I read The Mark’s special on venture capital in Canada and while I agree with all of the hub-bub about a lack of early stage financing in Canada, what I want to talk about is the other side of the equation; the Canadian entrepreneur and our sense of addressable market.
First, a bit about myself to give you a perspective on where I am coming from. I started my career in Ottawa, one of Canada’s tech capitals. My first startup had customers around the world, initially most were in Europe, over time the US represented our largest base of customers. While the Canadian government was the reference customer for my next startup, American customers soon drove over 80% of our revenues. The story is similar for every startup I have been part of.
So, I wonder “why” when I speak with Canadian entrepreneurs and hear that they are chasing a domestic market and have no foreign competitors in their sights. Canadians are very talented, but sometimes we tend to not “think big” enough – it is an unspoken reason why our startups don’t get funded.
One would think that Canadian entrepreneurs aspire to enter larger markets in the United States and across the pond in Europe and Asia. But what I keep hearing is “our target market is… the 5 big financial buildings in downtown Toronto, or the large insurance companies in Toronto and Montreal, or the federal government in Ottawa…”
Sure, land your first customer on home turf – Toronto, for example, is a hotbed of financial, insurance, mining, and advertising companies. Call up all of the people that you know at these Canadian institutions to get that pilot account – but as soon as you have refined the product and pitch, start looking beyond Canada’s borders for customers.
That slide in your funding presentation with addressable market numbers for the US mean nothing if you don’t spend any marketing dollars generating leads and time on the road landing new prospects south of the 49th parallel.
Canada represents just a small fraction of the market opportunity for your startup. Drive sales abroad, then even if Canadian investors don’t step up, with a global customer base and growing revenues, you will attract the attention of foreign investors.
Build locally, market globally.
This guest post was contributed by Roy Pereira. Roy is the founder of Shiny Ads, a self serve advertising platform for long-tail advertisers. You can follow Shiny Ads on Twitter: @ShinyAds
Roy,
I hear you. It's a huge planet out there, and one you have something good enough for the Canadian market, it would be foolish to not market worldwide. Why leave revenues on the table.
This is of course a lot easier when you are working with a sell-direct-over-the-Internet business model, where geographical friction does not really factor in (unless you find the need to support different languages or honor distinctive cultural norms and customs)
Roy,
I hear you. It’s a huge planet out there, and one you have something good enough for the Canadian market, it would be foolish to not market worldwide. Why leave revenues on the table.
This is of course a lot easier when you are working with a sell-direct-over-the-Internet business model, where geographical friction does not really factor in (unless you find the need to support different languages or honor distinctive cultural norms and customs)
Roy,
Very insightful comments.
Having been an early stage stage investor for over 10 years, I can confirm that when technically talented entrepreneurs expand their scope and increase their business acumen, good things happen.
As such, what can entrepreneurs do to have these and other important skills in their venture to improve the probability business success (with increased experiences, capabilities and bandwidth in the Mgmt Team and the Board of Directors to improve decision making and achieving results) ?
Further, how can entrepreneurs identify and engage with others that can add value to fast track moving the company forward by ramping sales, validating the busienss model, and better managing risk ?
Ron
Roy,
Very insightful comments.
Having been an early stage stage investor for over 10 years, I can confirm that when technically talented entrepreneurs expand their scope and increase their business acumen, good things happen.
As such, what can entrepreneurs do to have these and other important skills in their venture to improve the probability business success (with increased experiences, capabilities and bandwidth in the Mgmt Team and the Board of Directors to improve decision making and achieving results) ?
Further, how can entrepreneurs identify and engage with others that can add value to fast track moving the company forward by ramping sales, validating the busienss model, and better managing risk ?
Ron
GREAT Article. While Canada is making certainly making strides, having just 3 entrepreneurial meca's in Ontario alone (Waterloo & Ottawa and the Mars Center) is hardly enough to foster the entrepreneurial spirit en masse. You've got a country full of budding entrpreneurs who would be happy to build locally, market globally but they are completely underserved – with inspiration, mentoring, support and financing (too little, too late). Unfortunately i'm not surprised to hear there's a lack of global marketing but as that serial Canadian entrepreneur when you can barely rally support or encouragement to build out locally, it's just not a logical progression to 'oh- i'll go global'..more like a blow to the ego! I love Toronto but can't even begin to describe how refreshing it is to be admist a sea of entrepeneurs, angels, vc'ers etc south of 49 who do this day in and out because they love it! Here's to hoping Canada catches on and fast.
GREAT Article. While Canada is making certainly making strides, having just 3 entrepreneurial meca’s in Ontario alone (Waterloo & Ottawa and the Mars Center) is hardly enough to foster the entrepreneurial spirit en masse. You’ve got a country full of budding entrpreneurs who would be happy to build locally, market globally but they are completely underserved – with inspiration, mentoring, support and financing (too little, too late). Unfortunately i’m not surprised to hear there’s a lack of global marketing but as that serial Canadian entrepreneur when you can barely rally support or encouragement to build out locally, it’s just not a logical progression to ‘oh- i’ll go global’..more like a blow to the ego! I love Toronto but can’t even begin to describe how refreshing it is to be admist a sea of entrepeneurs, angels, vc’ers etc south of 49 who do this day in and out because they love it! Here’s to hoping Canada catches on and fast.
GREAT Article. While Canada is making certainly making strides, having just 3 entrepreneurial meca’s in Ontario alone (Waterloo & Ottawa and the Mars Center) is hardly enough to foster the entrepreneurial spirit en masse. You’ve got a country full of budding entrpreneurs who would be happy to build locally, market globally but they are completely underserved – with inspiration, mentoring, support and financing (too little, too late). Unfortunately i’m not surprised to hear there’s a lack of global marketing but as that serial Canadian entrepreneur when you can barely rally support or encouragement to build out locally, it’s just not a logical progression to ‘oh- i’ll go global’..more like a blow to the ego! I love Toronto but can’t even begin to describe how refreshing it is to be admist a sea of entrepeneurs, angels, vc’ers etc south of 49 who do this day in and out because they love it! Here’s to hoping Canada catches on and fast.