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Toronto vs. K-W: Why Should Techies Have to Choose?

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When Jesse Rodgers hops in the car to head to work on a cold winter's morning, there's only one thing that's pretty much guaranteed: It's going to be dark.

The director of Rotman's Creative Destruction Lab at the University of Toronto, Rodgers leaves by 7:30 most mornings to begin his sojourn from Waterloo to downtown Toronto. It's a multi-stage journey that typically starts with a 45-minute drive to Aldershot, followed by an hour on the GO Train to Union Station, 15 minutes on the subway up to U of T, and a three-minute walk to his office at Rotman. For the life he leads in Waterloo, it's worth it (for now).

"My commute, worst case, is probably two-and-a-half hours if I hit some traffic on the way to the train," says the 37-year-old co-founder of TribeHR and former director of the University of Waterloo VeloCity program. "But I'm staying in Waterloo. I have four kids and right now I'm the only one commuting in my family -- my kids can walk to school, my wife works about five streets down from our house. I mean, it's a quality of life thing."

Quality of life is why 26-year-old Neville Samuell can also be found rising at the crack of dawn in downtown Toronto's Little Italy. A project engineer at Avvasi, a mobile video company in Waterloo, he finds an urban lifestyle more his speed, though the commute to work can be hellish, when it's even possible.

"I head out of here by around 7 a.m.," he says, "and I take the 401. If you do that, you can do it in the Google Maps time of like an hour to an hour and fifteen, but if you miss that window, you're looking at a two-plus hour drive, so I just don't do it. Anytime there's inclement weather or you oversleep or whatever, you just work from home."

Samuell was already working at Avvasi when he graduated from the University of Waterloo in 2010 and left for Toronto partly because his wife was returning to school in the city and partly because, well, he prefers a more urban life.

"I mean, Toronto is no New York," he says, "but it still goes to bed later than Waterloo."

For most of us, the idea of a two-hour commute, twice daily, is nuts. But both Rodgers and Samuell have their reasons for taking on that heroic morning haul: They love where they work and they love where they play.

Unfortunately, those two locations aren't always aligned, and for tech companies looking to recruit diverse talent along the Highway 401 corridor, location can be a deal breaker, even though there's little more than 100 kilometres separating downtown Toronto from Kitchener-Waterloo. The inability to move human capital efficiently between the two centers is increasingly being viewed as more than an inconvenience by industry leaders at either end of the corridor -- it's something they fear might kneecap the region's aspirations to grow into a technology supercluster that helps drive the province's economic engine.

While Rodgers has made the most of his commute, catching up on emails during his hour-long train ride from Aldershot to Toronto, he can't imagine doing it long-term.

"At the end of it all, Waterloo is an amazing community to be in if you want to build a company," he says. "Toronto's an amazing community to be in if you want to build a company. There are amazing people in both places, but there are challenges and restrictions we're having in our transportation and it's awful that people would have to choose between the two in where they need to be. You don't have to choose between being in San Francisco and the Valley...we shouldn't have to choose between being [in Waterloo] or in Toronto. I mean, they're so close."

The (small) urban appeal
Andrew Matlock is sitting at a board table on the sixth floor of 305 King. St. W., a 12-story office tower in downtown Kitchener. The founder and CEO of Industry Corp., a technology and multimedia company that moved out of the Communitech Hub in 2013, he's extolling the virtues of his hometown, where he never expected to find himself living and working after going to school overseas.

"There's been a huge turnaround here," he says, surrounded by floor-to-ceiling windows overlooking the burgeoning downtown core. Like many young founders in Kitchener-Waterloo, Matlock is attracted to the development, transit and tech intensification taking place in the city's heart.

Across North America, urban cores have proven to be an attraction to young knowledge workers and entrepreneurs whose lifestyle isn't necessarily in tune with the suburbs. There's a reason why Twitter, Salesforce and Dropbox are all headquartered in San Francisco. And while Kitchener-Waterloo is by no means a city on that scale, it increasingly affords young tech innovators many desirable urban elements, albeit on a smaller, more personal scale.

"My whole life could exist within a three-block radius if I tried really hard," says Matlock, with a laugh. But he means it: He can see his office from his nearby loft. Mike McCauley, co-founder of BufferBox and now product manager at Google, tells me his parking spot is farther from his desk than his house is. Thalmic Labs' Stephen Lake lives within walking distance of his office, as does Vidyard's Michael Litt.

Cost of living and office space are also favorable factors, but perhaps more importantly, the city's size is a bonus for young CEOs trying to make their businesses fly.

"We could have picked up all our stuff and moved to Toronto or moved to the Valley," says Thalmic Labs co-founder Aaron Grant, "but we decided to keep our operations based here. It's a much smaller city than Toronto, with a lot fewer things to do, which, when you're doing a startup, is a good thing. It's actually nice to have fewer distractions. To be honest, I don't even really notice the difference between being here versus being in the big city because of what I'm focused on right now."

For Michael Litt, family and educational roots were part of the reason to return to K-W, but it's also where he knew he could land most of the people he needed to make Vidyard succeed.

"I'm a big proponent of the local thing," says Litt, whose video analytics company, Vidyard, was one of the first local startups to attend California's Y Combinator accelerator program, raise money then return to Kitchener-Waterloo. "Paul Graham, who's the founder of Y Combinator, told me [setting up here] would be like climbing Mount Everest with a ten-pound weight on my back. But Ron Conway, who's a really notable investor, said, 'Go where the talent is.' And we figured the talent that we needed was readily available in town here. We understand the [University of Waterloo] culture, and there's the co-op program so the engineers are, bar none, some of the most experienced in the world."

The decision has paid off: Vidyard has 32 on staff, and has been touted to go public within the next two years. That team will likely to grow to 50 in the next six months and possibly 100 within a year.

But sales and marketing roles remain difficult for Vidyard to fill. The company recently had a VP of marketing who tried to commute from Toronto to Kitchener three days a week. The arrangement proved untenable, and Vidyard and the VP were forced to part ways.

"This whole supercluster idea is very interesting to me," says Litt, "because I know that to scale, we need to attract some of the talent from Toronto."

The solution, he suggests, is right in front of us.

"When I lived in the Valley, I lived in the city and worked in San Jose and it was transit all the time, but I could work on the train with a little Wi-Fi transponder and get stuff done. That's what I think we need to replicate if we're ever going to be a globally dominant ecosystem. There's lots of great sales and marketing talent in Toronto and they want to get down here, and Toronto wants a lot of great engineering talent that we've got up here. So there's a need on both sides and [the train's] a way of connecting those needs. It's a fucking no-brainer."

The (big) urban appeal
"There's a certain category of people who want to live in a big city," says April Dunford, a longtime tech marketing professional and current COO of Tulip Retail. "They want to eat at nice restaurants, they want to go to the AGO, they want to go to bars, there's a nightlife scene in Toronto. Other people don't want to live in the city for the exact same reasons -- too much traffic, too many people, it's expensive to live here...there's reasons on both sides why you'd want to be in one place or the other."

Tulip's Toronto office, situated in the OneEleven co-working space on Richmond Street West, also has roots in K-W, where a staff of 13 complements the seven working alongside Dunford. Both Dunford and Tulip CEO Ali Asaria live in Toronto, as does the company's head of solutions and a staff salesperson.

Like their colleagues in Kitchener-Waterloo, many Toronto-based startups stay in the city primarily because it's an ecosystem they've come to know. As Jesse Rodgers told me, much of the city's startup scene is comprised of people who have gone to local schools like U of T as grad students. They've established their lives and decided that this is simply where they want to establish their businesses.

Dunford agrees.

"Frankly, in Toronto, you've got a big population of people like [those local guys in K-W]," she says. "And asking them to relocate to Waterloo is a bit like asking them to relocate to Timbuktu. They've spent their whole lives in Toronto, they went to school and university in Toronto, so why would you leave now?"

There are, of course, more pragmatic reasons to make Toronto a home base, from easier access to capital, a wider variety of talent and, depending on what your company does, the chance to be situated amid a much larger customer base. That's why Kaz Nejatian, CEO of AvidRetail, opened an office on Bathurst Street after building the company up in Waterloo.

"Our decision [to move to Toronto] was not an easy one," he says. (The company still retains a small office in Waterloo.) "But for us, just the type of clients we have and the type of users we have, we needed a cluster of retailers and there's just more retailers in Toronto than there are in K-W."

Now, Nejatian is now focused on recruiting talent and the Toronto office, he says, is a big draw.

"There are probably a dozen live music venues within walking distance of our office, and there's this massive influx of young talent coming back into the downtown core of the city. We're walking distance to Kensington Market and Queen West. Our offices are very close to Chinatown. I think a lot more people who we'd recruit right out of school -- the younger generation of folks -- just want to live in downtown Toronto."

The end of having to choose
Steve Woods is imagining a utopian world where strong, centralized tech clusters have sprouted and flourished in both Kitchener-Waterloo and downtown Toronto. Where a high-speed train moves almost constantly in both directions between them. Where one's home base isn't determined by where one works.

"It would be so amazingly different," says Google Canada's senior engineering director. "There would be a very strong movement of people both ways, and not just daily, but I mean on a career basis. People would quit seeing those two choices that they have to make once in their career, they'd be able to move back and forth between startups and large companies more fluidly, it'd increase [a company's] acquisition capability and the ability to keep functioning without having to move people."

For tech companies, that improved fluidity would be a boon for recruitment (not to mention the bottom line), allowing them to tap into a larger, more diverse talent pool that would be much less concerned about having to relocate for work. The quality of life at either end of the 401 corridor could, in fact, become a recruiter's selling point, says Tulip's April Dunford.

"The neat thing about the Toronto-K-W corridor is that we're really close together. But you've got these two very different communities from a lifestyle perspective and if you can figure out, as a company, how to make it work across these two areas, then that's a neat way to be able to recruit people. It could be like, "Oh, you like the smaller town thing? We've got the smaller town thing.' Or, 'Oh, you like being in the city? We're downtown too."

For tech workers, a transportation solution that connects the region more reliably than the 401 could eliminate the need to choose between having a life -- whatever that might entail -- and having a great career.

"People have different lifestyles," says Woods. "Sometimes they're younger, maybe they have children and they want to live in another place. This would give them all those options."

 
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