StartupNorth

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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 Follow @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, Wattpad, Upverter, Chango, Fixmo, Desire2Learn, 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

• Ruby Hack Night
• HackDays
• Get Your Bot On!
• Hacking Health
• AngelHackTO
• Pixel Hack Day
• Hackasaurus
• Hack/Reduce
• HackLab.TO

APIs and Developer Starting Points

• Wattpad API
• Yellow API
• 500px
• Freshbooks
• Wave Accounting
• Shopify
• Influitive GitHub
• Upverter GitHub
• TinEye Commercial API
• Top Hat Monocle GitHub
• Hootsuite API
• Hopper GitHub
• Unbounce API

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?

David Crow

David Crow focused on product design, customer development and go-to-market implementation on $0. He is available as a consultant. He is a mentor at UW VeloCity, Jolt and FounderFuel. Follow him on Twitter @davidcrow or at DavidCrow.ca

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Editor’s note: This is a guest post by Jesse Rodgers. Follow Jesse on Twitter Follow @jrodgers. This post was originally published on November 21, 2012 on WhoYouCallingAJesse.com.

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The Startup Genome released another report mapping top startup cities but this time a bit more specific than it’s heat map from April of this year. Canada did well depending on how you interpret it with Toronto at #8, Vancouver at #9, and Waterloo at #16. In its previous report, Startup Genome ranked Toronto at #4, Vancouver at #16, and Montreal made the list at #25. Oddly Waterloo wasn’t listed in the previous ranking but made it into the top 20 in the new report while Montreal remained outside of it.

Focusing on my Ontario centric nitpick – the separation of the Toronto and Waterloo “ecosystems” when they are anything but separate is not going to give an accurate picture of Canada’s awesome startup communities. They are unique communities but their strength comes from how they work together in the same ecosystem. The emotional energy (and money) burned in defining how they are different is holding Canada back from an even better and sustainable growth curve. That energy is in the report.

In the report:

“Toronto competes for startups with regional competitors such as NYC, Boston and nearby Waterloo.”

Then in the Waterloo profile:

“In the near future, it will be interesting to see whether Waterloo is able to hold on to its talent base or whether it will be sucked into Toronto.”

Would you say that about Palto Alto sucking talent to San Francisco and vice versa? No. It’s the valley. A huge area that is far more developed but very similar to the Toronto – Hamilton – Waterloo. The problem, I think, is that at some point in the past when local economic development groups were competing on a similar scale for tax dollars (and manufacturing plants) they narrowly defined regions (Golden Triangle, Golden Horseshoe, etc) where everything above the escarpment is barbarians and the urban modern folk live below next to the cold blue lake.

There can be (and there are) distinct communities inside the larger Toronto – Hamilton – Waterloo ecosystem. Each community has its strength. Each success in the larger ecosystem helps the entire ecosystem.

The big problem the ecosystem faces (in Toronto):

Startups in Toronto receive 71% less funding than SV startups. The capital deficiency exists both before and after product market fit. Toronto startups receive 70% less capital in Stage 2 (Validation) and 65% in Stage 4 (Scale).

The ecosystem most likely lacks a sufficient quantity of all kinds of startup capital sources: angels, super angels, accelerators, micro VCs, VCs etc. As a result Toronto startups rely more on self-funding, or rounds from family/friends.

The other big problem (in Waterloo):

Waterloo has a funding gap (96% less in the second stage) for early stage startups before product market fit, probably due to a lack of super angels and micro VCs. There are high numbers of accelerators and much lower numbers of super angels and VCs than SV.

Solving the funding problem in Toronto also solves the problem in Waterloo, more companies that able to find the money and the talent to scale in either or both communities helps both or am I missing something?

Building a strong economy, community, and ecosystem isn’t a zero sum game.

Jesse Rodgers

Jesse is the Director of VentureLab at Rotman (rotmanventurelab.com), a cofounder of TribeHR, and ran VeloCity at the University for a few years. He has been a key member of the Waterloo startup community hosting StartupCampWaterloo and other events to bring together and engage local entrepreneurs. Follow him on Twitter @jrodgers or WhoYouCallingAJesse.com.

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Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter Follow @aprildunford or RocketWatcher.com. This post was originally published in August 31, 2012 on RocketWatcher.com.

I spent the day yesterday at FounderFuel for their Mentor Day. If you aren’t familiar with FounderFuel they are a very successful startup accelerator based in Montreal. And what a day it was – 8 startups pitched and then did roundtable breakout sessions with over 50 mentors including VC’s, angel investors, entrepreneurs and senior executives. Here’s my mentor’s perspective on how a startup can really get the most out of a day like that:

1/ Pick your Target Mentors Ahead of Time: 50 mentors is a lot and they represented a wide cross section of folks that have deep experience in different consumer and business markets, and have a range of skills from technical expertise to sales, marketing, finance, and legal experience. Selecting a subset of the mentors with experience relevant to your business will help you target your discussions.A handful of the teams that needed marketing help reached out to me by email before the day and that helped to make sure that we connected at the session which I thought was pretty smart.

2/ Ask for Feedback on your Pitch: The mentors are both experienced pitch artists, and listen to pitches a lot. What better folks to give feedback on what worked and what didn’t work with the pitch you just gave? In this case the companies are all still in the early stages of the accelerator program so it’s a great time to get feedback that will improve the ultimate pitch you give on demo day. The feedback will also give you a feel for the differences in what an Angel investor might be looking for over what the more traditional VC’s are looking for in a pitch. “Tell me one thing that would have made my pitch better” or “What was missing from my pitch?” would both be great ways to start that discussion.

3/ Ask for Specific Help: The mentors are ready and willing to help but they can’t guess what you need. Coming with a set of specific requests helps shape the discussion in a way that is most helpful to you. Don’t be afraid to ask for specific introductions – even if the folks in the room don’t have the answers you need, chances are they know someone who does.

4/ Listen, Ask Questions (and Filter later): – The mentors yesterday came from really different backgrounds and had worked in a broad range of industries (consumer, gaming, retail, enterprise, financial services). Sure we’re all smart folks but you wouldn’t believe how different our opinons were about questions the startups were asking. For example, at my session with Openera – a tool for automatically organizing files and attachments –  we got into a discussion about selling to consumers versus enterprises as a starting point. I ALWAYS tilt toward enterprises when people ask me that because I know/love enterprise sales. The mentor beside me, Yona Shtern, the CEO from Beyond the Rack on the other hand thought selling B2C (or B2C2B) was just fine. Only Openera can decide who’s got smarter advice for their business (yeah OK, in this case it’s probably the smarty-pants Beyond the Rack guy but hey you get what I’m trying to say here). Another example – in the discussion with InfoActive (a very cool tool that lets you easily create beautiful interactive data visualizations), I immediately saw the applicability to creating interactive marketing materials. I’m a marketer, that’s the obvious use case for someone like me.  The mentor beside me (James Duncan, CTO at Inktank) on the other hand saw the value in selling to IT departments that needed a way to easily create good looking dashboards to help IT communicate to the business side of the house. That’s a great use case that a marketing person like me would be unlikely to immediately think of. Both ideas might be worth investigating but only InfoActive can really decide that. Avoiding “mentor whiplash”, as the FounderFuel gang refers to it, is a critical skill for startups in accelerators that have deep rosters of active mentors. Remember too that time is limited so you don’t want to waste it having a long debate with a single mentor over a specific point. Listen, probe a bit if you need to, and then move on. You can always schedule follow-on time with a specific mentor to explore an idea later.

5/ Take Notes:  You put a couple of CEO’s a VC, a senior exec and a CTO at a table together and guess what happens? We talk. A lot. Not only that but the conversation moves very quickly from one point of view to the next. Some teams were recording the sessions but the room was loud (did I mention we talk a lot?) and figuring out who said what later might be a challenge by voice alone. Having someone taking notes is a good idea to make sure that you’re capturing ideas as they are flowing.

6/ Work the Edge Time: By far the best way to get 1 on 1 time with a mentor yesterday was to do it over the break or over lunch. That also gives the mentor a chance to ask questions they might not get a chance to in a round table session.

7/ Don’t Forget Everyone’s a Potential Investor : The VC’s are easy to spot (and there were a lot of them there) but most of the mentors I talked to are also doing a bit of angel investing as well. For companies at this stage anyone that’s willing to invest time with your company might also be likely to invest cash as well.

So there’s my advice. I’m sure the other mentors all have different opinions – yep, we’re funny that way.

April Dunford

April is a marketing executive with a broad range of experience at technology companies. She specializes in bringing new solutions to to market including messaging and positioning, market strategy,go to market planning and lead generation. April has a technical background (Systems Design Engineering) and deep practical experience in marketing, product marketing and sales.

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