Editor's note: This is the second in a two part series on our interview with Francis McGuire.
Francis McGuire draws an analogy with baseball to describe the Atlantic Canadian startup community, saying a lot of young entrepreneurs have hit singles and now they have to progress toward home plate.
In a wide-ranging interview, the President of the Atlantic Canada Opportunities Agency said the support organizations need to find creative ways to help scaling companies – and in ways other than providing financing. The key, he suggested may be in helping these companies hire key personnel.
McGuire also highlighted the region’s strengths in key sectors like life sciences and ocean technologies, and said Atlantic Canada needs to think more regionally about the development of the startup community.
“We know how to get people to first base,” said McGuire. “We have to focus more on getting them to second base. The next step is helping them to find the right people.”
Asked what ACOA should do going forward, he said, “No. 1, keep doing what we’re doing.” He said the region has a good record of getting a lot of companies “to first base” and ACOA will continue to support these efforts.
However, he said there are challenges involved in helping larger companies – those that have validated their products in the market but need now to grow into bona fide corporations with international reach. Such companies often need millions of dollars of capital to develop sales teams and marketing programs – something McGuire says ACOA can’t and won’t provide.
“Some of these first-base companies, all they need is a bit more expertise,” said McGuire, mentioning they may need a sales exec with international experience or an expert in gaining regulatory approval for biotech products. ACOA can provide some financing to help these companies attract top-flight talent.
McGuire understands the risks of backing startups. (Over the years, he personally has invested in 20, and 15 have failed, which he figures is business at the earliest stages of startup life.) But he also said that ACOA by its nature is an economic development agency and there are risks inherent in economic development.
Entering his job at ACOA, McGuire said he had a good understanding of startups themselves, but he had to learn more about how the ecosystem worked. What he decided was that ACOA operated too much as four provincial siloes. So he has appointed vice-presidents to be provincial champions in eight specific sectors, such as IT, oceans, and life sciences. These execs are now encouraging a more regional approach to growing their sectors. Similarly, ACOA is encouraging local startup groups like Volta in Halifax, Venn Innovation in New Brunswick and Genesis in St. John's to think more regionally.
“We’ve made pretty good progress in allowing companies to bounce back and forth between them,” said McGuire.
Until two years ago, McGuire was best known as the President and CEO of Major Drilling Group International Inc., a Moncton-based industrial company that is now producing revenues at a $400 million annual clip.
Under McGuire’s stewardship, ACOA has increased its support of startups and high-growth innovation companies, which usually takes the form of loans and in some cases grants. In the year ended March 31, ACOA’s contributions to startups amounted to $30.7 million, an increase of 35 percent over $22.8 million in the 2016 fiscal year.
In terms of sectors where the region has excelled, McGuire said Atlantic Canada has made surprisingly fast progress in life sciences, a sector whose companies often take ten years or more to get a product to market. He believes more companies will choose low-regulatory segments such as pet medicine to get to market even quicker.
He added that the recent emphasis on oceantech and the development of the Ocean Supercluster is changing the way the region’s business people think about themselves and their strategic advantage in being a coastal jurisdiction.
Disclosure: ACOA is a client of Entrevestor.