Cali or Bust.

This was the M.O. of University of Waterloo Math & Engineering students when I graduated in 2019, and is still to this date in 2024.

Almost every smart, talented individual I knew from my alma mater ended up in some way or another in the US.

Opportunities to work at some of the largest, fastest-growing, and vision-inspiring tech companies in the world were much too compelling for starry-eyed undergrads to pass up on. The few exceptions I knew of who decided to stay in Canada were due in large part to personal circumstances, particularly strong family ties or the impossible US immigration hurdles for international students.

I fell into this "trap" early on. After a freshman year internship at Shopify in Ottawa, I landed my first "Cali or Bust" internship at Google in California. I saw first-hand the difference in attitude in the Valley vs what I observed at Shopify. I did not care too much for the sleep pods or the 30+ themed cafes serving everything from ramen to Thali platters — instead what excited me most was the sheer density of the world's brightest technologists and builders in the 50 x 50km San Francisco Peninsula. This phenomenon wasn't just restricted to the birthplace of the microprocessor: I saw the same effects in NYC, where I subsequently worked full-time after graduation.

For a 23-year old at the time with few commitments rooted in Canada and the ambition to become a master of his craft, it was a no-brainer for me to move down to the US and learn from the best in a country with the highest density of technical talent. It wasn't until a literal world pandemic, two years of WFH, encouragement from my better-half & immediate family, and an itch to make something people want did I decide to return to Canada to build Tensor Labs with my co-founder.

As someone who benefited greatly from Canada, it is frustrating to think that there needed to be multiple significant factors to convince myself that I could have a successful professional and personal life in my home country, but unfortunately those are the circumstances that face nearly every ambitious STEM new grad in Canada right now.

But it need not stay this way.

Reflecting back on the past two years of building Tensor in Canada, I believe there is a window of opportunity for the country to win back its homegrown talent in a fast-growing industry and the Next Era of the Internet.

The major opportunity here is to become a top exporter of web3 technology, where some of the best crypto teams like Dapper Labs and LayerZero have already chosen to headquarter in Canada despite the lack of incentives. I would argue the talent density in Canada for blockchain and crypto is one of the highest amongst developed nations, where the likes of Vitalik Buterin began working on Ethereum at the University of Waterloo. It would be a shame to ignore this given the continued decline in real GDP per capita and the widening tech GDP gap.

Why Now?

The stakes here are high: Silicon Valley’s GDP would make it the world’s 18th largest economy and have been a huge driver for talent-based immigration of individuals with “extraordinary ability”. It has been shown time and time again that innovation and technology has been a leading determinant in building great empires, and it would be remiss for Canada to remain on the bench here as the world order begins to shift.

As with all paradigm shifts and innovative products, there needs to be compelling reasons for why a Crypto Canada can happen now and why this is different from all previous attempts in creating a world-class tech hub. There are strong network effects and momentum that solidify Silicon Valley as the tech capital of the world, and it would be foolish to assume that you can bootstrap a tech hub outside the Valley without significant unfair advantages.

That being said, there are three good reasons for why crypto is truly a differentiated opportunity for any aspiring technology-first country, let alone Canada. These are:

  • Crypto is global-first. This means that both the technology and capital is globally distributed vs concentrated in the historical tech hubs i.e. Silicon Valley. Crypto investors don't care if you're based in Dubai, the US, or Canada. Since the market is global, there is no apparent advantage being in tech-dense cities like San Francisco, even for B2B startups.
  • Crypto talent is remote-first. In a post-COVID world, remote-first talent supply is especially at its all-time high. You no longer need to convince a rockstar hire to uproot their life and move to a completely new country. Because crypto companies build for a global user base, it is actually a strategic advantage to hire talent globally. This is precisely how we are able to attract the best talent for Tensor.
  • Crypto is heretical. The word on the street is if you are a crypto company in the Bay Area, you are either crazy or doomed to fail, and you should be working on AI instead. Making the Internet commercial was also a heretical idea and disbelievers were demonstrably proven wrong. There are too many arguments for why crypto and blockchains will fundamentally change the world, much like how the Internet did, to fit into the margins of this page, so I defer to others who have more eloquently expanded on this.

Other nations have already jumped at this opportunity and are becoming de facto hubs in the industry. Singapore has some of the clearest and sensible regulation around crypto businesses, where their policies inspire innovation and enable entrepreneurs to do what they do best. Anecdotally, every other Solana ecosystem team I've interacted with are either based out of a crypto-friendly jurisdiction or have significant presence there.

What Needs to Happen?

Canada's competition isn't with the likes of Singapore. Unsurprisingly, not a lot of folks who grew up in Canada would want to move halfway across the world. The immediate priority is to become competitive with our neighbours down south who continue to import the brightest minds of our country.

This is why I think there are some reasonable and immediate policies that can be rolled out to seize the opportunity of becoming a talent hub for crypto. The highest priority ones are as follows:

So What?

Crypto is a key issue in US politics, and we are already seeing crypto ownership rise to double-digit percentages in Canada with younger generations seeing 4-5x the adoption.

I would argue that crypto in its end state is not a bipartisan issue and should be embraced by both sides of the aisle. Instead, it is a question of (1) government control and (2) special interests.

On (1): it is tempting for policymakers to believe that if you enable an open and free financial system, then you are ceding all of your sovereign monetary levers. It is in reality quite the opposite. Most cryptoassets are priced in fiat USD and traded against USD-stablecoin variants like USDT and USDC, and they trade more like commodities than currencies. Blockchain rails are global value super-highways and in their current state will bolster adoption of the USD and other hard currencies. This is an opportunity for stable regimes to proliferate their currencies to the rest of world as high-inflation nations have thoroughly adopted stablecoins into their economy. Regulating stablecoins as securities however achieves nothing and squashes any chance of global payment rails being “Made in Canada”. When it comes to financial transparency, blockchains are — contrary to popular belief — not anonymous (they are pseudonymous). All transactions on public blockchains can be audited and traced back to their sources, and identities can be mapped back to blockchain addresses at the on- and off-ramps. If you were tasked to re-build the financial system to eliminate accounting fraud and the overhead of private audits, it would look something like a blockchain.

On (2): there are established incumbents in the traditional financial system who believe that maintaining the status quo is the best way to stay open for business. They face the classic Innovator's Dilemma, and will convince themselves that if they impede this disruptive technology from gaining momentum they can kick the can down the road for another 100 years. Unfortunately for them history tends to rhyme and the ones who do not embrace the new wave will be swept away by it. It is a matter of when, not if, crypto adoption reaches an inflection point, after which the disbelievers will be left in the dust and our institutions will be forced to listen to their customers and their wants. The forward-thinking institutions will see crypto as an opening to establish themselves as the de facto market leaders, and they will be rightly rewarded by the free market.

With the Canadian election cycle around the corner, I urge both sides of the House to consider the prospect of Canada becoming an incubator of high-tech talent. Crypto is here to stay, and by construction it offers the perfect wedge for a nation like Canada to carve out a competitive tech hub outside the likes of Silicon Valley. All it takes is for a bold leader to see this obvious opportunity for what it is and to bring Canadian innovation home.

Canada or Bust.

Kudos to Phil Jacobson, Ilja Moisejevs, Lori Stein, and Mike Nasser for providing feedback and reviewing drafts.