2011

There were 153 posts published in 2011 (this is page 4 of 51).

Startup Down Under

Editor’s note: This is a guest post by Alyssa Richard (@AlyssaJRichard), Founder of RateHub, a Canadian mortgage rate comparison engine. While StartupNorth is focused on Canadian startups, with Winter on the horizon we thought some readers would enjoy hearing that our cousins in the Southern Hemisphere are building a thriving tech ecosystem.

The garage enjoys a special place in the mythology of tech entrepreneurs. It’s where Steve Jobs, Bill Gates, and many other aspiring techies launched their first ventures. Whether it’s your garage, living room, or home office, I’m sure you founders out there will agree that startups are usually launched close to home. It’s where we’re most comfortable, have built strong connections, and, yes, it’s a way to reduce pressure on already burdened finances. Bolder souls might opt to move closer to cash and talent pools, such as Silicon Valley, and some even make the journey overseas to be closer to manufacturing. But with cold days and dark mornings closing in, I’m tempted to consider one final factor: climate.

The inspiration for this post comes from a recent trip to Australia, where I judged Univation 2011, a business competition for students and alumni of universities in Western Australia. The total prize pool was over $200,000 AUD. During my stay, I had the opportunity to meet many talented entrepreneurs in both Sydney and Perth. Suffice to say I fell as much in love with the startup scene as I did the beautiful beaches.

Here are some of the startups I met:

Shoes of Prey is a website that allows users to design their very own custom women’s shoes. From booties to stilettos, satin to sparkles, users can release their inner fashionista and wear the results within just a few short weeks.

Unique Aussie Benefit: Close to Manufacturing
Shoes of Prey’s proximity to China allows this largely Sydney-based business to travel from its headquarters to its manufacturing plants in 8 hours or less. No need for a 24 hour flight. Since both countries are located in the eastern hemisphere, there is only a 2 hour time change which makes communication and working together incredibly simple.

Unique Technology: 3D model shoe design
Bringing the customizable fashion trend (think TailorYou.com) to the shoe industry was no small “feet”. While the manufacturing industry has been set up to handle customizable items like shirts and suits, shoes presented a new challenge as a less experienced vertical. The young company has also overcome a major technological hurdle: the site was originally launched with a 2D shoe model, but found that customers were having trouble picturing the beauty of these $280 shoes in full. This week they’ve launched their new and vastly improved 3D shoe model after 6+ months of hard work.

Funding Stage: Bootstrapped and raising
Shoes of Prey has been bootstrapped to date with a $300,000 investment from its three co-founders but the company is currently in the process of raising $2M. With their impressive mix of technological and manufacturing expertise and 5,000 pairs of shoes sold, I don’t imagine they’ll have much trouble.

Fusion Books is an online yearbook system that makes building school yearbooks easy. Bootstrapped by co-founders Melanie Perkins (23) and Cliff Obrechet (25), Fusion Books now services hundreds of schools throughout Australia and will be licensing their yearbook system internationally in the coming months.

Unique Aussie Benefit: Underserved local market
While the yearbook industry has some major players in the North American market, such as Jostens, Melanie and Cliff are on their way to a significant share of the Australian market through superior technology and an incredible team on the ground taking the Aussie market by storm.

Unique Technology: Accessibility and ease of use
Melanie and Cliff launched Fusion Books because too many schools and businesses were wasting hours with complicated technology like Adobe Indesign and Photoshop. Worst of all these programs could only be accessed on one computer, allowing limited opportunities for collaboration. While their technology, designed by Melanie at the age of 19, is as easy as pie to use, don’t underestimate the coding. For example, editors can set up basic profile questions that students answer through an e-mailed URL, and crowd-sourced content is uploaded and formatted automatically for all students.

Funding Stage: Bootstrapped, cash flow positive
In a world where venture-funded startups attract a lot of attention, I was very impressed with this dynamic duo who have built and own 100% of a profitable business.

Posse is a social platform that leverages a brand’s most dedicated customers to help spread the word online. A brand’s customers, or “fans,” are given exclusive product/service offerings that they can share with friends to receive prizes in the form of cash and products. Posse captures the viral aspect of sharing deals online but allows brands to control the deal.

Unique Technology: QR codes track offline activity
It’s easy to see how a platform could be set-up for customers and fans to redeem pre-purchased vouchers, but Posse takes this one step further. Fans of a brand can share exclusive deals with their friends, through a voucher containing a unique QR code. When the friend goes to redeem the product, say a haircut, the business scans the QR code, collects payment and enters in the gross sales associated with the service. The original brand fan can now be awarded for their friend’s sale through a combination of deals and points. Essentially Posse has created a trackable affiliate program where companies/brands are in the driver’s seat.

Funding Stage: Seed, en route to Series A
With two rounds of funding under their belt, the company has built a platform, acquired users to test and refine the service, and will eventually raise additional funding. With this company’s unique spin on the group deals space, it’s no surprise angels have gotten so excited.

As the winter chill sets in, just remember you have options. With all the activity in Australia, I highly recommend exploring startup life down under, where technology and business have a home by the beach.

Top left: Beach in Margaret River with fellow judges including Bill Tai of Charles River Ventures

Top right: Kitesurfing with Dan Larsen of Qualcomm

Bottom left: Meeting with co-founders of Shoes of Prey in their Sydney office

Bottom right: With the winners of the Mobile App contest, the brilliant minds behind Big Help Mob

CIX TOP 20

This morning Rick Nathan, Robert Montgomery, and Chris Arsenault announced the 20 Canadian technology companies that have been selected to present at this year’s CIX conference. Many you’ve heard of, a few are well on their way, all definitely worth connecting with December 1.

  • Massive Damage – Founded by veteran app developers Ken Seto and Garry Seto, Massive Damage is building next generation location based massively multiplayer games for mobile devices.
  • Arcestra – Arcestra is a new cloud-based technology and business platform that streamlines commercial real estate transactions unlocking tremendous value for tenants, landlords, brokers, designers and suppliers in the multi-billion dollar commercial real estate market.
  • Vanilla Forums – Vanilla is open source community forum software that powers discussions on over 500,000 sites around the world.
  • Woozworld – Founded in 2010, Woozworld created and operates Woozworld.com, a Web 2.0 innovative social virtual world, specifically designed to answer the needs and expectations of tweens.
  • Wattpad – On Wattpad users discover a new form of entertainment where you can interact and share stories across text, video, images and through conversations with other readers and writers.
  • Infersystems – Infersystems has developed a proprietary, automatic predictive analytics engine based on non parametric statistics. The Infer RTB Optimizer enables marketers to effectively and efficiently optimize display media campaigns at the impression level in order to maximize CPA, CPC and/or profit.
  • Recoset – Recoset is a predictive analytics company that allows marketers to bring 1st, 2nd and 3rd party data together in real time and use economic models to make purchase decisions across multiple digital marketing channels.
  • ClearRisk – ClearRisk helps the insurance market by giving them a way to win in the mid market by providing the needed risk management solutions to medium sized companies.
  • Achievers – Achievers is an employee recognition solution that helps companies recognize brilliant performance and empowers employees to choose their own rewards.
  • Bitheads – An award-winning product development company that is creating a unique cloud-based solution for a large and emerging entertainment market.
  • Shoplogix – Shoplogix envisions a manufacturing industry where every manufacturer has access to the right information to make the right decisions.
  • True Voice – True Voice Technologies caters to organizations that recognize the importance of live conversation and how it can play a pivotal role in their business.
  • Polar Mobile – Polar Mobile provides media companies globally an industry-leading Platform that makes it fast and easy to launch branded mobile Apps across every smartphone.
  • Wave Accounting – Wave Accounting is the fastest-growing online accounting tool for small businesses around the world. Wave is 100% free, offers complete accounting made ridiculously easy, and is designed for the real-world needs of small business owners.
  • Nexalogy Environics – Nexalogy Environics is a leading Canadian provider of social media/ research technology and consulting services. Nexalogy takes the guesswork out of social data analytics.
  • Quickmobile – QuickMobile is a software development company that builds interactive, engaging mobile applications and mobile websites for audiences at conferences, trade shows, film festivals and other events.
  • Responsetek – ResponseTek helps organizations see the link between poor customer service delivery and retention and growth problems.
  • Nexj Systems – NexJ Systems (TSX: NXJ) is a leading provider of enterprise private cloud software, delivering customer relationship management solutions to the financial services, insurance, and healthcare industries.
  • TribeHR – TribeHR provides a Software as a Service human resources management tool for small and medium businesses to reduce the time, cost and aggravation resulting from managing human resources on a tight budget.
  • Evoco – Evoco is an enterprise class, software-as-a-service provider that integrates real estate management, project data management, and facilities management solutions for multi-location real estate owners.

The Untold Story of Kobo

So I read most of the news this morning around Kobo and the links being passed around. Generally I was miffed. When folks in the startup scene complain about media doing a lame job covering entrepreneurial stories, this is a great example. The story being published in the media is “Indigo sells Kobo”, “Indigo builds Kobo”, etc, etc. All Indigo, all the time. Probably due to PR agencies spinning the story that way, and also due to lazy business journalism. Well, having chatted with a bunch of folks involved with Kobo, I have a different take on the Kobo story:

Mike Serbinis

If you are in the startup scene in Toronto and you have not heard of Mike Serbinis – shame on you. He is another example of an amazing entrepreneur in the community who has been wildly successful. The first company he started, DocSpace, was an internet leader in security. He founded it in 1997, and went on to sell it to CriticalPath in 1999, for whom he was CTO and EVP marketing for some time. Throw in a master’s in engineering, a few patents, and you can see why folks were pretty excited about his return to Canada, joining Indigo in 2006.

The Indigo/Shortcovers/Kobo story is as such. In 2007, 2008 Serbinis starts lobbying Indigo about the coming sea of change called “ebooks”.

In April of 2008, Shortcovers is created within Indigo. Shortcovers is an online ebook store and mobile app meant to work across the plethora of new smarter devices – Apple, Android, BlackBerry, Palm, etc. Access to books on any device.

This date is important, April 2008. If you think this is just another dumb Canadian “me-too” play, you should look up the launch date of the Kindle. The Kindle launched in November of 2007. And Amazon blew the Kindle launch, and had no stock available until April of 2008. Every attempt before April of 2008 at ebook readers and online ebook stores had been nothing short of disasters, ripe with lost capital. Let me double down on this point:

ebook Sales 2007-2010

In 2007 and early 2008 it was NOT obvious that ebooks would be a big factor, and that Indigo should meaningfully go after the ebook space.

So Mike Serbinis, within Indigo, stared at this in 2007/2008 and said “Indigo should enter the ebook space”. Wow – those are some big brass entrepreneurial balls.

So they create Shortcovers. Shortcovers name was from their original “gimmick” in that they let folks buy books a chapter at a time. Shortcovers was a pure ebook store & software client. No hardware. They were originally intending to put their ebook app on as many devices as possible. No hardware. So somewhere in 2009, things change.

Kobo is Created

Serbinis then goes on to do the unthinkable. At some point in 2009, he see’s the only way for Shortcovers to get critical mass adoption is to launch its own hardware. Whattt????

Shortcovers is a software company. Serbinis is a software exec – CIO & EVP Online at Indigo. Indigo is a brick and mortar retailer. They have ZERO hardware background. That’s a big-ass, high-risk pivot folks!!

So he goes off with his “lets build a device” vision and convinces Indigo to spin them off into their own business, but also gets Indigo to cough up another $5mm as part of a $16mm round where he gets Borders, RedGroup & one of the most famous Asian investment firms around – Cheung Kong Holding.

In early-mid 2009, it probably looked like launching a new ebook reader was a good idea. By the end of 2009 though, everybody and their sister was launching a new ebook reader. Check out this article:
http://www.zdnet.com/photos/ces-2010-top-10-new-e-book-readers/382181. Everybody I know who went to that CES said “maannnn, so many ebook readers”.

I remember talking to Dan Leibu, CTO of Kobo, who in early 2010 was nervous as hell about launching their own device. He said something to the effect of “if we had known so many ebook readers were going to launch, we probably wouldn’t have launched our own”.

Kobo launched in July 2010, well after many of the above devices were in market. How did they do? The rumour on the street is that Kobo cracked $100mm in sales in its first 12 months. $100mm in revenue in its FIRST YEAR!!! They only raised $16mm in their A round and built a $100mm revenue company in 12 months. That is simply unbelievable. How about you other startups, have you done 10X your initial investment in revenue yet?

And how did the rest of the industry do? Anybody know where the Skiff Reader, the Plastic Logic Queue, the Alex Reader, and so on and so forth ended up? Probably not with $100mm in sales and a $315mm acquisition.

And that my friends is why I’m miffed at the coverage on Kobo. This is a wild and crazy story entrepreneurial story full of big risky moves. Its a story of an entrepreneur doing things that only great entrepreneurs can do – even making elephants dance. And its a rare story in Canada, and as such a story that deserves proper coverage.