6 ms·

> B2C tech startups cannot takeoff in places that don't have really high densities of people because places like that wind up having the people with the mentali

by jvm 13y ago

> B2C tech startups cannot takeoff in places that don't have really high densities of people because places like that wind up having the people with the mentality to use technology to get ahead/make their lives simpler. One reason I find this unconvincing is that Toronto specifically has very similar size and density characteristics to the Bay Area. Toronto's metro area has a comparable population [1][2]; and before it was amalgamated with its suburbs, the city itself also had a very similar population and population density to San Francisco [3][4]. Toronto is also home to U Toronto which has one of the world's top CompSci departments. I suspect there is some sort of policy problem at work here rather than a lack of density, possibly as banal as drawing from a smaller talent pool. [1] Toronto/Hamilton/Niagra area: 8.7 million http://en.wikipedia.org/wiki/Golden_horseshoe http://en.wikipedia.org/wiki/Golden_horseshoe [2] Combined San Jose/SF metro: 8.37 miilion http://en.wikipedia.org/wiki/San_Jose-San_Francisco-Oakland,_CA_Combined_Statistical_Area http://en.wikipedia.org/wiki/San_Jose-San_Francisco-Oakland,... [3] Old Toronto: Population 736k, density 19,600/mi^2 http://en.wikipedia.org/wiki/Old_Toronto http://en.wikipedia.org/wiki/Old_Toronto [4] San Francisco: Population 812k, density 17,620/mi^2 http://en.wikipedia.org/wiki/San_francisco http://en.wikipedia.org/wiki/San_francisco

potatolicious 13y ago
> "I suspect there is some sort of policy problem at work here rather than a lack of density, possibly as banal as drawing from a smaller talent pool." I'm a Canadian who grew up, went to school in Canada, and am now in the US. The problem is very simple and can be summed as such: A skilled software developer can make double to triple their salary easily by moving to the USA. And Canada and the Us have a legally porous border when it comes to exchanging workers. Double to triple. I shit you not. This is a huge part of what holds Canadian tech back. What kind of talent pool are you looking at when the US pays so much more, and there are relatively few legal barriers to taking these opportunities?
- jvm 13y ago
  My girlfriend is Canadian but this is exactly what prevents us from moving there, I love Canada as a country. But something's missing from this equation. If wages are low in Canada because there is a glut of workers relative to the number of jobs, then why doesn't the sector expand to take advantage of the low wages? Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies? There's nothing magical about America that allows its startups and companies to pay so much; Canada isn't particularly poor itself and its companies don't even have to pay for workers' health care. Either way, there has to be a deeper reason.
  - sounds 13y ago
    Wage rates are less elastic than simple supply/demand until you get to macroeconomic scale. I'm obviously not an expert on Canada, so I'll try to illustrate one way it might work, but please feel free to shoot this full of holes... Say companies in Canada start by paying their employees half of a competitive wage. Not all employees will notice. The ones who are willing to move thousands of miles will eventually disappear but there will always be new hires, right? Thus the management gets away with low wages. I _have_ seen this exact scenario play out in several locations in the US, but not Canada. In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company." At that point the company will never make enough money and can't even dream of raising wages. Only at that large scale (companies competing for talent and then trying to turn their talent into revenue) do you start to see the effects of their salary range.
    - liquimoon 13y ago
      - In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company." Interestingly, you just described what happened to RIM.
  - potatolicious 13y ago
    > "then why doesn't the sector expand to take advantage of the low wages?" It is. See: the huge presence of multinationals in Canada like IBM, SAP, even gaming giants like EA and Ubisoft. The Canadian tech industry is by no means shrinking, it's just growing in a way that doesn't fit Silicon Valley's "high pay, high benefits" mold. Canada has not seen the massive software engineering wage explosion that the US has. Which naturally leads to your next question: > "Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies?" This is a big and complicated question. The short answer is: because it somehow got this way and now we can't change it. It's important to note that the US tech industry isn't all shuttles and gourmet meals either - the bulk of the industry is paid a fraction of Silicon Valley salaries, with none of the cushy benefits. The tech industry is divided into the low/mid-end and the high-end, and the two sides could not be more different. There is an active war for talent in the high-end that keeps driving up salaries and benefits, while low/mid-end software engineering remains relatively stagnant. It's largely a group of companies working on computationally hard problems that's driving this war - folks like Google, Facebook, Microsoft, Amazon, etc. These companies are uninterested in low/mid-end talent, confining the insane salaries to only a small segment of the total industry. This segment of the industry also largely does not exist in Canada. Canada's tech scene has, for many complex and perhaps unexplainable reasons, developed into one that is largely enterprisey. The tech jobs are largely at not-tech companies (where you're a cost center, not a profit center), and where they are at tech companies, they are at satellite offices of American or European companies. This doesn't create a market where there is high demand for top-level talent. Complicating this somewhat is the fact that the talent war in the US has bled across the border, thanks to relatively easy immigration laws for Canadian citizens - the bleeding of talent to the south prevents the establishing of companies locally that would feed on a top-level talent pool. So this really circles back to OP's original complaint. The reason why wages aren't rising in Canada is because companies that demand high talent do not exist in Canada. There are no major companies working on truly hard problems that would demand campuses full of top-level engineers, and thus no drivers for salary growth. The companies that do exist cannot raise salaries wildly for a few reasons. Firstly, because they are not having trouble finding talent at the level they want at their existing salaries. Secondly, because their business model may rely on being cheaper than the US. Thirdly, there is a lack of institutional employers who employ high-end engineers which would kickstart a talent war.
- Element_ 13y ago
  Not only do you make more as a software developer in the USA, the living costs are much less (I believe the average price of a home in Canada is currently close to double that in the USA [1]) I think a person is more likely to pursue a startup and succeed at it when they can spend less time/energy covering their basic living expenses. A lot of SV giants were started by people in their garages, they simply had enough surplus resources to pursue their ideas[2]. [1]http://www.cbc.ca/news/business/story/2013/06/05/business-oecd-housing.html http://www.cbc.ca/news/business/story/2013/06/05/business-oe... [2] http://en.wikipedia.org/wiki/HP_Garage http://en.wikipedia.org/wiki/HP_Garage
  - potatolicious 13y ago
    In general this is not actually true. Software developers as a whole do not make much more in the USA than they do in Canada. Only certain geographies tend to have a large number of high-paying software jobs, and those places (see: Seattle, SF, NYC, etc) tend to have inflated housing prices. Ditto Canada, there are plenty of places where housing is cheap - but that's not where the tech jobs are. The bulk of the tech work is concentrated in cities like Vancouver, Toronto, and Montreal where housing is expensive. That being said, being a Vancouver native I try to keep an eye out on salaries in the city vs. cost of living. Vancouver has the double whammy of being extremely expensive but not nearly making it up in pay - this is a somewhat uniquely Vancouver phenomenon though... housing in other parts of Canada is less insane.
- parasubvert 13y ago
  Having worked 15+ years in both countries (SF, NY, Toronto, Calgary), you're not wrong. But this is a bit misleading. In the SF Bay Area or NYC, yeah, double to triple. But a lot of that is cost-of-living related. Housing is half (or even less) the price in most cases, with Vancouver being an exception. I paid $2700/month for my 800 sq. ft place in Pac Heights with parking, we pay maybe $2200/month with property taxes in Calgary for a 1600 sq. foot house w/ 2 car garage just slightly north of the Bow River. Whereas a small 2br in NY in the West village was $4k a month 10 years ago. That said, most living-in-Canada techs making good coin are either (a) working at Vancouver startups, who pay reasonably (b) working as contractors doing boring/annoying work that pays well, (c) working for international tech companies who pay the same rate in Canada as they do in the USA (usually in field sales or consulting - this is what I currently do). The main reason I don't think this holds Canadian tech back is that many people meet their significant other here and don't want to deal with the hassle of leaving - they like the rockies, for example, or have family, or love snow. Or they're stuck for one reason or another (child custody, etc.). There's also a rather poisonous political environment in the USA that adds a cost to one's stay there. I also think it's a great opportunity for companies to thrive in Canada and retain talent by paying them well and giving them access to lifestyle incentives. Not quite a startup, but an example: Cenovus energy has a startup-like culture in some ways after being spun out in 2002. They give employees every 2nd Friday off, they have major perks for working families, discount family passes to Banff/Lake Louise for skiing, and pay extremely well (usually bridging your pension, RSUs as part of a signing bonus).
  - potatolicious 13y ago
    Being from Vancouver myself, I frequently go back and do the math on cost of living. No matter which way you bend the math, even accounting for the (massively) inflated housing prices in the Bay Area or NYC the American salary still comes out ahead. Far ahead, even. I've heard Canadian friends use this sometimes as a reason to not consider state-side opportunities, but in their cases it's simply not true. Granted, this is math for a single guy with no children - so YMMV. I don't disagree with any of the facts you've laid out - but I do disagree heavily on whether or not this is holding Canadian tech back. There are certainly people who won't move to the US for any number of reasons - family, lifestyle, geography, politics, etc. But the fact of the matter is that there are over 300,000 Canadians in the Bay Area[1] - clearly the number of people willing to jump south of the border overwhelms the number of people who will not. This represents nearly 1% of the entire population of Canada. The brain drain is very real, it's biased towards the more desirable parts of the talent pool, and it's happening at a mind-bogglingly large scale. While the brain drain will never claim everyone, it's certainly claiming enough talent that I think it's hard to argue that it's not having a massively negative effect on the industry domestically. [1] http://business.financialpost.com/2013/07/10/why-canada-is-failing-at-tech/ http://business.financialpost.com/2013/07/10/why-canada-is-f...
- dennisgorelik 13y ago
  Lower salaries is a benefit for business (and startup), not a disadvantage.

by jvm 13y ago

potatolicious 13y ago

> "I suspect there is some sort of policy problem at work here rather than a lack of density, possibly as banal as drawing from a smaller talent pool." I'm a Canadian who grew up, went to school in Canada, and am now in the US. The problem is very simple and can be summed as such: A skilled software developer can make double to triple their salary easily by moving to the USA. And Canada and the Us have a legally porous border when it comes to exchanging workers. Double to triple. I shit you not. This is a huge part of what holds Canadian tech back. What kind of talent pool are you looking at when the US pays so much more, and there are relatively few legal barriers to taking these opportunities?

jvm 13y ago
My girlfriend is Canadian but this is exactly what prevents us from moving there, I love Canada as a country. But something's missing from this equation. If wages are low in Canada because there is a glut of workers relative to the number of jobs, then why doesn't the sector expand to take advantage of the low wages? Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies? There's nothing magical about America that allows its startups and companies to pay so much; Canada isn't particularly poor itself and its companies don't even have to pay for workers' health care. Either way, there has to be a deeper reason.
- sounds 13y ago
  Wage rates are less elastic than simple supply/demand until you get to macroeconomic scale. I'm obviously not an expert on Canada, so I'll try to illustrate one way it might work, but please feel free to shoot this full of holes... Say companies in Canada start by paying their employees half of a competitive wage. Not all employees will notice. The ones who are willing to move thousands of miles will eventually disappear but there will always be new hires, right? Thus the management gets away with low wages. I _have_ seen this exact scenario play out in several locations in the US, but not Canada. In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company." At that point the company will never make enough money and can't even dream of raising wages. Only at that large scale (companies competing for talent and then trying to turn their talent into revenue) do you start to see the effects of their salary range.
  - liquimoon 13y ago
    - In this scenario, the company slowly accumulates B and C players who drag down the company's reputation: death by a thousand paper cuts. The company doesn't _die_ outright, but everyone just thinks, "Oh, not a Silicon Valley level company." Interestingly, you just described what happened to RIM.
- potatolicious 13y ago
  > "then why doesn't the sector expand to take advantage of the low wages?" It is. See: the huge presence of multinationals in Canada like IBM, SAP, even gaming giants like EA and Ubisoft. The Canadian tech industry is by no means shrinking, it's just growing in a way that doesn't fit Silicon Valley's "high pay, high benefits" mold. Canada has not seen the massive software engineering wage explosion that the US has. Which naturally leads to your next question: > "Contrarily, if the sector is small because high wages attract workers to the states, why can't Canadian companies pay as much as the American companies?" This is a big and complicated question. The short answer is: because it somehow got this way and now we can't change it. It's important to note that the US tech industry isn't all shuttles and gourmet meals either - the bulk of the industry is paid a fraction of Silicon Valley salaries, with none of the cushy benefits. The tech industry is divided into the low/mid-end and the high-end, and the two sides could not be more different. There is an active war for talent in the high-end that keeps driving up salaries and benefits, while low/mid-end software engineering remains relatively stagnant. It's largely a group of companies working on computationally hard problems that's driving this war - folks like Google, Facebook, Microsoft, Amazon, etc. These companies are uninterested in low/mid-end talent, confining the insane salaries to only a small segment of the total industry. This segment of the industry also largely does not exist in Canada. Canada's tech scene has, for many complex and perhaps unexplainable reasons, developed into one that is largely enterprisey. The tech jobs are largely at not-tech companies (where you're a cost center, not a profit center), and where they are at tech companies, they are at satellite offices of American or European companies. This doesn't create a market where there is high demand for top-level talent. Complicating this somewhat is the fact that the talent war in the US has bled across the border, thanks to relatively easy immigration laws for Canadian citizens - the bleeding of talent to the south prevents the establishing of companies locally that would feed on a top-level talent pool. So this really circles back to OP's original complaint. The reason why wages aren't rising in Canada is because companies that demand high talent do not exist in Canada. There are no major companies working on truly hard problems that would demand campuses full of top-level engineers, and thus no drivers for salary growth. The companies that do exist cannot raise salaries wildly for a few reasons. Firstly, because they are not having trouble finding talent at the level they want at their existing salaries. Secondly, because their business model may rely on being cheaper than the US. Thirdly, there is a lack of institutional employers who employ high-end engineers which would kickstart a talent war.
Element_ 13y ago
Not only do you make more as a software developer in the USA, the living costs are much less (I believe the average price of a home in Canada is currently close to double that in the USA [1]) I think a person is more likely to pursue a startup and succeed at it when they can spend less time/energy covering their basic living expenses. A lot of SV giants were started by people in their garages, they simply had enough surplus resources to pursue their ideas[2]. [1]http://www.cbc.ca/news/business/story/2013/06/05/business-oecd-housing.html http://www.cbc.ca/news/business/story/2013/06/05/business-oe... [2] http://en.wikipedia.org/wiki/HP_Garage http://en.wikipedia.org/wiki/HP_Garage
- potatolicious 13y ago
  In general this is not actually true. Software developers as a whole do not make much more in the USA than they do in Canada. Only certain geographies tend to have a large number of high-paying software jobs, and those places (see: Seattle, SF, NYC, etc) tend to have inflated housing prices. Ditto Canada, there are plenty of places where housing is cheap - but that's not where the tech jobs are. The bulk of the tech work is concentrated in cities like Vancouver, Toronto, and Montreal where housing is expensive. That being said, being a Vancouver native I try to keep an eye out on salaries in the city vs. cost of living. Vancouver has the double whammy of being extremely expensive but not nearly making it up in pay - this is a somewhat uniquely Vancouver phenomenon though... housing in other parts of Canada is less insane.
parasubvert 13y ago
Having worked 15+ years in both countries (SF, NY, Toronto, Calgary), you're not wrong. But this is a bit misleading. In the SF Bay Area or NYC, yeah, double to triple. But a lot of that is cost-of-living related. Housing is half (or even less) the price in most cases, with Vancouver being an exception. I paid $2700/month for my 800 sq. ft place in Pac Heights with parking, we pay maybe $2200/month with property taxes in Calgary for a 1600 sq. foot house w/ 2 car garage just slightly north of the Bow River. Whereas a small 2br in NY in the West village was $4k a month 10 years ago. That said, most living-in-Canada techs making good coin are either (a) working at Vancouver startups, who pay reasonably (b) working as contractors doing boring/annoying work that pays well, (c) working for international tech companies who pay the same rate in Canada as they do in the USA (usually in field sales or consulting - this is what I currently do). The main reason I don't think this holds Canadian tech back is that many people meet their significant other here and don't want to deal with the hassle of leaving - they like the rockies, for example, or have family, or love snow. Or they're stuck for one reason or another (child custody, etc.). There's also a rather poisonous political environment in the USA that adds a cost to one's stay there. I also think it's a great opportunity for companies to thrive in Canada and retain talent by paying them well and giving them access to lifestyle incentives. Not quite a startup, but an example: Cenovus energy has a startup-like culture in some ways after being spun out in 2002. They give employees every 2nd Friday off, they have major perks for working families, discount family passes to Banff/Lake Louise for skiing, and pay extremely well (usually bridging your pension, RSUs as part of a signing bonus).
- potatolicious 13y ago
  Being from Vancouver myself, I frequently go back and do the math on cost of living. No matter which way you bend the math, even accounting for the (massively) inflated housing prices in the Bay Area or NYC the American salary still comes out ahead. Far ahead, even. I've heard Canadian friends use this sometimes as a reason to not consider state-side opportunities, but in their cases it's simply not true. Granted, this is math for a single guy with no children - so YMMV. I don't disagree with any of the facts you've laid out - but I do disagree heavily on whether or not this is holding Canadian tech back. There are certainly people who won't move to the US for any number of reasons - family, lifestyle, geography, politics, etc. But the fact of the matter is that there are over 300,000 Canadians in the Bay Area[1] - clearly the number of people willing to jump south of the border overwhelms the number of people who will not. This represents nearly 1% of the entire population of Canada. The brain drain is very real, it's biased towards the more desirable parts of the talent pool, and it's happening at a mind-bogglingly large scale. While the brain drain will never claim everyone, it's certainly claiming enough talent that I think it's hard to argue that it's not having a massively negative effect on the industry domestically. [1] http://business.financialpost.com/2013/07/10/why-canada-is-failing-at-tech/ http://business.financialpost.com/2013/07/10/why-canada-is-f...
dennisgorelik 13y ago
Lower salaries is a benefit for business (and startup), not a disadvantage.