This let people experiment on the side, which sometimes failed, but sometimes discovered something useful. It takes some of the risk out of startups in the very early stages. By contrast my employer in the UK at the time claimed that anything I invented while employed by them (eg new cat food) would be owned by them, no matter how unrelated and no employer equipment used.
I've almost always excluded specific prior built or in-progress IP from my employment agreements without issue, as long as my employer's HR knows about it. Informing your employer of what you've created or are creating independently is almost always the best policy as it's unlikely they'll argue against it when it's early-stage (and you're protected if it becomes suddenly valuable).
Firstly, obligatory invention disclosures are often enforceable if they're related to your employer's business, as they often exist to protect your mutual interests.
Secondly, IP assignment is related to this entry in the CA labour code:
Which clearly states that if you're working on the same area your employer is paying you for, it's not going to be trivial to claim it as your own even if you did it on your own time.
In short, California has the benefit of making IP assignment unenforceable if it's on your own time, in an unrelated area to your employer. But it's not carte blanche.
Note - the other interesting bit here is that if you're worried you might be at risk, just quit. After all nobody who is suing their employer for ownership of their work stays an employee (at will work clauses). Even though I had confirmed that work on my project could not legally be claimed by Google by the time I had done the research and ascertained that it would end up in a lawsuit I was already convinced it wasn't going to be a good long term fit for me. That simplified the question immensely :-)
My original post wasnt intended as criticism, it really just trying to provide commentary that while Canada doesn't have the full protections of Cali, the typical contract only assigns specific areas relate to your work.
Also, related, non-competes in Ontario at least are largely unenforceable.
That's true, but it's usually part of the boilerplate. I'm not suggesting it's related to the perceived problem, but every research position I've been in has had a clause like that. One place even offered to change it for me, saying "oh that's just some boilerplate the lawyers used."
Bankruptcy law for example really plays a big role when it comes to innovation.
I would argue that you need two things for the average person (rather than the independently wealthy) to be an entrepreneur: limited liability and bankruptcy. Without limited liability, an entrepreneur would be saddled personally with the debt of a failed venture. Without being able to declare bankruptcy as a last resort, they would not be able to discharge the debt and start fresh. Instead, they would be a debt slave to their financiers until it is repaid, which could be for the rest of their lives.
That's a lot of risk for an entrepreneur to take on, and too much for all but the most reckless -- I know my wife would never let me do that -- or those with the ability to bootstrap the venture without debt or outside investment.
BK law in the US one case where, because things work well, people take it for granted and assume the laws work well everywhere. (They don't.)
Europeans probably think the same about healthcare. (For those not in the know, U.S. healthcare is awful and insurance companies kill thousands per year.)
It's not too bad, of course, when coupled with limited liability from the start of the business venture. In that case, the bankruptcy reform doesn't really touch you - it's only there to catch private consumers.
In the context of bankruptcy, this means that laws that are heavily punitive towards bankruptcies, and where declaring bankruptcy threatens the basics of your entire life, people become more risk-averse.
In some countries, this is not the case, and it creates a big legal barrier for being entrepreneurial.
* - I am a long-time (greater than 10 years) Microsoft employee.
I also don't see how this could practically apply to all intellectual property you create whilst employed otherwise you would be open to being sued for posting on a blog since you are distributing the companies IP (i.e the words you wrote) without the companies permission.
People who aren't explicitly protected by state law get fired for putting something on the internet that their employer doesn't like. There is an explicit carve out in California law (http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&gr...) I don't know if there are any other states that have this carve out, but that section combined with "Section 16600 of the California Business and Professions Code states that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." makes quitting your job, taking your own IP made on your own time, and competing with your employer. A protected activity. in California.
Some will tell you otherwise (Google does this) but I sought out advice from a labor law attorney on the legality of their claim and his opinion was that it was largely unenforceable. You couldn't use proprietary information in your gizmo but you could, for example, write a phone operating system on your own time and equipment, quit Google and start competing with Android and they would have a hard time preventing it. But only in California, the employment agreement would hold up in Boston for example.
An example of California law working is that the founders of Hotmail were working for other companies when they wondered why you couldn't access email in a browser. eBay was a similar hobby project.
A quick Google seems to indicate the "Copyright, Designs and Patents Act 1988" is the relevant law
Trying to claim that as an IT professional your new cat food belongs to them would not work but if it was anything to do with IT you might be in trouble both in the USA and UK (employment law is descended from the same roots in both countrys)
Neither had any difficulty agreeing to it, and there was never any trouble later about it. I know others who have done the same.
It's impudent to Vancouver's culture--and more generally the world--to insinuate that we're "blindly [competing] to build the next Silicon Valley". We're not. Canada's not. Vancouver's liberal lifestyle is innate, not superficial, not a failed attempt to clone Silicon Valley. And our immigration policy is definitely not to "bring immigrant entrepreneurs together"; it's the result of a small population, the demand for skilled workers, and the correction of a historically xenophobic foreign policy. This creates a large influx* of liberal and skilled immigrants--known risk takers. Hence the entrepreneurial honeypot (our social programs help). It's necessity that's bred Vancouver as a technological center, not ambition. Thus, similarities to Silicon Valley are purely coincidental, or are the result of correlated effects rising from the increasingly entrepreneurial working force.
As for investors? I don't know enough to comment.
*: Immigration levels have been relatively low, recently
My point is on the investors' side. Investors play a big role in the tech startup ecosystem.
When you have investors who don't get tech and who just want to get rich quickly, you run into serious problems on the road to build the next billion dollar company.
I think reading Steve Blank's Secret History of Silicon Valley gave me the best break through in understanding of why Silicon Valley is so dominant in tech.
There's just been decades and decades and billions of even World War and Cold War money poured into into it's infrastructure. The shear amount of money and momentum of peak US effort seems nearly impossible to catch up to.
My best advice to other locations is to tie into SV as best as you can and of course focus on getting to scale by bringing in external to your local economy revenue and partnerships to bootstrap, but regardless it's gonna be a long haul. SV is the Holliwood of programmers and its best to acknowledge that. If you are an actor in Canada you know you are likely going to stay small time unless you go down North West for example and break out or stick to a niche.
Skype is a great example of this: they created a billion dollar company in Europe; and most of the development was done in Estonia (a country of about 1.3 million people, much less than most bigger cities).
Asia, especially Taiwan and South Korea, have some amazing examples as well (like HTC, Samsung, Asus etc.)
And it may still be relevant because of face-to-face interactions. No, Hangouts won't cut it
And Github has probably done a lot for remote work, but there's still a gap
Here's an explanation:
Because Canada prefers many more smaller companies, that actually employ people, instead of few billion dollar tech darlings with a sub par personel and even less taxes paid?
How about: why California is bankrupt, as a state, and with large swaths of the population in utter poverty, despite having the worlds largest tech companies?
I refer you to historical growth of California revenues http://www.dof.ca.gov/budgeting/budget_faqs/information/docu... It's boom-driven, so you get revenue shortfalls during bust years, but on the aggregate the revenues are growing - the $97 billion of revenues in 2013-2014 budget years is still higher than 5 or 10 or 15 years ago.
Perhaps if your revenue is consistently growing, and you still cannot run a balanced budget, the problem might be on the spending side?
I don't know why that obvious contradiction was never tackled. I would like to think it's because the Hollywood execs of SoCal and the ex-hippie/Silicon Valley combo of NorCal are so geographically far apart that they don't talk, but that's too simplistic, I'm sure.
I've heard prisons and state employee benefits are superb, but have had no chance to verify either claim.
Not sure what definition of 'big' the auther is using, but CGI has revenue of 10+ billion per year (more than double that of Yahoo), RIM also has revenues of over 10 billion (despite their recent troubles), and there are a whole bunch of fairly large tech companies that aren't well known but do a whole lot of revenue... http://www.branham300.com/index.php?year=2011&listing=1
The measure of economic benefit isn't just the creation of big firms, but also the amount of people employed, money put back into the economy, etc...
It is true that our investment community is far more conservative, but then again, we weathered the 'recession' better than most, and have one of the healthiest banking sectors in the world...
- Vancouver has a high cost of living without commensurate salaries (and often no equity).
- Because of the wealth of technology companies, it's easy to find a job here.
- The weather (at least in the valley) is far better than sitting in the rain (Vancouver), or snow (rest of the country).
- Quasi-reasonable immigration policy (TN-1 visas are easy to get, although have weird drawbacks)
- A common language, and a fairly similar culture.
- Proximity to home (it's only a 2 1/4 hour flight back to Vancouver with no time change -- can someone start flying out of SJC instead of only SFO?).
- decent universities
- former military/government technology jobs
- easy access to capital
After having been so successful being an employee at two startups that did well, I started my own company a couple of weeks ago. It's absolutely amazing the amount of support you get here, and the network of people who you can tap to ask questions and help out in your venture.
Vancouver and Toronto both have parts of the equation, but they don't have the whole package. And neither of them have the kind of past success which breeds future success.
I think a lot of the Bay Area power comes from having so many tech folks in one place, which is hard for Canada to manage anywhere given population. In the Bay Area, you can go for a coffee or a beer and run into a bunch of tech folks and something may come out of that. There's no where in Canada where tech has the density to make that happen in a random way (maybe Ottawa or Waterloo back in the day).
Immigration can help, for sure bringing smart minds in is never a bad thing. I've only lived in Ottawa and Toronto, I think creating the critical mass of tech folks is difficult in those cities which have other more dominant industries (government and financial/cpg respectively).
Agree that past success fuels the mentality that builds the future.
Thanks for sharing Patrick!
It's a pity.
This means that corporate investment might be more slanted towards that areas, and it also means a narrower set of potential customers for a given application.
Anyway, as a Canadian computer scientist I'd be very happy to see knowledge industry grow here.
Firstly, Canada has a huge branch-plant economy in agriculture, manufacturing and services, which has grown over the past 70 years. Ownership != economic output. It does change the pattern of investment, of course -- less disruptive entrepreneurs and more incremental improvements.
Secondly, the world is not made of software alone. Facebook is utterly irrelevant to the world economy. The world is still sadly not made of electrons, it is made of stuff, and that stuff powered (mostly) by hydro or carbon, and run by humans that need fresh water. Those industries you discount are massively important and only getting more so globally. IF Canada doesn't provide a large chunk of the world's natural resources, others will, until we devolve into a Mad Max type future fighting over fuel or fix our renewable energy problem economically (whichever comes first). Thus, Alberta is likely the new global oil powerhouse for the next century. Saskatchewan has the largest deposit of Potash fertilizer on Earth (4+ trillion tonnes).
None of this precludes Canada from investing in tech entrepreneurship, but it does mean the incentives need to be higher than usual.
For software developers, that doesn't help matters, but there remains a thriving software scene in certain Canadian centres (Vancouver, Toronto, Waterloo have thousands of startup each)- its just not made of behemoths.
Someone please correct me if I'm wrong, but the article's not convincing me. e.g. quotes like this, "Do you think Google will be a billion dollar company had they license the technology to Yahoo?" Yes, since they did. They also would have sold to Yahoo IIRC but Yahoo didn't want to pay enough (cite: http://www.paulgraham.com/googles.html).
Silicon Valley's success is commonly attributed to being within proximity of two major schools (Stanford and Berkeley) fueling the talent funnel. But that is far from a sufficient explanation.
Massive government investment in R&D helped birth the first semiconductor and aerospace companies that helped create the first critical-mass concentration of tech industry and talent.
And those were just the baby steps. The current behemoth of the Silicon Valley machinery is sustained in large part by the enormous amount of investment, as well as ease of access to said investment. Modern startups go to/stay in the Bay Area largely for funding reasons.
> "They also would have sold to Yahoo IIRC but Yahoo didn't want to pay enough"
And therein lies the difference between Canadian tech and Silicon Valley tech. In Silicon Valley Google had enough funding to keep going and reject Yahoo's offer, and thereby growing by leaps and bounds into the giant company we see today.
If they were in Canada, they would almost certainly not have had the funding, and be pressured into an early sale for less, and Google today would probably be a sub-brand of some stodgy old behemoth of an enterprise-tech company.
Funding is, IMO, Canada's biggest problem. I've worked in the Toronto side of the software industry, and still know some people on that side. Canadian tech is dominated by either very large enterprise software firms, or slow-and-steady small businesses. There is no readily available investment source to perform the type of "grow fast, shoot for the moon" type of startups that the USA is known for (see: AirBnb, Square, etc, companies that took enormous amounts of funding very quickly and scaled just as quickly).
A startup in Canada means going for profitability very quickly, and being doomed to a slow-growth strategy, as large chunks of cash are nowhere to be found.
On a more sombre/cynical note: as a Canadian expat in the US tech industry, I basically have given up hope on Canadian tech. The first step is for the industry, government, and everyone to acknowledge that Canadian tech is fundamentally dysfunctional. And I just don't see this happening. Every opening of another satellite office that exploits the large salary gap is greeted with pomp and circumstance and speeches about how Canada's being recognized for its unique technological prowess.
Gag me with a spoon.
Flickr was based in Vancouver, as is HootSuite, ActiveState (the perl guys), Peer 1 Hosting, PlentyofFish. There's Shopify in Ottawa. Edmonton has Stormboard. Toronto has/had Kobo eBooks, Freshbooks, Well.ca, CryptoLogic (one of the main online gambling platforms, though they moved to Ireland), among others. On the more enterprisey side there's Layer 7 in Vancouver (API management), Bycast (bought by NetApp). There's also SMART technologies in Calgary (still independent though no longer a startup). There were many successful game companies (many WERE startups in the 1980's and 90's but are no longer): Bioware in Edmonton, Digital Extremes in London & Waterloo (Unreal & UT, Bioshock 1 & 2), BlackBox in Vancouver (Need for Speed), Uken Games in Toronto (a startup for once ;), and Ubisoft in Montreal (arguably French but most of their success came from the Canadian studio). There are also thousands of startups I haven't even mentioned in smaller communities like Halifax, K-W, Moncton.
I don't think it is necessarily bad that Canada is basically a "farm league", a ground for niche companies (only making millions, not billions). This is just an evolution of it being a "branch plant" economy for nearly 70 years since the early-mid 20th century. Clearly there is a small but thriving startup culture, particularly in Vancouver, or (for now) K-W, where good engineers don't have to go into IT, they can work at pure tech companies. Canadian startups tend to exit the only way MOST do - by acquisition. As Pmarca would say, the problem is with the poor IPO market.
Beyond IPOs, to become a disruptive multi-billion dollar play is by its nature a rare event. Add in the fact that Canada is geographically disbursed across five time zones, with huge (labour-intensive) natural resources to exploit, and the same population as California... the incentives need to be right to change Canada's industry structure. I'm not too worried about it - if one wanted to start a successful tech company in Canada, it's clear that there's enough talent to make it happen, and likely enough capital to get through seed or Series A. It might require foreign capital for subsequent growth investments, but by the time you're in the tornado, that won't be a problem.
I was under the impression that the satellite offices aren't just to exploit the wage gap, it's also to set up a pipeline to get more foreign engineers to the SV based motherships through the TN-1 visa.
I worked for one of them, was not fun. Everything we did was basically something management didn't want to pay a $120K Californian to do. Without the giant salary gap these satellite offices simply would stop existing.
TN work permissions (usually not really a "visa" as such, and note the lack of numeral) are for Canadians and Mexicans to work in the US, and have no tenure requirement with the company. http://en.wikipedia.org/wiki/TN_status
B2C tech startups cannot takeoff in places that don't have really high densities of people because places like that wind up having the people with the mentality to use technology to get ahead/make their lives simpler. Because of the high demand for access to pretty much everything in these kinds of cities, people there will be more likely to try new things to get an edge. Is it an accident that the big consumer startups tend to come from SF, NY, and Boston?
This doesn't seem to be a big deal, but as an example you can probably see how it helped foursquare(SF) pull ahead of Gowalla (Austin) in the location app shootout of a few years ago. Its the reason why Austin will probably not become a real startup powerhouse for another couple of years (as more and more people stream in here).
B2B is a little easier because businesses have more uniform needs that aren't usually dependent on city characteristics. But then again, a place with a higher concentration of businesses per capita will usually have that edge.
I think this is why you see smaller cities having startups that are more successful at B2B (Austin for example) but not so much in the B2C scene ... in fact the exact thing that the writer mentions in his article happens here where startups get bought out by their competition in Silicon Valley or other places.
I guess the point I'm making is for Canada to get a successful tech startup scene going, concentrate on high density cities (Toronto?) otherwise see what edge you can give companies that do B2B startups.
One reason I find this unconvincing is that Toronto specifically has very similar size and density characteristics to the Bay Area. Toronto's metro area has a comparable population ; and before it was amalgamated with its suburbs, the city itself also had a very similar population and population density to San Francisco . Toronto is also home to U Toronto which has one of the world's top CompSci departments. I suspect there is some sort of policy problem at work here rather than a lack of density, possibly as banal as drawing from a smaller talent pool.
 Toronto/Hamilton/Niagra area: 8.7 million http://en.wikipedia.org/wiki/Golden_horseshoe
 Combined San Jose/SF metro: 8.37 miilion http://en.wikipedia.org/wiki/San_Jose-San_Francisco-Oakland,...
 Old Toronto: Population 736k, density 19,600/mi^2 http://en.wikipedia.org/wiki/Old_Toronto
 San Francisco: Population 812k, density 17,620/mi^2 http://en.wikipedia.org/wiki/San_francisco
I'm a Canadian who grew up, went to school in Canada, and am now in the US. The problem is very simple and can be summed as such:
A skilled software developer can make double to triple their salary easily by moving to the USA. And Canada and the Us have a legally porous border when it comes to exchanging workers.
Double to triple. I shit you not.
This is a huge part of what holds Canadian tech back. What kind of talent pool are you looking at when the US pays so much more, and there are relatively few legal barriers to taking these opportunities?
In the SF Bay Area or NYC, yeah, double to triple. But a lot of that is cost-of-living related. Housing is half (or even less) the price in most cases, with Vancouver being an exception. I paid $2700/month for my 800 sq. ft place in Pac Heights with parking, we pay maybe $2200/month with property taxes in Calgary for a 1600 sq. foot house w/ 2 car garage just slightly north of the Bow River. Whereas a small 2br in NY in the West village was $4k a month 10 years ago.
That said, most living-in-Canada techs making good coin are either (a) working at Vancouver startups, who pay reasonably (b) working as contractors doing boring/annoying work that pays well, (c) working for international tech companies who pay the same rate in Canada as they do in the USA (usually in field sales or consulting - this is what I currently do).
The main reason I don't think this holds Canadian tech back is that many people meet their significant other here and don't want to deal with the hassle of leaving - they like the rockies, for example, or have family, or love snow. Or they're stuck for one reason or another (child custody, etc.). There's also a rather poisonous political environment in the USA that adds a cost to one's stay there.
I also think it's a great opportunity for companies to thrive in Canada and retain talent by paying them well and giving them access to lifestyle incentives. Not quite a startup, but an example: Cenovus energy has a startup-like culture in some ways after being spun out in 2002. They give employees every 2nd Friday off, they have major perks for working families, discount family passes to Banff/Lake Louise for skiing, and pay extremely well (usually bridging your pension, RSUs as part of a signing bonus).
Granted, this is math for a single guy with no children - so YMMV.
I don't disagree with any of the facts you've laid out - but I do disagree heavily on whether or not this is holding Canadian tech back. There are certainly people who won't move to the US for any number of reasons - family, lifestyle, geography, politics, etc.
But the fact of the matter is that there are over 300,000 Canadians in the Bay Area - clearly the number of people willing to jump south of the border overwhelms the number of people who will not. This represents nearly 1% of the entire population of Canada. The brain drain is very real, it's biased towards the more desirable parts of the talent pool, and it's happening at a mind-bogglingly large scale. While the brain drain will never claim everyone, it's certainly claiming enough talent that I think it's hard to argue that it's not having a massively negative effect on the industry domestically.
Canada's population is ~33 million, so that would be about 1%, not 10%. Still a surprisingly big number, though.
This was in the 90's during the dot com boom... but the world kept turning, Canada didn't implode, there's still talent here, and I eventually moved back to have a family (no way do I want one raised in the USA).
I have plenty of friends staying in the USA for the reasons you state and I may go back some day when our kid(s) are older for the reasons you cite. But I'll just say that money isn't everything ... it's arguably the single most important thing.. others factors eventually add up however.
And hell, I may be back someday - I can't see it, but I can't discount it. I do like Vancouver too much to stay away forever.
My point is that empirically, money matters to people. Those 300,000 Canadians aren't hanging out in the USA for fun, they are largely there because of the market gap. This is an enormous loss of talent for Canada.
Now, we can argue about whether or not they're making the right decision being in California, paying Bay Area rent, etc etc, but the fact of the matter is that they're doing it, which puts them in the US, and not Canada, and harming the Canadian tech industry. We're training a huge number of capable technologists, exporting the bulk of them to the US, and the domestic tech industry is poorer for it.
I do not see anything slowing the brain drain by an appreciable degree, except to hugely raise engineering salaries in Canada. I don't think there's a chance in hell of this happening. And I believe that the brain drain, at its current scope and scale, is having a large chilling effect on creating the sort of companies and jobs that the blog author is talking about.
There are still certainly tech jobs in Canada, there are even (some) very well-paid ones, but Canada cannot hope to have even a sliver of the scale of the Valley's success unless it can retain its own talent pool.
It should be noted also that the link from my previous post is an op-ed by the CEO of HootSuite, itself one of the bigger successes to come out of the Canadian startup scene, where he claims that the shallow talent pool (and the brain drain) is a large growth-limiter on his business.
Where he and I disagree is that he advocates for more immigration and education as a solution. Based on what we've seen with Canadians moving south, I think it's a sure bet that the immigrants he proposes to import will likewise drift southwards, and the extra graduates he proposes to educate will do the same. Short of some kind of indentured servitude you can't prevent that from happening. We even have companies like Microsoft and Facebook who specifically set up Canadian offices for the purpose of greasing this "Canadian immigration as gateway to USA" process along.
Of course, IMO the real solution HootSuite's talent woes is to make their pay market-competitive with the American companies that are draining their talent pool...
My point is that (a) US immigration reform is dying in the house of representatives, there's a chance the US will make it harder and harder for Canadians to stay there. I know I had my complications. Canadians largely enter the US on TN visas, which have gotten easier (the 3 year renewal requirement vs. 1 year). An immigration-unfriendly administration could make this harder.
H1B's are also possible lately as the quotas haven't been being hit since the financial downturn, but they have always been highly controversial.
(b) Canadians require citizenship before they can be eligible for a TN visa to the USA. It's a long period of time for a Canadian immigrant to achieve citizenship in Canada and THEN move to the USA.
Anecdotally, I have seen what you're suggesting (a southwards movement), but not with the majority. For example - my colleagues & friends that have received permanent residency in Canada from India (usually engineers from Infosys or TCS that were part of the onshore crew of a contract) have mostly stayed in Canada, with a couple of exceptions that moved to the USA for a specific job opportunity and used the L1 visa to do it.
But something's missing from this equation.
If wages are low in Canada because there is a glut of workers relative to the number of jobs, then why doesn't the sector expand to take advantage of the low wages?
Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies? There's nothing magical about America that allows its startups and companies to pay so much; Canada isn't particularly poor itself and its companies don't even have to pay for workers' health care.
Either way, there has to be a deeper reason.
I'm obviously not an expert on Canada, so I'll try to illustrate one way it might work, but please feel free to shoot this full of holes...
Say companies in Canada start by paying their employees half of a competitive wage. Not all employees will notice. The ones who are willing to move thousands of miles will eventually disappear but there will always be new hires, right? Thus the management gets away with low wages.
I _have_ seen this exact scenario play out in several locations in the US, but not Canada.
In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company."
At that point the company will never make enough money and can't even dream of raising wages.
Only at that large scale (companies competing for talent and then trying to turn their talent into revenue) do you start to see the effects of their salary range.
Interestingly, you just described what happened to RIM.
It is. See: the huge presence of multinationals in Canada like IBM, SAP, even gaming giants like EA and Ubisoft. The Canadian tech industry is by no means shrinking, it's just growing in a way that doesn't fit Silicon Valley's "high pay, high benefits" mold. Canada has not seen the massive software engineering wage explosion that the US has.
Which naturally leads to your next question:
> "Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies?"
This is a big and complicated question. The short answer is: because it somehow got this way and now we can't change it.
It's important to note that the US tech industry isn't all shuttles and gourmet meals either - the bulk of the industry is paid a fraction of Silicon Valley salaries, with none of the cushy benefits. The tech industry is divided into the low/mid-end and the high-end, and the two sides could not be more different.
There is an active war for talent in the high-end that keeps driving up salaries and benefits, while low/mid-end software engineering remains relatively stagnant. It's largely a group of companies working on computationally hard problems that's driving this war - folks like Google, Facebook, Microsoft, Amazon, etc. These companies are uninterested in low/mid-end talent, confining the insane salaries to only a small segment of the total industry.
This segment of the industry also largely does not exist in Canada. Canada's tech scene has, for many complex and perhaps unexplainable reasons, developed into one that is largely enterprisey. The tech jobs are largely at not-tech companies (where you're a cost center, not a profit center), and where they are at tech companies, they are at satellite offices of American or European companies.
This doesn't create a market where there is high demand for top-level talent. Complicating this somewhat is the fact that the talent war in the US has bled across the border, thanks to relatively easy immigration laws for Canadian citizens - the bleeding of talent to the south prevents the establishing of companies locally that would feed on a top-level talent pool.
So this really circles back to OP's original complaint. The reason why wages aren't rising in Canada is because companies that demand high talent do not exist in Canada. There are no major companies working on truly hard problems that would demand campuses full of top-level engineers, and thus no drivers for salary growth.
The companies that do exist cannot raise salaries wildly for a few reasons. Firstly, because they are not having trouble finding talent at the level they want at their existing salaries. Secondly, because their business model may rely on being cheaper than the US. Thirdly, there is a lack of institutional employers who employ high-end engineers which would kickstart a talent war.
I think a person is more likely to pursue a startup and succeed at it when they can spend less time/energy covering their basic living expenses. A lot of SV giants were started by people in their garages, they simply had enough surplus resources to pursue their ideas.
Only certain geographies tend to have a large number of high-paying software jobs, and those places (see: Seattle, SF, NYC, etc) tend to have inflated housing prices.
Ditto Canada, there are plenty of places where housing is cheap - but that's not where the tech jobs are. The bulk of the tech work is concentrated in cities like Vancouver, Toronto, and Montreal where housing is expensive.
That being said, being a Vancouver native I try to keep an eye out on salaries in the city vs. cost of living. Vancouver has the double whammy of being extremely expensive but not nearly making it up in pay - this is a somewhat uniquely Vancouver phenomenon though... housing in other parts of Canada is less insane.
When it comes to B2B, you don't really need a concentration of early adopters to make this work. You need to solve problems for businesses (doesn't really matter where they are). More importantly, you can see revenue right away if you ARE solving a real problem. I think that's why it's relatively easier to build a B2B startup outside of the valley.
Nope not really but you're in HN and most people here tend to think that Silicon Valley is like Mt. Olympus or something. There are a lot of startups out there that are very successful and not in Silicon Valley.
I don't think most places like Canada want to replicate SV... just the part about creating large successful tech companies. The article suggests this might be helped by allowing people to actually get and stay there. It's not really about 'centralized technology' but more about creating a culture where people from around the world can come together and make these things happen.
Silicon Valley has the lowest latency in searches, both for job seekers and for employers. If you're looking for someone with deep experience in 3 disjointed areas of technology, you can find that person in SV. You can't easily find that person anywhere else. You have to train someone into the role, or convince the one matching person in the world to move.
For extremely specialized queries, SV still has a continuous labor market while the rest of the world is discrete. If you're doing the kind of get-big-or-die red-ocean gambit that VCs like to fund, that latency risk is undesirable.
Other than that, I think SV is overrated. There are probably 20 places in the country (many cheaper and with fewer douches) where it's not hard to find generally smart, technical people in large numbers.
Anyway, I can't imagine anyone under 45 willingly living in "Silicon Valley" unless that includes San Francisco. The reason for moving out to the suburbs is to get a cheaper place and more land, but the Valley doesn't have that going for it because even suburban houses with disastrous commutes are expensive.
In my experience, a large percentage of engineers of any age have suburban tendencies. There are way more "nerd's nerds" down in the valley. If you want to run into people who build robots as hobby projects, they will be at Menlo Park Techshop on the weekends, not at Dear Mom. (although I've heard these days that a lot of maker-hacker types live in Oakland)
SF isn't only bars; they could also be at Noisebridge.
In Vancouver we have MDA, which makes satellites, PMC Sierra, PlentyOfFish, HootSuite, PhoneGap. Not huge, but substantial. Oh, and a dark horse named D-Wave.
And we had Creo and Flickr.
We don't have much of a military presence to help with R&D funding, hence Ottawa's slightly bigger scene. They almost got rid of the only army base on the West Coast a few years ago in fact.
There was an article on here a while back about what made a good startup city. We do have some old wealth (mining cos), some great universities, and nice weather by Canadian standards.
Also doesn't help that we're a 2 hr flight from San Fran!
It has great connectivity, cultural diversity, easy access to both Seattle and SF (a couple of hour drive/flight), a hub for asia, a great university in UBC.
There is a lot going on there that should make it more open to tech companies, but it has always been more of media than a tech town.
It's slowly changing now. Facebook, Twitter, Amazon and Microsoft all have their offices here.
Though some of those offices were, from what I recall, a method to get around issues in dealing with US work visa issues for foreign talent...
Sorry to hear that. Should catch up soon!
The philosophy has been mostly to create a profitable company, in the more traditional sense-- consistent revenue that can employ people.
- I share with this philosophy exactly.
The thing I am pointing out is that because of the VC gap, startups are dealing with the lack of cash infusion to really hit a homerun. As a result, Canadian tech companies stall after growing to a certain size. The options were taking VC money with bad terms or getting bought by US companies.
US companies are buying profitable Canadian businesses at a bargain price, reaping all the benefits of job creation and ambitious business goals.
The branch plant mentality, and the resource give away. It's a big US company in Canada reaping the benefits (but only 1/10 of what they reap in the USA.) And yes sometimes, it's a big (as in big for Canada) Canadian company in the USA reaping (ten times) the benefit but that's rare.
Canada's 100 biggest companies by revenue in 2012...
22 BCE Inc.(De11) 19,588,000 7.69
20 Bombardier Inc.(De11)1 18,882,000 11.99
26 Research In Motion(Ma12)1 18,456,000 -7.33
27 Bombardier Aerospace(De11)1 18,347,000 -1.14
29 Bell Canada(De11) 17,133,000 9.34
53 Telus Communications(De11) 10,397,000 8.4
54 Telus Corp.(De11) 10,397,000 6.27
64 IBM Canada(De11) 9,051,000 14.3
Having only 35 million people spread across one of the largest countries in the world makes it difficult to spawn consumer and retail conglomerates. Nintendo and Sony excelled in part because Japan was a perfect playground for testing personal technologies. Walmart had 300 million customers, 90% of which live in extremely developed locations, which allowed for retail stores to spread quickly and profitably across the states.
Further, having a history of less than 50 years means that less sustained activity has likely been driven from within Canada as opposed to from overseas. Given the choice of where to locate, a tycoon from Toronto had the choice of working out of London.
That narrative is, mostly, dead. Thankfully.
Now the entrepreneurs in this country have left the bad investors in their dust and the angel and VC community is playing catchup.
The author's point has some merit but it is hardly "the reason" we have so few billion $ companies.
The point worth making is: we are making progress. If we take the time to quantify it I'd guess that the ecosystem here is evolving more quickly than almost anywhere else in the world.
The other point being missed entirely is that there is no barrier for US investors to invest in Canada. Many (tempted to say most but I'm not sure) tech/web seed and A rounds in Canada now have some level of US (read: valley) participation. There are no legal or economic barriers to cross border investing anymore. The idea of a "Canadian investor" is becoming completely moot.
That's not the whole story by any means. No matter where you are the problems are almost always money and time. In this case, how much will it cost to lure people to Canada, which is not know for big tech? Google didn't happen overnight, but now that it exists, any new tech company is competing with Google in a way for top talent, if that is what they are after. So, not only would Canada need to grow a Google, they'd have to compete with Google. That is difficult. Throw a less friendly business climate than the U.S. into the mix, and that is just more money and time that would be required.
All of that said, sure Canada is spoiled and lazy, but that's no different than the U.S. We expect too much.
Matrox didn't get acquired but kinda changed their target markets.
While there are a few smaller tech companies here and there, the only larger home-grown one I can name at the moment is Atlassian (owners of BitBucket, Hip Chat etc). And they have international offices now I believe.
I remember reading a few years back, local startups were either moving to, or establishing a presence in the US to try to secure VC funding.
This may change as MITs Drew Houstons Drop Box is monetized.
"We don’t have billion dollar Internet companies with the likes of Microsoft, Google, Facebook, and Amazon."
With a discussion only of Silicon Valley, given 2 of 4 are based in Seattle.
I don't have any measurable "unique skill", nor do I have millions to invest. Is there any way for me to move to SV and get proper funding?
I've been to Vancouver many times as a tourist, a few times for conferences / standards meetings, no problem, no visa required.
This doesn't sound right.
A former employer of mine had U.S. based employees that were subject experts / trainers on proprietary systems - Written internally, used internally. We had to do training sessions via teleconference after the border services turned our trainer back. Our Legal followed up with border services and was given the requirement that we advertise nationally for someone to fill the training role for a period of i-can't-recall how many weeks then re-apply if not able to fill the role from a hardworking but unemployed fellow Canadian.
It was utter crap. Time we didn't have to look for a person who didn't ( couldn't ) exist seeing as it was a new system, written outside Canada. Trainers had crossed previously to fill similar roles without issue. go figure. We ended up doing it over the phone..
As a Canadian travelling to the US for business, we have the same process. But if you're going to a conference, you're fine, I used to do it all the time (from Canada to the US).
Who told you it was going to take two months?
My favorite Nexus benefit is avoiding hours of waiting in line at major US/Canada border crossings, especially on holiday weekends.
One potential drawback for some people is that applicants to Trusted Traveler programs receive a criminal background check.
US government Western Hemisphere Travel Initiative Info: