Above: This is the second instalment in The West Block’s series The Big Idea, in which we look beyond the daily political skirmishes and engage in a broader, engaging discussion of our potential as a nation and a people.
Could Canada be the most tech savvy country in the world?
Sure.
First, though, citizens, government and the tech community need to help fill in a few pieces of the puzzle.
“We, as Canadians, need to build great companies here,” said Harley Finkelstein, chief platform officer at Shopify, an Ottawa-based company recently valued at $1 billion — Canada’s first Internet start-up to reach that milestone since the dot com crash in the early 2000s.
“We have to get a little bit louder about doing things and telling people what we’re doing, but I think that’s the ‘big idea.’”
There is a common conception in Canada that in order to become highly valued, profitable and truly remarkable, a company will inevitably have to move to the United States.
Not so fast.
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“We think (being in) Ottawa and Canada has been a competitive advantage for us,” Finkelstein said. “We think access to talent here is incredible. There’s amazing universities. There are amazing programmers, engineers and designers.”
So where are the Googles of Canada? Well, they could be coming.
Shopify’s founder and CEO, Tobi Lutke, suggests financing and time are two factors contributing to Canada’s absence in the world of tech giants, though he can see both those puzzle pieces are starting to fall into place.
WATCH: There is no need for Canadian tech companies to move south, says Harley Finkelstein, chief platform officer at the Ottawa-based e-commerce software company Shopify.
He begins by explaining it takes roughly 10 years to develop a “great” company. But Canadian organizations are getting cut off at the knees, not getting enough time to blossom.
“There very clearly has been, for about four or five years, a nuclear winter of no companies truly getting to a size that Canada can really celebrate,” he said, noting hardly any tech companies are currently listed on the TSX.
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The reason for that phenomenon is two-fold, he says: the dot-com crash and a section of the tax code, since removed, that effectively prevented American venture capitalists from investing in Canadian companies.
“There wasn’t a whole lot of money around. So out of necessity, the exit strategy for our companies was essentially to try to build a $50-million-plus (company) and then sell to Americans.”
GALLERY: Take a quick tour around Shopify’s Ottawa office, where hundreds of employees receive catered lunches and can take a break to zip down a slide or get a new high score on one of the pinball machines.
The result of that widespread exit strategy is a half decade of deprivation and drought leaving any company that would have today been coming into its own relegated to the pages of tech history, Lutke says.
But Canada may be entering a new chapter, he says.
“I think what we’re seeing now is I think very early in this wave of companies that now actually have opportunities to access their capital, who could stay here, who didn’t need to relocate.”
Of course, the drought can’t all be blamed on the government and tax codes. Tech start-ups also need role models who pay it forward, Finkelstein and Lutke say,noting that was sorely lacking when they were nurturing Shopify toward becoming the billion-dollar company it is today.
WATCH: With software companies taking over the old bricks-and-mortar style of shops, Canada needs to invest in educating programmers and designers, says Tobi Lutke, founder and CEO of Shopify, and Ottawa-based e-commerce software company.
“Any Canadian entrepreneur that has had some success owes it to future Canadian entrepreneurs to pay it forward, to help them,” Finkelstein says. “To at least introduce them to the right people. To give them contacts.”
That chain of paying it forward is being born at Shopify, where Finkelstein and Lutke host hack-a-thons and offer classes for children to learn the basics of software development. What’s crucial is the chain not break, Lutke says.
“Sometimes when you’re building a company, out of necessity there’s just a gazillion things you have to learn and figure out,” he says. And if there isn’t another company in the same city, province or even country that has accomplished what a potential up-and-comer is looking to accomplish, well, that new company may not remain Canadian for long, he says.
“That’s going to be one of those pieces of doubt that you’re going to carry around with you and it’s going to be in the back of your mind the entire time,” Lutke says. So what happens when an opportunity arises, say an American venture capitalist indicating a willingness to invest, on the condition the Canadian company moves to Silicon valley?
“Then you’re probably going to take that opportunity,” he says.
The duo’s philosophy on paying it forward folds into another missing piece of the puzzle — one Finkelstein and Lutke envision revealing a scene in which 33 per cent of the TSX is tech-based and Canadian companies are shining stars in the global tech world.
That piece is education, though not necessarily in the classic sense.
“We are now in a super interesting time of the world,” Lutke says. “Almost every company that exists out there is being replaced with a software company.”
Apple’s iTunes has all but wiped out large, physical music shops like HMV. Blockbuster was forced out of existence, succumbing to the powers of online, on-demand streaming sites like Hulu and Netflix.
READ MORE: Canada continues to lose tech talent to Silicon Valley
“So in our world, you need a lot more programmers, you need a lot more designers. We need a lot more technically literate people,” Lutke says. “The computers are the tools that are going to solve essentially all problems, and the people who can use them better will be more effective.”
Ultimately, that is what will give each country its competitive advantage in the future, he says — the groundwork governments, schools and existing companies are laying now to increase the technical literacy of citizens.
While the men behind Shopify wait for the education system to catch up, there are ways the existing tech community can fill that gap in the puzzle.
“If our students are not getting the apprenticeships they need elsewhere, we’re going to try to subsidize that ourselves and do it here .. in a very grassroots-type manner,” Finkelstein says. “We can’t change the education system, but we can create our own little mini school here at Shopify, where people can come in on weekends and learn about coding … We’re trying to do our part, but I think other cities and other companies have that same responsibility.”
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