With over $1.6 billion invested in Toronto area startups and nearly $1 billion invested in Vancouver startups in Q3 2021 alone, it’s clear that Canadian startups are back to scaling their businesses. But those businesses are managing a lot right now, from an accelerated digital transformation to an employee shift to remote and hybrid work. The recent Cisco Designed State of Startups survey, presented in partnership with BetaKit, reveals the stated challenges, priorities, and areas of investment for Canadian startups and small businesses.
In a recent BetaKit Live panel discussion, Shaun Ricci, General Manager, Talent Intelligence at Ceridian Dayforce, Lissa Ricci, Head of Sales, Small Business Solutions at Cisco Canada, and Andrew Popliger, Partner, National Tech Sector Leader at PwC spoke about the changing tides in Canadian tech and explained why talent is at the top of everyone’s mind right now.
From defense to offence
With billions flowing into the Canadian tech ecosystem, things are looking up for future growth prospects. But these capital flows were not a foregone conclusion.
Popliger said if you had asked him at the start of the pandemic, he would have never predicted the level of growth in Canadian tech and the rapid pace of digital transformation.
“We’re seeing something in the last five years we haven’t seen before in Canadian tech.”
– Andrew Popliger,
PwC
“The pandemic accelerated the pace we were on,” Popliger added.
Popliger also remarked that while the number of deals is similar to what it was two years ago, the funding amounts are larger, a signal to him that the Canadian tech ecosystem is truly growing. Companies raising seed rounds a few years ago are now coming back for growth-stage capital, something Canada has struggled with in the past.
“We’re seeing something in the last five years we haven’t seen before in Canadian tech,” Popliger said.
As a co-founder of Ideal, before selling to Ceridian, Shaun Ricci said the pandemic pushed the startup into a defensive posture at first – but they couldn’t afford to wait and see how things went. The company had to get aggressive to survive.
“Wait and see could have killed the business,” Shaun said.
As a member of Cisco Canada, which supports thousands of companies in the tech ecosystem big and small, Lissa Ricci noted a similar sentiment among her client base.
“Small businesses continue to invest, to grow, and to expand,” said Lissa.
Tech is a tool, not a plan
According to the State of Startups survey, collaboration software is the top investment area for Canadian companies in the next year. For the panel, this seemed like companies grappling with remote or hybrid work environments while still focusing on market expansion goals. At the same time, Shaun cautioned against thinking that simply buying software will solve your scale and collaboration problems.
The founder said that, from a change management perspective, it’s critical to have a plan in place to introduce the technology to your workforce, adding that even the most intuitive platforms will be confusing to some people.
“Every tool does take some sort of the process to make sure it’s a success in your organization,” Shaun said.
To this end, he recommends not just buying the tool, but working with that vendor partner to plan a successful rollout.
As part of her role, Lissa Ricci often has conversations with companies when they are considering technology solutions. On top of planning for a successful roll out, she recommends startup leaders ask themselves five questions to assess how technology will fit into their business and how to plan for a successful roll out.
- Do I need this for my business? Make sure it’s business-critical so the expense will create value.
- Is the price point affordable for us? And is the price comparable to similar software on the market?
- Is it simple to install and manage? And does the vendor offer assistance on how to install and manage the platform?
- Will this platform scale with me as the company grows? Or will I need to get new software later?
- Does the platform have additional features that will be valuable for my business at a larger scale? Or is this feature set all I get?
Always be recruiting
In perhaps a startling contrast, the State of Startups survey also found that despite a shortage of talent being named the biggest challenge for companies in 2021, investments in talent were the lowest priority for 2022.
In response to this, Popliger said it’s easy for founders to focus outward – as they should – but they need to still invest in talent to succeed.
“Talent and people are a company’s most important assets,” he said.
Popliger added that there are two sides to the coin of the current talent war taking place: while Canada might be losing talent to global players recruiting here, Canadian tech companies are now more empowered than ever to recruit globally.
“From an exciting standpoint, we’re at the edge of a new world of work,” said Popliger.
Shaun Ricci agreed with this sentiment, adding that even if new hires aren’t on the roadmap, companies should invest in preventing burnout.
“Don’t just assume it’s going to work out,” Shaun said. “What often seems like a small inconvenience can lead to burnout really, really quickly.”
Building bonds with and between employees is necessary, especially in a hybrid or remote environment where people can’t see each other in person on a regular basis. In order to build that culture, said Shaun, the key is to build trust – and trust comes from transparency.
He acknowledged that sometimes you can’t tell people everything; for example, hammering out the details of Ideal’s acquisition by Ceridian meant keeping things quiet until the official announcement. However, Shaun noted that by sharing everything you can share, even (and especially) when you’ve made a mistake and need to change course, leaders build enough trust that employees will give them the benefit of the doubt in the face of future uncertainties.
“People prefer to hear the truth about what you’re doing, what you’re thinking, and your decision making process,” said Shaun Ricci.