One of my favourite books is “Why Mexicans Don’t Drink Molson” by Campbell Mandel.
The premise is simple: Canada has all the makings of a global leader, yet chooses to be a loser. For example, why is it that Mexico, a country with very little fresh water or barley relative to Canada, produces four times as much beer?
The book brilliantly walks through several industries where Canada should be a global powerhouse (e.g., lumber, steel, dairy) yet falls short. Mandel suggests that one major reason is small dreams.
As the founder of Wealthsimple, Canada’s fastest-growing online investment manager, I watched as our US counterparts raised $114 million in fresh venture capital funding this past week and industry giant Charles Schwab entered the space. My reaction was: Canadians need to dream bigger.
Before moving back to Canada in late 2013, I spent three years in San Francisco building 1000memories (Y Combinator S’10, acquired by Ancestry.com in 2012). I’ve seen the differences between the two startup ecosystems first hand.
When we raised a $2 million seed round in May, we were often told that our vision to transform the $1.5-trillion investment management industry was naive. Despite the exciting traction of similar US companies, many prospective investors defaulted to the “Canada is different” excuse, saying it will be too difficult to build an alternative to the big banks. We knew they were wrong and managed to find the right investors to help us move forward.
Juxtapose our experience with the US. In the past week, US-based online investment managers raised $114 million in fresh VC funding and Charles Schwab announced its entry into the market. Adam Nash, CEO of Wealthfront (the largest online investment manager in the US), is explicit in his goal to service the $7-trillion market for millennials over the next five years.
The reality is that the same problems with investment management and many other industries persist in Canada (in fact, they are even worse—Canadians pay the highest investment management fees of any country in the developed world). However, too few Canadian companies are willing to boldly tackle these issues head on. Those that are willing are often too timid in their vision, seeking to service only the Canadian market.
I believe Canada’s tech sector sits at an inflection point. We will either step up and play a major role in the global technology landscape or, as in so many other industries, fall somewhere into the middle of the pack.
If we can do it in financial services, a highly regulated industry with an entrenched oligopoly and massive consumer trust barrier, then you can do it to. I moved back to Canada to help put Canada’s tech community on the global map. I invite you to join us in our quest.