Startup communities

In January 2010, I interned in the RIM (BlackBerry) RF Lab. My job was to run around from 9 to 3 doing tests for the 10 engineers in the group. When I finished early, I got to work with an RF Engineer named George, who was developing a DC-DC converter circuit to pass upcoming hearing-aid-compatibility (HAC) regulations. I always finished early, and together we ended up building this.

It was the most fun I’d ever had at work. We were solving a problem, it was incredibly hard, and everyone in the lab was on the same team competing against our rivals in the world. It felt more real than everything I had done [1].

That same work-term, I heard that a friend of mine got into this residence called VeloCity. At the time, no one really knew it as this place where you build startups. I applied mainly for the air conditioning.

As I’ve written elsewhere, it’s been an incredible experience. People built stuff in their spare time that they simply thought would be cool. That Fall, some guy had just launched his app called Kik. I think what motivated my friends and I to work on these side projects, ours being Mappedin, was the same feeling I had in the RF lab: that what we were doing was hard, but relevant. It affected the real world, not just our grades.

At that time, I would not have believed what my side project would become. Most days for twelve years and counting, I’ve had a singular purpose: build a great company to make the indoors discoverable. We’ve grown to over 100 people, work with a third of the malls in the world - and that’s less than half of our customers now. I’ve screwed up plenty of times and still struggle daily, but two things keep me going.

The first the feeling that startup is an economic sport. You win by being better, working harder, making smarter decisions. The market objectively decides the winner and it’s mostly fair.

And the second is something an investor said, ten months after we first met: “Hongwei, how much better are you now than you were ten months ago?” Twice as good, I thought. I could recite all the painful mistakes I had made, things I’d do differently and lessons I will never forget.

“Good,” he replied. “I agree. Now there’s at least five more years of this. That’s six iterations of 2x. Imagine how much better you’ll be then.”

I’m lucky to have great mentors, to have played with computers as a kid, to attend a school that sees knowledge as only the first step to learning, to have immigrated with my parents to this country 25 years ago. My story is about the American Dream, alive and well still in Canada.

But I think it’s also important to look for things that break as we grow. Founders know that company culture breaks at 15 people, then again at 50, then 100, and so on. Only by anticipating these changes can you hope to survive them.

VeloCity is now the world’s largest startup incubator. The University of Waterloo is the top engineering school in Canada [2] and our alumni excel in the world’s best companies. Indeed, looking around this city, our alumni have built some of those companies and institutions. We are doing better than ever. And now we must be careful.

If VeloCity exists to help founders build great companies, I worry that those founders are increasingly distracted. When I moved into the residence, we were a group of misfits who didn’t want to spend our extracurricular time joining clubs and padding our resumes with hollow titles. Now, VeloCity is the ultimate resume padder. When Mappedin first took up three desks in the original Garage, we shared a small, concrete room with Vidyard and Well.ca, tucked as far away from the Tannery entrance as possible. (We weren’t “tour material”). Now, the Garage is literally Google’s former office, with basketball nets and espresso machines. Premiers and Prime Ministers drop in annually for photo ops. New founders are being asked to contribute to government job statistics when they’ve yet to pay themselves a salary. They are told to present their business plans to people who have never built businesses so as to receive small grants. All of this before they have figured out product-market fit.

As an operator, this concerns me. And while I agree that educational institutions shouldn’t operate like businesses, both are players in the global competition for talent. The MVP of a junior hockey team may quit if she isn’t challenged. She wants to be on a team where she can learn from stronger teammates. She wants to win, not just participate. Eventually, players like her end up on the A team, with best wishes from friends and former teammates.

The University of Waterloo, as an educational institution, has a civic duty to help everyone walking in its doors. But it must offer an A team for the most ambitious. Top research profs already offer exclusive research positions each year for hand-picked students. The profs themselves get special leeway and resources to operate. The university supports this because they know quality of research matters more than quantity.

Every competitive university now has an experiential learning program. In five years, I think the average quality of their startups will publicly measured, just like the quality of their research. [3]

VeloCity must be about winning, not participation. It should provide the essentials: desks, food, oxygen, internet, and as few distractions as possible. I realize that the school will need to build a bigger tent for everyone today wanting entrepreneurial experience, but maybe that should be done separately.

I wrote the first draft of this essay in 2016 when I signed the UW startup pledge but never hit publish. It didn’t feel right to call out a problem without offering a solution. Time has provided me with one: the 2023 tech recession.

The rate of new startup creation in Kitchener-Waterloo today is one-third of what it was pre-COVID. People have been worried. I was worried. But now I’m realizing the silver lining: the tourists are gone. The people who build and run startups in hard times are the ones who would be doing this anyway. [4] I’m excited to see what they do.

[1] Math tests, physics tests, PE tests, music lessons, Mandarin lessons on weekends, Grade 11 literary analysis assignments (ugh), and court societies in everyday life

[2] Generally we always place in the top 5. I thought about generalizing this statement and including other faculties (eg. Math, whose computer science discipline is functionally viewed as engineering by employers). But it’s important that we celebrate our strengths, and doing so is not meant as an offense.

[3] With startups in particular, quantity is almost guaranteed to dilute quality after a certain amount, since most startups participate in winner-take-all economics. One BlackBerry can build a whole city, but the city was probably only going to sustain one hyper growth startup at that time.

[4] Intrinsic motivation always beats extrinsic in the long term.

 
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