I profess no special insight into what really goes on inside the Canadian venture capital world. I am not part of the esteemed club, do not possess the insider’s secret decoder ring and am not a confidant to anyone who has one. Instead, my vantage point is down the food chain looking up, a service provider selling to, working for, and dependent upon this community for part of my livelihood.
These days, one need not be an insider to sense that the venture capital sector is in a funk, a condition which has been rich fodder for the gossip and rumor mills. Such and such a firm is struggling to raise its next fund, this or that labor sponsored fund is toast, such and such a firm will raise far less than expected, so and so is on his way out the door. Occasionally, real news interrupts the frenzy, such as RIM’s new fund or Roynat’s decision to exit the venture business altogether. But the word on the page has little chance in a race against the word on the street and soon we are run amok with scuttlebutt and innuendos once again. While such goings-on are pure schadenfreude for some, for most of us the health of the venture capital sector is a matter of great concern.
Given the unsettled mood, I decided to attend my first CVCA annual event which was held this year in Montreal. The event seemed well attended with an array of interesting panel discussions and high profile speakers. But if I had to distil the dominant take-away image (outside of the Crosby, Stills and Nash look-alike American VC whose band played at the dinner) it would be the sea of fingers pointing every which way in search of those culpable for the damaged state of the great venture nation. Take your pick…macroeconomic forces, government myopia, the credit crunch, the shortage of good entrepreneurs, the lack of industry critical mass, structural problems, etc. etc. etc.
But while these swirling forces are undoubtedly affecting the industry as a whole, it seemed odd that the attendees spent so little time talking about the thousand pound, lifeless gorilla plopped in the middle of the conference room…..performance, or more specifically, the poor performance of so many of the firms. If, as has been widely reported, the performance of many Canadian venture capital firms has been let us just say modest, then the search for culprits in the current fundraising crisis should at least include a drive to the closest full length mirror.
Oddly enough, self-reflection and navel gazing did not appear to be high on the CVCA agenda this year. There was not a lot of talk about lessons learned, best practices among the more successful Canadian firms, how professional development can be improved, or in fact how the whole industry can be improved. There was not a lot of talk about models, the assumptions on which they are built, or the extent to which they need to be tweaked to stay relevant in a rapidly changing world. This is especially regrettable as there certainly is a lot of talk about these issues in the markets they serve.
Also, one would have thought that the veneer of certainty, dare I say hubris, which so characterized a percentage of this population, might have been washed off by the inclement weather of poor performance and the damage it has inflicted on the sector. But based on what I saw at the CVCA, for some, a yet stronger solvent appears to be needed. Until that time however, soul-searching and the growth that it promises will not occur, attitudes and behaviors will not change, skills will not improve, wisdom will not be found and success will not come. And that’s why there is an upside of these downtimes, for trying as they may be, they will flush out some and mature others. And that will benefit the venture capital industry and the tech sector as a whole.
Looking for a dynamic HR role? Stay away from the entrepreneurial tech sector.
January 1, 2012
In a recent survey of HR graduate students, the technology sector rated among the most coveted destinations to ply their trade. It is viewed as a world of innovative people, technologies and approaches where progressive talent management, OB/OD and related HR work awaits.
The Cry to Replace RIM's CEOs – A Truly Dumb Idea
October 13, 2011
Leaving aside the recent service outages, the shellacking of RIM in the press is a tad surreal to behold.
For the few Luddites not familiar with the firm, Research in Motion is the successful Canadian smart phone pioneer with revenues of $20bb per year, no debt and cash in the bank. They manufacture products that remain popular around the world and continue to boast technological innovations unmatched by any competitor. Their most recently launched smart phone devices have been well reviewed and appear to be selling well. And though the company's first version of its new tablet, the Playbook, has room for improvement, it is a promising piece of technology.
Context: When Companies Confuse Start-up Experience for Start-up Experience
October 7, 2011
I had the occasion this week to chat with an entrepreneur still licking his wounds from a stalled startup venture. His tale is a reminder of how easily companies misunderstand organizational context when hiring. For startups, such a misunderstanding can be fatal.
The CEO Hiring Practices at HP
October 3, 2011
The press tells us that Hewlett Packard is the largest technology company in the world with revenues of $126bb. Impressive as those numbers may appear, they do not seem to impress HP's Board of Directors. You see they do not believe that any of the firm's 324,600 employees are capable of leading it. Not one person. Not this year or last year when CEO changes were made. In fact they were apparently not capable six years ago or even eleven years ago when CEO changes were also made. But before summarily indicting the firm's succession planning/leadership development programs, it is useful to consider the track record of the external candidates who were considered better choices than the firm's internal candidates. This analysis decidedly shifts the spotlight to the competence of Hewlett Packard's Board of Directors.
The Folly of Believing What You Read
September 19, 2011
Some time ago we posted a blog titled ‘So you REALLY want to be a CEO?' which looked at the human costs of climbing the upper rungs of the management ladder. The blog was based on a series of articles immediately following the ‘resignation' of Pfizer CEO Jeff Kindler. All of these articles presented a cautionary tale of life in the fast lane, the long hours, the extensive global travel, and the shareholder pressures that accompany an uncooperative stock price. They also spoke poignantly of the physical and emotional toll that such unrelenting pressure took on the Pfizer CEO who eventually resigned in order to attend to his family and health. As it turns out however, much of this narrative may not have been true
Before sending us your resume (and then getting frustrated with us) ask who we work for
July 25, 2011
A friend of mine is a trustee in bankruptcy. As his title suggests, he and his firm serves those contemplating the ‘cleansing' process of personal bankruptcy. Potential customers compare service providers, select one, and then pay the chosen firm a fee to initiate and manage the ensuing process on their behalf. However, as soon as the relief-seeking customer signs on the dotted line, the trustee's allegiance shifts to the creditors for whom they then seek to maximize debt recovery. This shift in who works for whom must be a tad unsettling for people who already have a heap of problems and stress on their hands.
What Dating Services Can Teach Companies About Hiring
June 1, 2011
Executive-level hiring is a decidedly aspirational endeavor. Organizations idealize their workplace cultures, select for attributes that will fit into those romanticized environments, and then immerse unsuspecting hires into their ice-cold reality of their works-in-progress.
How to Survive a Startup - by Jill Ram
April 20, 2011
If you're an executive and you're thinking of joining a start-up, know what stage of a start-up to join. If the company is in its first year or so, don't expect to make significant changes. If you join after the company is somewhat established and mistakes have been made and learned from, you'll likely be more successful from the outset. If the founder has stepped aside, well, by then, the company is likely not considered a start-up anymore. It won't be functioning like a big company yet, and it won't have all the structure in place that it needs, but it will be run with more practicality and with less emotion. Timing is everything so choose it well.
Good News for the Old, Overqualified and Overlooked
March 18, 2011
It is expected that a significant percentage of the baby boomer generation will drive right past the Freedom 55 highway exit. For many the goal of early retirement will have proven to be unattainable hype, while for others the ups and downs of working will appear more attractive than the prospects of working up and down the local lawn bowling leadership board.
Pressed for time? Blame those Benedictine Monks.
February 24, 2011
It is among the principal reasons candidates tell us they are open to consider a change in employers. They are tethered to it, yet somehow it still flees. It is time, the most precious of resources, and for many harried executives they want some of it back.
Though their relationship with time may be strained, it is worth pointing out that it was not always this way. In his fascinating book Time Wars, Jeremy Rifkin chronicles the evolution of our modern relationship with time. He points out that in traditional agrarian and pastoral cultures, time was a very naturalistic notion maintained in cyclical, repetitive, biological and even sacred terms. The ‘passing of time' was cued via the changing seasons, biological lifecycles and lunar patterns and thus, the cadence and tempo of those societies were finely tuned to the cyclical rhythms of their physical environments. As he states, "Our early ancestors coveted the circle, perceiving time as eternal return, a ceaseless repetition of an endless cycle of birth, life, death, and rebirth". Since these cyclical rhythms could neither be accelerated, nor altered, the cadence of these societies' was natural and harmonious.
The Upside of the Venture Capital Crisis
May 27, 2008