In this episode of Island Thrive, we chat with Dan Gunn, executive director of VIATEC. He shares his thesis of the city of Victoria, referring to it as a magnetic city — a place that has a remarkable quality of life and offers exceptional opportunities. This pull helps fuel the growth of the four billion dollar per year tech industry. Dan also talks about the organic development of the tech district, the industry landscape and how the pandemic has impacted the mission and culture of their own organization.
So everybody knows a magnet has two poles, and I think ours are quality of life and quality of opportunity. Victoria is one of the top places in the world to live…when you’re values-driven, you find a place like that, and once you get there, you realize, I want to be here and I want to stay here and that changes the value of social capital, and it changes the long-term view of the people who are here.
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Paul: So Dan VIATEC has obviously been around since 1989…The mission is pivoted a few times throughout its existence, obviously still going strong, you joined…Gosh, what year was it you joined VIATEC?
Dan: I think by this time, 20 years ago, I knew I had the job, and I think my first day was September 22nd, 2000.
Paul: I remember when you came because I started in the industry in 1990, and I remember the big announcement of this Dan Gunn guy and I think I met you probably in the first year or two, when you arrived on the scene and….What was that like for you?
Dan: Well, I came to Victoria as I was following a girl who got into UVIC Law School, and when I came out to visit, Royal Roads had a business program, and I had been going to Trent University for… I was in my third or fourth year, and I just kept changing majors, trying out things. After I realized I didn’t want to be a lawyer when I grew up, I didn’t know what I wanted to do. And then business becomes the most applicable area. Royal Roads had a really good B-Com Program, and I got into that, so I moved out here just to do that, and the expectation was graduate and move back to Toronto.
But in that time, I fell more in love with here than Toronto and any one individual. And I ended up staying, and so it was all..it wasn’t a plan. It just kind of all fell into place. My international business professor at Royal Roads was the CEO of VIATEC. And we hit it off. And this job came up and he encouraged me to apply for it, and so I really…By that time, it just felt all like just an opportunity, I just finished university, I started a new job, I wasn’t really sure what a not-for-profit was. I had just taken this opportunity because it was the first one available to me after graduation, and it was a seven-month contract which worked out perfectly because that’s when my then girlfriend was supposed to finish law school and then back to Toronto, we would go… But we parted ways during that year, and I just started with this job that was a seven-month contract, and it turned into…Four years later, I was the CEO, and now I’ve been doing it for quite a while.
But it was exciting. One of the nice things I think about those early days, like 2000, I think my first email account was ‘94 probably, but the Internet really wasn’t hitting its stride until about 2000, 2001. E-commerce was actually becoming a real thing. My first job was e-commerce coordinator, so my job was to work with all the dev shops and the web people in that area, but it was all potential. And I think there was a lot of optimism. I look now at… You listen to podcast like Rabbit Hole, you watch shows like Black Mirror, and you just see how technology is both a tool and a weapon depending on whose hands it’s in. But back then, it just all felt like we’re on the cusp of flying cars and everything being at our door step, you can live anywhere, and it was really exciting. And Victoria’s tech community was burgeoning at that time, it was under a billion dollars in revenue, now it’s over 4 billion with over a 5 billion economic impact. But it was still invisible, and the people who were in that community, we’re just so tight, they were so helpful to each other, and that’s one of the magic things about living on an Island with a 4 billion dollar tech industry. Like Smart Dolphins is one of the few companies that actually has customers here. Most people have customers internationally, all the revenue comes from somewhere else, and as you result, they don’t have a lot of competition locally, and so their willingness to share new business models, new tools, new practices, or even just be there as a shoulder to laugh on or cry on, depending on the situation seemed remarkable, and now that I have toured the world, literally the world, the tightness of this tech community has been it’s strength all along. A 400,000 person community shouldn’t have a 4 billion tech industry, but it does because of the personality of the community as a whole.
Dave: I was just going to say that story of coming to visit and staying for a lifetime is…there’s thousands of those. It’s funny, we have actually have a guy starting tomorrow, at Smart Dolphins here who that is his story, came to visit and stayed. One of our long-standing employees, our controller, same thing, she actually camped for a couple of months waiting to hear from us whether or not we’d give her a job hoping she could stay… Came for a camping trip and stayed. It’s a pretty awesome place. So I guess, is that part of what feeds the tech community is that what’s the root of that?
Dan: That long-term connection, that deeper root that they get. I think I have a thesis that I call the magnetic city. So I feel like most large cities are gravity cities, they just have so much critical mass that everything that gets within orbit eventually gets pulled in – good and bad, it just plots them and jets them. And so I look at the big the big centers of tech like Seattle and San Francisco on the coast, or big cities in Canada, like Toronto and Vancouver. And then there’s these places like Austin, Texas and Victoria, and parts of New Zealand and Granada, Spain, where it’s less than that. Well, now Austin is bigger, over a million people, but places that are in the 500,000 or less population mark, that have just this remarkable quality of life and exceptional opportunity. So everybody knows like a magnet has two poles, and I think ours are quality of life and quality of opportunity. And somebody, it’s easy to go to a gravity city because that’s the sort of accepted wisdom. Opportunity is in New York, like that you go there and there’s going to be things for you. And it’s something different about people who choose where they want to be, not based on where everybody’s going, but based on what they really want, and I think that’s a more values-driven person, and there’s something about when you get to…I think, in my opinion, Victoria is one of the top places in the world to live, and I think when your values–driven, you find a place like that, and once you get there, you realize, I want to be here and I want to stay here, and that changes the value of social capital, and it changes the long-term view of the people who are here. And so if you move to a gravity city based on opportunity, you may be willing to burn many bridges and only be there for two or three years to get to that that experience, get those relationships, get that title and then move to another city, and so it’s a little bit more nomadic and maybe a little bit more myopic in the view of ladder climbing. Whereas if you know you want to stay on an island that’s bigger than Belgium, but still it’s an island you recognize that you’re going to have to have relationships with the same people for your whole life, and so how people manage those relationships and how they value those relationships is different, and I think that’s good for community. I think sometimes it slows us down as well, I think…We hoard our social capital more than we need to. We’re all scared to make a bad vouch, we don’t want to speak up for somebody and have them tank and make us look like a fool. And so I feel like some people they’re a little Scrooge McDuck with their social capital. But as we mature and we get more sophisticated and our community grows, I see that starting to evolve as well. And so all of that, I think, are strengths, but there are differences that allow us to stand out, and once you’ve made that choice, if you’re a magnetic city versus a gravity city person, like gravity cities, there’s just not enough black hole to get you to feel like that’s appealing to you. And so I think you get people with a different set of priorities. And as a result, people are very like-minded, they’re very community–oriented, they’re very values-driven, their very long-term reputation-driven, and that makes them more community-focused, and I think that’s an exceptionally valuable thing that we have that no economic development policy or government could create. Those are the circumstances of physical geography, of climate, of the combination of the communities that originally we’re here. All of that is the DNA of what we’ve become, and it’s exceptional. And as a result, there’s people like me who graduated university and are never leaving.
Dave: And certainly Covid, as an example of where this comes alive. I think in a lot of the conversations we’ve had have been so value-driven, so community-focused and what a horrible thing but what a great time to come together and kind of showcase that and use it. So we should frame this conversation a little bit, we’ve got an audience that’s business leaders and community leaders, not necessarily intimately familiar with VIATEC, so maybe just a bit on VIATEC, on your role there and maybe some of the key things you’re doing.
Dan: Yeah, and you’d be surprised how many people have heard of, but don’t know what VIATEC is.
Dan: VIATEC is a not-for-profit society that was started by a handful of tech entrepreneurs that felt like there was value in coming together and creating an organization that would focus on growing the tech sector. And so we’re a member-driven organization. We have somewhere between 400 and 500 members at any given time, and our job is to help those companies grow and learn.
And so we’ve recently updated our mission statement to make it sound…Well, we had a mission statement that was accurate, but it had no nothing inspirational in it. It’s like saying “that is a blue car with four wheels.” And so now our mission statement, (I’m doing this off the top of my head for the first time) is our mission is to cultivate the most cohesive tech community in the world by providing resources and events for the shared opportunities and challenges within our community while developing a sense of belonging and shaping our region. And so there’s four main components to that, there’s we are about cohesion, that’s been our magic superpower, so we want to help preserve that. The next part is recognizing that regardless of if you’re a gaming company and advanced manufacturer, an ocean scientist company, there’s going to be shared opportunities and challenges. We’re on an Island, so what are the logistics of being on an island? We’re in Canada, so what are the trade barriers with the world? We’re trying to attract people to move to our city so that we can have more skill talent. And so our job is to find what we call the great consequential denominators, what are the things that I can find that there’s a dozen or hopefully many dozens of companies that are struggling with or could leverage and then create opportunities for them to create opportunities or resources to help them either leverage or mitigate, depending on the situation. The sense of belonging part is really important because diversity and inclusion is a really hot topic today, which is fantastic, and it’s a very important priority for VIATEC. Overall, many industries, they can get a lot of homogenous characteristics, and white men is the prevailing archetype in the tech sector. But we know that with more diversity and inclusion, you get better innovation, you get more profitable companies like… There is study after study that shows that. And so what we’ve keyed in on is there’s diversity, there’s equity, this inclusion, all priorities, but the real ultimate goal is do people of…whatever they look like, whatever they believe. Do they feel like they’re welcome and they belong? And what work can we do? I don’t know about you guys, we were talking earlier about introversion, extraversion. I don’t like walking to rooms full of people, I don’t know. I don’t like putting on a mask and performing for strangers, and I think that’s not human nature, and so when somebody’s new to town or somebody’s new to the industry, how do we help them feel like they belong when they come into the room. And so belonging is important and then and shaping our region, recognizing that now that tech is the number one industry in Greater Victoria by a lot, we have a responsibility to help and support the rest of our community and help shape what that could be. And so that’s what we’re working on, and we do that with events, we do that with training, we do that with an accelerator program, we own a building that houses 23 to 28 startups depending on the time of year and other circumstances, and we connect people to each other on a regular basis. So I did that as generally and naturally, as I can do it, I don’t like to read the bullet points that are normally on slides. So I hope that made sense.
Dave: You mentioned belonging, which I would see as a big challenge, you got such a tight community already, so I think somebody on the outside of that looking at VIATEC and there’s just that culture there, and there’s a strong community there. So how do you tackle that when it’s such a core part your purpose, mission?
Dan: Yeah, so it’s a strength to have a tight-knit group but it’s a weakness to belonging if people don’t feel like they can plug in. And so there’s some very tactical things that you do right on the ground, which is like every board member and every staff member remind them, watch for people who look like they’re not connecting with people, look for people who are alone and go and find out about them, and then find other people in the community that have a shared interest with them, so make feel warm and welcome, make them feel comfortable, get them over that initial hurdle. I think once you get…use the temperature of a room psychologically, the temperature of a room, it gets a lot easier and that usually takes depending on the person, 10 to 30 minutes. And so in that first part, make sure that they’re welcomed, that there’s exuberance in that welcoming and that there’s engagement to understand who they are. And then it’s looking more and more closely at where you promote things, how you promote things, the language that you use, like the different cues, and it can be…We have a lot of blind spots I mean here we are three-white dudes in Canada, gold medalist and the privilege Olympics, and so you just have tons of blind spots because you don’t recognize some of the things that may be in the way along as you go and you also have a tendency. Many people who match our profile of a tendency to fall into a defensive mindset when they’re told that, “hey, that doesn’t feel very welcoming, or there’s not enough equity,” and they’ll switch to the terms of equal opportunity. Well, anybody can apply, and if they’ve got the skills and they do…But what you learn is like, language is really important, the wrong job description will drive women away and attract men. And there’s a great example of that actually, Amazon built like an AI tool for screening resumes, and so they went through what are all the characteristics of our best hires, and then they built this thing and it started just recommending only people who went to the same schools, white developers, engineers, it was just all the same stuff and they had to tank it because what it revealed was all the hidden bias in their minds when they were coding it, then they’re like, “we’re trying to make this completely unbiased machine, and the machine was just a reflection of the programmer,” and so just continually learning about that.
And also a lesson that I had to learn, which is pretty obvious to everybody else, but me was, we would do lots to support women in technology, lots to support diversity in the sector, but we wouldn’t trumpet it, we didn’t want to be seen as just signaling for the sake of it. Like I really hate it when I’m in the Pride parade and I see a bank flag. I’m just like, “I’m not excited about you as a bank, I think that you’re using this as a branding opportunity, I don’t think you’re using this as a solidarity moment or an ally ship thing.” And so we did so much quietly, and then it came around, I guess starting…I don’t know exactly, but let’s call it five years ago, where there’s a few people saying, “you know, I’m hear some people think that this is an old boys club,” and I’d be like, “what are we doing specifically that makes you think that or that makes somebody think that?” And we weren’t getting concrete examples. And the real trick was we started to articulate, “here’s what we’re doing about diversity and inclusion in our community,” and it’s a long list, and when people saw that, they’re like, “wow, you guys really are champions, you are investing money, your investing time, it’s obviously a priority,” but we were quiet about it. So finding that balance between making sure people know what you’re doing, but not making it a branding opportunity, it’s about belonging and welcoming, it’s not about…it’s not about brand, what do they call that brand equity, but brand is what people think of you, it’s a reflection of form of reputation, and so just finding that, because the last thing I want to do is just be another one of those corporate things that shows up at everything, because they know it’s good to put on their Instagram. I just feel like it’s so disingenuous. But my belief coming up was have great character, carry yourself with integrity, be consistent, and people will notice. And generally that’s true, but in an era where so much information is being shared and if you are not talking, you’ve made a vacuum, and that vacuum will get filled by something, and then it will become an echo chamber, and so you have to have a hand in seeding that conversation because if you don’t, then people are going to put whatever they want in there, and we’re all basically animals that were coded up until the age of seven, by whatever traumas and fears behind their lives, and now we just have all these thoughts that we think are rational, that are just responses. And so we project all of that to the world, and projections are usually the thing you don’t like to see in your own mirror and so if you leave yourself an echo chamber, guess what, somebody’s going to have something about themselves that they wish was different, and they’re going to put that in the echo chamber, in the vacuum that you’ve left in the echo chamber will repeat it. And so I think you have to have a more active hand in that dialogue than ever, because what you don’t want is somebody who would, if they came to something, have tremendous opportunity laid at their feet and a very warm and welcoming experience, but they’re scared to go through the door, because you didn’t bother to tell people that matters. And so I think that’s the big thing that we’re getting better at right now, we’re running a lot of Diversity, Equity and Inclusion workshops, I think we’ve done six lately, and we’re making those free for the community, and we’re also watching who’s going, so we know who in our community maybe needs a nudge to make that a higher priority for them.
Paul: Yeah, I think that coming from a place of sincerity is it really can be a really good idea. I’m kind of with you in the sense that it also becomes a bit of a virtue signaling exercise for a lot of corporate types, but one of the criticisms I’ve long had as an IT veteran, been doing this now for 30 years, is the kind of “bro culture” and I have seen it historically at VIATEC meetings, not everyone, but I remember back in the day... It’s almost a machismo that kind of like, “well, I’m in IT, and I’m a pretty smart guy.” And they were, they were generally speaking. But for somebody with my personality, it’s sort of like, “well, that’s not fun.” And I hope that these sorts of initiatives will lead to a more balanced environment, right? Nobody wants to work in an environment where it’s just a bunch of dudes that are like, “alright, now I’m smarter than you, no I’m smarter than you.” Having a more well-rounded sector, I think would be great for everybody, so I hope that goes well. Yeah, and I don’t want to be overly critical because VIATEC has done amazing things, but I definitely did notice that over the years. And I remember flying to conferences at various different stages in my career and just hanging out with mostly white guys who are mostly smart, that kind of give off that vibe. Is that what we’re talking about?
Dan: Well partly I think that it’s hard to know because everybody has their own their own experience and what they mean by it, but I agree. My least favorite thing in the world is to talk to one really smart Engineer or Developer about a project, and then get there sort of “this is the best thing that could be done,” and then talk to another one. And it feels sometimes like, “Oh, you just want to prove that you know more than the last person, so this idea…I think that that may have something to do with the personality of the people who are attracted to certain roles, it may have something to do with the culture of the educational experiences that they’ve had along the way, whether they were in competition. When you spend your life…we’re all insecure, but we don’t want to reveal our vulnerability, but if you spend your life where the primary thing that has got you attention and differentiation has been that you’re smart, you’re going to go out of your way to preserve that at all costs because it’s the thing you feel is valued in you. And so I agree when that happens, and I think the hard thing, Paul, is when…We host an event it’s like hosting a party, so if you host a party for 300 people, I guarantee you a few assholes are showing up.
Paul: Not my parties.
Dan: It doesn’t matter what…It doesn’t matter about industry, even among friends. Somebody’s going to bring a friend. You know what I mean?
Paul: Good point.
Dan: And being welcoming is about bringing everybody in and helping smooth off those edges. So there are times where I think we get painted with the tech brush right? Whoever you’re mad at. Zuckerberg is a really good target he pisses me off almost daily. And you look at toxic cultures in the valley and things like that, and I think people then they use that as a crib note, and then they just apply it to other things. And you can find evidence of that. Listen, I can find smug people in the hospitality industry, I can find them in tourism. You can find that, but what happens is all of us, there’s too much information to take in, so we pretty much move through the world with blinders on and trying to use past experiences to draw a tangential line of like, “oh, that proves that oh that proves that.” And so, maybe correlation, but the discipline of us actually looking for causation leading to correlation is lost, like the scientific method and critical thinking is just not a strength that’s rewarded currently. And so as a result, it’s all about gathering superficial information, painting a picture and feeling comfortable that you got it figured it so your brain can work on something else, which is usually whatever else it is trying to work through internally. But none of that’s an excuse. Those are all just realities, and so how do you do your best to overcome that, and how do you do your best to address that or give people a platform to discuss that? Right, so I think the conversation is a big part of it, I think that there’s no doubt in my mind that the work that we’re doing now supporting the women’s equity lab, supporting documentaries on tech diversity, the number of women who are executives at the VIATEC Awards, the number of women who work at VIATEC, then all of those things are great. Honestly though, I think Victoria has another layer. If we’re the gold medalist, silver medalist would be educated white women in the privilege Olympics, and really, if you look at black, indigenous, people of color in Victoria, it’s a very small pool. So I have a thesis on what we can do about that. Would you like to hear it?
Dave: Yes, please.
Paul: Would you like to share it?
Dan: Yeah. So there’s something in Canada called a startup visa, and a startup visa is something where a foreign entrepreneur can apply for it, and if they get a partner of the program…I don’t know what they call us. It feels like we’re an adjudicator, but you get approved by the federal government to be a part of this program, I think they call us a partner. And so in our case, we have an accelerator program, and the first thing you do in our accelerator program is called market validation training. And it’s basically a module five module course that by the time you’re done it, you’re going to have a value proposition, you’re going to have a rough sense of your financials and most importantly, your market potential. And almost all ideas die in market validation, right. So there’s lots of stuff we think is a good idea….We’re all entrepreneurs where you’ve had an idea and it’s the only thing to think about for a little while, and then you realize, “oh yeah, there’s so many things that I wasn’t seeing because I was so in love with my concept.” So market validation is an important thing, and we make that available for free. And so if you’re a foreign entrepreneur and you want to come to the program, you contact us as a partner and we say, “here’s the market validation training program, it’s free, do the five modules, and when you’re done, you have a playbook, it’s not a business plan, it’s on an opportunity, but the playbook really flashes it out conceptually.” And then we review that and if it looks like, “hey, this has a chance. You have the skills and the background, the market seems like it’s a real thing.” Then we will write a letter to the federal government saying “you should give these people a startup visa and they should be allowed to move to Canada, and then there’ll be in our accelerator program and they’ll start a company in Victoria.” And so when Covid started, we noticed that, and this happens during recessions as well, people find themselves without opportunity, so they create opportunity by becoming entrepreneurs. And so we saw over 100% increase in applications to our accelerator program. I think right now we have 150 applicants in the first stage of our accelerator program. At any given time, we’re carrying about 24 to 28 companies, so that gives you a sense of the why part of the funnel. And so we send that out 60% or more of the applicants, sometimes it’s higher, depending on the month, are coming from foreign entrepreneurs through the startup visa program. So my thesis is if we can get the federal government to add some more transparency and certainty to the timeline of a startup visa, we could probably attract dozens of new tech entrepreneurs to start companies in Victoria. They’re going to come from around the world, we get applications from literally everywhere, Brazil, South Africa, Australia, Russia, lots from China. And so for us to enhance the diversity and enhance the economy of Victoria, this seems like the best silver bullet opportunity. And so we’re signing off on more and more of these companies, but then it goes into the government black box of like, “how long will they be in there, what stage are they at, when are they going to get a decision and well, does that person have months to wait to find out, and is there another nation that’s more aggressively willing to welcome them?”
But I think that when we want to deal with black, indigenous and people of color, in particular, black and people of color, obviously, we have a great indigenous population locally, this I think is the way for us to enhance that diversity within our community. And there’s great examples if you look at AOT Technologies or you look at FreshWorks, those are two companies, people who came here to go to school, and then they started companies that now we’re employing 50 to 100 people doing great services, these are young companies that are growing like gangbusters and they’re generally hiring a lot of people from the nation they came from. And so that bringing more diversity to our community, and the number one challenge facing any tech company anywhere in the world is finding enough skilled experienced talent. And so we need better runways and on-ramps for the rest of the world to get in here. And so I’m really hopeful that we can continue to apply support and pressure to the federal government to embrace that program and making it faster and more certain because it would make a huge difference in the community like ours, and I think that’s an opportunity for all of Canada. Thanks to the President of the United States, Canada is one of the most attractive Western world democracies going. And so we should be making hay, while we can on that because you may not feel welcome in the valley right now.
Paul: So let’s talk a little bit more about the landscape of Vancouver Island. And I guess more in particular, the South Island here. How has that evolved? We talked about 20 years ago, ancient history in technology where if you don’t have impostor syndrome, you’re probably doing it wrong. But what does it look like for companies over the last five years and kind of where are going…You talked a little bit about where we’re going in terms of diversity, but what about the companies themselves, are they growing? Are they looking for the big sale? Are large companies setting up shop here because I know, and maybe this is just my misinterpretation, Dan, but I know for a long time what was happening or what the perception of what was happening, and maybe I’m wrong about this, was that you’d get these great startup companies they’d start up in Victoria, the boots on the ground, everybody’s excited about it, they’d get bought out by some larger company and they moved the whole operation to San Francisco or somewhere else. Is that a thing of the past now? And what are we looking at for development in the big picture?
Dan: Yeah, well, let’s talk about that last bit because I think that…I think that’s a perception, but I don’t think it’s accurate, and here’s what I mean: Canada has an issue in that company’s exit earlier than they do in other places. So you get to a certain size, you get an offer of 15 to 50 million dollars and you think “well, do I really want to grow this company to 100 million and take another 10, 15 years to do that, or do I want to sail a boat today and become an investor and a mentor and other things? And so that’s a natural Canadian personality set, and it’s a challenge for our nation, we do not have enough anchor companies in Canada, anchor companies are important because they spin off talent and they spin off ideas and they create brand recognition for the nation, and so we want more of those. I don’t want Amazon HQ3, I don’t want a Google dev lab. I want a company started here that’s a 100 million or more, and we have some of those, but not a lot. And so our biggest acquisitions, if you look over the years, Schneider Electric buying Power Measurement was big, Amazon buying AbeBooks was big, Workday, most recently buying MediaCore was big. All of those have a larger presence in Victoria than they did before they were acquired, so it’s not like they were bought and they moved. And so that goes back to the magnetic city thing we were talking about.
Another good example is, there used to be a company called Flock, so there was Mercurial Communications, and they developed Netscape 8 and so they had a bunch of devs in-house that were good at browsers and that company grew so fast that it collapsed under its own weight, and then this other company wanted to start a new browser, it was a social media browser…We’re probably talking 2009–10 area.
Paul: I remember it well…Mr. Stark.
Dan: Yeah, that’s right. Clayton Stark was the team led that brought those people together. So Flock out of the Valley, hired this team of 15 developers here in Victoria, they were building this new browser, they got acquired by Zynga, and then Zynga said, “look, we’re going to give you shares and we want to make you a part of the team, but for two years, you got to come to the Valley.” So the 15 devs went to the valley. Like two years plus one day they were back in Victoria, they opened a Zynga office, they opened a Kixeye office, they opened the change.org office. That one team of 15 brought all of that back with them, and so yes, it would be great to maintain and grow our own companies and that is a top priority, but I think it’s a misunderstanding that people think that the big companies come here, buy things up and leave. And another one that a lot of people, I think misunderstood was the Microsoft location. So Don Matrrick was the head of Microsoft Studios, which made the Xbox and did all the gaming stuff, and they were doing some cutting edge stuff, and he’s got a really nice house here in Victoria, and I was working in Seattle and he wanted an office in Victoria, so Microsoft got this great presence, everybody’s excited, Microsoft is coming to town. And then I don’t know all of the circumstances so I won’t speculate. But eventually Don left Microsoft to be the CEO of Zynga, and then all of the Microsoft operations in Victoria were rolled into the Vancouver operations.
So now you’re in Vancouver, you got like a 40 person head count in Victoria, and you can’t get more head count because Microsoft isn’t allowing you to hire, and you’re like, “well, how do I get more devs working on what I want…Let’s close a Victoria office and bring those seats to Vancouver.”
So that started because of one person being a charge of a very important technology for the world, and then that person moving on. But you look at companies like, Oh, what’s the gaming company that does the virtual reality things… I’ll come back to it. They’ve had a few names along the way, I feel really bad.
Paul: Is that the one in Qualicum. Cloudhead?
Dan: No, these guys are bigger than that. They are off Glanford and they’re a great team, they’re a great company too, and they keep growing and they want to expand and bring in more people. A lot of that came because of the Microsoft presence, so Microsoft shut down. Once again, people who were loving Victoria, we’re like, “well, I’m not leaving.”
Paul: Isn’t that the story though? That is the classic Victoria story, Dan. And this pre-dates you, I remember when BC Systems Corporation was a thing, and it was a government entity and it was designed to bring all the IT services together, a remnant of it still exists, but they were developing products, selling them internationally and the new government came in and decided this was not the route they wanted to go and sort of shutdown a lot of those operations and a lot of those people from that time, and they said, “well, we’re here, we were in Victoria now, we’re going to just start our own thing.” And a lot of the tech industry found its roots in that, and you see that, and I think that’s sort of a natural thing, there’s people that they come, they become part of a business, they work in that business for a while, they move that something happens, something maybe cataclysmic in some cases, right? And then something new and dozens of new things are born out of that right? And so it’s almost like the phoenix rising from the ashes. In many cases, something more incredible comes out of the passing of something that you thought was the end all be all right? So I guess what you’re saying is that trend continues, but we still don’t have that quote, anchor tenant phenomenon the way that I think…I think that was sort of envisioned, I remember…And you’ll remember it well, because you worked there when VIATEC was up at the Tech Park, and the idea was that there would be a couple of big anchor tenants and that there would be a whole ecosystem buzzing around of technology companies. Does that happen, or is that what we’re seeing happen only in maybe a more organic way than the anchor tenant model?
Dan: A couple of things on that. So one, I got to go back. The company is called Dreamcraft. I remember it, and they do virtual attractions and it’s mind-blowing stuff, if they ever invite you for a tour, go. You want to fly a dragon, that’s the joint.
Paul: It’s on my bucket list.
Dan: But I think anchor tenant anchor company, very similar, we call them whales because we wanted to localize it. So VIATEC has a goal of us having a 10 billion dollar industry by the year 2030, the 10–20-30 goal. And I think that’s very realistic, that’s 2X growth from now, and our trajectory is faster than that already, and so…But when we said that we want to be 10 million by 2030, what we said was, if we can have a hand and encouraging and assisting more the development of more whale companies, and we started out like a blue whale is a billion dollar company with at least a thousand staff, but recognizing, walk before you run. And we’ve got 4 two new 50 million companies are 10 now, 100 million dollar companies. That all helps. And so part of it, you’re asking earlier about how has the industry changed as we demonstrate, it used to be, if you exited for five million bucks, you were a big deal. And now it’s like companies are exiting for more usually some sort of confidentiality requirement is related that. So I won’t talk about any specific deals, but the deals now are 20 times the size of what they used to be. And so what that does is it changes the ambition, it changes the intention of the entrepreneurs that come next, so they just saw a company get to 150 staff and they start thinking, “okay, well, I want to get.. My intention is to build something.” So it has a lot to do with what you set out to do, you build the foundation for an anchor company here, you build a foundation for an easy exit, and we’re seeing more intention around becoming an anchor company along the way.
And then as far as the attract them and create that hub of activity…the Tech Park, we were there for seven years and it’s a great facility if you need a large footprint, like if you need more than 10000 square feet. I think the sense of community was a challenge because it’s a little bit remote, a little bit removed, so it has that campus feel, but campuses can feel disconnected. And so I think they have the right people there, and I think we had a great experience while we were there, but what we’ve seen before Covid, and we should talk about this some more, is like the downtown core, we bought a building in the downtown core in 2014 and at that time, on the block that we were on a Fort Street was pretty much half empty and pre-Covid, there wasn’t a vacancy left on the street. And that was within five years that that had just all been filled in. So I think what happened more serendipitously, and then people like to admit is we buy a building, we house 30 new companies in that space, we are holding events with hundreds of people coming to it every day, Owen Matthews of Wesley Clover at Alacrity buys a building a block over. Space station is just down the street. SendwithUs leases a space just a few doors down from us, then the same developers who helped us buy our building, open a building at 844 Courtney Street, so one block over, and they house five or six companies in there, and then Checkfront moves a little bit down Broughton Street. And so now we’ve created this tech district, but it happened based on opportunism and circumstance more than, here’s a strategic plan that everybody’s going follow it. It was just like, where is the space available that’s going to work? And if I had a place, a pin where I’d like to be, I would have placed it at Douglas and Fort before we bought the building, but I never expected we would be able to afford and find an available space there, and so the circumstances worked out. So now I think there is an element of gravity to parts of the city where there’s intermingling, and that’s really important, that’s shared energy, that shared opportunity, there’s comfort in that. Esprit de corps is a great term where people feel like they’re all part of a larger thing, there’s a sense of community, and there’s also comfort in the fact like, “okay, if I ever want to do something different, there’s lots of opportunity for me here.” It’s not all invisible like it used to be, and so I think those are all part of the evolution and maturing of the sector. And I think people’s eyes are just opening up a little bit more to see it. One of the issues we have is tech companies don’t sell anything in Victoria, so they don’t have signs, they don’t do marketing and Victoria when they support something, philanthropic, they want their staff to know, they want their families to know, but they don’t necessarily want a lot of recognition for it, so there’s all this stuff that’s been under the surface that hasn’t been as widely obvious to people. And I think more and more that’s percolating to the top.
Paul: I know for sure the VIATEC headquarters prior to covid 19 was really great. Just, I would pop in there and grab a coffee and sometimes have a meeting there, it was just a really…And you felt like you were really part of a community and that prior to that, and certainly I felt that way going to the Alacrity building and hanging out in the restaurant down below and stuff, and you really feel like you’re part of the tech community. And so that’s really cool, it’s really neat that you’ve been able to foster that, how… I imagine it’s not as prevalent now with covid-19, so we should probably talk a little bit about that, obviously, you’re working primarily from home, what’s on the radar in terms of the impact of Covid–19 specifically for VIATEC, but also for the industry, I guess of all industries, the technology industries, probably the most resilient to being able to work from home because technology allows that right? But what’s your take on that?
Dan: Yeah, I think you’re right that it’s more resilient and adaptive by its nature, so flipping to remote work is, I think, easier for tech companies than anybody based on the infrastructure of the tools that they use. And so I think that part was pretty smooth. Obviously, there’s somewhere between under 20, but 15% or so companies are really struggling as a result of the current circumstances, and that’s no surprise. In fact, the surprise is it’s not higher, like other industries, boy oh boy I feel for them. It’s really tough.
As far as VIATEC’s operations, we’ve (a little pat on the back) we are a very resilient and stable organization, we have best-in-class financial management and how we handle things, not–for–profits on a building, and that provides a great backstop. Like I said, to the board of the directors, “if we had a million dollar idea that would be vital to the tech community in the next year and we couldn’t find a funding partner for it, we could always finance the building to find the revenue or to find the capital we need to implement that,” and that’s why we have it, is to serve the community we’re trying to build. We’re trying to cultivate the most cohesive tech community in the world, but we’re also trying to build the most stable and dependable tech organization of our kind. And so overall, operationally, we have, I think, 23 offices in Fort Tectoria, that’s the building that we own, and I think six of those might be vacant right now, which is…we normally have a wait list of about 15 companies.
Dan: But what we’re seeing different is now more mature companies are second guessing or re-thinking what their footprint needs to be, and so we’re seeing more and more companies say, “well, we do need to have a place…we need to have a location and a headquarters, we need to have a meeting space, convening space, and a place for our people to connect, but what size would that be?” And so my anticipation is, within the next six months, we’ll probably see a lot more mature companies taking up space in our building instead of startups. So our business model is largely month-to-month, very flexible, it’s not a complicated agreement, we include your Internet, we include your power, we include everything. So you just pay a rate and you got a space and you’re among other people. And so I think that model is likely to be adopted by more traditional commercial real estate holders in the future because they’re going to have a hard time filling large footprints and getting five-year commitments from people at least in the near term and possibly forever. And so our organization is on very stable footing and credit to our federal government, things like the emergency wage subsidy, things like the commercial rent assistance program and even CERB all of those things provided in some comfort, security, stability, so that people can do the right thing and continue to employ. So we’re a long way from ever having a meeting, about “well we better cut back some costs and lets some people go.” And credit to our community. We’ve offered membership deferrals, so if you’re in a tough spot, you can’t pay right now, and depending on the month, we’re seeing 80% to 90% of the companies renew are now just fine, and we’ll say, “are you sure you don’t want to preserve that cash,” and they’re like, “what you’re doing right now is probably the most important thing you’ve ever done, and I want to support that.” And so that feels really good. I think the nice thing about shared suffering is it really heightens the value of community in people’s minds, and so our value proposition didn’t change but our value perception went up, right? And we learned a valuable lesson too that we are a very consultative organization. So we want to be industry-led, so if we have an idea, we try and test that idea with a bunch of companies before we ever bring it to market.
And once Covid hit, there was no meeting on, “we need to do a survey right now on productivity and understanding the impacts and the remote workforce challenges of our companies, just get that out.” We need to create a resource center on our website that lists every program that might help a tech company so people can get the answers quickly and digest that, sift through it. We need to create a return to the office handbook that gives people a checklist with a bunch of templates on exactly what you’re going to need to do because it’s confusing with all the different information people were getting. And so it up our speed on how quickly we launched and did things and it reduced consultation, and what we’ve realized is sometimes consultation just uses up all the resources and then you don’t have anything left to actually execute. And so I think there’s going to be I think we’re going to probably tilt a little bit toward launch and test as opposed to consult and consult, and then maybe launch.
Paul: You did a survey recently, or released a report in March, and I know you’ve kind of pulled some of the topics out already, but is there anything else worth highlighting in the minutes that remain here?
Dan: Yeah, so a couple things from that survey, we did two of them, so we could put right at the beginning, and then we did another one like July-ish, because we wanted to see how is that needle moving. But the main takeaways are… So we asked about productivity with remote workforces, how are you finding productivity? 55% said about the same, 20% said it’s better, and about 20%, said it’s a little worse. And so that was really interesting to see that. The other thing that was really interesting in that is we asked each company, what percentage of your staff do you think will continue to work remotely even after it’s not required because of Covid. And the sum total was 59% Now, Statistics are like a bikini what they reveal is intriguing, but what they conceal is vital. We don’t know, the survey didn’t attach that to head count, so if smaller companies were answering that question more, it could skew, so are we saying that 60% of the 17,000 tech workers are going to remain working remotely, we could never draw that conclusion from that data. Somebody could try and draw that conclusion, but I think that would be foolhardy. But what we do know is there’s this huge opportunity with remote work, there’s a huge opportunity for how we reshape everything in society because of remote work and at a much lower level how do our companies work now? So if recruiting skilled and experienced talent is the number one thing holding back our tech companies and now they’re comfortable talking to plastic screens all day, we can start hiring talent from anywhere in the world, and they can stay there, but they can start working within those companies, and so I think what you’re going to see is what more people who live here are going be working for companies that aren’t here, and more companies are going to employ people who aren’t from here. And that’s going to make us a more global community overall, and so I think it’s an exciting opportunity. I get a little frustrated when I’m dealing with and consulting with politicians and policy makers, and I hear like, “well, we got to get things back to the way they were because parts of the economy are suffering.” And as politely as I can say, I’m like, “you’re on the threshold of the greatest opportunity to redesign everything we do, infrastructure, public transit, how long we work, the way we work…”
Dan: Education, great example.
Dan: So this race to the illusion of the past was stable and right is a challenge, but there’s just so much opportunity in all of this, and I’d rather not have another fall where Oregon is so on fire I can’t see across the street.
Dave: We’ve talked a lot today about macro stuff, right? Can you dig in a little bit into what you’ve seen within companies, the best practices for the work from home, keep productivity up, what’s working, what’s not…some technical stuff?
Dan: Yeah, well, sure, I think I can. We talked about it a lot, and I’ll try and keep it general, but drill down more for you. I think what’s keeping CEOs up at night is onboarding, so you hire somebody and they’re not around all the time, it’s really difficult for them, that person to feel like they’ve become a part of something, and for them to embrace a culture. And culture is the next thing, how do I preserve the positive things about the culture that I had before Covid? And so the main things that we’re seeing, I don’t think are going to be a surprise, but more you have to do more mental health check-ins on everybody. Everybody’s in a more vulnerable and tender state, and I think that’s actually…there’s a lot of beauty in that as well, it’s not all about the masks and stuff, and so you got to be watching your people more closely and checking in with them, and expect them to be going through some heavy staff, expect them to lose a loved one, expect their relationship to be strained by the confines of isolation, expect them to get existential. And so I think that’s a big part of it. And then, so one of the things that we did early that I’ve shared with lots of people, we’re not the only ones, every day, we used to do a morning stand-up, like a 10 minute stand up as a crew at VIATEC now, every day we meet at 1 o’clock and we talk about what our morning was and what our afternoon is, and it’s a much more open discussion. It’s generally half an hour, sometimes it’s 45 minutes, sometimes it’s 15, where everybody just talks about what they’re working on, and people can ask questions and I think we have a more cohesive understanding of everything that’s going on than we’ve ever had, even when we all sat across from each other. But you got to put that effort in, like that scheduling, and we scheduled a virtual happy hour every Thursday at three, and so every Thursday at three, we all log in, we all have whatever our beverage of choice might be, and we try and not talk about work, what are you watching, what are you binging, what are you seeing, what are you hearing, what are you excited about, what projects do you have on the go, just because that watercooler small talk isn’t happening anymore. And in our case, we had onboarded a couple of people during the beginning and during Covid, and I feel like they’re definitely they are people that everybody on the team cares about, they’re not this anonymous video feed. So that’s been a big part of it. And then I think the other thing is, depending on the type of business you are, the embracing of okay ours like the Google model of objective key results, so that there’s added clarity for everybody.
And the other thing is getting to trust. I think a lot of the reason people were, I think, opposed to the concept of virtual work before they had to try it was related to if they’re not around, I can’t trust that they’re working on what I need them to be working on, and that they’re getting things done. And so getting to trust, I think is a big part of it, so you’re building that culture within your company and hiring people you can trust. And my management style is, “look, I don’t have a checklist for you today, I trust that you’re getting everything you need to get done, and I trust that you’re going to ask for help when you need it, and you’re going to tell me when you can’t get it done, and then I’m going to have some questions about what you’ve been doing that relate to you not getting it done.” But I think giving people that room to work when they want to work, how they want to work can work with the right people and the right culture.
And an interesting thing that happened for us too is we switched to a 4–day work week experiment, like three weeks before lockdown. Well, I can tell you that I have no chance of ever going back to a five-day work week, right so one remote, no more compute, all that saved time. Even in Victoria, where you can be 5-10 kilometers from your office, it still takes time to get there, and there’s parking, there’s costs that’s all washed away, so that’s all a gift to everybody that they can use for the rest of their life. And then for us, the four-day work week it’s like, “hey, I don’t have a list for you, but you have to get everything done, and if you can’t get everything done, I need to know why, and then we’ll find the resources or we’ll take things off your plate along the way.” And that’s worked quite well.
And then the other thing is what’s going to happen with business development? So there are businesses that they had to go to trade shows because that’s where their customer was, and they had to bring their shiny object and show it to people, answer their questions, schmooze the right person and the sales cycles for some things, especially in advanced manufacturing can be years, like literally two years to close a sale, and then there’s a year of production before you deliver.
How now do you go ahead? Talking to Scott Phillips from Starfish Medical, I would say one of our shining examples of just the best tech companies in the world, and he was telling me they’ve done some deals that they would never have possibly been able to do virtually before Covid, they just wouldn’t have been acceptable, it would have been like, “you have to bring that dev team to my shop, I want to meet everybody, I want to have a number of meetings before we can do that.” They just did that all online and we’re able to close deals.” And so what’s that going to mean for business travel? And I don’t know how many people know this, but first class pays for the flight, those 12 seats up front cover the cost of the flight, what you’re paying in channel gap class when you’re sitting there, three abreast which is exactly where I sit, don’t get me wrong, I’m not trying to put myself in the elite status, but without those first class tickets, that plan does not fly. And so what’s going to happen to business travel after this? How often are people are going to travel? When are they going to be comfortable traveling again, and as a result, how easy is it going to be for us to go on vacations because there’s going to be less connecting flight opportunities or more expensive tickets, and so how that culture is going to evolve and how elastic and how plastic are we? How much will it snap back and how much will it hold? It’s tough to predict.
One thing I know is there’s so much less certainty in what’s next then I’ve ever experienced in my life, maybe it was always less certain, and we just had this hubris of believing we knew how things work. But now when I hear somebody tell me what’s going to happen next and they’re certain of it, I just make a note that any time that person tells me anything for the rest of their life, there’s just a big grain of salt that I have to take with that because there’s just nobody knows and anybody pretending they know, I’m just like, “I’m glad you’re giving yourself the comfort you need by the illusion of certainty, but I don’t accept that you know what you’re talking about.”
Paul: It’s so funny, the joke, of course, was very suddenly everybody online is a pandemic expert. I had no idea that you were a virologist. This is very difficult times for people, people are going through all kinds of mental stress that is just unimaginable, even nine months ago that this is even a thing. Here we are. We’re all living through it, and so I certainly went through the mental process myself of like, “all this is terrible, and we should do and we should do that.” And had to check myself and recognize that I also wasn’t a pandemic virologist and everything else. But I think for interpersonal, we just we have to give people a little bit of space and just recognize that we’re all going to be a little bit crazy some days, and hopefully we’ll all land a bit better, but definitely you do learn a little bit more about people’s personalities, people you thought you knew really well…
Dan: And it’s such an opportunity. Similar to you, I’ve had thoughts and then instead of churning outward judgment, I’ve been more inward analysis, like “why is that so important to me? Why do I think that? What’s going on with me?” Because it gives me more empathy when somebody else is projecting whatever their fears are on me. I could be like, “oh man, you’re so scared in there.” I understand, so I don’t mean this to sound like anything other than compassionate, but I’ve really started because of this to see the world more like an ant farm. So of course, out of eight billion people, how many of them are going to be awful? A lot. So why would I be surprised by one awful news story or a dozen awful news stories, I didn’t hear the seven billion good news stories today, but I heard the dozens of bad stories. But also I needed that perspective so that everything didn’t upset me so much. Yeah, just like, “hey man, this is a large group of things and there’s going to be a selfish set, a dysfunctional set, a scared set, and that’s normal, and you’re not going fix it by being angry about it yourself, so learn from it as best you can.” And I don’t spend a lot of time on social media, hopefully, to most people, I’m invisible on social media because I don’t use my own name, but I’ve taken to posting just like, “hey, this is something I’ve been working on myself or something I’ve been scared of or I’ve been feeling” and sharing that, and it opens up a lot of conversations and dialogues. Social media is either a tool or a weapon, depending on who’s using it and how it’s being used, but I think there’s opportunity in that for us to connect more, but it requires us sharing our own vulnerabilities and thinking as opposed to cleverly created meme images by Russian trolls designed to divide us, right.
Paul: Yeah, everybody just needs to take a deep breath once in a while, and I include myself in that list because I’ve probably spent far too much time dooms scrolling on social media, just like a lot of people, and it’s easy to get so caught up in the bad news and yet and I think you framed it really nicely, Dan, Covid-19 has been awful, but it’s also possibly the greatest opportunity we’ve had to look at better ways of doing things, not just within obviously the industry, but perhaps in the world right and if there’s any silver lining, maybe humanity will come out of this with a different perspective and we can hope, right?
Dan: That’s what tech is. Tech is finding opportunity and transitioning change in fear. So if you have an entrepreneurial mind and you have an innovative mindset than anything you see as potentially opportunity for improvement and growth. And so I think that’s why I find it so compelling to work with tech people is they’re the masters of their own domain (to steal from Seinfeld) and they want to shape a difference and hopefully a better future, and I think that’s great.
Paul: So, speaking of shaping the future and a better future, I know that VIATEC annually does a food bank challenge. Is that proceeding as normal this year and what’s the status of that?
Dan: Yeah, it’s funny I was thinking about that this morning in the shower, that’s what I think about food bank challenges when I take a shower. No, I don’t think it can happen exactly as it normally would, but I think it’s important that we do something. And so normally at the VIATEC awards, we do a big fundraiser as well. Last year we raised $300,000 for food security and for that new project out in VicWest. And the food bank challenge last year was one of the better years in a long time. And so now we got to figure out, well, how do we structure this so that it works now, but if your company is stable, if your life is secure, you owe it to everybody else to give more.
Dan: So yeah, we got to figure that out. Normally, that runs in November, I expect it’ll be the same, and so, yeah, we’ll be probably talking about that as a crew today at our 1:00 o’clock crew connect.
Paul: I look forward to just finding out that what’s happening because it’s definitely a really cool thing that VIATEC does. For the awards are we going virtual, are we waiting to open?
Dan: It’s definitely our marquee event, so if I go to another city and they’ve heard of VIATEC, they’re like, “I’ve heard about your rewards.” Right because we go crazy. And so we had moved, so we saw the writing on the wall, normally it would have been early June, I think June 5th this year was the date, and were were like right away, I was like, backup venue. And we got the Conference Center again, so we’ve been at the Conference Centre and we moved to the Royal, and that means that we had to give up the dinner, but we could fit more people. It was a trade-off. I’m not sure which one’s better. So we booked December 10th, I think it was, at the Conference Centre this year. We know that’s not realistic. We’re not going to be able to put 1000 people in a room this year, we hope but we don’t know about next year. And so we’ll be doing something virtual, I don’t want to…When will this come out?
Dave: October 6th or something like that.
Dan: Okay, so by then we might be talking about it, and I don’t think it’s revealing too much, but right now what we’re exploring and building out is instead of the typical VIATEC awards, it’s definitely something virtual, but probably different categories, entirely. It’s going to be all about Covid heroes. So what are the companies that have just done exceptional things that we want to eat praise on and draw attention to as examples, if you’re trying to call to vacuoles of tech community, one of the best things you can do is hold up the most community-minded people because then it encourages and replicates itself as a behavior. And so we haven’t figured out exactly what all the ins and outs of that are, and I may even go beyond tech companies, we might start targeting who are the people that just deserve recognition, and we can use our spotlight and our microphone to you get them some attention.
Dave: That’s great.
Paul: Very cool.
Dan: Yeah, and we will never be able to virtually match what happens at the VIATEC awards.
Dave: It’s hard to throw whales.
Paul: Less broken glasses at home I think.
Dave: Some though.
Dan: We could mail everybody a whale and a wine glass so they could smash it. So what makes a lot of sense to just use the name, use the momentum, but do it entirely different for a different set of categories.
Paul: Well, on that note, we will wrap up for today, we’ve been joined by Dan Gunn, CEO of VIATEC. Thanks, so thanks so much for joining us.
Dave: Love it, that’s great.
Dave: Thanks Dan.
Paul: I think there’s probably a 100 other things that I’d love to ask you about, but we only all have so much time, but hopefully, we can have you on again. Happier days ahead and see how some of these initiatives roll out and what the future is.
Dan: Thanks for having me on guys. I really appreciate the time. And it’s good to catch up. I don’t think I’ve had a chance to talk to you guys for a while.
Paul: It’s been a while. Thanks, Dave.
Dave: Thank you Paul.
Paul: We’ll see everybody next week.