Waterloo will thrive, not just survive, despite the recent turmoil and management shakeup at Research in Motion, the leader of the city’s local tech startup incubator says.
The southwestern Ontario city has become somewhat synonymous with RIM,since the company was founded in Waterloo and went on to globaldomination while maintaining its international headquarters in thecommunity of 400,000 people.
Although RIM just replaced co-CEOs Mike Lazaridis and Jim Balsilliewith Thorsten Heins and is struggling to regain its competitive edge,Waterloo has blossomed into a high tech business hub that goes farbeyond just being the birthplace of RIM, says Iain Klugman, CEO ofCommunitech, an organization representing the region’s tech sector.
“There are 800 technology companies in Waterloo. RIM is the biggest andmost successful by far. But it’s kind of full steam ahead,” Klugmansaid.
Although 2011 was a challenging year for global economic conditions anddomestic financing activity, 302 new startups were formed last year inWaterloo, almost double the 156 companies started in 2010. About 450new startup jobs were created in 2011 and local companies working withCommunitech leaders raised over $70 million in financing last year.Over the past three years, Waterloo has created 531 new companies and1,441 jobs at startups as well as 1,000 new jobs at medium- tolarge-sized firms.
Lazaridis and Balsillie are no longer CEOs but their legacy in theWaterloo area will outlast their time inside RIM’s executive suite,Klugman said.
“They’ve built a company that’s put this region on the map globally andinspired a whole generation that wants to be the next RIM. It’s reallytaught people to think big about their ideas and that’s unusual inCanada.”
Lazaridis and Balsillie have also been extremely generous donors tolocal charitable and educational causes. For example, Balsillie foundedthe area’s Centre for International Governance Innovation with $20million of his own money and Lazaridis has personally donated over $100million towards the new Institute for Quantum Computing at theUniversity of Waterloo.
“They’ve really put their money where their mouth is in giving back (tothe community),” Klugman said.
To support the city’s growing startup community, Communitech isbuilding a 15,000-square-foot addition to the Hub, a 30,000-square-footincubator and accelerator facility that opened just 18 months ago. Thefacility has helped 165 startups so far, including 40 housed in thebuilding.
In fact, Waterloo’s startup activity is so strong that about 1,300 techpositions remained unfilled in the region, according to Communitech.Klugman listed the local IT sector’s top three challenges in 2012 as: ashortage of talent, lack of access to capital, and the ability to helpstartups go from “being a technology to being a business … these dayscompanies have to be real businesses with real products and realcustomers,” he said, comparing today’s more realistic tech climate tothe frothy days of the late 1990s tech bubble.