How Hot is Toronto’s Startup Community?

There is no lack of excitement about Toronto’s emergence as one of North America’s leading startup communities. After the Startup Genome project ranked Toronto as the world’s fourth best startup ecosystem, you hear the champagne being popped.

But here’s a thought: Is the excitement about Toronto’s startup community really just a reflection of the growing enthusiasm as opposed to an increasingly vibrant community that is, in fact, emerging as one of the world’s leading startup communities?

There is little doubt Toronto’s startup community is oozing with enthusiasm. The recent Elevator World Tour event at the CN Tower attracted a packed house, there’s a healthy turnout today at the GrowTalks event, and you could attend a startup event day of the week.

Meanwhile, there are incubators and accelerators nurturing startup entrepreneurs. And there are have lots and lots of people doing startups or thinking about doing startups.

It all sounds positive and encouraging but it feels like something is missing, which I just can’t pin down.

The landscape is a lot healthier than it was five years when there was lots of talk about startups but little walk. Today, there is still lots of talk and some solid walking.

But I think more walking needs to happen. It feels like there’s lots of talk, lots of meetings, lots of beer-driven idea brainstorming get-togethers. And there are plenty of entrepreneurs who have launched startups that are interesting but seem like features as opposed potential businesses.

Maybe my unease is a fear of frothiness.

Maybe it has to do with not enough startups that have the potential to create large, fast-growing businesses.

Maybe it has to do with the belief we need more money, particularly acceleration capital to fund startups looking to take the next big step forward, including all those startups graduating from the incubators and accelerators.

What do you think? Do you think I’m off the mark, or does all the bubbly enthusiasm overshadowing some fundamental structure issues that need to be improved?

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  • M. Al-Borno

    IMHO energy+enthusiasm+creativity-job.opportunities=startups. There is a disproportionate (and fantastic) amount of talent in Toronto relative to the quality if its job market. Those who dare will startup! I find it natural and exciting, however do share your concern of lacking acceleration capital and a saturated market. Focusing globally (even nationally) can offer improved chances for access to capital and customers. The good news, this city also cranks out a fantastic number of global citizens.

  • Jeremy Campbell

    I think that investors need to do a better job of being public figures in Toronto, they need to be part of more startup events, and host their own too in order to recruit founders. And we need more investors to take chances on entrepreneurs who have potential rather than always needing to see revenues and profits. I think in time as more and larger exits happen to pay back investors we will see them get looser and take on more risk. And we will also see investors who have gotten burned by bad local startup investments stick with mutual funds, real estate, and safer investment vehicles with proven long term track records.

    • Silicon Valley Entrepreneur

      Hmmm. Or maybe startups need to do a better job of selling to investors? Your post is filled with what investors need to do. They do not need to do anything. They will follow the opportunities. Seems like the startups and their investor propositions are not sufficiently attractive.

      • Debra Chanda

        Well stated – weak on packaging/presenting/understanding what’s compelling to the end audience – customer/funder

      • Jeremy Campbell

        That’s a good point, but investors aren’t as transparent here in Toronto as they are in other places like in the US. It’s all about connections and referrals I suppose. And us Canadian entrepreneurs have to get more aggressive and show more hustle!

  • Ian Hayes

    love the idea of (domestic) acceleration capital. FedDev’s IBI program has been great for amplifying the angel round, but VC’s and PE’s seem to be the only option for acceleration capital. Often their objectives are much shorter term than the founders which creates conflict. It also drives our top start-ups into the open arms of foreign suiters

    • Debra Chanda

      Control distribution

  • Debra Chanda

    Mark, we need more early/stage and scale business operator “know how/track record” with the “know how” to secure pilot commercial contracts of first customers and how does a start up translate this into further refinement of technology and market roadmap to create a repeatable marketing and sales a function thereof model to roll out/scale.

    Key metrics: measure annual net product sales

    Capital will follow if there are initial Purchase Orders – again need “know how/talent” who can sell concepts and prototypes and have the skill to figure out why an end customer cares.

    So yes there is a lack of talent and/or earlier recognition of HR Gap not capital with this skill. The reality of customer investment $ for innovative solutions is South of the Border where the SBUs are; hence the investment dollars for 3-5 year product pipeline – so find the best agent/former executive in your customer segmentation and PAY them 50 percent to get a first customer deal and recognize and value the operating leverage of accomplishing this key milestone.

  • cfine

    My concerns with the influx of incubators and accelerators is that it puts a lot of power in the hands of a small few. Extremelabs and others are adding a tone of value and I love being a part of the mentor networks, however my only concern is what happens to the hundreds of entrepreneurs and their ideas who are not admitted to these programs? Do they simply give up because those who “know” didn’t pick them? We need to help people understand there are other options and tracks than the few incubators and accelerators that exist in market.

  • Debra Chanda

    Cfline – business is the most competitive sport in the world and start ups are not for the faint of heart – one must take the risk of placing payrolls on credit cards, using RRSP $, etc. before you can expect someone else to participate. Your post reads like you have not ask potential funders or customer the right questions to even see if you can solve their pain points. This is not about power – it is about market fit and survival. Entrepreneurship is not socialism and propping up the weak. It is about identifying a problem and presenting a compelling value proposition to solve it.