Why Canada is desperately in need of a united SaaS community
What was the motivation behind SaaS North?
With the development of Cloud computing, coupled with the increased availability of “anytime, anyplace, anyhow” (the triple AAA) communications, enterprises of all sizes are now able to implement and afford “on demand” software services. As this new way of using software is becoming the norm, a new business model has also evolved. It is called Software as a Service or SaaS. The SaaS business model is a software licensing and delivery model in which software is licensed on a subscription basis.
Today’s software companies are embracing agile development which is enabling them to rapidly scale customer and user growth. At L-SPARK we work with entrepreneurs to concentrate their efforts to achieve a repeatable sales process, establish metrics (including MRR, MOM, LTV, CAC) as well as build customer success and onboarding processes in line with the SaaS business model.
However, the SaaS industry is still in its infancy. Best practices and tactical strategies are still being formed. We founded SaaS North to bring leaders and practitioners of SaaS companies together to help us build what we hope will be a future playbook for scaling a SaaS company.
There has not been one central destination for Canada to grow a strong SaaS community. We are it! Canada has produced some of the top leaders in today’s SaaS marketplace. However, early stage Canadian SaaS companies are struggling to scale up into globally competitive firms that generate large revenue. L-SPARK is the point of concentration for enterprise SaaS and cloud companies to connect with Canada’s SaaS experts. SaaS North is the annual destination and physical event that will support this.
Why is NOW the right time for a SaaS-focused conference in Canada?
The worldwide public cloud services market is set to reach $204 billion by the end of 2016, according to Gartner, and the Canadian SaaS contribution is growing.
In recent years, the Canadian ecosystem has produced more than its fair share of leading SaaS startups. These include Vancouver-based Hootsuite, Montreal’s Startup LightSpeed, Ottawa’s Shopify and Halogen Software, and Toronto’s FreshBooks.
Each one has raised a wealth of venture capital funding. Hootsuite in particular achieved $165 million in a series B, to make a total of $250 million investment to date. Halogen brought in $55 million in its IPO in 2013 and Shopify achieved $100 million in a series C — and is now also publicly traded. To further underline the depth of Canada’s tech pool, Salesforce acquired a number of SaaS startups including Golnstant from Halifax, Rypple from Toronto, Radian6 from Fredericton for a total of half a billion dollars in 2014.
Ottawa, in particular, has re-emerged as an inviting place for SaaS startups and legacy enterprises moving into this space. Past successes in the city’s tech scene have created a fertile environment and paved the way for a new industry to emerge. Ottawa’s long history of telecommunications companies began in the 80’s and 90’s. And though they might be greying at the temples, the executives who grew up in the heydays of Blackberry, Mitel, Nortel, Newbridge Networks and Cognos have a wealth of experience. The IPO successes of these companies might have faded from memory, but their legacies have created a foundation of talented executives.
U.S. tech companies like Apple, Amazon, Microsoft, OpenText, Survey Monkey, IBM, Google, and others are all setting up local development centers, so it’s no wonder we are poised to be Canada’s capital of software.
How will Canada foster the emergence of more SaaS global companies?
First and foremost, global SaaS corporations need the intellectual capital to build the products to meet the market. Canada is rich with such intellectual capital (entrepreneurs, engineers and software designers) as evidenced by the many Canadian born senior executives in leadership positions in global SaaS companies around the world, in United States, in South America, Europe and Asia. These Canadian execs provide the drive, the vision and the operational ‘chops’ for many of these Global corporations.
Secondly, to reach global scale, this intellectual capital needs to be coupled with a self-confidence to take on the world, a vision to drive hard and expand in spite of the perceived risks involved in such growth. This self-confidence, sometimes called ‘swagger’, and sometimes confused with arrogance, is a key requirement in SaaS businesses. It is a requirement born from the need of SaaS companies to expand and grow exponentially and rapidly. This rapid growth is needed in order to establish a solid base of sustainable and repeatable revenue stream, which than can fuel the ongoing drive to grow.
To gain such self-confidence, our CEOs need to know that Risk Capital is available to fuel this growth. Unfortunately for us, this risk capital is still in short supply in Canada. Which, in many cases, drives entrepreneurs to join other growing companies, rather than build them right here in Canada.
Is that because we do not have financial capital is Canada? I don’t believe that. We do have the financial capital, but it is being deployed in lower risk investments, and only a very small percentage is deployed in the higher risk opportunities that exist in the SaaS industry. If I had a wish, I would cast a magic wand to release a portion of this pool of capital into this higher risk category to fund the emerging SaaS companies. This will not only provide the fuel for growth, but also provide our CEOs with the self-confidence to take these larger risks necessary to compete in the global market place.
The SaaS North conference is the forum for gaining the skills and best practices of growing a SaaS company, and also a demonstration to the Canadian Capital markets of the untapped investment opportunity in Canadian SaaS. We have the people, we have the smarts, we have our conference and together we can build our own home grown success stories.
See you at SaaS North!
