Sizing up Ottawa’s wearables scene: Local entrepreneurs must act soon or risk being left behind

About 100 of the city’s brightest business minds gathered in a ByWard Market office in late June, cloaked in excitement and curiosity about a sector many are calling a potential game-changer: wearable technology.

The strong turnout at the inaugural meeting of the Ottawa chapter of We Are Wearables suggests there is a clear appetite for risk-taking entrepreneurs to dive into the field, organizers say.

But Ottawa’s limited success so far also shows that while the city has the potential to take a lead role in the wearables space in Canada, it has some catching up to do to join front-runnersToronto, Montreal and Waterloo.

Right now, Canada’s wearable tech scene is predominantly centred in those cities. Toronto is home to about 20 startups devoted to the sector. Montreal entrepreneurs say their city, with its focus on fashionable smart tech, isn’t far behind. 

Meanwhile, despite its reputation as a tech hub, Ottawa has so far spawned just a handful of companies in the wearable space. 

But that lack of early traction doesn’t worry We Are Wearables founder Tom Emrich, who says he chose Ottawa for the organization’s third chapter after Toronto and Chicago because of its deep high-tech roots.

“That leaves a lasting impression,” the Toronto-based consultant says. “It also leaves a lot of resources and talent which is well-suited for having a new way of computing be successful.”

Jennifer Greenberg, a senior associate at Export Development Canada who helped Mr. Emrich launch the Ottawa chapter, says she is convinced the city has what it takes to be a major player in the field.

“We have a lot of highly educated people in the city and a strong design presence,” she says. “You look at it and there are all the same pieces in Ottawa that they have in Toronto, so why not?”

Disciples of wearable tech say the time is now to enter a sector that is expected to expand exponentially over the next few years, fuelled by devices such as the Apple Watch and firms such as headset maker Oculus VR, which Facebook purchased in March for an eye-popping US$2 billion. 

A recent report by market intelligence network IDC Canada projected the Canadian wearables market would experience “hockey-stick” growth over the next five years. Another study by Juniper Research forecasted retail revenue from wearable technology could jump from $1.4 billion worldwide in 2013 to $19 billion by 2018.

Just where Ottawa fits into that equation remains to be seen, but there appears to be no shortage of enthusiasm for the cause. During a panel discussion at the We Are Wearables meeting, moderator Rob Woodbridge asked the audience how many of its members were considering launching a startup in the field. Nearly one-third raised their hands.

One local entrepreneur who has already taken the plunge is Kyle McInnes, director at Maker Space North. He is helping a new company called Open View develop a prototype for a bracelet that can communicate with other devices connected to the “Internet of Things,” which allows data to be transferred without human-to-human or human-to-computer interaction.

He says he believes Ottawa can capitalize on the inextricable link between the Internet of Things and wearable technology that lets users control myriad appliances and other devices with practically a wave of the hand.

“We’ve got two major players in the Internet of Things space with IBM and QNX,” he says. “Any great ecosystem is going to have a combination of large companies with the money and the want to promote this stuff, and small startups trying and failing or succeeding. I think Ottawa’s got all the pieces to the puzzle.”

Mr. McInnes envisions Maker Space North as a hub for emerging wearable technology, with big companies such as IBM as anchor tenants providing assistance and support with the goal of “startups all around them being able to try new things.” 

“It seems intuitive to me that if you have more startups making more of these companies, then you’ll have more successes and more successes will beget more investors … and that will kind of drive the industry.”

Leonard MacEachern, co-founder of startup GestureLogic, says the emergence of maker spaces and groups such as We Are Wearables could be a “catalyst” for growth in the sector. But that alone isn’t enough, he adds.

“The problem is you need a lot of capital to get started,” says the associate electronics professor at Carleton University. Mr. MacEachern’s firm manufactures a high-tech leg band that allows cyclists to monitor muscle contractions, lactic acid buildup and other key indicators as a tool to prevent injuries.

A crowdfunding campaign on Indiegogo last year brought the company more than $140,000, well above Mr. MacEachern’s initial $50,000 goal. Still, he says he “spent the better part of last year running around all over Ontario to raise money.”

Carleton University chancellor Charles Chi, a former partner at pioneering Silicon Valley venture capital fund Greylock Partners, stepped up with angel funding, helping GestureLogic raise “well over $1 million,” Mr. MacEachern says. “From our viewpoint, it gives us some confidence.”

Other trailblazers in the local wearables space argue Ottawa businesses need more of a go-for-broke attitude if they want to want to make a dent in an increasingly competitive sector.

“I really think the biggest thing is the mindset,” says Lee Silverstone, co-founder of Gymtrack, which makes a bracelet that lets users monitor their fitness workouts. “We have everything that every other city has, if not more – amazing engineers, manufacturing, investors, everything. I still think that we have this bad mentality where we try and think small and we have a fear of failure and a very big aversion to risk. I think that’s the biggest thing that needs to change.”

Gymtrack, which has raised more than $2.5 million in seed funding in just over a year and now has 37 employees at its new downtown headquarters, is an example of the kind of company Mr. Emrich thinks can put Ottawa on the map when it comes to wearables.

“There is something happening here in this city,” he says.

Still, Mr. MacEachern says local startups need to be more aggressive in pushing to the forefront of wearable tech or risk being left behind.

“The problem is we have a lot of competition in Montreal, Toronto and Waterloo,” he notes. “If you’re talented, you’ll just get sucked away to those locations. In order to get anything started here, you really need somebody behind the scenes ensuring it happens.”