By Cameron Burke
It’s no secret that Canada has a scale-up problem. Often, we cite finite resources – talent, money, expertise – as the major barriers to scaling our tech companies at the same rate as our neighbours.
Over the last 15 years, I’ve been the co-founder of two software-as-a-service businesses and a senior leader at two rapidly scaling companies, including Hootsuite. Now I’m a managing director at PwC.
I’ve learned that it’s often the little details and impossible-to-predict moments that are the hardest to navigate. It’s the due diligence emails that need a reply by 8 a.m. but require more detailed attention and work than there’s time for. It’s the minutiae of structuring shareholder agreements that retain your top performers. And it’s the unexpected surprises and challenges that arise when expanding into new markets.
Unfortunately, many first-time founders – myself included – don’t know where to look for help. Here are some insights I wish I’d known and lessons I’ve learned along the way.
1. Be measured and discerning when entering new markets
Many companies believe they’ll grow faster outside of Canada than in. They’re not wrong, necessarily – but too often, founders go after markets opportunistically.
Certainly, there is something to be said for moving into markets where you already have demand, but opportunism needs to be balanced with strategy: are you entering the right markets at the right time? Choosing the next place to scale involves understanding the regional variations or localizations you need to make in your products; it requires making a decision about whether you’re going to partner with an established company in the same or an adjacent space.
When I was starting out, we built globalization into our strategy, but we didn’t know how to anticipate and plan for these additional considerations. Determining the right team to take your product to market, for example, is a complex process that is critical to executing your growth strategy.
2. Don’t underestimate the importance of your winning culture
There’s no “one size fits all” formula for expanding, but one thing I learned is that your company is only as strong as the team taking your strategy to market. If you’re opening an office abroad, is it necessary to hire senior talent from that country, or can you look to the rising stars at your headquarters who are already strong contributors to your culture? These are the people who are most likely to replicate your way of working, creating cohesion and consistency between new offices and the rest of the business. They’re also the most likely to localize your product and marketing materials successfully, because they understand your company’s values and are on the ground in your new market.
Another important detail: hire for cultural contribution, not just experience. Culture is such a fundamental force in companies, and it often goes unnoticed when scaling is a priority. But the drive to just fill seats with “qualified” people is a mistake. When you get culture right, your hiring is easier, your deals close faster and your company experiences notable growth. If you get it wrong, however, it can be expensive to fix and harmful to your brand.
3. Have the right conversations with investors – and keep relationships warm
A key component to scaling any business, as well as attracting the right resources, is ensuring that there is enough funding available to make it happen. I learned early on that funding takes much longer than expected – typically three to six months longer – and this needs to be accounted for at the planning stages of any new initiative. Founders should devote time to building strong relationships with early investors, as they can help mitigate this problem by providing additional funding or advocating for your company to other investors down the line.
Of course, it helps to have a defined sense of what investors are looking for. A decade ago, defensible intellectual property (IP) was the central piece of every fundraising conversation. Today, there’s more emphasis on the quality of the IP versus the quantity – just because you have IP doesn’t mean there’s perceived value in it. Creating the right IP takes time, and you may need to involve multiple stakeholders, including external lawyers, as you refine your strategy. Invest in this process up front; you’ll be grateful when it’s time to articulate your product in those critical funding conversations.
When it comes down to it, it doesn’t matter if you’ve raised $1 million or $300 million – you’ll never have all the talent and resources you need to scale as fast as you want to. But if you work creatively with what you’ve got and think boldly about your go-to-market strategies, you can outpace the competition.
Cameron Burke is Managing Director, Tech Sector, Western Canada, at PwC Canada. He’d love to hear the experiences of other entrepreneurs who are currently scaling Canadian tech firms at home and overseas. Get in touch with him via email or on Twitter, or learn more on how the PwC team is helping Canadian tech companies scale.