Would you move your startup to Buffalo for a million dollars?
Andrew Pulkrabek hopes you would. Pulkrabek is executive director of 43North, a business plan competition billed as the world’s biggest, to be held in Buffalo this year.
To be blunt, Buffalo has seen better days; hence the eye-popping $5 million in prize money that 43North will award in October. In addition to a $1 million top prize, the contest will hand out six $500,000 awards and another four at $250,000.
Winners will also get free incubator space for a year, guidance from mentors in their fields and access to other incentives, such as Start-Up NY, which offers 10 years of tax-free status to companies that operate in New York State.
It’s a bold move, but tough times demand nothing less – and Buffalo has struggled through more than its share since its heyday as an industrial powerhouse. The fact that everyone knows it hasn’t exactly helped the city to shake its beaten-down image.
The thing is, while Buffalo is known to most southern Ontarians as the home of chicken wings, cheap flights, blighted neighbourhoods and not much else, it has so much more than that to recommend it – fantastic architecture, a thriving arts scene, a first-rate research university, and most important, an abundance of underdog energy.
I was reminded of this last Friday when I shuffled off to Buffalo for at least my 10th time in the past decade, this time to catch a Sabres game with my son. Quite simply, I like the place, especially its downtown and surrounding neighbourhoods.
A day earlier, by coincidence, Pulkrabek stopped by the Communitech Hub to pitch 43North as part of an ongoing tour to drum up applications for the contest (due May 31, by the way). We sat down for a quick Q & A after his presentation.
As unlikely as Buffalo might seem as the next startup hub, Pulkrabek ticked all the right boxes as he offered his take on how to get it going.
Q – A million bucks is a lot of money for a business plan competition.
A – Five million.
Q – Yes, with a $1 million top prize. Why so much.
A – It needed to be large enough to really grab people’s attention. The objective with this is obviously to fund high-growth, scalable businesses, but it’s also about the opportunity to focus on the broader ecosystem of western New York, southern Ontario and Toronto, and put it out on a world stage and have people stand up and take notice.
And $5 million, with a top prize of a million bucks as you pointed out, grabs people’s attention.
Q – You’re from Minnesota. How long have you lived in Buffalo?
A – Since November. But I’m OK with the weather. My home state has had a worse winter than here.
Q – What has surprised you most about Buffalo since you’ve been there?
A – The warmth of the people, and no pun intended when I say that.
The reality is, the people are not just friendly on the outside, but they’re really friendly and welcoming when you get to know them. These are people who will not only say, ‘Hey, here’s a great restaurant or a great bar you should go to,’ but they’ll also say, ‘Why don’t we go?’
That’s different. When you’re an outsider coming in, that’s a really amazing thing.
On one of my first days here, I’m dressed to the hilt, my car’s parked out on the street in Buffalo, covered with snow, and I’m like, ‘Gall darn it’ and brushing it off. And this gentleman who’s got a house behind the place where I’m at, he motions to me that he’s deaf, he shuts his snowblower off and comes over with a brush, and he starts brushing my vehicle.
I’m like, ‘What’s this guy doing?’ And pretty soon he just looks at me as if to say, ‘Stop, get in the car.’ So I get in the car and start it up, and he keeps brushing it off. And he doesn’t just brush it off enough so that I can see and go; he’s brushing every little last bit of snow off the entire vehicle.
That, to me, spoke volumes about something that represents the people of Buffalo.
They’re very, very welcoming.
Q – What does that tell you about Buffalo’s potential as a startup community?
A – I think there’s great potential, because I think it means that anybody with a robust idea can come in and people will embrace it. People are willing to accept folks from the outside who are going to bring something that’s going to be challenging, something that’s different, something that’s new.
Unlike a lot of places, where world views are very set and cloistered, Buffalo is willing to say, ‘We’re open to alternative things.’
And I think part of that is because there’s a relationship, right close to Canada, where although there are many cultural similarities, inherently there still is a difference. And I think that serves to benefit both sides of the border, because you learn to be open and accepting of different perspectives.
Q – You’ve said that it’s better for a startup community to be itself rather than emulate another place. Why is that important?
A – Because if you try to emulate something and you achieve what you strive for, you’ll already be behind the game.
I gave a talk in London and I was on a panel afterwards; I was the only American sitting up there with all the Brits, and folks said, ‘Should we not be trying to be the next Boston?’
And my whole objective with that is, if you’re trying to be something that you’re not, you’re going to – in the long term and in the short term, probably – fail. You’re better off to understand who you are, what you do really well and do it better than anybody else out there.
Be unique, because inherently, you’re going to be. You can’t be like somebody else.
It’s tough to do, because everybody has a bit of an overshadowed feeling; a big-brother inferiority complex that says, ‘Jeez, there’s Boston; there’s the Bay area.'
I think part of what 43North brings to the mix of this for the overall ecosystem is, now we’ve got great things like Communitech here, and people with great ideas, and they don’t have to go to the Bay area now; they don’t have to go to Boston. They can stay within this ecosystem and develop something here at home, and that’s an opportunity that I don’t know that altogether existed before.
Q – You’re visiting a lot of places pitching this contest. How did Waterloo Region end up on your list, and what are your impressions of it so far?
A – I think Waterloo ended up on the list because of what Communitech represents in terms of individuals and organizations that are focusing in on the market opportunities of today, but more importantly, the market opportunities of the future.
This goes to what you were saying about trying to be somebody that you’re not. If you work towards where the future is going, and you can somehow see that and you can somehow start to work towards that, you’ve got a great opportunity to hopefully capture it.
This place has a phenomenal vibe, phenomenal people, a lot of things going on, and it just makes complete sense for what we represent, in terms of innovation and entrepreneurship at our core for 43North, and pairing it up with what’s going on in Waterloo, and in particular, with Communitech.
Q – We’ve been talking here in this region about forming a closer bond with Toronto’s tech community, in a ‘supercluster’ initiative to tap into our mutual strengths. You’ve used the term ‘supercluster’ in reference to Buffalo’s potential role in a regional tech ecosystem. What possibilities do you see for collaboration among startup communities in this part of North America?
A – I think we, in some respects, artificially let the border be a divide.
How long did it take us to cross the border yesterday? Thirty seconds. So, it really isn’t as much of a divide as much as we perhaps think it is.
Culturally there is that difference, as I mentioned, between an American and a Canadian, but it’s something where if you look at it from that overall supercluster or ecosystem standpoint, there’s no reason why we shouldn’t collaborate and work together.
There are great things happening on both sides of the border within that whole supercluster.
There are great educational opportunities. Some companies are training folks and part of their education is to go and work within companies as their college credits. That’s phenomenal. That’s real-world experience, and when those individuals come out, they may not start a company, but they’re going to go and work for somebody.
If they happen to go to Buffalo, that’s a wonderful thing. So, too, if somebody gets trained in Buffalo and comes up and happens to work in Waterloo or Kitchener or Toronto, that’s a great thing. It serves to benefit the overall ecosystem, that overall supercluster, if all of us stay here, we get smart people who develop great ideas here, and we can grow phenomenal industries.
Laurier is now advertising in Buffalo, to come and be educated in Waterloo, and that’s new. That’s positive, because that’s more continuity between the two, and more linkages.
Q – So if 43North ends up stealing one of our startups, will we be able to get them back?
A – The companies are obligated to locate in Buffalo for 12 months. The reason for that is, we want to surround them will all the resources; there’s tremendous community support for 43North and everything we’re doing.
So, we want these companies, these 11 winners, to be extremely successful. We can’t do that if they’re a long distance away. We want to give them free access for incubator space, because they need to have a roof over their head. They might be in advanced manufacturing and need high ceilings and an open bay to put in their equipment; they might be a life-science company that needs a wet lab; or a tech company that needs this kind of space.
All that stuff is going to be provided to them at no cost for 12 months.
We also have deep connections into mentors, and I think sometimes that can be thrown around very lightly, in terms of what a mentor is, but these are people – we have significant networks to bring people in who have deep expertise on operations of a particular entity, on formation of finding funding for these entities; on how you should develop your opportunity; whether you’re life science, whether you’re tech, whether you’re biotech, whether you’re clean tech. We’ve got deep expertise in them.
Then, on top of that, we want to pair them with additional financial incentives to give them the greatest opportunity for success, like Start-Up NY. That’s a program where you pay zero corporate income taxes and zero personal income taxes for 10 years.
When you start to put all this together, we think that it really gives a platform, a great launching point, for these companies to ultimately be successful.
But at the end of 12 months, if somebody says ‘I’ll give you $10 million but I need you to locate in Singapore,’ we don’t want to prevent them from doing that. We want them to be successful.
It’s kind of like having children, in a way – there’s a point where you’ve got to let them go.
We want them to succeed. That really is our ultimate goal with this.
Anthony Reinhart is Communitech’s Director of Editorial Strategy and senior staff writer. View from the ‘Loo is a weekly look at the issues, people and events that shape Waterloo Region’s technology sector.
