Can You Beat My Friends?
Investors have many different frameworks for evaluating startups. Some focus on the 3 Ts (Team, TAM and Traction), others look for the 3 Hs (the Hacker, the Hustler and the Hipster) while others ask the 3 Why’s (Why this? Why you? Why now?).
Whenever I meet a promising Canadian startup, I focus on a single question: can you beat my friends?
Aster Data, circa 2006
Let me explain.
In 2006, I signed on as employee #1 of a new startup called Aster Data Systems, founded by three friends of mine from Stanford. It’s very likely you’ve never heard of Aster Data, but once upon a time we had a small but significant impact on the tech world: we helped to invent big data.
As fondly as I remember those days, when I think about the many friends I made at Aster Data, I rarely think about what we did back then. More likely, I’m thinking about what they’ve created since. In the 10 years since Aster Data was acquired, our small group of alumni have gone on to found some of the most impactful (and valuable) companies in enterprise software.
And in Silicon Valley, that story isn’t anything unusual. In fact, it’s not even the only time it happened to me.
Meet some of my friends
To give you a sense of what I mean, here are just a few of the people I’ve had the privilege of working with:
If you’re in IT or chatbots, can you beat my friend Vaibhav, who cofounded the conversational AI platform Moveworks (valued at $2.1B)?
If you’re in cloud storage, can you beat Dheeraj, who cofounded Nutanix (NTNX, valued at $4.1B)?
If you’re in data management, can you beat Mohit, who cofounded Cohesity (valued at $3.7B)?
If you’re in business intelligence, can you beat Ajeet, who cofounded ThoughtSpot (valued at $4.2B)?
If you’re in banking-as-a-service, can you beat Itai, who cofounded Unit (valued at $1.2B)?
If you’re in customer data and personalization, can you beat Tasso, who cofounded ActionIQ ($145M raised)?
What’s your point?
Believe it or not, I’m not dropping names for the sake of dropping names.
My goal here is to highlight a simple but important point: if your aim is to be the best in the world, your competition isn’t in Canada.
The Startup Olympics
In a winner-take-all / winner-take-most market, there are generally 3-5 “finalists” once the market matures.
Now, try to think of a global winner-take-all / winner-take-most market where more than one “finalist” was based in Canada.
I’ll wait.
The reality is that tech is a lot like the olympics. Sure, there are plenty of companies founded all over the world, but once everything is said and done, the podium often looks like this:
As a result, whenever I meet a promising Canadian startup, one of the earliest warning flags for me is if they show me a competitive slide with other Canadian companies.
Why?
Because unless they’re building X for Canada, then there isn’t a single other company in Canada that matters.
At least not if their goal is global supremacy.
How good are you?
When I meet your founding team, I’m not comparing you to anyone else in Canada. Instead, I’m assuming that you’re the best in Canada and I’m comparing you to all of my friends in the states. I know how they work and I know what it took for each of them to be successful.
When I’m talking to you, I’m envisioning the founders in your industry who are just like my friends and asking myself:
Do you have their hustle?
Do you have their determination?
Do you have their passion?
Do you have their storytelling ability?
Do you have their resilience?
Can you recruit the absolute best engineers, designers, product managers, marketers and salespeople in the world?
Can you inspire investors and customers like they can?
Will you do whatever it takes and go wherever you must go to win?
Because that’s what you’re up against. Not the other founders in your local coworking space. Not the “competitors” in your city, province or even country.
The numbers tell us that in any given tech market, at best one global competitor will come from Canada.
So if you really, truly are aiming to be the best in the world,
…you need to beat my friends.
Game on.
