Canada’s Quiet Ascent as an Entrepreneurial Powerhouse
By Ryan Holmes
Founder and CEO of Hootsuite
YPO member since 2013
A third floor conference room at my company headquarters in Vancouver, British Columbia, Canada, holds a glimpse of the future of Canadian entrepreneurship. A dozen young founders, some as young as 17 years old, have gathered for a fellowship program — The Next Big Thing — hosted on our campus. Over the course of eight months, these budding entrepreneurs will develop and commercialize everything from apps that leverage the sharing economy to sugar-free gummy bears to on-demand tutoring services, attracting millions in investment.
These young founders are hardly the exception to the rule. Canada has quietly grown to become a global hub for entrepreneurship. Among the Group of Seven, we’re second only to the United States in terms of the level of entrepreneurial activity, according to the “Global Entrepreneurship Monitor.” And while Canada may have a reputation as a resource-based economy, tech is increasingly driving new growth. In fact, since 2013, the technology and innovation sectors have grown faster than any other sector. Unicorn companies such as Shopify, Kik and my own firm, Hootsuite, are increasingly conceived, scaled and globalized, all from Canadian soil.
Undergirding this growth is an exceptional foundation for entrepreneurship. At both the provincial and federal levels, the government has made a significant investment in the startup culture, including a new, USD100 million VC fund in my home province. At the same time, the low Canadian dollar offers a significant headwind for entrepreneurs, keeping costs down and opening up foreign markets. In terms of talent, Canada has one of the best education systems in the world, ranking in the top 10 globally according to the Organisation for Economic Co-operation and Development. Because of its commitment to the environment and social justice, Canada also receives top marks for quality of life, and liberal immigration policies further incentivize talented newcomers. Finally, strong financial and political institutions, not to mention equitable wealth distribution, have enabled the country to weather the global recession favorably and avoid the social turmoil roiling parts of Europe and North America.
Despite these advantages, Canada has historically suffered from one major handicap when it comes to entrepreneurship: capital. Thankfully, over the last decade capital has grown increasingly accessible to entrepreneurs of all sizes. At the seed stage, companies now are able to tap funding platforms, including Kickstarter and AngelList to launch promising startups. For later-stage companies, a growing base of Canada-based VCs has been complemented by increased investment from abroad. Canada ranks as the most sought-after global destination for American VCs. Even as investors tightened their wallets in 2016, Canadian companies enjoyed record levels of funding.
Nonetheless, Canada still faces some hurdles on its path to entrepreneurial power. Although the educational system is strong, we have a deficit of STEM (science, technology, engineering and math) candidates, with only one in five graduates coming from these critical disciplines. Only a redoubled commitment to science and math education, in particular at the university level, can reverse this trend. At the same time, while entrepreneurship in the abstract is seen positively in Canada, little has been done to provide concrete support for young entrepreneurs. I was hungry to start a business from an early age but found minimal guidance within the education system and had to forge my own path.
All of which makes the scene inside my company conference room — packed with young, ambitious entrepreneurs — so encouraging. The new founders who make up this year’s cohort for The Next Big Thing benefit from access to mentors, investors and industry contacts, as well as in-depth guidance from entrepreneurs who have successfully navigated the startup landscape. And that support can make all the difference: The 34 graduates from our program have launched 23 ventures and raised nearly USD5 million in capital, an exceptional success rate. If Canada, with all its existing competitive advantages, can find more ways to bolster our homegrown innovators, our entrepreneurial future will look even brighter.
This article first appeared in the November 2016 issue of YPO’s “Ignite” magazine.
Ryan Holmes is the founder and CEO of Hootsuite and a member of YPO in British Columbia. He started the company in 2008 and has helped grow it into the world’s most widely used social relationship platform with more than 10 million users, including 800 of the Fortune 1000 companies.