Nortel’s death might be bad for Canada but it means little to Ottawa.

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“So, Matt after your MBA, are you coming back to Ottawa?”

This is a question I’ve been getting hit with a lot. And it’s one I’m struggling to answer. After the recent demise of Ottawa’s ‘Flagship’ company certainly we’ve got a problem but I think it goes back several decades and Nortel’s recent death is a just a symptom. Ignoring the National dimension here, how is this going to affect my hometown. Adam Chowanieac, (Tundra’s former Chairman) was recently quoted by Andrew Wahl in Canadian Business saying, “No matter what happens and who picks up Nortel’s pieces, they’re just going to be R&D branch plants in the end.” For Ottawa that doesn’t matter all that much.

You see, Ottawa has always suffered from the Branch Plant problem – we are one.

NT’s Head office was in Brampton and for all the good it did Ottawa it may as well have been on Mars. From Ottawa’s point of view, who cares if your HQ is in Brampton or in the US or Europe you will be dealing with the same issues.  So for all the idiocy at Nortel just remember this, you don’t hear that it’s a problem with their technology or technological staff. In fact this bankruptcy has shown just how valuable they are. In any event, I truly believe in keeping the Sales and Dev groups in close proximity to one another, I’d think those who’ve tried both systems would agree.

I keep hearing from friends (I’m looking at you Ian Graham) who think there will be a wave of startups after each Nortel layoff. There’s a lot of talk, but not much else.

You see, when a layoff hits Nortel they lay off Engineers who have very little to no direct sales or business development experience, because those guys are in Brampton or Toronto – they got laid off too – but they stay there. Thus each Ottawa ‘Nortel -Alumni’ startup is essentially an R&D group. And no VC is interested unless they’ve taken it to (at least) the Customer interest stage or further.  The vast majority of them wither after 3 months, usually after they attend one or two local OCRI Events/Courses and decry the lack of available funding. Those that do persevere do so not as an R&D group but building a product for someone they were consulting for usually 12 months after they got laid off, those typically are the gems -they’ve developed sales and biz dev experience. And like Gems they’re pretty rare.

So why were there previous waves of startups? Well Newbridge and JDS all had their sales and marketing staffs here. Cognos (and Watchfire) is a great recent example, I’ve seen startups by alumni, and several of our startups have hired their sales people. Startups need that sales/marketing/bizdev experience; and importantly we need a company to anchor here to bring them to Ottawa.

But from a Nortel-Ottawa point of view, we’ve been a R&D branch plant for years…. If we wanted to fix the problem of Ottawa’s lack of sales and business development experience then government bailout of Nortel isn’t going to fix that structural issue, in that we’ve been answering to Brampton for years now. It takes years to develop that specialized portion of a business cluster.

So, am I coming back to Ottawa after my MBA? Who knows? But if the year was 1999, after an MBA – I’d have been moving to Brampton.

The Author

Hi. My name is Matt Roberts, you can find me at www.mattroberts.com.

1 Comment

  1. Ian Graham says

    Hey Matt,Thanks for the mention (I think?). Suprised there are no comments and in typical fashion don’t mind being first to jump in.My RSS feeder seems to have died so I am just seeing this post now after dropping by your blog (I do stop by ever now and then). I think you underestimate the strength of exodus talent from Nortel and the mix of skill sets. Having had the opportunity to sit in on a number of the screening interviews for Tony Bailetti’s "Lead to Win" I have been pleasently suprised by the depth and breadth of local talent (mainly Nortel Techugees). I suspect given the proper levels of support (an NO I am not bemoaning funding short falls … lets get on with it and let the bootstrapping begin) there will be any number of local startup successes emerge. IIRC there have been 30 – 45 companies formed out of the 2 cohorts. Gazing into my crystal ball … I see a number of success stories in the making in the not to distant future.Next time your in town ping me and we can further the discussion over a pint. ;-)cheers,Ian

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