When you think of the best places in Canada to start a business, does Ottawa come to mind? Invest Ottawa’s Nick Quain says it probably should.
Quain is the vice-president of venture development for the local economic development agency, leading programming and helping early-stage startups hit the ground and scale to new heights. In 2018, he led the development of the organization’s IO Accelerator, a three-month training program for entrepreneurs ready to launch a new business. Before joining Invest Ottawa, Quain was co-founder and CEO of CellWand, which pioneered the #TAXI dialling system to connect North American mobile users to cab companies through their phones.
In the past few years, Quain said innovation has skyrocketed in Ottawa, fostering a new generation of entrepreneurs in the city. In this instalment of Top of Mind in Tech, he breaks down the startup boom, the city’s unique bootstrapping culture, and the emergence of founders hoping to tackle issues in health care.
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The transcript has been edited for length and clarity.
More startups than ever in Ottawa
“I would say something that’s really happened over the last year is that there are more startups being started and more founders starting early-stage tech businesses than ever before. In the last six years since I’ve been with Invest Ottawa and probably in our city’s history, (I’ve never seen) the sheer number of players coming in and founders looking for support. I don’t believe it’s just because now they’re coming to us more, though maybe that’s a part of it. But I think it’s really more about more people starting tech startups now than ever before and that makes sense because it’s easier now than ever. There’s all the tools out there; you’re got low-code and no-code tools that allow non-tech founders to build a prototype. You’ve got generative AI that allows you to do all sorts of things in terms of creating content. (AI is) opening the eyes of innovative people who are saying, holy cow, I could start a business that utilizes these tools to do something more efficiently or much easier than it’s been done before.
“From Invest Ottawa’s perspective, it’s exciting and overwhelming to see the sheer number of founders coming in. We’ve been scrambling a little bit to reset our programming and we’ve added resources and people. Our Ignition program, which is for early-stage programs, has been running quarterly but typically had 30 or 40 applications. Now I see 70 or 80, so we need to triage some of those folks that can’t get into that program and support them in other ways. It’s interesting because I talk to other innovation leaders across Ontario and the country and they’re not feeling that same thing. I think part of that might be ecosystems not set up to support very early-stage programming. So I think it’s really exciting and it’s something that does seem to be somewhat unique to Ottawa.”
Ottawa as a centre for bootstrapping
“There’s been a real transformation of Ottawa over the last 15 years. There was the telecom tech hub we had back in the ‘90s and early 2000s and now today the biggest companies are in software. It starts with something like Shopify, or you look at other anchors that we have, like Kinaxis or Fullscript. These are massive anchor software companies that we have, which have a lot of executives and add a lot of different talent into our ecosystem to support startups and to support company scaling. I think Ottawa, we don’t see how good we really are. Having Shopify and Kinaxis, those are two top-10 tech companies in Canada. We punch way above our weight class when it comes to producing top anchor firms. Frankly, other cities don’t have the same level of big-tech software companies that have established themselves as global powerhouses.
“It’s become very clear to me that Ottawa is a bootstrap city. It’s unreal, the number of companies that have scaled to a million, two million, some to five million with zero outside equity. That doesn’t happen in other ecosystems. We’ve had founders come back from visits to California where an investor says, ‘You scale to a million dollars with no capital? We’ve never heard of this.’ And we’re like, are you kidding? I can name six companies that have scaled to that stage. We’re a top-five city in every category for tech, except capital. We’re beaten by Calgary and Vancouver consistently when it comes to raising capital, but those cities have nowhere near the tech anchors that Ottawa does. So I think it’s really interesting that we’ve been able to build these companies.
“Ottawa has always received less capital, so you bootstrap partially by necessity and partly by wanting to build it that way. That has put Ottawa in a unique position, that we just have this whole foundation of bootstrappers in our city.You should have product and you should have a cost-effective scaling strategy before you raise significant capital. Ottawa companies are able to get to that stage, which allows them to raise more capital at a better valuation and it’s super founder-friendly. They control the terms. They’re not under pressure. They’re going to control the board. They’re going to control who’s going to be the CEO. That is a bit of the culture within the Ottawa startup ecosystem.”
Growth in digital health and cleantech
“I think it’s really interesting to see the number of digital health companies that are coming up in our ecosystem. We have this huge percentage of founders looking to solve problems in our health-care system and not all of them come from the health-care space. Some of them have been impacted by family members or through their lives have experienced our health-care system and said this is crazy. We’re seeing all of this talent, all these amazing people trying to solve issues, without a major health-care anchor in our ecosystem. It’s not like we have these billion-dollar health-care companies that are solving these issues that are spinning off these founders. These are people that are coming out without experience in that space, that are solving issues and many of them very successfully.
“(We’re seeing that) in cleantech as well. Cleantech covers a bunch of things. It can be carbon capture, efficient use of energy, sustainable food storage – we just see this huge wave of the next generation. It shouldn’t be surprising that the next generation is passionate about solving some of the world’s major issues, and health care and things like sustainability are two major things that are important to the current population. Again in cleantech, it’s not one where we have these big firms in our city, with all these experts on carbon capture and these things, but it doesn’t matter. These are talented people and that includes some repeat founders who have taken another swing at this.”
