In Praise of the Loser Class

On the founders who failed, the wisdom they earned by failing, and the culture of innovation Canada cannot build without them.

John Pope, Founder, midagent AI · Ottawa, Canada

Before many of the PayPal Mafia became icons of success, they endured and overcame epic failures.

I want to tell you something about myself before we get to the argument, because the argument is not abstract and neither is the credential that earns me the right to make it.

I have failed, epically, three times. In two separate countries.

We did not fail in the sense that some people say they have failed when they have had a job they did not enjoy. Not in the sense of a project that did not quite hit its milestones. I mean the actual thing. I mean I built companies that I believed in with my whole body, that I staked my time, my savings, my reputation and my sleep against. Failures that other people invested time and money and belief into because I had convinced them that the future was going to bend the way I said it would — and then the companies did not survive.

The doors closed. The investors and founders did not get their money back. The co-founders had to find new jobs. The grand vision of the company we were building, the specific future I was trying to bring into being, did not happen. Three times.

This is the story about the lessons learned from those epic agonies of defeat.

The first two ventures ended simultaneously, in London, England, in a way I did not choose and could not have prevented. I was hit by a car. The injury was life-changing in the literal sense of that phrase — it changed what my body could do and, for a period, what my mind could sustain — and both ventures I had been building at the time became impossible to continue with any seriousness. So they naturally wound down because the work it required was work I could not do while I was rebuilding a version of myself that could barely walk across a room without support.

Both ventures were, on their merits, promising, with early valuations in the tens of millions. Neither of them failed because I made the wrong strategic call or misread the market or assembled the wrong team of co-founders. They failed because a car hit me and I could not continue the journey. The lesson about founder mistakes in those two cases is — there was no founder mistake. There was a body, a pedestrian crosswalk, a driver from out of town unfamiliar with the roads, and a single moment that ultimately determined the future of my life.

The ventures ended because biology intervened. Not because of market dynamics.

The third is a different story, and it is the one that actually sits at the heart of this essay. I came to Canada and wanted to build something in my home country that I genuinely believed in. It was a solution that addressed a set of problems that I could see clearly, after I personally identified it in my former career, and in an industry that all of the stakeholders being hurt had no good answers for. But I did.

They were a very large problem set affecting tens of millions of businesses around the world that I understood intimately. They were widely-acknowledged problems that I had been researching and thinking about for many more years as I recovered from my previous road-accident injuries. But the audiences and community leaders that I had access to did not understand, or frankly have much awareness about, the problems I was attempting to address. Even though they were problems directly impacting the lives of the people they were leading. The people I reached were oblivious about the problems I was referring to, and therefore had no ability, or incentive, to credibly assess the value of our solution to the market.

So my third venture ultimately failed for a very specific reason: I was in the wrong place at the right time, speaking to the wrong audiences about problems they did not yet understand to be problems. And the problems have only gotten worse since.

Two different times, for two unrelated reasons, I ended up building a product, that I was 100% committed to, in the wrong place at the wrong time. And in the innovation game, time, place and audience profile are the factors that really matter.

The ideas were not wrong. The timing, in a sense, was not even wrong — the problems I was naming have since become the mainstream concerns of Canadian and G-Middle innovation policy, documented in the Draghi Report, in Statistics Canada research, in many authoritative policy papers from many respected sources, in every Carney speech about sovereign infrastructure. The problems were real. I was just early, even though I was right about what was coming. And I was speaking to a constituency that was not yet ready to hear what I was selling. That venture ended not because the thesis was wrong. It ended because the culture was not yet ready for the thesis.

The full story of that third venture is now a book that has written itself across the past four years back in Canada. It is not yet published. It is waiting for the right moment — for the cultural readiness and good timing that was not there when I was living through it, to then have caught up with the argument I was trying to make all along.

When the book is finally published, it will be positioned as a cautionary tale for other Canadian innovators and entrepreneurs who think they are bringing a relevant message to their intended audience before they are prepared to receive the message. And the book will be a direct call to action for the people in this country who occupy positions of influence and power — in the political and business realm — who are most responsible for setting the strategic direction and cultural agenda for Canada, and who, in my case, were not listening when it would have mattered most.

I will not tell that story here. It is a much longer story than this essay can hold. But I want this audience to know that it exists, and I want you to hold it in mind as you read what follows, because the argument I am about to make about Canadian innovation culture is not an abstract argument. It is an argument that I have lived personally.

If you are reading this from a certain kind of Canadian vantage point, you have already reached a conclusion about me. It is a conclusion I have watched form on people’s faces in rooms for much of my recent adult life, and it is a conclusion that is very quietly, but very effectively, strangling the innovative capacity of this country. The conclusion is: this man is a failure and not worth my effort.

If you are reading this from a different vantage point — a certain kind of Silicon Valley vantage point, or a certain kind of London vantage point from the ecosystem where I spent my first two attempts, or from a seat in the small number of cities in the world that have figured out what this essay is about — you have reached a different conclusion. The conclusion is: this man has a non-trivial amount of hard-won knowledge about how to build things at the frontier, under difficult conditions that included one literal near-death event and one culture that was not ready for the argument he was making, and the next thing he builds will benefit from those experiences in ways that somebody who has never been tested this way cannot possibly match.

Both conclusions are about the same man. Both are based on the same set of facts. The gap between them — the gap between the Canadian reading of three failures and the London or Silicon Valley reading of three failures — is what this essay is about.

That gap is the reason why I believe Canada does not have a Shopify for every sector it could have one for. It is the reason we do not have a Cohere for every domain where the science is Canadian. It is the reason our most ambitious technical graduates routinely get on planes and go to San Francisco, Seattle or Austin. It is the reason our productivity growth has been half the US rate for four decades. It is the reason Mario Draghi had to write a four-hundred-page report telling Europe that the entire continent’s productivity gap versus the United States is, in his own words, "largely explained by the tech sector."

And it is a gap we can close, because it is not a gap in talent or ingenuity or appetite. It is a gap in culture. And cultures are things human beings build. They are not laws of nature. They are logical fallacies adopted by human nature.

Draghi’s diagnosis is the starting point, not the destination

The case for governments supporting sovereign digital innovation is now as well-documented as any macroeconomic argument in contemporary policy. Draghi’s September 2024 report to the European Commission made it institutionally explicit. Statistics Canada’s own research has attributed part of the Canada–US productivity gap directly to market power in information and cultural services. The OECD projects Canada will rank last among its member states in GDP per capita growth through 2060 on current trajectory. Canadian GDP per capita fell from 83.1% of the US level in 2014 to 71.4% in 2024. The numbers are not in dispute. The diagnosis is settled.

I am not going to spend this essay rehearsing those numbers, because that work has been done exhaustively elsewhere in this series and our white papers — including in other letters I have written, including in a research report called The Structural Cost of Big Tech that is available on our website for anyone who wants the full evidence base. The numbers are the starting point of the argument, not its destination. The destination is the question Draghi’s report raised but did not fully answer: why.

Why did the European Union, a twenty-seven-country bloc with 450 million people, four of the world’s top fifteen economies, and a public research apparatus that produced the Higgs boson and the Nobel Prize pipeline, fail to produce a single hyperscaler? Why did Canada, a country that invented deep learning in its universities and whose graduates built much of the modern AI industry, fail to retain any of them commercially? Why did every G-Middle democracy — the UK, Germany, France, Japan, Australia, South Korea — arrive at 2024 with the same problem?

The superficial answers are real but insufficient. Capital-market fragmentation, yes. Regulatory complexity, yes. Smaller domestic markets, yes. Weaker venture-capital ecosystems, yes. Fewer tax incentives for risk-taking, yes. All of these contribute. But they do not explain the depth or the persistence of the gap. Because each of them could be fixed with policy intervention, and each has been at least partially addressed in multiple G-Middle jurisdictions over the past two decades, and the gap has not closed. In some dimensions it has widened further.

The deeper answer, the one that explains why the policy interventions have not worked as hoped, is cultural. It is not about money or markets. It is about what we collectively do to the people who try to build something ambitious and do not succeed on the first attempt. And what we do to them is the thing that, more than any other single variable, determines whether the next cohort of ambitious people will try at all.

Risk aversion is the enemy of innovation. This is arithmetic, not aspiration.

Here is a number every Canadian policymaker and every G-Middle finance minister should have tattooed somewhere they can read it every morning. Depending on the definition you use and the specific study you reference, the failure rate of venture-capital-backed start-ups is somewhere between 75 and 90 per cent. That is not a pessimistic reading. That is the central estimate across multiple decades of data, from the best-funded, best-networked, best-mentored companies in the most developed innovation ecosystem on earth.

Let me say what that number means, because I think we often repeat it without grasping it. It means that if you take the hundred most promising technology companies launched in Silicon Valley in a given year — companies that cleared the extraordinary bar of attracting professional venture capital, that assembled elite founding teams, that received mentorship from people who have built and sold billion-dollar businesses, that had direct access to every network they could plausibly need — approximately ninety of those companies will fail within a decade.

The failure is not a consequence of bad founders. It is a consequence of the activity itself. Innovation at the frontier has a roughly 90 per cent failure rate under the most favourable conditions human civilization has yet invented for it. This is not a bug. It is the design specification.

If you want a small number of extraordinary companies that create most of the economic value in a sector, you need a large number of teams willing to try, knowing that most of them will not succeed. The math does not work otherwise. The 10 per cent of ventures that become genuinely transformative companies — your Shopifys, your Stripes, your Anthropics, your Nvidias — emerge from a population of a hundred attempts. You cannot pick which ten. Nobody can pick which ten. The best venture capitalists in history have hit rates of roughly 15 to 20 per cent on their top-decile deals. The system is probabilistic by nature, and the probability of individual success is low.

Now consider what this means for a country’s innovation culture. If your culture treats the ninety per cent who fail as a reputational catastrophe — as people whose judgment cannot be trusted, whose subsequent ventures should not be funded, whose job applications should go to the bottom of the pile, whose credibility in rooms is permanently diminished — then you have created an incentive structure that rewards not trying. Because the arithmetic is unforgiving. If the probability of success is 10 per cent, and the cost of failure is career-ending reputational damage, then the expected value of founding a venture is catastrophically negative for any rational actor. Only irrational actors will attempt it. You will have a very small, self-selected population of founders, most of whom will also fail, and your country will produce almost no transformative companies.

This is not a hypothesis. This is Canada. This is every G-Middle nation. It is what happens when a culture punishes failure in an activity whose success depends on the willingness to fail.

The opposite culture — the one that has produced roughly ninety per cent of the world’s most valuable technology companies over the past four decades — treats a founder’s first or second or third failure as something closer to professional training. Not because the failures were good, but because the knowledge acquired by surviving them is real, specific, and accumulates in ways that no amount of reading or observing can replicate. A Silicon Valley venture capitalist meeting a founder who has failed twice does not conclude "this person cannot build companies." The conclusion is closer to "this person has been through the fire, has learned things they can only learn by failing, and therefore represents a de-risked proposition relative to somebody who has never attempted this at all."

That is the cultural difference. It is not about money. It is not about policy. It is not about tax incentives or capital markets or any of the structural factors that legitimately also contribute to the problem. It is about what a society chooses to think about a person who has tried something hard and not succeeded. Everything else follows from that choice.

You cannot have it both ways

Here is the part of the argument that I think is the one most Canadian policymakers, most G-Middle innovation ministers, and most domestic venture investors have yet to fully accept. You cannot selectively support the successful innovators without also creating a framework that supports the unsuccessful ones. The two are inseparable. They are one system.

Everybody wants to support a champion. When Tobi Lütke is sitting on a ten-figure fortune as the CEO of Shopify, every politician in the country wants to be photographed with him. When Cohere raises a billion-dollar round, the press releases write themselves. When Wealthsimple becomes a unicorn, Michael Katchen is invited to every roundtable in the country. This is easy. Supporting success costs nothing and yields political upside. Any government can do it. Every government does.

The hard part — the part that actually determines whether your country will produce the next Tobi, the next Aidan Gomez, the next Michael Katchen — is what your society does when a founder is three years into building something, has raised from angel investors, has hired seven people, has taken on personal risk that cannot be undone, and realises that the thesis was wrong or the market is not ready or the competitor out-executed them or the cofounder relationship broke or, in my own experience, a car on a London street ended the attempt before it could be resolved on its merits.

What does your culture do to that founder?

In Canada, on the evidence of almost every ambitious builder I have met or based on my own experience, the culture does several things simultaneously:

• It treats the failure as a character indictment rather than a market outcome or a circumstance outcome.

• It makes the founder explain, in every subsequent professional encounter, why they "failed" — the word used with a meaning it does not carry in ecosystems that understand the base rates of innovation.

• It treats the years of work the founder invested as time that should have been spent on a safer path, rather than as a specific form of training no institution can provide and no degree can replicate.

• It prices subsequent attempts higher — both in the cost of capital if the founder tries again, and in the cost of hiring talent, and in the cost of signing customers who now view the founder as "risky."

It compounds, over time, into the pattern Canadian ambitious builders all know intimately: one attempt, maybe two, and then quietly the person leaves for the United States, or takes a corporate job, or retires from the specific activity of trying to build something new.

In Silicon Valley, and I would add in the London ecosystem where I spent my first two attempts, the culture does something different. In London, the question after my accident was "what are you building next?" In Canada, the question was more often "what happened?" — asked in the tone of a cross-examination rather than curiosity. That difference is not trivial. It is the difference between a culture that reads a founder’s trajectory as accumulating capability and a culture that reads it as accumulating liability.

You cannot have the Silicon Valley outcome without the Silicon Valley disposition toward failure. You cannot have it both ways. A society that wants its best and brightest to attempt ambitious things must make it psychologically and professionally survivable when those ambitious things do not succeed, for whatever reason — whether that reason is a strategic error, a market timing miss, a cofounder rupture, a cultural audience that is not yet ready, or a driver who runs through a pedestrian crossing in a leafy London suburb in 2012.

If the culture does not embrace failure as a natural outcome of the innovation process, the best and brightest in Canada will inevitably move to the United States to seek opportunity, or do something else entirely. And the country as a whole diminshes itself.

What I actually learned from failing three times

I said at the beginning of this essay that I have failed three times. I want to tell you, specifically, what each of those experiences taught me, because the argument I am making is that failure-earned wisdom is real, and you should be able to evaluate the claim by seeing what the wisdom actually looks like.

The first two failures, the London ones, taught me something it is difficult to teach yourself any other way. They taught me the difference between defeat and conclusion. A venture that is defeated on its merits — that fails because the thesis was wrong or the execution was insufficient — is categorically different from a venture that is concluded by circumstance. I did not lose those first two companies because I was a bad founder. I lost them because I was hit by a car, and the person who woke up after that event was not, for a long time, the person who could keep running them.

That experience taught me something about the relationship between a founder and their ventures that I think most founders never have cause to examine. It taught me that the ventures do not belong to me in the way I had assumed they did. They are things I am temporarily stewarding toward either success or conclusion, and my stewardship can end at any time, for reasons that have nothing to do with my talent or effort or conviction.

That perspective changes how I build. Every subsequent company I have been involved in has been architected with a specific awareness of the founder’s mortality — succession plans, documentation practices, institutional continuity mechanisms, the specific work of making sure the thing I am building does not depend on my continuing ability to build it. Most founders do not think this way. They are not wrong not to. But the ones who have been through what I have been through think this way instinctively, and I would argue that this mindset is a structural advantage, not a structural limitation.

The third failure, the Canadian one, taught me the lesson that matters most for this essay. It taught me that being right about the future, and being understood by your audience to be right about the future, are two entirely different things — and that in a culture that is not yet ready to hear an innovative argument, being right is not a resource, it is a burden.

Three years ago I was talking about problems that are now becoming mainstream in Canadian innovation policy conversation: the capture of Canadian digital commerce by foreign platforms, the extraction of productivity from the Canadian economy through market-power-driven pricing, the strategic risk of building Canadian analytical infrastructure on systems subject to foreign legal compulsion. These are not my ideas anymore. They are, for the moment we are living in, the orthodoxy. But when I was trying to build a company around them, they were not orthodoxy. They were a view that was too early, and the audiences I needed to reach, but did not have access to, did not yet have the conceptual equipment to evaluate what I was saying on its merits.

The lesson from that experience is a long one. Part of it is about audience — about learning to read, very precisely, whether the constituency you are addressing has yet developed the capacity to understand the argument you are making. Part of it is about timing — about when to build the company and when to write the essay that makes the company possible. And part of it is about the particular texture of Canadian institutional culture: the combination of politeness, risk-aversion, and deference to 'best practice' and conventional wisdom that makes it extraordinarily difficult for an early argument to land, even when the argument is correct. That Canadian mindset is the enemy of innovation. To embrace new and innovative ideas requires an open mind. From my personal experience in Canada, that mindset is few and far between where it really matters to move the needle.

That said, I have recently discovered that that mindset does exist in Canada in certain circles who share my observations. But you need to know where to look. And they are critical to Canada's future economic prosperity in the age of AI.

The fourth thing I am now building — midagent AI and the sovereign infrastructure project called PSN — is the direct beneficiary of what those three failures taught me. It is being architected with the understanding that the founder is not the venture. It is being built at a moment when the cultural readiness that was absent four years ago has arrived. And it is being deployed into an audience that is now ready. Whatever midagent becomes, it will be a better company for having been founded by somebody who has been through this three times, not a worse one.

What Silicon Valley actually figured out

What distinguishes Silicon Valley is not that it celebrates success. Every culture celebrates success. What distinguishes Silicon Valley is that it has figured out how to metabolise failure.

The ecosystem has built institutional memory around the proposition that most attempts will not succeed, and that the attempts that do not succeed are still valuable to the system because they produce the people and the knowledge and the calibrated instincts that the next generation of attempts will need. This is visible in specific institutional practices:

• The venture capital industry prices second-time founders at a premium.

• Accelerator programs explicitly recruit failed founders.

• Conferences give stage time to "failure stories" as valuable lessons.

• Corporate employers actively recruit out of failed start-ups for their high-intensity experience.

• Investors maintain relationships through failures and back founders again.

This infrastructure of graceful failure is not incidental to Silicon Valley’s success. It is the success. Without it, the ten per cent success rate destroys the system; with it, the ten per cent success rate is the engine that powers the entire thing.

What celebrating the losers actually requires

I am not arguing for participation trophies. I am arguing for a cultural disposition that treats the attempt as the thing worth honouring. Concretely, this looks like:

• Venture capital firms that explicitly prioritise second-time and third-time founders.

• Boards and hiring committees that read a failed company as a credential.

• Media that stops using "failed" as a pejorative and starts using it as a neutral descriptor.

• Government programs that evaluate founders on the trajectory of their thinking across attempts.

The work is underway in Canada. For example, Build Canada, the Council of Canadian Innovators, and leaders like John Ruffolo and Tobi Lütke are building the institutional innovation substrate our country has been missing. But the culture is still thin. Until failed founders stop being "people to be careful about" in small rooms, the structural interventions will only partially work.

The founder you are looking for has probably failed

If you are looking for the next breakthrough, remember: the best founders in history have disproportionately failed before they succeeded. Steve Jobs was fired. Elon Musk’s first company was a grind. Reid Hoffman, Max Levchin, Evan Williams, Travis Kalanick — all failed before their iconic successes. The relationship between prior failure and eventual breakthrough is the single most reliable predictor of founder outcome venture capital has identified. But that Canada ignores or discredits.

The founders are already here. Some, like me, are on their fourth attempt. The question is whether the people in the rooms will read what they are looking at correctly. I believe they eventually will. The culture is beginning to shift. The founders are more ready now than ever. The only thing that remains for Canada is the choice each of us makes, the next time a founder with a failed venture walks into our room, about what we decide to see.

I am going to fail again. Probably. Every founder I admire has failed more than they have succeeded. What I hope is that we are now entering a period in which the failures will be productive rather than destructive. In which the wisdom of failed ventures will be metabolised rather than dismissed or exported. In which the losers will also be celebrated, not for the value we did not create, but for the risks we are willing to take and what we have learned along the way about the value we still can in the future.

We are all living through the most innovative moment in human history, and that creates the incentive and permission structure for a necessary cultural reset for both Canadian policymakers and business leaders alike.

This is the moment for Canada to adopt the culture of innovation required to build the next big thing. But also know that innovation creates winners and losers in asymmetric outcomes that produces losers at a 9:1 ratio.

So celebrate and support the losers as much as you do the winners out of national self-interest and economic necessity.

I invite you to start with us. Because the odds are much better we will win!

John Pope

Founder, midagent AI

Ottawa, Canada · April 2026