January 23, 2023: Test Your Product on Your Parents
plus: the journey to creating Vault, a call for co-founders and more!
Quick Takes: Something different
Today we are going to do something a bit different, more of an opinion response piece than an analysis of Canadian tech news.
What are we responding to?
On Friday, Sean Silcoff and Josh O'Kane published a great article in the Globe and Mail entitled "How the Liberals' multi-billion dollar tech plan create 'chaos' instead of growth". You should read the original work - it is great.
The main takeaway, in our opinion, the Federal Government has spent significant effort and invested large sums of money to create a more "innovative" economy and there is no indication that this has resulted in any more "innovation"
What do we think?
Overall, we agree with the findings of this article.
What would we do differently?
The current top-down bureaucratic processes stifle innovation as they are slow, worry about the details, and try to encourage stakeholders who have too much to lose to act differently. Our approach or framework would focus on providing clear and simple incentives that will encourage individuals and corporations to change their behavior. These incentives need to reduce risk, increase reward and enable stakeholders to move fast. (If you want to know why speed is important in innovation you should read this great piece by Abraham Thomas).
Can you give us some examples of policies that could make a difference?
We will focus on reducing risks as increasing rewards is simple and most likely not politically possible at the moment (e.g. reducing the income tax on certain types of business).
There are multiple proven ways to reduce risks to encourage renovations:
- Guarantee future revenue for companies. If we want to encourage the development of Quantum Computing or Carbon Capture. The government can offer contracts to purchase future output from companies with different methodologies based on specific proof that the company has a viable process that may work. This de-risks the companies as they have guaranteed revenue if they can produce the desired output. This makes it easier for companies to recruit talent and finance. The government de-risks the outcome as it can back multiple startups pursuing different scientific means that may or may not work. This has been used to encourage pharmaceutical companies to pursue the research of vaccines in the US.
- Lower the cost of doing the work. The Canadian government has actually done this well in the past with SR&ED which reduces the costs of investing in research and various visa programs which make it easier for individuals to move to Canada and less risky compared to the US H1-B where if you lose your job you have to leave the country. Yes, these programs aren't perfect but the more simple and clear incentives like these we offer the more risk individuals and companies can take in pursuing innovation.
- Lower the transaction cost for companies that have failed. Innovation means that people and companies have to take risks. What programs can we institute that lowers the cost of failure? Could we have higher EI benefits for people involved with a failed startup? Can we provide lower tax rates for individuals for 36 months after they were at a failed business or fired from a struggling one? I don't have a clear idea but we are positive that the government can reduce the cost of failure to encourage innovation.
To be clear, no incentive will be perfect as there are always unintended consequences and not all investments will be a net positive (e.g. not all work that receives SRED is net new). Despite this, we would encourage many simple and clear incentives to be launched into the market with clear goals. Ideally, with limited overhead and a start-up-like approach to the incentives. Measure the impact and change the ones that are not working.
Will this make Canada more innovative?
The only way this country becomes more innovative is by unlocking the creativity and speed of new companies. If the government can encourage the creation and financing of these companies it can moves us in the right direction, but there are no guarantees in life.
What do you think? Let us know - we may discuss this in more detail on Thursday's Quick Takes, and would love to share the best inputs/thoughts that are shared with us.
We return with another episode of Quick Takes this Thursday January 26. Episodes dropping every other Thursday all year long!
Catch up on past episodes here, while you wait.
What is Vault?
Vault is the first all-in-one business account that saves Canadian businesses time and money. Vault offers multi-currency accounts, corporate cards, global transfers, currency conversion, and accounting – all in one place. Get up and running in less than 5 minutes without ever having to step foot in a branch.
What was the insight/inspiration that led you to launch it?
We were finally starting to see some traction on the consumer banking side but were very disappointed with the state of business banking. Especially surprising was despite covid being a catalyst for many industries to improve their online offering, this wasn’t the case for banking. Even today, you cannot open a business bank account at any of the big 5 without having to step into a branch.
How has it been received by the market? Why do you think it has been so well received?
We’re still in our closed beta, but the reception has been extremely positive. Almost every company that started using Vault has referred another company. For the first time, many companies feel in complete control of their money. Whether it’s being able to pay a contractor in Poland, convert USD to CAD, or instantly generate cards for their employees, our customers can do all of this without having to go in person to a branch or pay exorbitant fees for simple banking.
How did your work at Revolut lead to this product launch?
Launching Revolut in Canada was a fantastic opportunity. I often say it was starting your own startup with training wheels. Ultimately, Revolut didn’t work out in Canada but we learned about the Canadian landscape very intimately. The local payment infrastructure, regulatory setup, key partners and vendors, and most importantly what customers wanted vs what was available in the market. It also really embedded the idea of challenging the status quo.
How did you know you were ready to found a company?
I don’t know that either Ahmed or I were ready. We saw a gap that remained unsolved in the market, and we believed we were the best people to solve it and that’s about it.
How did you meet your founders/know they were the right people to start a company with?
Ahmed and I met at Revolut. We were the first and second hires brought on to lead the Canadian expansion. The 3 years we spent working together prior to founding Vault were intense, and demanding, but also incredibly rewarding. There’s something about going through an experience like that with someone where if you make it out on the other side in one piece and still want to spend time together, that means it's a partnership meant to last.
What has been the hardest thing on your journey so far?
Lack of infrastructure and access for fintech in Canada. After speaking with customers we knew the product we wanted to build for them. However, the infrastructure didn’t really exist which meant we had to invest a lot of time and resources towards building it ourselves. This also goes towards access to the payment rails. There is very little direct access given to non-financial institutions which means you’ll need to have partners to get access.
What has been the most pleasant surprise?
How incredibly supportive and helpful friends and former colleagues have been. Whether helping with hiring, introductions, or beta testing, they’ve gone above and beyond anything I expected.
What is your super strength?
Persistence (or stubbornness). Every day you’ll likely have 10 things go wrong and if you’re lucky you’ll have 1 go right. That ratio holds true for a very long time and without persistence (and great folks by your side) it would be very hard to keep going.
Who is the unsung hero on the team? Why?
Definitely Yisheng. Not only is he one of the hardest-working people I’ve had the pleasure of working with but Yisheng took a huge bet on us. He agreed to join before we had a single line of code written or even raised funds. He believed in us and what we were building. He embodies everything it means to be an owner, deeply cares about our customers, and strives to make sure the business succeeds.
What are you trying to achieve over the next 12 months?
We’re still in closed beta but will be doing our full launch this year. We’ve gotten great feedback from our beta customers and want to provide the same experience to the Canadian businesses that have been underserved for too long. We’re also looking to digitize more banking products for businesses and increase access to products they’ve never had.
What advice do you wish you had been given prior to launching?
Make sure to run your onboarding process through the mom test. I got my parents onboard to Vault shortly after our launch and watching them go through onboarding was very painful as there were minor tweaks we could have made to make it smoother.
What is your proudest accomplishment outside of your startup?
For a long time, I’ve been at odds with balancing various parts of my life like most folks (work, family, friends, etc.)
It took a long time to get here but I have clarity into what’s important and how to juggle these various responsibilities.
Who are the 5 Canadian startups you like in your market?
- Sonnet - fast and simple onboarding + competitive pricing
- Walnut - Derek, and the team at Walnut are great. Onboarding was almost a white glove experience, and they managed to get us very competitive rates
- Nesto - fast and easy application process + competitive pricing
- Zum Rails - Robust API with great documentation. They really get Canadian payments
- Wealthsimple - Lately, I like the simplicity of the product (for something that is so robust) and the transparency in their messaging
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Headlines and Content
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- Canadian Startup News of the week - READ HERE
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Data Analyst, KOHO (Remote)
Why is this cool? KOHO’s purpose is to empower Canadians to build a great financial foundation with products that are radically transparent and easy to manage. Our journey began in 2014, and we have since built a community of over 800,000 users. KOHO is looking for Data Analysts (at Intermediate, and Senior levels) to drive in-quarter and long-term business growth through empowering data-driven decision-making and uncovering opportunities to grow company-wide business outcomes. APPLY HERE
Senior Product Manager, drop (Toronto, Remote)
Why is this cool? Drop is a rewards platform on a mission to inspire people to live their optimal lives by empowering them financially. Through our personalized platform, Drop intelligently surfaces the right brands, at the right time, to make members’ every day better than it was before. They're looking for a Senior Product Manager to join and help shape their rapidly growing product function. APPLY HERE
Senior Data Scientist, Borrowell (Toronto, Remote)
Why is this cool? Borrowell is a Canadian company whose mission is to make financial prosperity possible for everyone. The first in Canada to offer free credit scores, Borrowell provides educational resources, monitoring, innovative digital tools, and personalized product recommendations to help people feel in control and optimistic about their financial future. As a Senior Data Scientist, you will play a key role in formulating the most suitable Machine Learning (ML) solutions by identifying new opportunities, then owning the end-to-end development of ML models (ideation, development, validation, and model monitoring). APPLY HERE
Are you looking for your next Co-Founder? Not sure where to start?
Reach out to [email protected] with the following info:
- What you're looking for in a Co-Founder
- What you're building
Events and Links
Check out the interesting content, events, and happenings for the community here:
- TechTO Together | Montreal: January 31, 2023 - Join us LIVE from Montreal and kick off the year with the Montreal tech ecosystem - REGISTER HERE
- Starting and Building a Career in Data: January 26, 2023 - Learn how to start your career in data and related fields with guidance from expert professionals at CIBC and 1Password - REGISTER HERE
- StartupMoves Virtual Job Fair: Multiple Dates - Attend World's Largest Virtual Job Expo / Career Fair - REGISTER HERE
- TechTO Together | Toronto: February 6, 2023 - More announcements coming soon! - REGISTER HERE
- TechTO Talent | Virtual | February 22, 2023 - Meet and mingle with top tech talent and employers hiring now! REGISTER FOR FREE
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