From his vantage point in the capital’s newest startup hub, Brad Forsyth has a bird’s-eye view of exactly the kind of opportunities he hopes lie ahead for the tenants under his roof.
The veteran tech entrepreneur is the managing director of the Ottawa office of OneEleven, an organization launched in Toronto five years ago to help promising young companies become the next, well, Shopify.
So it’s hardly a coincidence that when OneEleven brass chose Ottawa as the group’s first expansion site, they decided to set up shop downtown on Slater Street – just a stone’s throw from the e-commerce juggernaut’s global head office on Elgin Street.
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To quote the old entrepreneurial saw, if you can see it, you can be it. Forsyth – whose mission is to take software firms that have graduated from local incubators and accelerators such as L-Spark and Invest Ottawa and help scale them into global leaders – can’t think of a better neighbour and role model for a new breed of local companies that, as he describes it, are bucking the old trend of “build it to a certain stage and let it be acquired.”
“I must admit, I did the same thing in my day,” says Forsyth, who helped launch aircraft maintenance software firm Mxi Technologies in 1996 and stayed on as a director until the company was sold to New York-based Moelis Capital Partners in 2012.
“But there’s a new attitude out there that, ‘No, we can actually take (a startup) and grow it in the marketplace to maybe (become) a public company.’”
A partnership between OMERS Ventures – the venture-capital arm of the Ontario municipal employees’ pension fund – the provincial government’s Ontario Centres of Excellence and Ryerson University, OneEleven hosts more than 30 companies at its main office on Front Street in downtown Toronto. Once the Ottawa office is fully operational, it expects to house up to 15 startups.
The organization provides mentorship, office space and other services to software ventures, with the goal of nurturing them to the point where they’ve secured enough capital to stand firmly on their own two feet. Graduates of its Toronto location include online investment management service Wealthsimple.
Forsyth says Invest Ottawa, L-Spark and local incubators such as Carleton University’s Lead to Win and the University of Ottawa’s Startup Garage are welcoming the organization with open arms.
“Everyone is super supportive,” he says.
OneEleven chief operating officer John Mavriyannakis says he sees the new accelerator as a complement to what Invest Ottawa and others are offering.
“At Invest Ottawa, you have companies that are growing, hitting their max, and with nowhere else to go, they end up with a glut of very large companies that don’t want to leave (the organization’s accelerator at Bayview Yards) because there is no natural progression,” he says.
“Their graduates are really our new clients”
“Their graduates are really our new clients. For them, this becomes a pressure release valve as opposed to a competitor.”
A key component of OneEleven’s strategy is the creation of various “peer groups” made up of members from each portfolio company.
Each group focuses on a specific aspect of a business – for example, marketing, technology, product management or sales. Members meet regularly to discuss problems, share ideas and best practices or bring in outside experts to advise them on how to scale as quickly and efficiently as possible.
“What we hope to is by building this peer group community and building on the skills of these people and the leadership inside of these companies, that we can help them get to the next level,” Forsyth explains.
“What we want to do is (be) like the real-life university. Too many people take the theory and they never apply it. What the peers help people do is, say, if we do really good inbound marketing and we apply the latest theory, it actually works. It’s partly knowing about it, and it’s partly the validation from your peers that says, ‘This is working for me. Why aren’t you doing it?’ That’s what we want to encourage.”
An engineer by trade, Forsyth says Ottawa’s trademark has always been great engineering talent. But he says the trend toward big-data analytics in sales and marketing is playing to the city’s growing strength as a developer of artificial intelligence tools – a strength he believes OneEleven’s members can use to their advantage.
“More and more, the marketing side of it is becoming analytical,” says Forsyth, whose daughter Brittany has followed him into the tech world as Shopify’s senior vice-president of human resources.
“It’s becoming data-intensive. If we develop them, we’re going to take these great engineers (and) some of them will end up being great marketers and create great companies.”
More venture capital
Being in the heart of Ottawa will give OneEleven’s tenants easy access to a host of potential mentors and invaluable contacts at nearby software companies, he adds.
In addition to Shopify, firms such as Klipfolio – which recently moved into a new headquarters just down the block at World Exchange Plaza – are showing up-and-coming entrepreneurs it is possible to scale an enterprise software venture while keeping it in local hands.
Forsyth says his ultimate goal is to help lay the foundation for more public companies that call this city home. That won’t happen, he adds, until much more venture capital starts circulating in Ottawa’s tech ecosystem.
“Right now, it’s still difficult for a VC, particularly if you’re a Series-A VC, to come into this town and look around. If you come here, who do you meet with? There’s just not that critical mass. If we start creating 15, 20 companies that are all Series-A-ready or going to be, it’s a big difference. That’s what I’m excited about creating.
“The idea is to get (companies) to that Series-A, maybe Series-B, and then they’re ready to roll. We haven’t done as many (IPOs) as we should (in Ottawa), and I think that’s going to be one of the measures I’m going to be looking at.”
Forsyth says OneEleven also hopes to become a regular gathering spot for groups such as Fresh Founders, the Capital Angel Network and The Ottawa Network, whose members learned how to scale their businesses the hard way and can pass those lessons on to the next generation.
“We really want to build a community, and the Fresh Founders and those types of (organizations) are the ones that we wanted to leverage,” he says. “That was very much a part of the strategy.”
OneEleven is officially launching its Ottawa space next month. For now, it’ll occupy nearly 12,000 square feet on the third floor on Slater Street, with an option to take two more floors in the building.
Member companies sign leases of varying terms, from 60 days to 18 months. OneEleven has already inked a letter of intent with its first Ottawa tenant, and Forsyth has contacted more than 20 other potential candidates in the software-as-a-service sector.
He sees big opportunities for startups in fields such as fintech, health-care tech and big data analytics, as long as they’re coming up with “brand new solutions to old problems. That’s really the key. There’s lots of great minds here in Ottawa thinking of that right now.”
Mavriyannakis couldn’t agree more.
“We could have made site No. 2 anywhere,” he says, listing Berlin, Boston, London and Vancouver as the next potential future expansion sites for OneEleven. “We chose Ottawa. Everyone sees what’s going on here and what’s coming out of here. For us, what we see here, what we see coming out of this environment, is incredibly valuable.”