Canadian Entrepreneurs — Need to Make Bigger Bets and Make Bolder Moves

As Canadians we have a naturally conservative nature. This has helped us avoid major issues, like the 2008 financial crisis, but also results in us failing to capitalize on major opportunities.

I’ve recently emerged from my protective Canadian shell that has served me well. I’ve started to make bold claims and have been encouraging others to do the same. For years I have felt that being bold would require me to give up the Canadian values I hold so dear. I will happily pay my taxes to ensure we take care of the less fortunate. I will continue to say sorry when I bump into someone at a bar. Being polite and caring are not mutually exclusive to building a successful business, and I would in fact argue these traits can serve as a differentiated asset.

My good Canadian nature does not require me to make unnecessary compromise on my desire to push myself, my team and those around me to think big, dream big, and make bold moves.

I have spent the last few months trying to understand what is causing the shortage of Canadian unicorns. On a per capita basis, we are significantly underrepresented. And with the fantastic exception of Shopify, the unicorns we are creating are stagnating. In speaking with multiple American board members of some of our other large tech companies, the executive teams there seem very content to maintain their current market share. They are falling into the typical Canadian trap of playing it safe and being content with the status quo.

On a recent visit to San Francisco, I met with some super talented Canadian CEOs. Sean Lynch, Dave McJannet, Sean Carr and Brad Milne to name a few. These guys represent a few of many Canadian success stories(Stewart Butterfield the Ceo of slack, is Canadian), who have built wildly successful and fast-growing businesses by taking their Canadian talent, and manners south of the border.

I probed these successful entrepreneurs brains to try and uncover what the benefits of relocating to San Francisco has enabled for their business, with the objective of understanding what we as Canadians can do to improve our ecosystem. Here are some of the highlights:

Information Flow

Being close to the heart of technology allows you to more quickly identify an emerging technology trend so that your business can capitalize on these shifts rather than fall victim to them. The wording is particularly important, it suggests that knowledge is not an immovable mass (density), but rather a viscous substance with a malleable flow that can be transported to any geography.

Make Bold Moves

When building a business there are many obstacles of varying sizes that we as entrepreneurs will face. We can choose to hop over them, plow through them, or decide they are insurmountable and be happy with the status quo. Sometimes plowing through them means taking on risk, or raising massive amounts of capital. When the circle around you has plowed through these obstacles before, theses obstacles aren’t viewed as risks but opportunities. In Canada we lack the experienced expertise required to turn these risks into opportunity.

Make Bigger Bets

In Canada we push our startups to monetize early. Pushing for a massively large TAM would not be a core focus of investors. In the valley it is the core focus. This type of thinking places the emphasis on the upside, making the risk of complete failure much more tenable.

Remove Market Bias

Every market adopts technology in a unique way. This is due to a variety of factors including predominant local industry(tech vs. manufacturing vs finance), political views, social/economic conditions, and demographic. Our personal view on the world highly biases our decision making and personal identities. As part of building a business its important to remove local market bias. As an example, if your objective is to discover early adopters in the US market, given a defined persona, don’t interview users in the Canadian market with a similar persona. Interview your target users. While their responses may be similar, the 5% variance could result in the difference between success and failure of your product and business.

Access to Talent

There is a popular belief that the best talent in the world lives in San Francisco. Few would refute that there is an abnormally high density of talent in San Francisco. This facilitates an ability to locate and work with like-minded individuals. However, purely disruptive conversations, like in many cities, remain concentrated. San Francisco doesn’t give you superpowers. Thought leadership ideas are simply distributed at greater velocity due to a high concentration of early adopters. This provides the false perception of a city built by thought leaders and innovators. In Canada, thanks in large part to our strong social school system, we are doing a great job creating our prorata, or above prorata share of fantastic engineers. Where we fall short is in our ability to retain them. We need to reverse this trend.

So What Can Be Done?

There are some easily actionable first steps that all entrepreneurs in Canada can independently implement to improve their potential for success.

1. When it comes to capital our Canadian entrepreneurs need to remove the notion that an imaginary line separates our nations. Raise financing from the Canadian or US VC that provides you with the best terms. In speaking with multiple VCs, the invisible line that separates our nations no longer exists when it comes to raising capital. There is no requirement to relocate your business. The benefit of building your engineering team in Canada is well understood. As Canadian VCs learn they need to compete the terms they offer will correspondingly improve.
2. In all cases, there should be US board and advisor representation, from entrepreneurs and executives that have successfully scaled in your space. This will help with both information flow, making bold moves, and making bigger bets.
3. Import Global talent into Canada. The San Francisco lifestyle is not as shiny as it once was. New graduates are demanding a more balanced lifestyle. Senior developers are looking to start families. Affordable housing, free health care schools and a 20 minute commute are compelling Canadian differentiators. An opportunity exists to both bring talent home, and new Global talent to Canada to help us raise the talent bar.
4. Listen to solid relevant(global) content. We compete at a global scale. This means you need to understand global trends and absorb information from global thought leaders. Great information is available at local meetups, but don’t limit yourself. Great online sources of content include Angel List, YC combinator, Coursera, and other thought leaders. Position yourself in the global information stream. Make decisions with full visibility, not with tunnel vision.

What More Can I Do?

We have put together a 10 minute, multiple choice survey together to help us assess the state of the Canadian ecosystem so. Please help your fellow entrepreneurs by filling this in.

There is a group of experienced entrepreneurs with hyperscale experience being assembled. These top talent individuals are the key. This is an entrepreneur issue that needs to be solved by entrepreneurs. If you know anyone interested in helping, that has achieved PMF in the last 5 years and has scaled past Series C, please ask them if they are interested in being involved ask them to connect with me on LinkedIn or email jvangaal@soullabs.com.