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6 Reasons Vancouver Is Hot for Start-ups

Here's why Amazon, Microsoft, and Facebook are opening local development offices there--and why you might want to do the same.

If you've ever been to Vancouver you know the Canadian city is chock full of coffee shops, cyclists, and cultural diversity. Consistently rated as one of the most livable cities on the planet, the British Columbian locale is also a hotbed for start-ups and big business alike.

Here's why the picturesque coastal city, which hosted the 2010 Olympic Winter Games, is where you might want to kick off your next big idea.

Superb Support From the Government

More than 100 tax cuts have been introduced in British Columbia in the last eight years so that the province boasts some of the lowest taxes in North America.

Kia Rahmani, co-founder and CEO of ShareDesk, a Vancouver-based company that lets businesses all over the world rent unused office space to other firms, says the combined provincial and federal tax rate is 25 percent for small businesses that make up to $500,000 in profits a year.

"And in addition to this, a lot of start-ups and tech companies in Vancouver benefit from R&D rebates. In some cases they get up to 40 percent in rebates from the government," he says.

Rahmani also points to an initiative the Canadian government recently rolled out called the Start-up Visa Program.

"Essentially it's making Canada in general a very favorable platform for launching a start-up because of lax immigration policies. So if [a foreign entrepreneur has] investment from a Venture Capital firm or if you're accepted into an accelerator the government will immediately issue a permanent resident status," he says.

Top-Notch Software Development Talent

Brian Shuster, founder of the virtual reality platform Utherverse, says the skill level of software developers and artists in Vancouver is the best he has ever encountered--a pretty big statement considering the serial entrepreneur has operated several companies in Los Angeles, Lake Tahoe, and San Jose, including the website creation tool Webjump, which he sold in 1999 for $25 million to TheGlobe.com.

"Vancouver has become home to the world's largest game developers. Electronic Arts, for example, has a campus here along with hundreds of other game and app development companies both large and small.  Schools in Vancouver are churning out students specializing in 3-D graphics, game development, and programming in general.  I've also noticed that Amazon and Microsoft have begun snapping up offices throughout the city," he says.

Rahmani agrees and says half of the city's population has a college or university degree and British Columbian skilled information and communications technology workers include 67,000 people in engineering, IT, and production.

"This makes for world class R&D," he says.

Proximity to Silicon Valley

Dr. Boris Wertz, founding partner of Vancouver-based Version One Ventures, an early-stage venture capital firm says there are benefits to running a start-up outside of Silicon Valley, where talent is a premium and turnover is high.

"Vancouver is a great place to build a company and hire strong technical and design talent for much lower salaries than in the Valley. Many Vancouver-based startups like Clio, HootSuite, Indochino, or Unbounce have benefited from that and build really strong product teams," he says, also echoing Shuster's point that big name Web companies have recognized Vancouver's advantages and opened local development offices.

"At the same time you're super close to [the Valley] when you have to do business development or talk to VCs. It's an easy two-hour flight down there," Wertz says.

Canadian Work Ethic and Politeness

Shuster says Canadians are more dedicated to their jobs and take more pride in their work, compared with what he saw with many of the people he employed in the U.S. who were interested in an impressive title, higher salaries, and getting stock options with the hope of going public right away.

"In Vancouver, building something meaningful seems to be prioritized over the quick hit," he says.

Aaron Rallo, founder and CEO of TSO Logic, a Vancouver-based company that helps businesses reduce server farm and data center energy consumption, agrees.

"There is a culture here that's 'What can I do that's cool and interesting' and not necessarily 'Who's going to pay me the most money,'" Rallo says. "One of the things you have to give is empowerment so they really get input into what's going on because people here do thrive off of that."

As a former New Yorker, Rallo says it took him a while to get used to the emphasis on work-life balance in Vancouver. He wondered why someone would take an hour-long lunch break to do yoga. After years of running his company there he now sees it differently.

"They come back and maybe they work late or maybe they work a little bit extra but... when you have that balance I think it does let you put a little bit more effort into your work," he says.

And while there's a stereotype that Canadians are easygoing and polite, Shuster says they really are friendly, caring, and courteous--traits that make them good co-workers and better customer advocates.

"This is true even in areas that don't interact directly with the public, things like creating legal agreements or business agreements," he says. [My employees in Vancouver] have an empathy that makes our business run more smoothly in general."

Greenest City in the World by 2020

Rallo, whose company is all about helping customers around the world use less power in their data centers, likes that Vancouver Mayor Gregor Robertson is a big green advocate and has initiated a campaign to turn it into the greenest city in the world by 2020.

Server power costs are also relatively low in British Columbia.

"When we look to sell to people we're actively looking for people that spend quite a bit more on power [per kilowatt hour]. You go to California and you're in the high teens; Toronto you're at $0.13 to $0.15. In Vancouver you're like $0.07 or $0.08 cents."

Quality of Life

Last year Mercer rated Vancouver No. 1 in the Americas and No. 5 in the world for quality of living.

Geoff Mair, CTO of Vancouver-based enterprise app store provider Partnerpedia can see why.

"Vancouver has a rare combination of outdoor living and city culture making it a truly great place to live, especially for young people starting their careers.  It's one of the only places in the world where you can windsurf or ski during the day, go for great sushi or live music at night, all in a thriving city that supports career growth," he says.

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IMAGE: Getty
Last updated: Jun 6, 2013

CHRISTINA DESMARAIS

Christina DesMarais is an Inc.com contributor who writes about the tech start-up community, covering innovative ideas, news, and trends. On Google+, add her to one of your circles. Have a tip? Email her at christinadesmarais (at) live (dot) com.




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