By the time Alexis Ohanian wrapped up his campaign-style Internet 2012 bus tour of middle America last week, BuzzFeed was touting him for a new position: President of the Internet.
Such is Ohanian’s charismatic reach in the online world, where he led the fight against the SOPA and PIPA anti-piracy bills last year, and where Reddit, the social-sharing site he co-founded in 2005, is playing an ever-larger role in American politics, having hosted a Q+A with President Barack Obama in August.
After a whirlwind week that began in Denver, Colorado, ended in Danville, Kentucky and made seven stops in between, you’d have forgiven Ohanian for heading home to Brooklyn to recuperate.
Instead, he did what any new American President would do: He boarded a plane and flew to Canada – specifically, to visit the Communitech Hub – and give a talk at Techtoberfest, a three-day celebration of Waterloo Region's flourishing startup community.
Techtoberfest was timed to coincide with the annual Kitchener-Waterloo Oktoberfest, the world’s second-largest behind Munich’s. That happy fact was painfully evident as Ohanian, 29, took the stage at the Communitech Hub, the de facto heart of Waterloo Region’s startup ecosystem, to address an enthusiastic crowd on Saturday.
He was introduced by his friend and Waterloo Region host, VidYard co-founder Michael Litt, who had been seen sporting lederhosen during Techtoberfest.
“Thank you very much for that introduction, Mike,” said Ohanian, who launched Reddit from California’s then-new Y Combinator accelerator, where Litt’s company also got its start. “I’m not going to thank you, though, for what you did to me last night. I’m still recovering from it.”
It proved to be a quick recovery, as Ohanian, sipping water, free-wheeled for an hour while the developers and entrepreneurs in the audience enjoyed free beer and pizza.
The talk ranged from internet freedom and the SOPA/PIPA fight, to the importance of strong UX and customer service, to Ohanian’s post-Reddit projects, Breadpig and Hipmunk, to an account of Reddit’s humble birth out of the ashes of an unrelated idea he and co-founder Steve Huffman had initially pitched to Y Combinator’s Paul Graham.
Graham suggested they dump the idea – a mobile food-ordering solution – and build “the front page of the Internet" instead.
The result was Reddit, which was acquired by Condé Nast in 2006. It became YC’s first big success, which made Ohanian the logical choice to become the accelerator’s “ambassador to the east” based in New York.
This put him in a position to meet Waterloo-based startup founders who have since passed through YC, including Litt (2011), Eric Migicovsky of Pebble (2011) and Mike McCauley of BufferBox (2012).
Not only were all three founders in the audience for Ohanian’s talk on Saturday, but all three of their companies – plus a fourth YC grad startup, Pair – have maintained key development operations in Waterloo Region.
Ohanian seized on this as part of a trend he's been seeing for years now, thanks to the democratizing effect of the internet: That successful startup communities are flourishing anywhere that talent, creativity and entrepreneurial drive are in supply.
“What is happening here is happening all over; not just all over Canada, not just all over the United States, but all over the world,” Ohanian said. “The idea that this kind of innovation and this kind of awesomeness has to come from Silicon Valley is pure bullshit.”
The myth of the Valley’s omnipotence in the tech startup world “needs to be dispelled once and for all,” he said, adding that it was propagated over the past year by media who characterized the SOPA/PIPA battle as “a fight between Hollywood and Silicon Valley.”
“It’s a really good headline, but it is false,” Ohanian said. “And the more founders who know this, the more investors who know this, the more people who know this, the better off we all are, because these startups can be tremendous, tremendous things.”
That can only happen, he said, “if the internet continues working the way it should, where all links are created equal.”
After his talk, Ohanian stuck around for more than two hours to chat with attendees. First in a long line was Phil Noelting, founder of Waterloo-based Qwalify, an employee-recruiting startup that has Boston investors.
Noelting, a 2009 graduate of Babson College in Boston, told Ohanian he started his company in Waterloo to take advantage of top engineering talent, government incentives for startups and the lower cost of living – and that he hasn’t looked back.
“So you’re part of the brain drain,” Ohanian said to Noelting. “That’s not how America’s supposed to work; we’re supposed to steal all the best and brightest.”
Ohanian, whose 50 angel investments include BufferBox, told Noelting he was happy when the company announced it was returning to Waterloo after its Y Combinator stint.
Investors, he said, care less and less that companies decide to build outside the Valley, as long as it makes sense to do so.
“There are still places where they’re a long way from having a real startup community,” Ohanian told Noelting. “You guys have a real startup community.”
“As long as you can make a couple of substantive arguments, I think the vast majority of investors are now just, like, ‘Cool beans; like, go back to Des Moines, Iowa and do your startup.”
As the last of the attendees filed out, I toured Ohanian through the Hub to show him our startup spaces, HYPERDRIVE incubator, strategic partner area and VeloCity Garage.
“I was in the first round at YC, so I’ve seen a lot of YC founders and a lot of applications,” Ohanian said as we finished the tour. “The reputation Waterloo has as a technical powerhouse is not lost on us. We’re very aware of the talent that comes out of here.”
We wrapped up with a quick Q+A, in which he elaborated on why places like Waterloo Region are great for startups:
Q – I was struck by what you said about Silicon Valley not being the only worthy place to do a startup. What makes you say that?
A – Well, I feel like I’ve been saying it for a while. Reddit is a good example; we left Virginia to come up to Boston, which is where we started and sold Reddit from.
I didn’t actually go to San Francisco until many years after the acquisition, when the company moved there.
The big trend that’s really starting to show itself in the last few years has been, as we’ve had more wins, and we’ve had more successful companies coming from places that aren’t Silicon Valley, it’s proving this model. Those wins bring in more investors to the area who are excited about investing back into the community, and it excites members of the press, because now they’re aware that this is a thing to cover.
We’re fortunate, because we’re in an industry right now that is growing, that is hiring, that also has a certain kind of cachet. As crazy as it is, it’s very appealing. And, more and more examples are going to keep springing up and keep growing and keep feeding this virtuous cycle.
I mean, a startup can’t happen anywhere, per se, but it could happen anywhere, as long as you’ve got the right elements in place.
You’d have to have a place with a decent enough population size to even have a community of startup founders, so you’ve got to have the talent.
You’ve got to have some hubs within that talent who are willing to really plant a stake in the ground and say, ‘All right, I’m going to take charge of this community and try to use my resources, use my time, to build it.’
And then you just need that example that folks can look towards and say, ‘All right, there’s a precedent here for companies that have done it and succeeded,’ and they inspire others.
What we have going for us long-term, and what this movement has going for it long-term, is that as humans, we are inclined to want to stay close to home.
There are plenty of us who go off and never look back, but for plenty of folks, the opportunity to stay closer to friends, closer to family, closer to familiarity, closer to the food you love, closer to that pizza place down the street – that is valuable.
By comparison, the Valley actually doesn’t offer too much in the way of lifestyle that most people are accustomed to. It’s a quiet, wealthy suburb that, for a 22-year-old who just graduated from college, is probably not the most exciting place to be.
San Francisco is obviously a significant improvement [over the Valley] in terms of lifestyle, the stuff you can do, but there’s still just that fact, that whether it’s the place we went to school, the place we grew up, these become our communities. And, if you can really believe that you can start the next great thing there, you’re going to stay.
And you can take the money from Silicon Valley and go back.
I just got off a 10-day bus tour all across the heartland of the U.S.A., meeting founders who have raised money from all over the country, and sometimes internationally, and taken it right back to where they started. And it’s great, because it has that same virtuous cycle, and it feeds into other companies. It just does wonderful things.
So, it’s great, because now that it’s so much cheaper to start a company – now that you can start a company with a laptop and an internet connection and some ramen and a roof; like, that’s literally all you need to start the next Facebook – that is going to do tremendous things to spread this talent out, to spread these success stories out all over the world, not keep them bottled up in Silicon Valley.
Q – Is this your first visit to Waterloo?
A – It’s my first visit to Waterloo; I’ve been to Toronto a few times.
Q – Now that you’ve been here, how does this community stack up to what you’ve seen elsewhere?
A – It certainly benefits from having all the talent coming out of the university.
Just the fact that you’ve got all these bright engineers pumping out makes for a really, really fertile environment, and that’s something that I frankly imagine every other part of Canada and the United States looks rather enviously at, probably with the exception of Boston, which is well-known for all its great universities.
And, you know, Stanford has a little bit there, but it is undeniable the talent that comes out of here, and specifically, the talent that can make these companies.
Lots of us have ideas, but the difference is whether you can actually build something with them. When you’ve got tons of young, energetic, smart people who can actually build this stuff, here in this place, interesting stuff is going to happen.
I mean, this is a vast facility, and the fact that you’ve got the right people, all bouncing off each other, getting lunches and coffees and whiteboarding stuff…
Even though the statistics are going against you in doing a startup; most are destined to fail, but the great thing about a startup ecosystem – especially one like this where you’re literally sharing the space – is that, as startups fail, the founders start something new or they join other thriving companies.
You don’t meet someone in a startup who is too worried about the next step should this thing not work out; 1) because we kind of delude ourselves into thinking it’ll always work out, but 2) because it’s a really fluid marketplace of talent.
Everywhere I go, someone’s asking me if I know a developer who needs a job, and the answer is always no; there’s no such thing.
That, all under one roof, is pretty spectacular, and from what I can tell, this is pretty special.
I’ve toured a space that just opened in Boston, which is a pretty new space and I think it’s aspiring to do a lot of the stuff you guys are doing here, in terms of participation between private and public, and making sure all that talent stays in town and has a place to work and start companies. But this is far more mature, and it’s pretty damn cool.
Q – If other investors asked you, ‘What’s with this Waterloo place,’ what would you say?
A – I would tell them they need to see for themselves, because the next big thing is going to be coming from a place like this. And when I say the next big thing, I’m talking about, ‘Oh my God; how did we live without that?’
And it’s so cool because, at a time when the American economy is still trying to find its footing, still trying to find its swagger, there are still so many investors who are hungry for that next big thing, and are looking to put capital to work.
They should be at ease knowing that there’s a good chance a company that comes out of here – even if they go through Y Combinator for three months – is going to come right back, and that should not be a concern in any way, because if this is where they think they should be, this is where they should be.
Q – What will you take away from this visit?
A – I’m an investor; I’ve invested in about 50 startups to this point, and I’m also an advisor to a bunch more [including VidYard] through Y Combinator.
I’ve always had a very high regard for University of Waterloo graduates. Folks coming out of this facility in particular are now going to have – I don’t want to say an unfair advantage, but an extra advantage, because it’s one thing to hear about a place, and it’s another thing to go there.
To actually see what’s going on here, it’s impressive, and it’s certainly not something I’m going to forget any time soon.
So, congratulations, you’ve got a few extra cheat codes going on now.