in MaRS, Ontario, Startups

Searching for life on MaRS

MaRS Phase 2. This does not bode well...

MaRS Phase 2. This does not bode well…

Yesterday afternoon I decided to visit MaRS and see for myself… just how empty (or occupied) is Phase 2?

Of the 20 floors, only 3 had any tenants. And all but 1 tenant (a clean tech fund with 2 errr vultures according to MaRS 101 h/t Mark McQueen, but in my estimation exceedingly nice guys) were provincially funded organizations! Not one startup to be found in Phase 2.

It is a new building after all… so unfazed, I continued on to Phase 1 which has been open for years. If PR statements are to be believed surely I’d find a hive of startup activity.

I saw a sign for Execusuites… perhaps this is where the serial entrepreneurs have set up shop?

So I turned down a dark hall to find… empty offices (again the listed tenants almost entirely provincially funded agencies), there was one lonely but pleasant provincial employee at her desk.

Execusuites. French for empty seats…

Execusuites. French for empty seats…

The MaRS office, stationed behind the main lobby, had perhaps a dozen staff members mulling about in an area with 30-50 desks. I backed out and continued on…

Could I find even a single Ontario startup?

Yes, exactly that… just one startup!

While I admittedly had low expectations walking up to the building for a spot check, I was pretty shocked to discover what the ~$1B (real estate and operating budget) netted.

I sat down with the founder of this MaRS based startup, to learn how he ended up at MaRS, which if any programs he thought had value, and what might be done to improve the situation.

It turns out his company took over space previously leased by GE, apparently many of the corporate tenants have logos on doors but next to no staff using the building!

Did his startup get substantial value from the advisory services, educational programming, or market research? His answer was pretty much… No.

How about investment? His company had recently raised several million dollars from notable valley and local investors, was IAF interested in joining the round? No again. In IAF’s opinion his startup didn’t need their capital – is the IAF policy to prioritize allocation of capital to weaker startups? It seems so…

This founder agreed that MaRS required structural change and that most if not all of the programming should be canceled. However until such change was implemented, he wondered perhaps something could be done to extract some value for Ontario startups and was working toward this end… the best idea currently on the table? An open space for startups to connect, use WiFi, etc. otherwise known as a coffee shop (now being planned for the empty ground level auditorium still under construction in Phase 2).

He had been pushing for this open space (an improvement over the status quo in my opinion as well) within MaRS… The administration’s concern: How could they ensure visitors were registered / counted as MaRS clients? I thought, perhaps a MaRS client card with every latte… but was pleased to hear him say that they relented.

So this my friends is the absurd result of the much ballyhooed innovation stimulus programs at MaRS – a $1B coffee shop (and two towers filled with bureaucrats).

Le sigh.

Join the conversation:

  1. Good for you for walking the factory floor as the saying goes. Shocking discoveries.

    However to be fair my friend, your comments on IAF (btw are they even formally a part of MaRS?) are an unfair generalization. I’ve recently done two deals with them, Figure1 and Aislelabs. Both were syndicated with myself (Rho) and top notch institutional, strategic and angel investors, including Version One Ventures, Salesforce and some very recognizable & vocal, local super successful entrepreneurs. Not bad for so called “weaker Startups” eh? ;-)

  2. So you discovered 3 things: the real estate building, the funding programs and office-based advising.

    1- We know that the real estate play is old school, but that seems to be what politicians like to point to, because it’s tangible, and it’s visible from a eye sight perspective. It’s a no-brainer that the open, agile and distributed approach is better than the centralized and rigid one.

    2- Venture investment funds run by government-funded entities are marginally additive. Yes, there might be a couple of good investments, but overall, it’s better to put that money to work via the private sector, and you also need to ask about the decision-making process which I’ve heard is quite time taxing for startups.

    3- “Startup Advice” or mentoring are not something you administer from the permanent confines of an office space, and by people who don’t have a recent track record of similar experience. Effective mentoring is tricky, and one can easily botch up a startup by giving wrong or meaningless advice, and by how you give it.

  3. Thanks Roger, somebody needed to do it!

    Yes, IAF was absorbed by MaRS. My point was not that IAF (where I have many friends) only invested in weak companies (as you pointed out some are interesting startups), but that there may be some *strange* policies in place.

    I think a returns driven model, without strings and soft metric accommodations, would yield the best result for all stakeholders.

  4. Bold move – kudos for doing it!

    This is such a huge lessons learned for PEI which is about to have a symposium on business incubation this week. I’ve been lamenting that what we currently have here (which is only 2 government run incubators) aren’t actually incubators – just real estate or lab space. It’s been challenging to bring all the stakeholders to the same table to try and work together instead of compete against one another.

    With the presentations from successful incubators like the Toronto Business Development Centre and Innovacorp – PEI will hopefully develop a better model for incubating startups in Canada.


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