You can’t grow a plant out of a dry cement block. You need the right combination of soil, water, sun, air and care to raise those seeds into a full-fledged garden. The same holds for a good tech company.
Ottawa needs a better ecosystem for startups if it really wants to retain the moniker of Silicon Valley North. What makes that eponymous Californian suburb so darned enticing to the tech world? In a word: funding.
What Silicon Valley has that Ottawa lacks is support by way of cash. An example: Peter Thiel, a co-founder of PayPal who flipped those earnings into running a $2 billion venture capitalist firm. Thiel also had the foresight to invest in Facebook in 2004, gaining 10 per cent of the company for a paltry $500,000.
All this to say that Silicon Valley has the venture capitalists, incubators, accelerators and otherwise the proper ecosystem to let brash and bold techies come forward with new ideas. It’s that willingness to take risks and the cash to back them up that allows Silicon Valley to keep scoring winners.
Shopify, the multi-billion dollar e-commerce success story could be the start of something big in Ottawa.
Everyone is talking about the tech giant all across Canada, and with good reason. But we won’t see more Shopifys – at least not with any regularity – unless we provide the financial backbone for these companies to grow and make mistakes.
Shopify came about through dedication and talent, surely, but confident investors were also key ingredients that helped bring them to a boiling point.
While Canada is steadily improving in these areas of funding, it’s not happening nearly fast enough. Canada will never have the draw that the US has in terms of outside investors, that’s a given, but where Canada can help is via federal and provincial funding.
Whatever this funding looks like, whether it’s more comprehensive grassroots startup grants or more targeted investments made by a board, Canada needs to find a way to support its fledgling companies so they can afford to be daring in their visions.
Money shouldn’t be a problem, even if you’re anti-taxes. Because this government spending is the sort that usually sees huge returns. Let’s go back to Thiel. If Canada had a Facebook on its hands, wouldn’t it behoove the government to invest an affordable $500,000 for 10 per cent? The returns would justify the investment many times over, our economy would benefit with jobs, capital, and startups would have the confidence to grow in Ottawa. It’s a no-brainer.
Startup funding is the life-water for a sapling tech company. Canada needs to step up to provide that capital to grow our garden.