There’s a palpable energy intensifying in the business sector of British Columbia’s Okanagan region — a product of many ingredients, but most notably technology. The area’s tech sector enjoys an annual growth rate of 15 percent, which contributes to a $1.3-billion industry. That’s enough to establish the Okanagan as the fastest-growing tech region in Canada.
In fact, the Financial Post’s 2016 ranking of the top entrepreneurial cities in Canada lists Kelowna, B.C. as the number one place to start a business in Canada. So what is it about the region that’s prompting such optimism?
Moving from startup to growth stage
Raghwa Gopal, CEO of the region’s tech accelerator, Accelerate Okanagan, explains that there are several factors contributing to the region’s success for startups and growth-stage companies.
“We have a great infrastructure here, a great airport, and reasonable housing prices compared to the (B.C.) coast,” he said. “Our location lends itself to making this a nice place to come and work or to start a business.”
Accelerate Okanagan offers mentorship, structured programs for companies of all development levels, and runs the only program for growth-stage companies in the country. Gopal says that of the 40 companies to go through the growth-stage program, all have achieved double revenue or more and many have yearly revenues of over $5 million. For Gopal, that intangible “X-factor” for the Okanagan is the region’s size. It’s perfect for maintaining the right cluster of tech companies who share a similar mindset.
“You’re not coming to an island. It’s an established area with likeminded people,” Gopal says, adding that the Okanagan’s tech ecosystem continues to grow. “Here, when you connect with someone, you connect with everybody.”
Quality business community aside, it is lifestyle that is still the driving factor for recruitment to the region. Its growing amenities, combined with the high costs of living in major cities, allow a group of high-growth Okanagan companies to attract and retain talent. Much of that talent is young, too: a recent demographic shift for the area now means that 52 percent of people in the sector are under 35.
Why tech startups are flourishing
One growth-stage company making a global impact is Bananatag, which has managed to build a strong company culture with low turnover — unusual for a growing company. Bananatag’s platform allows individuals or sales people to track emails. Another offering allows internal communicators to analyze metrics of their newsletters. The cloud-based tool is the same for both types of customer, and anything the company builds for enterprise clients is without fail a good feature for individuals or sales people. Bananatag has become a thought leader on company culture with a strong blog following on the topic; they sit on panels, and lead conferences on employee engagement.
The company has an office in Kelowna and a satellite location in Vancouver, and was founded in August 2011 by Corey Wagner, his mom (programmer), dad (legal) and best friend (Web). “We now have a team of programmers, my parents aren’t involved as much anymore, and we have over 40 employees,” Wagner says. Bananatag has over 300 large enterprise clients and 300,000 customers who have signed up for its services. Last year, the company generated $2 million in revenue and is on track to grow to $4 million in 2017.
Wagner, who went to school in the Okanagan, wanted to start his company there because he loves the lifestyle. “It’s an interesting place because you have a fairly small city with access to some great resources you wouldn’t find anywhere else,” Wagner says.
“The community is still small enough that everyone knows everyone and is willing to help, and at the same time I can call another growth company’s CEO and ask for advice and vice-versa.”
Like many like-minded entrepreneurs, Wagner enjoys the small-town feel. While a 40-person company is considered a big tech company in Kelowna, one of that size in Vancouver or Toronto would be deemed small. “In a bigger city, you wouldn’t be able to develop the relationships we do here,” he says. “When a potential employee comes to town, we are introduced to them through Accelerate Okanagan and it makes the hiring process much easier.”
Investing In Western Canada
Rick Sellers, Vice-President of Enterprise and B2B for B.C. for Rogers Communications, is enthusiastic about the region and has assigned representatives to cover the area. “We are making investments here and have seen the growth potential that exists, especially over the last few years,” he says. “We have seasoned account managers that travel to the region, which represents an important part of B.C. It’s a great area for us.”
Rogers is also investing into other verticals like forestry, and believes in supporting other industries in addition to the tech sector. “Overall, the cost of doing business is much easier in the interior,” Sellers says.
It’s also easy for individuals to work in the Okanagan, chiefly because of the lifestyle, which appears to be the deciding factor in keeping entrepreneurs and employees firmly planted in the region.
“The lakes, mountains, the non-commute… it takes me 10 minutes to get to work yet I still complain,” Wagner says. “We are spoiled. When I look at Vancouver, the wages aren’t high enough to offset the housing. Here you can find a cool job, work at a cool company and live in a great place. There isn’t a lot of downside here right now.”