Mid-sized cities are the perfect places to build a startup

What do Verafin, Radian6, Kinduct, Coconut Software, Vendasta, AbeBooks, GranDuke Geomatics and New Horizon Interactive all have in common?

They are all very successful Canadian technology companies that emerged in mid-sized cities, which for the purposes of this article are defined as Canadian census metropolitan areas with anywhere from 50,000 to 500,000 residents.

More than 80 per cent of Canadians live in urban areas, with close to one in threeCanadians residing in Montreal, Toronto and Vancouver. There is a tremendous amount of startup activity taking place in these three large ecosystems. With all of this activity, technology entrepreneurs have access to deep talent pools, diverse investment-growth capital, and global transportation hubs.

Nevertheless, founding a technology business in a mid-sized city is increasingly an attractive option for entrepreneurs. Compared with the largest urban centres, mid-sized cities generally have a lower cost of living and doing business. For instance, according to recent census data, the average monthly rent of a one-bedroom apartment is $2,020 in Toronto, whereas it is $900 in Halifax, $890 in London, $800 in St. John’s, and $750 in Saskatoon. As the cost of living increases, wages and commercial office rent rises, which puts pressure on a company’s profitability and overhead.

For entrepreneurs who have raised investment capital, building a business in a mid-sized city often means a lower “burn rate,” which is the level at which an enterprise spends money in excess of income. A lower burn rate often corresponds with higher capital efficiency, meaning that entrepreneurs need to raise less capital to grow their businesses and can retain more ownership of their companies.

Creating a business in a mid-sized city provides not only savings on wages, but also the ability to better retain talent in the long run. With the soaring cost of living in large urban centres, more and more millennials are flocking to mid-sized cities. As Patrick Sisson writes in Curbed, a website about homes and communities, millennials increasingly see mid-sized cities “not just as places to find a lower cost of living, easier commute, and closer connections with family, but also a more approachable, neighbourhood-oriented version of the urban lifestyle that sent many to the larger cities in the first place.”

Continue reading “Mid-sized cities are the perfect places to build a startup”

What’s holding Canada’s tech companies back? Surprisingly, it’s not a lack of technical talent

In television shows such as Silicon Valley, fast-growing technology companies are depicted as employing predominantly software engineers. The reality of most companies is quite different, as these types of firms often have more business than just technical roles.

Consequently, many fast growing firms – often referred to as scale-ups – face more significant challenges recruiting for business people in areas such as sales, marketing and human resources than for engineering positions.

Training and developing more business/management talent adept at building scale-ups is paramount to catalyzing Canada’s economic potential.

WHAT ARE SCALE-UPS AND WHY DO THEY MATTER?

According to the Organization for Economic Co-operation and Development (OECD), scale-ups are defined as “all enterprises with average annualized growth greater than 20 per cent per annum, over a three-year period, and with 10 or more employees at the beginning of the observation period.”

These companies account for less than 5 per cent of all Canadian firms, but create more than 50 per cent of all new jobs. Catalyzing more scale-ups is essential to enhancing Canadian prosperity.

While scale-ups produce half of new Canadian jobs, Canada needs to foster more high-growth firms. According to the Impact Centre at the University of Toronto, Canada “dramatically” underperforms the United States in scaling private companies, although we do perform well when compared with European countries.

If Canada catches up with the United States in producing the same number of scale-ups per capita, there will be significant positive outcomes for Canadian prosperity. Consequently, it is very important for Canada’s future that there is a better understanding of why there are not more Canadian scale-ups.

Continue reading “What’s holding Canada’s tech companies back? Surprisingly, it’s not a lack of technical talent”

Canada shouldn’t aspire to be the new Silicon Valley

*Please note this piece appeared originally in The Globe and Mail.  Here is the link.

When you think of startups, Silicon Valley likely comes to mind. The birthplace of Apple, Google and thousands of other technology companies is often presented as the global pinnacle of innovation.

As a consequence of this branding, Canada’s respective technology ecosystems are often referred to as “Silicon Valley North.” A Google search of the term generates millions of entries, including scores of articles from major news outlets using the phrase.

One does not have to go very far back to find a Canadian publication prominently making the comparison with our American neighbours. As recently as September, 2017, Toronto Life published on their magazine cover that Toronto is “the new Silicon Valley.”

There is much to admire about Silicon Valley and there are reasons why the region has spawned so many of the world’s leading technology companies. The area is phenomenally successful at spurring innovation and is assessed as the top performing startup ecosystem in the world, according to Startup Genome.

Nevertheless, while I am an avid proponent of building a vibrant knowledge economy in Canada and admire aspects of Silicon Valley, I believe it is problematic for Canadians to attempt to replicate the region’s model.

Continue reading “Canada shouldn’t aspire to be the new Silicon Valley”

It’s human skills – not technical skills – that we need the most in today’s work force

*Please note this Op-ed initially appeared in The Globe and Mail

We are living in a fourth industrial revolution – millions of jobs in sectors as diverse as transportation, manufacturing, and retail have the potential of being automated. A recent report by the Brookfield Institute for Innovation + Entrepreneurship indicated that nearly 42 per cent of jobs are at risk.

In the wake of these changes, the skills that Canadians require to have successful careers are rapidly changing, and Canadian workers will need to adapt to stay ahead of the curve. Increasingly, attributes such as critical thinking, communication and emotional intelligence, all of which are often described as soft skills, are critical for career success.

Consequently, Canadians need to focus on developing not just technical skills (coding, engineering, data science, and others), but also essential soft – or what I will refer to later as human – skills.

What exactly are ‘soft skills?’

Unfortunately, the term soft skills is increasingly a buzzword and can often mean quite different things to different people.

According to the Oxford English Dictionary, soft skills are “personal attributes that enable someone to interact effectively and harmoniously with other people.” What is frustrating about applying the adjective soft to these kind of attributes is that it implies that they are unimportant, and a “nice to have” rather than a “need to have.”

What is a better name for ‘soft skills?’

In place of the term soft skills, I prefer Seth Godin’s phrase human skills, as it provides an appropriately broad umbrella definition for describing a wide subset of characteristics relevant to working with others, thinking critically and being self-aware.

As part of this classification, Mr. Godin breaks human skills into five categories, which include “self-control, productivity, wisdom, perception, and influence.” These categories encompass our ability to interact collaboratively with others, as well to think strategically and regulate emotions.

Why are human skills becoming even more important?

Gone are the days where many workers perform the same repetitive task over and over. In an age of automation, the jobs that will remain will more often than not require critical thinking and collaboration skills. Technology can automate repetitive tasks, but it is much harder for artificial intelligence to compete against humans in roles that require social finesse and emotional intelligence, such as selling and managing people.

In 2016, the World Economic Forum published an extensive report called The Future of Jobs. One of the report’s main findings is that “social skills – such as persuasion, emotional intelligence and teaching others – will be in higher demand across industries.”

According to a survey of major employers by the Business Council of Canada, Canadian firms do not face a “comprehensive skills shortage,” although there are some gaps in specific technical areas. Instead, the survey indicates that hiring managers identify soft skills as “most in-demand.”

To succeed in the 21st century, Canadians have to marry high-calibre technical and human proficiencies. For instance, the best coders need to not just be excellent at software programming, they also need to be able to work together in teams. If an employee is toxic to a workplace culture, then that individual will likely have a far more negative than positive impact, regardless of that individual’s intelligence or technical proficiency.

Therefore, while technical abilities are important to thriving in a 21st-century economy, there needs to also be a national focus on developing essential human skills in all Canadians.

How do we develop a Canadian work force that has both the human skills and the technical skills needed to thrive in a world that is rapidly changing?

More academic institutions should consider incorporating course work relevant to the development of human skills, such as emotional intelligence and public speaking. This should extend across all disciplines, including the humanities, business, and STEM (science, technology, engineering, and math). More emphasis should be placed on supporting work-integrated learning, which provides students with real-world learning opportunities, allowing Canadians to gain a better understanding of themselves as well as others.

In my role at Venture for Canada, an organization that recruits and trains Canadian youth to work at Canadian startups, we see firsthand the transformative impact that real-world work experience has on developing essential skills among young Canadians.

Understanding people, including ourselves, is one of the most challenging aspects of life. As our world becomes even more complex and the structure of work evolves significantly, Canadians must focus more than ever on sharpening these human talents.

The sooner we embrace uniting human skills with the technical, the sooner all Canadians will be empowered to prosper in our rapidly changing 21st-century economy.

Why liberal arts degrees are more valuable than you might think

*Please note this Op-ed appeared in The Globe and Mail.

What are you going to do with your humanities degree? This is a question that almost anyone who has studied the humanities faces at some point from a skeptical relative or friend.

The belief that humanities graduates, which can include those who studied philosophy, literature, religion, art, music, history and language, bring little or no value to the work force is unfortunately an all too common narrative in our society.

With a surge in demand for technical graduates, it is easy to see why one would question the value of a humanities degree. STEM (science, technology, engineering, and math) graduates bring vital technical skills to Canadian startups, which are in short supply. At Venture for Canada, we have seen this demand first-hand and as a result have gone out of our way to recruit STEM talent for Canadian startups.

Nevertheless, when building a team, it is important that entrepreneurs hire individuals from all academic backgrounds, which means seeking out and hiring more humanities graduates as well, recognizing the unique skill-sets and experiences these individuals can bring.

Every academic discipline equips individuals with valuable tools and perspectives. Part of building a diverse workplace is ensuring there is a diversity of academic backgrounds. As a consequence of different life experiences and training, a chemical engineer is likely to see an issue differently than an art history graduate. The best, plans, strategies, and ideas are hashed out through bringing many unique perspectives to the table.

This has been backed up by countless studies, which have proven that companies that foster diversity are more successful than those that don’t. As a recent Harvard Business Review article argues, “diversity unlocks innovation by creating an environment where ‘outside the box’ ideas are heard.” Companies where everyone thinks similarly are less likely to innovate and more likely to embrace tunnel vision and group think.

Making a similar point, Steve Jobs said that “it’s in Apple’s DNA that technology alone is not enough – that it’s technology married with liberal arts, married with the humanities, that yields us the result that makes our hearts sing.” Jobs also commented that “creativity is just connecting things” and “the broader one’s understanding of the human experience, the better design [users] will have.” Teams with minimal academic diversity are not as easily able to connect seemingly unrelated experiences or concepts, because their collective backgrounds are less diverse.

In the same vein, Jeff Bezos, CEO/founder of Amazon, is a bibliophile who requires senior executives to write six-page memos, which are read by attendees at the beginning of meetings. In a Fortune profile, Bezos says “there is no way to write a six-page, narratively structured memo and not have clear thinking.”

Writing a 40-page paper on Hamlet may seem like a waste of time if one is planning on working in business. However, the exercise of writing that paper is as much or more about sharpening one’s communication and logic skills as it is learning about Shakespeare.

In a 100-person software company, as many as 40 of the employees will likely work in sales alone. In roles such as marketing and sales, the ability to communicate effectively is paramount, which means studying the humanities is a great training to potentially excel in these fields.

Studying the humanities also equips one with skills useful for inter-cultural understanding and communication. Through studying and reading about the history, religion, culture, and philosophy of other countries, an individual is able to develop a heightened understanding of how different societies function, which can help in everything from small-talk to closing international sales deals.

In addition, numerous studies have demonstrated how reading fiction develops empathy by forcing readers to put themselves in others’ shoes. In a world where inter-personal skills are ever important, the humanities help to develop core skills essential to most careers.

These findings have also been backed up by my experience leading Venture for Canada, where we have seen the substantial number of humanities graduates, who we recruit, train, and support in the transition to working in startups, thrive in their roles.

There is no better time than today for small businesses to hire humanities graduates, who are a considerably untapped area of the work force.

Next time you see on a résumé someone has studied art history or political science – don’t rule the person out – he or she could be your next great hire.

How I Use Twitter

It seems like fewer and fewer people I know are regularly using Twitter.  When I was a student at Georgetown, many of my friends were regular Twitter users, sending out several tweets a day.  There are now very few people who I know socially that regularly use Twitter.  What’s changed?

Twitter seems to becoming more of a news service, and less about sharing personal updates.  One of the knocks against Twitter has always been about how some users have had the tendency to share inane updates.  This was particularly severe during the FourSquare era — when you would see countless random check-ins posted to Twitter.

Another frustrating component of Twitter has been that the timeline is simply impossible to keep up with.  I follow nearly 900 users, and there are simply too many Tweets being sent out over a day for me to keep up with my newsfeed.  Perhaps this is my problem because I simply follow too many people — but I suspect this is a challenge that other Twitter users also face.

I’ve found a solution to getting the best out of Twitter, which works well for me.  Rather than checking my newsfeed, I regularly check the individual Twitter feeds of select users who regularly tweet out information that relates to my interest.  The users who I regularly check on could be described as “power users” — individuals who tweet 10-100 times per day.  A decent percentage of these users Tweets are retweets (otherwise how could they have time to send out that many Tweets in one day).

One person who I in particular enjoy to check on is Marc Andressen.  He tweets incredibly often, and as many as 100 times per day.  Probably two thirds of his tweets are retweets, and he regularly shares content I find extremely interesting.  To go through only one day of his tweet’s can sometimes take me up to 20 minutes.  There are several other Twitter users who I like to regularly check out — they include Benedict Evans, Sam Altman, Chantal Hébert, and Andrew Coyne.

Twitter has many different uses for many different people.  It can be a tool for staying connected to others, for companies to market their content, for disseminating breaking news, and a thousand other things.  But for me, Twitter is a great platform to see what likeminded people who I admire are thinking and reading.  While Twitter’s interface can be clunky, I’ve found moving from checking my newsfeed to checking the profiles of certain prolific Twitter users has significantly increased the personal utility Twitter holds for me as a tool.

The Case for West Wing Idealism

Over the past few weeks I’ve been working my way through the seasons of The West Wing. I was in middle school when The West Wing was last on the air, and after hearing so much about the show; I thought it was time to take a look.

What’s so striking about The West Wing is how different it is to the current American TV shows that portray the presidency, such as VEEP, Scandal, and House of Cards.  All of these shows center on characters who are either completely incompetent, incredibly unethical, or a little bit of both.

west wing

In VEEP, Selina Meyer is a target of derision – and much of the show focuses on her incredible self-obsession, and series of bumbling decisions. Meanwhile, Frank Underwood of House of Cards is incredibly calculating, and will do anything to win power.

By contrast, the fictional president in The West Wing, Jed Bartlett, has a PhD from LSE, won the Nobel Prize in Economics, and was a successful Governor of New Hampshire. More than just these accomplishments, he is also incredibly well read, and has a seemingly encyclopedic knowledge of almost everything.

Continue reading “The Case for West Wing Idealism”

Lessons from The Life of John Rockefeller Sr.

Until a few weeks ago, my knowledge of the Rockefeller family extended only to a general awareness of their philanthropy, and immense wealth.

Little did I know of the family’s extensive business dealings, the history of Standard Oil, and the origins of John Rockefeller Senior.

Over the winter holidays, I had the pleasure to read Ron Chernow’s biography of John Rockefeller Senior, titled Titan. It’s a very well-written book, which was named as one of the Top 10 Books of The Year by The New York Times.

Rockefeller is a remarkable subject to profile.  Born in 1839, Rockefeller rose from humble beginnings to become the richest man in the United States, and then the world. He built Standard Oil into one of the first American multinational corporations, which had a presence around the world, as well as virtual monopoly on the American domestic oil market for decades.

One of the most interesting components of Rockefeller’s biography is the background on his father, “Bill” Rockefeller, who was a con-artist that travelled around the United States for decades, and towards the end of his life became a so-called “natural healer.” Midway through his life, Bill became a bigamist, taking up a second wife, and creating a new name for himself in Iowa and Illinois.

irocker001p1

All of this contrasts with the life of John Rockefeller Sr., who was a lifetime non-drinker, and devout Baptist, who went to church multiple times a week.

Continue reading “Lessons from The Life of John Rockefeller Sr.”

It’s time to remove the stigma from sales

I love sales. It’s one of the things that I spend most of my time doing, be it talking with partner startups, fellow applicants, or donors. Yet while I write this now, I feel uncomfortable. I think of all the negative images of smarmy used car salesman, and how being a salesperson is a career choice of last resort.

We unfortunately live in a culture where being a salesperson is not upheld as an honorable profession. Our best and brightest pursue careers that are framed as being “analytical,” such as consulting, law, and investment banking. The irony being that to truly succeed in all those careers — and in any career for that matter — requires being good at sales. It’s not the lawyers that labor away in the backrooms all day that make partner — but those that maintain relationships with clients — and are even more importantly able to attract new business to the firm.

In the end, sales is just the ability to convince others to buy into a vision or idea. It’s the ability to motivate others to unite behind a vision. Great companies and organizations are built by thousands of people working together — meaning the ability to sell and hence get the right people on board — is crucial to the development of any organization.

Then why is sales viewed in a negative light? I think it partly has to do with the fact that when people think of a salesperson — they think of someone who is trying to sell a product that will not actually benefit the consumer. While that is sometimes the case, it’s also important to realize that sales is at its best when mutual value is being delivered to all parties involved.

In the end, sales is about empowering action. If we want more great builders, then it comes down to teaching the skills relevant to motivating others and inspiring confidence — in essence sales.

That’s why we need to start teaching sales in schools, and encouraging more of our best and brightest to learn these skills. Teaching to sell is all about experiential learning — the more you practice the better you get at it. It’s also a mixture of knowing about public speaking, human psychology, and the actual product/idea that you are selling.

If someone is launching a business, they have to be able to inspire confidence in customers, investors, and potential employees. Virtually every conversation is in some ways a “sales” experience. If we had more effective salespeople, we would have more successful businesses, and organizations springing up across the country.

Teaching these skills is at the core of teaching entrepreneurship. Yes, coding is important, as is product development, but there are plenty of great products that flounder because of unconvincing founders. In particular, Canada has a reputation for being great at producing research, but ineffective at commercializing and selling it.

It’s time that we remove the stigma surrounding “sales” as a career path. We need a paradigm shift, where sales is recognized as simply the ability to build relationships with other people, and motivate others to unite behind a vision.

Being good at sales is at the core of getting stuff done. If we want more builders, doers, and strivers, we need more great salespeople.

The Importance of The Little Things

Every week I visit Aroma Café a few times. The place has a great vibe, and the food isn’t too bad either.

The other day while I was waiting to order my food, I realized that what I was looking forward to as much as my sandwich was the small complimentary chocolate that comes with it.

Chocolate

Thinking about it, the free chocolate is one of the first things I think of whenever I think of Aroma Café. While it is a small fraction of the size of what I usually order, it’s something I disproportionately look forward to.

Why is that?

  • It’s free (kind of). As the saying goes, nothing in life is free. The chocolate may be complimentary, in the sense that I did not order it off the menu; it’s not in the sense that you only get it by ordering something. However, in my mind I always associate it as free — and in a strange way that makes it even better.
  • It’s a nice touch you don’t get at most other coffee places. I haven’t been at a similar place, which gives free chocolates to their customers, as part of every purchase. It’s a little thing that immediately distinguishes Aroma from its competitors.
  • It’s chocolate. Chocolate is one of the few things, which almost everyone enjoys eating.  There are few things that would be better to give as a small complimentary snack to customers.

There are thousands of coffee shops out there. In a market where it can be hard to stand out, these little things matter. I would bet that giving these small complimentary chocolates is well worth it for Aroma – and that in the end it drives far more revenue than the relatively minimal cost.

The lesson in short: the little things matter. Always think about how to distinguish yourself from your competition. Sometimes it’s the smallest details, which can drive the most intense customer loyalty.