The Waterloo Region startup scene has been doing plenty of celebrating lately and with good reason.
About 500 new companies have emerged from the region each year for several years running and Waterloo Region is now the second-most-dense startup community outside of Silicon Valley. Several of our companies are now in the process of scaling up.
While these successes have helped put us on the map, it can be easy to forget that it’s exceedingly rare – not to mention difficult – for a startup to achieve global scale.
We should by all means celebrate when that happens, but until then we need to get more serious about how we go about starting and growing our tech companies.
When I joined Communitech as Vice-President of the Startup Services Group three years ago, many companies were preoccupied with finding investors instead of customers to buy their products or services. Venture capital funding rounds were celebrated, but sales were rarely discussed.
If you look to the world’s most successful startup communities you’ll find that in addition to trumpeting the latest raise they think deeply about customer acquisition and business development and they take their tech very seriously. That seriousness makes the difference between being merely interesting and being truly meaningful.
I want to get us from interesting to meaningful. That’s the path for Waterloo Region and this tech sector.
To help achieve that, we started the Rev accelerator program and accepted our first cohort of companies in March 2015, with a focus on building revenue through a six-month program of sales-focused programming, access to mentors and an introduction to potential customers and investors.
Rev is all about cutting through the hype, getting to the core of the business and executing on a credible plan to get to serious revenue.
The truth is, even for startups with ambitions to change the world, $100 million in annual revenues can sound almost unattainable. But at Rev, it starts with $25 million – if you can articulate a path to $25 million in revenue, we’ll help you chart a path to get there and still be in growth mode when you do.
It’s hard, especially in a small market like Canada, to build a $100-million company. Once you get there, though, things just kind of open up, and you have smart people, resources, and lawyers at your disposal.
To get to $100 million and beyond, you not only want your business to grow, but you want the rate of that growth to be accelerating. In other words, you want to grow on a curve, not a line.
To achieve that, startups need to be thinking about international sales almost immediately. Only American and Chinese companies have the luxury of big domestic markets. Canadians don’t, and that’s their big challenge.
As head of Startup Services, I’m responsible for the growth and development of startup-focused programming for nearly 1,000 early-stage Communitech clients. I’ve had the good fortune to work with smart, focused people and have built companies which have sold for a couple of million and for a few hundred million. I also served on the Communitech board from 2004 to 2009. We’re working hard to help more and more Canadian companies achieve rapid international growth and pass that vaunted $100 million in “ARR” (annual recurring revenue).
Through this monthly blog post we've named Sweat Equity, I’ll be sharing what my team and I have learned and keep you current on the various startup programs available through Communitech. I’ll also highlight some of our entrepreneurs’ biggest successes, take you behind-the-scenes in startup communities around the globe, introduce you to other tech leaders, and more.
Sweat Equity is a monthly column focusing on strategies for startups to raise money and scale quickly.
