Edmonton blogger and Techvibes contributer Mack Male wrote a post yesterday morning on the state of Edmonton’s Tech community that takes a critical stance on the effectiveness of TEC Edmonton and the Edmonton Economic Development Corporation (EEDC) and proposes that the city would be better off with an organization that provides seed capital to young companies.
I would encourage you to take a full read of the post and the lively discussion that is happening in the comments, but to give you some framework, here is an excerpt.
We don’t need two events to talk about business and communication problems for TEC Edmonton associated companies, nor do we need an organization filtering communication between the City and the technology community. What we really need is for TEC Edmonton or an organization like it to help software startups by doing the things the community can’t.
Essentially, Mack is expressing a popular sentiment that City-led initiatives are not providing adequate help to early stage start-ups in Edmonton.
I think that there is an important terminology distinction to be made here between technology startups and web-based startups. Often when people think of the “tech scene” they often think of products like Flickr, places like & Silicon Valley, and people like Scoble. This ecosystem, while technology based, I think is better termed as a “startup community”. It consists of people and programmers developing software, products and tools- often web-based entrepreneurs.
Models like TechStars and Ycombinator are focused on the “startup community” because they are able to provide the small amount of seed capital and mentorship that founders need to develop their product. The working capital of these companies is essentially the programmers livelihood- as long as there is enough to live on, they can survive and continue to develop and iterate. (Paul Graham, the founder of Ycombinator calls this being “ramen profitable“)
The Technology community however is different because it is usually composed of companies that are very capital intensive. They require significant investment, R & D, and technological development to come to market. TEC Edmonton takes companies that require this type of upfront capital to enable them to get off the ground, obtain a patent, or bring a product to market.
This creates a gap, and I think Mack is right- Edmonton needs an organization that caters to the startup community. I don’t think that it will ever be TEC Edmonton, and thats okay. Ideally this organization would have funding from the municipal or provincial governments, but it doesn’t have to start with a big grant.Groups like ENTS are providing an atmosphere for the community that is essential for startups to thrive, and with an active DemoCamp and BarCamp scene, we are well suited to continue to grow. When a community is thriving, it makes it easier to bring groups and speakers from outside the city to come and provide mentorship.
Now I understand these are generalizations, and that there are some software companies that take years of development, and technology focused companies that take weeks to develop. But I think it is important to distinguish between the two groups, as both of them have a lot to bring to the City of Edmonton.