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Dispatches: January / February 2005



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Stormy weather

In that November snowstorm, it took Progress publisher Neville Gilfoy and me two tries to drive from Halifax to the Ignite Summit in Saint John, N.B. The conference was designed to allow managers of the region’s technology companies to focus on what entrepreneurs can do to stimulate growth. Pardon the metaphor, but the technology sector itself is a storm. It changes the landscape. It destroys and it also creates.

So maybe it shouldn’t be surprising that top managers in this sector aren’t just smart and creative but also passionate, strong, and agile. They have enough ego to execute but also enough humility tounderstand their markets.

The session on access to capital introduced me to Brian Flood, who, as founder of Q1 Labs, lived on airplanes courting venture capitalists. For Votemail Express, his second high-tech venture, he is back on airplanes; this time his focus is China. We need a collegial approach in our region, he said. We can profit from our senior business mentors like Arthur Irving and Gerry Pond (an organizer of the conference). Get everyone to chip in.

In California the VCs are fighting to get deals, Flood added. They have massive funds and no deal flow. His advice: start in California and work your way back. UNB produces talented kids, but they are petrified to start their own businesses. They can’t get funding, whereas a Stanford engineering grad can get half a million dollars for a start-up. The Valley has billions to invest. “I’m a rarity,” said Flood.“I’m the guy who made it out of Alcatraz.”

VCs understand the markets, said Jamie Nicoll of PricewaterhouseCoopers. Drop the sense of entitlement that the dollars should come to us. Get on the plane and go to Toronto, Montreal, the United States.

Getting the provinces to work together would be better than the present competitive approach, said Tony Van Bommel of the BDC. Two provinces asked if New Brunswick-based Q1 Labs could move. My goodness!

Kevin Francis talked about co-operation. A Cape Bretoner with degrees from St. Francis Xavier and Saint Mary’s universities, when he became CEO of Xerox Canada he made Saint John a major base for the company. Now he’s doing the same thing as CEO of Center Beam, which is based in San Jose, Calif. Atlantic Canada should have an office in Silicon Valley, he said. The Valley is hungry for deals. We need to promote ourselves with a high degree of focus.

“You can also relocate an existing Silicon Valley company here, as I did, ”said Francis. There is a race for Silicon Valley-based investments to move offshore.

We have a credible case here: lower costs, higher retention, incredible telecom. We are a hidden jewel. Our case is compelling, but it has to be told to the Valley.

Raise money when you don’t need it, said Joe Catalfamo of BCE Capital. Look for a product to sell globally. Then find good sales guys—hunters who want to make money. They will seek out the large markets. At the session on access to markets, Steven Palmer of Whitehill Technologies told about attracting an experienced U.S. salesperson: You need raw-meat aggression when you are face-to-face in the U.S. market.

You need to be able to take failure and rejection. Build the killbox (define your market), said moderator Michael O’Neil of IDC Canada.

Anger spilled out from several panelists about the lack of direct flights between Atlantic Canada and the U.S. Atlantic Canada is hard to access by plane, which is a competitive disadvantage when you want to sell or raise money.

The challenge for the technology industry is how to “scale,” how to grow faster than your competitors amid the uncertainty of constant change. This was the message that Francis gave in his keynote speech and when I spoke to him later. Employees can’t deal with confusion, Francis said. Managers must be clear, concise, and consistent. His model is the inverted pyramid that turns conventional management on its head. At the top is the customer, who runs the company. Next come the frontline staff. It is up to the managers below to support the staff. The CEO is at the bottom, trying to support everyone. Manager as coach is his model.

Business today is an endless effort to do everything cheaper and faster, he said. The essence of speed is getting rid of management slowdowns. Be direct. Get feedback. Employees want straight talk.

The key for managers in Atlantic Canada is to liberate the minds of their people, Francis added. He quoted opening speaker Frank McKenna, who said that the Net is either a threat or an opportunity, and we must make it an opportunity. McKenna also stressed that the region needs people, and therefore an immigration policy designed for Atlantic Canada and faster certification of skilled immigrants. McKenna had spoken about urgency. A strong technology sector is away to keep talented young people and attract talented immigrants. The train is leaving the station. Inaction is deadly.

One day seems much like the rest, until a sudden storm transforms the landscape. The technology industry is a storm. It destroys and it also creates. Our region has what it takes to be a creative force. But will it happen? It is up to us.


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