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How the Canadian Tech Scene Encourages Finite Gameplay

155 points by kipply 6y ago

coldtea 6y ago
Who says it doesn't work? If it produces viable companies, it does work (sure, it might fail to do that, but the parent haven't showed that). Don't have to ve FAANG sized. If anything, in my book, it's more of a societal success and healthier for them to NOT be FAANG sized - and screw the VCs.
- SpicyLemonZest 6y ago
  It's not just about size, at least not directly. FAANG companies are big in large part because they radically changed the world for the better, and most people who identify as part of the "startup scene" are hoping they can be a part of something similar.
  - coldtea 6y ago
    >because they radically changed the world for the better Did Facebook "radically changed the world for the better"? Did Twitter? Did Google, for that matter? Is the control it has amassed, and its imperial impact of business and ideas (and the web itself) a net positive to a good search engine and a OK email service (both of which have gotten worse over time)?
    - pm90 6y ago
      Facebook is the only social media company in “FAANG”. Amazon, Apple, Netflix and Google have, I would argue, materially changed our lives for the better. They created the smartphones that are now ubiquitous and that opened up a whole marketplace of app based tech. They literally created cloud computing which has allowed more companies to focus on product ideas and get off the ground quickly. E-commerce (disrupting retail), streaming (disrupting Hollywood). Not to mention all the OSS and platform improvements that have originated at Faangs. They have grown powerful and entities with power will often abuse it, and I would argue that regulations would be a good step in this direction. But arguing they haven’t had a positive impact on society is absurd.
      - coldtea 6y ago
        Notice though how none of the above looks into second order effects. Nor is "disrupting retail" or "disrupting Hollywood" automatically good in themselves... (e.g. a question would be "disrupting towards the better?").
        SpicyLemonZest 6y ago
        Second order effects are important to consider, but the idea that the world would be better off if nobody had ever built something like Netflix or Amazon is... hard to take seriously.
      - danlugo92 6y ago
        I'd rather not have streaming and ecommerce if it meant to not have PR1S M
    - Yizahi 6y ago
      I dislike all those companies and net negative impact by all of them is undeniable. They do sell our "private" data, they do foster bad behaviors in humans. They monopolized whole industries and cemented bad ideas everywhere. But if we would assess them overall - they indeed has changed the world for the better (in my opinion). The communication benefits provided by them to humanity is immense. Nokia's slogan - "connecting people" is the important thing, which force accelerated a lot of things on the planet. Yeah, maybe in some other timeline different companies may have done it better, but we are not debating hypothetical, we just observe what has already happened.
- SV_BubbleTime 6y ago
  > If anything, in my book, it's more of a societal success to NOT be FAANG sized - and screw the VCs. Agreed. I question the article measure success on wether you can attract angel or other money. How about “no thanks, we have enough money to make this thing and we really like it, we’re happy, we make enough to keep the doors open and everyone gets a paycheck and no one suffers with or from our product”, that seems like success to me. Surely we have measurements besides how many billions of dollars a company is worth?
- yowlingcat 6y ago
  I mean, Canada did produce a Shopify, which while not FAANG sized is still a >$100B public tech company that for all intents and purposes is competing with one of the FAANGs (Amazon).
- mk81 6y ago
  Typical Canadian attitude^ Proudly mediocre
kipply 6y ago
There's a lot in here, but the title may be better as "How the Canadian Tech Scene Encourages Finite Gameplay"
- kipply 6y ago
  oh beautiful i can just edit the title
andi999 6y ago
So is this romatizizing the bay area, or are these the true reasons for bay areas success?
- guyzero 6y ago
  Yes and yes.
astlouis44 6y ago
Promising Canadian tech startups need to stop selling out to America and global competitors. Shopify has the potential and likelihood to get to near the market cap of Amazon one day, and we need to encourage more of these types of companies to stay here and inspire the next generation of entrepreneurs here.
paxys 6y ago
There's just one line in the article about low wages, but IMO that's a massive problem with the Canadian tech scene today. You cannot have a thriving startup ecosystem when your best talent leaves for the US right after graduating from college. I love Vancouver as a city and would move there in an instant if it didn't mean taking a 50%+ pay cut for the exact same role (with comparable costs of living to the Bay Area).
guyzero 6y ago
IMO the conclusion isn't that the scene "doesn't work" but that it's not producing a lot of "moon shots" and tends to focus on "roof shots". There is nothing inherently wrong with this strategy and it produces solid gains over time, but it's a lot harder going to accidentally create a billion dollar company. That said, Solect got acquired for 1.5B back 20 years ago, Shopify exists, it's not like there are zero Canadian unicorns, they just get produced a lot more slowly.
- guyzero 6y ago
  That said, this article: https://betakit.com/narwhal-list-2020-tracks-a-year-of-massive-raises-42-potential-unicorns/ https://betakit.com/narwhal-list-2020-tracks-a-year-of-massi... seems to think Canada is on track to produce a lot of unicorns in the next few years. Seems like pretty good work for a country 1/10th the size of the US.
  - gabbo 6y ago
    From this list: Chinook Therapeutics Element AI Repare Therapeutics Enerkem DalCor Pharmaceuticals Verafin Fusion Pharmaceuticals Stormfiser Biogas Hootsuite North Element AI was acquired by ServiceNow, North was acquired by Google. Both were widely seen to be overhyped underperformers. Element was acquired for roughly the $200M it raised in financing. North also raised about $200M over its lifetime and was reportedly acquired for around $180M. Not really value creation. Chinook Therapeutics merged with Aduro Biotech and is now headquartered in Seattle. It's publicly traded as KDNY and is worth ~831M CAD. Hootsuite is kind of stagnant. It has been on and off being close to being worth $1B since 2014, hardly a growth story. Verafin was purchased by NASDAQ for $2.75B. A good exit, though it took nearly 20 years to get there and now it's just another Canadian office of a US tech company. I don't know enough about the cleantech/pharmaceutical angle, but if this list is the best we can come up with, it's far from cause for the software industry to celebrate. My feeling on articles like the one you posted is they're mostly superficial cheerleading. From https://medium.com/@lawrencekhov/narwhals-and-unicorns-where-are-canadas-billion-dollar-startups-9ef098a6fb6d https://medium.com/@lawrencekhov/narwhals-and-unicorns-where...: Despite investing the second most into venture capital amongst all OECD countries, Canada is producing the least amount of unicorns. Not only that, of the unicorns it produces, valuation are also the lowest amongst the group (to be fair, the sample size is tiny. Plus, Canada’s unicorns are generally really new compared to that of other countries, which may have opted to stay private for a variety of reasons). For an ecosystem that is by most metrics, really well funded and really strong, the number of narwhals and unicorns that it produces is disappointing. In terms of creating billion dollars startups, Canada is ruthlessly inefficient compared to the likes of Germany, Sweden and the United Kingdom.
disillusioned 6y ago
This could've just as easily been written about the Phoenix metro area. Phoenix is the 5th largest population center in the US, barely now beating Philly, and while we've had a handful of few dozen small or medium successes (and a very small handful of big ones), our startup scene is... mediocre at best. The good vs. bad angels thing is a factor: we have no REAL good angels to speak of. (Happy to be corrected here.) No one is in the game for the game's sake. And our bad angels are even few and far in between. There are a handful of VCs, family offices, and such, but they usually want lower risk, post-revenue opportunities. There are one or two "angel" groups, but they take forever to stroke a check and it's an ordeal that's discouraging and not a lot of options. Instead, we have a lot of SF (and other prominent geo) companies moving their ops here because we have lower cost of living and lower tax rates (though our top bracket just took a big step up due to 208) and a decent talent pool. And while there have been a few incubators and such and there's a feel good startup community in YesPHX, there isn't any real circulating _money_ here. The uber wealth in this state is concentrated in old money forms like real estate and healthcare and conservative family offices and Bruce Halle's tire money and whatever the hell Bob Parsons is up to, but we lack that interconnected network of IPO-30-and-40-something-millionaires-willing-to-throw-down. We don't have anything resembling that. From what I've heard, SLC is doing better on this front and beating us at a game we should be winning, but no one stays here after they make success, no one rich enough to matter is willing to splash out any real money themselves, and it ends up being a self-fulfilling, far too conservative environment for startup investment. That being said, there are definitely some great startups still trying to make a go of it here. And per Gregslist & Crunchbase, we have over 300 startups here, with over 100 of them VC funded. And you'll see successes come out of here: InfusionSoft, CampusLogic, and sure a bunch of others... but nothing quite like a mega IPO, and nothing that feeds enough capital back into a huge pool of newly minted moneyed people ready to pay it forward into the next cohort. That ecosystem is damn hard to build up, it turns out.
neom 6y ago
One thing this article seems to miss is that the tech scene in Canada isn't the same as the tech scene in America because Canadian capitalism and ideals are vastly different than Americas. I'm a 6th generation Canadian who left and went to NYC to build tech companies, much to the dismay of my parents who continually asked "why are you so interested in getting above everyone else?". While I agree with a lot of what the author said, I think that the Canadian tech scene doesn't jive yet because Canadians haven't really embraced ruthless capitalism fully.
- bregma 6y ago
  > Canadians haven't really embraced ruthless capitalism fully. You write that like it's a bad thing.
  - neom 6y ago
    I tried it write it without any opinion about it being good or bad, just as a fact. If you want my opinion, I think it's great.
deepspace 6y ago
As someone who has worked in the Canadian tech scene for 25 years, and rode two startups all the way to exit (i.e. acquisition by US companies), in my opinion the problem has nothing to do with exit mindset, good angels, bad angels or SRED. It is all about talent retention. Up until early 2000, Canadian tech salaries at least somewhat kept pace with US salaries, albeit 20-30% lower. After the dot com crash, however, for some god-forsaken reason, the surviving tech companies decided that keeping salaries low was the new path to profitability. Every year the HR departments in Vancouver and Toronto do a hush-hush survey among each other and fix their salaries to the exact same level - maybe 2% but usually closer to 1% higher than the previous year. The result of 20 years of this is that Canadian tech salaries have fallen ridiculously behind those of US companies, resulting in a massive brain drain to the south. Now that Amazon, Microsoft and Google are setting up shop right here in Canada, the talent drain away from Canadian companies is only accelerating. I have no idea what it will take to make companies realize that long term success requires retention of top talent and that that in turn requires paying competitive salaries.
- DaiPlusPlus 6y ago
  > Every year the HR departments in Vancouver and Toronto do a hush-hush survey among each other and fix their salaries to the exact same level - maybe 2% but usually closer to 1% higher than the previous year. Collusion like that would almost certainly be illegal - do you have a source for that?
  - dismayedjim 6y ago
    It is but it happens all the time. Google, Facebook, Amazon, and the rest all have been caught doing it on a large scale. Most of them even agreed not to hire from each others employee pool.
    - deleted 6y ago
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  - wvenable 6y ago
    There is an entire industry around the collection of and aggregation of salary, benefits, and perk information. Every year your HR department pays a firm, fills out these surveys, and a few months later gets a report on salary ranges and perks for their industry. If you think about it then it makes perfect sense, how else do businesses know they're offering competitive salaries, benefits, and perks? Source: I consulted for a company that does these surveys and aggregates the results.
pySSK 6y ago
This is poorly written. I lost interest a minute into the article and skimmed the rest of it and didn't take much from it. The blob before the first subheading just repeats that the Toronto scene is not a good one – this could have taken just 3-5 sentences, and not 5 paragraphs. The part about good/bad angels, finite/infinite game typically would have been interesting to me but I was asleep by then. I recommend putting a summary in the first blob, and/or making the subheadings more informative e.g. instead of "Angels" "Deal Speed and Founder Leverage", should say "Angels are Shortsighted and Play Finite Games" and "Deal Speeds are Magnitudes Slower".
adverbly 6y ago
Some nuggets here. Totally agree with the second order effects of incentives and milestones. The author seems a bit overly enamored by SV though. It's really not all its cracked up to be. Stop trying to be SV. SV has produced some truly toxic companies. The world can do much better, but they wont do it by copying what works in SV. I think Canada should just experiment more. Try different things. Have the courage to forge your own path.
deleted 6y ago
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indyfob2008 6y ago
I'm from Indianapolis, but currently in South Korea, where accelerator/incubator programs are funded by the government. Angel investors work in some government agency. Centrally planned and controlled "capitalism". Engineer salaries much lower than US or Canadian salaries. Yet somehow, the Republic of Samsung/Hyundai keeps churning.
- deleted 6y ago
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baron816 6y ago
Building a successful startup is hard. Even a software startup. You don’t just need a few engineers who know what they’re doing. You need designers, product managers, data analysts, marketeers, PR, some sales people maybe, finance folk, people ops, and maybe even a lawyer or two who understands tech. On top of that, you need people who are capable of bringing it all together and operate different orgs as a real tech company should, ie managers. If you have any hope of succeeding, you need to eventually fill all those positions with experienced hires. Where are all the experienced tech workers? They’re in the already established tech hubs. How do you get those experienced tech workers to move to your aspiring tech hub? I don’t know, but certainly not with lower salaries and skimpy benefits. I don’t think I would leave SF to work at a startup in Toronto, or, let’s say Houston, where I couldn’t be confident that the company would be able to fill all the other roles it needs to to succeed.
fedd 6y ago
I think you could put any non-Valley country/region name there instead of Canada
- harpratap 6y ago
  One exception is that Canadian talent can migrate to US with very little friction (both immigration wise and culture wise) but you can't do it from many other countries. For many valid reason someone talented living in China, Japan, South Korea may not end up moving to US, instead set up companies in their home country.
antoniuschan99 6y ago
I’m 10 years into my career and been in Toronto the entire time. I often feel like I’m slowly wasting my talent here that would be better utilized somewhere else. Maybe Shenzen or the West coast. I work days at a job and nights and weekends on my business. The business is doing good, it’s slowly scaling, just a long slog. In the last 10 years I worked at around 15 different places as a contractor. I met a lot of developers and tech people in general. I get the sense that people here just don’t have the motivation or ambition for business. Maybe because house prices have shot up the last few years, or because it’s the financial capital of Canada. People just want to make money (again the house, living costs, and taxes are high) or move up the ladder. Or maybe because life is comfortable so everything moves at a slower pace. On the technology front, growing up learning about Nortel and RIM/Blackberry, I just feel like the Innovation Ecosystem is just not here compared to other places. Maybe it’s partially because Toronto Is just too conservative (eg. East Coast vs. West Coast mentality). There’s a lot of Fintech, Marketplace (Shopify), and SaaS Apps. Pretty much safe bets in terms of Businesses. I think as a tech Founder part of your goal is to try to balance money generation with innovative ideation. Companies here adhere to money generation before innovative ideation, which results in “meh” businesses. Being Asian I also feel disadvantaged. It’s like if I moved to Shenzen I would have an advantage because I’m westernized people there would value me more. But the grass is greener on the other side (aka. 996). I think the Government protects businesses too much vs in the States. Seeing how there’s so many monopolies it’s hard for the small startups to rise up. Look at the telco monopolies and how verizon gets blocked into coming to Canada. Or how the marijuana LPs get a huge head start before the micro craft growers can enter, and you still need a bunch of license to grow and distribute. It’s a comfortable life here though. I’m mainly here because of family. My last point is that there is a big problem with startups being acquired by US companies. Tim Hortons got bought out by BK, North got bought out by Google. When I first started, this notable design company behind Medium, Teehan+Lax got bought out by Facebook. Also, I think North got propped up by the tech media here even though their product was never good. v2 showed promise though, maybe they just burned too much VC/Angel/Grant money so they had to sell to Google.
- modo_mario 6y ago
  >My last point is that there is a big problem with startups being acquired by US companies. Tim Hortons got bought out by BK, North got bought out by Google. When I first started, this notable design company behind Medium, Teehan+Lax got bought out by Facebook. Basically this. US tech companies are sitting on such stacks of cash seeking for avenues to expand in line with the others that most Canadian or European companies that might make it big and join them just get bought out. The alternative is not selling out and making that money in the long term which doesn't seem likely when instead of buying in that big company just forces itself into the market with it's cash and clout to destroy your margins. Oh and then there's the success-stories that don't get bought out but just move to san francisco for the infrastructure or money and partnerships like gitlab, etc Without some kind of protectionism on this front it won't change either.
renewiltord 6y ago
Interesting. I wonder if Canadians insist that only Canadians must be hired by the FAANG companies in Canada.
MartianSquirrel 6y ago
Disclaimer: Clearly biased, I am from Montreal. > That’s part of why I think that if any city in Canada has the potential to actually develop a Bay Area grade startup scene (smaller, sure, but actually the real thing), it’s clearly Montreal I would have to agree with the conclusion of this article, Montreal has: (i) 5 universities very close to each other(i.e. 10 to 20 minutes walk from each other) + Great public transport (ii) Lots of government subsidies for startups, on municipal, provincial and federal levels (iii) Small tech companies and startups can afford rent downtown (or in the mile-end), where other tech companies and universities are located. (I also have a 1200sf apt downtown for 1/6th the price of SF) (iiii) It's an amazing market where to fail quickly. Quebec is some sort of small scale self-sufficient society where you can experiment before scaling. And outsiders tend not to look at failures in the Quebec startup scene (iiiii) It's surprisingly easy to get funding from the massive government investment funds(IQ, CDPQ, BDC), and they have been focusing more on the startup scene lately. (iiiiii) The french Canadian "culture" tends to be bolder and more dynamic than what you would expect in the rest of Canada. Can't hurt the ecosystem if you're expected to move fast and fail quick (iiiiiii) Move to MTL already, we want more startups!
- MartianSquirrel 6y ago
  Bonus: there are 56 craft breweries on the island alone
  - gdsdfe 6y ago
    Yep craft beer scene is fantastic!
- jariel 6y ago
  Those are all inputs, which are nice, but the outputs which we care about, are negligible. Where are the exceptional companies employing a lot of people, doing 'important' or 'impactfull' things? Or the exits? Or even externalized value creation? Edit: I will give an interesting answer to my own equation and that is Element AI. A ridiculous concept from a startup perspective, but very rational regional investment argument: round up the AI talent and give them something to do. In the end, they couldn't make money - but - they didn't lose money and they may have secured at least a foundational location for AI researchers to be employed in montreal, which is not nothing. It remains to be seen if it can be expanded, and if all those AI researchers will just end up moving to the US for more money. It's a little bit like the 'Boston Dynamics' of Montreal - clearly something going on, but difficult to commercialize so it needs a massive company to see the strategic benefit. I feel the staff of Boston Dynamics will stay put though - they're not moving to Korea (i.e. new Hyundai owners) .
chongli 6y ago
It's a difference of cultures. Canadian culture traditionally focuses less on making a lot of noise, standing out from the crowd, etc. Canadians are almost infamous for politeness, especially compared to Americans. Now, couple this with the ease at which Canadian engineers can get jobs in the US and the picture emerges, bright and clear. Any Canadian with a lot of ambition may be alienated by the relaxed culture in Canada and subsequently move to the US, further reinforcing the cultural divide. On the other hand, Canadians (and even Americans) who are disillusioned with what they may see as an excessive ambition and a relentless focus on "growth hacking" might opt to live in Canada, also reinforcing the cultural divide.
- __turbobrew__ 6y ago
  You didn’t go over the possibility that Canadians may prefer to live in Canada compared to the United States. Last time I checked there wasn’t a race war and a group of belligerents storming the capitol in Canada.
  - ramraj07 6y ago
    The primary difference between Canada and the US was that Canada was small/smart/lucky enough to enact some social nets before the world became too easy to manipulate by media and the internet.
    - Tsarbomb 6y ago
      Not really. Our first attempts at universal healthcare involved general strikes from doctors and the government standing its ground. Some of the most important legislation and infrastructure in Canadian history was done under minority governments have to work with other political parties. I would say it would it comes down to a much healthier government with more churn and not two different flavours of the same political party. I only found out this year that in certain states the ballots contain options "Vote all Democrat" or "Vote all Republican". Enshrining political parties like that into an electoral process reminds of the Soviet Union.
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RavlaAlvar 6y ago
As someone just applied for immigration to Canada, this post trigger my anxiety.
- HDMI_Cable 6y ago
  Honestly, you'll be fine. As long as you don't live on Granville in Vancouver, or Front street in Toronto, housing prices are too bad, and incomes aren't too low.
3pt14159 6y ago
I try to be charitable when I critique an article, so Alex please don't take this comment as a personal attack. I appreciate your writing of this article and your efforts to improve Canada. There are some truths in your article and an interesting perspective on the cascading feedback loops, which I think has merit, but there are some factual errors here that I think should be addressed. > The problem with SR&ED credits, honestly through no fault of their own, is that you have to say what you’re doing with them. That's not true. The SR&ED program is retrospective. It's an earned grant. If your company does real scientific or technological research you get a portion of the salaries and overhead back after you already did the research. And a small portion of consultant or contractor fees as well. It's true that you can have your project span multiple years, but at the end of each year a new report is written with the chief technical and scientific uncertainties that were encountered and how they were addressed. I've written multiple, funded claims for my own business and for others with Paul Vice from GetGrants in Toronto. None of my claims to date have been rejected or failed to survive an audit. It pays to have professional help with these so you don't waste time doing unnecessary, distracting work. They can be assembled by the natural exhaust of real research, like Git commit logs or project plans. > To be clear: I am not saying there are no individual success stories of Canadian startups, or that there are no good angel investors or VCs here, or that there are no individual instances of things going right. Well, you kinda are though. Most American companies don't raise rounds in 72 hours. Even ones that go through YC sometimes fail to raise for months. It's true that it's slower here, but there are some good angels like Andrew Peek or David Crow, both of whom have invested in a company of mine. One private angel invested $50k in less than a day of thinking about it. Also, on the topic of individual success stories: We have RIM, Shopify, and plenty of successful financial services startups. We're one tenth the size of America, we're not going to be unleashing Facebooks or Googles every couple years. > Including salaries, which is helpful if you’re staffing entry level positions but a huge problem when you’re trying to recruit experienced managers & senior talent. I completely agree. But there is a reason why salaries are lower here in Canada. Most of our workers don't work as hard and they don't have to worry about healthcare costs. There is less of a culture of brashness here and, subsequently, our startup scene looks different. We make less, true, but we see our families more. I'd rather have it this way, and if you're really good smart companies pay out big anyway. Anyway, thanks for writing the article I hope you take these comments well.
mdtusz 6y ago
I know many will disagree, but I think the commentary on SR&ED killing momentum and motivation in startups is bang on, even though it's a nearly impossible thing to measure or quantify. I'm sure many fellow Canadians reading this comment can relate to the absolute draining feeling when you see that message "remember to update your SR&ED timesheets by the end of the week!". Time tracking isn't inherently bad, or counterproductive, but I haven't once come across a startup that does their SR&ED reporting with an ounce of honesty. Timesheets are essentially fabricated based on either what the developers think their managers expect to see, or based on what the managers tell them to fill in, and it's entirely understandable - programming is not a job where tracking hours makes sense. Rather than timesheets, it would make _so_ much more sense if instead, high level but detailed quarterly reports were made outlining what was completed, and if there needs to be more detail, an audit can be done. Timesheets kill productivity, motivation, and curiosity to try new things and accomplish actual research and development - what the SR&ED program is intended for. At the end of the day, it's the implementation of the program and the industry of consultants surrounding it that is flawed.
- jariel 6y ago
  That's nice, but it doesn't explain why SR&ED is bad. If the reporting was crazy burdensome - ok - but that doesn't seem to be the case. The article makes the impression that it's more like a 'welfar trap' type scenario. In my view, it's just not relevant, the money just doesn't matter that much. Good projects tend to get funded.
- MattGaiser 6y ago
  And all the time wasted on SR&ED. My manager is constantly pulled away to fill out some document to do with it.
  - danbolt 6y ago
    I can't tell if the worst part of SR&ED is management pulling you away to document your work for tax credits or management hoping you'll lie about your work for tax credits.
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arcosdev 6y ago
Good? Trying to be like SV and push Canada in that direction is toxic. I agree salaries should be better, but they should be better across all sectors, not just technology.
- boc 6y ago
  Not sure if I follow this logic. Are you saying that importing SV salaries and culture will create a Dutch disease effect in the broader Canadian economy?
  - busrf 6y ago
    We already have petroleum Dutch disease, switching to another Dutch disease would be very welcome at this point (:
pm90 6y ago
I have a contrarian take. The Canadian tech scene is limited not by the Captains of Canada’s industry (although it might be a factor, but not the major one) but by the simple fact that Canada’s economy and population are much smaller than the US and importantly, Canada doesn’t throw insane amounts of Cash into its Defense industry. They also cannot deficit spend forever like the US can because of the USD. I would wager these structural issues are likely to be more consequential than debating over compensation fixation.
pietrovismara 6y ago
Infinite growth is a delusion. Who said that behaving like a tumor is the best path for a company? Especially when we complain all the time about colossal corporations being more powerful than nations. That's what you get with infinite growth: monopolies, too-big-to-fail companies, etc.
djmips 6y ago
This is a good take in my opinion and generalizes to any endeavor of creation. You can't plan that. Only when you have figured everything out can you move into a production mode. In game dev, this is informally known as Czerny's method. Production is a finite game but design is an infinite game. Forcing startups to work like they are in production is a good way to lol them.
jariel 6y ago
This is a very interesting piece but: 1) Although it may be impossible ... you might need 'more data' to prove your point and 2) "SR&ED forces you to play finite games, because it forces you to articulate what you’re spending this money on. And so you have to justify, at the very least, what problem you are solving and what specific steps you are taking to solve it. You enter the world of problem definition, where building your startup becomes Serious Work, with official time sheets and government forms. " I think is just straight up wrong. Not only is focusing in the problem just fine, it's actually probably a healthy thing. The 'real answer' to these credits is that they are probably not needed, a 'good startup' should just be able to fund itself. But the fact that forms and some degree of problem statement are required is not the problem.
Jack000 6y ago
The Canadian startup bureaucracy is real. I find it kind of funny that the main requirement for IRAP funding is that you don't actually need the money. It's extremely frustrating when you see a punt like Element AI get 20 million from the government, despite not having any product direction or seemingly any idea what to do with that money. It feels like people are rewarded for navigating the bureaucracy rather than actual startup success.
- antoniuschan99 6y ago
  Companies like Myant which look so innovative but haven’t produced anything consumer related that I can purchase. Also startups here (such as ElementAI) tend to screw over their employees with their stock options. I feel like here you get all the bells and whistles working at startups without the potential exit rewards - except for Shopify of course, their employees must all be super happy :)
motohagiography 6y ago
If you wanted to summarize that uncanny Canadian quality about television, movies, and lately startups, it's that they are the artifacts of a mandate, which is usually a condition of some kind of institutional funding, like SREDs, but also a bunch of other vehicles. The finite game is that a lot of capital and incentives come from agencies who have government mandates, which gives everything a certain tint. So glad to read this. The author wrote a story some months ago about the reason SV angel works is because it's part of the social signalling for wealthy people. You make money, you show you can do it again, and that's what makes you a player. In Toronto, it's different.There are excellent global tech companies in Canada (Ubisoft, EcoBee, Shopify, Pornhub, etc.), but like everywhere, excellence is exceptional. It's the "why is this weird? Oh, because they had to write around this condition of their granting agency." The US has tons of public funding as well, but much of it is defence driven, which has more general reusable business applicability than say, "culture," driven. Not sure what the solutions are, but something we should put words to as that weirdness has been a ceiling on growth and opportunity here for a couple of decades.
chrisallick 6y ago
"In contrast, infinite games are played for the purpose of continuing to play. You do not “win” infinite games; these are activities like learning, culture, community, or any exploration with no defined set of rules nor any pre-agreed-upon conditions for completion. The point of playing is to bring new players into the game, so they can play too. You never “win”, the play just gets more and more rewarding." Sounds nice...
plankers 6y ago
Interesting analysis of the differences between the two scenes, but I'm not convinced of Danco's assertion that bad angels keep away the good. It seems equally possible that the attractive draw for angels (and all VCs) of a red-hot scene like SF is simply too powerful, so all the "good" angels flock there rather than waste their time in a less productive market. The same phenomenon he describes where liquidity events propagate the cycle of early movers becoming angels could easily take place on a larger scale where an exodus of "good" angels from SF seeking value in other markets disseminates this model and evens it out a bit. This could also dampen some of the externalities created by this feverish form of capitalism i.e. ludicrous real estate prices, crushing income inequality, etc. Of course this would take some rather weighty exogenous event taking place to make either SF or the US unattractive locations to start a business.
l2silver 6y ago
I have absolutely nothing to back up this statement, but I wonder if the problem with the Canadian tech scene is that, from a societal level, Canadians are more conservative and risk adverse.
Dan42 6y ago
> If Montreal weren’t in Quebec, it would be an unstoppable startup scene. I'm really puzzled by that statement. I don't see Quebec as having anything particularly different from other provinces that is harmful to startups. French? Everybody in Montreal speaks English anyway, and developing i18n software is super-trivial if you do it from the start; not something that would impact startup velocity in any meaningful way. Or was this meant the other way around? That Quebec founders are disadvantaged in the same way that black and female founders are disadvantaged in SV?
- HDMI_Cable 6y ago
  Honestly, from what I've seen, people really are just too scared to speak French. People will pick Toronto or Vancouver over Montreal, mostly because of the language. I haven't seen anything to suggest that Quebecois are disadvantaged, maybe except for the fact that anglo VCs will mainly try and fund anglo startups? Being bilingual is a big perk in Canada, so many from Montreal might have a leg up in that sense. But I could be wrong though.
MattGaiser 6y ago
The bit about accelerators is interesting to me. I was involved in QICSI, a Canadian startup accelerator as part of one of the startups there. I was then part of another startup from that same accelerator. Have encountered several others that have bounced from accelerator to accelerator. And it does almost seem like a very milestone and very checklist driven thing. They all seemed to just be jumping from accelerator to accelerator. Does that happen in the USA? Do you go somewhere else after Y Combinator?
glitchc 6y ago
Bah, this reads like a screed. The author wants Canada to be like the US, but they are fundamentally different countries with fundamentally different ethos. The motto of the US govt. is “Life, Liberty and the pursuit of happiness.” Contrast that to the Canadian motto of “Peace, order and good government.” The rest flows from this difference in perspectives. As for Montreal being a tech hub? Blech. The city is covertly racist to anyone who is not French Canadian. Death by a thousand cuts.
pimlottc 6y ago
I thought this was somehow about gamification UX or actual game design or something, but the actual article title is “Why the Canadian Tech Scene Doesn’t Work”, which is more informative to me, at least.

155 points by kipply 6y ago

Who says it doesn't work? If it produces viable companies, it does work (sure, it might fail to do that, but the parent haven't showed that). Don't have to ve FAANG sized. If anything, in my book, it's more of a societal success and healthier for them to NOT be FAANG sized - and screw the VCs.

SpicyLemonZest 6y ago
It's not just about size, at least not directly. FAANG companies are big in large part because they radically changed the world for the better, and most people who identify as part of the "startup scene" are hoping they can be a part of something similar.
- coldtea 6y ago
  >because they radically changed the world for the better Did Facebook "radically changed the world for the better"? Did Twitter? Did Google, for that matter? Is the control it has amassed, and its imperial impact of business and ideas (and the web itself) a net positive to a good search engine and a OK email service (both of which have gotten worse over time)?
  - pm90 6y ago
    Facebook is the only social media company in “FAANG”. Amazon, Apple, Netflix and Google have, I would argue, materially changed our lives for the better. They created the smartphones that are now ubiquitous and that opened up a whole marketplace of app based tech. They literally created cloud computing which has allowed more companies to focus on product ideas and get off the ground quickly. E-commerce (disrupting retail), streaming (disrupting Hollywood). Not to mention all the OSS and platform improvements that have originated at Faangs. They have grown powerful and entities with power will often abuse it, and I would argue that regulations would be a good step in this direction. But arguing they haven’t had a positive impact on society is absurd.
    - coldtea 6y ago
      Notice though how none of the above looks into second order effects. Nor is "disrupting retail" or "disrupting Hollywood" automatically good in themselves... (e.g. a question would be "disrupting towards the better?").
      - SpicyLemonZest 6y ago
        Second order effects are important to consider, but the idea that the world would be better off if nobody had ever built something like Netflix or Amazon is... hard to take seriously.
    - danlugo92 6y ago
      I'd rather not have streaming and ecommerce if it meant to not have PR1S M
  - Yizahi 6y ago
    I dislike all those companies and net negative impact by all of them is undeniable. They do sell our "private" data, they do foster bad behaviors in humans. They monopolized whole industries and cemented bad ideas everywhere. But if we would assess them overall - they indeed has changed the world for the better (in my opinion). The communication benefits provided by them to humanity is immense. Nokia's slogan - "connecting people" is the important thing, which force accelerated a lot of things on the planet. Yeah, maybe in some other timeline different companies may have done it better, but we are not debating hypothetical, we just observe what has already happened.
SV_BubbleTime 6y ago
> If anything, in my book, it's more of a societal success to NOT be FAANG sized - and screw the VCs. Agreed. I question the article measure success on wether you can attract angel or other money. How about “no thanks, we have enough money to make this thing and we really like it, we’re happy, we make enough to keep the doors open and everyone gets a paycheck and no one suffers with or from our product”, that seems like success to me. Surely we have measurements besides how many billions of dollars a company is worth?
yowlingcat 6y ago
I mean, Canada did produce a Shopify, which while not FAANG sized is still a >$100B public tech company that for all intents and purposes is competing with one of the FAANGs (Amazon).
mk81 6y ago
Typical Canadian attitude^ Proudly mediocre

kipply 6y ago

There's a lot in here, but the title may be better as "How the Canadian Tech Scene Encourages Finite Gameplay"

kipply 6y ago
oh beautiful i can just edit the title

andi999 6y ago

So is this romatizizing the bay area, or are these the true reasons for bay areas success?

guyzero 6y ago
Yes and yes.

astlouis44 6y ago

Promising Canadian tech startups need to stop selling out to America and global competitors. Shopify has the potential and likelihood to get to near the market cap of Amazon one day, and we need to encourage more of these types of companies to stay here and inspire the next generation of entrepreneurs here.

paxys 6y ago

There's just one line in the article about low wages, but IMO that's a massive problem with the Canadian tech scene today. You cannot have a thriving startup ecosystem when your best talent leaves for the US right after graduating from college. I love Vancouver as a city and would move there in an instant if it didn't mean taking a 50%+ pay cut for the exact same role (with comparable costs of living to the Bay Area).

guyzero 6y ago

IMO the conclusion isn't that the scene "doesn't work" but that it's not producing a lot of "moon shots" and tends to focus on "roof shots". There is nothing inherently wrong with this strategy and it produces solid gains over time, but it's a lot harder going to accidentally create a billion dollar company. That said, Solect got acquired for 1.5B back 20 years ago, Shopify exists, it's not like there are zero Canadian unicorns, they just get produced a lot more slowly.

guyzero 6y ago
That said, this article: https://betakit.com/narwhal-list-2020-tracks-a-year-of-massive-raises-42-potential-unicorns/ https://betakit.com/narwhal-list-2020-tracks-a-year-of-massi... seems to think Canada is on track to produce a lot of unicorns in the next few years. Seems like pretty good work for a country 1/10th the size of the US.
- gabbo 6y ago
  From this list: Chinook Therapeutics Element AI Repare Therapeutics Enerkem DalCor Pharmaceuticals Verafin Fusion Pharmaceuticals Stormfiser Biogas Hootsuite North Element AI was acquired by ServiceNow, North was acquired by Google. Both were widely seen to be overhyped underperformers. Element was acquired for roughly the $200M it raised in financing. North also raised about $200M over its lifetime and was reportedly acquired for around $180M. Not really value creation. Chinook Therapeutics merged with Aduro Biotech and is now headquartered in Seattle. It's publicly traded as KDNY and is worth ~831M CAD. Hootsuite is kind of stagnant. It has been on and off being close to being worth $1B since 2014, hardly a growth story. Verafin was purchased by NASDAQ for $2.75B. A good exit, though it took nearly 20 years to get there and now it's just another Canadian office of a US tech company. I don't know enough about the cleantech/pharmaceutical angle, but if this list is the best we can come up with, it's far from cause for the software industry to celebrate. My feeling on articles like the one you posted is they're mostly superficial cheerleading. From https://medium.com/@lawrencekhov/narwhals-and-unicorns-where-are-canadas-billion-dollar-startups-9ef098a6fb6d https://medium.com/@lawrencekhov/narwhals-and-unicorns-where...: Despite investing the second most into venture capital amongst all OECD countries, Canada is producing the least amount of unicorns. Not only that, of the unicorns it produces, valuation are also the lowest amongst the group (to be fair, the sample size is tiny. Plus, Canada’s unicorns are generally really new compared to that of other countries, which may have opted to stay private for a variety of reasons). For an ecosystem that is by most metrics, really well funded and really strong, the number of narwhals and unicorns that it produces is disappointing. In terms of creating billion dollars startups, Canada is ruthlessly inefficient compared to the likes of Germany, Sweden and the United Kingdom.

disillusioned 6y ago

This could've just as easily been written about the Phoenix metro area. Phoenix is the 5th largest population center in the US, barely now beating Philly, and while we've had a handful of few dozen small or medium successes (and a very small handful of big ones), our startup scene is... mediocre at best. The good vs. bad angels thing is a factor: we have no REAL good angels to speak of. (Happy to be corrected here.) No one is in the game for the game's sake. And our bad angels are even few and far in between. There are a handful of VCs, family offices, and such, but they usually want lower risk, post-revenue opportunities. There are one or two "angel" groups, but they take forever to stroke a check and it's an ordeal that's discouraging and not a lot of options. Instead, we have a lot of SF (and other prominent geo) companies moving their ops here because we have lower cost of living and lower tax rates (though our top bracket just took a big step up due to 208) and a decent talent pool. And while there have been a few incubators and such and there's a feel good startup community in YesPHX, there isn't any real circulating _money_ here. The uber wealth in this state is concentrated in old money forms like real estate and healthcare and conservative family offices and Bruce Halle's tire money and whatever the hell Bob Parsons is up to, but we lack that interconnected network of IPO-30-and-40-something-millionaires-willing-to-throw-down. We don't have anything resembling that. From what I've heard, SLC is doing better on this front and beating us at a game we should be winning, but no one stays here after they make success, no one rich enough to matter is willing to splash out any real money themselves, and it ends up being a self-fulfilling, far too conservative environment for startup investment. That being said, there are definitely some great startups still trying to make a go of it here. And per Gregslist & Crunchbase, we have over 300 startups here, with over 100 of them VC funded. And you'll see successes come out of here: InfusionSoft, CampusLogic, and sure a bunch of others... but nothing quite like a mega IPO, and nothing that feeds enough capital back into a huge pool of newly minted moneyed people ready to pay it forward into the next cohort. That ecosystem is damn hard to build up, it turns out.

neom 6y ago

One thing this article seems to miss is that the tech scene in Canada isn't the same as the tech scene in America because Canadian capitalism and ideals are vastly different than Americas. I'm a 6th generation Canadian who left and went to NYC to build tech companies, much to the dismay of my parents who continually asked "why are you so interested in getting above everyone else?". While I agree with a lot of what the author said, I think that the Canadian tech scene doesn't jive yet because Canadians haven't really embraced ruthless capitalism fully.

bregma 6y ago
> Canadians haven't really embraced ruthless capitalism fully. You write that like it's a bad thing.
- neom 6y ago
  I tried it write it without any opinion about it being good or bad, just as a fact. If you want my opinion, I think it's great.

deepspace 6y ago

As someone who has worked in the Canadian tech scene for 25 years, and rode two startups all the way to exit (i.e. acquisition by US companies), in my opinion the problem has nothing to do with exit mindset, good angels, bad angels or SRED. It is all about talent retention. Up until early 2000, Canadian tech salaries at least somewhat kept pace with US salaries, albeit 20-30% lower. After the dot com crash, however, for some god-forsaken reason, the surviving tech companies decided that keeping salaries low was the new path to profitability. Every year the HR departments in Vancouver and Toronto do a hush-hush survey among each other and fix their salaries to the exact same level - maybe 2% but usually closer to 1% higher than the previous year. The result of 20 years of this is that Canadian tech salaries have fallen ridiculously behind those of US companies, resulting in a massive brain drain to the south. Now that Amazon, Microsoft and Google are setting up shop right here in Canada, the talent drain away from Canadian companies is only accelerating. I have no idea what it will take to make companies realize that long term success requires retention of top talent and that that in turn requires paying competitive salaries.

DaiPlusPlus 6y ago
> Every year the HR departments in Vancouver and Toronto do a hush-hush survey among each other and fix their salaries to the exact same level - maybe 2% but usually closer to 1% higher than the previous year. Collusion like that would almost certainly be illegal - do you have a source for that?
- dismayedjim 6y ago
  It is but it happens all the time. Google, Facebook, Amazon, and the rest all have been caught doing it on a large scale. Most of them even agreed not to hire from each others employee pool.
  - deleted 6y ago
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- wvenable 6y ago
  There is an entire industry around the collection of and aggregation of salary, benefits, and perk information. Every year your HR department pays a firm, fills out these surveys, and a few months later gets a report on salary ranges and perks for their industry. If you think about it then it makes perfect sense, how else do businesses know they're offering competitive salaries, benefits, and perks? Source: I consulted for a company that does these surveys and aggregates the results.

pySSK 6y ago

This is poorly written. I lost interest a minute into the article and skimmed the rest of it and didn't take much from it. The blob before the first subheading just repeats that the Toronto scene is not a good one – this could have taken just 3-5 sentences, and not 5 paragraphs. The part about good/bad angels, finite/infinite game typically would have been interesting to me but I was asleep by then. I recommend putting a summary in the first blob, and/or making the subheadings more informative e.g. instead of "Angels" "Deal Speed and Founder Leverage", should say "Angels are Shortsighted and Play Finite Games" and "Deal Speeds are Magnitudes Slower".

adverbly 6y ago

Some nuggets here. Totally agree with the second order effects of incentives and milestones. The author seems a bit overly enamored by SV though. It's really not all its cracked up to be. Stop trying to be SV. SV has produced some truly toxic companies. The world can do much better, but they wont do it by copying what works in SV. I think Canada should just experiment more. Try different things. Have the courage to forge your own path.

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indyfob2008 6y ago

I'm from Indianapolis, but currently in South Korea, where accelerator/incubator programs are funded by the government. Angel investors work in some government agency. Centrally planned and controlled "capitalism". Engineer salaries much lower than US or Canadian salaries. Yet somehow, the Republic of Samsung/Hyundai keeps churning.

deleted 6y ago
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baron816 6y ago

Building a successful startup is hard. Even a software startup. You don’t just need a few engineers who know what they’re doing. You need designers, product managers, data analysts, marketeers, PR, some sales people maybe, finance folk, people ops, and maybe even a lawyer or two who understands tech. On top of that, you need people who are capable of bringing it all together and operate different orgs as a real tech company should, ie managers. If you have any hope of succeeding, you need to eventually fill all those positions with experienced hires. Where are all the experienced tech workers? They’re in the already established tech hubs. How do you get those experienced tech workers to move to your aspiring tech hub? I don’t know, but certainly not with lower salaries and skimpy benefits. I don’t think I would leave SF to work at a startup in Toronto, or, let’s say Houston, where I couldn’t be confident that the company would be able to fill all the other roles it needs to to succeed.

fedd 6y ago

I think you could put any non-Valley country/region name there instead of Canada

harpratap 6y ago
One exception is that Canadian talent can migrate to US with very little friction (both immigration wise and culture wise) but you can't do it from many other countries. For many valid reason someone talented living in China, Japan, South Korea may not end up moving to US, instead set up companies in their home country.

antoniuschan99 6y ago

I’m 10 years into my career and been in Toronto the entire time. I often feel like I’m slowly wasting my talent here that would be better utilized somewhere else. Maybe Shenzen or the West coast. I work days at a job and nights and weekends on my business. The business is doing good, it’s slowly scaling, just a long slog. In the last 10 years I worked at around 15 different places as a contractor. I met a lot of developers and tech people in general. I get the sense that people here just don’t have the motivation or ambition for business. Maybe because house prices have shot up the last few years, or because it’s the financial capital of Canada. People just want to make money (again the house, living costs, and taxes are high) or move up the ladder. Or maybe because life is comfortable so everything moves at a slower pace. On the technology front, growing up learning about Nortel and RIM/Blackberry, I just feel like the Innovation Ecosystem is just not here compared to other places. Maybe it’s partially because Toronto Is just too conservative (eg. East Coast vs. West Coast mentality). There’s a lot of Fintech, Marketplace (Shopify), and SaaS Apps. Pretty much safe bets in terms of Businesses. I think as a tech Founder part of your goal is to try to balance money generation with innovative ideation. Companies here adhere to money generation before innovative ideation, which results in “meh” businesses. Being Asian I also feel disadvantaged. It’s like if I moved to Shenzen I would have an advantage because I’m westernized people there would value me more. But the grass is greener on the other side (aka. 996). I think the Government protects businesses too much vs in the States. Seeing how there’s so many monopolies it’s hard for the small startups to rise up. Look at the telco monopolies and how verizon gets blocked into coming to Canada. Or how the marijuana LPs get a huge head start before the micro craft growers can enter, and you still need a bunch of license to grow and distribute. It’s a comfortable life here though. I’m mainly here because of family. My last point is that there is a big problem with startups being acquired by US companies. Tim Hortons got bought out by BK, North got bought out by Google. When I first started, this notable design company behind Medium, Teehan+Lax got bought out by Facebook. Also, I think North got propped up by the tech media here even though their product was never good. v2 showed promise though, maybe they just burned too much VC/Angel/Grant money so they had to sell to Google.

modo_mario 6y ago
>My last point is that there is a big problem with startups being acquired by US companies. Tim Hortons got bought out by BK, North got bought out by Google. When I first started, this notable design company behind Medium, Teehan+Lax got bought out by Facebook. Basically this. US tech companies are sitting on such stacks of cash seeking for avenues to expand in line with the others that most Canadian or European companies that might make it big and join them just get bought out. The alternative is not selling out and making that money in the long term which doesn't seem likely when instead of buying in that big company just forces itself into the market with it's cash and clout to destroy your margins. Oh and then there's the success-stories that don't get bought out but just move to san francisco for the infrastructure or money and partnerships like gitlab, etc Without some kind of protectionism on this front it won't change either.

renewiltord 6y ago

Interesting. I wonder if Canadians insist that only Canadians must be hired by the FAANG companies in Canada.

MartianSquirrel 6y ago

Disclaimer: Clearly biased, I am from Montreal. > That’s part of why I think that if any city in Canada has the potential to actually develop a Bay Area grade startup scene (smaller, sure, but actually the real thing), it’s clearly Montreal I would have to agree with the conclusion of this article, Montreal has: (i) 5 universities very close to each other(i.e. 10 to 20 minutes walk from each other) + Great public transport (ii) Lots of government subsidies for startups, on municipal, provincial and federal levels (iii) Small tech companies and startups can afford rent downtown (or in the mile-end), where other tech companies and universities are located. (I also have a 1200sf apt downtown for 1/6th the price of SF) (iiii) It's an amazing market where to fail quickly. Quebec is some sort of small scale self-sufficient society where you can experiment before scaling. And outsiders tend not to look at failures in the Quebec startup scene (iiiii) It's surprisingly easy to get funding from the massive government investment funds(IQ, CDPQ, BDC), and they have been focusing more on the startup scene lately. (iiiiii) The french Canadian "culture" tends to be bolder and more dynamic than what you would expect in the rest of Canada. Can't hurt the ecosystem if you're expected to move fast and fail quick (iiiiiii) Move to MTL already, we want more startups!

MartianSquirrel 6y ago
Bonus: there are 56 craft breweries on the island alone
- gdsdfe 6y ago
  Yep craft beer scene is fantastic!
jariel 6y ago
Those are all inputs, which are nice, but the outputs which we care about, are negligible. Where are the exceptional companies employing a lot of people, doing 'important' or 'impactfull' things? Or the exits? Or even externalized value creation? Edit: I will give an interesting answer to my own equation and that is Element AI. A ridiculous concept from a startup perspective, but very rational regional investment argument: round up the AI talent and give them something to do. In the end, they couldn't make money - but - they didn't lose money and they may have secured at least a foundational location for AI researchers to be employed in montreal, which is not nothing. It remains to be seen if it can be expanded, and if all those AI researchers will just end up moving to the US for more money. It's a little bit like the 'Boston Dynamics' of Montreal - clearly something going on, but difficult to commercialize so it needs a massive company to see the strategic benefit. I feel the staff of Boston Dynamics will stay put though - they're not moving to Korea (i.e. new Hyundai owners) .

chongli 6y ago

It's a difference of cultures. Canadian culture traditionally focuses less on making a lot of noise, standing out from the crowd, etc. Canadians are almost infamous for politeness, especially compared to Americans. Now, couple this with the ease at which Canadian engineers can get jobs in the US and the picture emerges, bright and clear. Any Canadian with a lot of ambition may be alienated by the relaxed culture in Canada and subsequently move to the US, further reinforcing the cultural divide. On the other hand, Canadians (and even Americans) who are disillusioned with what they may see as an excessive ambition and a relentless focus on "growth hacking" might opt to live in Canada, also reinforcing the cultural divide.

__turbobrew__ 6y ago
You didn’t go over the possibility that Canadians may prefer to live in Canada compared to the United States. Last time I checked there wasn’t a race war and a group of belligerents storming the capitol in Canada.
- ramraj07 6y ago
  The primary difference between Canada and the US was that Canada was small/smart/lucky enough to enact some social nets before the world became too easy to manipulate by media and the internet.
  - Tsarbomb 6y ago
    Not really. Our first attempts at universal healthcare involved general strikes from doctors and the government standing its ground. Some of the most important legislation and infrastructure in Canadian history was done under minority governments have to work with other political parties. I would say it would it comes down to a much healthier government with more churn and not two different flavours of the same political party. I only found out this year that in certain states the ballots contain options "Vote all Democrat" or "Vote all Republican". Enshrining political parties like that into an electoral process reminds of the Soviet Union.

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RavlaAlvar 6y ago

As someone just applied for immigration to Canada, this post trigger my anxiety.

HDMI_Cable 6y ago
Honestly, you'll be fine. As long as you don't live on Granville in Vancouver, or Front street in Toronto, housing prices are too bad, and incomes aren't too low.

3pt14159 6y ago

I try to be charitable when I critique an article, so Alex please don't take this comment as a personal attack. I appreciate your writing of this article and your efforts to improve Canada. There are some truths in your article and an interesting perspective on the cascading feedback loops, which I think has merit, but there are some factual errors here that I think should be addressed. > The problem with SR&ED credits, honestly through no fault of their own, is that you have to say what you’re doing with them. That's not true. The SR&ED program is retrospective. It's an earned grant. If your company does real scientific or technological research you get a portion of the salaries and overhead back after you already did the research. And a small portion of consultant or contractor fees as well. It's true that you can have your project span multiple years, but at the end of each year a new report is written with the chief technical and scientific uncertainties that were encountered and how they were addressed. I've written multiple, funded claims for my own business and for others with Paul Vice from GetGrants in Toronto. None of my claims to date have been rejected or failed to survive an audit. It pays to have professional help with these so you don't waste time doing unnecessary, distracting work. They can be assembled by the natural exhaust of real research, like Git commit logs or project plans. > To be clear: I am not saying there are no individual success stories of Canadian startups, or that there are no good angel investors or VCs here, or that there are no individual instances of things going right. Well, you kinda are though. Most American companies don't raise rounds in 72 hours. Even ones that go through YC sometimes fail to raise for months. It's true that it's slower here, but there are some good angels like Andrew Peek or David Crow, both of whom have invested in a company of mine. One private angel invested $50k in less than a day of thinking about it. Also, on the topic of individual success stories: We have RIM, Shopify, and plenty of successful financial services startups. We're one tenth the size of America, we're not going to be unleashing Facebooks or Googles every couple years. > Including salaries, which is helpful if you’re staffing entry level positions but a huge problem when you’re trying to recruit experienced managers & senior talent. I completely agree. But there is a reason why salaries are lower here in Canada. Most of our workers don't work as hard and they don't have to worry about healthcare costs. There is less of a culture of brashness here and, subsequently, our startup scene looks different. We make less, true, but we see our families more. I'd rather have it this way, and if you're really good smart companies pay out big anyway. Anyway, thanks for writing the article I hope you take these comments well.

mdtusz 6y ago

I know many will disagree, but I think the commentary on SR&ED killing momentum and motivation in startups is bang on, even though it's a nearly impossible thing to measure or quantify. I'm sure many fellow Canadians reading this comment can relate to the absolute draining feeling when you see that message "remember to update your SR&ED timesheets by the end of the week!". Time tracking isn't inherently bad, or counterproductive, but I haven't once come across a startup that does their SR&ED reporting with an ounce of honesty. Timesheets are essentially fabricated based on either what the developers think their managers expect to see, or based on what the managers tell them to fill in, and it's entirely understandable - programming is not a job where tracking hours makes sense. Rather than timesheets, it would make _so_ much more sense if instead, high level but detailed quarterly reports were made outlining what was completed, and if there needs to be more detail, an audit can be done. Timesheets kill productivity, motivation, and curiosity to try new things and accomplish actual research and development - what the SR&ED program is intended for. At the end of the day, it's the implementation of the program and the industry of consultants surrounding it that is flawed.

jariel 6y ago
That's nice, but it doesn't explain why SR&ED is bad. If the reporting was crazy burdensome - ok - but that doesn't seem to be the case. The article makes the impression that it's more like a 'welfar trap' type scenario. In my view, it's just not relevant, the money just doesn't matter that much. Good projects tend to get funded.
MattGaiser 6y ago
And all the time wasted on SR&ED. My manager is constantly pulled away to fill out some document to do with it.
- danbolt 6y ago
  I can't tell if the worst part of SR&ED is management pulling you away to document your work for tax credits or management hoping you'll lie about your work for tax credits.

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arcosdev 6y ago

Good? Trying to be like SV and push Canada in that direction is toxic. I agree salaries should be better, but they should be better across all sectors, not just technology.

boc 6y ago
Not sure if I follow this logic. Are you saying that importing SV salaries and culture will create a Dutch disease effect in the broader Canadian economy?
- busrf 6y ago
  We already have petroleum Dutch disease, switching to another Dutch disease would be very welcome at this point (:

pm90 6y ago

I have a contrarian take. The Canadian tech scene is limited not by the Captains of Canada’s industry (although it might be a factor, but not the major one) but by the simple fact that Canada’s economy and population are much smaller than the US and importantly, Canada doesn’t throw insane amounts of Cash into its Defense industry. They also cannot deficit spend forever like the US can because of the USD. I would wager these structural issues are likely to be more consequential than debating over compensation fixation.

pietrovismara 6y ago

Infinite growth is a delusion. Who said that behaving like a tumor is the best path for a company? Especially when we complain all the time about colossal corporations being more powerful than nations. That's what you get with infinite growth: monopolies, too-big-to-fail companies, etc.

djmips 6y ago

This is a good take in my opinion and generalizes to any endeavor of creation. You can't plan that. Only when you have figured everything out can you move into a production mode. In game dev, this is informally known as Czerny's method. Production is a finite game but design is an infinite game. Forcing startups to work like they are in production is a good way to lol them.

jariel 6y ago

This is a very interesting piece but: 1) Although it may be impossible ... you might need 'more data' to prove your point and 2) "SR&ED forces you to play finite games, because it forces you to articulate what you’re spending this money on. And so you have to justify, at the very least, what problem you are solving and what specific steps you are taking to solve it. You enter the world of problem definition, where building your startup becomes Serious Work, with official time sheets and government forms. " I think is just straight up wrong. Not only is focusing in the problem just fine, it's actually probably a healthy thing. The 'real answer' to these credits is that they are probably not needed, a 'good startup' should just be able to fund itself. But the fact that forms and some degree of problem statement are required is not the problem.

Jack000 6y ago

The Canadian startup bureaucracy is real. I find it kind of funny that the main requirement for IRAP funding is that you don't actually need the money. It's extremely frustrating when you see a punt like Element AI get 20 million from the government, despite not having any product direction or seemingly any idea what to do with that money. It feels like people are rewarded for navigating the bureaucracy rather than actual startup success.

antoniuschan99 6y ago
Companies like Myant which look so innovative but haven’t produced anything consumer related that I can purchase. Also startups here (such as ElementAI) tend to screw over their employees with their stock options. I feel like here you get all the bells and whistles working at startups without the potential exit rewards - except for Shopify of course, their employees must all be super happy :)

motohagiography 6y ago

If you wanted to summarize that uncanny Canadian quality about television, movies, and lately startups, it's that they are the artifacts of a mandate, which is usually a condition of some kind of institutional funding, like SREDs, but also a bunch of other vehicles. The finite game is that a lot of capital and incentives come from agencies who have government mandates, which gives everything a certain tint. So glad to read this. The author wrote a story some months ago about the reason SV angel works is because it's part of the social signalling for wealthy people. You make money, you show you can do it again, and that's what makes you a player. In Toronto, it's different.There are excellent global tech companies in Canada (Ubisoft, EcoBee, Shopify, Pornhub, etc.), but like everywhere, excellence is exceptional. It's the "why is this weird? Oh, because they had to write around this condition of their granting agency." The US has tons of public funding as well, but much of it is defence driven, which has more general reusable business applicability than say, "culture," driven. Not sure what the solutions are, but something we should put words to as that weirdness has been a ceiling on growth and opportunity here for a couple of decades.

chrisallick 6y ago

"In contrast, infinite games are played for the purpose of continuing to play. You do not “win” infinite games; these are activities like learning, culture, community, or any exploration with no defined set of rules nor any pre-agreed-upon conditions for completion. The point of playing is to bring new players into the game, so they can play too. You never “win”, the play just gets more and more rewarding." Sounds nice...

plankers 6y ago

Interesting analysis of the differences between the two scenes, but I'm not convinced of Danco's assertion that bad angels keep away the good. It seems equally possible that the attractive draw for angels (and all VCs) of a red-hot scene like SF is simply too powerful, so all the "good" angels flock there rather than waste their time in a less productive market. The same phenomenon he describes where liquidity events propagate the cycle of early movers becoming angels could easily take place on a larger scale where an exodus of "good" angels from SF seeking value in other markets disseminates this model and evens it out a bit. This could also dampen some of the externalities created by this feverish form of capitalism i.e. ludicrous real estate prices, crushing income inequality, etc. Of course this would take some rather weighty exogenous event taking place to make either SF or the US unattractive locations to start a business.

l2silver 6y ago

I have absolutely nothing to back up this statement, but I wonder if the problem with the Canadian tech scene is that, from a societal level, Canadians are more conservative and risk adverse.

Dan42 6y ago

> If Montreal weren’t in Quebec, it would be an unstoppable startup scene. I'm really puzzled by that statement. I don't see Quebec as having anything particularly different from other provinces that is harmful to startups. French? Everybody in Montreal speaks English anyway, and developing i18n software is super-trivial if you do it from the start; not something that would impact startup velocity in any meaningful way. Or was this meant the other way around? That Quebec founders are disadvantaged in the same way that black and female founders are disadvantaged in SV?

HDMI_Cable 6y ago
Honestly, from what I've seen, people really are just too scared to speak French. People will pick Toronto or Vancouver over Montreal, mostly because of the language. I haven't seen anything to suggest that Quebecois are disadvantaged, maybe except for the fact that anglo VCs will mainly try and fund anglo startups? Being bilingual is a big perk in Canada, so many from Montreal might have a leg up in that sense. But I could be wrong though.

MattGaiser 6y ago

The bit about accelerators is interesting to me. I was involved in QICSI, a Canadian startup accelerator as part of one of the startups there. I was then part of another startup from that same accelerator. Have encountered several others that have bounced from accelerator to accelerator. And it does almost seem like a very milestone and very checklist driven thing. They all seemed to just be jumping from accelerator to accelerator. Does that happen in the USA? Do you go somewhere else after Y Combinator?

glitchc 6y ago

Bah, this reads like a screed. The author wants Canada to be like the US, but they are fundamentally different countries with fundamentally different ethos. The motto of the US govt. is “Life, Liberty and the pursuit of happiness.” Contrast that to the Canadian motto of “Peace, order and good government.” The rest flows from this difference in perspectives. As for Montreal being a tech hub? Blech. The city is covertly racist to anyone who is not French Canadian. Death by a thousand cuts.

pimlottc 6y ago

I thought this was somehow about gamification UX or actual game design or something, but the actual article title is “Why the Canadian Tech Scene Doesn’t Work”, which is more informative to me, at least.