Since moving to Montréal two years ago, Shopify president Harley Finkelstein has made it clear that he thinks entrepreneurship runs through the city’s veins.
Harley Finkelstein,
“We have to be force multipliers for Montréal. There’s a legacy to live up to.”
Shopify
At HEC Montréal last night, joined by his friend and DavidsTea co-founder David Segal, Finkelstein took the stage to impart lessons to 600 attendees (mostly entrepreneurs) on building a global company from anywhere, including Canada.
The talk was part of the “Made in Montréal: From Bagels to Billion-Dollar Ideas” event, organized by TechTO in partnership with HEC Montréal’s incubator La base entrepreneuriale and Sage Canada, as part of Open House Montréal week. BetaKit was a media partner.
Finkelstein says he wants Montréal to be the “mecca” of entrepreneurship due to its rich history of immigrant-founded global companies that trace back to the city’s garment sector along Chabanel Street. He argued that founders have a responsibility to be tour guides and champions for the city.
“We have to be force multipliers for Montréal,” Finkelstein said. “There’s a legacy to live up to.”
Finkelstein said his grandfather, upon arriving in Canada in the 1950s, started an egg stand in Montréal’s Jean-Talon Market (it’s still there, and now its online store is powered by Shopify).
Segal, who co-founded DavidsTea with his cousin and led the retail company to an IPO in 2015, argued that the “best concepts in retail” have come out of Montréal, not Toronto, despite its status as an economic hub.
Alongside Finkelstein, Segal has reentered the tea business. The two partnered in 2021 to launch Firebelly Tea, which they called the “21st century tea company.” It sells luxury, loose-leaf teas and accessories, including an autowhisk that Segal has been “perfecting for years.”
Alongside a “Buy Canadian” movement, patriotic sentiment has been coming to a boil in Canadian tech this year as a trade war continues with the United States. At Toronto Tech Week in June, Cohere CEO Aidan Gomez encouraged founders to say “no” to investors who told them to move to the US. At the ALL IN conference in Montréal, a panel of venture capital (VC) investors claimed that Canada was the best place to build a business.
“People are going to tell you that you have to move elsewhere,” Finkelstein said. “You do not.”
While Segal and Finkelstein made championing Montréal a key point of the night, they argued that location is no longer a limiting factor for building a company. They encouraged the crowd to build a company from anywhere and to hire and sell globally.
“You don’t have to go to a local VC or local angel. You don’t have to hire a CFO or a general counsel here, you can hire them anywhere,” Finkelstein said. “That means you can live wherever you want and operate at whatever scale you want.”
Finkelstein’s hope for SR&ED reform
Finkelstein addressed his advocacy for reform to the Scientific Research and Experimental Development (SR&ED) tax credit. He claimed consultancy fees were siphoning a significant portion of the $4.7 billion in government tax credits away from entrepreneurs. Referring to a memo he submitted to Build Canada, he argued that reforming the program to cut costly consultants out of the process could benefit entrepreneurs.
Finkelstein said that the new government marks a change in engagement from what he’s seen in the past. He said that 10 days ago he handed a version of the memo with his proposed changes to SR&ED directly to finance minister François-Philippe Champagne.
“I have felt more engagement in the last six months than I have in the last 16 years when it comes to government,” Finkelstein said.
Proposed changes to the SR&ED program anticipated in the upcoming budget include reintroducing capital expenditures as eligible for claims and making public companies eligible for the preferred tax credit rate.
‘When no one’s watching’
What sets a company’s culture apart, Finkelstein argued, is “what you do when no one’s watching.” He encouraged founders in the room to follow Shopify’s lead in hiring entrepreneurs with a “give-a-shit” attitude to spearhead different divisions of the business.
“If you look across every product line at Shopify…the people running each of those areas of the business are founders, in some cases founders we acquired,” Finkelstein said. “That has been our best trick to keeping our company culture as strong as possible.”
He argued that seeing more scaleups with founders at the helm is a “wonderful” thing.
“No one is a guardian of a company’s culture the way founders are,” he said. “There’s no way a hired gun from McKinsey is going to care more about the culture of Shopify than Tobi and I.”
Segal said a company’s culture, especially with consumer-facing businesses, should empower people working on the front lines, like customer service reps. A brand’s values should never change, he said, but how a company does things should never stop changing. “What’s important is you don’t confuse the two,” he said.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
All images courtesy TechTO.