Bay Street & Natural Resources – FinTech in Toronto


Toronto is a center of gravity for financial services. There aren’t a lot of financial technology startups in Toronto. There is a new Toronto FinTech Meetup. FIrst meeting is Wednesday, April 10, 2013 at the MaRS Commons (Suite 230, 101 College St.) hosted by Blair Livingston of Quantify Labs.

Bay Street and Natural Resources

[Editor's Note: This is a guest post by Blair Livingston LinkedIn , founder of Quantify Labs. Full disclosure: I'm an investor in Quantify Labs. Blair and I share a view that given the technology and talent available on Bay Street there should be a strong financial tech and startup community in Toronto. It is sad that my typing "toronto fintech" into Google results in a Montreal conference as the first result. ]

Google Search for Toronto FinTech

Great cities prosper and thrive, in part, because of their proximity to valuable resources. Arguably, the nearby resources were likely the main reason the city or village was situated in that location to begin with. However, it’s not enough to simply be near resources – gold still has to be mined – and we need to put those resources to work. Indeed, Canada is a country rich in resources; we have diamonds, gold, lumber, oil, gas and everything in-between. Canada’s strong economy is fuelled in part by this abundance of resources.

However, over the last hundred years (or so) new types of resources have emerged – communities, technologies, groups, industries and people. Many of these resources don’t take the familiar form of something tangible and malleable, and for that reason can go unnoticed for a long time.

One Hub to Rule Them All

When we talk about finance, we invariably talk about New York City. We talk about Wall Street, the 1%, and a concentration of capital, services, people and technology that makes NYC one of the financial industry capitals (if not THE capital). It is the density of entrepreneurs, emerging companies and people that are one of NYC’s greatest resources. Consider the effects on start-ups built to service financial companies – this industry has supported, nurtured and allowed some of the biggest financial technology companies in the world to grow and flourish in its ecosystem.

Bloomberg LP, with estimated yearly top line revenues of $10 billion, was started in New York. The city is host to a number of trading venues, back office technology providers, data aggregators and other interesting and innovative companies built on the resource of this community concentration. They even have an accelerator dedicated solely to financial services technology (appropriately named the FinTech Innovation Lab).

In New York, FinTech flourishes by connecting the community and building an ecosystem that leverage existing resources. Financial institutions play a role in supporting the new ecosystem by acting as customers, acquirers of startups and hiring talent that develops in each of the early stage companies. Demonstrated by the support, both financial and at very high management levels, that FinTech Innovation Lab receives. It’s no wonder a large portion of all leading financial technology, especially institutional tech, is coming out of New York.

Where is FinTech in Toronto?

Toronto has a booming financial industry. Our banks are in excellent shape. The combined market capitalization of Canada’s six leading banks is more than $323 billion. And with that kind of market capitalization comes new problems, new opportunities and potentially new tech. The difficulty lies in the regulation, legislation, risk standards and software/hardware requirements. This poses challenges for developers and entrepreneurs in selling to financial services firms. It doesn’t matter if the solution is aimed at the retail (bank branches or individuals), corporate (the mother ship) or institutional (sales & trading, investment banking). Selling to financial institutions is not an easy process. It requires assistance in process, guidance (legal, technical, financial), support, experience and a depth of knowledge that is greater than just hustling.

It is because of the complexity in the go-to-market and technical requirements, why very little innovation happens in financial services technology (aka fintech). It’s like the shadow cast on a wall – it looks menacing, like a panther or some dangerous beast – but in reality it’s only a little kitten. If you understand how to deal with the issues, and properly approach them, they aren’t all that scary (and a little help never hurts).

But, with little innovation comes massive opportunity – there is so much opportunity in financial technology that it’s hard to decide where to begin.
What Toronto needs is to start taking advantage of these resources – a thriving financial services industry. It’s already happening in pockets around the city, but it’s about time we started getting aligned to make a consolidated push together. I have had the opportunity of meeting with/hearing about/noticing some interesting financial tech companies in the city, who include:

  • D+H (payment/lending solutions)
  • Market IQ (data/social sentiment analysis)
  • FINMAVEN (data/social sentiment analysis)
  • eDYNAMICS (salesforce integration and consulting/cloud computing)
  • OANDA (FX trading platform)
  • Quantify Labs (institutional content/CRM platform)

Who else should be on this list? Who are the startups, developers, investors and entrepreneurs that are interested in FinTech in Toronto? If the community is the framework, let’s get the community going. Let’s share stories and guidance on selling, building and launching financial technology. Let’s offer insight and experience into usage and problems. Let’s discuss. Let’s take advantage of one of this city’s most abundant resources. That’s what we want to do, and if you have any interest in financial technology, I would encourage you to sign up for the Toronto Fintech Meetup. We’re having our first ever meeting next Wednesday, April 10th, at the MaRS Commons, just a ‘get to know you’ – no speakers, no schedule, just an introduction to the financial tech community in Toronto.

When I started in finance ask a desk analyst, I was repeatedly told – “it’s too bad, the low hanging fruit is gone” – well I took a walk out of that orchard, down the lane, and stumbled into another called Financial Technology. The fruit just isn’t low hanging, it’s on the ground – we just need a few more people to come help us pick it up.


Growing successful companies

I am sick of hearing there is no money for #startups in Canada. BULLSHIT! It might be there is no money for YOUR startup in Canada.
David Crow

Mark Evans (LinkedIn) wrote a blog post about my tweet. The blog post captures much of my sentiment and frustration around entrepreneurs. I commented about entrepreneurs learning about how to build a successful, high growth emerging technology companies. And there are lots of ways to learn what is considered a successful company. And a great way to learn is to learn from others that have been in the trenches. Debbie Landa (LinkedIn) and her team at Dealmaker Media have done most of the hard work for you.


They have brought together a great event. Attending the event won’t bring you investment. It won’t make you a successful company. But it might increase the odds. They are bringing together an amazing set of entrepreneurs. And they are bringing them to Toronto and Montreal to share their experiences, stories about what worked and didn’t work for their companies.

Local Events Matter

You can and should get your ass on plane and head to New York City and San Francisco to attend events. But you don’t always have to. There are advantages to attending these events locally.

  1. Local connections can help you see The First Rule of Real Estate - you can find and connect with local talent. Whether that is for funding, moral support, hiring, etc. There will be people you do not know yet. Easy way to find them out.
  2. Travel costs are less for regional travel. If you live in Ottawa or Montreal or Halifax, you can make it to Toronto or Montreal by plane, train or automobile for a lot less than travelling elsewhere.
  3. Travel time is lessened. You can spend a day.

This all assumes that the event is providing amazing content that you would travel to consume.

World Class Content

The content that Debbie and team have assembled is unbelievable. If you don’t know who these people are, my advice is take a little bit of time and use the GOOG. These are entrepreneurs that have seen the ups and downs, the ins and outs of successful businesses.

Every single person is worthy of a keynote presentation at a larger conference. This is not a vanity presentation. They are on stage sharing information about their specific expertises in building successful businesses. It’s not Mark Organ talking about random things, which is fun, but Mark Organ talking about leveraging disruptive technology in fund raising. Holy crap! You want to learn how Mark used AngelList, LinkedIn and other tools to raise 2 of the most impressive rounds of capital in Canada…quickly.

Every single person speaking, every one, will be providing expertise about what they did to build a successful company.  Here is the list of presenters in Toronto:

You want more details, check out my first post. Do your homework. But this is an amazing opportunity.  The lineup is different in Montreal. It includes 2 of my close friends, but they are 2 of the best people in helping startups become successful. Mark MacLeod and Alistair Croll . Unbelievably kind and intelligent people, who beyond that know WTF it is startups need to do to become successful. They like the others are the best of the best.

Our Commitment to Successful Companies

There are initiatives like Startup Visa Canada and the Upside Foundation that we strongly support. And we’re committed to helping provide education to entrepreneurs to help them to build successful companies.

We’ve committed to provide a limited number of $100 discounts. I am not going to tell you how many. If you are building a successful startup, and you want to hear the tactics and advice of other entrepreneurs that have been massively successful in building their startups, sign up now and save $100 before the discount expires.

  • GrowTalks Montreal – February 19, 2013Register use promo code: startupnorth
  • GrowTalks Toronto – February 21, 2013Register use promo code: startupnorth


Firing People

I hate firing people. It’s the worst part of my job. Even after all these years I still spend days or even weeks agonizing over a decision to let someone go. I feel absurd complaining about this, given that of course it’s a hundred times worse for the person being fired than it is for me. Still, I hate firing people.

My first firing at Top Hat was our VP Sales. He was employee number two, he joined right after we raised our angel round. In retrospect it was doomed from the start, and it was entirely my fault. I had no idea what I was doing when it came to building a sales organization and brought him into a role that didn’t make sense (read about the lessons learned in building a sales team). It took me 6 months before I finally pulled the trigger. In the end, it was undoubtedly the right decision and set the company back on track. But at the time it was an extremely tough call. It was admitting failure – to myself and to our investors – that this first major hire was a mistake. I felt  ashamed about it for months and kept convincing and re-convincing myself that we could still make it work.

As a general rule once you’ve lost faith in an employee, things rarely get better. You can sometimes fix a skill-level problem by giving someone time to grow, but you can never fix a personality problem. If you’ve identified that someone isn’t a fit you need to move on it quickly and decisively. The longer you wait the worse it will be for both parties.

Firing is an essential part of running a successful company.

In a narrow way, it’s actually more important than hiring. You could, in theory, use a shit-against-the-wall style hiring strategy and as long as you filter out the bad apples quickly enough you’ll be able to build up a functional team over time. Of course that’s probably not the best approach.

The reality is that even the most effective interviewers are rarely more than 70% or 80% accurate. The average interviewer is quite a bit worse than that and isn’t much better than chance – often even worse, because the naive approach just selects people who are great in interviews, which disproportionately selects for bullshitters. However, even if you’re some kind of super-human talent screening machine with a 95% success rate, that 5% will accumulate and degrade the culture until you’re surrounded by bozos.

The Best Firing Process is a Better Hiring Process

Of course the best “firing process” is not to have to fire people, which can only be done through effective hiring. That being said, not having an effective firing process is like not having an immune system – the first cold will eventually kill you.

It’s fairly common knowledge these days that A players only like to work with other A players. A slightly more subtle observation is that someone’s status as an A player isn’t fixed. Bringing a weak player onto a team has a tendency to poison the culture and downgrade the rest of the team (especially if that weak player has a shitty attitude.) This bad apple syndrome has been observed to happen fairly reliably in studies on organizational dynamics.

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The Bad Apple Syndrome

We’ve experience this at Top Hat a couple of times. One of the most instructive was with our inside sales team. Early on when we were in a pinch to fill the team we lowered our standards and brought on a few people that we should have passed on. The results were disastrous. The quality of the team degraded and eventually hurt not only the inside team but also other parts of the company that came into contact with it. It took nearly a year of solid effort to rebuild the team. For a time it seemed hopeless. No matter what changes we put in place, no matter how much talent we threw at the team, the cancer of negativity and poor morale just wouldn’t go away. The most profound mistake we made in the process of trying to fix the team was to keep those who were performing well but had a negative attitude.

There was a pattern we observed a few times: we’d put a new person into the team, their performance would be great and they’d be super enthusiastic. Then like clockwork after a week or two their numbers would slowly drop, and they’d become engrossed in the culture of negativity and gossip. It was only after the cleared out the ringleaders who were perpetuating the negativity (who happened to have decent performance numbers!) and put in strong positive management that things finally began to change. The most amazing thing is that many of the people who were B or even C players when the team was dominated by negativity shot up to solid A player status. The overall output of the team per person went up by nearly 300%. In addition it seems as though life was trying to setup a lab experiment for us to prove just how much things had improved – we had a person who had left the company a few months prior re-join the team. His feedback was that he was blow away, he couldn’t believe it was the same team.

Lessons Learned

The first lesson we learned was that no matter how strapped for manpower you are, no matter how much it seems like the world will end if you don’t fill a position, compromising on the quality of talent will surely be more damaging. Second, we learned that in fixing a damaged team the key is to identify the cultural sources of the underlying problem and focus on those. Finally, we learned to use a divide and conquer approach – we would pull all the top talent into a separate team while rehabilitating the broken remaining team separately – it really helped prevent the “negativity cancer” from spreading while we were fixing things. These are simple things in retrospect, but it took a while to pull it off.

One of the most revealing questions I tend to ask when interviewing potential managers is whether they’ve ever had to make the decision to fire someone. The answer and subsequent discussion usually tells you two things: first, it tells you if the person has ever had to deal with the most difficult problems in management, second it tells you if they know how to handle those problems through the process they followed. Assuming the person has ever had to hire and manage a team of a decent size for any length of time, it’s almost certain they’ve made hiring mistakes, and their answer tells you that they know how to detect and correct these mistakes. If the person simply walked into a mature team, or has had HR handle all the hiring/firing decisions for them, then they’ve been living on easy street.

The process of firing someone is always somewhat unique to each situation. That being said there are some basic principles that you should always follow:

  1. Give people plenty of notice and regular feedback. Give people several chances to improve. The actual firing should never be a surprise – if it is then you almost certainly did something wrong in setting expectations. Depending on the role the whole process should take 1-2 months (longer for senior roles.)
  2. Try to be generous with severance and leave the person in a good spot to find their next employment. I know it’s not always possible in a startup, but do what you can. It’s the decent thing to do.
  3. Take time to reassure the rest of the team and explain (with discretion) the process that was followed and why the decision was made. Letting someone go is always a huge morale hit (even if the person wasn’t well liked, it still scares people.) You need to make people understand that their job is not in danger.

Firing someone is always a brutal experience. Anyone who says otherwise is either lying or is a psychopath. That being said, it’s unfortunately a necessary evil and understanding when and why it needs to be done is essential to the success of any business.