Plugging in to a high-tech future 

Internet entrepreneurs build a business incubator in Whistler

click to flip through (5) PHOTO BY ADAM BLASBERG.  WWW.ADAMBLASBERG.COM - Michael Stephenson, centre left, and staff of Payroll Hero take to the woods with mountain bikes and laptops.
  • Photo by Adam Blasberg. www.adamblasberg.com
  • Michael Stephenson, centre left, and staff of Payroll Hero take to the woods with mountain bikes and laptops.
 

Come to Whistler for the lifestyle, stay for the high paying and secure high-tech job prospects? This may seem like a pipedream but it is slowly becoming a reality.

"Whistler needs a young, full-time professional workforce to derive their income from Whistler and spend their money in Whistler, but have meaningful careers that give them significant salaries," says Michael Stephenson, CEO and president of Payroll Hero, a software engineering company that has been taking root in Function Junction in the last year.

"It just sucks to see so many people leave Whistler because there are just service-based jobs. I think you could have 50 tech start-ups in Whistler and none of them would compete with each other because we are competing with the global market. There is so much opportunity."

Sounds like a great dream and it's one that Mat Peake believes in. Peake, like Stephenson, is part of a burgeoning high-tech industry that could change the way a significant chunk of Whistler works. It could encourage talented techies, perhaps even entire companies, to relocate to the resort.

Originally from Melbourne, Australia, Peake first moved to the resort in 1999, but he was eventually lured to Vancouver because of the realities of the job market — all the software engineering work was in the Big City.

He never lost the hope of coming back to Whistler and finally moved to the Alpine neighbourhood this spring. From here, Peake runs his company micasahq.com with two partners located in other cities, one in Vancouver's Gastown and the other in Vienna. This is no longer rare; the virtual office approach is growing across many economic sectors.

"Having three locations works really well. It's important to build autonomous groups, groups that don't have to be overseen to the Nth degree," he says. "Until I decided to move up to Whistler I never knew there was a tech scene here."

MiCasa is an online-based application that allows high-rise and low-rise strata property owners to communicate with their property managers and each other. With international potential, the company has been established for just over 12 months and is expanding and growing.

Peake currently works a two-day week at his home office, one day in Vancouver and the rest at the hackerspace set up this summer at Payroll Hero's office space.

Payroll Hero's Stephenson and his partner Steve Jagger saw a gap for payroll software in Southeast Asia. The company now has staff in Singapore, Manila and Whistler. The company is also doing well, with solid early successes to build from. In February this year, it announced it had raised $1 million in seed capital to build its company, which has created an online cloud-based employee-and-payroll management system targeted at the Asian market.

Since companies like this work online and do not need to transport products up and down the Sea to Sky Highway to larger markets they can be based anywhere in the world. Why not here?

Whistler's work tradition

The business story of Whistler is the search for diversity in order to foster growth beyond the mountains, tourism and outdoor activity. The resort municipality has established a taskforce to explore the potential of a large educational facility and the economic potential it would have on the community.

The Resort Municipality of Whistler (RMOW) also has a multi-million dollar fund given to it by the British Columbian government — the Festivals, Events & Animation Fund — to pay for its commitment to cultural events.

The Audain Art Museum, now in the planning stages, will eventually join the Squamish Lil'wat Cultural Centre and events like the Whistler Readers & Writers Festival in developing a year-round cultural draw for a new kind of visitor from the skiers, snowboarders and mountain bikers.

In terms of the tech company angle, Whistler salaries may not yet equal Silicon Valley salaries but the resort has other attractions for the right people that can make up for that.

RMOW councillor Jack Crompton, who has become involved with Stephenson's vision, is excited by the prospects of a software/technology industry taking root:

"This kind of thing has worked incredibly well in cities and towns around the world and Whistler has something special to offer that none of the others do. It's a really exciting opportunity. When I think of diversifying Whistler's economy, this is number one on my list," he says.

Payroll Hero and a new Whistler business model

Stephenson established the software development part of the company in Whistler with the understanding that lifestyle — the prospect of cutting lines into freshly powdered snow on Blackcomb followed by work at a well-paying software engineering job — would prove an irresistible draw to talented, highly skilled "adventure engineers" from around the world.

"We put the word out to the professional talent core in Whistler. The fact is that Whistler is an easy international sell for a certain demographic for expert computer programmers," he said.

"I knew from my experience in Whistler that we had the workforce. We could bring the engineering department back to Whistler and build the software product."

Payroll Hero's Function Junction staff currently hail from India, France, Vietnam, Australia, the U.S. and, of course, Canada.

Simultaneously, while Stephenson was in the middle of his "three-year project" to it set up, he rented out his home in Whistler and noticed how many talented professionals he was meeting.

"They were all incredible people I would love to work with but they would come to Whistler and stay for six months to one year and leave. I'd always ask them why they'd leave and it would come down to their loving the environment here and if they could work in their professions they'd stay," Stephenson said.

This model, Stephenson believes can be replicated by other software companies in Whistler. This desire led to the hackerspace and this is where Peake and MiCasa – along with other software companies and contractors such as Ubertor, ridebooker.com, Adviser Websites and pezillionaire.com – joined the picture.

Peake says: "The culture in working at Payroll Hero is great, it's important and that's the reason I work there. It works well because in our industry we tend to be fragmented, in my business in particular with our founders spread all over the world."

"Doing this is more about the culture and being surrounded by people that are doing cool stuff. We all come across the same problems in our industry... it's nice to be in a room full of people who are innovating and finding different ways of doing things. The amount of the talent in the office is kind of mind blowing. People have come from different parts of the world; everyone has a different story... It draws a lot of talent and that's really important."

When companies are able to work remotely or can transfer their entire workstations as simply as putting their laptops in a carrier, things can become even more interesting for the hackerspace.

Case in point, says Stephenson, was a visit to Payroll Hero by the staff of investor information website Dashboard.io for week in August. With remotely working staff based in San Francisco, Austin, Texas, Portugal, Bangkok and Washington, D.C., they decided to come to Whistler and have a working "fun week" together; it was the first time all of them had been in the same place at the same time.

The Dashboard.io team worked, socialized and checked out what the resort had to offer.

"We are big on inviting teams from around the world to come and do a retreat in Whistler... beyond hosting them in our office and showing them Whistler, we assisted with corporate rates at Aava (Whistler Hotel) that we have set up in order to lower the costs for teams to visit Whistler," Stephenson said.

But this fast-growing success has created challenges, with 25-plus people working on two floors in the Function Junction office some days.

"If anything we are oversubscribed. We're in that interesting in between phase where we are trying to figure out the next step," Stephenson said.

Enter the business incubator

Stephenson says that with the support and input of Crompton, whose ridebooker.com company is also currently sharing Payroll Hero's hackerspace, they are looking to expand — and to commit to a full-on business incubator model.

Business incubators create a web of services and support in one location, often for a set period. There are 104 business incubators in Canada.

Perhaps the most significant thing about them is their success rates: according to the Canadian Association of Business Incubators, 80 per cent of companies that got their start with business incubators were still operating after five years; around 65 per cent of traditionally run businesses succeed in Canada over the same period, according to Industry Canada.

There are many different models of operation (see box). Growlab Accelerator is a highly successful for-profit incubator in Vancouver. Ingeonuity is another incubator that is attached to an academic institution, the Nova Scotia Community College in the Annapolis Valley, and creates a place for students to explore their technology business ideas.

In Ontario, the Haliburton Creative Business Incubator was set up in 2009 with support from the Halliburton County Development Corp. as a non-profit. Similar to Whistler in that an outdoorsy region of 15,000 people plays host to tens of thousands more visitors every year, the Haliburton incubator was started to diversify the economic base in Ontario's cottage country.

Crompton wants to use a model similar to Growlab to establish a software engineering and high tech business incubator established in the resort.

"It's a step towards a tech incubator. Right now the space we're in is bursting at the seams. We're trying to find a location that works so we can say to Vancouver software companies 'hey, move your operation up here for three months and have your engineers ski and enjoy our town and start considering this as the place to locate your business,'" Crompton says.

"The long-term goal is to make Whistler home to a number of software companies, both companies that are already established and startups. It's really the creation of a software tech sector here. We are in a process of putting together a space and then a location where that can happen easily."

Stephenson concurs: "It's a personal desire to see Whistler grow. I'm in my 30s and I have a lot of friends in Whistler in their 30s and most of them are leaving because they work retail and they can't move up into management because those jobs are locked up."

A future home for Whistler's tech incubator could be a large space in Creekside, which Stephenson and Crompton "could fill up right away." Putting an incubator right outside the Creekside chairlifts is a deliberate attempt to make it more attractive for technology companies to move to the resort.

Stephenson and Crompton can't look at it being much bigger because it would be too much of a financial risk. Payroll Hero and Ridebooker would be the anchor tenants and they would carry the costs, at least initially. They've already spoken to Vancouver software companies with this in mind, Crompton added.

"And we're talking to commercial landlords, trying to share the vision with them, so they will be willing to invest some of their space in the concept. In my view there is a long-term payoff for a landlord who is willing to do something different with their space than they've done in the past," Crompton says.

He adds that some of his colleagues on the RMOW have expressed an informal interest in the incubator undertaking but nothing formal has been discussed about the plan.

Watching with Interest

The incoming chief executive officer of the Whistler Chamber of Commerce, Val Litwin, said that he could see a commercial property owner that engages with Stephenson's and Crompton's plan could develop a strong business over time with enough companies taking part.

"If you create an exciting value proposition to the entrepreneurs coming in you can charge, depending on the level you come in at and if you're responsive to their needs, $250 a month. It's a pittance compared to setting up your own office. You get eight businesses in there and there is a strong business model behind it," Litwin says.

"If you have an incubator platform where you've got not only office space but also a great environment where you are riffing off brilliant business minds, maybe you've got an entrepreneur-in-residence and programs... if the mandate is to create a platform for entrepreneurs then it's a great value."

Jeff Dawson of the Howe Sound Community Futures in Squamish is also impressed. He'd like to see more than one business incubator in the Sea to Sky region, serving different industries, as it would further solidify the concept.

"I think what they are doing is fantastic. It's a model for the future for a lot of reasons. It's a fantastic use of resources and creates incredible and effective synergies. Just the dynamic that they have already set up feeds on each other," Dawson says.

"The energy in the office turns into the energy in the building turns into the energy in the community. You can build on it. You can have one pod focusing on one sector of the community and another pod in another building focusing on a different one. The next thing you know, you've got a highly effective, highly functioning, highly sustainable small business community."

On the cusp

After nine years in Whistler, independent software engineer Pez Pengelly certainly hopes this happens. Currently working from his Nordic home and at Payroll Hero's hackerspace, he is a front-end developer for Vancouver-based accounting software company Kashoo.com. In the past, he was not able to follow his career and worked for Coast Mountain Photography, Fairmont Hotels and others.

"I had a mishmash of jobs. It was the general Whistler thing," Pengelly says.

"I moved back to software design because of my passion for it... technology being what it is, things had changed, so I spent a lot of my time over two-three years just relearning everything... I decided that I wanted to it but I also wanted to stay in Whistler. I met my wife here and I'm very happy with this town, lots of friends and the lifestyle is just wonderful.

"I didn't know there was a hackerspace and I looked through town for work that would accommodate my skills and it would have been very difficult four or five years ago. So I started my own business and did client work."

In mid-August, the GROW Conference brought international technology gurus and entrepreneurs to Vancouver, and a VIP "After GROW" party weekend took place in Whistler, which brought more recent attention to the resort. As a playground for techies, Whistler is established but now Stephenson and Crompton say it can offer more.

"Having these people come through Whistler shows how it is an easy, attractive place," Stephenson says.

"I think that establishing a business incubator will be an uphill climb but as the world gets even more globalized our opportunities for digital intellectual material can find a place here. I could see kids out of Whistler high school getting involved and learning to trade apps to the global market."

A new business model for Whistler?

Business incubators are programs for new and established companies where supports and services are provided, usually for a flat fee or a future financial return from the succeeding business or their products. Services can include a workspace/store front, equipment, services (meeting rooms, Wi-Fi and Internet, hotdesking) and in-hand support and training from other entrepreneurs, accountants and financial advisers, office managers and others.

Companies usually stay with business incubators for a set period of time, say one year, or through a set program. The all-encompassing supportive web created by a business incubator greatly increases a company's chance of succeeding.

According to the Canadian Association of Business Incubators, 80 per cent of companies that got their start with business incubators were still operating after five years. As of March 2013, there were 104 business incubators in Canada — supporting everything from technology companies to agriculture to creative industries. Funding for incubators can come from government, business organizations, academic institutions or industry.

A seed accelerator is a for-profit business incubator where investors support startups with funding, mentoring, training and events for a specific period of months in exchange for equity in the company.

Hackerspaces or hacklabs are opencommunity workspaces where people with common interests or similar industries and business goals collaborate and socialize, especially in the technology, digital and sciences sector. Open community spaces can also provide a communal machine shop or studio element. The first independent hackerspace was founded in Berlin in 1995.

Hotdesking is an office system where multiple workers share a single physical workstation or surface but use it at different time periods. It is arguably more efficient in its use of space than traditional offices.

Co-working means sharing office space and work environment. This is usually by people who do not work for the same company or organization and are often freelancers, work-at-home-professionals or independent contractors who would otherwise work in isolation.

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