The Big Read

Up in the air: Aboard the seaplane that’s helping the Vancouver-Seattle tech connection take off

A Harbour Air deHavilland Single Otter taxis in Vancouver's Cole Harbour
A Harbour Air deHavilland Single Otter taxis in Vancouver's Cole Harbour. Photo: Harbour Air Seaplanes

When Greg McDougall and Windoak Air Services’ other pilot began flying their de Havilland Beaver seaplanes from Prince Rupert, B.C. in 1982, the clients who chartered their planes were forestry buyers in search of wood. “You’d look at a bunch of logs floating,” says Randy Wright, president of what’s now called Harbour Air Seaplanes.

McDougall still owns the company, and still flies, but today’s passengers are more likely to be venture capitalists in search of promising startups, or tech executives headed for a meeting.

Harbour Air runs half of a regular flight between Vancouver and Seattle. The service—launched in April 2018 with Kenmore, Wash.-headquartered Kenmore Air—gets passengers from downtown to downtown in about an hour. The route connects the two cities’ tech ecosystems at a time when U.S. tech giants like Microsoft and Amazon are adding thousands of jobs in Canada’s western tech hub.

And it comes as elected officials and executives in British Columbia and Washington are trying to establish the Cascadia Innovation Corridor, an umbrella brand for partnerships between governments, companies and universities on either side of the border.

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On a mild and drizzly April morning, Kenmore Air Flight KA211 taxis through Vancouver’s Coal Harbour, floating past the convention centre where Twitter CEO Jack Dorsey is finishing up a talk at TED2019 about how the social media giant plans to better moderate the content on its platform.

The 10-seater de Havilland Otter is nearly full. The only remaining seat available when a visiting reporter boards has little room for even this short man’s legs, so the pilot lets him sit up front.

There’s no in-flight beverage service or Wi-Fi. The constant hum of the motor and view of little islands and cabins on coves more than make up for the fact that any passenger looking to get some work done must balance a laptop on their knees. “Looking out the window going down the coast is pretty awesome,” says Wright.

Kenmore also flies to Victoria, where it uses Harbour Air’s terminal; the two companies had been talking about a scheduled Vancouver-Seattle flight for several years before the 2018 launch, according to Wright.

Talking Point

Government and business leaders in British Columbia and Washington want to build a Cascadia Innovation Corridor across the border filled with innovative companies, high-paying jobs and free-flowing trade. The first step is a seaplane service between Vancouver to Seattle, ferrying tech workers and venture capitalists from one downtown to the other in less than an hour.

The U.S. carrier had originally decided not to start the service in 2011, citing a lack of dock space in the Canadian city’s harbour and the Canada Border Services Agency’s (CBSA) quote of “well into the six figures” to provide officers for customs and immigration processing, according to Craig O’Neill, Kenmore’s then-director of marketing and sales.

But the construction of the Vancouver Harbour Flight Centre in the city’s west end that year added slips to park the seaplanes. And, the city’s growing innovation ecosystem brought passengers. “This is doable because of the tech sector investing into Canada,” says Wright.

Seattle-based firms have hired thousands of workers in Vancouver in recent years. “For them [the tech giants], I think it’s a talent arbitrage opportunity, and even for the small startups,” notes Brandon Lee, Canada’s consul general in Seattle. Lee says his office receives interest from at least one company a week wanting to relocate to or open an office in Canada.

In April 2018, Amazon announced it would take up about one-third of a redeveloped Canada Post building in downtown Vancouver and hire 3,000 new employees there. Zillow, a real estate marketplace also has staff in the city.

So does Tableau Software, a data analytics platform that Salesforce bought in June. San Francisco-founded Salesforce said Seattle will be its second headquarters following the acquisition. In February 2018, the company announced it would invest $2.5 billion in its Canadian operations over the following five years, including to expand its workforce.

Microsoft has more than 780 staff in Vancouver, according to LinkedIn data. The city is also the home of The Coalition, a Microsoft-owned video game studio of more than 120 people, which makes the Gears of War franchise.

The Redmond, Wash.-headquartered tech giant played a key role in the flight’s launch. “They gave a seat guarantee for a period of time so we could pilot the ‘nerd bird’ to see if it has business sense,” explains Lee, using the flight’s nickname among tech workers. Samantha Kent, marketing manager at Harbour Air Group, confirmed that Microsoft initially made a “per day seat commitment to the route,” but said the airline has no standing agreements with Seattle-based tech firms to buy tickets. Microsoft declined to comment on its seat purchases.

Wright says the federal government also supported the venture, funding a pilot project for CBSA officers to process passengers inside a floating grey cabin that Harbour Air towed from Vancouver.

Innovation Minister Navdeep Bains speaks in Seattle in April 2018 at the announcement of the Harbour Air-Kenmore Air scheduled service between Vancouver and Seattle
Innovation Minister Navdeep Bains speaks in Seattle in April 2018 at the announcement of the Harbour Air-Kenmore Air scheduled service between Vancouver and Seattle. Photo: Microsoft

Innovation Minister Navdeep Bains took the route’s exhibition flight to Vancouver on April 25, 2018, following an announcement in Seattle attended by Washington Governor Jay Inslee and Microsoft president Brad Smith. The scheduled service launched the following day.

Tickets typically cost between $299 and $370 one-way, although The Logic bought them during a sale for $199 each way. The companies ran a $149 promotion in the spring, said Ben Cardin, station manager of the airline’s terminal on Lake Union.

Boris Wertz, founder of and partner at Vancouver-based Version One Ventures, has done the round trip at least three times in the last two months. He began flying by seaplane from Victoria to Seattle in 2002, when his employer, AbeBooks, a marketplace for independent sellers to list books and collectibles, formed a partnership with Amazon.

Wertz left the company in 2008, turning to investing, but the trips to Seattle continued. “It’s one of the four ecosystems we focus on,” he explains. “But getting there was actually suddenly much harder than before in Victoria—there was no seaplane service [from Vancouver].”

Driving from Vancouver to Seattle takes at least three hours, Wertz says—usually more, because of traffic in both cities and at the border. The seaplane service is much faster. On that April day, the first flight out gets him to the U.S. in time for an 8.30 a.m. appointment. “A whole day of meetings, and you’re back in the evening,” he says.

Since the service started, Wertz has been able to take more “discretionary trips” to Seattle. “In my business, sometimes there’s no concrete reason to go somewhere,” he explains. “But you want to meet people [and] get to know new entrepreneurs.” On one such recent visit to Seattle, he was introduced to Dolly, an on-demand app for moving and delivery. Version One participated in the startup’s US$7.5-million funding round, announced in May. The VC firm’s portfolio includes Outreach, a sales engagement platform, and Yapta, which makes air ticket-tracking software, which are also based in Seattle.

“Talk about an intimate environment—you can really form a relationship with somebody on that flight,” says Heather Redman, managing partner and co-founder of Seattle-based Flying Fish Partners. On the return leg of a recent trip, she met a Canadian founder travelling to Seattle for meetings with investors who had never heard of her firm, and arranged for him to pitch to her team. “We didn’t make the investment, but that was super important in terms of deal flow, because that’s what we live and die by,” she says.

Redman says the Canadian federal government should give flight vouchers to early-stage companies in the city. “That would be really empowering to startups in raising capital and getting first customers in the [U.S.],” she explains. In October 2018, Flying Fish co-led a $14- million Series A round in Finn AI, a Vancouver-headquartered maker of bank chatbots.

Seaplane pilots need daylight to fly, so the airlines cut back from four daily round trips between March and October to two from November to February. In the darker months, Kenmore Air’s last plane from Seattle leaves at 1 p.m., which may not be worth the trip for someone coming to town for a meeting, acknowledges Cardin. But the service has attracted frequent flyers. “We have a good dozen … regular business travellers that do this route,” he says.

Amazon has more than 45,000 employees in Seattle, working in about 12 million square feet of office space. Its northernmost building is less than a kilometre from Kenmore Air’s terminal, while the company’s planned Vancouver location is slightly farther than that distance from Harbour Air’s docks.

Contrast that with travelling between the two cities’ major airports, which “adds two to three hours to this little flight,” according to Lee. “At this point, we don’t need a lot more corporate sponsorship. We need usage.”

The government and airlines also need to figure out the long-term cost of the CBSA processing at Coal Harbour. The pilot project is scheduled to end in March 2020, and the agency has not yet decided whether to make it permanent, says Cecelia Parsons, communications officer for Western Canada.

Both Cardin and Wright say the flights have been growing more full over the months since they started, as awareness has increased. “A measure of success would be, I would say, 10,000 passengers [in a year],” says Wright, noting that it’s important to have two-way traffic, so that the airlines don’t have to fly empty planes on the return leg.

That’s still a relatively small share of the travel between the two cities. According to Statistics Canada data, a combined 59,070 passengers flew between Vancouver and Seattle-Tacoma International Airports in 2016, the last year for which the agency has published numbers.

Though the seaplane’s four-a-day schedule only started in September, the service has transported more than 6,000 passengers since it launched in April 2018, according to Harbour Air. While tech workers make up the biggest group, the flight also attracts executives from other Seattle-based companies like Starbucks, as well as real estate developers from each city who are building in the other.

Tourists and sports fans also travel the route. “You’ve got the [Seattle] Seahawks games,” notes Wright, who has flown to some of those himself. “You’ve got a new hockey team going down to Seattle, so there’ll be a rivalry between the Vancouver Canucks, and whatever they’re calling themselves, [the] Seattle Sockeyes.” Fans of the Toronto Blue Jays also travel for games with the Seattle Mariners. And, Major League Soccer’s Seattle Sounders and Vancouver Whitecaps have a local rivalry; the latter’s crest is painted on the tail fin of one of Harbour’s 42 seaplanes.

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The B.C. and Washington governments are conducting a joint study of a high-speed rail line between the two. In February, B.C. Premier John Horgan announced $300,000 for the research during his fourth meeting with Inslee. Microsoft has also contributed funding.

The two economies are already highly integrated. Merchandise trade between Washington and B.C. exceeded $13 billion in 2018, according to Statistics Canada data, representing over a quarter of the province’s economic exchange with the U.S.

Lee says the nerd bird and the high-speed rail project—the latter of which he says is more than 10 years away—have been the two main projects of the Cascadia Innovation Corridor, which includes B.C., Washington and neighbouring Oregon. The initiative aims to promote trade, innovation and job creation across the border, through transportation links and partnerships between governments, companies and academic institutions.

“Both of those [the flight and the rail line] are infrastructure-based, so it’s natural that government would be engaged in those,” says Lee. “But then underneath, there’s a lot more that needs to happen to create a tech ecosystem and to bind us together.” A new steering committee for the corridor has chosen to focus on growing sectors like fintech, retail, life sciences, artificial intelligence and virtual reality.

For now, at least one corridor project seems to be working. On the evening of the same April day, Kenmore Air’s under-renovation terminal is filled with passengers waiting for the last flight back to Vancouver, including three who flew in with the visiting reporter. As the travellers—two of whom are in Allbirds, shoes that are particularly popular in Silicon Valley—climb into the plane, it starts to rain again.

As the flight descends into Vancouver, the second day of TED2019 is wrapping up across the harbour. Stepping out of the luxury Harbour Air Cessna Grand Caravan—with leather seats, wood-finish interiors and jetliner-style reading lights—the visiting reporter sees no logs of wood, but at least one Microsoft backpack.