The Canadian startup scene is an interesting and enjoyable one. But let's please allow the numbers to speak for themselves. If there's one thing I dislike about the past few years of the startup scene, it has been this circle jerk echo chamber of "we're great, let's all go for a drink to celebrate".
Canada has a broken VC industry. Our telecom industry is indeed backwater. People are getting into startups because there's no other option for them, and the startup jobs offer lower pay with fewer benefits. This would be a great tradeoff if Canadian startups actually thrived to the point where early employees could make back their investment. But the track record is fairly poor there. Government grants and funds prop up a large percentage of Canadian startups for the 5 years or so that they manage to survive.
These are problems we face today with solutions that will require long term thinking to resolve. I think we have the right attitude at all levels in this country. All levels of government across the political spectrum are on the entrepreneurship bandwagon, and there is no longer a stigma to starting a business. It is actually quite trendy to the point that everybody and their brother is doing it. But let's please improve our track record by staying in business, and in fact thriving as a startup as opposed to flaming out after a year or two when the government grants and initial investment are burned through.
"Government grants and funds prop up a large percentage of Canadian startups for the 5 years or so that they manage to survive."
I used to work for one of these. Being greentech is a great way to have a the government be your VC. I remember one of the "signs to leave" was when the CEO popped a champagne cork when we got a couple million in funding from the feds.
The best part was that the CEO used to be senior aide to an environment minister. He popped a champagne cork because he best navigated the bureaucracy he helped setup.
Any company that can get those funds can usually also get some kind of private funding, but why bother when the feds won't ask for equity? It really distorts things though, as VCs care about your company making money, whereas the government cares about you hiring as many people as possible.
Right and that is also reflected on grants based on salaries you paid the previous year, not exactly straightforward when you are just a few founders and not much cash yet.
Canada lacks tech VC because the whole investment market is structured for mining and oil companies. Through the TSX Venture Exchange small companies (eg. one guy) can raise funds to buy land exploration rights and go off and start a mining company. But you probably won't find any Canadian software companies that got their start this way.
Hey - I agree, the circle jerk is not helpful. But also understand that many of these companies have been started by people who have indeed built scalable businesses, sold, and started again. Rypple, Dayforce, Swix and others, for example. I don't agree that the problems need "long-term thinking". They need more people to go out and kick ass. In particular, by learning how to SELL AND MARKET. The point of the post is to suggest that Canadian culture (and yes, it is a stereotype) was not particularly supportive of this capacity. Now, with a bottom-up sale over the web Canadians have a more natural route to sell and market.
Sorry if I read too much of my own bias into your blog post. I agree that selling is what's important. The web has definitely helped Canadians in that respect, as our startups can now compete on an equal level with American players. In fact, as you alluded to, the startup scenes up here are big in the major cities precisely for the reason the scene is big in places like San Francisco (e.g., close proximity to good educational institutions, the right culture, etc.).
"Smart companies — including Rypple — are happily relocating their cosmetics, er, marketing budgets into product development."
I don't think that redirecting a marketing budget into product development is a great idea. A unique or revolutionary product can stand by itself. However, even products that are breaking new ground still need to get the word out that they exist and importantly what problems they're solving.
I'm Canadian and I completely agree that Canadian companies are in a unique position to kick ass. However, we still have a bit of an uphill battle to face. From financing to taxes it's important for us to clearly announce what products we're making, what problems they're solving and importantly what products we're selling.
Viva la Canada - just don't dismiss marketing - no matter how unconventional it may be.
Totally agree about having to still sell and marketing. The point was that a great product, supported by web-based, social strategies for selling and marketing are more cost effective and more amenable to Canadians.
I'm Canadian but I wouldn't want to associate myself with any such stereotypes.
We live in a world where a single individual can do more than ever before product-wise and location is not that important. Let's focus on that instead.
I can't help but disagree with the claim of how much it supposedly "kicks ass" to be a Canadian startup. I founded a Canadian company a few years ago (still going) and am friends with a few of the founders of those other startups listed there. We're mostly on the same page: we're started here because we lived here, but being in Canada isn't exactly a hub for innovation.
One thing Canadian tech companies are good at is growing to 20-30 employees and selling out to a US company. But that's very different - the innovation is sucked out in those circumstances.
I feel that the "Revenue? We'll worry about that later" attitude is somehow important for innovation. Investors in Canada are really not one for high risk, high returns.
I mean, it's not horrible here or anything, but I really don't think our startup environment holds a flame to the US.
A major problem in Canada in my humble opinion is a lack of or alternatively a very poor startup ecosystem... unfortunately Canadian society is still very much conservative in that regard and it is not very welcoming towards startups and in turn startups have a somewhat negative connotation. That's a shame of course... we have lots talent and very intelligent folks around here..
I have to say that I also have never encountered this (aside from my mom who prefers I work for companies she's heard of so she can tell her friends, but that's not common).
I've seen people treat founders the way you would a 12 year-old with a science fair project, but never in a negative way.
In Ottawa the challenge is to find a company that isn't totally tied into the government. I mean this even for the private sector. When navigating the job market here, having a security clearance (ever-important when working with/for the gov't) almost seems as important as competence. Ok, maybe not really, but the ubiquity of government contracts is probably far different than many other places in Canada.
I'd rather live in a successful rich country than a failing poor country.
Having strong companies in your country grows the economy in your country, which helps make your life better. More money coming into the economy means
1. Higher wages
2. Better public services
3. Lower taxes
More than that, having strong companies attracts better talent, which means better role models, peers, and opportunities to explore your own dreams. Silicon Valley is what it is because it built a track record of successful startups.
No, because I feel a kinship with other Canadians, which I think is a fairly common Canadian trait(once again, I don't want to sterotype here, maybe I have a unique set of a friends and associates). I'm from Newfoundland, Canada and I feel a kinship with other Newfoundlanders as well.
I can't speak to where you are from or what value set you have, but I feel it is important to support my country at all times, not just during the Olympics. I appreciate seeing other Canadians succeed and feel that it is good for Canada as a whole for them to do so.
Edit: Because I can't respond to the comment below, Im just going to follow up with the fact that if thats how you feel then you obviously don't have the same value set, or even understand what I am talking about. Which is totally fine, but I would guess that you don't care about someone you don't know succeeding or not, whether it has merit or not(which is also totally fine, just not how I feel).
As a fellow Canadian I have the same set of beliefs. Sure, I want people to succeed based on merit too, but I can more easily relate to people based on the similar path that they have had to take, especially coming from the same place. I don't have that same relationship with people from the United States, for example. One prime example is how much "easier" (I say that lightly) it is to get funding in the US. It's far more difficult to get funding coming from Canada, especially from American investors. You can't say the same being an American entrepreneur looking for American investment.
Canada has a broken VC industry. Our telecom industry is indeed backwater. People are getting into startups because there's no other option for them, and the startup jobs offer lower pay with fewer benefits. This would be a great tradeoff if Canadian startups actually thrived to the point where early employees could make back their investment. But the track record is fairly poor there. Government grants and funds prop up a large percentage of Canadian startups for the 5 years or so that they manage to survive.
These are problems we face today with solutions that will require long term thinking to resolve. I think we have the right attitude at all levels in this country. All levels of government across the political spectrum are on the entrepreneurship bandwagon, and there is no longer a stigma to starting a business. It is actually quite trendy to the point that everybody and their brother is doing it. But let's please improve our track record by staying in business, and in fact thriving as a startup as opposed to flaming out after a year or two when the government grants and initial investment are burned through.