Toronto s startups making waves
View 1: “996” Is Not a New Phenomenon
While the “996” working-hour system is something that has developed graduallyover the last ten to fifteen years, the culture of working overtime has beenaround since China’s economic reform in the late 1970s. Since China’s openingup, ambitious entrepreneurs have worked tirelessly to raise the country out ofpoverty. This is an important reason China’s economy has grown twice as fastas the US economy over the same period of time. (see endnote 3)In the early 2000s, Chinese tech companies started to grow rapidly, but theycouldn’t hire new employees fast enough to keep up with the growth. Therefore,they started to add overtime hours gradually, first one day a week, thenincreasing to every day. In this way, they were able to support the growthusing their existing staff while hiring new staff as fast as they could.Another reason for adopting the “996” work week was to keep labor costs down.Historically, China has had the competitive advantage of low labor costs. Butwith the rapid growth of China’s economy, wages have also increasedsignificantly. Therefore, to combat the declining cost advantage, companiesstarted asking employees to work longer hours.
View 2: There Are Many Different Flavors of “996”
Strictly speaking, “996” means working from 9 am to 9 pm Monday throughSaturday. However, there are many variants of the broader “996” workingculture, including 995 (9 am to 9 pm five days a week), “8106” (8 am to 10 pmsix days a week), and even “997” (9 am to 9 pm seven days a week). (seeendnote 4)The leaders in the “996” movement are large internet companies and techstartups. These companies have the longest hours and most regular schedules.Other companies that work closely with these firms, such as server vendors,also have adopted similar work schedules so they can respond rapidly to theneeds of “996” customers.Service companies, such as system integrators and IT consulting companies,tend to have more variability in their working schedules because their work isproject-based. If there is a backlog of active projects or a deadline that isapproaching fast, consultants will work very long hours. Otherwise, there isno reason to keep them at the office late.Outside of the tech industry, it is common for managers in more traditionalChinese organizations, such as government, state-owned companies, andhospitals to also work long hours and weekends. The purpose of workingovertime is different from the “996” internet companies, however. Managers atthese organizations will dedicate their evenings and weekends to activitiesthat build relationships, such as working dinners, seminars, and conferences.In the past, these after-hour activities took place at lavish venues. But inrecent years, following Xi Jinping’s crackdown on corruption, these eventshave generally become less extravagant. Employees who are not managers havefewer opportunities to participate in after-hours events. But if they areambitious and good at networking, they will gradually get opportunities, andadvance their careers more rapidly.
View 4: Smart Companies Enforce “996” Without Formal Policies
When you work at a “996” company, it is very clear what the working hours are,but these rules are typically not published in an organizational handbook. Oneanalyst explains, “it would be really stupid for a company to publish a policyabout working 996. It is against the law. And it is not decent or elegant.”Because “996” is an important part of the company culture, even if the policyis optional, staff really have no choice but to stay. “If you don’t stay, itmeans you don’t work hard enough, and other employees and managers will notrespect you.” Also, you will miss out on important collaboration and will notbe able to keep up with the rest of the team.Instead of using formal policies, companies use other ways to encourageemployees to spend long hours at work. For example, companies frequentlyprovide free evening meals and pay for late night taxi rides home from work.
View 6: Chinese Organizational Structures Encourage “996”
Chinese organizations generally have a different organizational structure thanWestern firms. Companies in the West are typically more structured and haveclear hierarchies. It is not easy for employees to jump from low ranks in anorganization to positions of senior leadership. Instead, career progression isincremental with gradual salary increases. In China, on the other hand, thereare more opportunities for rapid career growth, and there is intensecompetition for leadership positions. Both the opportunity for advancement andthreat of being left behind motivates Chinese employees to work longer hours.
View 8: Young Workers Have Varying Opinions of “996”
Mature Chinese workers accept the heavy imbalance of work in their lives sothey can financially support their aging parents and provide a bettereducation for their children. These workers have been in the workforce longenough to become accustomed to the overtime hours.Younger Chinese workers, on the other hand, have different priorities than theolder generations. These youth are attracted to a better work-life balance.They want to spend more time with their family and friends. And they also wantto have fun playing video games or spending time on Toutiao. (see endnote 5)One important group of young workers, known as the “fuerdai” (see endnote 6)or children of wealthy Chinese parents, is not as attracted to the highsalaries at “996” jobs. Money is not the most important goal for theseindividuals. Instead, they want a job that is interesting to them. They chooseto work for pleasure rather than laboring for a paycheck. While this group issignificant, the large majority of young Chinese workers do not come from richfamilies and do not have the luxury of choosing a career based on personalinterest alone.Many Chinese youth still share the values of the older generations. Theybelieve they should spend more time working to develop themselves and improvetheir professional capabilities. They are still motivated by money and theybelieve that if they fight hard during their youth life will get better whenthey are older.Another factor driving the acceptance of “996” within the younger generationis the steady flow of young workers from rural areas competing for tech jobs.College graduates from China’s interior have technical skills and are eager toimprove their social status. They are willing to work hard and compete withtheir classmates to see who can earn the most and gain financial success thefastest. “This period of intense competition usually lasts for the first fouryears after graduating from college. After this period, successful youngworkers realize that they have a competitive advantage in the job market andbegin to negotiate with their employers for higher pay.”
View 10: Chinese Firms With “996” Cultures Are Not Productive
However, others question whether forcing employees to work long hours achievesthe desired outcome. John Artman at Technode writes: “As wages rise, Chineseproductivity is lagging behind global averages. 996 schedules are an ad hocsolution for companies that don’t know how to manage workers effectively.”(see endnote 7)One analyst shared an opinion that was quite different from the otheranalysts, arguing that workers will only produce what they are willing toproduce, regardless of how many hours they stay at the office. Chineseemployees will go along with the company culture and stay late at the office,but that doesn’t mean they are always working. A lot of their overtime isspent sitting in meetings and chatting with co-workers. “When I visit acompany in China, the employees will usually look like they are working hard.But if I stick around and come back in fifteen minutes, it’s easy to see whenthey are putting on a show and just trying to look good.”
I find their support come from a Community section. It is like a forum, newcomer will introduce themselves and get to know more people. You can get toknow the anyone by directly message the person and add him or her to yourmember list.It seems like a great community where anyone can ask a question and help comealong the way.Lots of topic and question on Amazon FBA which you can find some great tipsfor your online business.
Hindering Innovation and Competition
One such announcement came from Democratic presidential candidate Sen.Elizabeth Warren, who made headlines after she released a plan to disbandAmazon, Facebook, and Google.Warren’s proposal outlines imposing new legislation that would make big techfirms “platform utilities” and prohibit them from owning participants on theirplatforms. The plan also calls for dismantling some of the biggest merger andacquisition deals in the tech realm in recent years — Amazon would have togive up Whole Foods, Facebook would break from WhatsApp and Instagram, andGoogle would part ways with Waze and Nest.> “Today’s big tech companies have too much power — too much power over our> economy, our society, and our democracy. They’ve bulldozed competition, used> our private information for profit, and titled the playing field against> everyone else. And in the process, they have hurt small businesses and> stifled innovation,” Warren wrote in a Medium post.While the proposal’s been labeled as “far-reaching” and “aggressive” by somemedia outlets, it does put a spotlight on the issue of how monopolies hinderinnovation and gobble up new companies before they can be a threat. In aninterview last year with “60 Minutes,” Jeremy Stoppelman, co-founder of Yelp,said the platform “would have no shot” if it were built today.“If you provide great content in one of these categories that is lucrative toGoogle, and seen as potentially threatening, they will snuff you out.”
France is becoming the new Silicon Valley.
Last year a friend of mine asked me to help him with business introductions inFrance because he wanted to move there. I made some introductions and heardabout every trip he took, each with his increasing enthusiasm for the move. Herecently announced that he had landed his dream job and was moving.There are obvious draws for Paris, great food, spectacular wines, lots ofhistory, good public transportation, free healthcare and a great walking city.It is also surprisingly affordable. But if you are a tech worker, there aresome really interesting things happening in France these days.As my kids are grown and on their own, my wife and I have been talking aboutmoving and this led me to take a closer look and conclude that France is theplace to be if you are a tech entrepreneur.
1. Tech Workers
France has a new president, Emmanuel Macron. He is a young, charismaticKennedy-esque leader who is pushing France’s move into tech domination. He isa former investment banker, whose previous political job was Minister ofEconomy, Industry and Digital Affairs so he totally gets the tech sector andits importance in growing a digital economy of the future.Macron wants to scrap the wealth tax on investments and reduce capital gainstax which will fuel further investments. To help fuel the supply of talent, hehas relaxed immigration with a new French Tech Visa (visa.lafrenchtech.com)for 3 groups: startup founders; employees; and investors. The key points aboutthis new visa are not only that it is expedited, but it also has these otherbenefits: * It is valid for four years * It is extended to immediate family members * No additional work permit is required.For startup founders, you must first be selected into one of 38 designatedincubators or accelerators (click here for a list), and meet a minimumcapitalization requirement (roughly $22,000).For investors to qualify for a Talent Passport you must be investing at least€300,000 into a growth company creating jobs with a value over €3 million.This is a lot easier than the historical process which could take years toclear. In addition to the new influx of start-up jobs and tech workers inFrance, the country is doing a pretty good job of growing their own talent.France has one of the most highly selective education systems in the worldwith top engineering schools like Ecole Polytechnique and CentraleSupelec, notto mention Paris Saclay University.Paris Saclay University was established in 2014 and is now one of the largestinnovation, R&D and student hubs in the world. The school has over 65,000students, of which 25,000 are Master or Ph.D. students and 10,000 are inresearch positions that use the 300 labs they have established.Over 10,000 of these students are in entrepreneurial tracks that feed the 28incubators, accelerators and fablabs they have on campus. Last year thestudents launched over 100 start-ups.The education doesn’t just stop with engineering and entrepreneurial tracks,they also have great business schools. The Financial Times ranked 4 businessschools in their top 10, HEC Paris (Hautes études commerciales de Paris),INSEAD, ESSEC and ESCP. Forbeshas them similarly ranked with INSEAD as theirnumber one pick for a global MBA.There are also major pushes with coding schools like Ecole 42 and HolbertonSchoolwhich are open to all students including drop-outs. I particularly like42 which is a private, nonprofit and tuition-free computer programming schoolcreated and funded by French billionaire Xavier Niel. The nerdier of us willrecall from The Hitchhiker’s Guide to the Galaxy that 42 was the answer to thequestion of “life, the Universe, and everything”.Best of all, this average cost for this workforce is far below that of SiliconValley or other major US tech centers and even lower than the UK, Germany, theNetherlands and Japan for some positions.
2. Venture Funds
The second leg of the stool is availability and access to funding at alllevels. If you have great angel and seed round investors, but no depth inlater stage Series A, B, C and D rounds, or the reverse, it can be as bad asnot having any sources of capital at all.According to the pan European tech site, Tech.EU, France now leads Europe inthe total number of deals done in 2016. It is 3rd in deal size behind the UKand Israel, but these reflect the fact that most of these are later stage,larger deals. That said, according to Serena Capital there were 227 deals donein 2016 above the €1 million level with one deal above the €150 million mark.The momentum is behind France as well. After Brexit, there is definitely amovement away from UK centered activity to a more European centered city andFrance seems to be benefiting as this chart from Tech.EU shows as well.According to Serena Capital there are over 75 venture capital firms withoffices in France. This doesn’t include European or US ventures funds thatinvest or co-invest in deals in France. Looking through the list they preparedit struck me how balanced it was with a dozen firms at each stage as well asregional funds in case you are not Paris based.For a complete list check out this blog post from Marie Brayer of SerenaCapital.And all of this does not include the angel investors and investment clubs thatare popping up. This is a point Emmanuel Delaveau the General Partner ofPartech Ventures stressed recently, “Lots of successful entrepreneurs are nowbecoming Angels and sharing their experience with the community”.I was intrigued with Partech because they have created funds for each stageand are heavily invested in ecosystem development. Partech Entrepreneur istheir seed stage fund investing from €150k to €2 million. They have over €100million for this fund and it is the largest seed fund in Europe.Additionally, they have a Series A and B round fund with €400 million fordeals from €2 — €15 million, and a growth fund of €400 million for deals from€10-€40 million. They also have a €52 million pre-seed fund that they use toleverage companies in local incubators and accelerators, which leads to thethird leg of the stool, ecosystems.
Toronto’s startups making waves
Last summer, Montreal’s Element AI raised an eye-watering $102 million frominvestors and earlier this year Toronto-based Integrate.ai secured a $5million seed round. That’s on top of other notable moves being made by some oftoday’s more entrenched companies, like Royal Bank that will employ AI for itscustomer operations and DeepMind, a Google-acquired intelligence company,opened an office in Alberta last summer.Not to be outdone, General Motors said it was going to launch one of its self-driving research hubs in Markham, Ontario. Thomson Reuters last year announcedit would open a Toronto center for “cognitive computing” that would create 400“high-quality” jobs. “Canada is home to some of the brightest minds in the field of artificialintelligence; it has been at the academic forefront of the broad field of AIfor over 30 years,” Richard Zemel, a senior fellow at the Canadian Institutefor Advanced Research, told R&D magazine. “Specifically in the areas ofmachine learning, reinforcement learning and deep learning, leadingresearchers and professors have been graduating some of the most promisingtalent out of cities like Toronto, Montreal and Edmonton.”