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‘Life is Good’ For Simpler Startups

Thursday, June 2nd, 2016

While many startups may have a desire to change the world, tackling a small problem can be simpler, more viable route to success. According to a report on Inc., Life is Good is valued at $100 million, having built its brand simply on combating negativity. The company sells everything from T-shirts to stationery, some of which feature its now iconic stick-figure character, Jake.

Life is Good: Jake

Life is Good is not the only startup taking a simpler approach to success. Startups like Israeli-based Gigya (data analysis) and Minneapolis-based When I Work (employee scheduling) are solving specific problems that companies face every day – and it’s paying off. Gigya is on its way to a billion-dollar valuation.

Point solutions – apps that also provide an answer to single, simple problems – are also prevalent in fintech, with startups like Trulioo and ChangeJar chipping away at big banks, one product or service at a time. When it comes to funding, Venture Capitalists are increasing looking for startups with a problem-solving mindset.

Simplicity is also key when making development decisions at the onset. Martin Weiner, CTO of Reddit, emphasized this point at a SXSW interactive conference held in Texas earlier this year. He advised that startups focus on “technologies that will help systems scale quickly, and are easier to employ.” This includes building with what he calls ‘boring tech’ – proven technology that works at any scale.

In the early stages of creating a startup, boring might be the right way to go.

“Silicon Forest” Attracts Talent from the Mother of all Tech Ecosystems

Thursday, May 19th, 2016

Tech disruption happens geographically as much as it happens across industries.

Portland, now known in the tech community as “Silicon Forest,” is becoming a big draw for developers as Bay Area high rents make Silicon Valley – arguably the most hallowed of startup ecosystems – less attractive.

As an indication of the trend, the region’s talent pool grew 28 percent between 2010 and 2013, compared to 20.8 percent in Silicon Valley.

Pacific Northwest Benefits

Portland’s affordability is major factor behind the growth experienced in the high tech sector, and resulting increased salaries are contributing back to the city’s wealth. And this benefits the U.S. Pacific Northwest as a whole.

While prospective migrants are attracted to the low cost of living and work-life balance offered by the region, Portland and Seattle, it’s neighbor to the north, are benefitting from employee exits at tech giants.

A tech ecosystem map from Madrona Venture Capital demonstrates how the University of Washington, Amazon, Microsoft and other notable contributors to the ecosystem have spurred the creation of startups, including now established Real Networks and Expedia.

With Google setting up a larger office space in Portland, this trend should continue to bolster the region’s startup prowess and ability to compete with other tech ecosystems around the world.


WIRED: Magic Leap Stands Out Among Giants in the Artificial Reality Race

Friday, May 13th, 2016

Artificial reality is making waves throughout the tech industry, and Magic Leap has made one of the biggest splashes in terms of financing. The company has secured what may be the largest C-round in history: $793.5 million.


Fort Lauderdale, FL-based Magic Leap will need to spend wisely to compete with the tech giants of the west coast and Asia.

A recent profile of Magic Leap in Wired noted that “Facebook, Google, Apple, Amazon, Microsoft, Sony, Samsung—have whole groups dedicated to artificial reality, and they’re hiring more engineers daily. Facebook alone has over 400 people working on VR.”

By 2020, the augmented and virtual reality markets are expected to be worth about $150 billion. This is creating hardware and software development opportunities for startups in just about every industry and facet of life, from film to education to day-to-day office administration.

But the potential applications could spill over combine with other emerging technologies. As we enter virtual worlds, the demand for IoT devices and smart-connected spaces could increase. The combination of virtual space and IoT tools has the potential to revolutionize industries such as skilled trades, healthcare, and tourism.

As startups plan for the future, it is worth considering if virtual reality will disrupt their business and how technologies like Magic Leap might impact them. Until Magic Leap unveils what it’s hiding, the true extent of its impact can’t be measured, but until then, it doesn’t hurt to imagine.  

Startup Simulations: The Future of VC Funding

Wednesday, May 4th, 2016

Startups understand survival of the fittest. But some might find themselves weeded out of the ecosystem faster than expected if artificial intelligence is deployed to evaluate them.

Recent advances in gaming and AI are adding another layer of complexity to an already competitive landscape in the form of “startup simulations.” As finance becomes more data-driven, simulations – which have been long been leveraged for gaming – serve a new purpose: determining whether or not a startup receives funding.

Business and economic simulations have been around since the 1990s, including well-known examples such as SIMS and Capitalism. In the past, these games catered to a leisure market, while simulations created for business applications have predominately served training and modelling purposes. Their potential now exceeds that.


Games have the ability to test a startup’s performance before it goes to market. Using real-world and real-time market and economic data, these simulations mimic the conditions a startup encounters at the time it seeks funding. Based on those conditions and predicted trends, VCs could watch the life-cycle of a startup play out within a game before deciding to invest.

Tweaking the parameters to resemble different geographic markets can  help VCs gauge where and when a startup might achieve success, or if it will fail regardless of the circumstances. Armed with that information, the risk of investing in any given startup could be lowered.

The current approach to valuations includes basic tools such as formulas, calculators, and spreadsheets, all supported  by a VC’s intuition.  While these tools may never completely vanish as part of a VC’s due diligence, they lack the predictive capabilities and rich-picture approach a simulation can provide.

Simulations aren’t just theoretical, futuristic ideas. Growth Science, a data science firm founded by Thomas Thurston, already uses them. Thurston’s simulations, he claims, correctly predicted that Snapchat, Uber, and Airbnb would be big  and that their accuracy  when predicting whether or not a company will still exist in five years is 66 percent.

“Comparing our ‘quant’ [quantitative] approach to traditional VCs is like comparing a qualitative stock picker with an algorithmic hedge fund,” says Thurston. “Our process is mechanical. We use data, math and rules to try and isolate the specific percentage probabilities that any business will hit our goals as investors. We invest based on quantified probabilities, rather than intuition.”

The implications for startups are huge.

According to Thurston, Growth Science can “not only make probability-based predictions about whether a startup will succeed or not, but they also let us run ‘what if’ scenarios and to test-drive multiple strategies. This way, we not only know what’s likely given the startup’s current assumptions, but we can also identify trouble spots and help the startup course-correct to be more successful.”

Growth Science claims to draw on private and public databases across industries, and has “guided billions of dollars in organic growth, acquisitions and corporate venture capital.” according to the company’s website.

What further implications might the prevalence of startup simulations have?

  • Venture capitalists might require a successful simulation from a reputable source before confirming investment and releasing funds. Valuations could be determined entirely by algorithms within simulations.
  • A startup’s international viability could be tested in advance, and used to determine the strategy and suitability for expansion into one market over another.
  • The gaming industry might follow suit and develop nuanced, AI and data-driven games for corporate clients who want an edge in formulating strategies, creating processes, risk management, increasing motivation/engagement, driving customer engagement, and developing talent.
  • Predictive analytics: Games could be used to identify real-world gaps and market opportunities, informing which businesses and services need to be created next.

Startup simulations have a broad economic impact if they are robust, realistic, and accurate. As the use of simulations becomes more widespread, the concept has the potential to alter how businesses are established, and how they grow beyond the early stages.

Startup simulations might not just predict future outcomes — they’ll create them.

Some details for this article were provided through a research project done as part of OCAD University’s Masters of Design, Strategic Foresight and Innovation program.

Toronto is a Cockroach Nest

Sunday, May 1st, 2016

The University of Toronto and RBC recently announced ONRamp, an initiative that will include a startup incubator meant to help entrepreneurs network with investors and each other. ONRamp’s RBC Innovation Hub is the newest among many multilaterally funded programs meant to help startups in a city endowed with world-class academic and financial resources.  

Toronto distinguishes itself as Canada’s financial center, the fourth-largest metropolis in North America, and its namesake university ranks in the world’s top-20. Toronto is also one of the most ethnically diverse cities in the world, a metric that McKinsey & Co. says supports corporate success.

So where are the Toronto-bred unicorns?


Ranked 17 in the 2015 Global Startup Ecosystem Report by Compass, Toronto has yet to produce a pre-IPO company valued at $1 billion or more. There’s no unicorn pasture in Toronto; it’s more of a “cockroach” nest. But given the shift away from frenzied VC funding of any startup that grew its user base, this might be a good thing.

Toronto’s Flixel exemplifies the cockroach, a moniker for startups that prioritize revenues over users when it comes to growth. Others include UberFlip and Wattpad. The city has also produced a number of reputable exits, including Kobo, which was bought by Japan’s Ratuken for $315 million,, and VerticalScope.

“It’s about shots on net, and muscling the good shots through i.e. you need a healthy number of seed/A stage companies, and when it comes to scaling you need growth capital,” says Kobo’s founder Michael Serbinis. “Toronto-Waterloo has the former now, but there are few funds here that can write big, later stage cheques.”

Serbinis currently serves as board director for the Toronto-based MaRS Discovery District, an innovation hub that connects startups with investors and corporations and is a founder of LEAGUE, a personal health management platform.

Endangered Species

If VC funding in the first quarter of 2016 is any indication of what’s in store for startups this year, unicorns are becoming an endangered species. KPMG’s latest Venture Pulse report noted that the first quarter of 2016 saw $25.5 billion invested across 1,829 deals, marking the second-straight quarter in which investors dialed back VC funding and activity.

Only 5 new unicorns were minted world-wide in the first quarter of 2016. By comparison, the fourth quarter of 2015 produced 13, while the second and third quarter each produced 25.

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Mark Skapinker, co-founder and managing partner at  Brightspark Ventures, says: “If you look at locations outside of Silicon Valley that have had huge successful companies, it is quite devastating to the surrounding market if they fail at a later stage [like] Nortel in Ottawa, Nokia in Sweden, Blackberry in Waterloo. So, having a unicorn is not always amazing for a city.”

The tougher funding environment will play to Canada’s strengths. The country’s banking system withstood the global financial crisis that began in 2008 while U.S. financial institutions went bust or survived on government support. However, the robust regulatory regime that kept Canada strong throughout the turmoil is a reflection of the conservatism that makes it difficult for all but the most self-sufficient startups – cockroaches, in other words – to get funded.

“Toronto does have a number of cockroach-type companies,” Skapinker said. “It is much harder to get funded in Toronto than somewhere like Silicon Valley and we have a [startup financing] infrastructure that is not very ‘robust’ so companies need to work much harder and be ready for hard times at every stage. That makes them ‘cockroach’ like.”


Startups Eat Into The $4.7 Trillion Financial Services Industry

Wednesday, April 20th, 2016

When Mark Andreessen of venture capital firm, Andreessen Horowitz, declared in 2011 that  ‘software is eating the world’, few predicted that banks – the bedrock institutions of economic activity – would be on the menu.

If Goldman Sachs is correct, fintech – which generally refers to “point solutions” created by startups to make payments, loans, and other financial transactions easier than what’s offered by incumbent banks –  could displace $4.7 trillion in revenue for financial services firms.

In Canada, fintech adoption is set to triple in the next year as startups like Wave and Trulioo unbundle banking services and products. In the U.S., Lending Club, one of the world’s largest fintech startups, has grown its loan portfolio rapidly since the San Francisco-based company went public in 2014

Angela Strange, an Andreessen Horowitz partner said in a keynote presentation at the Canadian Fintech Summit 2016 at MaRS Discovery District in Toronto that 75% of millennials would rather go to the dentist than listen to a bank’s message, and prefer financial services from the likes of Google, Amazon, and PayPal over those provided by banks.

Other stats Strange highlighted: Half of millennials think all banks are the same, and two-thirds of them don’t have credit cards.

Hundreds of Billions

The term fintech originally referred to the back-end processes of setting up servers and software applications for the front-end of traditional banking institutions. The definition has since evolved to include any tech solution that provides a financial service or competes with the offerings of financial institutions.

As an indication of the scale of this industry, these services generate more than $200 billion in returns for a group of 25 large banks analyzed by consulting firm Oliver Wyman.

And the competition is ramping up. A recent KPMG report reveals a booming North American alternative finance market. Transaction volume soared to $36.38 billion in 2015, up 213 percent on year.


Moreover, senior executives in the financial services industry surveyed by PwC for a recent report say 23 percent of their business is vulnerable to further developments in fintech, and fintech founders say they’re targeting about a third of the incumbents’ business.

Another key insight from the Canadian Fintech Summit 2016 is that the future of money and banking is not a matter of big banks battling startups.

Established tech giants like Apple have entered the space with solutions like Apple Pay, and Samsung isn’t far behind. The future of money and banking will likely be a hybrid model that merges the distribution channels and trusted relationships forged by banks with the user-centric sensibility of startups.

Regulation and governance will continue to be concerns in the future. Strange may have said it best: “Fintech startups that will succeed in Canada are the ones that take regulations seriously. Think customers don’t care about anti-money laundering? You’ll end up in jail.”

Apart from shifting demographics and an evolving competitive landscape, other factors such as the use of digital currency and emerging technology will play a role in shaping the future of money.

Fintechs and big banks, for example, are both trying to determine how to adopt and govern blockchain, the structure that eliminates the need for a central clearinghouse to verify transactions.

Robo-advisors are expanding the fintech market, serving those who either do not want or cannot find a financial advisor.

Advancements in virtual reality, augmented reality, biometrics, and artificial intelligence will also offer new opportunities for further innovation.

Overall though, startups have the advantage in deploying innovations because they don’t need to work around legacy IT systems that aren’t easy to abandon because of the huge amount of data that becomes vulnerable in any migration. Meanwhile, millennials are looking for the easiest robo-advisors and automated savings apps.

Like hotels and publishers, the big banks have billions to lose if they don’t provide solutions that mobile-driven, brand-agnostic millennials want.

Smart Cities Take Root in Canada as Apps Learn to Improve Services

Friday, April 15th, 2016

In 2014 the City of Surrey, B.C. launched Surrey Request, an app developed to field requests for service, including waste collection and road repair. The result? The city saves as much as $91,875 each year, a figure that’s expected to increase as residents acclimate to the automated service.

According to Sean Simpson, Surrey’s Director, Information Technology, in-person requests cost the city $9 per transaction while a phone calls cost $4.50. In contrast, a request sent through Surrey Request costs as little as $0.25. The self-serve channel now handles 15 percent of the 70,000 requests it receives annually.

Surrey took its smart city initiatives a step further when they partnered with tech startup Purple Forge last year to pilot the company’s Powered by IBM Watson solution. Available through the ‘My Surrey’ mobile and web apps that residents use to gather city information, including government services and job opportunities, the solution will further reduce Surrey’s reliance on telephone-based services.

The app uses IBM Watson’s advanced cognitive and natural language capabilities to answer residents’ questions about city services. Now, Surrey residents can hit the app and ask it, for example, how to contact animal control in the event that a cougar wanders into someone’s back yard. My Surrey will then reply with an email address and a phone number.

Building Entrepreneurs

The drive to make cities smart provides more than just faster answers to questions about municipal services. It gives entrepreneurs responding to the demand the opportunity to create solutions that can be commercialized. This ultimately builds the depth and breadth of startup ecosystems because the solutions that get deployed in smart city initiatives can often be adapted for other applications.

The concept of ‘smart cities’ has gained traction since the 90s with the rise of Information Computer Technology (ICT). In an interview with Wired, Gerhard Schmitt, professor of information architecture, and leader of the ETH Future Cities Laboratory in Singapore, said cities are “limited to technical data sensor inputs, control systems, apps”. To be ‘smart’, “cities need to be responsive this is a human-focused approach, where citizens can give feedback on the functioning of the city to those who run it.”

Working closely with multinational corporations, academic institutions, and tech startups in its top-20 ranked tech ecosystem, Singapore is taking a holistic approach to solving complex problems like urban density, energy sustainability, healthcare, mobility, and more, by leveraging technology.

“Technology builds its knowledge”

Given that 50 to 80 percent of requests submitted to service centers are for common questions, and apps like My Surrey can provide a potential savings of $4 to $6 per call, cities switching to smart solutions can improve their bottom lines. In a press release from Purple Forge, Councillor Bruce Hayne, Chair of Innovation & Investment Committee stated that “IBM Watson’s learning abilities are such that the technology builds its knowledge and improves as citizens use it.”

My Surrey is one of several IBM Watson-powered smart city initiatives in Canada. As cities transition to smart initiatives, measuring a city’s IQ, developing ‘telepathic cities’, and building ‘smart nations’, may become the norm.


Tech startups like Purple Forge have recognized that multiple opportunities leveraging their own IP exist within the public and private sectors. The company’s clients include five municipalities in the U.S. and Canada, as well as hospitals such as Norfolk General Hospital and industry associations including the Institute of Scrap Recycling Industries.  

Many Canadian cities are struggling with strained budgets as prices and demand for energy products fall, making more people dependent on provincial or municipal programs. As savings allow cities to divert funds to other priorities, and as the learning abilities of smart city apps improve the experience for users, smart technologies are likely to become more of a necessity than a nice-to-have.

Other Canadian startups pursuing smart city initiatives include Toronto-based Drven, and Kitchener-Waterloo based Miovision, which launched Spectrum, an app that sends messages to technicians if a traffic cabinet problem occurs.

Shopify Takes Vacant BlackBerry Throne—And What’s Next for Ontario

Thursday, March 31st, 2016

Analysts tempered their expectations in early 2015 when Shopify announced an IPO to raise $100 million. At the time, the e-commerce software company had 165,000 clients ranging from press-on tattoo retailer Tattly to Tesla Motors. If share prices held during the IPO and Shopify retained its $713 million valuation, the offering would be deemed a success.

After the implosion of Nortel and the missteps of BlackBerry, Canada wasn’t exactly a symbol of tech success. Ottawa-based Shopify’s IPO offered a chance to restore some faith in the country’s innovation capability. A free-fall in the price of oil, which was about wipe out tens of thousands of jobs in the energy sector, raised the stakes even higher.

Shopify’s valuation didn’t just hold, share price soared. By the time the IPO was over, the company was valued at $1.9 billion — more than double initial expectations.

Success stories like Shopify underscore the importance of Ontario’s startup ecosystems of Kitchener-Waterloo, Ottawa, and Toronto to the economic growth and innovation of the province and nation. They generate wealth and attract foreign investment.

In 2015, Canadian venture capital investments hit a 10-year high thanks to 536 deals totalling $2.3 billion (Canadian). Of that amount, $1.25 billion was invested in Ontario, according to the Ministry of Research and Innovation.

Direct Economic Returns and Job Creation

Ontario tech ecosystems also provide significant, direct economic returns and spur job creation. According to the Kauffman report, The Importance of Young Firms for Economic Growth, new businesses account for 20% of gross job creation in the U.S., while research findings from Nesta in the U.K. indicate that 6% of young, high-growth firms create half of all jobs in that country.

These patterns align with the economic impact seen in Ontario, as noted by the Ministry. Within the Ontario Network of Entrepreneurs (ONE), 5,899 new jobs were created and an additional 8,970 jobs/year were retained over the last two years. Furthermore, through the risk capital programs currently in place, the ministry expects a return of $10 for every dollar invested.

While startups make substantial contributions to Ontario’s economy, the province also has much to offer tech startups. Software engineers making less than half of what their Silicon Valley counterparts do are abundant, and this will help keep the operating costs of startups down.

Cultural diversity within the province brings different perspectives and skill sets to the table. Federal and provincial R&D tax credits are generous – a company spending $210,000 (Canadian) on R&D could receive a refund of $135,000 in investment tax credits.

Given the increasing desire by the national government to support Canadian tech, and the province’s recent investment in the IBM Innovation Incubator Initiative, the Kitchener-Waterloo, Ottawa, and Toronto tech ecosystems may improve their global clout.

While tech companies are spread out throughout the province, clusters of high-performing startups exist within the Kitchener-Waterloo, Ottawa, and Toronto areas. These regions are producing internationally recognized tech companies with high valuations other than Shopify, including Freshbooks, Open Text, Kik Interactive, and Wattpad.

The characteristics of Ontario’s main tech ecosystems, and their respective economic impacts, are outlined below.


Shopify was not the only Canadian tech company in the spotlight in 2015. Kitchener-Waterloo’s Kik secured unicorn status, and is one of two Canadian companies currently holding that title. Altogether, the Kitchener-Waterloo ecosystem has produced 1,845 new tech startups, thanks to the era ushered into the region by BlackBerry.

Communitech, an innovation centre, home to 1,000 startups, was co-founded by regional entrepreneurs including Jim Balsillie, former of CEO of RIM, the makers of BlackBerry. Today, BlackBerry’s former employees fill the workspaces of the region’s most successful tech startups including D2L and Freshbooks.

From 2014 to 2015, financing in Kitchener-Waterloo grew 97%, compared to the Canadian average of 5%. Although Kitchener-Waterloo is no longer considered a top 20 tech ecosystem, its drop from the ranking follows the removal of “startup output per capita” as a performance metric, not poor performance. It retains a growth index of 2.45, higher than half of the world’s top 20 ecosystems.

A 2013 PriceWaterhouseCoopers survey attributes more than 20,000 jobs to tech companies located in Kitchener-Waterloo. One of the biggest components of its success is the University of Waterloo, which accounts for $2.614 billion (Canadian) in annual “economic impact,” according to the study. The university’s comprehensive co-op program churns out top entrepreneurs and engineers sought by Silicon Valley’s tech giants, and its incubator, Velocity, has contributed to the success of startups like Kik and Vidyard.

Despite its impressive overall performance, a number of factors prevent Kitchener-Waterloo from fulfilling its potential. Techvibes notes that startups in the region raise a quarter of the funding received by their U.S. counterparts, and are four times less likely to obtain financing. In Silicon Valley, the bulk of angel investors are former startup CEOs who reinvest in the ecosystem.

In the Kitchener-Waterloo region, only 20% of former CEOs are investing in 80% of the companies, suggesting that an underlying fear of failure is hampering the region’s success.

In addition, its small size and relative isolation from Toronto is preventing the region’s startups from connecting with funding and resources. Infrequent, one-way trains hinder easy transit between Kitchener-Waterloo and Toronto, and a high-speed rail initiative connecting the two tech ecosystems will take 10 years to build and cost $2-3 billion (Canadian).

By contrast, Slovakia has entered discussions with Hyperloop Transportation Technologies to build a high-tech train that will carry passengers from Bratislava and Vienna or Budapest in 10 minutes or less for $200-300 million by 2020.


Shopify’s success has revived some of the recognition that Canada’s capital city once received as a tech ecosystem, and the area buzzes with hopes of potential IPOs in the coming years. Ottawa hosts 1,700 tech companies, ranging from startups such as Series B, funded Kilpfolio, as well as being the location for the regional offices of multinationals including Apple and Facebook.

Ottawa also has the highest concentration of science and engineering employment in North America, outside of Silicon Valley, perhaps due to the numerous multinationals that also make Ottawa their Canadian headquarters, including IBM, Cisco, and Ericsson.

The Conference Board of Canada estimates Ottawa’s tech industry enjoyed a robust 8% annual growth over the past 5 years, higher than the global annual tech market growth rates. Aside from Shopify, its most notable and successful startup, Ottawa companies brought in upwards of $100 million (Canadian) in VC financing in 2015, including Corsa Technology, GaN Systems and You.i TV.

While the Ottawa tech ecosystem has experienced a recent bout of success, it still has a long way to go. Ottawa enjoyed its ‘Silicon Valley of the North’ status for number of years with notable examples including Nortel.

When the dotcom bubble burst in 2000, Ottawa’s pedigree fell. To date, there are no direct flights from Ottawa to San Francisco, an unnecessary obstacle between startups and Silicon Valley VCs. During the 2000s, Ottawa experienced dozens of venture-backed startup failures and former giant tech companies were either downsized, sold off, or disappeared.

For the most part, recovery has been slow and bootstrapped. If Ottawa wants to regain its global status in the sector, it needs to capitalize on recent success by pursuing venture capital both within and outside the city. At the very least, it needs a direct flight to San Francisco.


According to the 2015 Global Startup Ecosystem Ranking report, Toronto ranks 17th among the top 20 global tech ecosystems, the highest of any Canadian city. Canada’s most- (and North America’s fourth most-) populous city hosts between 2,500 to 4,000 active tech startups, with notable examples including Nymi and Chematria.

Efforts to cluster startups in the downtown core are underway. Increased support for incubators and accelerators such as Ryerson DMZ, home to IBM’s Bluemix Garage, has created 1,833 jobs. Foreign investments, driven by the elimination of taxes on capital gains, are bringing more money into the province. In 2015, Toronto saw a 30% increase in total venture deals from 2014. These are all signals that the city’s tech ecosystem is headed in the right direction.

However, unlike Kitchener-Waterloo and Ottawa, Toronto has yet to produce a unicorn. Despite efforts to cluster startups, tech companies are still dispersed throughout the city and its surrounding suburbs. An underdeveloped transit infrastructure is seen as an obstacle.

Unlike other global tech ecosystems such as Tel Aviv, Toronto lacks founders with hypergrowth-company experience, an important factor in scaling up. Toronto dropped 9 spots in the 2015 Global Startup Ecosystem Ranking report, largely due to a slow growth rate, which lagged behind Berlin, Sao Paulo and Bangalore, among others.

Support for billion-dollar companies:

In the near future, the current decline of the Canadian dollar could make Ontario’s tech ecosystems more lucrative in the eyes of foreign investors who contributed $591 million in venture capital in 2015, as reported by the Research and Innovation Ministry. Disruptive tech startups in emerging industries such as fintech, connected cars, artificial intelligence, IoT, and smart city technologies will have a critical economic impact in the next 5 to 10 years.

In response, Canada’s federal government has identified the need to attract large corporations to participate in incubators and accelerators as one of six key priorities to ensure Canadian tech startups become billion dollar companies. This could translate into more strategic partnerships that would yield benefits experienced in other global tech ecosystems, such as Singapore.

There’s one wildcard for the health of Ontario tech innovation: how the province’s basic income pilot program could impact startups and entrepreneurs.

In the meantime, Ontario’s entrepreneurs face the same headwinds hitting those in the U.S. and elsewhere in terms of funding. The volume of venture capital investment in North America dropped off sharply in the last quarter of 2015. A joint report released by KPMG International and CB Insights pointed out that a number of IPOs fell short of expectations. It also stated,“VC investors could be less willing to invest in innovative companies without a far stronger business case for how their new business models should create profit over the longer term.”