Entrepreneurial ecosystem

Conrad Guziewicz at his offices at the PEC Innovation Centre in Picton.

Success of PEC Innovation Centre proves concept and may point to a path to an economic rebirth in rural Ontario

Israel, with a population of just 7.1 million people, has more hightech start-ups and more venture capital financing per capita than any other country in the world according to the Economist—more than the U.S. Japan, Taiwan, South Korea, India and China. Bookshelves sag with volumes seeking to explain this phenomenon.

Conrad Guziewicz believes the Israeli entrepreneurial model and ecosystem approach, built around supporting fledgling technology-based businesses, must become a more prominent part of the response to the ongoing decline of the manufacturing sector in Ontario, specifically rural parts of Ontario.

Guziewicz has put his capital, his resources and his relationships, forged over 20 years in Silicon Valley and the high technology sector in Canada and the US, to do just that in Picton.

The PEC Innovation centre is incubating nine startup businesses— powered by young and creative minds—each creating and burrowing into market niches for their products, services or technology. Gusiewicz would like to see 20 more just like them at the former motel, situated at the end of Picton Bay.

His team scours colleges and universities, looking for the best and brightest ideas. Some, find him because of his track record of success in the tech sector. Guziewicz brings these budding entrepreneurs to Picton to develop their businesses, amid an ecosystem of accountants, lawyers and capital market experts as well as like-minded entrepreneurs.

It’s working. And producing dividends. One startup has already been acquired by a division of Torstar. Another has gained access to the purchase flow of about 80 per cent of the car dealers in Canada with its sights set for the US and Europe. Others are at varying stages of the development curve. Investors have climbed aboard. Entrepreneurs now come to them. The model is working. Guziewicz has seen the results and believes this model can be replicated in other communities, particularly rural economies that have been drained of their manufacturing base.

But the PEC Innovation might not have happened at all were it not for the meltdown of world financial markets in 2008.

That summer, Guziewicz was preparing to tear down the Tip of the Bay motel to make way for a residential condominium development. He had deposits and financial commitments lined up. He was ready to go. In September, those commitments dissolved as the global credit market and banking sector came to a grinding halt. With it, went Guziewicz’s prospect of a condominium development in Picton.

“I didn’t know what to do with the building,” said Guziewicz. “It was empty and costing a great deal of money just to hold it. That is how it started.”

It wasn’t his idea. Guziewicz said the first couple of times Craig Desjardins had suggested he might establish a business incubator, he had told him to go away. But the third time the Prince Edward Lennox and Addington Community Futures Development Corporation (PELA CFDC) executive director came to Guziewicz, he had a tenant for part of the building.

Desjardins again urged Guziewicz to use the balance of the space as an entrepreneurial incubator. He would help with funding from his federal economic development agency. This time Guziewicz agreed.

“It was totally Craig’s idea,” acknowledges Guziewicz. “Totally his vision.”

Desjardins says it was apparent to him that the County enjoys some unique attributes that he felt could be leveraged to create opportunities.

“It’s all about people,” said Desjardins. “We have a unique set of human capital resources here who have come to pursue the quality of life in Prince Edward. These are people who are incredibly worldly, with incredible experience and bring their vast networks with them.”

Desjardins points to two colleges and a world-class university (Queen’s University) within 40 minutes of this community, providing a source of bright young minds and energy.

But how to utilize these resources?

“How can we put the people with expertise together with young people to create opportunities?” said Desjardins.

There were significant gaps, however— space and access to capital were big ones. Gusiewicz had both. Plus a track record of success working with technology companies over the past two decades.

“We had looked at other communities and best practices,” said Desjardins. “It was clear there was a trend emerging of clusters of business startup and innovators. We pitched the idea to Conrad. What if we pulled out the bathrooms, created some common space and converted the space into a business incubator?”

Though skeptical at first, Guziewicz soon grasped the concept with both hands, according to Desjardins.

“He immediately took a shine to this sort of mentorship/ business incubator idea,” said Desjardins. “He’s become a real evangelist for what these startup ecosystems can mean to communities like Picton and elsewhere.”

One of Guziewicz’s early investments was with a young man who had developed a web-based tool offering car dealers an easy-to-use supply purchasing solution.

“I recognized that this kid was a great inventor but a terrible operator,” recalls Guziewicz.

Guziewicz’s son had just graduated from Loyalist College and was struggling to find work.

“My son is very frugal and very good with money,” said Guziewicz. “I put those guys together to sell this solution. They’ve created a solid niche. In doing so they’ve already inserted themselves into the purchase flow of about 80 per cent of the car dealers in this country. They’ve hired 10 local people and made Picton their headquarters.”

“That success really turned me around,” said Guziewicz. “It was clear to me then that this model could have a profound effect in transforming economies like this one.”

Last year he formed First Stone Capital Partners— bringing other investors together in a venture capital firm, purpose-built to finance early stage technology startups in Picton.

That group is now busy looking for great ideas and great minds.

“I believe this model can go a long way toward solving rural Canada’s economic development issues,” said Guziewicz.

He has seen the proof.