In the narrative of technological advancement, it’s often natural to root for the underdog as many of us have been in their shoes before – the scrappy startup with a revolutionary idea and boundless potential. This tendency to champion the little guy has led to an abundance of support and attention for early-stage tech companies in Canada.
However, just as the middle child in a family can be inadvertently overlooked, Canadian scaleups find themselves in a similar position, caught between the excitement around startups and celebrating established tech giants. Yet, these scaleups are the unsung heroes of Canada’s tech ecosystem, playing a crucial role in driving sustainable growth and innovation.
Small but mighty
In Canada, only around 1 in 100 companies meet the definition of a scale-up. While they represent a small percentage of tech companies in the country, their impact is huge. Studies show that scale-ups achieve at least 20 times the revenue of non-scale-ups, and have five to ten times more employees.
Scale-ups have proven business models, established customer bases, and the potential to become industry leaders. By concentrating our efforts on nurturing these high-growth companies, we can create a more resilient and prosperous tech ecosystem.
Challenges in growth
Despite their potential, we see many promising scale-ups struggle as they navigate their growth phase. It’s a whole new ball game compared to the startup stage.
Among the most common obstacles that companies at their growth stage face are capital efficiency, which has become more prominent in recent years with elevated operational and labour costs.
Additionally, many struggle with market expansion, particularly in international markets. Scale-ups struggle to navigate complex regulatory landscapes and cultural differences when entering new territories.
This is where an athletic mindset becomes crucial for founders. Just as athletes face intense competition and must continuously adapt their strategies, founders must navigate the challenges of building a startup in a dynamic market. The discipline, resilience, and growth mindset that athletes cultivate are invaluable assets for entrepreneurs facing these same hurdles.
OneEleven companies like Lazer, Leni, and Triyo all have concentrated customers outside of Canada. It wasn’t easy to get there. Zown, one of our fastest growing companies recently was part of the C100 program and found the U.S. market to have open arms and deeper pockets. For them it’s about managing their rapid growth and the mindset south of the border is closer to athletes than bankers. We are continuously bringing in trade and economic and ecosystem partners from around the world to help make it easier for our members to navigate their quick market expansion.
One accessible way for scale-ups to address these challenges is by joining a tech community like OneEleven, lending them access to tailored resources, mentorship, and workshops. A tech hub can play a vital role in addressing these challenges by offering tailored resources, mentorship, and workshops focused on understanding foreign markets and regulations.
All hands on deck
To unlock the full potential of scaleups, tech leaders and policymakers must take decisive action.
Establishing mentorship networks that connect experienced executives with scaleup leaders can provide invaluable guidance on navigating growth challenges, mirroring the coach-athlete relationship where experienced mentors guide and push founders to reach their full potential By providing networking opportunities with industry experts and facilitating connections with local partners abroad, a tech hub can empower scaleups to confidently chart their path to profitability, expand their reach, and establish themselves as global players.
We provide focused workshops, peer groups, and guidance and advice — the coaching these companies need at this stage. We have seen our members benefit from market entry approaches, customer experience mapping, and helping define their value proposition and growth model. We have seen many companies at OneEleven save time and grow faster as a result of this focused coaching.
Creating funding mechanisms specifically designed for scaleups, such as Sustainable Development Technology Canada’s Scale-Up Funding, offers tailored support for high-growth companies.
Advocating for policies that address the unique needs of scaleups is also crucial. This includes pushing for improving the Scientific Research and Experimental Development (SR&ED) tax incentive to work better for scale-ups, as well as programs for upskilling local talent and attracting global talent, which can significantly boost the growth trajectory of these promising companies and their competitiveness.
The Path Forward
As we look to the future of Canada’s tech ecosystem, it’s clear that scaleups hold the key to propelling the industry’s growth on the global stage. By shifting our focus from startups to scaleups, we can create a more balanced and resilient tech economy. We just need to support them better.
At OneEleven, we’re committed to providing scaleups with the structured support they need to thrive. Through coaching, strategic guidance, and access to the resources they need, we’re helping these companies navigate the challenges that come with growth and help them continue to scale.
Just as athletes train relentlessly to achieve their goals, founders must cultivate a mindset of perseverance and continuous improvement. The journey of a founder is much like that of an athlete, requiring unwavering dedication, the ability to learn from failures, and a relentless drive to achieve their goals. By embracing this athletic mindset, entrepreneurs can better position themselves to overcome the unique challenges of scaling a business and ultimately succeed in the competitive world of tech innovation.
It’s time for all stakeholders in the tech ecosystem—from investors and policymakers to industry leaders and educators—to recognize the critical role of scaleups. Let’s start working together to support these high-growth companies, then we can ensure Canada remains at the forefront of global tech innovation for years to come.
Chris Greenfield is Managing Director of [111] OneEleven, the accelerator at the pinnacle of Canada’s innovation ecosystem. Helping turn Canada’s most promising scale ups into our most successful companies.
