Why Waterloo’s Reputation In Silicon Valley Is Growing

July 24, 2015 by John Lorinc

Ever since BlackBerry lost its position atop the global smartphone industry, Waterloo has become known internationally as a place where innovation-minded entrepreneurs and engineers have learned the lessons of disruption at close range.

“It’s not the end of the world if the behemoth loses its position,” observes Ajay Royan, co-founder, with Peter Thiel, of Mithril, a San Francisco-based venture investment powerhouse. “The last five years is when things have taken off in Waterloo. People have been freed from the single company town complex.”

Any successful startup region “needs to have gone through that tornado of growth,” adds Lars Leckie, an Ajax, Ont.-born managing director of Hummer Winblad Venture Partners, a San Francisco firm that invests in early-stage enterprise software companies.

Indeed, Royan and other global tech leaders understand that Waterloo’s remarkable resilience in the face of what initially seemed like a disaster – as well as its rapidly growing reputation in Silicon Valley – is directly connected to some key characteristics of the region’s cultural and educational infrastructure.

Royan, who will be a keynote speaker at the Waterloo Innovation Summit this September, highlights the University of Waterloo’s intellectual property policy as a vitally important point of differentiation from other top-ranked engineering and computer science schools.

Most faculty use the same texts and cover similar material, he says, but Waterloo’s IP policy, which allows students and researchers to retain ownership of their discoveries, has created “a turbo effect.” When Royan is asked by other universities how they should reformulate their IP policies, he says, “Photocopy the Waterloo version. It’s not that hard.”

The far-flung diaspora of Waterloo/BlackBerry alumni, Royan adds, has created important international networks of engineers and tech entrepreneurs, including many who ended up in the Silicon Valley/San Francisco region. “That’s what led to this very organic move between the two communities.”

For strategist and entrepreneur Salim Ismail, who built and ran Brickhouse, Yahoo’s internal incubator, the University of Waterloo’s co-op program has also served a pivotal role in accelerating the region’s international reputation as a startup hub. A Waterloo graduate with degrees in civil engineering and physics, Ismail says he “attributes 90 per cent of my success to that co-op program.”

In his view, the hands-on experience students receive during their placements has played a far more important role than more conventional technology transfer programs in the creation of a startup culture. “It’s the most well developed innovation ecosystem in the world today,” says Ismail.

“People see the value of the co-op education,” agrees Leckie, adding that he was recently talking to the founder of a 30-person San Francisco startup who had just returned from an intern-recruiting mission to Waterloo. When Leckie asked why he’d gone so far afield to hire talent, the founder replied that a graduate who had already worked in several firms was “ready to work.” “That’s night and day better than even Stanford.”

Ismail, who graduated in 1989, also notes that the presence of so many ex-RIM engineers accounts for the fact that the founders of many of Waterloo’s newest startups aim to build globally-scalable companies. “That [experience] sets a bar. Everybody realized that nothing would stop them.”

Many seem to be doing just that. Citing the region’s showing on the C100 – a roster of the most influential Canadians in Silicon Valley – Leckie points out that “the proportion of Canadians in the Valley that are Waterloo alumni is exceptionally high.”

His one piece of advice for the region going forward: make even more of an effort to tell the story of how the phoenix rose from the ashes.

“I’m always a proponent of making sure people know about your successes.”

IN QUOTES: WATERLOO’S REPUTATION IN SILICON VALLEY

  • Frank Bruni, New York Times (March, 2015). “I spoke with Sam Altman, the president of Y Combinator, one of the best-known providers of first-step seed money for tech startups. I asked him if any one school stood out in terms of students and graduates whose ideas took off. “Yes,” he responded, and I was sure of the name I’d hear next: Stanford. But this is what he said: “The University of Waterloo.”
  • Twitter chair Jack Dorsey on his decision to establish a Waterloo office for Square (September, 2013). “The engineering discipline and all the technology thinking and support and mentorship happening in the community make it a very easy choice. We’ve seen this in a lot of other college towns around America. This one (Waterloo) is quite special.”
Reddit co-founder (and now chairman) Alexis Ohanian (centre) chats with a group of Waterloo Region startup entrepreneurs in New York in April, 2013. (Communitech News photo: Anthony Reinhart)

Reddit co-founder (and now chairman) Alexis Ohanian (centre) chats with a group of Waterloo Region startup entrepreneurs in New York in April, 2013. (Communitech News photo: Anthony Reinhart)

  • Alexis Ohanian, co-founder of Reddit (October 2013): “[Waterloo University’s] reputation precedes every single one of these graduates [who apply to Y Combinator]. It’s just a factory for entrepreneurial engineers, and it’s amazing.”
  • Google executive chairman Eric Schmidt (October, 2014): “We have something like 400 engineers and something like 700 or 800 employees [in Canada] and I always knew Waterloo was a fantastic engineering centre.”

Source: Communitech