High-tech takes root in smaller urban centres
Silicon Valley … Waterloo … Whitby? Some urban areas have earned a reputation as high-tech hubs, but smaller centres such as Whitby and Prince Edward County, both east of Toronto, are proving they have the right stuff for high-tech startups, too.
Some young tech companies have realized they don’t need to be in a downtown city setting to be successful. They’re building tech brands and innovation cultures in smaller population centres, which offer lower costs and a different quality of life.
I think 360insights is a good example. It’s located in Whitby — population 125,000 — on the eastern edge of the GTA. CEO Jason Atkins is an entrepreneur who created a disruptive business model to drive efficient incentive and rebate programs, for such clients as Samsung, Mitsubishi, Sony, GE, Sub-Zero and Wolf.
One of the beauties of tech is that the infrastructure is very portable. The challenge is to attract your own talent cluster to your desired locale.
Atkins established an office in a commercial space about a block from his home. He filled his talent requirements by convincing qualified people, who were spending three hours a day commuting to and from downtown Toronto, that they would be happier working within walking distance of their homes. And those homes could be much bigger and cheaper than a property in a big city.
That quality-of-life differential helped seal the deal for many of his 225 employees. Being surrounded by the right people not only drives his success, Atkins says, but helps create a culture they want to stay with as the company grows.
Clients of 360insights are interested in results, not the company’s location. Atkins can still easily connect to other tech hubs and world markets.
360insights is now helping build an east-GTA tech ecosystem. For example, it’s partnering with industry-led not-for-profit Spark Centre on an investment accelerator for the region.
Farther east yet, the Prince Edward/Lennox and Addington Community Futures Development program aims to achieve the same thing for Prince Edward County, by investing in startups. Conrad Guziewicz and Mauro Lollo, principals of First Stone Venture Partners, are matching those funds to help bring economic diversity to an area they value for its quality of life.
Nectar Desk is one company they’ve invested in. Located in the town of Picton and offering cloud-based call-centre software to more than 100 clients around the globe, Nectar Desk handles inbound and outbound calls, and provides clients with full reporting and analytics. Moving these functions to the cloud is the right idea.
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Both Nectar Desk and 360insights have attracted international clients to their businesses without being housed at an expensive address. Reduced costs go straight to the bottom line and help fund more innovation.
Small-centre startups can look to other benefits. Smaller governments often mean that decision-makers are easier to find and speak with one on one. Towns often work harder to find new businesses the right location, smooth the startup process and help access incentive programs.
Innovation builds on innovation. Successful tech startups can attract like-minded businesses and eventually achieve the critical mass required to form a self-supporting tech hub.
While I don’t see a mass movement away from big cities, as the search for talent heats up and lifestyle becomes more of a deciding factor for employees, startups may want to consider a smaller centre first, to see if it provides many of the same benefits at lower costs.
Bruce Croxon is co-host of BNN’s The Disruptors and partner at Round 13 Capital. On March 27, Bruce will be the moderator of an NP Talks event on how to disrupt your business.