How Ryerson University's Incubator Fuelled its Own Growth
DMZ has gone from serving students of a Toronto university to acting as a mentor to other growth accelerators
When Justin Trudeau wanted a direct line to the people when he was running for the Liberal leadership, he went to a company called Soapbox. It deals in what’s known in the industry as heavy engagement. People submit questions and they get up-voted, à la Reddit, and the top question every day, week, month, or hour gets a direct answer from the person in charge. It’s a way for someone like Trudeau to take a pulse, and appear to directly engage with a population without being mired in a thousand questions.
It seems to have worked.
Soapbox is mostly a corporate tool, used by CEOs and others, from Heather Reisman at Indigo to execs at BMO and Coca Cola to communicate with their employees, and for their employees to get their most pressing concerns addressed by the person who can actually do something about it.
But the first client was Ryerson University. The founders of Soapbox were all Ryerson students who, when they had the nugget of an idea for this interface, went to then-president Sheldon Levy and asked if the school might put up some space for them, and people like them, to hash out their business ideas. Lev, who’s now Ontario’s deputy minister of training, colleges, and universities, rented them a floor in a building facing Dundas Square. Soapbox blossomed, as did other early student ideas like 500px, now the biggest professional photosharing service, and Figure 1, an image-sharing outfit for medical professionals.
There was so much early success, in fact, that Levy and Ryerson decided to double down on this whole incubator idea. He rented some more space, and called the thing the Digital Media Zone.
Seven years on, the incubator has five floors, hosts 400 people from 60 fledgling companies, can boast a total of $280 million in total investments in its current and past clients. For the past two years it has been ranked the top university incubator in North America by UBI Global, a Stockholm-based research firm.
It has evolved in other ways, too. DMZ (dmz.ryerson.ca) is no longer focused on digital media, so its current moniker, DMZ (pronounced the American way, alas), doesn’t stand for anything.
It’s also no longer for students. According to executive director Abdullah Snobar (a former corporal in the Canadian military who went on to Ryerson, befriended Levy, and handled communications for the business faculty before moving to the DMZ), the original age range for DMZ participants was 18 to 22, and now it’s about 28 to 33. In addition to making the regular “Good Scotch Fridays” legal for everyone, Snobar says the new mission is better able to jumpstart truly viable ideas.
“You have to have validation and work revenue to get into this space,” he says. “To have to have an innovative piece of technology, and you have to have a team. Teams can really be the most important thing. We say yes to fantastic teams with horrible businesses, and we've said no to fantastic business and horrible teams.”
The DMZ not only provides desks in its five floors of open-concept office space, but a direct pipeline to entrepreneurial expertise, meetings with industry leaders, and regular events called capital catalysts, which turns the usual investment model upside down, with potential investors pitching startups.
According to Snobar, the DMZ has a 70% success rate, judged by companies that have continued to grow or have been acquired.
Though participants no longer need a Ryerson connection to apply for a desk, Ryerson has continued serving its own students with a DMZ-feeder operation that starts with Sandbox, where Ryerson students can come to learn basic skills like coding, as well as what makes a viable business idea. From there, they can go into a system known as Zones, where ideas that fall into market areas such as biomedicine, fashion, trans-media, design fabrication, legal innovation, social venture and others can further develop their ideas before possibly applying to the DMZ, which Snobar says these days is accepting about 1 in 10 applications.
The DMZ’s success has not gone unnoticed. The CEO of the Bombay Stock Exchange dropped by a while ago and was impressed enough to invite the team to set up a parallel incubator in the stock exchange’s own building, which they’ve now done. They’ve also helped others develop the model, with spores now sprouting in Halifax and Charlottetown.
In other words, the DMZ is spreading its know-how across the country and the world, rather than collecting everything in one spot (à la Silicon Valley). So despite the disappointing pronunciation of its name, it sounds pretty Canadian after all.