More pirates, fewer bankers: Steve Blank’s prescription for scale-up funding in Canada

Steve Blank

Photo: Steve Blank by JD Lasica is licensed under CC BY-NC 2.0.

It’s a long-held truism that too much caution among Canadian investors is starving our companies of fuel to grow. Steve Blank, the Silicon Valley sage whose teachings underpin the Lean Startup movement, reinforced that view in an interview with Communitech News, likening Canadian investors to “19th-century bankers” instead of the “pirates” whose embrace of risk turned the Valley into the world’s pre-eminent startup ecosystem.

The comments came in advance of a rare Canadian visit in September, during which Blank will speak at the Waterloo Innovation Summit, size up some of the region’s entrepreneurs and learn more about a community whose reputation as a supplier of top talent to Silicon Valley has steadily grown.

Blank’s observations bolstered findings in the just-released 2015 Global Startup Ecosystem Report by Compass, which placed Canadian cities at the low end of the rankings based on a relative lack of significant exits and slow growth among scale-up companies. On the plus side, Compass noted strong growth in the Waterloo Region ecosystem, where the quality of technical talent is among the world’s highest – a point that shone through in an in-depth profile in the Globe and Mail’s Report on Business.

While Canadian investors came in for Blank’s criticism, its entrepreneurs could also benefit from thinking bigger, a group of founders were told during a trip to Silicon Valley hosted by the C100.


One Waterloo Region startup that has taken full advantage of Silicon Valley connections is Kaizena, a University of Waterloo Velocity company, whichraised a $900,000 seed round from a slate of notable investors.

Meanwhile, Beagle, a Kitchener startup whose software scans dense legal contracts and highlights key clauses, pitched to investors in Seattle after completing the four-month Microsoft Ventures Accelerator program.

In other coverage, Canadian Business chose a diverse set of Waterloo Region companies – SeeHorse, Bridgit, Palette and HockeyTech – to profile as startups to watch. SeeHorse in particular drew a lot of attention in July, as its health tracker for horses shone a light on what founder Peter Mankowski called the “quiet revolution of how people want to treat their pets.”


As early-stage companies continued to grind their way to growth, we heard from a veteran of the Waterloo Region tech community, Igloo Software CEO Dan Latendre, whose intranet company is hitting stride seven years after it was spun out of a project at the Centre for International Governance Innovation.

Thinking globally is a must for any Canadian company seeking to scale, as Miovision is demonstrating through the international spread of its road traffic management technology.

Opening an office in Silicon Valley is often cited as a key strategic move for Canadian companies looking to scale internationally, and it’s one that six-year-old Clearpath Robotics announced late in the month. Before year’s end, the company plans to open a design facility in the Bay Area.

Meanwhile, Ted Livingston, CEO of mobile messaging juggernaut Kik, again fended off rumours that the company is for sale, calling its quest “one of the most fundamental races in the history of humanity.” Speaking of Kik, it is the first Canadian company to deploy Microsoft’s new PhotoDNA cloud service, which helps keep mobile users safe and stem the spread of child pornography.


Livingston wasn’t the only CEO quelling talk of a sale in July. In an interview with CBC’s The Exchange with Amanda Lang, BlackBerry CEO John Chen said a sale of the smartphone pioneer would not be considered “until the BlackBerry shareholder has good value reflecting truly what we have.” Chen tapped Cisco veteran Carl Wiese as BlackBerry’s new head of global sales, as the company continued to trim its workforce.

Canada’s largest software company, OpenText, was the focus of a Globe and Mail feature in a series on how Canada’s tech communities nurture entrepreneurship. With a market capitalization of $6 billion, OpenText has $3 billion set aside for expansion through further acquisitions.

As corporate innovation movement continued to build, the partnership between Canadian Tire and Communitech was held up as an example for the rest of the country in the federal government’s latest Digital Canada 150 report.


On the topic of government, a group of area MPs visited the Communitech Hub to announce $9.7 million in funding from the Canada Accelerator and Incubator Program (CAIP). The funds will enable Communitech and its partners at the University of Waterloo’s Velocity program, Laurier LaunchPad and the Accelerator Centre to offer more help to growth-stage companies.

An issue all fast-growing tech companies face is finding the right kind of space. In downtown Kitchener, where dozens of companies have taken up residence in just a few years, the market is hot for desirable offices with startup-friendly terms. We prepared this special video report on the state of space for startups.

Legal advice is another issue crucial to early-stage companies, which need guidance on protection of intellectual property and on incorporation, shareholder agreements and equity-based incentives. Communitech announced two free legal programs to help Ontario-based startups meet these critical needs.

The financial industry, meanwhile, is among the many traditional economic sectors facing technological disruption. As a reflection of that fact, more than 300 attendees turned up at the Tannery Event Centre for a sold-out event in which top banking executives met with fintech startups to discuss the changes buffeting the industry.

In other news 

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About The Author

Anthony Reinhart
Director, Editorial Strategy

Anthony Reinhart is a veteran journalist who left the Globe and Mail to join Communitech in 2011. Tony has covered everything from crime, politics and courts to business, the arts and sports, and his writing has won numerous journalism awards. He is Communitech's Director of Editorial Strategy and senior staff writer.