwal’s fax (no e-mail), showing you people in tech laden Burnaby South just how technically with it your representative is!

Forseth.P@parl.gc.ca Paul Forseth is New West, Coquitlam and Burnaby

Fry.H@parl.gc.ca Hedy Fry is Vancouver Centre

McWhinney.T@parl.gc.ca Ted McWhinney is Vancouver Quadra

Robinson.S@parl.gc.ca Svend (God should be struck from the constitution) Robinson is Burnaby-Douglas

The rest can be looked up at

http://www.parl.gc.ca/36/senmemb/house/
MemberList.asp?ProvCd=BC&Lang=E&Home=SenMemb

 

Brent,
Great article.  I've been trying to stop whining and become more active in changing things instead of merely complaining about them.  My track record so far:

Strike One.  I sat on a provincial government sponsored panel to look into the tax treatment of Individual Stock Options (ISO's).  I was shocked to hear that the money generated by ISO's in fact "belonged to the government" and they couldn't reduce taxes or this would entail "losing some of THEIR" revenue.  I foolishly believed we worked to add value to our companies and then SHARED some of our success with government.  My erroneous views were swiftly corrected.

Many other companies participated and all recommended deep cuts to the taxation of ISO's.  The common theme - if B.C. must have a high income tax rate (and this is likely to take time to change), give the province's companies some recruiting advantage over our neighbors.  The premise is staggeringly simple.  IF a Company is successful, then the ISO's are worth something (i.e. you need not worry about unsuccessful ones - this is after all, income at risk, not guaranteed income); the company grows, employs more workers who pay more taxes, the Company pays greater payroll taxes, the investors make money and pay more taxes - you get the theme.  It turns out that the problem with this is: they don't want the Vancouver Sun to report that someone in a hugely successful endeavor made millions from low taxed

options; apparently this would look bad.  They'd be a hero in the U.S.  As we all know, the odds of doing this in the business world are the same as winning the lottery.  We all know how that's reported in the paper and what tax is paid on the winnings; the difference is the Company creates something lasting in the process.

Strike Two.  I volunteered to sit on the Canadian Biotechnology Advisory Committee.  This is an "arms-length committee ... to advise Ministers, raise public awareness and engage Canadians in an open and transparent dialogue on biotechnology."   The panel members were selected on the "basis of individual merit" according to Minister Manley and I didn't cut it.  That's fine.  As a former practicing physician and the head of one Canada's 10 largest publicly traded health sciences companies, I looked forward to reading the backgrounds of the 20 individuals who would guide policy in the sector that I work.  I'm sure that these are all fine people but, the list includes a consultant from Newfoundland, a University Vice President of Public Affairs and Communications, a nutritionist, a law professor, a venture capitalist (sorry), an environmental lawyer, a physiology student, and our local representative - the Manager of the Vanderhoof Chamber of Commerce.  Interestingly, it did not include anyone from companies named

QLT, Biochem Pharma, Biomira, Stressgen, Anormed, etc. whose businesses it may ultimately affect.

Strike Three.  Pending.  When it occurs I can be reached in Seattle.

Bill Hunter
Angiotech Pharmaceuticals Inc.

Bill:
You might have a future as an “irreverent” writer.  I enjoyed your letter.  I know it’s hard to keep positive when you go and offer to help and you get frustrated even more.  Vanderhoof Chamber of Commerce.  I’m still giggling at that.  Maybe he/she took biology in high school and is therefore qualified?  As for strike three, I hope that you go down swinging if you must go.  You are one of many of us that have had it almost as much as we can take it.  Clearly, our political leaders don’t understand that.  Nor do they understand the implications of entrepreneurs, such as yourself, leaving and taking your new economy ideas and experience with you.

Hi Brent,
Just read your piece on the investment situation in IT and how the government's utterly tuned out.  I'm not really surprised by that, just saddened.  Almost every government in Ottawa appears to need the approval of the Americans before they do anything the least bit progressive; if they were to undercut the Americans as you suggest, you can imagine how terrified they'd be of the sudden lack of films arriving, the anger of Prairie farmers that can't get their products to market because of suddenly-imposed regulation, etc.

The above is more observation than defense; I find most politicians, while well-intended, are often small minded and vote-grabbing....and for some reason, the majority of Canadians treat the Government like a parent: they're supposed to protect us from our own stupidity (how can that work if we keep electing them?).

I'm an independent start-up who could really use funding for a couple of projects, but this is the first time I've been given a clear-enough indication of what I'm up against and how business works in

general (I think up the content and the interactivity; I keep hoping someone else will provide the financial side of things).

Did you intend for readers to copy and paste your list of what-to-do-next and send it to the Powers That Be?  If so, where should I send it?

The impression I get from reporting on television is that the existing media of radio, tv, and print are the only ones that are legitimate and worth the bother.  Using the Net and emails appears to be something to marvel at and ignore....to their amazement when the returns start coming in.

I'm really not interested in politics until they do something blatantly stupid, but this blindness to IT - which most of the population appears to have contracted (maybe it's fear, too; there's a lot of confusion based from ignorance and the speed of change that leaves people gasping) - that's crippling those of us working in IT.

I'm not sure where I was going with this, other than to say I agree with the bits I could relate to; raising capital is not my thing, although I certainly understand the need for risk, the healthy financial climate to make that happen, and the need for active competition in Canada.

Roger
Cineaste Media Ltd

Roger:
As you no doubt saw above, you can get started on your letters.  My experience is that the rants don’t get answered.  A well thought out letter that includes solutions (so they can look smart tabling it in front of their cronies) is the way to go.  Get on it!

Get this!
Did you know that companies that decides to move to BC to create jobs in this province, gets charged 7% on all their company's assets! This is a fact, and has happened to a company I am closely associated with (which has to remain nameless at this time).

Imagine if you got charged PST on your assets if you moved to another province...

This is how our government encourages new business in BC ???

Dennis Beaudoin

Dennis:
Thank God most of us IT firms have no assets to tax.  Am I surprised?  No.

I'm in full agreement with your "Get IT or get out" article.  I just finished reading a book called "The Lexus and the Olive Tree" on the subject of globalization which espouses the same views.  Countries such as France are in an even worse predicament than Canada.  France soon will have a 35 hour maximum work week.  It already has a culture where the university you graduated from is more important than what you've done since and where the most "moral" way of acquiring wealth is to inherit it, according to a recent poll.  As the author says (as though countries were stocks), "Sell France."

Darryl Mountain

Darryl:
I will stay away from any libelous references to Quebec.  Your posit that countries can be traded like stocks (which is almost exactly what free floating currencies allow bankers around the world to do.  And you see where our currency has gone relative to most world currencies in the past 2 years) raises an interesting game.  If I were buying, I’d go long on Sweden, Australia and add the blue chip US.  I’d wait a little while and maybe short Japan.  Canada offers long term potential, but I don’t have time to wait.  There’s faster moving stocks out there…

 
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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