Canada’s startup ecosystem made impressive strides in 2015 but there’s plenty of room for improvement. Here are the things I would like to see happen in 2016.
More institutional investors: For too long, institutional investors have stayed on the sidelines. Their reluctance to get involved stems from poor historical returns from VC investments and more attractive opportunities in other asset classes. This approach, however, has to change as the Canadian startup ecosystem becomes bigger and stronger. The success of companies such as Shopify, ScribbleLive and Hootsuite makes it increasingly difficult for institutional investors to not get back in the game because healthy returns are possible.
More U.S. VCs investing in Canada: There is a major capital challenge facing Canadian startups, particularly when it comes to accessing growth capital. The Canadian VC ecosystem isn’t big enough, active enough or, frankly, bold enough to support growing demand. This is why the growing interest among U.S. VCs in Canada is an absolute necessity. It is the only way Canadian startups can step on the accelerator to power their businesses forward. With more capital, innovative Canadian startups have a better shot at becoming industry leaders, rather than slowly trundling along.
More marketing: Clearly, I’m biased in hoping that Canadian startups become more enthusiastic about marketing. While things are getting better, too many Canadian startups see marketing as an expensive or evil necessity. Sadly, they don’t look at marketing as an integral part of building a business. This needs to change because developing a good product isn’t good enough. There is too much competition for the spotlight, customers and investors. By not embracing marketing to build brand awareness and a sales funnel, Canadian startups are operating with an arm tied behind their backs. Yes, marketing takes money, commitment, and resources but it’s a powerful force if they properly.
More government support, not money: I’m not a believer in federal or provincial governments pouring money into venture capital. They shouldn’t being picking winners. Instead, the different levels of government need to encourage, support and facilitate innovation, entrepreneurship, and trade opportunities. They need to wave the flag for Canadian startups and promote the reality that Canada has one of the world’s best startup ecosystems.
More (some!) corporate VC: In the U.S., a growing number of corporations are becoming VCs. It’s a great way to make strategic investments and, as important, learn first-hand how their industries and business models are being disrupted. In Canada, corporations are scared of investing in startups or they have no interest. At best, some corporations are dipping their toes in the water by establishing low-risk partnerships that involve a minimal financial commitment. This needs to change because the economic sands are shifting. Marcus Daniels has some thought on the need for more corporate engagement with startups.
More private/public sector buying: If Canadian corporations don’t want to invest in startups, they should buy from them, a point that Kevin Lynch and Iain Klugman emphasized in a Globe & Mail editorial. There are Canadian startups developing innovative and disruptive technology in every part of the Canadian economy. If Canadian corporations want to remain competitive, innovative and market leaders, it’s a complete no-brainer to buy from Canadian startups.
More serial entrepreneurs: One of the benefits of creating a startup is it sets the stage for the next startup. The lessons, failures, and successes provide entrepreneurs with valuable insight and experience for future endeavours. As a bonus, let’s encourage successful entrepreneurs to support other entrepreneurs.
What’s on your wishlist for the Canadian startup ecosystem?
Are you a startup looking to jump-start your marketing? I helped dozens of startups to drive more awareness, leads, and sales. There are different ways we can work together – everything from messaging to strategic planning and content to get customers into and through the sales funnel.