StartupNorth

Year: 2011

  • Shit, that was a big year. Now we make our move…

    2011 was an important year for Canadian Startups.

    We had some exits. Over $1bn worth. We needed that. The more important thing is that a lot of those exits were by entrepreneurs who “get it” and who are going to be re-investing in startups here in Canada.

    Now we have a handful of funds who have money to deploy. Many of you probably don’t remember the good old days when there was no money to go around. I once saw a startup panhandling on Queen St West to raise money for some Dell servers. No joke.

    This was also a big year because it was one of the first in which we saw deals getting done in Canada by US based investors. That’s good because it keeps us all on our toes and it forces local investors to compete on market-driven terms.

    The biggest problem now, as far as I can tell, is that we are out of excuses. There is money, talent, and the need to build more quality startups.

    So get to work.

    In the early days of Democamp there was an obsession with quality. I think it probably stemmed from our (Toronto’s) own insecurity with itself. There was no identity or real history to draw from, so we had to be careful to make sure that everything that came from the community was world class. It wasn’t always but we tried. We need to get really obsessed with the quality of stuff we turn out in Canada in the next year. No more being cheerleaders for mediocre shit. We need to be OBSESSED with setting the bar high.

    We need to go a step further now. We need to set the bar for world class. Now is not the time to slow down.

    Part of the problem is that we don’t have a single voice to tell our story. Techvibes is doing an amazing job covering EVERYTHING, but it doesn’t have personality. Startupnorth is editorial and a lot of preaching (like this post). That doesn’t help much either. I hope a voice emerges in the next year that has the time and economic model to really tell the story in Canada. It would be good if Mark MacQueen quit his job as a banker and just blogged fulltime. That guy has it right.

    If you are still reading, you should put your name in for the founders and funders dinner in toronto in February. I promise it will be good.

  • How a Canadian startup took investment from a european incubator

    This is a guest post by Patrick Hankinson, the CEO/Founder of Compilr.com a Halifax based startup building an online IDE which has almost 100,000 users. Patrick is also a co-founder of Tether.com.

    In early 2011, I met an entrepreneur and angel investor from London, at a Starbucks in my small province. He literally just took the red-eye from London, I could tell by his blood shot eyes. He wanted to know what I was working on and I explained what I was working on an “online IDE for programmers”. I could tell immediately he didn’t know what an IDE was…

    Talk about a pivotal experience. I was a programmer turned marketer, yet I still used very technical terms to describe what I was working on. The angel investor looked at me with a blank stare; he didn’t understand exactly what I was working on.

    After another couple of minutes of questions, I explained and tweaked my value proposition. He finally understood what I was working, but exclaimed that I definitely need to work on my non-technical elevator pitch. Naively, I responded I’ll never need to pitch to non-technical people.

    Now, I know that a non-technical pitch is critical. You may end up with non-technical investors like doctors, who will want to brag to their friends what they are investing in. You don’t want to put your doctor in a situation where they can’t explain exactly what you’re product does, killing viral potential. This is sometimes the case, because the investor is more in love with the team than the product.

    After this, he explained an incubator from London was putting a session together in New York. The incubator was called Seedcamp. I’ve never heard of them before, I looked at them online, saw they had invested in a several companies and were considered a European Incubator. They definitely didn’t have any credentials like Y-Combinator or Techstars. In fact, the only acquisition that I saw, to date had beenMobclix.

    I decided to apply to Seedcamp anyway since it New York was literally a 2 hour flight away (I had never visited New York, gave me an excuse). Plus it was at Google’s office in New York. Our product, Compilr, was definitely potentially a product to someday be acquired by a company like Google, Microsoft, Salesforce, Facebook, and the list goes on. Any visibility I could get at this stage was definitely worth it.

    Compilr was accepted to present in New York to the Seedcamp list of mentors. We presented at Google’s office in front of 100 mentors or so. Presenting in front of 100 people was definitely not on my bucket list, but I got through it. It actually has helped in a lot ways. I’m definitely not worried presenting in front of 100s of people as much as I thought.

    The day after, Compilr was invited to pitch to some of Seedcamp’s core investors. The room had maybe 15 people but I was more nervous than the day before. In all honesty, I thought I blew it because I was being asked a ton of questions. I answered them all, but Carlos, one of the main guys from Seedcamp had asked a question and I got sidetracked with an answer, when someone basically said “Well, ok thanks for your time, we’ll be in touch.” I still feel like a total d-bag because I didn’t answer his question…

    At this stage I became defensive in my mind, even though I hadn’t received a yes or no to their investment. In reality, I didn’t care if I received Seedcamp’s investment or not. Personally, I was funding the company out of my own pocket, almost $150,000 a year, their small investment would only really marginally accelerate my company. I was hoping to get visibility in front of the right potential acquirers.

    A few weeks later, I was in total shock when Seedcamp told me they were willing toinvest in Compilr. Even though, I personally felt like I blew the follow up meeting in New York. When I told several of my advisors, most of them were eager for me to take the funds. While some opposed to the idea, stating the same facts I alluded to earlier, onlyone successful exit, etc…

    Our team decided to go ahead and take small investment from Seedcamp to use towards accelerating our business. Our end goal was that Seedcamp would present our company to potential acquirers like Facebook, Google to hopefully stimulate an exit, producing a positive ROI for them.

  • Should We Drink the Local Kool-Aid?

    Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in December 15, 2011 on MarkEvansTech.com.

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    In the post I wrote earlier this week about the demise of Thoora, there was a comment suggesting that “Toronto failed Thoora” due to a lack of community support to make it a “winning formula”.

    It was a puzzling comment because it suggests a community has an obligation to support a startup so it can thrive. This strikes me as an absurd idea because startups should succeed or fail on their own merits, and the ability to attract an audience near and close.

    Sure, it’s good to drink the local flavour of “Kool-Aid” but only if a startup is offering a product or service that meets a need or interest. There are lots of local startups, including some that pitch me directly, that don’t resonate because nothing something interests me or the product/service doesn’t resonate enough to warrant further exploration.

    It doesn’t mean I’m not supporting the local community; it just means a startup has a service that didn’t pass the sniff test.

    At the same time, I do think Toronto’s startup community is extremely supportive. There’s no lack of enthusiasm, energy and a willingness to share ideas, feedback, resources, real estate and time to provide startups with a boost.

    This has been a fact of life for the past five years, even before we started to see a flurry of startups appear on the scene. There has always been a strong, support community that has pulled together in different ways. A great example is tonight’s HoHoTo party, which has become a major fund-raising machine due to tremendous support from the community.

    The bottom line is if a startup needs to rely on the community to make it, it also suggests what it’s offering can’t survive  without artificial support.

    For startups, the market has to be bigger than its own backyard. It needs people to support it or not based on what’s being sold as opposed to a sense of duty or obligation.

    Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in December 15, 2011 on MarkEvansTech.com.

  • Location, location, location

    Editor’s note: This is a guest post by Lymbix founder and CTO Josh Merchant (LinkedIn, @joshmerchant). Josh was born and raised in Brampton, before relocating to New Brunswick to attend the University of New Brunswick. Josh and the team at Lymbix are based in Moncton, NB but spend time on planes between Toronto, San Francisco and New York. Disclosure: David Crow sits on the Board of Directors for Lymbix Corporation. 

    Idea – check. Cofounder – check. Home base – che-… hmm?

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    At a company’s inception, what factors do entrepreneurs consider before deciding on a location to set up shop?

    Scenario A:
    Some may automatically choose their hometown, whether it is Halifax, Brampton, or even Hazelton, as a default location. With this option, entrepreneurs have the potential advantages of already knowing the city’s particular market quirks and tapping into a network of home-grown connections.
    Scenario B:
    Conversely, others flock to a major city such as Toronto, New York, San Francisco or Palo Alto, which have a thriving tech communities. This is a great option, as we see many acquisitions and exits coming from these startup hubs.

    Is there any benefit to laying a company’s foundations in an “out of market”[1] (non-traditional) city, like Moncton? Definitely. Here are some reasons for why you might choose to set up your next startup in a location other than a major city.

    Keep Costs Low

    The average office rent and employee salary are noticeably lower in a city such as Moncton, especially compared to Toronto. The ability to limit the rate at which a young company burns through cash can be a major advantage right out of the gate. An “out of market” city injects new meaning into the phrase “cost of living.” In these locations, emphasis is shifted to the “living” part, and entrepreneurs don’t have to uniformly dread the “cost” part.

    “One of the big advantages I see, and have been privy to is the political support. In a “smaller pond” with a limited amount of startups and successful IT companies, it is easier to get quickly noticed….We have been extremely fortunate to have the local and provincial government assist in opening doors for us, providing us with early incentives to stay in NB and shine the spotlight on us, which in turn helps raise capital and grow our business.” — Matt Eldridge, CEO & Founder Lymbix

    Low Competition for Early Sources of Funding

    Getting started is cheap, but eventually everyone needs money to keep that ball rolling. Hopefully by this point, you’ve already got traction and your idea is gaining momentum. Without some form of traction, it doesn’t really matter where you are. If you do have it, however, it is easier to secure government and angel funding in a province like New Brunswick. Why? You will encounter significantly less competition – if any – for what money is available.

    Low Competition for Talent

    “If you build it, they will come.” Well, it isn’t quite that easy in a small tech community. However, there is a greater chance that there aren’t as many companies drawing the interest of the local, tech-minded talent. Your company could be one of only five fishing in the talent pool in a particular city. Let’s face it, there are smart people living all across this country – not just in Toronto.

    I can’t say for sure, but I would venture a guess that there is less employee turnover in a city like Moncton as well. This translates to less time wasted worrying about knowledge transfer, and more time invested in building a strong, diverse team that you can count on.

    “Building a company out in a growing tech community is great – it’s like a talent magnet! The more news that’s pushed out of prospering areas like San Francisco, Vancouver and Toronto, the more talented developers want to jump on an opportunity locally without having the resources to relocate.”

    If you could do it all over again?

    If you were starting out or had to do it all over again, what city in Canada would you call home for your startup? Why? 

    Acquisitions across Canada

    I wonder where Anand Agarawala (@anandx), Nick Koudas (@koudas), Ray Ready (LinkedIn), Albert Lai (@albertupdates) will set up shop for their next venture?

    Footnotes

    FN1. An “out of market” city seems to be a great ecosystem in which to nurture a startup.

    However, deciding on such a location does have its drawbacks:

    • In the early days, working closely with new clients and prospects can be a challenge in a small market. It is more difficult to have those valuable face-to-face feedback sessions away from large urban centres.
    • If and when an opportunity arises for rapid growth and expansion, you may be hard-pressed to find the quantity of talent your company suddenly requires. After all, startup life isn’t for everyone.
    • Ideas are contagious. It is easy to observe the community-created inspiration in the valley or in Toronto. A twenty-minute coffee break with an intelligent peer can spur an eight-hour hackation thanks to a flood of ideas. Motivation automation.

    Editor’s note: This is a guest post by Lymbix founder and CTO Josh Merchant (LinkedIn, @joshmerchant). Josh was born and raised in Brampton, before relocating to New Brunswick to attend the University of New Brunswick. Josh and the team at Lymbix are based in Moncton, NB but spend time on planes between Toronto, San Francisco and New York. Disclosure: David Crow sits on the Board of Directors for Lymbix Corporation. 

  • When a Massive Opportunity Knocks!

    Editors Note: This is a guest post by Chris Arsenault (LinkedIn, @chrisarsenault) a tech entrepreneur turned venture capitalist. Chris is the Co-Chair of the Canadian Innovation Exchange (CIX), a board member at the Canadian Venture Capital Association (CVCA), a Supporter of the C100, among other things. Follow Chris at chrisarsenault.wordpress.com or on Twitter @chrisarsenault.

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    The last few weeks have certainly proven to be extremely promising for Canadian Tech Entrepreneurs. Almost $80M of equity financing has recently been secured from some of the top investors in the world to help build our next generation of massive tech companies. It’s even more exciting when you realize that these funds are going to three especially young, dynamic and opportunistic companies, all of which are in our backyard!

    Beyond the Rack

    Beyond the RackYona Shtern, Robert Gold and the team over at Montreal-based Beyond the Rack (“BTR”) lead the way with a whooping $37M financing round that should propel the company to new heights yet unseen on the Canadian eCommerce front. BTR has quickly established itself as an eCommerce leader by showing the market that Canadian companies really do know what a “hockey stick” revenue growth chart looks like. The teams’ ability to build such a big company in such a short time frame has earned them our utmost respect. We initially met the team and reviewed their business plan in late 2008; by 2011, they were already ranked as one of the fastest-growing online retailers in the entire world. Yona was also wise in choosing his investors, be it industry specific angels or great VCs such as Panorama Capital, iNovia Capital, Rho Canada, Tandem Expansion, BDC Venture Capital, Highland Capital Partners, EDC and Montreal Start Up. If you aren’t a Beyond the Rack member, don’t wait – register now, and you’ll be impressed!

    Shopify

    Shopify - LogoJust down the road from Montreal is another world class eCommerce team. Ottawa-based Shopify recently closed a $15M second round of financing. Tobias Lutke, Cody Fauser, Daniel Weinand & Harley Finkelstein have developed an industry leading eCommerce platform that is already being used by thousands of leading online retailers around the world. The team, their vision and commitment to execution all combine to make Shopify one of Canada’s tech leaders in an extremely high growth global market. Unfortunately, we missed the boat on the opportunity to work with them, but our friends over at Bessemer Ventures, Firstmark Capital, Felicis Ventures and Georgian Partners were more than happy to come aboard. I’m expecting to see Shopify rise above the tide over the coming years and establish itself as a global leader in its space.

    Fixmo

    FixmoThe most recent team to announce a substantial equity-financing round is Toronto-based Fixmo. Led by its founders Rick Segal, Shyam Sheth and Joyce Janczyn, Fixmo just announced a $23M round. This investment round included both existing investors (iNovia Capital, Panorama Capital, Rho Canada and Extreme Venture Partners) and an impressive syndicate of new lead investors: Silicon Valley-based Kleiner Perkins Caufield & Byers, Washington-based Paladin Capital Group and Hong Kong-based Horizons Ventures. While the company’s core vision has not changed over the last two years, the product development road map has evolved at a rapid pace. Within an extremely short time frame, Fixmo launched a series of Government and Enterprise products, acquired two companies (Conceivium Business Solutions and Chocolate Chunk Apps), established a series of key partnerships and practically jumped ahead of every other Mobile Risk Management solution provider in the market. Obviously, the founders didn’t do it alone, but the sheer fact that Rick was successful in attracting some of the best talent out there (Bruce Gilley, Jonas Gyllensvaan, Tyler Lessard, Lee Cocking, John Yuen and others) speaks to the long term execution ability and potential of Fixmo.

    Ambition coupled with Execution

    The average tech financing round in Canada is under $4M. Therefore, the aforementioned three companies basically raised as much cash as 20 average Canadian tech startups combined. Obviously, I get nervous when I see a company (portfolio or not) raise such a large chunk of cash. Why? It’s not because I like the small size of the average Canadian financing rounds. Rather, it’s because I think that too much money for a young business can be as bad as or worse than not having enough. $15M-$40M rounds for Canadian tech companies are amongst the largest we have seen this side of the border in over 10 years. That being said, I do also think that Canadian Tech Entrepreneurs are now entering a phase of Ambition coupled with Execution. We have lived through too many years of “lack of ambition”, quickly followed by “lack of execution”, not to mention the much lamented “lack of capital”. However, we are now seeing deals done where massive amounts of ambition and execution converge, and capital is becoming available to build large tech companies right here in our own backyard. With more companies able to raise the amount of funding they truly need to generate hundreds of millions of dollars of revenue, not only we will stop selling our companies short, they won’t need to move down south. Hopefully other investors will note the phenomenon, and future startups won’t have as much trouble raising the capital both from Canada and into Canada. And that’s good for all of us.

    At iNovia, when a massive opportunity knocks, we answer! I’m expecting to be sharing a lot more stories about successful Canadian entrepreneurs, and how they’ve built hugely successful companies here as they compete globally for resources, capital and market share. There isn’t much stopping the entrepreneurs driving Canada’s next generation of large tech companies, and for the likes of Beyond the Rack, Shopify, Fixmo and many others, this is just the beginning.

    Congratulations to all the teams mentioned in taking important steps on their paths to success!

    Below some article worth reading with regards the above companies:

    Editors Note: This is a guest post by Chris Arsenault (LinkedIn, @chrisarsenault) a tech entrepreneur turned venture capitalist. Chris is the Co-Chair of the Canadian Innovation Exchange (CIX), a board member at the Canadian Venture Capital Association (CVCA), a Supporter of the C100, among other things. Follow Chris at chrisarsenault.wordpress.com or on Twitter @chrisarsenault.

  • High Tech Holidays and HoHoTO

    I can’t believe it was back in 2008 that #HoHoTO started. For the past 3 years instead of a Holiday DemoCamp or Festive Founders & Funders, we’ve sponsored and attended HoHoTO. (We’ve even helped document the shenanigans). So why the fuss about a holiday party?

    Toronto’s High Tech Holiday Party – #HoHoTO

    “Fortune favors the connected entrepreneur.” @jcal7 #trueuniversity via @hnshah

    We talk a lot about what is going on in Silicon Valley and how to make Toronto better. We can look to Helsinki, Israel, New York, Boston, Austin, and other places. But we have a strong emerging high tech culture in Toronto (and across Canada, just check out the efforts in Montreal and Vancouver). There is a strong vibrant community in Toronto that actively seeks each other out. Maybe because it’s cold and we like to snuggle, maybe because in dark of winter it’s best not to drink alone. But there are entrepreneurs that are trying to do it in Toronto and they like to get together.

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    We have a great community that knows how to have a great time. And with HoHoTO the great time also supports a great cause.

    What is HoHoTO?

    Daily Bread Food BankWe often joke about startups being “ramen profitable”, but for many this is not a choice. We are working with HoHoTO and the Daily Bread Food Bank we hope to improve Toronto. HoHoTO is a Holiday party to raise sorely-needed funds for Toronto’s Daily Bread Food Bank. It brings together the hyper-connected tech, marketing, PR, social media and startup communities  to raise attention and support around a core idea:

    “People in our town are hungry – damnit – and we can make a difference.”

    Here is the call to all Toronto startups, you should attend HoHoTO and support the Daily Bread Food Bank. It’s a great way to initial meet and connect with other readers of StartupNorth and give back to those less fortunate in Toronto.

    It’s easy to sponsor, it’s easy to attend, it’s easy to donate.

    Get Tickets Now!

    PS this is a call out of our friends to match or beat our sponsorship/donation:

    We’re hoping to see everyone on December 15.

     

     

  • Incubators, Accelerators, and Cyclotrons

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    They are lining up like storm troopers.

    It looks like a new crop of accelerators, incubators or, as I prefer, cyclotrons have started opening in Toronto. We’ve been talking on and off about Incubators, Accelerators and Ignition since early in 2009.

    Here is my list of incubators/accelerators/cyclotrons:

    And this is on top of the existing coworking, shared real estate, available to entrepreneurs in Toronto.
    There are lots of opportunity for entrepreneurs to find a mix of real estate, services, and cash for equity in their businesses. My advice is make sure you aren getting more than real estate with benefits. Maybe next we need to provide entrepreneurs a framework for making critical decisions about startup things including incubators 😉
    Who did I miss?

  • OMERS Ventures ramps up with Howard Gwin & Derek Smyth

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    It’s has been a long time since Canadians have seen the creation of a new 200MM+ venture capital fund. It was back in June 2010 that OMERS announced the creation of the INKEF fund. OMERS and ABP have since gone their separate ways with ABP running INKEF Capital focusing on high tech startups in the Netherlands. And OMERS creating OMERS Ventures focused on “investments in the Technology, Media, Telecommunications, Clean Technology and Life Sciences sectors in Canada and the US”.

    A little more than a week ago, OMERS announced that they had hired Howard Gwin (LinkedIn, @howardgwin). Who I’ve been quoted as saying “he really is the best VC in Canada”, mind you Howard was buying the drinks at the time…

    And it looks like they have added fellow Edgestone alumni Derek Smyth (LinkedIn, @derekjsmyth). I’ve heard the announcement is due later today, but OMERS Ventures announced Derek Smyth as part of the team today, Derek’s profile is already part fo the team at OMERS Ventures. Derek is another rockstar going to OMERS. Prior to joining OMERS Ventures, Derek co-managed two VC funds at Edgestone Capital Partners. He also has operational experience that includes his former roles as President and CEO of solutions provider Bridgewater Systems, and as COO of California-based Ironside Technologies Inc.

    Derek and Howard were instrumental at Bridgescale in running the Digital Puck and Mentor Monday events that helped connect Canadian entrepreneurs. I’m hoping that these guys continue to invest in connecting, engaging and supporting all entrepreneurs (along with their portfolio). The ongoing support of the C100 and AccelerateTO already show that OMERS has a larger operational budget that allows them to support and sponsor community activities.

    The future looks bright for OMERS Ventures.

  • Startup Life: Trough of Sorrow or Crest of Success?

    Editor’s note: This is a guest post by Kimchi Ho (LinkedIn, @kymchiho). Kim is an architect by training and has been working to build community spaces in the physical and virtual worlds. Kim’s post, “The Startup Girlfriend” was featured in Forbes Startup Life series. This post was originally published on Kim’s blog on November 16, 2011 and is republished with her permission. 

    Entering Startup

    Ilya Zhitomirskiy, a cofounder of Diaspora, passed away earlier this week due to unknown reasons, however it is suspected that it was related to his depression and the pressures associated with startup life. Startup culture is as much a lifestyle as it is a very small community. It is not a 9-5 job with the ability to turn yourself into “off” mode. Do people actually get that? Startup mode is always on. It’s fuelled primarily by passion and for those of us who find ourselves working on things we are passionate about, time is not a factor.

    But as this taboo topic poses, where is the fine line between madness and sanity? Is the line so far away that it’s a dot?

    Fill in the ______

    I have the fortune to be surrounded by some good friends who share a love for startup culture. It’s not always pretty, like anything worth pursuing there are troughs of sorrow and crests of success. How do you put one foot in front of the other on those days? In startup culture, it’s a fairly intimate circle of people working on manifesting an idea, these people become your family, it’s a package deal (the good, bad, and the ugly). However, the ability to stay grounded and balanced, while pursuing such unveiled ideas can seem daunting and doubtful while also being awesome and fulfilling. All off these feelings are usually experienced many times a day in startup life. It is only human to have ideas reinforced by others, we are social creatures. However, ironically, the actual work itself is often a solo unsocial pursuit, you just have to get the work done to contribute to the bigger picture. For those hours spent hustling, coding, communicating, leading, experimenting, call it whatever you want, a bit of debt is incurred, maybe in the form of physical (you’re not exercising as much, you’re not eating as much, you don’t care as much) or mental, as in the case of Diaspora’s Co-Founder. Maintaining the optimistic front in light of setbacks and financial stress is not always easy. There is under-rated stressed from publicly press-released information about your start up and there is under-rated stress from the day to day that startup life demands. So how do entrepreneurs win? How do you put one foot in front of the other? Clearly there is a trend, Zhitomirskiy isn’t the first.

    Ramen Noodles aka Top Ramen

    Take preventative measures. When I socialize with friends who are startup doers, they literally live and breath their business. Can I blame them? Not really, it’s what they love to do. However, we make a point to try to do non-startup-esque things to get away from work, if only for a bit. We go rock climbing. We eat good food, away from our offices. We dance like crazy, also away from our offices. All these things can be great breaths of fresh air and are under-rated solutions that contribute to a healthier state of mind. I’m a firm believe in allotting time to do things that are not related to your start up directly, because the time spent doing those things is actually propelling the productivity and success of the time you do spend working on your startup. All of these ideas are summed up nicely in this Hacker News discussion which was initiated by this key topic: Dealing with Post Startup Depression. I think we can all empathize, startup or not.

    Transparent Toaster

    Be transparent. There are great listeners who are accountable confidants. It is worth engaging in these conversations. Don’t try to be a hero by holding down the fort. Know when to speak up, it doesn’t have to be closed doors. You know who you trust, speak to those people. Accountability & mentorships go along way. I’ve had some of the best insights when I can get past this threshold and voice my concern for something. We often think we’re the only ones struggling with these internal ideas, but if you speak up, chances are someone else can relate and has some insight. The act of sharing and engaging in someway is the premise of most startup ideas…why not use that same mantra to tackle those problems on a personal level as well?

    There needs to be outlets, let’s un-taboo this.

    Thoughts?

    Editor’s note: This is a guest post by Kimchi Ho (LinkedIn, @kymchiho). Kim is an architect by training and has been working to build community spaces in the physical and virtual worlds. Kim’s post, “The Startup Girlfriend” was featured in Forbes Startup Life series. This post was originally published onKim’s blog on November 16, 2011 and is republished with her permission. 

  • 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