It’s 11 a.m. on a weekday morning and the garage-style doors fronting the Summit building at 838 Fort Street are wide open, drawing in a stream of sunshine and a who’s who of Victoria’s tech community, from CEOs to coders, along with a flow of downtown hipsters, seeking coffee or nosh from Dak, the eatery that’s also a portal to Summit’s tech hub.
At the long-table coffee bar, a group of tech workers gathers, coffee cups in hand, mobile phones at the ready. No one wears a business suit here, not even Owen Matthews, general partner of investment firm Wesley Clover.
Named VIATEC’s Technology Champion of the Year in 2014, Matthews is not simply a tech investor — he’s a company creator who thrives on investing time, energy and even funding into promising startups and early-stage companies.
“I like to create companies,” he says simply, pondering the launch of the Alacrity Foundation in 2009. Initially motivated by the goal of keeping top grads from heading stateside in search of big salaries, Alacrity found a way to bring the government, education and private sector together to grow tech talent here in Western Canada. Alacrity works with institutions like UVic to match top engineering and business students and recent graduates with the knowledge and opportunities to grow their own companies.
Today, Alacrity plays a keystone role in the growth of tech in Western Canada, with seven companies in its [email protected] program, which has attracted $20 million in investment, created $10 million in revenue collectively, and had an estimated direct economic impact of $100 million. Together, these companies employ over 100 people in high-quality positions.
An additional 31 companies have taken part in Alacrity’s Investor Readiness Program (IRP) which focuses on driving venture capital investment to firms in the information and community technology (ICT), life sciences and cleantech realms. Investment generated through the IRP program is $204 million to date, according to Alacrity.
From Ground Up
Amidst the high energy of 838 Fort, Owen Matthews appears quietly thoughtful. And while it’s tempting to think of him as a Svengali of tech startups, Matthews prefers to deflect attention to the companies that are part of Alacrity, including Encepta, Pretio Interactive, Referral SaaSquatch, Tutela and Echosec.
Echosec’s location-based social media search platform made its big debut in Wales in 2014, at a NATO summit held at Celtic Manor, the five-star resort owned by Sir Terence Matthews, Owen’s father. Echosec created a “digital fence” around the resort to monitor all social media posts emanating from the location to track potential threats to the heads of state gathered at the resort.
The pairing of Echosec with this opportunity is part of what makes Alacrity different. The foundation doesn’t just throw money at ideas — it develops entrepreneurs and mentors them through the process of testing and establishing their markets and finding those vital first customers. In some cases, Matthews acts as de facto CEO, helping guide the companies until they gain the skills to fly on their own.
Space to Create
As Matthews leads the way into the inner sanctum of the Summit building, where some of the companies in Alacrity’s portfolio share space and resources, it’s clear he’s got a eye for creating spaces tech companies can get excited about.
In the building’s foyer is the shell of the Bell 430 helicopter used in the movie Ocean’s Thirteen by Al Pacino’s character. Matthews bought the helicopter and transformed it into Victoria’s most unusual meeting room. Then there are three surplus gondolas he purchased from Whistler Blackcomb. These too have been transformed into meeting rooms.
The gondolas fit well at 838 Fort, called the Summit building for its alpine theme, which includes clusters of kitschy fake evergreens in the boardroom and vintage skis that serve as white-board penholders. There’s also the obligatory Ping-Pong table in the basement and plenty of plans for Astroturf.
Matthews’ goal is to marry atmosphere with affordability, so he doesn’t have to charge huge rents to tenants. “… I try to be creative,” he says. “A gondola for $300 makes for an interesting meeting room, which is cheaper than the drywall it would take to make a meeting room.”
Three years ago, he took the same approach when he bought a graffiti-ridden bottle depot at 1124 Vancouver Street and transformed it into a mini-tech park, home to Alacrity success stories like Tutela and Pretio Interactive. Inside an open-concept interior, a funky Boler camper and a vintage VW van act as meeting rooms.
“Some people think it’s just window dressing, but I disagree,” says Jim Hayhurst, Alacrity advisor and CEO of Pretio, a company formed out of merging the talents of Pretio’s founding team with Alacrity’s burgeoning entrepreneurs. As an adtech company, Pretio aggregates reward and engagement programs to help brands reach hard-to-get online consumers.
“It’s essential that companies in Victoria play and show at the level of others,” says Hayhurst, “because we are in competition [for talent] with Facebook’s new office in Toronto and Hootsuite’s office in Vancouver.”
Then there’s Fort Tectoria at 777 Fort, with its stripped-back industrial-cool interior and street-level barista bar, Ground Control. Dan Gunn, executive director of VIATEC, says Matthews helped the local tech association find its 16,000-square-foot headquarters and transform it into a functional, creative space worthy of being the town’s tech epicentre.
“Owen’s great at what he does,” says Gunn. “He really helped us out. I also think he likes to have fun and he just doesn’t want the world to be a boring place.”
Indeed, these buildings are connected dots of the local tech sector — enterprising, energetic spaces, home to companies whose innovation and workforces are boosting the vibrancy of the city core.
As for the salvaged gondolas and repurposed helicopters and VW vans, in many ways they seem to be metaphors for Matthews’ approach to entrepreneurship: Stay lean. Look at things from different angles. Experiment. Change course if necessary.
Beyond the Surface
As creative as Matthews’ spaces are, it’s technology that attracts him.
“I think at his core Owen is a technologist who happens to have social skills and leadership skills that bring people into what he’s into,” says Hayhurst, another VIATEC Technology Champion of the Year, who met Matthews through Power to Be, one of the many charities to which both men devote their energies.
“I say this with tremendous admiration,” Hayhurst laughs, “but he’s a geek. He geeks out on stuff and goes really deep on certain things and learns very quickly across a broad spectrum. He’s a polymath, so as opposed to being a jack of all trades, master of none, Owen knows a lot about a lot — and through his communication skills and his empathy he’s able to bring others into these conversations without losing them in techno-speak. That’s a great gift.”
As the son of Sir Terence Matthews, founder of Mitel and NewBridge Networks, Matthews’ DNA is likely coded in a love of engineering and tech. His father began his career in the U.K. in a union job at British Telecom as a semiconductor radio engineer. Then, after coming to Canada on his honeymoon, the senior Matthews got a position with a semiconductor company. His job: to talk to customers about their technical needs.
“As an engineer, it was obvious to my father: ‘this is what people want and this is what they’re willing to pay for,’” says Matthews, who grew up in Ottawa. “But the people he worked for weren’t, for whatever reasons, prepared to go with his recommendations.”
In 1972, out of frustration, Terry Matthews launched his own business, Mitel.
“My father only started his own company out of frustration,” Matthews emphasizes, “because he understood what customers wanted. So he went from a government-funded, relatively large company with lots of resources to investing $4,000 into a company which couldn’t afford to pay anybody. The government-funded, well-sponsored company evaporated — and the $4,000 investment into a business where he was highly focused on customer needs did enormously well.”
Today, Mitel is a $1.2 billion company. To the younger Matthews, the lesson was clear: listen to customers.
He also learned about testing limits as a teenager working in Mitel labs where products were tested before they were shipped around the world.
“Some of those phone systems would be used in very, very hot wiring closets in the Middle East, where temperatures would go up to 180-odd degrees,” Matthews recalls.
“We’d test them in an oven on low to prove they’d work in that kind of difficult environment. I thought it would be a good idea to find out if they could operate at higher temperatures, so I turned the oven up — and melted the phone system. We did learn that the plastics in the phone system melted at about 270 degrees!”
Despite his work at Mitel, when Matthews left Ontario to attend the University of Victoria, he didn’t pursue engineering — he went for a degree in psychology and computer science, while nurturing his interest in theatre and directing.
“I think it was more a teenage insistence that parents don’t know anything than it was any general disinterest in business,” he says.
As interesting as theatre and psychology were, Matthews liked hanging out with engineers — and he was attracted to tech. In his second year of university, he launched NewHeights, a tech innovator that created software for managing voice calls and video conferencing through a single interface. The company did over $1 million in business in its first 12 months.
“Boy, we thought we were very, very clever,” Matthews laughs. “I was generally following a philosophy I believed in, which is: ‘I’m listening to customers, customers are giving me orders, we have a lot of employees, it’s great, we’re growing rapidly in the middle of an exciting market.’ Then it all goes away because all of our customers were funded unrealistically and didn’t have sensible business plans. I thought I was being quite practical, not realizing the whole market was against me.”
Another lesson: make sure your customers are the right customers.
NewHeights was down but not out. It still had resources left with which to reinvent itself. In a case of good timing, Matthews’ family had bought back Mitel’s phone-switching division and didn’t have a lot of software experience in that area, but NewHeights still had a team of software designers to build softphones and the necessary software. Then, in 2007, NewHeights was bought by Vancouver’s CounterPath Solutions. Matthews had his first exit, but he wasn’t done with creating companies.
Culture Drives Success
Two years after the NewHeights sale, Matthews, along with his father and Simon Gibson of Wesley Clover, co-founded the Alacrity Foundation.
“We’re not an incubator. We’re not an accelerator,” says Matthews. “We’re not ‘give me your ideas and we’ll curate them and help you’ — we’re really creating companies, which is what we love to do.”
In the students and grads Alacrity works with, Matthews seeks “people who want to control their own destiny, to start up companies not because they have visions of grandeur where they want to make a lot of money but because they’re willing to work for themselves, to work hard and take reasonable risk.”
At Alacrity, part of what the grads learn “is how to manage people who aren’t just going to do what the spreadsheet says to do,” says Matthews. “Because they’re largely engineers and process driven, they really need to learn about managing culture.
“Without a doubt,” he continues, “the philosophy that ‘culture eats strategy for breakfast’ is absolutely true. All of the time I spent [in theatre] understanding character, trying to make characters realistic, or studying and understanding different elements of psychology, plays directly into how you manage people and how you manage culture, which is a very, very important topic to me.
“You need a team who’s behind you and works hard, who believes in what you’re doing. The minute you lose the culture by bringing the wrong person in, or making decisions the team doesn’t support, productivity goes from a small team punching way above its weight to a small team that just doesn’t go anywhere.”
It’s Not About Ideas
A lot of people think ideas are the most vital parts of building successful businesses, but Matthews takes a different approach.
“Most people ask me, ‘Well, what about the ideas?’” he says. “‘How do you invest in ideas …?’ Generally, they give me a surprised look when I say, ‘I’m not interested in ideas from entrepreneurs.’ Ideas are very, very dangerous if they’re not baked in a marketplace or based on customer feedback. Ideas are less important than a process by which they create a successful company.”
Growing Up, Reaching Out
At 838 Fort, every meeting room is engaged. The new guys from Hyas, Alacrity’s latest addition, are excited about their cybersecurity company. The Echosec team jokes about an idea for Dak to deliver coffee to them via an electric train set. There’s laughter and a sense of excitement. Morale seems high.
A big part of that may be because Matthews is all about helping people discover their own strengths. “Ask a lot of questions and never, ever tell anybody what to do, ever,” he says. “It is absolutely the fastest way to kill morale.”
“He creates the conditions for people to succeed or fail,” says Hayhurst. “He doesn’t tell them they might be heading for a brick wall; he lets them bump into it gently but with enough force that they know they bumped into it. Then he’s there to say, ‘OK, what did we learn?’”
It’s not for everyone, Hayhurst adds. “Some people want to have someone say, ‘I’m the leader, this is what we’re going to do.’ But Owen has the ability to let people find their own way. What he’s really doing is saying, ‘I’m committed, but you’ve got to give me something that we both are in for.’ It’s also a great sift mechanism. It gets rid of the people who aren’t willing to do the work …”
Alacrity has proven so successful in Canada, it has branched out globally. In 2012, it launched a sister organization in the U.K. Since then, programs under Alacrity have been developed in Turkey, France, Mexico, Indonesia, India and, most recently, China. Alacrity is managed overall by Matthews and co-founder Simon Gibson, but each location is run by its own leadership team.
As big as the foundation gets, Matthews is passionate about Victoria.
“Somebody with Owen’s resources and influence could easily get caught up in just doing their own thing,” says Gunn. “But he continues to take the time to make sure what’s best for the community overall is at the forefront. That’s unique, and we benefit greatly from that as a community.”
“He could live and succeed anywhere in the world but he chooses here, he cares about this place,” says Hayhurst. “He’s doing it his own way with a really clear sense of his own values. He’s not having an internal struggle about ‘Am I a player in San Francisco or Toronto?’ No, he’s a guy in Victoria who’s doing good work, and he’s true to himself and his sense of community — that’s a good example for everyone.”