OTTAWA — Chief executives of Canadian scale-ups were preoccupied with finding firm footing as they gathered in Ottawa for the first in-person CEO summit organized by the Council of Canadian Innovators since the COVID-19 pandemic.

The virus has receded and so has the tide in the tech sector. Whether it’s coming back in isn’t clear to anybody, judging by the summit’s panels.

Some takeaways:

Know the rules (and try to change them): Canada’s governments fundamentally misunderstand how the 21st-century economy works, said CCI chair Jim Balsillie, kicking off the day with one of his favourite subjects.

“It’s not about scale,” he said—economies of scale work in manufacturing, not in creation of intangible products and intellectual property. “It’s winner-take-all. It’s fundamentally zero-sum. [That] creates strategic behavior by nation-states and their firms because they want to be the landlord and they want everyone else to be the tenant. We think if everybody’s nice, then everyone will get a fair share—half-tenant, half-landlord—but that’s not the way it works.”

Canada doesn’t lack entrepreneurial spirit, it lacks the legal mechanisms to protect Canadian creations and keep them in Canada, Balsillie said. Recognizing that you’re constantly in a knife fight is critical to running a successful company in Canada, and that needs to be brought home to policymakers, he said.

Prepare to hunt or be hunted: Mergers and acquisitions are picking up, Axonify CEO and serial entrepreneur Carol Leaman said in a panel on how to manage companies through them. “Investors are paralyzed. They don’t want to deploy more capital, but they do want to deploy more. It’s a very wonky market right now.” After a period of depressed values, she said, many companies are going to be “looking for a good home.” 

But if you’re a buyer, or a strategic seller, remember what you’re about, Questrade’s chief strategy officer Romit Malhotra warned—don’t get bogged down in the mechanics of combining two sets of servers and systems, or think that you’re suddenly an expert in what the new part of your operation does.

“Especially in our case, when we’re diversifying across lines of business, we don’t know squat. We acquired the entity required to bring the business know-how and the platform that they brought and the 25 carriers that they had contracts with. So don’t start acting the next morning like you all of a sudden are going to tell them what to do,” Malhotra said.

Unicorns are in pain: Although there’s a lot of venture funding still out there, it’s not going to support as many billion-dollar valuations, including for some companies that previously had them, said Michael Garrity, CEO of Financeit, on a panel about raising money. He estimated he’s raised $750 million in multiple ways since 2007.

“There’s already some Canadian examples of unicorn companies just wallowing in sadness at the moment,” he said. “They’ve got to accept that it’s very possible that that valuation from 2021 is bullshit. … We’re now in this correction mode of where that capital is going to get deployed, and I think it’s going to move to safer parts of the market.”

“We’re back to the days of business fundamentals,” agreed Alison Sunstrum, CEO of agtech firm CNSRV-X, who joked she was on the panel to give the perspective of someone who’s been bad at raising—though she’s now an investor herself. “You’re going to be pushing revenues—the cheapest money I ever got was from a customer. Know your sales, drive your sales, drive your customers. … That’s what will sell you to investors.”

Don’t get into AI for its own sake: “This is something we hear all the time: ‘What can I do with AI?’ Put that aside. Forget that. That’s garbage,” said Nicole Janssen, co-CEO of AltaML, in a panel on adopting artificial intelligence. “What you want to ask yourself is, ‘What are my biggest business problems?’ And then, ‘Is AI the best solution to those business problems?’”

Fellow panellist Humera Malik, CEO of Canvass AI, talked about the importance of knowing what your AI project is for. She told the story of a municipal government that used AI to make its water-treatment plant more efficient. The driver: the city had demand for more water but just couldn’t afford a new plant.

“That’s how you can make these things successful: when you start with a very clear mandate in mind,” Malik said.

Letting go: Every leader’s time ends. It can hurt, even when it’s your choice, said Allen Lau, reflecting on resigning as CEO of Wattpad after selling to South Korea’s Naver.

“Two days before I stepped down, I finally finished the blog post I wanted to share internally and then externally. I finished that in a restaurant—I was sharing this with my wife and I was trying to read it to her and I could not finish because I was crying,” he said.

Lau has remained an adviser to the firm, and that’s meant he’s been close enough to its operations to think, occasionally, about going back to the C-suite. “We sold the company more than two years ago and I stepped down 18 months ago,” he said. “The emotion is getting easier to handle day by day.”