Q&A: Entrepreneur Mark Blackwell on building a strong innovation ecosystem in Calgary

Mark Blackwell, an investing partner at the Canadian office of Builders VC, says there is currently a "war for talent" among tech companies.

Mark Blackwell, an investing partner at the Canadian office of Builders VC, says there is currently a "war for talent" at Canadian tech companies.

Mark Blackwell, investing partner and lead of the Canadian office at Builders VC, is, at 32, a seasoned entrepreneur and venture capitalist. He is also board chair of the $100-million Opportunity Calgary Investment Fund (OCIF).

With an investment in OCIF in May, the City of Calgary became the first Canadian municipality to invest directly in a venture capital fund for early-stage tech start-ups.

Blackwell has already had a long and varied career as an entrepreneur and investor. Before joining Builders VC, he was a product manager at SolarWinds, which develops IT monitoring and network management tools. He joined SolarWinds when it paid $30 million to acquire GNS3 Technologies, a start-up where he worked as the chief operating officer.

He's also worked in financial and investment management roles at several major companies — CIBC World Markets, Enbridge and Cenovus Energy's corporate venture fund among them — and is a member of the Order of the University of Calgary.

Research Money spoke to Blackwell about his experiences as an entrepreneur, what success means to him and how to strengthen the innovation ecosystem in Calgary and Canada.

Mark Lowey: You worked and lived for a while in Silicon Valley, when you were chief operating officer of GNS3 Technologies. What was that experience like, and how did the innovation ecosystem in Silicon Valley differ from Calgary’s and Canada’s ecosystem?

Mark Blackwell: I lived in a “hacker house” with 17 guys in Sunnyvale, California, on bunk beds in about 1,400 square feet, for US$950 a month. That was affordable living in Silicon Valley. Every morning I’d wake up and ride my bike to our accelerator program, Plug and Play.

[Editor’s note: A hacker house is a residence in which many young tech workers and entrepreneurs live because they can’t afford to rent a place of their own in Silicon Valley, one of the toughest real estate markets in the world. Plug and Play is a network of 30,000-plus startups, more than 500 world-leading corporations and hundreds of venture capital firms, universities and government agencies across multiple industries].

The difference in the ecosystems is you can stand on a street corner or walk into a coffee shop in Silicon Valley anywhere and you see entrepreneurs building all the time. You can’t necessarily even get away from it, because everyone down there has some grand vision to change the world in some way, shape or form.

There are hundreds of thousands of startups that are concentrated in one area, with people building great things. It’s just so highly concentrated as a mecca that brings people from around the world.

I think there were 350 startups at the accelerator when we were there, in one massive building, so every day I was colliding with other entrepreneurs. The Government of Canada sponsored us to go down. They basically sponsor you to go live there for four months, hire you a business development consultant and they pay for office space.

I mostly spent my time socially with Canadians. There’s a large group, through the C100, with a high concentration of Canadian entrepreneurs and startups to help support one another.

ML: Why did you decide to return to Calgary to live and work?

MB: In 2014 when we started GNS3 Technologies we were still in the shadows of downtown Calgary, oil and gas was still key, and trying to find engineers here was impossible. The resources in Calgary were nothing like they are today.

I saw a lot of what was happening in Silicon Valley that I could try to transplant back to Calgary. And Calgary was always home to me, I wanted to start my family here.

Also, after having the early success that we did, I wanted to give back in a fairly significant way. My hope was that the learnings we took building our company, and also just philanthropy — giving back in a lot of ways — would help the next generation of entrepreneurs.

You look at the city now, between the Hunter Hub for Entrepreneurial Thinking [in the Haskayne School of Business at the University of Calgary], Platform Calgary, Startup Calgary, the Opportunity Calgary Investment Fund and everything that’s going on here, Calgary is bustling now. It is a real centre for technology and startups.

ML: What is your current role at Builders VC in Calgary, and what do like about that job?

MB: When we sold GNS3 Technologies in late 2015, I went to work for a company called SolarWinds in Austin [Texas] for two years. Then I took a sabbatical for a year. My wife and I decided to sell everything and take a year with our backpacks. I took some thoughtful time to decide what I wanted to do next.

I didn’t think I was going to be a venture capitalist. I wanted to start another company. But I’d known my partners at Builders VC for the past couple of years. It became really quite apparent that the vision they were building — going back to our industrial roots — was really something I wanted to get into. The other part [of returning to Calgary] was that the Canadian ecosystem was changing, and I thought I could transplant some of the learnings from Silicon Valley back to Canada.

Builders VC’s thesis is really [focused on] some of those sectors that are relatively under-represented in the venture asset class. There are natural advantages for us here in agriculture, food, supply chain, industrials.

Our first fund, launched in 2018, was $172 million with 41 portfolio companies across all those four sectors. We’re just about to announce the close of fund No. 2. We’ve got such significant interest the fund's going to be close to $250 million. It’s just a crazy boom time.

Last year alone we looked at 1,700 opportunities and we made about 16 investments. In my portfolio, I’ve got the future of dairy [technology], a last-mile logistics company, a workers’ safety and insurance company. I just made an investment in an autonomous company called SafeAI that is building retrofit kits for mining and construction. Just the diversity of companies and entrepreneurs we get to see is pretty inspiring.

ML: You’re still a young man, yet you’ve been very successful as an entrepreneur and venture capitalist. What does success mean to you and what do you attribute your success to? Have you had any mentors and/or role models along the way?

MB: I attribute a lot of my success to the University of Calgary, quite frankly. I think of all of the great things we were able to do inside of a pretty risk-free sandbox. For the first Solar Decathlon, we raised $1 million. That was my first foray into raising capital and learning sales and pitching. And we had the backstop of the university to support us.

[Editor’s note: While he was an undergraduate student at the University of Calgary, Blackwell chaired a student team from three Calgary post-secondary institutions that entered the U.S. Department of Energy’s 2009 Solar Decathlon competition. The team finished sixth overall, besting several large U.S. universities].

That’s why I’m so heavily involved back on campus, because I believe that student experience is 99 percent of the attribution for where I’m at today. I’ll never forget that.

[Editor’s note: Blackwell’s volunteer activities on campus include being an advisor to the Hunter Hub, a member of the Dean’s Advisory Board for the Faculty of Science, an associate with Creative Destruction Lab-Rockies, and advisor to the Haskayne School of Business capital campaign].

In terms of mentors, I still to this day stay in touch with Dick Haskayne. Being an entrepreneur can be lonely, and so I’ve really had to rely heavily on some of those mentors to be there to support me through that process.

My experience with GNS3 Technologies sounds great, we had a great success. But we almost went bankrupt twice. We hired and fired people. It wasn’t pretty. We don’t talk about the other side of building a company. It’s really, really hard. There’s a lot that goes into it, so I’m really fortunate I have some mentors along the way to coach me through that.

[Editor’s note: Dick Haskayne is a Calgary-based businessman and philanthropist who donated $16 million to the University of Calgary in 2002, resulting in the Faculty of Management being renamed the Haskayne School of Business].

For me, success is just being able to give back. Being able to take the learnings and mistakes that I made and hopefully allowing entrepreneurs and young founders to not make the same mistakes that we did.

I’m very fortunate that I can spend about 50 percent of my time volunteering in the community. The Opportunity Calgary Investment Fund is probably another full-time job as a volunteer. This  is a bold vision that the City of Calgary established in 2018 to launch a $100-million fund to invest back into ecosystem development and scaffolding to help entrepreneurs in this city. I spend a lot of my time trying to figure out the building pieces that we need in the city to build up the next generation of entrepreneurs.

The Junior Achievement organization was such a big part [of my experience], dating back to high school. I remember building my first lip balm and bath balm business in Grade 11 and 12, raising shareholder equity from my parents, doing sales, liquidating. So I sit on the board of Junior Achievement of Southern Alberta now, because I believe in general financial literacy and entrepreneurship at that young age.

ML: You were appointed Board Chair of the Opportunity Calgary Investment Fund (OCIF) in June 2020. Where do you see the opportunities in Calgary’s tech and innovation system, and why did OCIF create a venture capital fund for early-stage startups?

MB: There are three big building blocks. One is talent: how do we fill the talent gap? If you go on the Calgary Economic Development website, Calgary has over 2,000 open tech jobs. There is a war for talent right now with the top companies poaching each other’s talent. So we have a huge challenge of just making sure that post-secondary institutions are “arming” their students, developing the right curriculum to train students. That’s a big core foundational piece that we needed to invest in to make sure there’s a pipeline of talent.

There’s this whole under-utilized and displaced workforce that we need to think about retraining and reskilling. The University of Calgary is working on micro-credentialing, there are a bunch of for-profit initiatives out there that are trying to train highly competent technical workers in oil and gas to pivot their careers into technology. We made an investment in AltaML (a software company in Calgary) that’s doing that for machine learning and artificial intelligence — to put these workers through a super-highly condensed training program.

The second building block is incubators and accelerators: how do we get more velocity of startups that are being created in this city? We made investments in Harvest [a Calgary-based organization that builds and supports the startup ecosystem on the Prairies], we’re running a big international request-for-proposals right now, to attract accelerators from all around the world to come to Calgary.

The third building block is: how do we retain our big companies and how do we attract anchor tenants to Calgary? We’ve been commissioning studies all across North America to understand how their economic development agencies are attracting second headquarters or field offices or remote workers to their jurisdictions. That’s a big part of the equation that we’re working on at OSIF.

The other part is that there’s a general lack of very early-stage capital for companies. So the City of Calgary very boldly approved a $10-million allocation (from OCIF) to invest in a VC fund that’s focused on Calgary-based startups.

ML: Do you think Calgary has the potential to become a global leader in innovation and technology?

MB: I do. I think that what’s emerging is centres of excellence that are our natural advantages. Within an eight-block radius, we have more concentration of energy companies that are spending more and more money on technology and transition. There’s a natural advantage for us to play there, and there’s so much activity that’s happening now.

In Calgary, all the big capital providers in private equity have totally shifted their strategy from oil and gas to be more focused on energy transition.

Industrials, energy, logistics, health care — look at all the amazing research that’s going on at the University of Calgary. Since the launch of the Creative Destruction Labs, you’re seeing that [R&D and commercialization] in real time. We have some of the best and brightest entrepreneurs in health care, medical devices. We have the best entrepreneurs in energy transition.

If you look at Calgary’s anchor tenants — Benevity, Solium (now Shareworks), Attabotics — there are a number of companies now that are reaching that billion-dollar marker in financial services or logistics and robotics. They’re just natural hubs of what we’re developing. But it’s a long-term journey.

ML: If you could change one thing about Canada’s innovation ecosystem, what would it be?

MB: Generally speaking, we’re very conservative in comparison to our peers in the U.S. I always talk to entrepreneurs who had a far easier time raising capital in the United States. There’s a far bigger appetite for risk and boldness.

The general arc is that Canadian companies tend to sell out early to our peers in the U.S. But that is changing. There are multi-billion companies that have been created in Canada that are staying in Canada. That story arc is definitely evolving.

In the U.S., it’s just the [amount of] capital, the boldness of capital, companies that really have aspirations to change the world and grow and scale.

The natural advantage in some respect for entrepreneurs here is there’s so much access to non-diluted dollars in this country. The government indirectly through Sustainable Development Technology Canada and other organizations is helping to support some of those [entrepreneurial ventures], which the U.S. just doesn’t have. But sometimes that makes entrepreneurs a little bit lazy, when you just have boatloads of access to non-diluted capital. It’s both a pro and a con.

ML: What advice would you give to a young person who’s thinking about becoming an entrepreneur?

MB: You can build it [your company] here in Calgary. I think that there are the resources, the mentorship, the capital now — that you don’t have to leave. That has changed so drastically just around the scaffolding required to do that.

Never has there been more resources, mentorship, advisors, support, capital to grow and scale a business in this city. To those that may feel like they have to go to Toronto, Vancouver, Silicon Valley or Montreal, I’d say we can build it in our own backyard. There’s enough inspiration and case studies from companies here that should show the next generation that Calgary is the spot to build your next company.

My hope is that people stay here. There have been a lot of statistics around the general “brain drain,” the youth emigration out of Calgary. There is enough foundation here to build a big company and a big business in Calgary. You don’t have to look outside.

This interview has been edited and condensed for clarity.

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