Category Archives: Exits

It’s indescribably beautiful!

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On the surface this might not seem like a Canadian success story, Eloqua was acquired by Oracle for $871MM. Eloqua by all appearances is a publicly traded company with headquarters in Vienna, VA. But they are probably the best kept secret in the Toronto technology community. Eloqua was founded in Toronto in 1999 by my friend and co-founder, Mark Organ (LinkedIn,) along with Abe Wagner (LinkedIn) and Steve Woods (LinkedIn, ). This is nearly a $1B dollar deal that was born and breed in Toronto (yes, I can do basic math it’s $129MM short but that’s pocket change and unlike when Siebel acquired Janna in 2000 for $975MM at the time of the deal the price changing with the Siebel’s stock price, this is an all cash deal). I had started figuring that it would be Salesforce that acquired Eloqua, so I am surprised that it is Oracle, and so soon after their IPO. Here is a great analysis of the marketing automation industry and the assessment for Marketo, Act-On, ExactTarget, etc.

Congratulations to all of the Eloqua employees. I continue to hear stories about an amazing group of people including:

It’s an amazing story that still has a big chunk of the product development team based in Toronto. Congrats to the entire Eloqua team and alumni.

The Pending Talent Wars

 

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Did you know that accelerators are heading for a shake out? We’ve talked a lot incubators, accelerators and cyclotrons. And the proliferation of the accelerator model is generally positive, it started me thinking about a possibility for slightly different model. One that Kevin Swan posted an insightful comment on the talent shortage for Canadian startups. I don’t think I’m the first to propose this, but it starts to make sense. Incubators/accelerators don’t need to only hasten the formation, creation and ideation of companies. They are fertile grounds to accelerate people. And it’s not just incubators and accelerators, companies participate in HackDays to find talent.

Need proof?

Vuru acquired by Wave Accounting

Vuru founders Cameron Howieson and Yoseph West reached out to the Wave Accounting team for advice on building a free, web-based financial services tool. Over time, the two companies traded notes as Wave took on a an informal advisory role, and that led to a sense that Vuru’s talent and direction were something that would be well suited to the Wave Accounting mission. — Darrell Ethrington, Aug 21, 2012 in BetaKit

Vuru was a 2 cofounder team in the FounderFuel (full disclosure: I am mentor in FounderFuel and I now employed by Wave Accounting investor OMERS Ventures). They were building a “investment tracking tools aimed at managing personal finance, which is not something Wave currently offer[ed]“. It was a great fit, a team that had the entrepreneurial culture to make a difference at Wave and a product that filled a known product roadmap gap.

Algo Anyhere acquired by 500px

Ok, before Zach Aysan slaps me for being totally incorrect. AlgoAnywhere was not in an incubator or accelerator program. But they had raised a seed round and were building very interesting technology.

The 500px founders met Algo Anywhere at their Pixel Hack Day last year, and were impressed by what the team brought to the table. Algo Anywhere’s tech was originally intended to be sold on an SaaS basis, providing companies with the data crunching power of sophisticated recommendation algorithms, without the need for those to be developed in-house or hosted on a company’s own servers – Darrell Ethrington, July 9, 2012 in BetaKit

The interesting point here isn’t about incubators or accelerators. It’s about founders of early-stage companies looking for relationships and gaps in the market left by other players.

Pulpfingers acquired by 500px

It seems that 500px has been strategically acquiring companies. It looks like both Pulpfingers and Algo Anywhere were part of the PixelHackDay (see photo from TechCrunch). Which gives 500px access to see designers, developers working in their domain space. It’s a great way to round out the product roadmap, Pulpfingers was a iOS discovery application. And they aren’t alone. Hootsuite acquired Seesmic and Swift.

Built to Last versus Built to Flip

I’m not arguing that founders should be looking to build companies to flip. There is lots of conversation about building lasting value. I’m arguing that companies that have raised capital to scale are looking for alternative methods to acquire talent. Get access to the API, build a meaningful service, acquire shared customers and go forward, it’s Biz Dev 2.0 (as Caterina described back in 2006). What’s new to the game for Canada (well Canadian startups) is that for the first time since RIM we are starting to have web startups that are reaching scale and are able to acquire talent, teams and companies. The goal isn’t to look for a acqui-hire or a manquisition, but to look at where working with an existing company or API gives you immediate access to distribution or monetization that you might have to work harder to build on your own.

I’m betting that companies like Wave Accounting, 500px, Influitive, Hootsuite, Shopify,Freshbooks, Top Hat Monocle, WattpadUpverter, Chango, FixmoDesire2Learn, Lightspeed are all actively looking for teams that are building on their APIs or filling product gaps (it becomes a buy versus build decision).

If I was a developer or looking to get into an incubator program, I’d start looking at the hackathons and APIs that are aligned with my vision where I could accelerate customer adoption.

Events

APIs and Developer Starting Points

Find an API (be it local or otherwise) that aligns with your vertical, figure out if you can solve one of your immediate challenges (like distribution and customer acquisition). Maybe strike up a conversation with the product teams at shop. But build something that delights customers and users! Go! Now!

Who has something built on one of the above APIs?

Bufferbox Acquired

Waterloo shining star startup, Bufferbox, just announced that it was acquired by Google today for an undisclosed sum. Whaaaa?

Bufferbox is a Waterloo startup that builds locker-like boxes that enable consumers to mail their ecommerce orders to a convenient location where they can pick them up without having to worry about missed deliveries. Recently Amazon announced a similar service just for Amazon orders in the US, and similar ideas have taken off in Europe.

The growth of Bufferbox under the leadership of Mike “Matt Damon” McCauley, Aditya Bali, Jay Shah quickly became an example of how to “do startup” in Canada.

Bufferbox only started up in 2011 and won the Waterloo VeloCity Venture Fund in February 2012. They were prominent favourites of Paul Graham when they went through the YCombinator program in Silicon Valley. Bufferbox currently occupies a chunk of space in the VelocityGarage inside the Communitech Hub.

I remember when Mike and the rest of the team first stated they were building a startup around bulky hardware that wasn’t easily patentable, people said that they were crazy. Bufferbox started in an incubator surrounded by teams trying to make the next trendy social/mobile app – they stood out for wanting to do something physical and different (and a little bit crazy).

Mike was properly introduced to me just before Christmas in 2011. The person who introduced me basically said “This kid is trying to build something that is too audacious to ever really take off, but he’s a nice guy so you should give him advice.” In early 2012, the Canadian startup community reacted in a similar way: by all accounts, Bufferbox was in for a really difficult ride getting their idea funded so they could build and deploy more expensive boxes. People said that it was too hard to build a hardware startup these days. More than one person told them to give up.

But they didn’t.

Greatness is defined by how entrepreneurs act in the face of challenge, and this team reacted by working twice as hard and always smiling and being charming the whole way through. This attitude made them darlings of the YC Program which, rumor has it, they applied to last minute on a whim.

If you are to learn anything from the story of Bufferbox it is:

  • Never give up, and keep smiling
  • The first response to all audacious ideas is: “this is too crazy to work”
  • Harness the power of Silicon Valley while building in Canada (aka – get into YC)
  • Only the craziest, boldest ideas are rewarded with crazy, bold success
  • Always look like Matt Damon

Bufferbox’s story, like the other Waterloo (not-yet-acquired) startup darling, VidYard, demonstrates what’s going right in Waterloo and Canada in general. Bufferbox made use of Velocity and the VelocityGarage combined with Communitech’s mentoring power to successfully seed their company built on the engineering talent from the University of Waterloo. Silicon Valley noticed. Montreal VC, iNovia, swooped in to invest early. When Amazon launched a comparable product in the US, Bufferbox used that announcement to build more excitement around the category – alternate ecommerce delivery models went from cool to hot in a matter of months. All the pieces lined up. In the end, the Bufferbox team demonstrated what happens when awesome, charming entrepreneur engineers work hard in a hot space.

Even though the size of the deal was undisclosed, from the stories overheard in the halls of Communitech, there was massive competition from literally the best names in Silicon Valley to get Bufferbox and so we have an inkling that the Bufferbox team did very well for themselves in this deal. With that in mind, Mike McCauley needs your help in the comments below with suggestions for sports cars he should buy to replace the BufferBenz.