The following blog post is from Greg Phipps, our director of investment here at Innovacorp. He’s currently an "embedded executive" with one of our portfolio companies, Livelenz Inc., and chronicling his experience here.

Among the countless objectives and priorities in building an early-stage software company, office location may appear to play an insignificant role in the venture’s ultimate success. And while Silicon Valley, New York and Boston may spawn the bulk of SaaS/cloud computing companies, and therefore might be an obvious location choice for Livelenz, the company was born in this little corner of the globe and, in the near term at least, will continue to scale and deliver its unique SaaS solution from Atlantic Canada. Radian6 Technologies, Q1 Labs, and GoInstant were successful at building their venture-backed companies in this region, driving an eventual acquisition with significant ROI for their shareholders, so the model has been proven. There’s no good reason why Livelenz can’t do the same.

In fact, there are some compelling reasons to build an early-stage software company in Nova Scotia. Given the decreasing costs of delivering applications, infrastructure and platforms through the cloud, as well as rapid development methodologies, lower hosting costs, etc., the capital requirements to launch and the physical location of software start-ups has become increasingly irrelevant. Furthermore, the cost base for development here in Halifax, at least for a SaaS solution, is significantly lower than other jurisdictions –from HR costs to infrastructure and rent expenses.

After Innovacorp’s initial investment in Livelenz in February 2012, the corporate priority related to scaling the development capacity and recruiting experienced talent proved challenging for the rural home office in King’s County – as beautiful and attractive a place to live and work it may be. The company established a development shop at Innovacorp’s Technology Innovation Centre in the city to accommodate the new development and product team, thus addressing the recruitment issues. That action spawned a new challenge related to managing teams operating in two locations – 120 km apart. It became clear that, ideally, the development, product, sales and support (we call it “customer success”) teams really needed to be housed together, along with management and administration, to seed interaction, creativity, collaboration and cooperation – all hallmarks of successful, client-focused SaaS leaders. The initiative was certainly one I felt strongly about and have championed since “embedding” with the company.

I’ve spent the better part of three weeks searching for the perfect environment for the two offices and two teams to grow, together, in Halifax. Questions I (we) have wrestled with include: size (Do you seek sufficient space to accommodate the team as it exists now? How much space might you take to accommodate potential future growth?); location (How do you accommodate the logistical challenges of employees that live within a 100+ km radius? Is it on a bus route for those that take the bus? Does it have parking and accessible amenities?). These might seem like trivial matters, but I believe that if you’re asking employees to commit a significant part of their lives to this start-up, you’ve got to ensure they’re motivated, happy to come to work every day, comfortable, and incented to give their best.

We’re close to defining our new professional home. Stay tuned for your invitation to the housewarming party.

Greg Phipps, August 28, 2012