1997-2012: Fear, Uncertainty, Doubt.
2012-2020: Optimism, Opportunity, Execution.
I’ve been bullish for a while now, it’s no secret. It was 5 years ago that I was writing off VC in Canada and explaining how startups needed to step up to create an environment to bring them back.
And like a bowl of Sea Monkeys, the VCs have emerged from stasis.
Do you realize that I can’t even conjure up a single VC financing in Canada in 2008.
This week OMERs stepped up in a big way with a $20million financing for HootSuite. This, along with the recent $30 million (debt) financing of Halifax based Unique Solutions, represent some of the first real, and stable, “acceleration capital” that we have seen in Canada.
Five years of uncertainty about startups in Canada. Uncertainty about whether we could really start them. Uncertainty about whether we could really build them. Uncertainty about whether we could really scale them.
5+ years that I am happy to say good riddance to.
The last 5 years we have focused on:
- Seed stage financing
- Removing section 116 from the tax code
- Waiting for shitty VCs to go away
- Welcoming good VCs on to the scene
- Getting rid of any idea of building a startup “for the Canadian market”
- Making “Startup” an understood thing
- Telling good news stories when they came along
When I wrote a the post about 2011 being a big year I was focused on 2012 as the next step. What I realize now is that we aren’t just living year-to-year like we used to, the startup community in Canada now needs to start thinking in larger timeframes, with bigger goals and a far more ambitious strategy.
This is the time to double down.
I believe strongly that the values, infrastructure and growth of Silicon Valley are becoming better understood and slowly commoditized. Our challenge is not to try to recreate Silicon Valley, but to take the elements of what make it good and to apply it in our own communities. We are getting much closer to that.
A half-decade is a long time to think about, especially for entrepreneurs. Here’s what I think we need to think about that we haven’t done much about in the last 5 years. What do you think we need to focus on for the next 5 years?
Children need quality education in the fundamentals of the Web. Right now we have an education system which tried to teach students about computers but almost completely neglects the Web. A shift to Web-oriented education would mean:
- Understanding the role of many devices (computers, tablets, phones, etc) in education
- Web-infused curriculum in all topics. Such as: Web-focused research skills in science courses. Social Media in Language Arts. Etc.
- Programming skills which are introduced early on and are a required component of curriculum.
A focus on education should imply the participation of students in the startup community. We need to find ways to include younger and younger would-be entrepreneurs the web startup community.
Community as the framework
There are a lot of efforts underway to “professionalize” the management of the startup community in Canada. Watch out for people who claim to know what is best for the Canadian startup community but who haven’t felt the need to immerse themselves in it by being a part of it. The reason that Canada has managed to standup a respected and vibrant startup community is largely because the effort has been decentralized and grassroots. It has not been because of centralized programs or PR focused exercises.
We need to maintain this focus because developing a strong social network of individuals who are able to contribute to and support the development of Canadian startups is critical. It’s why I like the C100, Startup Festival, Grow Conference, CIX and others. They are efforts that have come from people who are entrepreneurs themselves and who understand that the health of the community is critical.
Tighter Silicon Valley links
The vast majority of startup hub cities in Canada are within a short flight of San Francisco. We need to take advantage of that link and make exposure in Silicon Valley an expected thing for Canadian Startups. This is easier than ever and it is getting easier. We need more Debbie.
Web Startups are not yet on the radar of policy makers. This has resulted in disjointed policy development which has sometimes harmed startups who develop and compete globally. I believe that the current government has actually made some changes such as the changes to Section 116 of the tax code. Startups benefit from very specific parts of the legislative and tax codes and we must continue to seek as many advantages from these as possible. I mentioned Education above but policy influence also needs to extend to Immigration, R&D programs, procurement and anything else that can be used to give startups in Canada an advantage.
Grow like hell and don’t stop
The final thing we need to do is to make even bolder moves. We have our feet under us and now it is time to double down again and again and again. Rather than being the companies who are getting picked off for $20million here and $50million there we need to find opportunities that let Canadian startups become the acquirer and growth engine, rather than the other way around. Hootsuite is a start, but we need to chalk up a few more before the process will become well understood in Canada.
Welcome to the next 5 years.