For years we have heard that Toronto is becoming the next great tech hub, AKA ‘Silicon Valley North’. Those paying attention to the industry were aware that yes, tech jobs were booming because tech companies were flocking to Toronto to hire at all levels of their organizations, but those same jobs were paying less than equivalent positions in the US.

 

The startup scene was growing and every university was hot to trot to start their own incubator to help students and alumni build the next unicorn right here at home. The near-bankrupt MARS Discovery District on University Ave. in Toronto was rejuvenated with this tech boom. Groups like TechTO became really important parts of this ecosystem as places for like-minded entrepreneurs and jobseekers to meet and join forces.

 

All of this helped Toronto become one of the fastest growing places in the world for tech hiring. Local, provincial and federal governments of successive regimes had no problem starting a new support program or a new loan program designed to help “build Canada’s tech industry”. If you weren’t a politician who was announcing some new program, you were falling way behind.

 

It all seemed so wonderful. We had Shopify. We had Lightspeed POS. Those were proof the system was working.

 

Then Alex Danco hit us with this cold dose of reality. It touched off a bit of a maelstrom as other, well-known Canadian tech people rushed to “Actually….” in the comments of his post, arguing that government support helped build Silicon Valley in the sixties and seventies. Granted, they have a point but they also miss what I think is the real key to Danco’s concerns about the Canadian startup scene:

In contrast, Canadian investors love to plan ahead for exits. You can’t blame them: they understand the value of these big liquidity events, and that we need more. They understand what we’ve been missing. It’s hard to overstate how much of the narrative around Canadian tech concerns: “we need to get more exits for the ecosystem.

This absolutely is the Canadian mindset in almost all areas of our country. Planning ahead for a nice exit. It’s this mindset that leads to repeated government support for flailing aerospace companies.

 

Being content to make an exit can build a very decent tech industry just like it can build a very decent aerospace industry but if we want to truly become Silicon Valley North we need to shoot for more. We need to be willing to risk more as investors in startups. Founders need to be comfortable asking for and keeping more of their company as they build. We need governments and universities willing to be there to help and support but without all the hang ups and red tape.

 

I think the best way to think about this is our Athlete Excellence Fund (AEF) for our Olympic athletes. We support our Olympic Athletes with funding so they can train to win. When you hear an athlete speak, they absolutely are there to win. To be the best in their sport in the world. Gone are the days of being happy to be there.

 

Changing the old mindset was exactly what I took from Alex Danco’s post. We all want Canada to become a tech powerhouse. We just need to start thinking way beyond exits and start thinking about building world class companies. Companies that want to be the “rebel army to Amazon’s web-empire”. I think you’d be surprised at how that makes every other industry stronger along the way.