Policy Wonking

Dan Managan and Bob Kronbauer - Hockey Day In Canada Photo by KrisKrug

Wojceich Gryc has an interesting post on the policies that he’d like to see the federal government implement to improve the startup ecosystem. The 5 key points are:

  1. Market Access Tax Credits
  2. Legal/Tax Advice for Market Access
  3. Sales-Oriented Startup Accelerators
  4. Global Benchmarks
  5. Global Branding

Not a bad list of things that could improve the startup ecosystem. However, I’m not sure they are not all necessarily things for consideration as governmental policy. Specifically, I have issues with 2, 3 and 4.

Legal/Tax Advice for Market Access

Entering new markets, particularly foreign markets, can be daunting. There are legal, regulatory, tax and other questions. And I would argue that the Canadian government already has a Crown corporation, Export Development Corporation, dedicated at lead to helping manage the financial risk of accessing new markets. Is there a step-by-step guide for emerging technology companies? (Let me know if you find one). There are access to the Trade Commissioners who continue to have a strong presence in the Bay area, New York and Austin, Texas.

The remaining advice and guidance about legal, regulatory and tax risks on entering new markets is provided by third-party services firms. I’ve worked with the teams at KPMGDeloitte, PwC and others on Canadian/US tax law and the implications for my firm. Also advice from Canadian and US counsel including BennettJones, CognitionLLP, LabergeWeinstein, Fenwick & West, Wilson Sonsini and others. You need to find lawyers and accountants that have experience with the risks and solutions and can provide you cost-effective advice.

Sales-Oriented Startup Accelerators

An accelerator feels like a red herring to me. Wojceich is 100% correct, companies should focus on focus on key traction metrics (see Getting Traction and Funding, Valuation and Accretive Milestones) including sales/revenue. But the idea that an accelubator is going to help you focus on driving realistic forecasts, and achieving milestones or traction feels lazy/wrong/not the right approach.

A startup is a temporary organization used to search for a repeatable and scalable business model. – Steve Blank

Depending on the type of business model, it can be okay to delay monetization. But if your business model is to sell software or software-as-a-service you need to determine if people are willing to pay you for it. I would argue rather than giving up 7% of company to an accelubator, you’re probably better to read David Skok’s Building a Sales & Marketing Machine and try to recruit an advisor that has experience selling to your idealized target segment. There are a lot of great sales advisors/board members including: John MacDonald, Howard Gwin, Andy Aicklen, etc. Most are accessible. Are they interested in working with you? On your business? Maybe, you need to convince them you’ve built something worth their time and social capital.

Global Benchmarks

Who gives a shit about where we fall on global benchmarks? It’s probably relevant as part of the next point, Global Branding, but I just can’t imagine that an understanding of the global startup benchmarks matters. Larger investment, more successful companies and exits probably have a larger impact on the overall startup ecosystem. It would be more interesting to see the creation of a Kaufmann Foundation with a focus on entrepreneurship.

“we develop and support programs that provide entrepreneurs with the education, tools, skills and connections they need to start and grow businesses. We also work to create a more entrepreneur-friendly environment, including lowering barriers to success and raising awareness of the important role entrepreneurs play in the economy” – Kaufmann Foundation

I’m unclear why federal, provincial or municipal policy should be based on a set of rankings provided by a private corporation. It just feels ill-informed view of the role of government and policy in managing the lives of citizens. But I am not a policy wonk and my understanding on the creation and execution of policy in the administrative branches of government approximates zero. (Take this free opinion for what it is worth, or at least what you paid for it).

The Greener Grass

It’s great to see entrepreneurs in the trenches think about the system and the support they need. It’s a honest view of the things that would help entrepreneurs improve their corporate performance, reduce their expenditures and risks.

I love the idea of a similar SR&ED tax credit for market access. Supporting companies as they experiment with distribution and monetization models is a great idea. Plus improving the Canadian brand through Startup Visa, Maple Syrup Mafia, The C100, and other activities is an amazing activity. It builds on the efforts that we as individual founders to support the ecosystem. Focusing on traction including customer acquisition, revenue growth and building a scalable business., I love that too. Using global metrics as a baseline to evaluate your business (see StartupCompass’ Navigating your Startup to Success) should quickly give entrepreneurs both the measures and the desired outcomes to compare against.

I don’t think it is going to be government policy changes, it is going to be founders and startups building successful companies that will ultimately improve the ecosystem.

Photo Credit: Photo by Kris Krug AttributionShareAlike Some rights reserved by kriskrug

The Rise of Fashion E-Commerce and Man’s Escape from the Mall

CC-BY-NC-ND-20 AttributionNoncommercialNo Derivative Works Some rights reserved by Photos By Zoe

[Editor's Note: This is a guest post from Thomas Rankin. It is subset of his original post, which is a collection of thoughts and research compiled during some of the earliest exploration into the Dash Hudson business model. ]

The Set-up

E-commerce is on a rocketship, with clothing retailers and brands using technology to create new ways to engage with customers online. In fact, clothing and accessories is the fastest growing segment of e-commerce. A study done by Emarketer projects that online sales of clothing and accessories will continue to grow year over year at a rate faster than even the electronics and books segment, with sales reaching $73 billion by 2016.

Don’t Forget the Dudes

Despite the trope of women as fashion-obsessed shopaholics, men also have a desire to buy things they know they’ll look good in. However, most department stores and shopping malls are designed with the female shopper in mind, leaving men to fewer clothing options, particularly for those who are sartorially-inclined. This void, combined with growing presence of internet and mobile technology in fashion e-commerce, creates a perfect storm of opportunity for online brands and retailers that offer affordable, convenient, and fashionable options for men. According to research from Rakuten Linkshare, 83% of men surveyed prefer to shop online. Not only are men flocking to online retailers to get their new threads, but according to Chris Ventry, the general manager of Gilt Groupe’s GiltMan, men are out-shopping women by 20-30% in all areas of online shopping.

Where the Boys Are: Men’s E-Commerce Companies

A number of men’s e-commerce companies are cashing in on men’s interest in buying fashionable and trendy clothes online. Companies such as Frank & Oak, Bombfell and Trunk Club are at the forefront of offering a curated subscription service that makes shopping efficient for guys. Subscription commerce has proven popular with men who wish to avoid the complex decision making involved with shopping. Other online-exclusive fashion companies like BonobosJack Threads, and Mr. Porter offer quality men’s fashion at various prices. Bonobos is for the guy who likes the crusts cut off his peanut butter sandwich, Jack Threads for the guy who likes crusty dive bars and Mr. Porter for the socialite upper crust. J.Crew is a well-known traditional unisex offline retailer that offers an expansive online selection for men. H&M, Uniqlo and Zara compete for the disposable fashion market at a lower pricepoint. Streetwear companies like SuperdrySaturdays Surf NYCNeed Supply Co.Union Made Goods, and Stussy offer casual and weekend wear for dudes that take their looks seriously. For the slightly avant garde, it’s all about the Nordic brands: Matinique, Norse Projects and Selected Homme are doing some of the best work in men’s fashion today.

Beautiful Matinique people from Mantinique 2010 catalog.

Beautiful people  from Mantinique 2010 catalog.

Just Show me the Good Stuff

Clearly the world has changed, as there are a growing number of fashion options for men. So many that it is easy for guys to get overwhelmed, like a child lost at Nordstrom. According to research from Rakuten LinkShare, 48% of young male shoppers between the ages of 18-25 are overwhelmed by the plethora of choices with online shopping. Refinement of those options is a serious challenge. A survey conducted by Dash Hudson indicated that more than 60% of guys aged 18-24 want social validation and recommendations before buying. This contrasts with women, where over 75% want to discover content on their own. Guys readily admit that they need help looking good, and want guidance on what to buy. For the sartorially interested male, the growth in popularity of social commerce sites has been a mixed blessing. Pinterest launched in 2010, giving consumers the ability to take part in a taste-based community that curates photos of fashion, food, architecture, hairstyles and many other things. Now social shopping companies like WaneloFancySvpply, and Fab are making it easier for fashion-conscious shoppers to curate their style, draw inspiration from other users, and connect to their favourite stores and brands. A review of Alexa data shows that each of these shopping sites is much more likely to be frequented by female shoppers, something that is evidenced in their communities and user experiences.

Mind the Gaps in the Market

Despite the growth of men’s fashion e-commerce, there remains a great deal of room for innovation. Although social shopping companies like Wanelo and Pinterest allow users to curate their style, the plethora of available products can be overwhelming for the male shopper. Our research at Dash Hudson indicates that over 80% of men come to a shopping platform with the intent to buy as opposed to create content. The prevalence of dead and broken links in social shopping sites often interrupts the demonstrated intent. I am Jack’s complete frustration.

Oops

 

So close.

New social marketplaces must solve the problem of enabling the customer to search great content and then convert intent into purchase. This is especially important in the case of the need and immediacy-driven male shopper.

The Future of E-Commerce Is In Your Hands – Literally

The trend of men shopping online will continue to grow with mobile shopping becoming the newest way to efficiently discover and purchase clothing. Mobile technology can capitalize on men’s desire to shop on the go, making the fashion e-commerce experience more efficient than ever. According to Forrester, mobile currently accounts for 5 percent to 10 percent of all retail transactions. Yet for most online retailers, the big story is that mobile commerce is increasing at a rate of up to 185 percent. For men’s retailers who have caught the mobile wave (ahem, Jack Threads) this is great news. The DDB Lifestyle Survey in 2013 indicated, of men aged 18-34, 30% use shopping apps on their phone and 24% typically shop for and buy items on their smartphones. In the age of the digital urban lifestyle, convenience wins.

Final Thoughts

Experiences need to become tailored to how men shop by getting the best, most validated clothing in front of the shopper for their final purchasing decision. As more social shopping experiences become tailored for men, and as better retail products are built for mobile devices, male shoppers will start to feel the warmth of a market that finally understands them. At the end of the day, it’s all about being the coolest version of yourself. Finally, guys are being given the tools that make it fun and easy for this to happen.

Mesh 14 Hosted Startup Program

Photo by Daniel Solis http://danielsolisblog.blogspot.ca/2013/05/appearing-at-mesh13-conference-in.html

I love Mesh Conference. I’ve called it “Toronto’s most important DIY conference“. It is an event that ebbs and flows with the opinions and interests of it’s founders:

It starts like a joke, did you hear the one about the marketer, the lawyer, the journalist, the founder and travel guy? These guys are all successful in their own right. And they continue to bring together a unique viewpoint that is different than the corporate marketing events and tradeshows. This is something about the underlying currents at the intersection of technology, marketing, politics and culture. I’m hoping they continue to bring people who challenge  existing ideas and frameworks. (My keynote invite would go to Shanley Kane of Model View Culture.)

One of the interesting additions to the program has been a separate startup track. I’d like to see a little more overlap in the participating startups with the audience and attendees interest. It is great to see early-stage companies getting local support to reach the Mesh audience. The Mesh 14 Hosted Startup Program provides:

  • Complimentary registration;
  • Demo Alley;
  • and 15 Minutes of Fame presentation.

Apply Now | 60 days left

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