How We Can Make Montreal the Open Source Startup Hub

We choose to do these things, not because they are easy, but because they are hard. — John F. Kennedy, “We Choose To Go To The Moon”

Earlier this week I made a case for making Montreal the Open Source startup hub. Three important things to note in that goal:

• the. It’s not worth doing this if we’re going to be third, fifth, or 107th. We have to be first. That’s how we kick off explosive growth — with a leading role in something.
• Open Source. I think the way to take first place in something is to choose a sector we’re good at and focus on it. Open Source startups are a subclass of startups that we happen to have a lot of experience with in this city. If you are in Montreal and your startup isn’t related to Open Source, don’t worry. I don’t want your startup to die or to steal your IP and give it away for free. Everybody benefits from a vibrant ecosystem, even if it’s in a different technology sector.
• startup. I don’t want to take on the task of building an Open Source fairy kingdom with big murals of Richard Stallman on every wall and every single company on earth related to Open Source having their entire workforce based downtown. I’m much happier having a good ecosystem of investors, startups and employees.

On the same day I made the proposal, I found two other cities – Raleigh, NC and Portland, OR – that are considering similar efforts to focus on Open Source startups. There’s a good argument to be made that these or other cities – Boston came up in blog comments – have even better conditions than Montreal to seize this opportunity. There is a window of opportunity that’s open today for Montreal that will close when another city chooses to pursue these plans.

I believe a relatively small amount of investment and community will can work to make this city the world capital for Open Source startups.

1. Thought leadership. When people think of Open Source commercialization strategies, they have to look north. I think there are a few ways that we can do this, in rough order of difficulty.
   • An Open Source startup blog. There’s not one out there specifically covering Open Source startups, aimed towards investors and practitioners: news, philosophy, interviews, opinion, tips. I realize it’s not easy to start or run a tech blog, but I think it’s necessary for visibility. Additional features might be Crunchbase-like indexing of “top” Open Source startups.
   • An Open Source startup conference or camp. Possibly linked with or hosted by the blog. Getting people physically together who are involved in Open Source startups. Goal would be to bring people in from outside the city.
2. An Open Source specific accelerator. The single most important step would be an accelerator program that identified Open Source projects that could be commercialized, and brought founder teams to Montreal for 3 months to work out a business and make first $. As far as I know, there is no Open Source-specific startup accelerator program on the planet.

   A first year cohort of 10 projects at (say) $50K apiece, plus 3 follow-on investments of $150K, would be a simple way to get a big kick-start for Open Source startups. Identifying and recruiting 10 projects may seem tough, but there are literally hundreds of thousands of FLOSS projects on github, sourceforge, and other networks. There are even tools like ohloh.net for measuring usage and participation.

   The accelerator would need to provide lots of information and mentoring to new Open Source entrepreneurs; help them understand ways to make money with Open Source, and possibly introduce them to new employees with different skills. An early “bootcamp” of a weekend or a week, plus frequent talks from commercial Open Source veterans, would help Open Source hackers become Open Source entrepreneurs.

   This accelerator fund could host a “graduation” event and make the city the place to go to shop for Open Source startups. The follow-on investments might be conditioned on staying in Montreal, say, or only as part of finding additional investment.

   I also think that the investment agreements would have to be structured to take advantage of Open Source business models. For example, a “successful” Open Source company like Automattic should be something that can work in this model.

3. Infrastructure. Startups need infrastructure: space, network connectivity, servers. A co-working space dedicated to Open Source startups might make sense in the future, but the existing co-working spaces and technology centers like Notman House should be more than adequate for the foreseeable future.
4. Service providers. In particular, legal and accounting. Being able to understand Open Source licenses and their value, as well additional agreements for cloud services.
5. An Open Source exit. We don’t have an Open Source exit yet. That might happen over the next couple of years, but it’d be a big help in moving us towards being a hub.
6. An Open Source business institute. It may be possible to create a multi-disciplinary institute (software engineering, business, social sciences) concentrating on Open Source (or Open Everything) models. Compare Hexagram. Could be a feeder for new projects or just a prestige organization. This would obviously cost a lot of money, require participation from one or more universities, as well as, probably, local, provincial and even federal government. I think this is probably a long-term possibility at best; I’m adding it because Claude Theoret suggested it was a necessity.
7. Government support. There are a few ways that municipal, provincial, and federal governments could support an Open Source startup hub. I think it’s unlikely until there’s been 1-2 years of an accelerator program and, say, >10 open-source startups in the city. Government officials are usually more reactive than visionary on these issues.
   • Tax credits. R&D tax credits are great, but the application process is costly. What if any work done creating Open Source software was a 100% write-off? What about salaries for “soft” Open-Source jobs, like volunteer coordination and community management?
   • Infrastructure. Providing some of the infrastructure for startups could be a big boost to move this effort along.
   • Direct investment. Investing in the accelerator as mentioned above, or in an institute, or some other way.
   • Open City declaration. Vancouver, Portland, San Francisco, and other cities have made open city declarations that make open data and open source software a priority for the city. It’s a great signal that these cities mean business about Openness. A similar declaration, with real results, from Montreal would go a long way towards attracting Open Source talent and companies to the city.
   • Market. Our governments have been notoriously hostile to using Open Source software; local advocates had to sue the province to open up bids for desktop operating systems. Making the government a key buyer of Open Source – or at least considering Open Source when purchasing – could, again, send the right signal.

There are some other things that would be great to have that we just don’t have and that we probably won’t have soon.

• Big Open Source companies. Big companies in a tech sector help startups in a lot of ways. First, they’re great opportunities for partnerships. Second, they make excellent acquirers. Finally, as executives in a big company hit a “glass ceiling”, they tend to peel off and join or start new ventures.

  We don’t have one in Montreal. I don’t think that’s going to change soon, except if some of the current Open Source startups grow bigger.

Can this effort happen in Montreal? I believe it can. I don’t think it all has to happen at once, and I think that small private-sector efforts (blog, conference, and accelerator) will move the needle much more than massive public-sector ones (however helpful they might be).

Most of all, I believe this is our fight to lose. We can take the opportunity today, or someone else can take it from us.

image courtesy of gpoo.

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1. Can Montreal Become an Open Source Startup Hub?
2. Canada Needs a Good Startup Visa – Open Letter to Federal Government
3. Resto-Net.ca – Open Data Aggregation of Health Inspections at Montreal Eateries
4. 12 Reasons a Healthy Startup Ecosystem Matters to Founders (And One Big Reason It Doesn’t)
5. Year One Labs Announces Second Investment in Location-Based Startup