Stefan Palios works in product marketing and sales enablement; he contributed to BetaKit from 2016 to 2024. He tells the stories of Canadian tech, and has interviewed over 500 entrepreneurs on how they built their businesses.
In 2017, I tried to build a profitable company using only Canadian technology. That little experiment gave me an up-close view of the underbelly of the Canadian tech ecosystem, where public cries for support belied private skepticism about the ability to build big in Canada.
“Talking nicely about someone is not the same as being their champion or helping them succeed.”
Nearly a decade later, things are markedly different, both for me and the country.
The Canadian tech ecosystem has been rocked. What most see as an unjustified trade war resulted in “elbows up” cries to build Canadian and buy Canadian. Alongside those cries came frustration that Canada’s strategies aren’t off to a great start and that Canadians aren’t buying Canadian tech.
When I attempted my experiment nearly a decade ago, I was shocked by how down on Canadian tech some VC and accelerator leaders were—many told me, privately, that the best thing a Canadian startup can do is move to the US and benefit from its larger domestic market. Today, I realize that the biggest insight into Canadian tech I took away from the project is the idea that talking nicely about someone is not the same as being their champion or helping them succeed.
Canadians have lost our lore
During my experiment, and since that time, I’ve often heard that the reason we lack multiple globally dominant Canadian companies is either tall poppy syndrome or lack of access to capital. While those points are valid, they don’t tell the whole story. Looking back on my decade in Canadian tech, I posit these are simply symptoms of the real cause: Canadians have lost our lore.
Simply saying the words “Avro Arrow” sends shivers down the spine of many Canadian tech commentators; the same goes with the recollection that Canada developed the initial research that the Danes commercialized into Ozempic. Bringing up the global rise and subsequent fall of Blackberry and Nortel Networks garners either a nostalgic, knowing smile or haggard sigh of frustration. Even two of Canada’s current tech leaders—OpenText and Constellation Software—are structured more like 1960s conglomerates than 21st-century tech players.
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When our national technology and innovation stories are based on lack of commercialization, failure to compete, and operating models from the last century, it creates a country that is once bitten and twice shy. Right now, our greatest, positive stories are those of “Canadian-founders, non-Canadian-based” winners like Slack, Clay, Instacart, Cloudflare, and others who decamped for NYC or Silicon Valley. This missing lore of domestic success is, to me, the root cause underlying the lack of domestic growth capital access in tech. Valuations, the choice to invest, and the will to champion a company are all informed by a belief, both individual and collective, that an unknown company has a chance to hit it big. That belief is hard to shore up when the national lore primarily focuses on flops and missed opportunities.
Image courtesy Setfan Palios.
Yes, we have Shopify. It is by every measure an enormous global success, headquartered in Canada. But it seems like many are waiting with bated breath for the other shoe to drop. This is particularly visible whenever the company’s market capitalization flirts with being larger than RBC; one Globe and Mail article shared an analyst’s view that companies often have a “dismal fate” after overtaking the bank. Others question whether an SEC filing means the company is relocating their HQ and leaving Canada. It seems to come not from malice toward the company, but from living up to Canada’s lore as it exists today: any tech company that gets too big in Canada either leaves or fails.
Contrast this to the United States. We’ve all heard the stories of how Silicon Valley got started through military procurement, or how NYC cut its teeth innovating in finance. There were also enormous and costly failures, but they were allowed to be overshadowed by the narrative of obstacles surpassed on the road to success. Add in a dose of Hollywood glamorizing futuristic tech and pithy song lyrics about “making it here,” and you see how US lore has evolved to indicate success is more probable there than anywhere else on earth—something I often see repeated in LinkedIn posts.
Act, then believe
The key to rebuilding our national lore will be based on redirecting resources. Here’s how I think that can be achieved.
As builders, be the buyer you want to see in the world:
If there’s one thing I’ve noticed about Canadians, it’s that we buy familiarity. It’s one thing to call for sovereign tech; it’s another to open wallets for unknown domestic firms. This is only a weakness if we don’t prioritize learning about and sharing Canadian technologies.
The builders I’ve seen grow enormously successful businesses typically have done three things.
First, keep building. Second, institute a Buy Canadian policy for your company that addresses your criticisms of the federal government’s version. And third, perhaps most importantly, be Canadian tech’s biggest hype crew. Tell your external lawyers they should be using Clio. If you have retail operations, use Shopify POS or Lightspeed. If you’re building an intranet, use Tailscale. Run your banking on Float or Loop.
As a community, redirect money to Canadian tech:
As a community, we point things out (“We need to celebrate wins more!”) but often stop short of supporting these companies commercially, not just on social media. I saw this in 2017—people wanted Canadian tech success stories but were reluctant to buy Canadian tech because it was “unproven” (never mind they were early users of American tech).
Here’s how I approach this: when I talk to friends, challenges and goals inevitably come up. I then do a quick search through Google (or BetaKit) for a Canadian solution, and suggest it. If you want to go a step further, categorize your spending by who owns the profits: hyper local (owners who live in your town or region), provincial, national, and international; then see what percentages of spend went to each. While useful for budgeting, the real value is you get a clear path to redirecting your existing spend to increasingly local Canadian solutions, where possible.
As investors, find the beauty in the weeds:
The most successful investors I’ve met are the ones who get in the weeds to help their portfolio companies operate and grow, making real introductions to potential customers and talent.
If you don’t see a single Canadian solution for a problem multiple portfolio companies are willing to spend money on, you have a potential gap in the market to invest in. You could make potential customer introductions immediately, thus kickstarting a virtuous cycle.
Oh, Canada
All of this might seem a bit like forced patriotism. Except Americans don’t think about buying American tech, they just do. The rest of the world is waking up to this as well, if they weren’t already buying domestically by default. It’s time for Canadians to do the same.
The opinions and analysis expressed in the above article are those of its author, and do not necessarily reflect the position of BetaKit or its editorial staff. It has been edited for clarity, length, and style.
Feature image courtesy Unsplash. Photo by Tom Carnegie.