What it Really Takes to Innovate

"I think a lot of investment firms, venture capitalists and growth equity firms maybe don't always understand what a difficult time it is to run a business."

So says Simon Chong, co-founder and a managing partner, Georgian Partners, an equity firm that invests in digital, internet and ecommerce companies.

Today's business climate is one of incredibly rapid change, Chong says: "When you look at what's happening today with cloud, mobile, social and the ‘internet of things,' this change creates masses of data, the likes of which we've never thought of before." And that's breeding unprecedented opportunities for the companies that can exploit it, especially in areas such as business process improvements based on applied analytics.

Chong has a solid understanding of what it takes to run a business, having built and sold a successful tech firm in the late 1990s before co-founding his current business. He believes it's essential that investors have empathy for the life of the entrepreneur. Imperative to that, he believes, is having a firm understanding of what it really takes to run an innovative business.

In Chong's view, truly innovative companies today require three main things:

1. Talent (no matter where it comes from)

According to Chong, smart companies today look less at credentials and degrees, and more at the quality of ideas—especially in tech. "The key thing around digital industries is that they generally are meritocracies," he says. "People will say ‘I have this great idea.' It doesn't matter where they came from or if they went to a certain business school." He believes that companies that harness this energy are the ones that get ahead.

2. Money

It's no secret that innovative businesses need money to grow. Thankfully, there's a lot of it available for tech companies today, Chong says: "In Canada, we now have pretty good capital pools able to fund great ideas," he says. And the scenario is only improving: "I think now we're starting to see more and more that companies can get funded from seed to growth equity," he says.

3. More women

Chong is one of many who'd like to see more women in science and tech; he believes women add intuitiveness and a different thought process that greatly enhances the innovation of the companies they work for. "Most companies have engineering companies that are mainly male," he says. "If you look at the data on science, tech, engineering and math graduates going into the job field, it doesn't support the 50/50 split of the population." How to fix the situation? Chong believes it comes down to better promotion of the opportunities in STEM careers at an early age; programs like Ladies Learning Code and Girls Learning Code are a great start, he says.