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The pandemic reshaped the world in an endless number of ways — especially how and where we work. Talent fled the major cities on a global scale, distributing itself across the world and tuning into jobs through Zoom. At the same time, startups and the venture dollars they attract continued to grow dramatically. The hunt for new hires shifted from centralized locations to a decentralized global talent pool. Positions that were previously reserved for office jobs in San Francisco and New York suddenly broadened to include not just anywhere in North America, but anywhere in the world.
The flow of VC money didn’t stop — and neither did the growth
Without having to pay for the high cost of living in those urban centers, hiring budgets suddenly opened up to the possibility of offshore talent — especially for software-developer roles. The flow of VC money didn’t stop and neither did the growth, so hiring managers found an amazing equilibrium by leveraging the global talent pool. Instead of stretching the budget to hire thee San Francisco-based developers, that same budget could be deployed across six or even seven high-quality developers based in places like Mexico, Chile, Canada, Portugal and other technology centers.
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This allowed rapidly growing startups to scale at an unprecedented pace because their access to talent increased while the cost of that talent simultaneously decreased. It’s created a massive boom for these startups and distributed workforces alike. The barriers to entry for a startup tech job have been lowered, and more people around the world have been able to get access to high-quality, VC-funded technology jobs than ever before. Even as the pandemic has slowed down, this trend has remained intact because the distributed workforce is working! It turns out you don’t have to pay junior software developers $200,000 salaries to live in San Francisco or New York, and startups can still build high-quality products, and frankly, more of them. Teams of three can be teams of six without compromises to the quality of the technology — all under the same hiring budget. This is great for margins and investors, but it’s also great for the technology sector as a whole.
More people need to build tech for maximum innovation
In order to continue climbing the exponential technology curve, more people need to build tech. Before the pandemic, that possibility was reserved for the highly educated few who were able to survive in high-cost living centers. Now, with the ability to learn to code digitally, the global talent pool has been slowly amassing, and the levy holding that talent back from Silicon Valley tech jobs broke under the pandemic. Even as things return to normal, those jobs will remain not only intact, but essential to the success of technology companies both young and old. Sure, people will return to San Francisco and New York to resume their high-pay high-cost lifestyles, but that’s no longer a requirement that startups and technology companies have to cope with. Now, they can afford to be more selective about whom they hire in those high-cost centers and how they want to assemble teams.
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And this isn’t just happening for software developers: It’s happening for founders too. Over the last year, we’ve seen an enormous migration of founders to places like Toronto, and the VC dollars are escaping the Valley to follow them. Canadian startups have attracted $2 billion of venture funding this year alone — and there’s no sign of slowing down. Just two short years ago, if you wanted to start a tech company, you pretty much had to move to Los Angeles, San Francisco or New York. It was essential for not just talent acquisition, but capital as well.
U.S. investors eye Toronto and other Canadian tech hubs
As a Canadian VC, I’ve been waving my arms at Silicon Valley VCs for years, trying to get them to see the amazing talent and products coming over from their north. Until the pandemic hit, there was always a certain amount of hesitancy to invest outside of their bubble, but in the last two years, that has completely changed. As a result of the pandemic and the enormous competition in early-stage venture, U.S. investors have been storming the gates in Toronto and other Canadian tech hubs and placing big bets on some of the emerging unicorns of the future.
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It’s not just small, speculative investments either — the legacy Silicon Valley VCs are going all in on the Canadian tech scene, and that trend is going to remain intact long after the pandemic subsides.
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