Recently, AceTech Ontario sponsor KPMG in Canada partnered with the C100 Association to compile a research report that dives into the minds of several Canadian technology company founders to gain their insights on the Canadian ecosystem and the biggest challenges they are facing with their companies. This report, Entrepreneur Rising, surveyed a select group of 52 Canadian entrepreneurs to discuss their experience, their tips and what keeps them up at night. In this blog, we will provide an overview of some of the items discussed in this research report.
Many of us have heard Toronto referred to as “Silicon Valley North”. While we may not yet have the opportunities that Silicon Valley does, several Canadian entrepreneurs believe that Canada’s technology ecosystem has a lot to offer business owners. In fact, 86% of founders surveyed agree that the Canadian growth company/innovation ecosystem has improved significantly over the last 5 years.
Not only have we seen a shift in Canada’s ecosystem, but we have also seen a shift in the Canadian entrepreneur. “What we are seeing is the emergence of a new class of serial entrepreneurs; they know how to bring a great idea to market and they are using those skills and resources to build more companies,” notes Terry Doyle, Co-Chair of the C100. There has also been a belief in the past that Canadian entrepreneurs are willing to sell their companies prematurely. However, Entrepreneur Rising reports that almost all entrepreneurs plan to grow their company with a long-term view to be the best in the world. David Wilson, an independent board advisor, notes that in cases where founders are looking for an exit plan, it is due to having too much of their own capital wrapped up in the company. What is the reason behind this new class of entrepreneur? 48% said that they saw a need in the market that was not being solved. Vince Mifsud, CEO of ScribbleLive and AceTech Ontario CEO member notes: “I’ve had the opportunity to work with some very successful entrepreneurs and business leaders and what I’ve found is that they all have a tremendous attention to detail. I think sometimes people think that when they delegate a job they don’t need to think about it anymore – …but the really successful Canadian entrepreneurs are the ones that are on top of their business in every way”.
What are the challenges that these entrepreneurs are facing? Almost a third of respondents have said that one the biggest challenges their company is going to be tackling over the next two years is the shortage of talent. At AceTech events, we have often heard that many of our CEO members struggle to hire the right sales professionals. While this rings true for many founders surveyed, 52% have found that the most difficult talent to recruit for is within their key management team (C-level executives). “The priority has to be on recruiting, retaining and inspiring great people because you can always scale up a finance system or procurement model but it’s much harder to scale up culture, to keep your ‘A’ players and motivate them and align them to the vision of the company”, says Razor Suleman, founder of Achievers and Partner at Alignvest. Many others agreed that a cultural fit is more important than having someone on the team who checks all the “job requirement boxes”. In fact, 87% of respondents agreed that cultural fit is the most important consideration when hiring the right talent.
Another challenge that many of these entrepreneurs face is fundraising. 62% of respondents experience struggles when attempting to access the right sources of capital, while 50% feel they do not have access to enough capital. However, Chris Chapman, National Leader, Growth Companies (TMT) at KPMG in Canada, believes that there is enough capital if you have the right metrics and are at the right stage, “the problem for Canadian start-ups is knowing what those metrics are and trying to ensure they are continuously aligning their business plan and objectives against those metrics”. Many others share Chris’ sentiment and believe that if you are having trouble raising capital, that may be a sign that you need to make some changes to your business plan or operating model in order to attract investors.
Lastly, many people have heard the stereotype that if you are going to be a successful technology company, do you need to be in Silicon Valley; however, only 6% of respondents agree with this. So as a Canadian founder, what should your presence in SV be, if any? 51% of respondents said that their ideal strategy is to be based in Canada while maintaining a SV presence through a local office or locally-based personnel. When asked this question, Entrepreneur Rising states “85% of our respondents say that spending time in Silicon Valley has helped them change the way they think about their company”. How do Canadian entrepreneurs tap into Silicon Valley? 71% of respondents note that their involvement through a C100 program has given them access to resources and provided them avenues to formulate relationships that they could not acquire otherwise.
One founder states: “you don’t know what you don’t know. It is important for Canadian founders and CEOs to get out of the office and see how the rest of the entrepreneurial world operates. The face and perspective is just different”. This is why several founders and CEOs of technology companies have found companies like KPMG in Canada, C100 and AceTech Ontario vital to the growth of their company.
For more insight on this research, please click here for the full report.