Jobber

Jun 15, 2022

At stake is something far more important than national pride Author of the article: Article content Chris Albinson, chief executive of Communitech Corp., the Kitchener, Ont.-based start-up incubator, wants to do for the Canadian economy what Own the Podium did for the country’s standing in international sport. Advertisement 2 Article content Try refreshing your browser, or Communitech assembles 'Team True North' to fight the magnetic pull of Silicon Valley Back to video Own the Podium is the non-profit formed after the Salt Lake Winter Games in 2002 to channel the money Canada spends on the Olympics and Paralympics into sports where it has realistic opportunities to win medals. Salt Lake was memorable because Canada won gold in hockey, ending a 50-year losing streak. But the euphoria of winning that event was spoiled by mediocre performances elsewhere. Canada won a total of 17 medals, which was 19 fewer than Germany, 17 fewer than the United States and five fewer than Norway. “There was this sense of, ‘Why the heck aren’t we winning?’” Albinson recalled. “It’s the Winter Games. We should be dominating, and why aren’t we?” Cathy Priestner Allinger, the former Olympic speed skater and founder of Own the Podium, thought she knew why. Advertisement 3 Article content “I’m not going to do her work justice, but she basically said, ‘You aren’t going to be the best in the world by doing Participation,’” Albinson said. “She went about this diligent process, saying, ‘If you want to be the best in the world, we have to use objective data to figure out which athletes have the probability of that success. And then invest in them and bring them together to have the success we want.’” There was something un-Canadian about Priestner Allinger’s approach. It recognized that winning was more complicated than a mix of grit and luck. Resources would be allocated based on the likelihood of winning a medal, not spread evenly across the regions and various athletic associations. A fourth-place finish would be assigned the glory it deserved: little to none. Two decades later, the results speak for themselves. Canada’s Olympic team is now consistently in the top three at the Winter Games and is no longer an embarrassment at the Summer Games. Advertisement 4 Article content Albinson, who spent a couple of decades in San Francisco as a tech investor before returning to Canada to run Communitech a year ago , thinks he can replicate Own the Podium’s success in the commercialization of technology and innovation. At stake is something far more important than national pride. Canada’s productivity is weak and it spends too little on research and development , partly because the economy is dominated by mature oligopolies that have little incentive to innovate and smaller companies that are content to stay small. If Albinson is right, and creating world-class companies is akin to developing world-class athletes, then he might be on the verge of setting some foundation stones for a generation or more of economic growth and wealth creation. Advertisement 5 Article content Chris Albinson, chief executive of Communitech Corp. Photo by Supplied/Chris Albinson Communitech’s answer to Own the Podium is Team True North, an assembly of 35 private companies, from 12 cities and five provinces, which are each on track to generate revenue of $1 billion by 2030, based on data gathered by Silicon Valley Bank, analyzed by New York-based data science firm Two Sigma Investments LP, and run through a model for predicting companies with high growth potential. (Disclosure: Andrew MacLeod, chief executive of Postmedia Network Inc., which publishes the Financial Post, is a member of Communitech’s 20-person board of directors .) The “team” includes Vancouver-based Themis Solutions Inc. , which sells legal software under the Clio brand; Edmonton-based Octopusapp Inc ., the company behind the Jobber business management platform; Toronto-based 2ndsite Inc. , which operates the FreshBooks accounting app; Montreal-based RenoRun Inc. , a digital marketplace for building supplies; and Charlottetown-based Biovectra Inc. , a contract maker of pharmaceutical products. Advertisement 6 Article content Each company meets one of four criteria: between $20 million and $39 million in annual revenue and an annual growth rate of at least 60 per cent; between $40 million and $79 million in revenue and a growth rate of at least 40 per cent; $80 million to $99 million in revenue and a growth rate of 20 per cent; or more than $100 million in revenue and a growth rate of 15 per cent. Communitech sifted through 17,000 companies that had received venture funding, and only a few dozen emerged as truly world class based on its criteria. The founders then had to pass something of a values test, since part of the initiative is creating a tightly knit group of high performers who will mentor their peers, just like the athletes who gather at Canada’s elite training centres do. (Priestner Allinger advised Communitech on the True North program.) Advertisement 7 Article content Unfortunately, it’s not just young software engineers who are attracted to the more established names, much to Albinson’s frustration. For instance, Canada’s pension funds rank among the biggest institutional investors in the world, and they are widely seen as innovators because they were among the first to expand their portfolios to include more than government bonds. But with the possible exception of the Caisse de dépôt et placement de Québec, Albinson said the pension funds are only just starting to get serious about venture capital. As a result, many companies on Team True North are backed by investors from the United States and elsewhere. For example, Calgary-based Benevity Inc., a charity platform, sold a majority stake to London-based private-equity firm Hg Capital LLP at the end of 2020, and RenoRun’s last funding round was led by New York-based Tiger Global Management LLC. Venture investments in Canadian companies rose to a record of about $17 billion last year, but about 70 per cent of the money came from outside the country, Albinson said. “We just sold 70 per cent of the shares in our best companies largely to Americans,” he said. “We’re saying (to Canadian investors), ‘We’re going to take the work out of it for you. These are the best companies. You don’t have to sift through 17,000.’” Share this article in your social network Share this Story: Communitech assembles 'Team True North' to fight the magnetic pull of Silicon Valley