Go big and stay home

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Wattpad announced today a $17.3MM raise from Khosla Ventures, Golden Venture Partners, Union Square Ventures and Jerry Yang. This is huge.

“It has been recognized as highly significant due to having two top-tier US funds investing at this level in a Canadian-based consumer internet company.”

We are seeing Canadian entrepreneurs build companies and demonstrate global traction. The changes to foreign investment related to Section 116 changes in the Tax Act, have allowed Canadian companies to go big and stay home.  The changes to Section 116, coupled with the desire of Canadian entrepreneurs to go big and stay home. Evidenced by Wattpad’s big raise, Wave Accounting’s $12MM series B from Social+Capital, Hootsuite’s $20MM round from OMERS (sure they’re not foreign capital but its a big round), Shopify’s $22MM ($7M series A + $15M series B from Bessemer), Beyond The Rack’s $36MM raise, Fixmo’s $23.4MM Series C from KPCB, Achievers’ $24.5MM Series C from Sequoia, and others. There are startups and there is capital. It’s possible to build a growth company in Canada and raise foreign capital. The game has changed for Canadian VCs, geography limitations can help these funds identify early but it potentially will relegate many to second tier status if they can not enable their startups beyond their geographies.

The great thing in talking with many of these entrepreneurs is that they want to build successful companies in Canada. Allen Lau, CEO of Wattpad, mentioned that his desire was to grow a large successful company in Toronto. He is not looking to move the company. The same is true of my conversations with Kirk Simpson at Wave Accounting, Tobi at Shopify, Mike at Freshbooks, etc. There are a lot of reasons to want to be way from the tensions and pulls the exist in the Bay Area. Canadian startups have access to great talent. While there is some pull between the different startups, many of these companies aren’t competing with each other for employees or mindshare. Just check out Shopify’s recruiting video and tell me why you wouldn’t choose to work for Harley and Tobi instead of a financial institution or a government organization.

It’s a great time to be an entrepreneur in Canada. It’s a great time to work for a startup. You should check out the opportunities on the StartupNorth job board.

Meaningful metrics for incubators and accelerators

Editor’s Note: This is cross posted from WhoYouCallingAJesse.com by Jesse Rodgers, who is a cofounder of TribeHR. 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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Incubators and accelerators are businesses just like the businesses they intend to help develop as they travel through the startup lifecycle. As with any business, there are indicators that they can measure to give them a better idea of how they are performing besides the big public relations buzz around a company being funded.

You need to measure these numbers so that when a success happens you can hopefully gain some insights on how to help the other companies better. The problem is that even though the model of an incubator or accelerator is generally known, how to take 10 companies and have 10 successful growth companies come out the other side of the program is not.

The issue of what metrics to use is an important but complicated problem to solve.

Set the baseline at the application process (pre-program)

There are far more applicants than slots offered in an incubator or accelerator program. However, it is at this point that a program is gathering it’s best intelligence. You need a baseline measurement at the start of the program that you can measure every team against. What you should be tracking:

  • Who applied to the program that you didn’taccept (this is your control sample)
    • Track their progress on Angellist, Crunchbase, and/or go back to their web site in 3, 6, 12 months.
    • Keep a ratio of who is still in business and what their status is.
  • Maintain, in a CRM system, information on the applicant founders and their team members.

Measure the incubator/accelerator clients (in-program)

At this point there are X number of startups with Y number of founders and maybe Z employees. What you want to measure are things that demonstrate they have improved (or not) and which are things you would expect to see improve as a result of the services provided by any incubator or accelerator:

  • Current customers and revenue per customer (for most that will be 0 at the start) that will work across revenue models: CAC, ARPU, churn rate.
  • Sales funnel – do they have leads? How many? Are they qualified leads? What are they worth?
  • Average user growth in the last month.
  • What mentors or advisors did they meet through the program? What role did they take with the company?

Run these numbers at the start and at the end of the program. If you are a pure research focused incubator, ignore this section. You have a much longer time to see success – but few are truly research focused.

Monitor the graduates: Alumni (post-program)

This is a very important thing an incubator/accelerator can do — build and maintain its alumni connections. These folks not only help at every stage of running future programs but their success lifts the profile of the program, just like how alumni of prestigious business schools make the business schools prestigious.

There should be reporting milestones at a set interval (probably financial quarter based) where you gain the following insights on the company:

  • Customer growth percentage: CAC, ARPU, and churn rate all expressed as percentage growth.
  • Sales funnel growth expressed as a percentage.
  • Average user growth in the last month.
  • What mentors or advisors are currently active with the company?

Ideally you should have a position that is equivalent to a close advisor or board observer with the company once it graduates from the program.

Defining success

If an incubator or accelerator program is successful, the graphs should be heading up and to the right at a much faster pace than they would have been had startups not entered the program.

The only baseline data I know of is from the Startup Genome. In their report they explain the stages and the average length of time it takes a company to go through them. For an incubator or accelerator to demonstrate that they work, I would expect a successful company to move through the stages faster than the average. I would also expect them to fail faster than the average.

Tracking metrics puts a lot more overhead on an accelerator. It is likely more than they budgeted for to start. However, if you want to know if the program is successful it is worth the investment of an admin salary to track and crunch data. This is just a baseline, track more and figure out what the indicators of success are for you.

Entrepreneurs can achieve anything

Editor’s Note: This is a guest post by Chris Arsenault, Managing Partner, iNovia Capital.

3 hours - trioomph - driving your successWhat would happen if you decided to take action by putting 100% of your focus on achieving your goals, or better yet, start with a specific goal? Is that a scary thought? Well if you haven’t seen the video below of my good friend and great entrepreneur – Francois-Charles Sirois, then you are missing out on the number one most important success factor for any entrepreneur - the willingness to take action.

I think there are many critical factors that make an entrepreneur become successful: knowledge, creativity, self-confidence, attention to detail, experience, intelligence, patience, perseverance, team building, risk management, customer centricity, connections, timing and luck. But the number one and most important factor is by far, the Willingness to take action. When combining willingness to take action with focus, only then, can one succeed, because every other factor doesn’t have any importance unless action is taken.

Yes, I’m an optimist. I don’t disregard what isn’t working, how hard it is, how little chance I have in succeeding each time I take on the creation of a new Fund, the backing of a new startup or the planning of a new ambitious project. Instead I focus my attention at looking at the bright side of every situation and I then pull all my energy to make it happen. Positive energy attracts positive energy, and it is also right the other way around. It’s not easy, mostly because too many people tend to, purposely or not, pull you down, discourage you by highlighting every possible reason why it “just won’t work”. It is no different when setting out to build a new VC fund, a local business or an international tech company, it requires the same set of criteria for an entrepreneur to succeed, and when you willingly decide to take action, there actually is nothing stopping you. So when I can share concrete examples of what it means to set your mind to something, I share it with my friends and hope they will share it with there friends, helping getting the message out. So this is the most recent Willingness to take action example I want to share with you:

In early January, I met Francois-Charles for dinner and he tells me that he wants to learn how to play the guitar. No, he rectified, his dream is not to learn how to play the guitar, it’s actually to learn and play the best guitar solo in history! “Why just learn guitar, when you can do so much more, and I want to do this before summer” he said.

So the below video, is of Francois-Charles, on his mission tagged: 3 hours a day to succeed. He is playing the guitar solo: Lynyrd Skynyrd’s “Free Bird” with extreme perfection. Driven, focused and enjoying his moment like any successful entrepreneur should be when they take action and achieve their goals.

I hope some of you will be, not impressed but rather, motivated to go out a take action with the same amount of focus and determination. Or at the least, share this video link with a friend.

3 hours a day to succeed

François-Charles Sirois
President and Chief Executive Officer, Telesystem
Founder, TRIOOMPH Foundation
Dream:
For many years, he wanted to learn how to play a great guitar solo: Lynyrd Skynyrd’s “Free Bird”
Coach:
When you’re working toward your dream, it helps to have an experienced mentor to guide you along the way. His “guitar hero” was François Lamoureux.
The three-hour-a-day rule
It takes time and hard work to make a dream come true. In his case, he practiced three hours a day, three days a week; two hours a day, two days a week; and one hour a day, two days a week. A minimum of one hour every day is essential to making steady progress.
Official video: April 27, 2012
http://www.trioomph.com/0-3h-per-day.html3 hours a day to succeed

3 heures par jour vers le succès

François-Charles Sirois
Président et chef de la direction, Telesystem
Fondateur, Fondation TRIOOMPH
Rêve:
Depuis plusieurs années , il souhaite jouer un des meilleurs solos de guitare ; « Free Bird » de Lynyrd Skynyrd.
Coach:
Pour réaliser un rêve, on doit trouver quelqu’un qui s’y connaît pour nous aider. Dans son cas, il a trouvé un super coach; François Lamoureux qui a accepté le défi.
La règle du 3 heures par jour:
Pour réaliser un rêve, il faut investir du temps. Pour le sien, il a pratiqué 3 heures par jour, 3 jours par semaine; 2 heures par jour, 2 fois par semaine et 1 heure par jour, 2 fois par semaine. Un minimum d’une heure par jour est essentiel pour s’améliorer et continuer à progresser.
Vidéo officielle: 27 avril 2012
http://www.trioomph.com/0-3h-par-jour.html