In a week where another nail seems to have gone into the Nortel coffin (or at best a dismantling continues to progress), amid a set of less than impressive 3 ^rd quarter results and dismal news from local companies, and with a dismal start to the season for the Senators, I am left to ponder what has happened to the big town/small city that I've called home for most of the last 20-something years.

Not so long ago, Ottawa was the technology darling of the country, Silicon Valley North to many, a haven to startups and technology entrepreneurs, headquarters to many of Canada's technology giants, destination for many multi-nationals to gain a Canadian presence and access to creative engineering talent.  Salaries, benefits and employee perks spiraled out of control.  Stock options were as available and easy to acquire as Canadian Tire money (and worth less in most cases).  The Corel Centre was a complete technology venue and hotbed when the Senators dropped the first puck in the building.

How quickly things change.  It's now Scotiabank Place and you would be hard pressed to find a single technology ad in the place, and I suspect you'd find the same with the corporate suites.  Just what has happened in Ottawa to cause the morose feeling you get across the city's remaining technology community?  Why do the layoffs and shutdowns continue?  Can something still be salvaged, reborn, or are those times gone forever?

I may not make friends with elements of this posting, but there are some things that just need to be said if we're to get a handle on how to fix things based on where we are today, move forward, and rebuild a successful Ottawa technology industry in the future.  Not all of the views that I share here are my personal opinions.  I have tried to summarize the sentiments of many industry veterans that I've spoken to, or met with in the last several months.  In no particular order, this is a set of consistent things that I've heard and/or personally feel have put us where we are today.

Sticking with Founders for Too Long - It takes a certain mindset to take the gamble and go out and start a company.  It is the true entrepreneur and risk taker that is prepared to take an idea and seed its genesis.  But how long do you want that skill-set, culture, leadership style, or set of expertise staying around and driving the business?  Some Founders make the transition and continue to mould and evolve themselves into what it takes to actually build and scale a company into something successful, and can become real leaders of teams.  But let's face it, many more of them hit the ceiling once the company reaches a certain size or stage.  Ottawa has no shortage of companies that have kept the Founders around for too long, or where the Founders have not figured out when it is time to step aside (or keep their fingers out of the pie), or where they should have left completely and gone off to do it again somewhere else (because maybe that is really what they are good at).

The Venture Capital Phenomenon - There are a lot of elements to this.  I think many of us have witnessed our fair share of companies/individuals that became addicted to VC money.  Rather than finish a product and really find a market and customers, they got lazy and complacent and took the view that they could continue to live off of a never-ending injection of money from others.  And the VC's fell for the bait and got what they asked for.  They asked for silly and ridiculous business plans and they got them in spades.  Instead of creating realistic and true plans to grow the business, CEO's and Founders manufactured straight line, hockey stick, or exponential revenue growth plans because that's what it took to get VC attention and cash.  And those companies then unnecessarily blew their cost curves through the roof to meet the mythical revenue curve that never transpired (but was always just around the corner). It's a self fulfilling prophecy in the end.

But another element of this is how the VC's stifled the growth of a broad executive talent pool in the city.  US based funds came into town and brought a US based VP of Sales, VP of Marketing, or even a CEO with them, planted them in the company, but left them living in Boston or California.  The funny thing here is that many Canadian VC's thought that this was a good idea, and persisted with the same thing.  Pretty hard to sustain and build the right talent pool for these key positions if you never invest in growing it organically.  So was bred the continued complaint that there is "no Sales and Marketing talent in Ottawa".  Quite honestly, a lot of that potential talent picked up and moved elsewhere because of the inherent bias against these local skills, and only a few have ever returned.

Ineffective Boards - VC dominance of Boards has destroyed far too many Ottawa companies, made them stagnant, or completely limited their ability to grow and truly be successful.  How many venture capitalists are really qualified to sit on a Board anyway?  For whatever reason, investing in a company seemed to earn some inherent right to sit on the Board of a company, regardless of qualifications.  Rarely has VC Board membership ever been selfless and in the broad interest of the success of the company.  It is more often than not biased towards the guiding financial principles of the fund that the VC represents, or the terms and conditions of the VC's fund management fee (which the individual is obviously biased towards attaining).  And in the case of so many VC Board members in Ottawa companies, they never could bring any experience to the Board table that was of any tangible benefit to the company.  More than any other factor, I have heard this viewpoint consistently from technology executives across the city, and from a number of VCs themselves.

Continuing to Bet on the Wrong Horse - When is it time to just shoot a company, write off the investment and move on?  Ottawa has suffered from more than its share of companies that just should never have been allowed to continue.  It has been the classic case of continuing to throw bad money after bad.  I've been startled to watch massive third and fourth round investments go into companies that were never going to succeed, and the people inside knew it.  Other companies failed with their first idea and investment round, but the same investors continued to pour money into a re-invention and re-birth.  In some cases even a company's third life received further investment.  If the business failed twice with the same set of people, is there any good reason why Round 3 might succeed?  Mean time truly legitimate businesses with decent products and solutions, and some with paying customers have been left to starve and stagnate.

Incestuous Culture - Any time that one or two companies are highly dominant and successful and get the majority of attention, you run the risk that creative blood and juices, cross pollination, and new and ripe sets of ideas are cast aside because people are comfortable with who they know.  Ottawa was the R&D centre of the universe for two late 90's technology powerhouses - Nortel and Newbridge.  They were the darlings of the press, and gained national (and international) media and investment attention.  And while that was a great thing for the growth of the technology industry in the city, we've also suffered the consequences.  Senior people left both of those companies, started new ones, or became VC's, and they stuck with their own.  There was a lot of ego and arrogance wrapped up in all of it.  A view and mindset that you had to have Nortel or Newbridge credentials on your resume to be somebody permeated the city (and to some extent still does).  One thing that many missed is (that at least in the case of Nortel), there were never really many of its business, financial, sales, marketing, or product management brains in the city - this has always been the core centre for Nortel's R&D.  Thus why should there have been a belief that these people could suddenly fulfill these critical sets of skills and experience in startups?  It is interesting that in the end what Cognos, OTI, ObjecTime, or Watchfire built in Ottawa may live a much longer and more successful life inside IBM, and continue to harvest new local jobs and opportunities, and I think a lot of people missed those movies....

So you may agree or disagree with some of the points that I've made here, and I'm more than certain that there are many other elements at play.  Maybe we all just got too full of ourselves and believed what OCRI or the local press was telling us, and the real technology centres in Canada have always been in Toronto, Waterloo, Montreal, or Vancouver.  But in the end clearly something is wrong in Ottawa, a time of serious reflection is required and necessary, and it is time for some leadership to start to pull us out of this mess and rebuild what once was, could have been, or frankly still can be.  Venture capital money is gone, so let's get back to the fundamentals, do some housecleaning, and harvest all of the creative talent that we do have to put Ottawa back on the technology map.