“Double-edged sword.” That’s the common phrase I heard from people in the Vancouver tech community when we talked about how U.S. tech firms are increasingly setting up engineering outposts in the city. As I reported in this week’s magazine, U.S. tech firms that include Amazon (AMZN) and Microsoft (MSFT) are turning to Vancouver as a workaround for the stateside talent wars. The city is close to Seattle and San Francisco, has several universities with strong tech programs, and benefits from Canada’s less-stringent immigration policies.
The pluses for Vancouver is obvious: This flattering recognition of the city’s tech talent has already raised wages for developers and could potentially attract both venture funding (which has been light so far) and programmers from across Canada and around the world. The risk is that the foreign interest could be fleeting—vulnerable to economic reversals or capable of vacuuming talent for relocation in the Bay Area, once engineers get U.S. visas. “Unless their headquarters are here, it doesn’t count,” Boris Mann, founder of the Vancouver-based angel investment firm Full Stack, bluntly puts it.
Not just big, American companies are setting up in the city. Vancouver has changed a lot in a short time, says Kalvir Sandhu, founder of Brewhouse, which develops software for startups. There are now about half a dozen co-working spaces and incubators, largely in Gastown, a hipster neighborhood akin to San Francisco’s Mission District. Sandhu works out of Full Stacks’s StackHaus, a co-working space that also houses small tech teams, including three developers for Sauce Labs, a Bay Area-based startup that helps companies test their websites.
Mann, Sandhu, and others in the tech community hope the fledgling scene will create additional “anchor” companies. They talk about people who are “Team Vancouver” and committed to building the local scene. HootSuite, a platform for managing social media marketing, is more or less the MVP of Team Vancouver. HootSuite, with almost 500 employees, has raised almost $190 million and has vowed to stay put.
Other growing start-ups show potential to become anchors. Unbounce, which enables marketers to build landing pages, plans to roughly double its staff of 50 by yearend. Clio, a cloud provider for the legal industry, has raised $27 million in funding. And Mobify, a roughly 85-person startup that optimizes e-commerce sites for smartphones, recently moved into a larger office tricked-out with murals and a workout room.
Microsoft’s and Amazon’s new offices won’t open for more than a year, so their full impact in Vancouver is still to come. Mann praises what appear to be long-term commitments from the tech giants. The leases they’ve taken in major new buildings, for example, make it more likely they’ll stick around. And Mann hopes for a trickle-down effect: Some of the giants’ employees are bound to get bored working for a big company and leave to join a startup that—who knows?—could become a homegrown anchor.