Tapping Canadian Talent Abroad

By Jeffrey Crelinsten

There's nothing like a pitch session to separate the kids from the grown ups. I recently attended a series of entrepreneur "bootcamps" designed by the San Francisco/Silicon Valley office of the Canadian Trade Commissioner Service (TCS). The TCS office has a number of programs to help Canadian ICT companies wanting to develop business in Silicon Valley and needing to find customers, partners, new employees or financing.

The challenge was how to identify companies that were ready and wouldn't waste people's time or the companies' own time and money. Enter the "bootcamp" — a one-day session in which experienced Silicon Valley venture capitalists and entrepreneurs come up to Canada, give presentations on the ins and outs of doing business in the Valley, watch Canadian company executives give a 10-minute pitch about their firm and the specific opportunity that they want to pursue in the Valley, and then ask questions and give the company executives feedback.

The TCS ran two "bootcamp" series in 2009, first in five Eastern Canadian cities and then in five Western cities. Last April, I attended their second Eastern series, which was expanded to other tech sectors and involved TCS offices and local experts from New York and Boston in addition to Silicon Valley. TCS is planning a second Western series in the Fall which will likely add an Asian market as well.

What struck me about these sessions is that they dealt with very practical issues pertaining to running a successful tech company. The discussions revolved around customers, revenue, competition, how to scale a business and how to grow. While many of the Canadian entrepreneurs were focused on their technology, the experts got them off that track very quickly. Entrepreneurs who thought they could succeed by capturing a small percentage of a huge global market were whisked back to reality. The experts were generous, gracious and brutally honest. They did not pussyfoot around - which is what the entrepreneurs needed.

Most of the pitches were from very young companies — primarily start-ups. Typical weaknesses were fuzzy ideas on who their customers were; lack of awareness of the competition; unrealistic assessment of the market opportunity; unclear business models; and, preoccupation with finding investors before they really had a business. There were some stand-outs. Interestingly, they tended to be companies that already had sales, customers and even profit in a few cases. For these companies, the "bootcamp" served a business development purpose. For most of the others it offered education and mentoring opportunities. All participating entrepreneurs benefited from the presentations, the experts' feedback and the networking. The TCS posts are following up with a number of the companies that have been deemed ready or close enough.

This innovative program highlights the challenges we face in Canada in our tech sectors and opens a door to potential solutions. Readers of RE$EARCH MONEY are only too familiar with the litany of economic woes facing Canada — declining prosperity relative to other nations; lagging productivity; relatively low business expenditure on R&D (BERD); and, firms being liquidated or sold too early. All this despite one of the world's most favorable R&D tax credits and major investments in university research. Much of today's policy discussion centres around R&D — how to increase Canada's BERD, how to attract R&D investment from outside Canada, how to commercialize university research, how to attract and retain world-leading researchers. What I found so refreshing about the "bootcamps" is that their focus was not on R&D, nor on technology, nor on financing; it was on how to run and scale a successful business.

Too many Canadian tech company founders and executives are preoccupied with technology and how to finance R&D. They lack customer orientation and commerce savvy. While policy makers are grappling with the macroeconomic issues, we need to mobilize experienced entrepreneurs, investors and executives who have "been there, done that" to help Canadians in our tech sectors grow successful companies.

TCS San Francisco/Silicon Valley has taken another major step toward this goal by helping a group of Canadian expatriates living and working in Silicon Valley to launch a new organization, C100, dedicated to helping Canadian entrepreneurs and executives get a foothold in Silicon Valley and scale their businesses (R$, June 4/10). C100 members are all Canadians who have successful careers as tech entrepreneurs, venture capitalists and C-suite executives.

They have seen similar groups of expats from India or Ireland come together to help their compatriots connect with influential players in the Valley, find customers, do financing deals or meet potential partners. Already, some C100 members are volunteering as experts for the next round of TCS "bootcamps", and they are developing other ways to help identify and coach Canadian firms wanting to do business in Silicon Valley.

The TCS "bootcamps" and C100 are examples of the kind of help our tech companies need. A firm with $1 million in revenue today, growing at a challenging compound annual rate of 20%, will take over 25 years to reach $100 million in revenue. We need more experienced business people to help Canadian SMEs grow into large, global companies. Two aspects of the TCS initiative are uniquely valuable in this regard. First, the help comes from offshore and is about expanding business outside of Canada. Our tiny domestic market compels tech companies to find niches where they can sell competitively to the world. Second, the helpers have first-hand experience. They have made the mistakes, they have learned from them and they are successful.

With the creation of more groups like C100, Canada can develop a network of experienced Canadians to mentor entrepreneurs, advise Canadian companies, sit on company boards, broker business deals for Canadian firms and share their expertise and contacts abroad to help Canadian firms scale their businesses and compete globally. Our expats in Silicon Valley and elsewhere are valuable assets. We should identify them, support them and work with them — via "bootcamps" and other means — to strengthen commerce competence in Canada's tech sectors. I guarantee that the resulting increase in global trade will finance lots of R&D in Canada and much more.

Jeffrey Crelinsten is president of The Impact Group and co-publisher of RE$EARCH MONEY.