I recently wrote about the need for focus in building the next generation of Canadian technology companies. I want to follow that up with what I believe is the first and most important ingredient – Entrepreneurship.
Today, there are simply not enough people catching the entrepreneurial bug and starting their own companies. It really is a numbers game – increase the supply of new companies, and there will be a proportionate increase in the number of successful companies.
The cultural change required needs to be instilled in us at the earliest possible opportunity, while we’re still in school and have little to lose and everything to gain. It is infinitely more difficult to convince someone to take risk when they have a mortgage, car payments, a spouse and children. It won’t work out for many that try, but for those that it doesn’t they will be better employees later for having tried, and better prepared should they perhaps try again.
Today our universities and colleges are focused on ensuring their graduating students are employable. Nothing wrong with that, but we need to do more. Educate someone to be an employee, and they will fill a job. Educate them to be an entrepreneur and they will create many jobs. Perhaps in exchange for the subsidized education most of our students receive, they should be required to receive a mini-credit in a short Entrepreneurial Studies course?
Finally, there is a mistake made by some that new company formation is strongly correlated to venture capital, and that by increasing the supply of venture capital there will be a corresponding increase in startups. That may be, but I would argue that the quality of those companies will be suspect as will the motivation of their founders. While there is no doubt a shortage of venture capital in Canada, new companies should not typically be looking to VCs for funding (of course there are some exceptions). Instead, they should be looking to bootstrap their business through their own time (and money) and other means including friends and family and angel investors.
And if you’re particularly successful, you may never need venture capital!