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.