"It's the most concentrated place I know of in terms of technology, even compared to Silicon Valley, which is 30 miles straight. Here we're talking about one square mile, at the most."
by Heidi Legg
When Donald Trump won in Indiana in the primaries, Trump declared that the North American Free Trade Agreement (NAFTA) was, possibly, the worst trade deal in the history of the U.S. We have also heard rhetoric around NATO, and, as always with a U.S. election year (this one exceptionally true to headline grabbing), other countries are pulled into the noise.
We thought we would sit down with two Cambridge-based trade consulates with very active entrepreneurship programs based in Cambridge: Canada and Switzerland, to discuss why some nations are doubling-down in trade and entrepreneurship in Cambridge.
Thierry Weissenburger is the Consul and Canada’s Senior Trade Commissioner in Boston. Weissenburger created and launched the Canadian Technology Accelerator known as CTA@Boston, which has received great accolades, including the International Business Innovation Association’s (InBIA) 2016 Accelerator Program of the Year Award with 60 member countries. He has also launched 48 hrs. and a new initiative called FastRunners. I sat down with Thierry to find out why the Canadians are coming to Cambridge and why their programming here appears so robust and is winning acclaim.
Would you tell us how and why the Canadian government is bringing Canadians here to work on their startups in Cambridge?
Kendall Square is extraordinary. It's often qualified as the Silicon Valley of Life Sciences. You can find basically any single large bio-pharma in the square mile around Kendall Square.
There are also other great new emerging areas developing quickly, mostly around MIT, but also inside other key academic institutions around Kendall Square. For Canada, it's very important to be here to take advantage of Kendall Square and tap into the excellence and the knowledge for the benefit of our entrepreneurs of our companies.
Kendall Square has unique resources that we don't necessarily have in the same vast quantities in Canada and unique talent. We also build bridges so that not only entrepreneurs come over and take advantage but also that Kendall Square and Massachusetts consider Canada a place to do business.
Are you trying to engage Canadians, like myself, who are here or engage those who are back in Canada and want to develop a market here? Who is your target audience as a consulate?
I'm a trade commissioner and part of the foreign service of Canada. We're a special corps within the foreign services. Our goal is to support Canadian companies growing internationally in the global market and my mandate is actually to help Canadian companies break into this market.
Since its inception in 2013, the CTA@Boston is a program of the Trade Commissioner Service of Global Affairs Canada, which manages a network of nine CTA accelerators in key innovation hubs around the world.
Are these companies based back in Canada?
Exactly. Most of our companies are based in Canada but we live in a global world. The patterns of trade and globalization are changing. Less and less is traded in terms of commodities and goods and more and more in terms of ideas and money. What we try to do is to facilitate the flow of people, ideas and money across the border in support of our goal, which is to help Canadian companies grow as big and as fast as possible. That is the main mandate.
This being said, to achieve this we have a tremendous resource abroad, particularly in places like Kendall Square and Boston. Here there is a high concentration of Canadian expatriates who have been successful in their career but still feel very much Canadian and who wish to stay connected and to give back to the place where they received their education. They may also wish to find business opportunities that allow them to come back to visit family or to help out. In that context, one very, very important tool we have developed, specifically here and in a couple of other places around the world, is to engage and mobilize the Canadian expatriate community.
We search for expatriates: Canadian entrepreneurs who have a level of accomplishment that would be useful to our clients. Maybe they will open up their Rolodex? More importantly, they can provide mentorship in the sense of sharing what they learned along the way for the past 20-30 years and try to help our entrepreneurs avoid making the same mistakes.
How do you help the Canadian entrepreneurs coming into the US?
Our initial approach is for them to call or email us and ask us for a point of contact, or introduction, or a brief on the market opportunities here or in the city they are exploring. It's the basis of what we provide.
Now in those very special places such as Kendall Square and Boston, we went a little bit further. We created something called the Canadian Technology Accelerator (CTA), which is to support smaller, early-stage entrepreneurs. We provide them with office space here in Kendall Square within the CIC, for four months. We provide layers of services so that when they come, they don't waste time. It's a client-based solution. They maximize their time here, optimize their connections and a very, very important service we provide, thanks to our community of Canadian expatriates, is the mentoring: something we have called the Canadian Entrepreneurs in New England that we call the CENE.
The mentoring service is structured mentoring based on the MIT methodology whereby each company that participates in the CTA comes here for four or five months and is paired with not just one mentor, but a team of mentors. A key feature of the CTA@Boston is the partnership with the CENE. The mentors are all volunteers and there are pros and cons to that approach. I personally believe – and many entrepreneurs share that view – that being a volunteer, you receive a different kind of advice than say, from a consultant. It's invested and honest advice.
What are a few of the success stories you've seen?
They vary. Not everyone's successful, obviously, but I think there are tangible and intangible types of success. The invariably intangible one that we hear from almost everyone is ‘time.’ They didn't waste their time being here or they gain a huge amount of time by having been here. Usually entrepreneurs report that in the space of four months, they did as much as they could do in two or three years in Canada.
Why is that?
The concentration is bigger and the pace is a little bit faster here. I was talking about Kendall Square being the Silicon Valley of life science. By being situated at the Cambridge Innovation Lab (CIC), within one block, an entrepreneur in life sciences can basically meet every single company they really need to meet to grow their business. You have all the tech scouts of those companies around, usually even within the CIC.
Scouts are here looking for startups? (We held the interview at CIC.)
Exactly. They are looking for new ideas, casing out what's coming out of the ecosystem, and being here at the CIC and at Kendall Square is the perfect opportunity to connect quickly with these people. It's the most concentrated place I know of in terms of technology, even compared to Silicon Valley, which is 30 miles straight. Here we're talking about one square mile, at the most.
An entrepreneur spending time in this building, will change floors or, at worst, change buildings and in one day meet 10 people. You cannot achieve that even in the Valley.
Why do you think your Canadian accelerator has been recognized globally?
This is because of the quality and consistency of execution, in particular The CENE Mentoring program, which we have meticulously implemented using the MIT team mentoring methodology, our ability to sustain the program both financially and from a program perspective, and results achieved to date against our KPI (key performance indicator) - 70 clients served, $55 million raised, $23 millions in increased sales, more than 150 jobs created and a number of partnerships achieved.
There has been a great deal of chatter over NATO in these presidential elections and now Trump says he is going after NAFTA. And so we can expect to see this discussion about our allies that surround America. Do you feel that in commerce there are national alliances?
I would say that in more than one case in history there has been a mesh between the political, defense and commercial interests. Currently we are in the round of regional trade agreements being negotiated with the EU, with Asia-Pacific, with TPP (Trans Partnership Agreement). These are really driven more by economic interests than political or defense interests. However, looking at history, there was an alliance based on trade and business and economic interests that often led to a strengthening of political ties and alliance. With this, all of a sudden you become interdependent for prosperity and for security. It will be difficult to achieve prosperity without a decent level of security. I don’t know which comes first but it seems to me that trade in those type of agreements is usually developed, primarily, for economic purposes and then over time as the ties build up, it's more difficult to enter into war with each other – that's putting it mildly.
Are you the only country doing this in Kendall Square?
I wouldn't say that. There is variation around the same theme. We're the only country who does it in that way at that scale, perhaps, but Switzerland also hosts companies and has their own space here in Cambridge [Our next interview is with Swissnex Trade Director]. There are quite a few countries that host entrepreneurs. The Germans are starting a new thing as well. The concept has been replicated. We were probably the first country to do this type of thing in Silicon Valley and there too the model has been copied.
The idea is that instead of creating your own brick and mortar space to host entrepreneurs for long periods, we imbed ourselves in an existing successful co-working space or accelerators. It's cheaper and, more importantly, our entrepreneurs can rub shoulders with world-class entrepreneurs that are around them. At CIC you have 800 companies and many, many, many entrepreneurs and many, many investors, and many, many corporations. Why go elsewhere?
Are the CTA spots very competitive?
It's pretty competitive. We take about one-third of the applicants.
How do Americans respond to you being here?
We actually bring business over. Most of our companies don't stay here but sometimes they open an office. The CTA is soft landing in the process and from an economic development perspective, that's what local economic developers like to see happen.
We create an ongoing Canadian community presence for businesses here in Kendall Square. It creates bridges, plus there are spillovers like those offices that are being opened to tackle the American market.
John Kenneth Galbraith was a very famous Canadian here in Cambridge, specifically, at Harvard. Do you see someone like him as an inspiration inside the Canadian consulate corridors?
I would say there are probably two things to say about his impact, noting that I'm not an expert on John Kenneth Galbraith's work. Yes, he was probably one of the most famous economists in America. He was Canadian. As Canadians, we know that very well, but maybe it's not always known that well within American circles. His thinking had many different layers and I think his thinking evolved over his long life. Yes, he's considered as a liberal and he would be rather a free trader. Of course he probably would not conceive exactly the way the economy is structured today, which has evolved greatly. I really think we have a major change right now going on, which I alluded to earlier in the discussion. It is not the pure trade of goods and the movement of goods and commodities that matters the most today. It's more the intangibles and they behave very differently.
Coming back to Galbraith, something that has always been there, and this emerging issue that we hear in the presidential campaign – and we hear it all across the Western world – is the distribution of wealth. The question is will trade help or alleviate the distribution of wealth and I don't think that we have a clear answer and I think trade alone is not the answer. There are obviously fiscal policies and domestic policies on redistribution that need to be taken into account. What I know is that it's in the mind of many right now and I think that is part of the narrative and the thinking with our governments as to how we should structure those trade deals – global trade deals – keeping in mind the domestic issues of the redistribution of wealth and not creating more poor and ultra-rich at the same time, which is very much, generally, a Canadian approach. Maybe that's the difference with the U.S. In Canada, we tend to privilege a wealth distribution more at the center with a middle class – which was actually an American invention.
I think both Canada and the U.S. have to struggle with that very, very important issue around income inequality because it’s not so much the national security but it's the domestic unrest that such a situation creates.
Even in Canada there has been some incredible wealth creation that we have seen over the past few decades, much like the U.S. How are things with the new Prime Minister?
Last month, the new government, led by Prime Minister Trudeau, issued its first budget, which is really a serious political statement as to where this new government wishes to go. There's certainly a new direction. Canada is also a country where we don't tend to shift 90 degrees overnight. We're a stable economy, stable society – aggressive in some ways, but also moderate in many respects. There is also the personality of the Prime Minister, which is a bit of celebrity, young, handsome and with a good name.
We want to know when he is coming to Boston?
Exactly. He may come but certainly it's an asset for us as diplomats for Canada. One issue, not a major one, but one issue that I have had with working in the U.S. since 2007, is that Canada is often taken for granted and now having a known, famous prime minister that excites people on this side of the border – for the wrong or right reasons – is good. I think it's important because it opens up the discussion and we can then talk about more serious issues.
The people of Canada made their choice but the choice in this case is also good operational news.
What American trait do Canadian entrepreneurs envy?
They don't always realize until they come here but once they experience a full month, I think one trait which is invaluable is the level of ambition, the somewhat aggressiveness in business, the persistence, and the tenacity. The Americans are the best business people in the world by a very long stretch. It's pretty clear to me and there's a lot to learn from this behavior of “thinking big.”
Going for the gold is something we hear.
Going for the gold. Yes. That's a very, very envious trait. That's something we try to teach in a small way, while remaining Canadian, of course. Especially if they want to play here in the U.S., they have to play by those rules.
What American traits do Canadians dislike?
I alluded to it before. We're sometimes taken for granted or we feel like that. I don't know whether it's true, but Canada is really not front of mind for most American business people and that's something we try to fight. I think we're part of the same continent, part of the same market, we hope, and their closest ally and very close culturally.
Canada has such a highly educated population sitting on that borderline. Is it surprising they aren’t tapped more?
Yes. And, of course, we're in competition. There are other markets that captivate the imagination in Asia and elsewhere but, hey, if your biggest trading partner's just next door and it's often an afterthought…
Does the size of the American market affect Canadian entrepreneurs? The population of Canada is literally the size of the state of California. Does that affect your entrepreneurs?
Consider Canada multiplied by 10…that's the U.S. America is 10 times the size for the market, 10 times the investment opportunity, 10 times everything. That’s usually what drives most entrepreneurs here in the first place because indeed for most entrepreneurs, especially those we work with here in Kendall Square, more than 90 percent of their market is not in Canada and a large proportion of that 90 percent is in the U.S.
It’s the most natural place to go first: not only because of size but it's also a steppingstone for a global expansion and to launch a global product, especially when you come to hubs. It’s probably not the same everywhere in the U.S., but in Kendall Square, Silicon Valley, and New York for media or Hollywood for movies, these are very unique places on earth. That’s where you need to be if you have a doable product.
What is 48 Hours?
We have many programs of what I call the 'accelerating spectrum.' 48 Hours is a lighter version, if you wish, where we bring between 25 and 30 companies every year here to Kendall Square and we expose them to this ecosystem for 48 hours. It’s a taste, it's a teaser, it's an ad for the CTA but it's also an opportunity for the entrepreneur to understand whether this place is for them and whether they can achieve what they want to achieve if they are here for four months. Invariably, many of them come back home saying, “Yes, I really need to come here for four months.”
Do they pay to come here?
Of course not. Actually, we provide a free service to them. They're entrepreneurs. They’re not paying us and we don't pay them, obviously. We provide a program, we provide the access and we provide the mentoring.
What are some Canadian startups that have used Boston as a runway?
We have many successes. One company I would describe as the Airbnb but with hotel level of service and consistency of service. They carved out a niche not yet occupied. They developed that product very, very quickly. They were first time entrepreneurs from Québec and very successful. The main focus was to develop their operations and we helped them. They opened their first office here and in many different other cities. They, of course, needed to raise capital. They were mentored by our expatriates and thought they would need three or four million dollars – five million at most. This is not an industry you can easily protect. Our advice was, “You need to really think bigger and go faster. You need to occupy the space.” They followed our advice and it was not difficult to raise $12 million U.S. very quickly. Today they're on the ground for really accelerated growth and that's the only way to win. It's not a choice. If you only raise three or four million, you would never have the dry powder to expand fast enough but with 12 you can, until the next round.
So they quadrupled their raise?
Yes. Another interesting company also that raised that size of money was more typical of some of the companies we get here in Kendall Square. It was a medical device company out of Vancouver and they raised also $12 or $13 million to help fuel their growth.
Is that not possible in Canada?
It's possible. Take Clementia Pharmaceuticals that raised U.S. $60 Million in Mezzanine Financing last year. There is revival in Canada on the pharma side. What would be more difficult is what this last company has achieved. Not only did they raise money, but sold their company to a larger acquirer. We don't have a market big enough bio-pharma market to buy those equipment. If they come to Kendall Square, they don't have to go far and do the rounds and sell a lot of these devices.
An event you're looking forward to?
What excites me the most right now is the next iteration of our acceleration spectrum suite of trade programs. It's called FastRunners.
Again our goal is to help companies grow as fast and as big as possible. Until now we have dealt with growth stage companies. With FastRunners we are going to help companies that are at several million in revenue and have reached a point where they need to change fundamentally or deploy results in a very different way to reach the $100 million mark. It's relatively easy to create a company today, to bring it to $1 million in revenue. I say 'relatively easy' – but then many companies hit walls. You need different type of talent. You need a different understanding to build a global market and operations need to be deployed globally. We thought we could help those companies here in Boston with the pool of mentors that we have created thanks to The CENE, again which is a group of expats here locally, and many of them actually wanted to be involved with companies a bit later stage because they have that experience.
Our mentors here know how hard it is to skip over that Grand Canyon of death. FastRunners is what excites me the most. From a public policy/commercial policy perspective, I consider that as the Holy Grail because helping startups is great but really what pays taxes, what creates jobs is companies that grow big. Many of our expats are excited about that.
When will it launch?
We have already launched in December. We are starting the first quarter with only three companies. We move from 48 Hours with 30 participants, then typically we have 25 entrepreneurs over the year at the CTA. With FastRunners we are talking three to four companies. It's much more intensive. The pool of companies is also smaller for this in Canada. It's an attrition process but we still can help them a lot and here the process is six months at minimum. We run deep dive strategic sessions.
In fact, this month two of the six recipients of the Governor General Innovation Awards in Canada had spent time in Boston. Orpyx is a former CTA participant, while Kinova is currently in the FastRunners program.
It sounds like an academic fellowship.
Yes, you could say that. We don't have all the answers yet and we are refining the pilot but it's really something that Prime Minister Trudeau announced in his budget last month and considered highly important. I think most governments around the world see this too. It’s really in the air.
How much money was given to FastRunners?
Oh, nothing. I'm doing it from the ground up here but the government of Canada announced something they call a high-impact fund. It's 50 million for one year.
It's an issue of finding the right people to advise these companies and then leverage the expat group and then leverage that global network of trade commissioners around the world to open doors for these companies in an organized fashion.
When is the Prime Minister visiting?
In our new government we have already had two Ministers, including my Minister – the Minister of International, Chrystia Freeland – visit. She is a brilliant personality and interested in all those issues we talked about on the economy. I think the trade agreement is very front and center in her mandate.
The Prime Minister asked that all ministers have a public mandate letter in the sake of transparency. Now, not only do we have a budget, but we also have online the mandate letter for each minister on what they're supposed to do and what the Prime Minister expects them to do in the course of their tenure.
Is this new?
This is new. We never did that before in Canada and it’s really powerful for accountability.
Where is your favorite place for a power lunch?
I like the convenience of the string of restaurants next to the CIC: EVOO, Kika and Commonwealth. Commonwealth has great sandwiches. I've even brought some Canadian ministers there. Catalyst is a great spot as well.
Where do you get your news?
As a diplomat, and not just as trade commissioner, we have to basically know both sides very well. I have to keep current on both the Canadian news and the U.S. Certainly Canadian news: The Global Mail is a primary source. We obviously as part of our internal services have clips every morning on what's going on in Canada.
For deeper thinking I like MIT Tech Review and The Economist is my favorite piece for global news, although I must admit a little bit of bias.
Two things you bring back from Canada in your suitcase?
Tarte au Sucre from St-Hubert, which is a restaurant chain in Québec. I bring that back for me and for my family, more importantly. When we cross the border we tend to go there first for the roasted chicken and the poutine.
Maple syrup, and we strongly argue within the family that the Canadian one is way better than what you find in Vermont or elsewhere.
Two places to visit?
We have great cities. Vancouver is a jewel obviously – nestled around mountains. It’s fantastic. For life, Québec City is particularly outstanding. It’s a fortified city and the oldest city in North America, founded in 1608.
Montreal life is unparalleled. Sorry, you asked for only two!
That’s OK, you’re a diplomat.
If you have to spend time and enjoy and have fun in Canada, Montreal is definitely a good place to go and the good news is that it's only a five-hour drive from here. You don't even need to fly.
And the U.S. dollar is strong.
At a 30% premium.
The Canadian Government sent us over these additional notes: The CTA@Boston has also forged partnerships in the Greater Boston ecosystem with corporations including IBM, Microsoft, Hubspot, Intersystems, Fidelity, Akamai, Raytheon, Whole Foods, CVS, and Johnson and Johnson. Formal partnerships have also been established with numerous New England innovation associations including MassBio, MassMEDIC, the MIT Enterprise Forum of Cambridge, TiE, MassTLC, New England HIMSS, and the New England Clean Energy Council (NECEC).
[Editor's note: Heidi Legg's husband in an active participant in The CENE and she is Canadian/American.]