BC Business
Against all odds, Vancouver Island's isolation proves a bonus for businesses trying to attract talent and capital. My father nearly made me an Islander in 1978. I didn’t know it until well after I grew up in London, Ontario, and, ironically as it turned out, moved to B.C. He told me he had turned down a position as a general surgeon at Royal Jubilee Hospital (yes, he is a Doc Holliday) after careful deliberation. He said he didn’t want to be “stuck” on an island.?
My father nearly made me an Islander in 1978. I didn’t know it until well after I grew up in London, Ontario, and, ironically as it turned out, moved to B.C. He told me he had turned down a position as a general surgeon at Royal Jubilee Hospital (yes, he is a Doc Holliday) after careful deliberation. He said he didn’t want to be “stuck” on an island.
This makes sense for my father, who is still shaky on an airplane and at that point had spent most of his life less than 90 minutes from his childhood home. But it does bear pointing out that the island he didn’t want to be “stuck” on is bigger than the state of Massachusetts.
Not everyone shares my father’s point of view, as 750,000 Vancouver Island residents can attest. However, it’s a common perspective, and it’s a challenge for a technology company trying to grow on the Island and attract talent and capital to a place where cars can’t go without a little help from a boat (which costs $130 return, by the way).
Nevertheless, technology talent does migrate to Vancouver Island, and Victoria in particular, as evidenced by the fact that some great success stories have emerged there. Rare-books retailer Abebooks sold to Amazon.com in 2008 and still operates as a subsidiary on the Island. Aspreva Pharmaceuticals was arguably B.C.’s greatest biotech success (when you consider where QLT and Angiotech are now) when it sold for $915 million to Galencia in 2007. More recently, in 2010, Victoria’s social game developer Backstage sold to Real Networks for an undisclosed sum.
Victoria is also home to Vecima Networks, a $115-million-a-year data hardware company, as well as Pareto Logic and its cousin, Revenue Wire. These last two are both privately held Internet software companies controlled by the Pereira family, renowned for their genius at an emerging form of marketing where an online business is paid for leads it generates for another business.
Some of the other top 25 technology companies in the area include Contech, an emerging green-technology star, and Reliable Controls, a 25-year-old building-automation company. If you add up the top 25 Vancouver Island companies’ revenue and employment numbers, as the Victoria Advanced Technology Council did in December, you get over $784 million and over 3,000 jobs in 2010. The industry association estimates that the Island’s entire technology industry employs 13,000. Clearly, talent is not as big a problem as I hypothesized. The Island’s universities and colleges create a steady supply of homegrown technologists and many more move to our rock for the quieter lifestyle.
What about access to capital? In my 13 years investing in early-stage technology companies as a venture capitalist, I looked at Victoria-based companies a few times, but never made a single investment. Why? Usually it came down to attracting other syndicate partners with capital. VCs are generally sheep; we preferred to invest together. It was difficult to get U.S. investors to follow us into deals on, well, an island. Coming full circle on this topic, the question remains, How do we get top senior management talent to move?
In my time as a VC, some companies were funded. Among them were Redlen Crystals, Genologics, Carbonetworks and, very recently, AERS, which is better known by its product name, Terapeak. Interestingly, three of these four examples have U.S. investors. I guess I just wasn’t very good at touting Island companies’ strengths, like the loyalty of their talented employees.
Now that I’m on the Victoria Advanced Technology Council’s board of directors, I have come to see that the Island is attractive to many people for the very reason my dad didn’t want to go there: once you arrive, you never leave. You are indeed “stuck” because you love living there. And that loyalty, combined with world-class innovation, has bred a pretty robust industry.
Brent Holliday heads the technology practice for Capital West Partners, a Vancouver-based investment bank.