On May 15 and May 16, the Ontario Centres of Excellence (OCE) hosted OCE Discovery at the Metro Toronto Convention Centre to bring together aspiring and budding entrepreneurs, investors, and those curious about how Canada is becoming a global tech leader. The innovation showcase featured a number of panels about Canada’s growing tech ecosystem, over 500 exhibits of some of the latest tech developments, and several pitch competitions.
Scaling up Ontario’s tech ecosystem
A panel moderated by OneEleven’s Bilal Khan during day one of OCE Discovery, featuring Top Hat CEO Mike Silagadze, Tulip Retail CEO Ali Asaria, and Axonify CEO Carol Leaman, focused on what it takes for Canadian startups to scale to the next level and position Canada as a global tech leader. The bright minds touched on their experiences raising capital and acquiring talent in Canada to scale their companies, giving the audience practical examples to think about.
“The biggest shortage of talent in Canada is senior executive talent, folks that have done there, been there before.”
Silagadze discussed why Top Hat’s recent Series C funding round of $29.5 million came from US-based investor Union Square Ventures. He said that while there’s capital available in Canada, very little of it is available to tech companies, so he advises young entrepreneurs thinking of scaling to look south of the border to raise money.
“The best tech investors are there and it’s always helpful to bring capital into Canada,” said Silagadze. He added that the key to securing investments is building strong relationships with investors through networking and introductions from other founders who’ve received investments in the past.
“With every round of financing that we’ve done, the way that process begins is through our relationship,” said Silagadze. “Get founders to introduce you. You have to go through an introduction and build a relationship. Over time, the fundraising becomes really easy.”
— Reza Moridi (@rezamoridi) May 16, 2017
Leaman agreed that it’s slightly easier to secure investments from US-based VCs, and building relationships where potential investors are kept in the loop of a company’s vision is crucial to the scale-up process.
“Axonify would not have gotten off the ground if I hadn’t convinced an early investor in California that I knew that relationship was critical to our seed capital,” said Leaman. “That allowed us to rebuild the technology to get the first few customers.”
Leaman also noted that when entrepreneurs raise capital, it’s important to know what that capital will be used towards. When Axonify raised $36 million in November 2016, Leaman said it wasn’t only about product development anymore; its sole purpose was to focus on the company’s sales and marketing.
“We figured out the tech. We know who we want to sell to, we know how to service, deliver, and it was really about customer acquisition and delivering in rapid acceleration for lots of net new revenue,” said Leaman.
— David Johnston (@GGDavidJohnston) May 15, 2017
While raising capital is one aspect of scaling up, Leaman, Asaria, and Silagadze believe acquiring talent and gaining international attention is also a critical component of the process.
When asked about what it’s like to build a team in Canada, Silagadze noted that Canada, in particular Ontario, has a large talent pool for areas like engineering, science, and sales. He said that a strong STEM talent pool has doubled salaries for top talent, and allowed “Canada to retain a lot of the talent that was previously being lost.”
But while it may be easy to find individual engineers and salespeople in Canada, Silagadze said the biggest talent challenge is acquiring senior executive talent — people that have worked in tech and significantly scaled companies before.
“In terms of talent that’s accessible, we found that individual contributors, individual engineers, individual salespeople, are fairly easy to come by. There’s enough of that out there in Canada,” said Silagadze. “The biggest shortage of talent in Canada is senior executive talent, folks that have done there, been there before.”
The importance of supporting AI in Canada
On day two of OCE Discovery, a panel featuring Creative Destruction Lab associate director Daniel Mulet; Layer6 co-CEO Tomi Poutanen; and NextAI academic director Graham Taylor touched on Canada’s foundation in artificial intelligence and how the country can support more AI researchers.
Kicking off the discussion, Taylor expressed his excitement about the power of reinforcement learning, an area of machine learning that’s inspired by behaviourist psychology.
“Reinforcement learning is particularly exciting because it’s feeling the move from learning in the cloud to learning in the physical world,” said Taylor. “What’s interesting is that both reinforcement learning and deep learning had been around for quite a long time but had been working in their own silos.”
— Tibor Turi (@tibor_turi) May 15, 2017
Mulet stressed that a key challenge for emerging AI startups is accessing data.
“In terms of challenges, I think access to data is one of the big ones, access to useful data in an environment that is trainable and that also has direct commercial applications is a challenge and then communicating and translating to investors the difference between an AI first company …versus a company that’s maybe two to three people that are using commoditized AI,” said Mulet.
The panelists also discussed how Canadian institutions and various levels of government can further support research in AI. While there has been a rise in federal and provincial government funding into AI research through recent initiatives such as the Vector Institute, Taylor doesn’t believe “that the funding should stop now that these programs have been established.”
He also believes that Canada should continue focusing its efforts on sustained support for AI researchers to maintain its leadership in the field.
“Certainly I applaud the federal and provincial governments, the private sector for investing into fundamental AI research and allowing us to take this outside the lab and commercialize it,” Taylor said. “We’re creating three huge research institutions, one in Edmonton, one in Montreal, and of course the Vector Institute in Toronto. We’re looking at recruiting and supporting CIFAR research chairs in AI and these people need to be supported in the long term, because research takes time.”