- There is no longer an issue with a lack of funding for entrepreneurs in Canada, with a growth in the diversity of types of funding sources.
- Canadian entrepreneurs are gaining more and more local success stories to draw inspiration and confidence from as Canadian startups have started taking off globally.
- Entrepreneurs with a cross-disciplinary approach are more likely to successfully de-risk opportunities.
The Canadian entrepreneur of today has to embrace intellectual humility and curiosity, adopting multi-disciplinary approaches in order to come up with successful ideas. As Canadian entrepreneurs become more emboldened in their visions, the country will start to see more businesses bound for global success.
Can you tell us about yourself and Connected?
As CEO of Connected, what keeps me busy is growing our business, growing our people, and keeping us all focused on our goal, which is to build better products for our clients and their end-users.
What is Connected? Connected is an end-to-end product development services firm. We specialize in helping our clients discover and deliver software-powered products to the marketplace. We partner with a number of ambitious product leaders across a number of different industries, building software-powered products.
How would you describe Canada’s entrepreneurship ecosystem? What are its strengths and weaknesses?
I have seen the strengths and the weaknesses firsthand as an entrepreneur in a number of different startups that I have either helped grow or founded. One anecdote that is relevant to Connected is that in 2014, when I started Connected, many of my peers at the time believed that our mission was inherently flawed. They said the broad category that we wanted to be in—software development services—had peaked and that there was no more room to innovate. They warned that the category was becoming commoditized and moving offshore, and others warned that we would not be able to compete with the big strategy, design, and advertising firms as they would converge into our space faster than we could merge into theirs.
“In the Canadian entrepreneurship ecosystem, there is resistance to being more optimistic about new visions.”
In the Canadian entrepreneurship ecosystem, there is resistance to being more optimistic about new visions. This is emblematic of the weaknesses that exist in the Canadian entrepreneurship ecosystem. It exists everywhere but in Canada, there is a fear of competition from bigger companies in the US or a fear of taking contrarian bets on new markets. Something that entrepreneurs hear from potential investors a lot is that the total addressable market for what they are working on is not big or interesting enough.
This is a weakness because it overlooks one of the biggest strengths that Canadian entrepreneurs have, which is world-class talent. It is not just world-class in the sense that the talent here can compete with talent from around the world, but that the talent here is worldly. They have a worldly perspective and the ability to see trends and potential new markets in a way that is very rare, rich, and deep.
Inside of this weakness, there is an opportunity for entrepreneurs who have a unique insight and can bring that insight to the market by building new products and leveraging a diverse talent base. This can make a real dent in a way that other countries cannot.
With more Canadian unicorns emerging, are Canadian entrepreneurs beginning to aim higher?
Yes, absolutely. Those examples are perfect and it is impossible to ignore now. Including Shopify, we also have a number of other newly-minted unicorns. There are a number of companies that are very explicitly tackling global markets, not just trying to be the best in Canada but trying to be the best in the world. Those examples are so inspiring for the next generation of entrepreneurs and it is something that I am fortunate to have been a part of. Companies that I worked for previously, namely Xtreme Labs, were led by founders who had a more global ambition. They believed that a little Canadian company could service the best technology companies in the world and compete at a global level, and we did. Now, the new generation of employees at some of the companies you named like Shopify and FreshBooks are getting a taste of what that looks and feels like and are getting the confidence they need to do similar things in their future endeavours, so it is very exciting.
Content continues below ↓
What does the CBGF investment mean for Connected and how would you describe the availability of funding for Canadian startups and SMEs?
Lack of funding was a problem 10 years ago, but there have not been any problems with lack of funding in Canada for some time now. Globally, we are awash with capital and there is no shortage of capital that wants to go into all sorts of places.
The problem, which I experienced at Connected, is that there has historically been a lack of the right kind of capital for the right company. In Connected’s case, we were very hesitant to take venture money or traditional private equity money for the seven years that we were in existence because we are not really the kind of company that needs that kind of capital.
Connected has a very long-term view. We want to be a company that lasts for many years and grows in a way that is unique and appropriate for our business model, clients, and people. What was so refreshing about the Canadian Business Growth Fund (CBGF) team is that they have an evergreen model, meaning they are minority, long-term, and patient investors. This is unlike most traditional private equity deals where you sell control of your company and within three to five years, the private equity folks want to flip the business and sell it to someone else.
CBGF takes a very different approach. They want to be with us for the long term. They want to take a minority position in the business and provide support but not take over. It is a very exciting development that there are organizations like CBGF for companies that do not follow the typical venture model or private equity model.
Currently, there is no problem with a lack of capital for entrepreneurs. The problem is more that there has been a one-size-fits-all model for entrepreneurs, but that is starting to change and CBGF is a great example.
What goes into the ideal DNA for an entrepreneur?
Courage, risk-taking, and cross-disciplinary thinking define the entrepreneurial DNA. Of course, entrepreneurs are very diverse and it is really hard to summarize what defines our DNA across the board, but having met many successful entrepreneurs, these three qualities are top of mind for me.
I want to focus on the risk-taking element because there is a myth that entrepreneurs are inherently risky people. Entrepreneurs are actually not big on taking risks. They are obsessed with taking smart risks and it is actually their deep understanding of a market or opportunity that lets them do something that may look risky but actually is the least risky thing they can do.
This has been written about many times before but it really comes to mind for me often, especially now that Connected is seven years in. We have raised money and there is some perceived success around Connected, which leads my peers or friends to say, “Oh, that was such a risky thing to do.” I am always at odds with that because when we started Connected, we had this really deep insight about where the market was going. We knew the value of building new products and that there were big opportunities there. Doing anything else would have been risky; doing this was actually not risky.
“For entrepreneurs, courage matters a lot especially in the early days, but also in the later days when you need to continue to keep pushing,”
That is where courage comes in. We need the courage to take contrarian and risky opportunities and run with them. For entrepreneurs, courage matters a lot especially in the early days, but also in the later days when you need to continue to keep pushing instead of looking around for where the grass might be greener. Lastly is cross-disciplinary thinking. This is something we preach at Connected. Crossing silos and having diverse skill sets is a really great way to discover new opportunities and de-risk the process of bringing those ideas to market. It matters a lot for entrepreneurs. If you have the intellectual humility and curiosity to go beyond the confines of your education and look to other places to learn and other people to work with, that is a really good way to discover opportunities and de-risk taking them to market.