In the interview, Boris thinks that Canada doesn’t have large tech companies. He named two – Nortel and RIM, one dead and the other dying.
Here are a few quotes from Boris’ interview:
“We don’t have billion dollar Internet companies with the likes of Microsoft, Google, Facebook, and Amazon.”
“The valley is big not because the entrepreneurs were born there.”
“Canada needs to attract foreign entrepreneurs.”
While I agree that Canada needs to attract foreign entrepreneurs, I think what makes Silicon Valley is not merely foreign entrepreneurs. At the surface, that might be what Silicon Valley looks like, but that’s like giving an elephant to blind people and ask them what an elephant is.
What makes Silicon Valley so unique is the complete ecosystem around technology.
You have people who got rich from working in technology. You then have these people invest in technology companies. In essence, what make Silicon Valley great is the insight on what it takes to build technology companies.
“Silicon Valley is not a place but a state of mind.” – John Doerr.
Some of these insights are collaboration, competition, openness to innovation, failures and experimentation. Probably the most important one is the long term commitment behind technology companies.
To the rest of the world, wealth equals money. In Silicon Valley, everyone understands that wealth is created by building something people want.
It’s hard to create the next Silicon Valley just by copying what Silicon Valley is at the surface. At the surface, you bring immigrant entrepreneurs together, and you magically create the next Silicon Valley. But it’s a lot more than that.
Just like it’s impossible to build the next Facebook by copying Facebook’s features. What makes Facebook great is the fact that it’s the virtual representation of your friends. You cannot compete unless you focus on the friends first. To disrupt Facebook, you will need to create a completely different product – think Instagram.
As the world blindly competes to build the next Silicon Valley, they are merely paving a better road to it. Almost all second-tier startup incubators end the program with a road show to Silicon Valley. You’d wonder who is really benefiting from the whole startup hype.
Solution to Canada’s Next Billion Dollar Company – Immigration?!
Now with Silicon Valley already a powerhouse, brining foreign entrepreneurs to Canada is not the solution to create the next Silicon Valley. Again, it’s like copying Facebook features to compete with Facebook. It’s superficial, and it’s missing the point.
You can have these foreign entrepreneurs work for a few years in Canada. And let’s say they become successful in 5 years and right before they have the serious job-creation potential, they move to the States or get bought off by well funded US companies.
Companies like Salesforce build a complete acquisition strategy around Canadian companies.
So, why is nobody pointing to these as the missing opportunity at creating the next billion dollar company in Canada?
Greedy Investors with Near-term Thinking
So, why is nobody talking about these acquisitions? I think it’s simply because investors are getting filthy rich off these deals.
And that’s exactly what not to do if you want to create the next Silicon Valley. You cannot sell the hen that lays the golden eggs for the quick buck. Technology companies take 10 years to really manifest the value. To really build a billion dollar company, it takes tremendous multi-decade commitment. And that’s the biggest missing piece in Canada.
Too many Canadian investors get rich off natural resources. So, they naturally have a tendency to sell off the hen that lays the golden eggs. Nobody understands how to build the hen. Too many people have near-term thinking.
It’s probably best embodied by this episode of Dragons’ Den.
To summarize, two young entrepreneurs reinvented a brilliant new luggage. They patented the innovation, and they went to the Dragons’ Den. There, all investors advise them to license the technology to US companies in order to get filthy rich quickly. Nobody advises or helps them to think big and disrupt the luggage industry.
If you are wondering why Canada doesn’t have the billion dollar company, it cannot be more obvious than this. Too many people are in it trying to get rich quickly off entrepreneurs. Not enough people have the guts and commitment to create or help create something truly meaningful.
Do you think Google will be a billion dollar company had they license the technology to Yahoo? Unfortunately, I don’t think Google would even get IRAP money based on what I had to answer last time…
It’s a shame!