By Dominic Abassi

Nanaimo’s tech incubator faces uncertain future amid steep operating losses

Mar 28, 2017 | 6:28 PM

NANAIMO — What was coined as the Nanaimo region’s first tech incubator is no longer fulfilling its intended goal, according to tenants and city staff.

The Nanaimo Economic Development Corporation (NEDC) launched SquareOne in July 2014. The downtown Nanaimo building was designed to create an incubator environment where tech start-ups could access affordable office space, mentorship and training resources. Since that time, the facility has run a combined annual deficit of more than $371,000, according to the City of Nanaimo’s economic development officer Amrit Manhas.

While Manhas wouldn’t outright confirm SquareOne will be shutting down, she said it was a fair assessment to say its future is very much in question, since council directed staff to dissolve the NEDC as of Jan. 31.

SquareOne tenants have been sent letters instructing them an official decision would be made by the end of June.

“Initially, the concept was working great…the culture was great and busy and they had delivered on what was envisioned,” Gavin Vickery, co-founder of Input Logic Inc., told NanaimoNewsNOW. Vickery’s company has been a tenant at SquareOne since it launched.

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He said when the community manager position was eliminated towards the end of 2015, the scene changed significantly. “You could just feel there was a certain level of mismanagement…it didn’t really have that tech community vibe anymore, it just sort of became this place to rent a desk…it wasn’t really anymore about growing the community,” Vickery said.

He said the situation further devolved when council scrapped the NEDC, noting tenants found out about the decision through the media. There was a feeling of disrespect by the City to the tenants, he said, because there was a lack of transparency around what was happening.

“We had contacted the City, at one point the person we talked to didn’t even know what SquareOne was,” Vickery said. “Nobody knew what was going on, nobody was being invoiced for their desk, the boardroom downstairs has literally been turned into a ping pong room.”

Seeing the community “fall apart” has been sad, Vickery said. A “work-sharing vibe” has given way to many operations leaving. He said attracting or retaining talent will now be a hard sell.

“I used to be able to say ‘oh SquareOne’s awesome, come check it out, the space is great, there’s a lot of talented people there.’ But now I can’t recommend that anymore…nobody even knows what the heck is going on around here.”

Manhas said SquareOne is no longer operating the way it was intended to, instead resembling a co-working space. She said a tech incubator typically has mentoring and advisory resources, as well as criteria for allowing companies in and specific time frames for which they are incubated.

“After about two years, they either move into a larger commercial space or it wasn’t a viable idea,” Manhas said. “To date there have been no companies that have moved out or scaled up from SquareOne.”

Manhas was asked if there’s value in the City investing an annual subsidy into SquareOne to nurture an industry that, by all reports, is burgeoning on the mid-island.

“Tech incubators can be a worthwhile investment, however there is a formula for setting up incubators for success and currently SquareOne isn’t operating in that form,” she said.

Manhas said she did not see a solid business plan for the operation from the start.

Mayor Bill McKay said council needs to look at SquareOne and decide whether they want it to be self sustaining or whether they want to help support it.

“I hear a lot of people around the council table talk about Nanaimo being a tech hub…and encouraging that business. We have to consider whether we’re prepared to make an investment in that,” McKay said.

McKay referenced interest in establishing a “network hub on a grander scale,” and noted interest from “others” in taking the space over.

A report with staff recommendations on the future of SquareOne is due in front of council in April.

dominic.abassi@jpbg.ca

On Twitter: @domabassi