In the constantly-evolving world of tech, 20 years is a lifetime. To wit: When Communitech launched in 1997, the browser of choice was Netscape. (Remember Netscape? Ugh.) If you loved streaming music, you probably spent more time watching RealAudio Player buffer files over a dial-upconnection than actually listening to any tunes. Savvy calendar-lovers could whip out their Palm Pilot 1000 to see if they could squeeze in a meeting while cinephiles plugged in the first DVD players to hit North American shores. (Sadly, they were likely stuck watching Space Jam on repeat until around 1999.) Quaint in hindsight, those well-intentioned ideas proved foundational. In the years that followed, major products were able to stand on their shoulders, from Google Chrome to Spotify, iPhones to Netflix.
In just 20 years time, Communitech has followed a similarly impressive evolutionary arc – from its humble beginnings in a corner of Taaz Corporation’s head office to its current incarnation in over 110,000 square feet of the iconic Lang Tannery, the organization set out to develop one of the most successful tech ecosystems on the planet by helping companies succeed and grow. It’s done just that: In 2017, the startup density in Waterloo Region is second in the world only to California’s Silicon Valley. Communitech fosters a community of over 1,000 tech companies of all sizes and, in 2016 alone, the region added 370 new startups and saw $341.6 million in private capital invested in tech companies. What started as a dream in 1997 has turned into reality in 2017.
“It took 10 years to build the startup community and get the companies to a certain point where we can actually start talking about scaling,” says Communitech CEO Iain Klugman. “Now we've got a crop of companies that we haven't seen since the mid-’90s. We've got a crop of companies that have the potential of being really successful, akin to the previous crop 20 years ago – companies like COM DEV and DALSA and BlackBerry and OpenText. It took 20 years of hard work and determination to build that next crop.”
Impact and evolution
From its impact on local business (in 2015 Waterloo Region’s GDP was 15 per cent higher than the provincial average) to infrastructure (the LRT being built to service the region’s core and the provincial government’s commitment to railway improvements in the Toronto-Waterloo Corridor are in part due to policy work by Communitech in concert with government partners), the legacy of collaboration fostered by Communitech is not only written all over the region, it’s now national in scope.
“I think what we're seeing play out in Ottawa right now is partly the result of the work that Communitech started 20 years ago,” says Kitchener Mayor Berry Vrbanovic. “[Communitech] was the voice of the tech companies and the innovation sector to the governments of the day, about the fact that we as a country are going to thrive in an era where manufacturing was going offshore and that our strength was going to be our knowledge-based economic drivers. We needed provincial and federal and – quite frankly – municipal governments to listen and to invest in this. And that's exactly what has transpired over the last 20 years.”
But Communitech’s next 20 years will be contingent on its continued ability to iterate and evolve. Tom Jenkins, one of Communitech’s founding members and the former CEO and current Chair of the Board at OpenText, credits the recent evolution of Communitech to the stewardship of Iain Klugman.
“When we started Communitech we had no concept of the Hub, we had no concept of Velocity or the Accelerator Centre, that all came later,” says Jenkins. “But those were very important evolutions. I think that one of the key evolutionary things in front of Communitech now is, number one, to stay relevant as the scale increases, right?”
So, as Communitech moves past its 20th anniversary, how can the organization continue to position itself to scale-ups and larger companies? The short answer, according to Jenkins: By figuring out what those organizations need and want, then delivering on those desires.
Courting corporations
Part of that growth strategy was unveiled in 2013, when Canadian Tire hoisted its logo to the rafters of the Communitech Hub. The first entrant into Communitech’s corporate innovation program, the iconic retailer looked to Waterloo Region’s entrepreneurial ecosystem for solutions to keep pace with a new economy. As Klugman wrote of the venture in a 2015 blog post, the win was two-fold: “Big companies get to tap into Waterloo’s legendary tech talent, develop ideas far more quickly and tune their workplace cultures to the new economy, while our startups get access to the buying power that big brands represent.”
Canadian Tire was soon followed by a legion of heavy-hitters including Manulife, Canon, Deloitte, Thomson Reuters and TD Bank Group. In 2015, a year after TD made its foray into Communitech’s corporate innovation space, it expanded the program, opening a new innovation-focused office in Waterloo, employing 120.
“Our investment in Communitech comes from wanting to deliver the most exceptional customer experience possible,” says Teri Currie, the Group Head for Canadian Personal Banking at the TD Bank Group and a member of the Communitech board. “This work is not only critical to the future of our business, but it's also helping us build the next generation of innovators by promoting technology as a career choice for students, women and entrepreneurs. That’s something I am incredibly excited about.”
For his part, Klugman is excited to celebrate the successes, too. But he does it with hallmark Communitech humility.
“Our intention is not to build any kind of legacy to anyone. Our intention is to complete a specific mission and when that's done, our organization will fade away,” he says. “It's never meant to be about us as an organization, it's only ever meant to be about the objective, about the cause, about the mission, about the companies.”
That sentiment – the idea of giving back to the community without ego – is part of Communitech’s legacy and promises to keep the Waterloo Region ecosystem in a continued state of growth whether Klugman takes credit for it or not.
The virtuous circle
When Mike McCauley started Garage Capital, a Waterloo Region-based venture capital fund, he did it with two friends, Michael Litt and Devon Galloway, co-founders of the video analytics company, Vidyard. McCauley co-founded parcel-kiosk service BufferBox in 2011 before Google acquired it in 2012, and went on to work for the tech giant in California. Like Litt and Galloway, he’s a graduate of Silicon Valley’s renowned Y Combinator program who returned to Waterloo Region to build his business. The values instilled in him en route to the Valley are what brought him back.
“All three of us were exposed to Communitech before we were exposed to Y Combinator,” says McCauley. “We saw that value in giving back, through Communitech. You look at the early founders – they were all tech executives that were giving back to the community through Communitech. Had they not started that, we never would have got off the ground. We never would've been able to go to Y Combinator, which, again, allowed us to see another example. Communitech was that first foundation of that giving-back cycle.”
After investing their own money in 10 local startups, the trio attracted the attention of individual and institutional investors who saw Garage Capital as their boots-on-the-ground talent scouts in one of North America’s hottest tech ecosystems. Among the fund’s early investments: Thalmic Labs, Sortable, Bonfire and Clearpath Robotics. In total, Garage Capital has invested in more than 50 local startups. They’re currently raising a $30-million fund with the intent of investing it primarily in Waterloo Region. It’s a virtuous cycle of investment that promises to strengthen the local ecosystem again and again. Like the origins of Communitech and the history of the region itself, the significance of reinvesting in the community will pay dividends down the road.
“There's an interesting quote from Jay Shah, the director of Velocity,” says Iain Klugman. “He said, ‘You know, if Communitech were shut down today, then tomorrow there would be another Communitech.’ Because it is a manifestation of this community, this community wanting to come together and help and give forward and give back. When we talk about Communitech we talk about how it's really another example of the culture and the history of this community. Because all these stories are the same in this community. A group of people got together to solve a big problem, to go after a big idea and that led to the creation of X, Y and Z.”
That’s how Communitech got 20 years in the books. And the next 20 are already being written.
Last in a series. Check out the rest of the Communitech @20 series here.