Note: This article originally appeared in The Hill Times.
Not very long ago, my co-founder and I travelled frequently to China for business. One week, we were attending trade shows, meeting with investors and potential customers. The next week, we were changing flights and postponing contract signings. A few days after that, we were wondering if we’d ever travel to China again.
COVID-19 has changed everything overnight, and mostly for the worse. But as entrepreneurs, our goal is to change things for the better. And like many other Canadian startups, we’re pivoting — repurposing our pollution-killing technology into virus-destroying clear coatings — in the war against our new invisible menace, the coronavirus.
We usually think of entrepreneurs pivoting to chase quick profits. But there are precious few of those to chase right now. We’re pivoting to survive; pivoting to support our front-line health workers; pivoting to build our country’s economic future. We’re pivoting because it’s what startups do best.
Startups play a crucial role in our economy because of their ability to adapt and maximize the potential of new technologies to solve society’s biggest problems.Consider the work of folks at TransPod, a Toronto firm that was created to build hyperloop trains — it’s pivoted to focus on making low-cost ventilators for overburdened hospitals.
Startups like this aren’t pivoting for profit. They’re evolving to survive, yes, but they’re also acting out of a sense of duty to help vulnerable people around them. It’s commendable, but these companies are also among the vulnerable themselves.
The majority of Canada’s most promising startup companies are not financially stable — far from it. They are early in their journeys toward becoming profitable. Many don’t even make revenue yet. They’re conducting research and developing their products, trying to cover overhead while retaining highly skilled employees. (Startups and other small businesses employ 70 percent of Canada’s private-sector workers.) While they strive for profitability, these companies rely on investors — venture capitalists, corporate backers, government funders — who share their vision of advancing both the economy and scientific discovery. Not to mention those who tap into their own savings and assets. And now all that is at risk, with jittery investors staying on the sidelines or focusing on salvaging their existing portfolios.
We’ve seen many great startups disappear in recent weeks, with the sector at large resorting to mass layoffs to stay afloat, according to a recent survey. All levels of government have responded to the economic emergency with unprecedented speed and force. (In fact, it’s pre-coronavirus government investment that’s allowed our company to pivot in the first place.) But it still won’t be enough. Tech leaders have said we have “days, not weeks and months” to save Canada’s innovation ecosystem, which was one of the fastest growing in the world before COVID-19.
Private investors and governments should be pivoting themselves to increase their investments in startups, if for different reasons.
Investors must focus on the immediate and long-term opportunities at hand. Look at CleanSlate UV, a Toronto startup with a product that sanitizes mobile devices and prompts users to wash their hands. It recently secured $8.4-million in Series A funding, thanks to its contribution to the coronavirus battle. New international customers, such as the Hong Kong Department of Health, have been calling CleanSlate UV with plans to deploy the company’s tech in hospitals, offices, and public spaces.
And governments should remember that innovation benefits everyone. Nimble startups and early-stage companies are switching gears and saving lives. And the outsized return from supporting them far exceeds the money we spend: research, knowledge, intellectual property, jobs, and growth.
Today, Canadian startups are pivoting to the front lines of the battle against COVID-19. Tomorrow, they’ll be resurrecting our economy. These firms will be our future — if we only stand behind them.
Scott Shayko is the president and CEO of Envision SQ, a clean-tech company based in Guelph, Ont.