Accelerating the Frankfurt Startup Ecosystem · Ecosystem Startup Ecosystem Unique opportunity to...

Accelerating the Edmonton Startup Ecosystem into an Engine of Economic Growth

JF Gauthier

November 2019

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© 2019

Startup Genome’s global movement with 3 pillars

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• 300 partners

• 150 metro areas

• 30+ countries

Global

Benchmarks

• Survey ~100K founders

• 1M url’s + machine

learning

• Global patent analysis

• 100 metrics validated

against Performance

Evidence-Based

Research

• Top policy advisers

• Best-of-breed programs

• Global exposure

• 300k views and 100s

of Articles

Execution

Experience

© 2019

Within 20 years it will become the

largest single sector of the world’s economy

The Global Startup Revolution is disrupting industry after industry

• >4% of the global economy

• currently valued at $2.8T (without incumbent tech companies)

• growing 10% a year and accelerating– 3X to 4X the growth rate of our economies

• #1 engine of economic growth and job creation

* 4.5% of OECD countries in 2015 (U.S. 5.2%)

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© 2019© 2019

Traditional R&D has lost power as economic engineAmbidextrous innovation ecosystems perform best

GDP CAGR growth

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© 2019

Economic power has shifted to creating businesses rather than licenses

© 2019© 2019

● Large companies are net destroyers of jobs, and this is

accelerating with the Fourth Industrial Revolution

Startups have become the #1 engine of job creation

Net Job Creation by Firm Age

Ne

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b C

rea

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© 2019 © 2019

Rank Company

1 Amazon

2 Microsoft

3 Apple

4 Google

5 Facebook

6 Berkshire Hathaway

7 Alibaba

8 Tencent

9 Visa

10 Johnson-Johnson

1. Market Capitalization as of June 21 2019 2. Top 10 based on revenue

5of world’s top-10 companies were

produced by Tech startup ecosystems

At their peak, the following industries had

in the top-10…

• Telecom 3

• Computers 3

• Automotive 3

• Semiconductors 2

The Global Startup Revolution is driving the most dramatic value creation in history

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© 2019

$ 200B

$ 150B

$ 100B

$ 50B

Unfortunately, the value created by the Global Startup Revolution is greatly concentrated

TOP 100 CITIES

EXITVALUE(USD)

San Francisco

New York

London & Beijing

Boston

Tel Aviv

Our mission is to break this concentration by learning

from each other

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© 2019

The Genome of successful startup ecosystems

Special focus on the role of

knowledge networks

© 201910

Startup Ecosystems are a new type of industry clusters

1. Global competition

for Resources and

Markets

2. Strength comes from

Local Community

© 2019

Edmonton is currently in the Activation phase of the Ecosystem Lifecycle

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Edmonton

© 2019

1. Bigger is better

2. Resources, Infrastructure and Policies

3. Local Connectedness

4. Global Connectedness = Global Knowledge + Potential

5. Global Market Reach = Realize Global Potential

What makes a Tech startup ecosystem become an engine of economic growth and job creation?

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© 2019

0

10

20

30

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70 700 7000

Exi

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alu

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$B

)

Log(Startup Output)(number of startups)

1. The larger our entrepreneurial community, the more productive we are

Exit Value vs. Startup Output

Total Ecosystem Exit Value accelerates with

ecosystem size

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© 2019 14

The # of Tech (~software) startups is very low

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1,000

2,000

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5,000

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Activation Globalization Attraction Integration

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Startup Output

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's o

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Startup Density

© 2019

2. Larger ecosystems are better resourced—no gaps

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4

6

8

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Toronto Vancouver Paris Amsterdam Singapore Berlin Tel Aviv London New YorkCity

SiliconValley

Su

cce

ss F

acto

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co

re (

Ind

ex

)

Market Reach Funding AVERAGE Talent Startup Experience

IntegrationAttractionGlobalization

Success Factor Scores by Lifecycle Phase

Phase:

Amsterdam in transition from Globalization to

Attraction

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© 2018

Edmonton is above phase average in Experienced Engineers but lower in Funding

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300

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rly-

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Access to Funding

30%

40%

50%

60%

70%

80%


Exp

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En

gin

ee

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Access to Experienced Engineers

© 2019

3. More Locally-Connected startups grow much faster

0.0

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1.0

1 2 3 4 5

Qu

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Age of Startup (In years)

Quarterly Revenue vs Age of Startup

High Local Connectedness

Medium Local Connectedness

Low Local Connectedness

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1. Founder helping Founders

2. Experts & Investors helping Founders

3. Quality relationships between them

© 2019

3. More Locally-Connected startups grow much faster

0.0

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1.0

1 2 3 4 5

Qu

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Age of Startup (In years)

Quarterly Revenue vs Age of Startup

High Local Connectedness

Medium Local Connectedness

Low Local Connectedness

>2x revenue growth for startups with High vs. Low Local Connectedness

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1. Founder helping Founders

2. Experts & Investors helping Founders

3. Quality relationships between them

What we do

together is more important

than what we do alone

Chance of success of Zuckerberg starting Facebook in Lagos versus in Silicon Valley?

© 2019

4. The bigger “WE” — an ecosystem’s Global Connectedness is source of Scaleup Potential for its local startups

The Global Fabric of Knowledge Between Entrepreneurs

Quality Relationships between Entrepreneurs20

The more connected to the

bigger “WE”

the higher our potential to create

Globally-Leading Business Models

© 2019

5. Early Global Market Reach by startups is the only way to fully “Realize” an ecosystem scaleup potential

0%

10%

20%

30%

40%

50%

0 4 8 12 16Global Connectedness (Scaleup Potential)(# of Founder Relationships in Top Ecosystems)

Glo

ba

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ch(R

ea

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Po

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of

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om

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)

Size of bubble indicates ecosystem value

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© 2019

Startups that “Go-Global” from day 1 grow their revenue 2X faster ➔ deserve larger funding rounds ➔ scaleup

Monthly Revenue

TIME

Globally-Focused

Startups

>50% Foreign

Customers

Nationally-focused

Startup

<50% Foreign

Customers

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© 2019

4. The bigger “WE” — ecosystem Global Connectedness is source of Scaleup Potential for local startups

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The Global Fabric of Knowledge Between Entrepreneurs

Quality Relationships between Entrepreneurs

The more connected to the

bigger “WE”

the higher our potential to create

Globally-Leading Business Models

© 2019

5. Early Global Market Reach by startups is the only way to fully “Realize” an ecosystem’s scaleup potential

0%

10%

20%

30%

40%

50%

0 4 8 12 16Global Connectedness (Scaleup Potential)(# of Founder Relationships in Top Ecosystems)

Glo

ba

l Ma

rke

t R

ea

ch(R

ea

lize

Po

ten

tia

l)(%

of

Ou

t o

f C

on

tin

en

t C

ust

om

ers

)

Size of bubble indicates ecosystem value

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© 2019

Startups that “Go-Global” from day 1 grow their revenue 2X faster ➔ deserve larger funding rounds ➔ scaleup

Monthly Revenue

TIME

Globally-Focused

Startups

>50% Foreign

Customers

Nationally-focused

Startup

<50% Foreign

Customers

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By focusing first on our national market,

we develop a national product,

not a globally-leading product

© 2019

Success Factor

The Focus is on 3 Objectives

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THESE ARE LENSES AGAINST WHICH TO ASSESS EVERY PROGRAM AND GOVERNMENT SPENDING

1. GROW NUMBER

OF STARTUPS

Enabling Factors Success Factor

3. INCREASE STARTUP QUALITY

2. INCREASE EARLY-STAGE

FUNDING

© 2019

1. Grow the number of startups in the Ecosystem

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FUNDING

a) Angel Expertise

b) Angel Groups

c) Capital Injection

1. GROW NUMBER

OF STARTUPS

b) Keystone Team

a) Universities

c) Subsector Focus


a) Mentorship

c) Customer Access

b) Talent production

© 2019

To grow in a small city, you must intensify student engagement

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Startup Creation Potential

Startups per million people Startup Output

• Waterloo has high rates of startup creation because of it created a entrepreneurial culture starting with its universities

• With many universities and colleges in the ecosystem, Edmonton has high potential to

➢ Grow Startup Output by 5X+

1400+ Startups

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Waterloo Edmonton

Activation Average

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1000

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© 2019

Engaging Edmonton’s universities and student communities will be taken on by the Keystone Team

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STEM Education FocusIncrease and promote diversity

Student CompetitionsCreation of technologies and products

University SSOPsPlaces for entrepreneurial minds to learn and share

Co-Op ProgramsEspecially in SMEs and Startups — Touch entrepreneurs

Entrepreneurship CurriculumMake it an explicit career path and start educating

Create an entrepreneurship culture on campus and get students to experience and get excited about entrepreneurship

OBJECTIVE

TACTICS

© 2019

The ’Keystone Team’ creates an exciting startup community and

culture, attracting millennials and engaging universities

A Keystone Team is an entrepreneurial-minded organization that support the success of everyone else: startups, programs, etc.

Stockholm: STING

Founded in 2002 and creating the greatest startup ecosystem success story

Amsterdam: Startup Amsterdam

Started in 2014 and codified and improved the model of STING and others for taking leadership and building

momentum

Waterloo: The Original Communitech

Founded in 1997 by RIM and Opentext founders + 2 other founders. Outside of the university to talk about

business, marketing etc.

Helsinki: Sauna guys

In 2014 four entrepreneurs started Maria, Slush, etc.

© 2019

Keystone Team Roles: the 4 Cs

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Cooperate(support)

Commence(initiate)

Connect Coordinate

Support the success of existing initiatives, organizations, and programs

Connect everyone: entrepreneurs, investors, universities, program leaders, corporations

Kickstart new initiatives and programs that are missing

Align and foster cooperation between organizations and programs

© 2019© 2019

Startup

EcosystemStartup

Ecosystem

● Unique opportunity to develop

● ambidextrous innovation ecosystems

Growth Strategy #2: New Deep Tech sub-sectors provide an opportunity to grow its startup ecosystem

Traditional Innovation Ecosystem

• Driven by corporations with universities and research centers

New Deep TechSub-Sectors

AMR, Blockchain, IoT

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© 2019

That means developing Lab-to-Startup Performance, like San Diego in Life Sciences

Lab-to-Startup Performance

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Traditional Innovation Ecosystem Performance

Sta

rtu

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cosy

ste

m P

erf

orm

an

ce

© 2019

Economic power has shifted to creating businesses rather than licenses

Calling all inventors and technical people to join the Global Startup Revolution!

© 2019

Focusing on regional strengths and market opportunities fuels startup ecosystem growth

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Fast-growing, leadership starting to

emerge

AGRICULTURELegacy strength in food processing, presence of multinational agribusiness and strong distribution networks support the ecosystem’s competitive advantage

Agtech and New Food

Ally with large ecosystems to create a

global program

Large and growing with

no clear leader

LOGISTICS & SUPPLY CHAINApplication across key industries like Oil & Gas, Mining, and construction, etc, will help all the sectors modernize

Operations and Supply Chain

Ally with large ecosystems to create a

global program

Niche, no clear leaderO&G Tech1

Ally with other ecosystems to create a

global program

OIL AND GAS AND MININGCalgary lies at the heart of Canada’s O&G Industry. Strong potential to add value by leveraging local strengths and latest technologies

Industries Tech Subsector(s)

Subsector Landscape

Program Strategy

Small and slow growingCleantech2

© 2019

2. Increase Early-Stage Funding

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FUNDING

a) Angel Expertise

b) Angel Groups


1. GROW NUMBER

OF STARTUPS

b) Keystone Team

a) Universities

c) Subsector Focus


a) Mentorship

c) Customer Access


© 2019

Edmonton has a low proportion of startups that receive seed rounds

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0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2014 2015 2016 2017 2018

Toronto-Waterloo Quebec City Calgary Edmonton Houston Austin

# of Seeds / # of Startups: Edmonton vs Activation Peers

2017 & 2018 are unreliable due to lag

in capture by databases

© 2019

3. Increase Startup Quality

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FUNDING

a) Angel Expertise

b) Angel Groups


1. GROW NUMBER

OF STARTUPS

b) Keystone Team

a) Universities

c) Subsector Focus


a) Mentorship

c) Customer Access


© 2019

Increase Startup Quality: Components

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1) Founder Know-How

Inject startup and business know-how through local and global programs, mentors and advisors

➔ Mentorship and other programs

2) Talent AccessAccess to technical and growth employees with startup experience

➔ Keystone and programs to directly engage students

3) Local Customers

Access to local consumers and corporations to understand problems/solution fit

➔ Engage corporations in the startup ecosystem

Components

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