Are we too polite to innovate? Three Canadians debate the culture of winning

The Canadian reputation for politeness is renowned. It could also be holding us back from developing a tech ecosystem.

With Ottawa promising a bold national innovation agenda, #RBCDisruptors — a monthly series — turned the spotlight this week on how the Great White North stacks up against the global hotspot of disruption, Silicon Valley. Tax policy, immigration, education and venture capital were all mentioned. But culture was tops for the three guests: Michelle Zatlyn, the Canadian cofounder of CloudFlare, a Silicon Valley star in cyber-security; Dan Debow, a serial entrepreneur from Toronto; and Angela Strange, a partner at venture-capital powerhouse Andreessen Horowitz.

“Canadians like winning,” Strange said. “We do it nicely. But we don’t tout our wins, so no one knows we win and success can’t beget success.” Here are five takeaways from the conversation on Canada versus Silicon Valley:

1. The meek won’t disrupt the Earth

Canada needs to be bold. Strange, who is also a member of the Trudeau government’s economic growth council, said Silicon Valley is full of entrepreneurs promising to change the world, no matter how preposterous their ideas may seem.

Debow, an active entrepreneur who has raised nearly $300 million through the sale of his companies, said Canada prides itself on a culture of being reasonable. However, “all progress requires unreasonable people,” he said. “Being polite means we don’t confront the truth that something isn’t good for a customer, that a product isn’t good enough.”

An innovative culture is by nature discomforting, because great ideas challenge accepted wisdom. That means taking risks, questioning authority, and not waiting around for government to catch up. “The crucible of good ideas is often conflict,” Debow said.

Strange said Canada is catching up  — and the money won’t be far behind. “We’re seeing more Canadian unicorns and more Canadian startups,” she said. “It’s a belief that you can start something that can become a global leader in a large industry, that’s really here.”

2. The key to success is success

Zatlyn, who co-founded the cybersecurity company CloudFlare after graduating from Harvard Business School, said Canada lacks the fairytale stories of Silicon Valley, where newcomers have been known to spin technology into gold. Those stories have made investors in the Valley more likely to take a chance on early-stage companies. “The ecosystem here, when people have no idea who you are, I don’t think is quite at the same level,” she said.

The Valley is also loaded with people who know how to grow companies — a very different skill from starting them  — or run them once they’re big. Think of Employee #20, a person who can slide into a startup that’s bursting at the seams and take it to the next stage through everything from product enhancement to marketing.

It’s about money as well as talent. Debow said successful entrepreneurs pay it forward — investing the money they make selling their companies in the next generation of companies. “Success begets success,” he said, a line attributed to Wayne Gretzky’s view that one Stanley Cup convinced the Edmonton Oilers they wanted to win a lot more.

Debow recalled his first trip to the Valley, and being struck by the fact that every office building held tech companies. The likes of Apple and Google created an ecosystem unlike any other in the world, including accountants, lawyers and investors who had tasted success and had a bigger appetite for risk.

3. It’s time to double down on human capital; financial capital will follow

All three agreed Canada has more than enough human capital. The Toronto-Waterloo corridor is a huge growth area for tech companies, Strange said, in part because of its strong universities and diverse population. “We have the talent, we have the appetite for risk. The percentage of Canadian-based entrepreneurs that we see has gone up significantly, so I suspect that we will have a pretty big-stake investment here in the next little while.”

Online marketplace provider Shopify and messaging service Slack are two examples of Canadian companies that have found success while staying in Canada.

“Toronto has come a huge, long way,” added Debow. “I think the cheerleading is happening more, people are investing more. But it just takes time.”

Zatlyn agreed, pointing out that Silicon Valley had a 60-year head start.

4. Big companies can help

While it’s easy for Canada’s startups to jump on innovative ideas, the same can’t always be said for the large companies that dominate the economy. In order to keep up with the competition and avoid disruption, Canada’s big companies should experiment with ideas that don’t work out. “Teams need to be allowed to spend time on new ideas, many of which won’t work,” Debow said. “You should be trying things first, doing things differently.”

He pointed to large U.S. companies that invest in the success of their suppliers, as those suppliers can then help the bigger companies innovate.

Strange added that large companies must take risks, be open to criticism, and acknowledge tiny successes. When she was previously at Google, where she helped build the mobile version of the company’s Chrome web browser, even mundane improvements were celebrated. “It helps people realize that these really small wins are super important. Maybe it’s only 10%, but 10% here and there can quickly add up.”

She added that large companies can foster innovation by supporting startups, and not just through corporate venture capital. “It’s about cooperation, it’s about the large companies and the startups working together. It’s about the full stack of the ecosystem working together, that’s how you build a thriving ecosystem.”

Zatlyn said big companies can open up their procurement practices and do more to focus on problems and solutions, not processes. “That’s how you get interesting solutions,” she said.

5. Expect the unexpected

One thing is clear from the digital revolution, Debow said: investment in innovation isn’t optional. “Software is eating the world,” he said, echoing the title of a landmark essay by Marc Andreessen.

He pointed out that computing power is still doubling roughly every 18 months, even as computer engineers bump up against the limits of quantum mechanics. That has big implications for any business. Think of the airline industry: improvements in virtual reality could eventually mean the end of business travel.

With that in mind, we should view technology as a key part of every business. The push for innovation ‘’is not just about building a tech industry,” Debow said. “It’s about taking every one of our industries and figuring out how we can reinvent them using software, computing, and better distribution models.”