No ‘sour grapes’ for OCRI

I admire the Toronto tech community because they’ve shown us what committed organizers, working at the grass roots, can to do. They look at cities like Ottawa, with its powerful economic development agency, wistfully – sometimes to the point that those of us who have questions about it are characterized as having sour grapes.

I’d be the first to admit that OCRI does many good things – but it has core structural problems that prevent it from being what either the city/province or itself want it to be – which is THE ONLY funded representative of tech business economic development initiatives in the Ottawa.

All levels of government have allowed OCRI to blur the lines between its member’s interests and those of broader tech community it receives funding to serve. That’s where I have a problem – the approx. $1.3 M of city money and potentially the equivalent in provincial funding that this “member based organization” spends in the name of businesses that are not members. This is a fundamental conflict. In OCRI we have an organization that must serve members interests first, deciding how public money should be spent to support all local businesses. To me this is no more right that the partial franchise (vote) was right it its day. It can’t work because it is not representative by its very nature.

And take a look at its membership. Of Ottawa’s approx 1819 ‘knowledge based’ companies only 35% are OCRI members. A closer look at OCRI’s membership shows that something like 42% are service providers (lawyers & consultants) and a further 21% are government agencies. Remove them and only 13% of what most of us consider ‘knowledge companies’ are OCRI members. And one has to ask how services designed for Ottawa’s largest taxi company, the British High Commission and Taipei Economic and Cultural Office, numerous Ottawa hotels or the Greater Peterborough Regional DNA Center (all members) jell with the needs of the far more numerous small tech firms that are not members but are expected by public funders to be served by it. It makes no sense.

This wouldn’t be so bad if other groups were getting funding – but if you’ve approached funders (which I have) the answer is always the same ‘have you spoken to OCRI?’ It’s the strangle hold on funding and program delivery that’s the biggest problem because it stifles program innovation and stops underserved groups getting an organized voice to offset the ear of funders OCRI’s members have. I would argue that it’s this funding stranglehold that led to the death of the Ottawa Life Science Council and its eventual decision to merge with OCRI. I’d be interested if any Life Science companies reading this think are they better or worse served since the merger.

Lets take a look at how OCRI supports the community. Sure there are a lot of events – but the preponderance of them are fee based, and fees for non-members are typically 80% higher than for members. This could be to encourage membership, or alternatively to discourage the participation of non-members. Either is a logical stance for an organization interested in serving its members, but I would argue neither meets the community serving objectives implied by the large public subsidy OCRI receives. 

It’s gets complex too. OCRI is a major advertiser, particularly to the two local tech focused papers. Whether this affects coverage is anybodies guess but I don’t believe the discrepancy between OCRI’s stated size of the Ottawa tech community (81,900) and the Conference Board of Canada’s numbers (46,000) got the coverage it deserved – especially because the size of Ottawa’s tech community gets to the core of the effectiveness of OCRI as the delivery and strategy vehicle for Ottawa’s tech economic development. It’s time we understood why these numbers are so different – and considered what that means for our economic development funding. 

Finally the notion that only a few people with ‘sour grapes’ have these concerns is simply wrong. I didn’t make the above list of issues up – I heard them from OCRI Partners, obliquely from previous and current OCRI managers, and from not a few small tech businesses. The issues are a lot more substantive than sour grapes.

If there were no public money involved these criticisms would be moot. As there is and it’s both fair and right to ask if we are getting the best value and the outcomes from the public investment we put in.

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8 thoughts on “No ‘sour grapes’ for OCRI

  1. This is really a reply to your question to Ali Asaria on David Crow’s blog, where he commented on your post.

    Communitech’s entrepreneur services group has always operated independently of the organization’s traditional membership model. I say “group” but when it was established in 2005 it was just me, two days a week. (They had a person on staff in the early 2000s assisting startups, but that role had faded away.)

    It was formed with an clear understanding that we would help any startups in the area — whether they were Communitech members or not. It was something I was adamant about and Communitech president Iain Klugman felt the same way, so it’s really never been an issue. I had been working with a lot of non-member startups through WatStart (Waterloo Technology Startup Network, launched a year earlier) and wasn’t going to insist that they become members before they could continue to get my help. Ideally, these companies will grow to become Communitech members, but their membership status isn’t a factor in the level of assistance they receive from my group.

    It was something different for Communitech, which had described itself as “member-based” and “member-driven” ever since it launched in 1997 and adopted OCRI’s membership model (this was back when OCRI was just a tech industry association and not a regional economic development organization). That model was useful in creating a revenue stream from membership fees, but in other dimensions it’s a bit of an albatross.

    Of course, the money has to come from somewhere and in our case Communitech was able to bring me on board thanks to financial support from IRAP. Last year we received additional funding from the Ontario Ministry of Research and Innovation, which enabled us to expand the group. I’m now at four days a week and we added two executives-in-residence last year. Ali made good use of all three of us! As did most other startups in the area. Our first EIR just left to become CEO of one of our client companies. In 2007, we probably spent 90% of our time working with startups or emerging tech companies with fewer than 15 employees. Through Communitech, we also arranged funding for StartupCamp/BarCamp and for WatStart, which are entirely focused on startups.

    Another half-time EIR is about to join the group, although technically they’ll be part of a MaRS-managed program and not contracted to Communitech.

    So there will be four of us at Communitech, paid mostly from government funding rather than membership fees, and all available to help any startups in the area whether they’re members or not. All of us were selected based on our track record of working with startups. Government funding brings its own issues, but it’s enabled us to build a bit of a Chinese wall between the member-driven components of Communitech and the entrepeneur services group.

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  3. I’d agree that member based organizations can serve non-members but it takes vision and commitment. It’s too easy to fall into the short term revenue trap and forget that the growing the community is the best insurance for both members and the organization. The truth is that the incremental cost to let non-members access a service or event can be negligible (especially for events).

    One of my pet peeves is OCRI’s insistence for charging non-members $70.00 (twice the $35. members pay) for Zone-5 – its tech marketing seminar series. We hear over and over that one of the differences between American tech businesses and Canadian ones is marketing savvy (from segment/need analysis during development to messaging). While I’m not sure that’s true any longer – one still as to question why the non-member fee is 2x when the incremental costs are nearly zero, and not opening the event up not only deprives presenters (typically marketing consultants) from the audience they desire – but keeps smaller tech firms for hearing about marketing approaches that could make them more competitive, which of course helps grows Ottawa tech base – and promotes Ottawa with every new customer. Everyone loses.

    That said I think that connection between grass roots and progressive organizations in the Montreal to Winsor corridor is positive. As you and others have pointed out the cities are different – both in terms of the composition of their businesses and the issues they face. This diversity gives rise to different approaches – from which we all can learn. It also opens the promise of organizations working together where issues and opportunity overlap.

  4. I don’t know much about OCRI’s operations, but it’s not hard to calculate that at a $25 a month full membership fee for startups, that it’s not much of a revenue grab — particularly when OCRI’s operating budget must be over a half-million a month.

    Have you ever asked OCRI if it would charge the member rate for all startups (member or not) to attend ZoneFive? I have no idea if it can do that, but OCRI would probably be able to use the difference as an in-kind contribution to match some of the government funding it receives for entrepreneur development.

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  7. Great post. I have been an observer and sometimes member of OCRI off and on for over 13 years and I completely agree with your assessment.

    When I attend OCRI events I am always struck by the fact that I paid $30 or $50 or whatever dollars out of my own pocket while the majority of people I end up meeting are government bureaucrats whose department picks up the cost of their attendance. Quite frankly it seems to me at least 60 – 70% of the attendees at any given OCRI event are government workers there simply for the free food and time away from their cubicles.

    When I first setup an office for my business in San Diego 8 years ago, I was introduced to an organization called the San Diego Software Industry council. Like OCRI, they organized events and meetings for the local high tech industry. Unlike OCRI, they were a member funded organization (read no tax money from the city of San Diego), they worked out of a basement office donated by Qualcomm, and the staff consisted of two, the director and his assistant!

    There is no question in my mind that OCRI’s government funding should be pulled, every last dollar of it. I am not going to hold my breath on that though. I can’t imagine any politican bothering to do the right thing and slay this beast; after all, where would they go for a free breakfast and box tickets to a Sens game if OCRI lost it’s funding?

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