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Accelerating the Edmonton Startup Ecosystem into an Engine of Economic Growth
JF Gauthier
November 2019
1
© 2019
Startup Genome’s global movement with 3 pillars
2
• 300 partners
• 150 metro areas
• 30+ countries
Global
Benchmarks
• Survey ~100K founders
• 1M url’s + machine
learning
• Global patent analysis
• 100 metrics validated
against Performance
Evidence-Based
Research
• Top policy advisers
• Best-of-breed programs
• Global exposure
• 300k views and 100s
of Articles
Execution
Experience
© 2019
Within 20 years it will become the
largest single sector of the world’s economy
The Global Startup Revolution is disrupting industry after industry
• >4% of the global economy
• currently valued at $2.8T (without incumbent tech companies)
• growing 10% a year and accelerating– 3X to 4X the growth rate of our economies
• #1 engine of economic growth and job creation
* 4.5% of OECD countries in 2015 (U.S. 5.2%)
3
© 2019© 2019
Traditional R&D has lost power as economic engineAmbidextrous innovation ecosystems perform best
GDP CAGR growth
4
© 2019
Economic power has shifted to creating businesses rather than licenses
© 2019© 2019
● Large companies are net destroyers of jobs, and this is
accelerating with the Fourth Industrial Revolution
Startups have become the #1 engine of job creation
Net Job Creation by Firm Age
Ne
t Jo
b C
rea
tio
n
6
© 2019 © 2019
Rank Company
1 Amazon
2 Microsoft
3 Apple
4 Google
5 Facebook
6 Berkshire Hathaway
7 Alibaba
8 Tencent
9 Visa
10 Johnson-Johnson
1. Market Capitalization as of June 21 2019 2. Top 10 based on revenue
5of world’s top-10 companies were
produced by Tech startup ecosystems
At their peak, the following industries had
in the top-10…
• Telecom 3
• Computers 3
• Automotive 3
• Semiconductors 2
The Global Startup Revolution is driving the most dramatic value creation in history
7
© 2019
$ 200B
$ 150B
$ 100B
$ 50B
Unfortunately, the value created by the Global Startup Revolution is greatly concentrated
TOP 100 CITIES
EXITVALUE(USD)
San Francisco
New York
London & Beijing
Boston
Tel Aviv
Our mission is to break this concentration by learning
from each other
8
© 2019
The Genome of successful startup ecosystems
Special focus on the role of
knowledge networks
© 201910
Startup Ecosystems are a new type of industry clusters
1. Global competition
for Resources and
Markets
2. Strength comes from
Local Community
© 2019
Edmonton is currently in the Activation phase of the Ecosystem Lifecycle
11
Edmonton
© 2019
1. Bigger is better
2. Resources, Infrastructure and Policies
3. Local Connectedness
4. Global Connectedness = Global Knowledge + Potential
5. Global Market Reach = Realize Global Potential
What makes a Tech startup ecosystem become an engine of economic growth and job creation?
12
© 2019
0
10
20
30
40
50
60
70
80
90
100
70 700 7000
Exi
t V
alu
e (
$B
)
Log(Startup Output)(number of startups)
1. The larger our entrepreneurial community, the more productive we are
Exit Value vs. Startup Output
Total Ecosystem Exit Value accelerates with
ecosystem size
13
© 2019 14
The # of Tech (~software) startups is very low
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Activation Globalization Attraction Integration
Nu
mb
er
of
Sta
rtu
ps
Startup Output
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
Activation Globalization Attraction Integration
De
nsi
ty (0
00
's o
f st
art
up
s p
er
mill
ion
po
pu
lati
on
)
Startup Density
© 2019
2. Larger ecosystems are better resourced—no gaps
2
4
6
8
10
Toronto Vancouver Paris Amsterdam Singapore Berlin Tel Aviv London New YorkCity
SiliconValley
Su
cce
ss F
acto
r S
co
re (
Ind
ex
)
Market Reach Funding AVERAGE Talent Startup Experience
IntegrationAttractionGlobalization
Success Factor Scores by Lifecycle Phase
Phase:
Amsterdam in transition from Globalization to
Attraction
15
© 2018
Edmonton is above phase average in Experienced Engineers but lower in Funding
16
0
100
200
300
400
500
600
700
Activation Globalization Attraction Integration
Ea
rly-
Sta
ge
Fu
nd
ing P
er
Sta
rtu
p (
$K
)
Access to Funding
30%
40%
50%
60%
70%
80%
Activation Globalization Attraction Integration
Exp
eri
en
ced
En
gin
ee
rs
Access to Experienced Engineers
© 2019
3. More Locally-Connected startups grow much faster
0.0
0.2
0.4
0.6
0.8
1.0
1 2 3 4 5
Qu
art
erl
y R
eve
nu
e (
$M
)
Age of Startup (In years)
Quarterly Revenue vs Age of Startup
High Local Connectedness
Medium Local Connectedness
Low Local Connectedness
17
1. Founder helping Founders
2. Experts & Investors helping Founders
3. Quality relationships between them
© 2019
3. More Locally-Connected startups grow much faster
0.0
0.2
0.4
0.6
0.8
1.0
1 2 3 4 5
Qu
art
erl
y R
eve
nu
e (
$M
)
Age of Startup (In years)
Quarterly Revenue vs Age of Startup
High Local Connectedness
Medium Local Connectedness
Low Local Connectedness
>2x revenue growth for startups with High vs. Low Local Connectedness
18
1. Founder helping Founders
2. Experts & Investors helping Founders
3. Quality relationships between them
What we do
together is more important
than what we do alone
Chance of success of Zuckerberg starting Facebook in Lagos versus in Silicon Valley?
© 2019
4. The bigger “WE” — an ecosystem’s Global Connectedness is source of Scaleup Potential for its local startups
The Global Fabric of Knowledge Between Entrepreneurs
Quality Relationships between Entrepreneurs20
The more connected to the
bigger “WE”
the higher our potential to create
Globally-Leading Business Models
© 2019
5. Early Global Market Reach by startups is the only way to fully “Realize” an ecosystem scaleup potential
0%
10%
20%
30%
40%
50%
0 4 8 12 16Global Connectedness (Scaleup Potential)(# of Founder Relationships in Top Ecosystems)
Glo
ba
l Ma
rke
t R
ea
ch(R
ea
lize
Po
ten
tia
l)(%
of
Ou
t o
f C
on
tin
en
t C
ust
om
ers
)
Size of bubble indicates ecosystem value
22
© 2019
Startups that “Go-Global” from day 1 grow their revenue 2X faster ➔ deserve larger funding rounds ➔ scaleup
Monthly Revenue
TIME
Globally-Focused
Startups
>50% Foreign
Customers
Nationally-focused
Startup
<50% Foreign
Customers
23
© 2019
4. The bigger “WE” — ecosystem Global Connectedness is source of Scaleup Potential for local startups
24
The Global Fabric of Knowledge Between Entrepreneurs
Quality Relationships between Entrepreneurs
The more connected to the
bigger “WE”
the higher our potential to create
Globally-Leading Business Models
© 2019
5. Early Global Market Reach by startups is the only way to fully “Realize” an ecosystem’s scaleup potential
0%
10%
20%
30%
40%
50%
0 4 8 12 16Global Connectedness (Scaleup Potential)(# of Founder Relationships in Top Ecosystems)
Glo
ba
l Ma
rke
t R
ea
ch(R
ea
lize
Po
ten
tia
l)(%
of
Ou
t o
f C
on
tin
en
t C
ust
om
ers
)
Size of bubble indicates ecosystem value
26
© 2019
Startups that “Go-Global” from day 1 grow their revenue 2X faster ➔ deserve larger funding rounds ➔ scaleup
Monthly Revenue
TIME
Globally-Focused
Startups
>50% Foreign
Customers
Nationally-focused
Startup
<50% Foreign
Customers
27
By focusing first on our national market,
we develop a national product,
not a globally-leading product
© 2019
Success Factor
The Focus is on 3 Objectives
29
THESE ARE LENSES AGAINST WHICH TO ASSESS EVERY PROGRAM AND GOVERNMENT SPENDING
1. GROW NUMBER
OF STARTUPS
Enabling Factors Success Factor
3. INCREASE STARTUP QUALITY
2. INCREASE EARLY-STAGE
FUNDING
© 2019
1. Grow the number of startups in the Ecosystem
30
2. INCREASE EARLY-STAGE
FUNDING
a) Angel Expertise
b) Angel Groups
c) Capital Injection
1. GROW NUMBER
OF STARTUPS
b) Keystone Team
a) Universities
c) Subsector Focus
3. INCREASE STARTUP QUALITY
a) Mentorship
c) Customer Access
b) Talent production
© 2019
To grow in a small city, you must intensify student engagement
31
Startup Creation Potential
Startups per million people Startup Output
• Waterloo has high rates of startup creation because of it created a entrepreneurial culture starting with its universities
• With many universities and colleges in the ecosystem, Edmonton has high potential to
➢ Grow Startup Output by 5X+
1400+ Startups
0
200
400
600
800
1000
1200
Waterloo Edmonton
Activation Average
0
1000
2000
3000
© 2019
Engaging Edmonton’s universities and student communities will be taken on by the Keystone Team
32
STEM Education FocusIncrease and promote diversity
Student CompetitionsCreation of technologies and products
University SSOPsPlaces for entrepreneurial minds to learn and share
Co-Op ProgramsEspecially in SMEs and Startups — Touch entrepreneurs
Entrepreneurship CurriculumMake it an explicit career path and start educating
Create an entrepreneurship culture on campus and get students to experience and get excited about entrepreneurship
OBJECTIVE
TACTICS
© 2019
The ’Keystone Team’ creates an exciting startup community and
culture, attracting millennials and engaging universities
A Keystone Team is an entrepreneurial-minded organization that support the success of everyone else: startups, programs, etc.
Stockholm: STING
Founded in 2002 and creating the greatest startup ecosystem success story
Amsterdam: Startup Amsterdam
Started in 2014 and codified and improved the model of STING and others for taking leadership and building
momentum
Waterloo: The Original Communitech
Founded in 1997 by RIM and Opentext founders + 2 other founders. Outside of the university to talk about
business, marketing etc.
Helsinki: Sauna guys
In 2014 four entrepreneurs started Maria, Slush, etc.
© 2019
Keystone Team Roles: the 4 Cs
34
Cooperate(support)
Commence(initiate)
Connect Coordinate
Support the success of existing initiatives, organizations, and programs
Connect everyone: entrepreneurs, investors, universities, program leaders, corporations
Kickstart new initiatives and programs that are missing
Align and foster cooperation between organizations and programs
© 2019© 2019
Startup
EcosystemStartup
Ecosystem
● Unique opportunity to develop
● ambidextrous innovation ecosystems
Growth Strategy #2: New Deep Tech sub-sectors provide an opportunity to grow its startup ecosystem
Traditional Innovation Ecosystem
• Driven by corporations with universities and research centers
New Deep TechSub-Sectors
AMR, Blockchain, IoT
35
© 2019
That means developing Lab-to-Startup Performance, like San Diego in Life Sciences
Lab-to-Startup Performance
36
Traditional Innovation Ecosystem Performance
Sta
rtu
p E
cosy
ste
m P
erf
orm
an
ce
© 2019
Economic power has shifted to creating businesses rather than licenses
Calling all inventors and technical people to join the Global Startup Revolution!
© 2019
Focusing on regional strengths and market opportunities fuels startup ecosystem growth
38
Fast-growing, leadership starting to
emerge
AGRICULTURELegacy strength in food processing, presence of multinational agribusiness and strong distribution networks support the ecosystem’s competitive advantage
Agtech and New Food
Ally with large ecosystems to create a
global program
Large and growing with
no clear leader
LOGISTICS & SUPPLY CHAINApplication across key industries like Oil & Gas, Mining, and construction, etc, will help all the sectors modernize
Operations and Supply Chain
Ally with large ecosystems to create a
global program
Niche, no clear leaderO&G Tech1
Ally with other ecosystems to create a
global program
OIL AND GAS AND MININGCalgary lies at the heart of Canada’s O&G Industry. Strong potential to add value by leveraging local strengths and latest technologies
Industries Tech Subsector(s)
Subsector Landscape
Program Strategy
Small and slow growingCleantech2
© 2019
2. Increase Early-Stage Funding
39
2. INCREASE EARLY-STAGE
FUNDING
a) Angel Expertise
b) Angel Groups
c) Capital Injection
1. GROW NUMBER
OF STARTUPS
b) Keystone Team
a) Universities
c) Subsector Focus
3. INCREASE STARTUP QUALITY
a) Mentorship
c) Customer Access
b) Talent production
© 2019
Edmonton has a low proportion of startups that receive seed rounds
40
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2014 2015 2016 2017 2018
Toronto-Waterloo Quebec City Calgary Edmonton Houston Austin
# of Seeds / # of Startups: Edmonton vs Activation Peers
2017 & 2018 are unreliable due to lag
in capture by databases
© 2019
3. Increase Startup Quality
41
2. INCREASE EARLY-STAGE
FUNDING
a) Angel Expertise
b) Angel Groups
c) Capital Injection
1. GROW NUMBER
OF STARTUPS
b) Keystone Team
a) Universities
c) Subsector Focus
3. INCREASE STARTUP QUALITY
a) Mentorship
c) Customer Access
b) Talent production
© 2019
Increase Startup Quality: Components
42
1) Founder Know-How
Inject startup and business know-how through local and global programs, mentors and advisors
➔ Mentorship and other programs
2) Talent AccessAccess to technical and growth employees with startup experience
➔ Keystone and programs to directly engage students
3) Local Customers
Access to local consumers and corporations to understand problems/solution fit
➔ Engage corporations in the startup ecosystem
Components