What Canadian Tech CEOs Are Saying About 2019
2018 was a good year for tech, and a particularly great one for Canada with global tech giants like Amazon, Microsoft, Uber, and Google directing their investment dollars to Toronto. Additionally, we saw more private capital being pumped into the ecosystem on the venture capital side. Canadian VC-backed companies raised a total of $4.6 billion CAD across 471 deals in 2018, compared to $3.4 billion across 361 deals in 2017 (MoneyTree report). Despite some of the more challenging situations happening globally like trade tensions and the recent tech selloff, Canadian tech CEO’s seem to maintain their optimism.
To learn more about the situation, the team at Sampford Advisors surveyed tech CEOs from across Canada with regards to how constructive the business environment is, and their outlook for the year ahead.
Let’s start off with some background information to give you more context…
• The majority of the respondents were based in Ontario (91.4%).
• 82% of the companies have more than 10 employees, with 31% having 10-30.
• 47% of the companies have been around for 5-10 years and 29% have been around for 10+ years.
• 66% of the companies are Software & Internet, 13% are IT Services.
• 39% of respondents said they have 10+ competitors in their space, while 31% said 5-10.
• 39% of respondents said that competition in their vertical has increased over the last 5 years, 25% said it stayed about the same.
[Question]: What is your priority at the moment?
When asked about priorities and what CEOs are focused on at the moment, the majority said acquiring new customers and increasing revenues are at the top of the list. This is followed by hiring talent and raising capital.
[Question]: What is the biggest challenge you are currently facing?
When asked about the biggest challenge companies are currently facing, the majority highlighted finding top talent as one. Other challenges included dealing with the pace of change, lack of capital relative to the U.S., and competing with bigger Tech companies entering the market.
[Question]: What emerging technology are you betting big on?
We asked CEO’s what emerging technology they’re betting big on. Here are their top 3 picks:
…seems like blockchain has died down (for now) after being the most talked about Tech last year.
[Question]: Do Tech CEO’s think Canada is a good place to build a Tech company?
70% of CEOs tend to think so. 23% of them think we’re getting there.
And with good reason. Here are 6 reasons why it’s advantageous for starting a business in Canada:
1. An abundance of seed capital & early-stage support
2. Access to a variety of government grants and tax credits
3. Access to great technical talent
4. A low cost of living
5. A favourable exchange rate
6. An abundance of entrepreneurial talent
Although we started the year on a chilly note, with a polar vortex that swept cities across Canada the U.S. with temperatures we’ve never seen before – the outlook for 2019 isn’t as bad as you might think. Most CEOs are pretty optimistic about the North American economy going into 2019. 38% have a positive outlook, 34% have a neutral outlook, and only 28% have a negative outlook.
Even when asked about recession expectations, 60% of CEO’s don’t expect a recession in 2019, but think it’s more likely as we head into 2020 and beyond. Only 40% think that a recession is likely to happen in 2019 – so I guess we’ll take those odds!