Andrew DSouza | Mashable

When RIM co-founder and former University of Waterloo Chancellor Mike Lazaridis handed me my degree four years ago, the world was a very different place. BlackBerry was the world leader in smartphones, its stock was at a record high, and the company was clearly seated as the crown jewel of Canada’s tech ecosystem. It was undeniable proof that the country could build a world-class tech company.

Today, well, things have changed. Canadian Business published RIM’s obituary, and according to University of Toronto Business Professor Joseph D’Cruz, Canadian entrepreneurs “should not dance with the giants” of Silicon Valley.

But that rather broad response may have been a bit premature. In fact, a wave of recent exits to high profile U.S. buyers has put Canada back on the radar of investors. It’s hard to go to a startup or VC event these days without feeling an iron ring on the other side of a handshake. But then that’s part of a growing trend of big money coming Canada’s way. Not convinced? Then here are five other reasons why entrepreneurs should consider setting up shop in Canada.

1. Talent

Canadian universities consistently graduate some of the world’s top technical talent, but the competition to attract them is much less intense. You don’t have Google and Facebook offering astronomical starting salaries for engineers right out of school. You’re not always looking over your shoulder at Wall Street, worrying that they’ll take your best data analysts once the markets pick up.

RIM’s success was driven by brilliant technologists and marketers, while its demise was due to hubris and poor decisions by key executives. The talent responsible for the company’s growth doesn’t just vanish because the company falls apart. They are freed to do bigger and better things. Kik’s Ted Livingston is a prime example of this (although RIM did try suing him in the early days). Former RIM exec, Dennis Kavelman, has also joined high-growth education company Desire2Learn.

2. Investor Interest

Too much money chasing too few good ideas and teams in Silicon Valley has led savvy investors to look elsewhere for promising investment opportunities. As a result, many high-profile Silicon Valley and East Coast investors have recently placed big bets on Canadian companies.

The historical funding environment in Canada has forced founders to do more with less and avoid the bad habits of many of their better-funded counterparts. In general, any Canadian startup that has been around for more than a year probably has a pretty sound business model and decent traction. Otherwise, they wouldn’t be able to keep the lights on. These characteristics are becoming more appealing to investors, as many of them have been burned by high growth consumer web flame outs.

3. Immigration

Canada’s economic growth has been built through immigration and its immigration policy reflects that. Canada doesn’t arbitrarily limit the number of qualified people allowed into the country to 65,000 per year. Canadians understand that immigration is a major driver of economic growth, and the country actively solicits immigrants. Canada’s government is also improving its immigration policy to make it easier for highly skilled and younger immigrants to enter the country, including piloting a startup visa. This means that it is far easier to bring technical talent into the country and build your team in Canada, and it will continue to getting easier.

That said, Canada still has an accreditation issue in many fields (and still have doctors driving taxis), but it will take as many IT engineers who want to help build its startups as it can get.

4. A Launchpad for the World

Largely a function of Canada’s immigration policy, the demographics of Vancouver, Toronto, and Montreal are about as heterogeneous as they come. This means that your early customers often have a variety of biases, so consumer products which do well in Canada often don’t need to change very much to do well around the world.

Canadian startups also don’t face the “valley effect” where ideas that seem to be growing like mad between San Jose and San Francisco quickly lose steam as they land in front of the more skeptical parts of the world.

One look at Quora for opinions on the hottest Canadian startups yields many strong B2B players: Shopify, HootSuite, Wave Accounting, FreshBooks, Desire2Learn, and VidYard are a few. Even the B2C companies like Kik either have healthy revenues or massive traction.

If your product works well in a major Canadian metro, there’s a good chance it scales well to most of North America, and large parts of the world.

5. Government Support

Canada’s government does more to support innovation than any other developed country. From rebates for R&D investment to very favorable tax treatment for capital gains for private company shareholders, Canada has shown a commitment to supporting startups.

And that commitment appears to be gaining steam. The government has allocated $400 million to bolster the VC ecosystem in Canada. While this may seem like a drop in the bucket (the equivalent of one mid-sized Silicon Valley fund), if allocated wisely, it could have a tremendous impact and effectively signal to the world that Canada is open for business.


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