It’s beginning to appear that Atlantic Canadians are going down the road for more than just jobs in Fort McMurray. The region’s startups are also feeling the lure of larger markets.
More frequently, when I contact an Atlantic Canadian startup I learn that the founders — the key decision-makers — have moved to Waterloo, Toronto or other larger centres. I don’t have data on the numbers, though it’s something I hope to produce. But the anecdotal evidence suggests it’s becoming something that’s noticeable when you scan the landscape.
When asked why they have moved to Ontario or another market, these entrepreneurs usually give one of two answers. First, they’ve been accepted into accelerator programs in Kitchener-Waterloo or Toronto. Second, and more frequently, they’ve got to be close to their market and the big market is in Ontario.
So here are five thoughts on our meandering entrepreneurs.
1. This was bound to happen if Atlantic Canada produced great companies. Within a few years, the region has developed the quality of company that is getting accepted into renowned accelerators. It’s no longer a detriment to tell these tech accelerators that you’re from the East Coast. And for every company that moves to Ontario, there’s another that enters programs in Ontario to receive training, but returns to Atlantic Canada once the course is complete. There are plenty of companies that remain here, even though they’re mentored in Central Canada.
2. Founders have to do what’s best for themselves and their companies. If the companies — especially those with a business-to-consumer model — need to be close to large population bases, then they should move. If they have received funding, they have a duty to do whatever it takes to make money and reward their shareholders. It’s worth noting that a Halifax company called e-Academy (now Kivuto Solutions) moved to Ottawa several years ago, and has done so well that it has paid dividends to Innovacorp that have exceeded the original investment.
What’s more, young people should travel because it enriches their lives immeasurably. One proviso on this matter: if entrepreneurs are considering leaving their home province, they should reveal their plans before they take money from government-backed institutions.
3. We have to understand the challenges of locating businesses in Atlantic Canada. The region has a small population base. There are very few large companies (which could be potential customers) headquartered here. Air travel is expensive, and often time-consuming. The people developing the ecosystem must devise and promote advantages to locating here that override these detriments.
4. Atlantic Canada should use this diaspora to its advantage. The people moving to larger markets still hold a deep affection for Atlantic Canada. The East Coast startup community should capitalize on the networks they are building and use it to link with investors, customers and mentors. There should be more structure in the efforts to build a network of expat entrepreneurs.
5. We should fight back. There are real reasons for locating companies in Atlantic Canada. Launch36 is one of the leading tech accelerators in the country. There’s a wealth of talent. Coding talent generally costs less than elsewhere. There are tremendous mentorship networks. An effort to attract startups to establish in the region would have better economic results than offering a Fortune 500 company incentives to set up a branch plant here.
There’s no reason to panic. This is part of the growth of the innovation sector. The best response is to keep improving the ecosystem here and use this trend (if it continues) to our best advantage.
