High-growth companies debate allure of Vancouver

While a ‘quiet pride’ is spreading to some B.C. sectors, fast-rising companies say the recruitment process is becoming too burdensome to keep their headquarters in the province 

From left, 1-800-GOT-JUNK CEO Brian Scudamore, Axine Water Technologies CEO Jonathan Rhone, Traction on Demand CEO Greg Malpass and Methanex CEO John Floren discuss whether high-growth companies should remain headquartered in Vancouver at a B.C. Tech Forum panel moderated by B.C. Innovation Council CEO Greg Caws (far right) on March 20 | Photo: Vancouver Board of Trade

Vancouver – the weather is mild, the mountains are beautiful, and it keeps landing on global top-10 lists.

Then again, it’s Vancouver – a relatively small outpost on the edge of the Pacific Ocean, where the talent pool is sometimes limited and the cost of living is high.

Panellists at the Vancouver Board of Trade’s B.C. Tech Forum swung back and forth on a rainy morning March 20 about the merits of headquartering their high-growth companies on the West Coast.

Axine Water Technologies CEO Jonathan Rhone told the roughly 400 people inside the Westin Bayshore’s Grand Ballroom that he appreciates the access to young talent coming from top universities in the region.

“A big grief in our sector, though, is the ability for us to recruit people from outside [B.C.],” he said.

“It’s very expensive for people to move here, but also Immigration Canada – if you’re talking about problems in Ottawa – are making it incredibly difficult to recruit people from the U.S. We’re stuck right now in a multi-month process of trying to recruit people.”

Rhone added he’s spoken to tech CEOs from throughout B.C., and recruitment has been a “huge problem” for them all.

“So if we want to grow our sector, we need to continue to import talent and we can’t have any impediments,” he said.

Methanex CEO John Floren  said his company was established in B.C. only “by accident” and has since gone on to acquire facilities and companies throughout the world.

“We can be anywhere in North America,” he said.

“We have about 110 people here, and when I think we could be in New York, or Toronto or Dallas, ,we’d probably lose about half those people [who prefer to be in Vancouver]. So the cost of the people in our business is very low. Building a plant has a much higher cost than people.”

But Floren pointed out that a major move would still be disruptive to any business, and, besides, Vancouver is a “great location” for a global company.

“I get on a plane direct to China, direct to Korea, direct to New Zealand, direct to Europe. So the time zone works and transportation works extremely well,” he said.

Despite the challenges high-growth companies face when headquartered in Vancouver, the Business Council of British Columbia (BCBC) is banking on the city’s advantages as an attractive place to live.

In February, the BCBC’s $6.5 million HQ Vancouver program began identifying targets and building business cases for corporate relocations from Asia to B.C.

Greg D’Avignon, CEO of the BCBC, told Business in Vancouver at the time of the launch that Montreal, Toronto and Calgary have all been far more assertive carving out niches for corporate headquarters for aerospace, financial services and oil and gas companies.

The Vancouver business community, meanwhile, hasn’t made a compelling enough case for getting high-growth Asian companies in life sciences or agri-food to relocate to the city.

Traction on Demand founder and CEO Greg Malpass, however, told the panel the province’s tech community is reaching a “turning point” when it comes to putting down roots.

He recalled that up until very recently, most startup founders would simply expand their companies until they could sell them to the highest bidder – someone who usually wasn’t based on the West Coast.

“There’s now a very quiet pride [associated with being in B.C.],” Malpass said before telling the panel he’s been “very, very vocal” about his vow to “never, ever” sell his own company.

Malpass added that growing pride is even affecting the team at Traction on Demand’s L.A. office.

“[The Americans] want to be part of the culture we’re building here, which is, ‘We’re going to win.’”

torton@biv.com

@reporton