Why Canada’s Tech Story Isn’t All Doom and Gloom
This post originally appeared in the Financial Post. You can view the original here.
When $78-billion goes up in smoke, it’s OK to be concerned. That’s roughly the difference between BlackBerry’s valuation at its peak — in the heady, pre-recession days of 2008 — and what it’s slated to be sold for after a half-decade of decline. (And that’s if all goes well.)
But before we start talking Nortel all over again, and reviving discussions about whether technology companies can succeed in Canada, I think it might be useful to take a more granular look at what’s really happening.
As a Canadian entrepreneur, I don’t want our nation’s tech scene to be a story of one or two giants; I want it to be the tale of a broad range of successes — thousands of startups making a name for themselves domestically and beyond our borders. I want it to be the story of home-grown businesses that don’t need to leave the country to attract investment and have international success.
A lot of these stories are already being written by companies that run the gamut from e-retailers to space-age computing firms. They may not be household names yet, and they may never approach the scale of BlackBerry. But that’s exactly the point. Right now, from coast to coast, Canada is home to emerging businesses innovating under the radar and quietly working on the the next big thing in tech.
While you may not have heard of Ottawa-based Shopify, chances are you’ve experienced its technology. The e-commerce tool is used by General Electric, Tesla Motors, Crossfit and 70,000 other businesses to simplify the process of operating an online store. Plus, they’ve recently launched a system to help bricks-and-mortar retailers do everything from check-out customers to manage inventory all from an iPad. With $22-million in funding and nearly 50 million products sold through their technology, Shopify is poised to grow dramatically in the years ahead.
On the subject of shopping, one of the country’s brightest retail stars is a little company called Frank & Oak, a Montreal-based fashion label and online retailer using new technology to rewrite the way men purchase apparel. Subscribers (currently more than 500,000) fill out fashion preferences on the site and receive a monthly digital newsletter with an algorithmically curated list of items. Customers choose their favourites, which are in turn crated up and shipped free of charge to try on. In true web 2.0-style, clothing designs are crowdsourced based on members’ preferences and produced nearly on-demand by Frank & Oak’s own mills, keeping costs low. The company, which received $5-million in funding last year, does an impressive 70% of its sales in the United States.
Meanwhile, Toronto-based startup InteraXon is making science fiction a reality. The company has created a brain-sensing headband called Muse which, for starters, allows users to play games using only their minds. The wearable technology converts brain waves into digital signals that can control a range of audio and visual equipment and even pair with iPhone and Android devices via Bluetooth. Muse, which one reviewer said threatens to make Google Glass look prehistoric, recently raised $6-million in financing from several prominent investors.
In Burnaby, B.C., D-Wave Systems is pushing the space-time continuum — literally — with new technology attracting interest from NASA and Google. By some estimates, its groundbreaking quantum computers, which rely on subatomic particles rather than transistors for processing, are up to 3,600-times faster than current devices at certain tasks. Lockheed Martin and the Universities Space Research Association have already purchased a pair of the $10-million machines, which may one day make today’s desktops look as quaint as old-fashioned punch-card computers.
Startups such as these — whether pushing the envelope in small or big ways — affirm that technology innovation is, was and will be alive and well north of the United States. I’ve contended with the Canadian tech bugbear since starting HootSuite in Vancouver in 2009. In spite of all the purported obstacles, we’ve managed to amass seven million users and now help 237 of the Fortune 500 companies manage their social media.
After breaking the record for the largest venture capital investment in a Canadian software company in history this summer — attracting $165-million from some of the same investors involved in Twitter and Facebook — I’m ready to put talk of Canada’s tech malaise to rest.
We have the engineering talent. We have the entrepreneurs. The capital is out there. And, most importantly, we have no shortage of brilliant ideas.
In September, a 15-year-old student from British Columbia won a $25,000 scholarship at Google’s annual international science fair for her invention of a flashlight powered by body heat. This young girl beat out thousands of students with a creation that has major global implications. How can we not expect big things in the years ahead?