• World domination demands navigating the U.S.'s unusually difficult political environment

    Source: Financial Post - Top Stories / 06 Nov 2020 16:23:45   America/New_York

    If Dax Dasilva can positively engage with a country of at least 69 million Trumpists, then any of us can. The founder and chief executive of Montreal-based Lightspeed POS Inc., a fast-growing developer of point-of-sale software for restaurants and other smaller businesses, is of Goan heritage, gay and a committed environmentalist. He writes in his book, Age of Union , that Lightspeed focuses on “culture as much as code.” That culture is based on inclusion, diversity and respect. Lightspeed, which has a market capitalization of about $5 billion on the Toronto Stock Exchange and is on something of a buying spree, won’t look at acquiring a company that doesn’t match its values, no matter how many customers it could add. President Donald Trump has spent four years assaulting Dasilva’s values, yet he captured roughly 48 per cent of the vote in one of the largest turnouts in American election history. The depth of Trump’s support surprised pollsters and everyone who thought his win in 2016 was a fluke. The latter group would include a large number of Canadians. Doing business in the U.S. will never be the same after election comes close to worst-case scenario Executives better get used to handling political risk no matter who wins the U.S. election Trudeau and the federal government have lost their way, innovators’ group says Canada is having a much better crisis than the U.S., though some fret about debt and deficits Before the election, David Wilkins, a former U.S. ambassador to Canada, told the Canadian Chamber of Commerce’s annual meeting that the two countries’ relationship was defined by bonds between individuals and businesses, not politicians. Yet those bonds were formed by people who thought they generally saw the world the same way and adhered to similar values. That’s no longer true. Some 65 per cent of Canadian voters supported liberals, social democrats and greens in the last election, a rough proxy for the extent to which Canada and the U.S. are out of tune. That has to matter to some extent. If it didn’t, we’d do more business in places that make us uncomfortable. Nevertheless, Dasilva made a big bet on the U.S. this week without worrying too much about who will be in charge in the years ahead. Lightspeed on Nov. 5 said it planned to purchase ShopKeep Inc., a New York-based rival, for US$440 million, its biggest acquisition to date and its most significant push into the U.S., which already represents about half of its sales. Lightspeed also reported that it earned US$45.5 million in the second quarter, more than it expected. The company’s Toronto shares were up about 20 per cent from the start of month. It was a good week. Still, there was no hiding from the event that cast a shadow over everything. Eric Miller, a Washington, D.C.-based political risk consultant, said it was difficult not to wonder whether the U.S. could fully recover from the damage that politics has inflicted on its institutions and its reputation over the past four years. The political polarization guarantees an extended period of instability that will weigh on confidence. Rules could change with the election cycle, and any company that offends a certain world view is asking for a boycott — or worse. “It’s been a dangerous and corrosive period,” said Miller, founder and president of Rideau Potomac Strategy Group. “The level of trust Canadians had in the U.S. isn’t going to be easily rebuilt.” Dasilva acknowledged that Lightspeed’s tendency to “stick our necks out a bit” on political issues comes with risks, but he was confident he could stay out of trouble by focusing his advocacy on issues, not individual politicians. He also noted that both candidates for president were keen on helping smaller businesses. Even though political uncertainty now hovers over everything in the U.S., he was feeling fairly confident that those conditions could end up strengthening the segment of the economy in which Lightspeed operates. “We’re bullish on the U.S. economy and the innovation we see in businesses there,” said Dasilva, one of the few chief executives who agreed to speak to someone from the Financial Post this week, despite more than a dozen attempts to get CEOs on the phone to talk about the one event that can compete with COVID-19 this year in terms of importance. “No matter who leads the country, we think (the U.S.) is going to continue to be a leader in innovating in the small-business space. There is this belief in supporting local, shopping local, and that’s very congruent with the customer base that we serve.” Away from the election, perhaps the most surprising Canadian business news this week was word that General Motors Co. intends to restart vehicle assembly at its plant in Oshawa, Ont., next year. The company said it will invest more than $1 billion to prepare the facility to build pickup trucks, eventually employing some 2,000 people. That’s great, but it’s companies such as Lightspeed that will dictate the strength of Canada’s recovery from the COVID-19 crisis. Employment in industries oriented around technology continued to climb above pre-pandemic levels in October, while hiring in most other sectors struggled to make up the lost ground, Statistics Canada reported on Nov. 6. These tech-centric companies tend to be less U.S.-focused than traditional manufacturers, if only because distance is less of an issue when you are selling services and cloud-based software. Lightspeed’s first acquisitions were in Australia and Europe. Dasliva aspires to run a global company, not simply a North American one. Still, world domination goes through the U.S., which means navigating an unusually difficult political environment. Dasilva thinks he can manage, but he knows it will be an issue. “It’s something we’ll have to think about a little bit more now that we have large teams in the U.S.,” he said. “The dialogue will be more present in the company. I don’t think it changes our business strategy.” Financial Post • Email: kcarmichael@postmedia.com | Twitter: CarmichaelKevin http://feedproxy.google.com/~r/FP_TopStories/~3/MfqSthu22TI/world-domination-demands-navigating-the-u-s-s-unusually-difficult-political-environment
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