Atomic VC partner Andrew Dudum (left) and Director of Engineering Liam Horne (Communitech photo: Phil Froklage)Atomic VC to build Canadian startups on California capital Anthony Reinhart January 26, 2017 Columns, Ecosystem, Startups, View from the ‘Loo It was an autumn day in San Francisco when the subject of Waterloo came up – and it would change everything for young Liam Horne. It was late 2015, and Horne, a coding prodigy who had studied computer science at the University of Waterloo, was chatting with his mentor, Jack Abraham. A few months earlier, Horne had snagged a coveted fellowship from the Thiel Foundation, a program that Abraham – himself an entrepreneur and investor – oversees for Silicon Valley billionaire Peter Thiel. On this particular day, the Thiel Fellows had gathered at Abraham’s home in the city’s Pacific Heights neighbourhood. “We had just been chatting and I think I casually mentioned Waterloo,” Horne, who at the time was Chief Technology Officer for Waterloo Region startup PiinPoint, recalled. “And he said, ‘We’re actually considering maybe opening an office there.'” The “we” Abraham referred to were he and his partners at Atomic VC, a four-year-old San Francisco venture capital firm with a twist – it builds its own companies in-house – and the boldface backing of Thiel, Marc Andreessen and other top Valley investors. Fast forward to Wednesday night, when an expected crowd of 200 converged on a historic building in downtown Kitchener to toast Atomic’s spacious new Waterloo Region operations. There to greet them was Horne, who, at 22, is in charge of the new office as Atomic’s Director of Engineering. As such, Horne – who also co-founded the wildly successful Hack the North event at the University of Waterloo in 2014 – will oversee the building of homegrown Canadian companies that will live under the Atomic umbrella. He will also co-ordinate engineering support for the firm’s existing San Francisco companies, five of which have been publicly revealed: Zenreach, a high-flying wi-fi marketing company with US$50 million in backing, led by CEO Abraham; Ever, a service that stores and makes sense of personal photos and videos; Mira, which enables screens to be controlled wirelessly via the Internet; Rested, a sleep-tracking tool; and TalkIQ, an AI system that analyzes voice calls to provide businesses with customer insights. “What we’ve done in Canada is have teams of people who are contributing to each one of those companies,” Horne said. “We have different entities in Canada that we’ve created for each one . . . and each one kind of maps to the company that they’re helping build product for and engineering for in San Francisco.” With new companies hatched at Atomic, however, “It’s almost all going to be here,” Horne said. In other words, fledgling Canadian entrepreneurs with great ideas will have a shot at building their startups here at home, while enjoying access to the funding and knowledge of Atomic’s partners, investors and fellow portfolio companies. “It’s a really good opportunity for the entrepreneurial-minded people in this region, which there are a lot of, to basically learn how to build a company right,” Horne said. “Because, obviously, we’ve done it many times already, so we have some pretty solid perspectives on how to build a company. “So, you can be part of a well-funded company from the get-go, but not just contribute without much meaning; you actually are super-impactful from the beginning,” Horne said. “You’re building the early product; you’re leading the direction of the entire company.” Its new space – the same one fast-growing Vidyard vacated for a larger office last summer – is not Atomic’s first in this region. The firm has had a low-key presence in Kitchener’s Tannery complex since late 2015, when it took over Shopify’s first Waterloo Region outpost. (The e-commerce juggernaut’s fast-growing Shopify Plus division has since moved twice and now occupies the former Seagram Museum in Waterloo.) In pondering why a company like Atomic would choose Waterloo Region, the expected answer would be this community’s reputation for producing top technical talent, owing largely to the University of Waterloo and the global reach of its co-op program. But Waterloo Region is far from the only talent hotbed Atomic could have chosen. Andrew Dudum, an Atomic partner, Ever co-founder and graduate of the University of Pennsylvania’s Wharton School, said talent was just the beginning. “The talent is extraordinary here, but the mix of the talent and the personality [of Waterloo Region] is why we’ll stay,” Dudum said Wednesday, moments after arriving in Kitchener for Wednesday’s launch. Back in late 2015, after Horne’s fateful chat with Abraham, Horne immediately followed up with an email, offering to arrange a Waterloo Region tech tour for Atomic’s partners. Nabil Fahel is a consummate connector with a strong network in Waterloo Region’s tech community. (Communitech photo: Anthony Reinhart) Abraham tapped Dudum to make the trip north. At the Waterloo Region end, Horne reached out to his friend Nabil Fahel of Shopify – a hummus purveyor, poker-tournament organizer and consummate connector who knows virtually everyone in the local tech community – to lead the tour. Fahel, a former Communitech staffer who played a similar behind-the-scenes role when Shopify was first considering Waterloo, made an immediate and indelible impression on Dudum. “Nabil became like family to me almost the second I came here,” Dudum said. Recalling that first visit, he said, “I landed in Waterloo, didn’t know anybody, met up with Liam and Liam says, ‘Hey, you’ve got to meet this guy named Nabil.’ So I met Nabil, jumped in his car, zipped around the city, and I think within 15 minutes, we met, like, 25 people.” In addition to stops at the Tannery, the University of Waterloo and other key locations, “we got to his family’s house, his uncle’s house, his uncle’s shop,” Dudum said. “He toured us through four different locations, and essentially, within 20 minutes, we were like family in the neighbourhood. He just made us feel completely at home.” At the end of the tour, Fahel took Dudum back to Shopify’s then-small office in the Tannery, which Shopify was about to vacate for larger digs. “We just ended up there, and I think we were having a drink,” Dudum said. “And he goes, ‘It’s funny; we’re actually going to be moving out of here pretty soon. What do you think of this space?’ I said, ‘This space is beautiful; we should talk about that.'” The year Atomic spent in that space, cheek-by-jowl with Communitech, UW’s Velocity Garage and the growing startup community around the Tannery, further convinced the firm that Waterloo Region was the ideal location for a second office. “Nabil has been a reflection of everybody else we’ve met here, whether it’s the Velocity team or the Communitech team or the university or the real estate organizations around town, to figuring out the best organizations to work with and collaborate with,” Dudum said. “It’s essentially been arms wide open and a big hug from Day 1, which has just made it so much easier and so much more enjoyable, and I think it’s reconfirmed our excitement for doing this.” Beyond a mere feel-good effect, Dudum said such conditions can give startups a competitive edge in the early going. “I think when you’re building companies, especially from scratch in the early days, it’s brutal,” he said. “You’re running uphill in the snow for a year straight, and it actually really does matter who you’re surrounded by. “When we started Atomic, we’d all built companies before and knew how painful it was, and how short life is and how difficult it was. And so, the importance of actually doing it with people you enjoy and want to be spending time with, it’s the only way to make this thing sustainable, to be honest.” For Horne, whose time in California included a stint in the fabled Y Combinator accelerator program with PiinPoint, his new role at Atomic combines the best of all worlds. As a Waterloo Region native who grew up in Cambridge, his local roots ran far deeper than the thousands of out-of-town students he’s met through UW and Hack the North. Among many Waterloo students, “Cali or bust” is still a popular refrain as they chase the pay and prestige that go with a tech job in the Bay Area, he said. “What’s the hope for the best to stay here? Why would they stay here? There needs to be some incentive,” Horne said. For him, the incentive Atomic offers is the chance to work on hard problems in a well-funded environment that’s embedded in a close-knit, collaborative community. “I’ve met hundreds of different people who have gone to San Francisco, moved there and lived there and built companies there, and I ask them, how do you enjoy living there?” he said. “For the vast majority of them, after a certain amount of time, they get sick of the culture and get homesick. It’s all the same; there’s no real feeling of home . . . where you go into any bar and it’s a bunch of people starting a company, and any conversation you have with anyone is about tech or company-building.” To Horne, “there need to be other parts of life that fulfil you, and for me, I have a lot of that here. I have family here, my close friends are here from high school and from university. I have a good mix in my life, so I like that part of it.” Anthony Reinhart is Communitech’s Director of Editorial Strategy and a senior writer. View from the ‘Loo looks at the issues, people and events that shape Waterloo Region’s technology sector.