Is Slack a harbinger of tech riches for Vancouver?

The arrival of Slack in Vancouver seems to indicate full steam ahead for B.C.'s tech sector. If things change south of the border, however, all bets are off

Credit: Tonia Cowan

BRICKS AND MOSS | More than 80 people work at Slack’s newly renovated and fast-growing Yaletown office

The arrival of Slack in Vancouver seems to indicate full steam ahead for B.C.’s tech sector. If things change south of the border, however, all bets are off

The enterprise software phenomenon Slack has been in its Hamilton Street offices for almost a year now. But with extensive renovations just complete, CEO Stewart Butterfield hosted a media unveiling this September. As only befits a seven-year-old company valued mid-2016 at $3.8 billion, the place makes most offices look very ordinary indeed. The Michael Leckie-designed space features brick walls and dark timbers, kitchen and bar, lounge areas with lots of throw pillows, gauzy balloon-like light fixtures and a six-metre wall at the top of the main stairs that’s covered in bright green mummified moss.

An evidently proud Butterfield characterized the Vancouver office, now employing 82 people, as his favourite, noting: “The San Francisco office has a great location. But it wasn’t entirely built out by us. So it’s much less us.”

That Butterfield would champion his Vancouver office is perhaps to be expected. The 42-year-old founder of Flickr, later sold to Yahoo, started life on a commune in rural B.C. with the original given name Dharma. You could say he’s emphatically homegrown. But his enthusiasm might also reflect the anticipation that, poised at the dawn of 2017, the B.C. tech sector is set to boom.

Slack isn’t the only driver of that potential phenomenon. Microsoft invested $120 million in its Vancouver facility this past year, where it eventually intends to employ 750 people. Hootsuite officially became cash-flow positive mid-2016, and its awaited IPO now seems likely for this coming year. According to numbers recently released by the province, the B.C. tech sector now employs over 90,000 people—more than mining, oil and gas, and forestry combined.

All of this activity can also be seen as part of a bigger plan, which is to expand the economic ties and coordination between Seattle and Vancouver. Separated by a snarled freeway and a plugged-up international border, the cousin cities have long attracted the attention of local planners seeking to bring their communities closer together. In September we got an emblem of that in the form of B.C. Premier Christy Clark’s and Washington Governor Jay Inslee’s signatures on an agreement to coordinate economic development of the technology sectors in both places.

The motive for American companies is clear. Canada has a speedier immigration environment than does the U.S. That’s important in a sector with a seemingly insatiable demand for engineers, many of whom are being schooled at the tech-friendly educational institutions of China and India. Getting them into Canada, by some estimates, takes less than half the time required to get them into the States.

Butterfield himself anticipates close to 40 new hires in Vancouver, including in “customer experience” and front-end engineering. “Engineering is the second-biggest team here,” he says. “And this is where most
of the design leadership is, the core of the front-end development team. So my focus in
Vancouver is on product and design, whereas in San Francisco it’s more on investors and executive recruiting.”

Executive recruiting may be easier in the San Francisco area because there would be much greater depth in people with experience in enterprise software companies in the first place. But it may also be easier because of the housing demands of people being hired at the most senior levels. Sure, a younger workforce—Butterfield looked to be the only person over 40 in the Hamilton Street facility—may be willing to live in small or shared quarters in what is widely considered one of the least affordable cities in the world. If you’re looking to hire senior people, on the other hand, who will likely be older and may well have families, then you need to have places for them to live that don’t cost millions of dollars.

But maybe real estate prices are, in the end, a red herring. San Francisco and New York, both thriving tech hubs, have more expensive downtown real estate than Vancouver. The risk factor for the Vancouver tech boom may come down to a piece of paper: the U.S. H1-B visa. A non-immigration work permit allowing U.S. companies to hire foreign nationals in specialized sectors including technology, the H1-B is capped at 65,000 persons annually. Were that head cap to be lifted, as it is rumoured it might be, a key Vancouver competitive advantage would fall away. And then the Slack-indicated tech boom might well be in jeopardy.

Butterfield isn’t worrying about that—not at the moment, anyway; 2017 is coming, and he thinks Slack’s drawing power will be ample to attract the people he needs. “Just look at how beautiful our office is!” he exclaims. Then, more seriously, he offers the following prognosis: “I think that being at Slack right now will be similar to having worked at Google from 2005 to 2007, or Facebook from 2007 to 2009, or Apple in the mid 2000s.”

If he’s right, a lot of people will be having a happy New Year.