New York and Toronto business leaders discuss an ‘east coast alliance’
Silicon Valley may still be the most well-known tech hub in the United States, but startup leaders in New York City and Toronto are betting that by building a super connected “east coast corridor” that they can lure more talent and money from the west coast.
Earlier this month, New York accelerator Grand Central Tech announced that it was partnering with MaRS, a Toronto-based innovation hub, to offer support, services and physical workspace to Canadian technology ventures looking to expand to New York City. At an event on Tuesday hosted at Grand Central Tech, entrepreneurs and VCs from both Toronto and New York spoke about the advantages of starting up in their respective city, and what the other city can offer them. It’s all part of an effort to build what Grand Central Tech co-founder and managing director Matt Harrigan dubbed “an east coast alliance.”
New York City and Toronto, located approximately 500 miles from one another, are no emerging startup ecosystems. Entrepreneurs at Tuesday’s event said that they looked to expanding to the other city not just to gain a foothold in New York City or Toronto, but in the United States and Canada as a whole.
But the partnership between Grand Central Tech and MaRS is indicative of an emerging trend in growing startup ecosystems — partnering with another city to help entrepreneurs get access to the talent, capital, or other resources they may lack in their own city. In August, two of Texas’ largest startup organizations — the Capital Factory in Austin and the Dallas Entrepreneur Center — announced that they would be offering their services in the other’s city as part of an effort to build a “Texas Startup Megatropolis.”
For some of the New York and Toronto entrepreneurs at Tuesday’s event, the need to expand to the other market was obvious. Michael Katchen, the founder of Toronto startup Wealthsimple, an investment service for young professionals, said that opening an office in New York was a no-brainer, given that Toronto and New York are both financial centers.
However, Toronto and New York entrepreneurs touched on a few lessons that are applicable to even smaller startup markets. First, that inclusivity can be an important selling point for prospective talent.
Toronto entrepreneur Allen Lau, the CEO of online storytelling platform Wattpad and co-founder of early VC firm Two Small Fish Ventures, said that he believes that Toronto’s reputation as a melting pot (50 percent of the city’s population comes from outside of Canada) has become increasingly enticing given the recent election of President Donald Trump in the United States, who has advocated for tightening immigration laws in the United States. In June, Canada launched a “fast-track visa” to shorten the work permit and visa issuing process to two weeks for highly-skilled technical workers.
“We just hired someone born and raised in Detroit, who was working in New York for her entire career up until now. We just hired her through the fast-track visa to come to Toronto and work for us as a product manager.” Lau said. “It’s the diversity, it’s the inclusion that is really attractive to her. Given the climate here [in the United States] she wants a change.”
Second, that cities should take stock of what strengths their market offers that others might not. Some of the Toronto entrepreneurs in attendance said that they opened a New York office to take advantage of the city’s sales talent, and to build connections in the city’s media and marketing industries. Meanwhile, some of New York entrepreneurs said that they looked to Toronto for engineering talent, particularly from the University of Waterloo and the University of Toronto.
Finally, startup ecosystems should consider the importance of having a “flagship organization” that entrepreneurs can turn to if they are interested in learning more about a particular market and expanding to it. Dessy Daskalov, the CTO and co-founder of Nudge Rewards, a recent participant of MaRS’ accelerator program, said that her company turned to MaRS to figure out what potential customers and investors and her co-founder could reach out to in New York.
“Especially when you’re an early company, when you get an intro through an organization like MaRS, you’re a lot more credible,” Daskalov said.