I usually cite 10 recommendations to improve the start-up ecosystem in Atlantic Canada, but there are four that I feel passionately about. My comments refer largely to the technology sector, but I think they apply to the entire start-up community.

Mentorship. The key ingredient in developing start-ups is having enough good mentors. Yes, capital is important, but the do-or-die element in the ecosystem is mentorship. And the most important—and hard to find—component is quality mentorship. We just can’t get enough of that, and I believe it’s the hallmark of a start-up community.

We’re finding it tough to get enough quality mentors. It really is no different than any other talent: there are people who are good at it and others who aren’t quite so good. It’s not a simple matter of bringing in someone with business experience, or even entrepreneurial experience, and saying he or she is a mentor. It’s a matter of finding the right people and matching them with the right companies.

A good mentor is difficult to develop. What we’re doing at Propel ICT, the region’s private sector-led accelerator, is working on developing mentors. And the Wallace McCain Institute is building this peer-to-peer support group, which is good for fostering mentorship. We’re getting there, but we’re not there yet.

International sales and marketing. Including product management for technology companies, we have big problems in taking products to international markets. It’s a real skill shortage in the region, and it’s hurting a lot of our innovative companies. They’re all export oriented, and they have to sell overseas or even in the U.S. What we lack is a training ground for these people because we don’t have the big companies like Cisco or Google here to train people in selling software in foreign markets. When we do hire people in these roles, they’re usually expats looking to come back to Atlantic Canada who have worked for some of these companies. We don’t have too many like them here to draw from. 

Most of the people in sales in this region haven’t experienced work in fast-growth economies or haven’t been to Asia. That means that they’re not, for instance, familiar with intellectual property rules in China. They don’t know how to operate and protect themselves in that climate. We need people who can operate in these markets. You can’t just say we’re not going to sell in China; it’s too big a market to pass up.

There’s a shortage of people in the world who have international sales experience in software. We need to get better at developing them. I’ve asked universities when they’re going to make international sales—not just marketing, but sales—a specialization in their curriculum, and I’ve been told they’re considering it. Of course, some private schools teach sales and they’re good, but we need to be more serious about it. Our companies are going to stumble until we get a higher quality of sales talent.

Access to capital. In particular, we need to find funding for companies before they’re cash flow-positive and in what we call “the valley of death.” They aren’t looking for huge amounts of money, but they need enough to finance a lean operation until they build their revenues. The easiest, most cost-effective way to do this would be to liberalize the Equity Tax Credits (ETCs) across the region so they apply to investors who live in different jurisdictions from the companies they’re funding. This is something we’ve been requesting for a long time.

Judging from the responses we get from provincial finance departments, they seem to be of the opinion that they aren’t part of the economic development programs of the governments they serve. It’s as if it’s someone else’s job. One advantage of enhanced ETC programs is they cost the government very little to administer. There’s a simple application process, and we don’t need armies of civil servants to oversee the program. I don’t see why we can’t be the best in Canada in ETCs.

In fairness, the ETCs in the region are as good as most others across the country. But we need to grow businesses at a faster rate than other provinces, so we need some unique programs. I’m saying these ETCs in Atlantic Canada can be better than other provinces. It wouldn’t cost the governments any money if you believe that new-business formation results in government revenue. And I’ve seen that it does.

Less overlap in government. We need more co-operation and less overlap among provincial bodies. Do we really need the cost of four security commissions? Do we really get any benefit from having four separate agencies? In several economic development functions, we have four little departments doing exactly the same thing when we’d all be better served by one large department. What we should do is pick the strongest elements of departments in each province and bring them to one pan-regional department.

I understand this is difficult to achieve on a political level. Provincial governments say they can’t offer services to residents and businesses of other provinces. But I think we have to chip away at such thinking. We’re losing a lot of money because of administrative duplication.

There are other things I could recommend, but I don’t feel as passionate about them as these four. If we could master mentorship, international sales, access to capital, and less governmental overhead, we could go a long way to developing the regional start-up ecosystem.

 [Editor's note: Gerry Pond, a founding member of East Valley Ventures, contributed this column to Progress Media and Entrevestor's supplement on the Atlantic Canadian Ecosystem.]