Oh Canada

Last fall, right around when Backtrack partnered up with TandemLaunch as an incubated investment, I ran into someone from the McGill research community where I did my Master’s work. When asked what I was up to since I graduated, I told them that I was in the early stages of starting a company; to which they replied, “Wow. You’re such an American.”

canadahatAs provocative as that statement may appear when written down, I never got the impression it was directed in a bad way. It seemed more to carry the notion of, “Huh, I didn’t realize that was allowed here.” And as I’ve been working on Backtrack over the last few months, I’ve noticed some revealing peculiarities about how Canadians outside of the startup ecosystem view company building (or, as we call it up here, ‘entrepreneurship’, a term that I dislike1).

I’m wading a bit into stereotypes here, but I think it’s pretty fair to say that as a whole, the Canadian population is a bit more cautious and measured than our cousins to the south. We don’t act rashly; we make fun of the Americans for their ‘ready, fire, aim’ mentality, and embrace ‘measure twice, cut once’ as a guiding maxim. While we do have a small, but vibrant and growing startup community (mostly in Vancouver, Toronto and Montreal) that is increasingly plugging itself into the worldwide startup ecosystem through initiatives like the C100, in my opinion Canadians tend to follow lagging, and not leading indicators of where the tech industry is headed. Furthermore, we also emphasize lagging effects, at the expense of leading causes, which result from successful startup growth.

As an illustrating example, three weeks ago I was invited to take part in a panel organized by the Canadian Council of Academies on how to help foster a ‘new economy’ in Canada. This panel was populated mostly with business leaders, university administrators and government representatives, and were charged with answering the question How well is Canada prepared to meet its future skill requirements in science, technology, engineering and mathematics (STEM)? Although I was generally impressed with the panel members’ open-mindedness, it was hard not to notice that the panel had already made up its mind before we even began that ‘Canada needs to produce more STEM graduates in order to stay competitive.’

This struck me as a very Canadian conclusion: it’s safe, it won’t ruffle too many feathers back at the office, and it will very nicely lead to a ‘Recommendations of the Panel’ report which will get endlessly peer reviewed, published as a government report, widely distributed, and never read by anyone. The problem is, in my (and the other presenters’) opinion, that’s not the right answer. There are plenty of STEM graduates here; in fact, probably a surplus as there is in the US. Screen shot 2014-04-22 at 2.50.45 PMWe don’t need to produce more STEM grads; we need more ‘startup minded people’: the kind of folks who will take risks, work for equity, and would rather build something new and own a piece of it than work for an established company with brand-name recognition.

If you look at successful startup companies that have scaled well, observe that they are full of STEM graduates, and then conclude that the way to create more startups is to produce more STEM grads, you are confusing cause and effect. It’s very tempting to do so, because your conclusion (we ought to produce more STEM grads) appears to be already validated by your observations. You’re following a lagging indicator, not a leading one. And the more that Canadian policymakers and educators seek out ‘validated evidence’ (read: lagging indicators) of what creates a successful startup, the more I fear they will neglect the true leading causes. Listen up, Canada: your biggest barrier to creating a new tech giant isn’t ‘there won’t be enough STEM graduates to staff the fully grown company’, it’s ‘the co-founders will graduate, look around and not find any startup-minded people to found a company with, and then move to California’.

Let me be clear: I appreciate the fact that we’re putting together panels like this to try and make good policy decisions. We’re definitely taking steps in the right direction. But Canada is still a country where I recently heard a BDC executive tell a group of business school students,

“The most important thing we look for in a young entrepreneur is a good credit score.” 

America beckons.

 

1. I can’t pinpoint the exact reason why, but using the terms ‘entrepreneur’ or ‘entrepreneurship’ to describe startups really bugs me. Entrepreneurship strikes me as the type of word that someone insecure would use in order to feel more legitimate and professional sounding. I also think it’s amusing (and quite telling) that McGill, my alma mater, offers a ‘certificate in entrepreneurship’ .


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