In particular, Toronto has become one of the best places to launch a B2B startup. If I could be so bold, Toronto may be the best place to launch a B2B startup.
1. A great pool of talent, particularly developers whose skills and experience are as good as anywhere and, as important, reasonably priced compared with places such as Silicon Valley. We’re also seeing a growing number of repeat entrepreneurs and more executives with solid marketing and sales experience. In other words, there’s plenty of startup bench strength in Toronto.
2. There are many large enterprise companies who can become customers of early-stage B2B startups. This includes Canadian companies, as well as foreign companies with Canadian operations. A Canadian startup, for example, could sell its product to a U.S. company based in Toronto, which would give it a great foothold to sell into the U.S. parent. An entrepreneur recently told me that Toronto is a great place to start a B2B business because the first five customers can be easily attracted to provide product market validation.
3. A strong and tight community of investors, entrepreneurs, service providers, incubators, accelerators and schools that make it easy to make connections and get the support needed to establish and grow a B2B startup. This is probably one of the biggest assets of Toronto’s startup community, although we may not completely appreciate it. You only have to look at the number of startup events to realize the vibrancy and activity of the startup landscape. I would argue the community has been nurtured over the past five years, and it is now starting to bear fruit.
4. There is growing access to capital, although there is room for improvement. Over the past few years, more capital has become available to B2B startups to make it easier for startups to get going. One of the reasons why B2B startups are attractive to investors is they can go after specific markets, driving development, marketing and sales efficiency. That said, there is still more series A money needed to accelerate growth once a B2B startup gains solid traction. The big thing that has to happen is the return of institutional investors, who have been on the sidelines for far too long. In the meantime, Toronto is a short flight from New York and Boston, making it easy for U.S. investors to invest in Canadian startups.
5. The rise of incubators and accelerators such as Jolt, InCubes, Extreme Startups, Ryerson DMZ, Drive and Hyperdrive that are developing, nurturing and developers entrepreneurs, while turning their ideas and projects into viable businesses. Many of the startups involved in these programs will fail but the experience gained by entrepreneurs along the way will be invaluable.
What do you think? Is Toronto a B2B startup haven?