- RT @canadatechnews: High school students to see top projects at Waterloo's Designing the Future event http://eqent.me/fQvll0 #
- RT @meshconference: One day left to jump on the #mesh11 early-bird special to save $100 off the regular price http://bit.ly/hwEC0F #
- New job posted: Web designer/developer / Confidential / Toronto, ON, Canada http://bit.ly/fQny3i #
- RT @heri: 30 tech entrepreneurs / developers speed dating tomorrow at cofounders http://twtup.com/mtlco31 come if you're looking to partner #
- New job posted: Web/iOS Developer / Bramm Technologies / Edmonton, AB, Canada http://bit.ly/hU5nQO #
- RT @Shopify It's Official! Build-a-Business 2011 is here! http://bit.ly/gYaXn2 Bigger prizes, more countries, & incredible advice #buildabiz #
- RT @byosko: Chris Albinson (@chrisalbinson) on Venture Capital & the Canadian Startup Ecosystem – http://bit.ly/gnglKY #
- RT @SarahPrevette: Optimize your startup financing http://bit.ly/fghlQJ by @bostonVC on @venturefizz #mustread #
- The Darkside of Hadoop http://bit.ly/emUbbM by @backtype via @peteforde cc: @attachmentsme #
- Sponsor Post @vmfarms talking about impact AWS EC2 + EBS downtime including SLA impact http://wp.me/p4tFC-1Pk #infrastructure #startups #
- RT @Rocketr: Announcement: @Rocketr Now Available Publicly! #jetcooper http://bit.ly/gdIL77 #toronto #startup #
- RT @cdixon: There are two kinds of people in the world http://bit.ly/eNNGEl #
- RT @rww: Add Location-Based Q&A With the Localmind API http://rww.to/e09XIc #
- RT @CBCPEI: P.E.I. company hits iPhone top 40 http://tinyurl.com/3tu9dac #
- RIM bought @tunglerocks http://bit.ly/eTPs65 #montreal #startups #acquisition #
- RT @Tunglerocks: Exciting news from Tungle – We've joined the RIM team! http://cot.ag/dT7aWn #
- New blog post: By train to Watelroo http://bit.ly/iTEQ0m cc: @communitech @fnthawar @extremevp @uwvelocity @jrodgers #kwawesome #
- Another day, another exit for the Montreal community. Congrasts @acroll http://bit.ly/lRYLlb – We think it is 9-figures #
- RT @newsycombinator: Why Immigrant Entrepreneurs Are Leaving the U.S http://j.mp/mjDX5s #
- RT @tribehr: @GigaOM: "TribeHR is one of the more robust platforms…providing many HR mgmt tools in one app": http://bit.ly/lfOJLg #
- RT @dpmorel: The Mis-interpretation of Minimal Viable Product http://bit.ly/jbZ77g @startupnorth #
- RT @techvibes: BlackBerry Partners Fund launches $3 Million Developer Challenge http://ht.ly/4JTPE #
- New job posted: HTML5 Game Engineer / Uken Games / Toronto, ON, Canada http://bit.ly/kCb5kL #
- New job posted: Mobile Game Developer / Uken Games / Toronto, ON, Canada http://bit.ly/jvP3Eb #
- RT @alancross: A Song for Coders and Developers | ExploreMusic http://bit.ly/mB2RTC #
- RT @chrisarsenault: Way to go guys! @appdirect – Announcing the winners of Under the Radar http://bit.ly/mx8kij #utr17 #
- RT @lborsato: #Waterloo where there are always 2000 tech jobs http://bit.ly/j1G1Gn #
Month: April 2011
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Week in Review
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The Misinterpretation of Minimal Viable Product
A few years ago the two memes of minimal viable product and lean product development were my favourites. There was this old-world, chronic problem of products getting stuck in product development until they reach “nirvana” – feature-itis, scope creep, etc. There was nothing more frustrating than sitting in a meeting where a product manager (with zero research or understanding) would state something like “we need to support groups, we absolutely can’t launch with out it or else it will be embarrassing”. So 18 months later product dev’t would complete, a few million would have been burnt and then we’d test it on the market and lo and behold nobody cared about that feature. Expensive. We can call this the “Microsoft Excel” product development methodology.
Why Lean Product Development Evolved… copyright Phil Gwinn Now I am seeing the opposite problem. Startups are launching crap under the excuse of “testing the market”. I think as a collective group we need to come together and put down a firm set of launch requirements:
1. Crashing should not be a launch feature. Please stress your stuff.
2. Whatever your apps core purpose is, it should do it fast. i.e. you should do performance testing.
3. You should use real designers – it should be easy to use and be easy on the eye.
You should still aim for simplicity & a bare bone set of features, but your product must work and meet the expectation of a professional product. A great example of a company doing this well has been Kik. Their core messaging product worked, worked fast and looked great – was super simple but also had some well thought out viral hooks. They even survived eXtreme scaling!
An exception to MVP, I don’t think it would make a lot of sense to use MVP if you were attacking an existing industry. Sometimes you know the business model, you don’t need to test it out. And your product has to exceed the current bar of products out there. This, for instance, is why it was ridiculous for the Playbook to be missing major features (like email) at launch.
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Housecleaning and what’s next for StartupNorth
We have a little house cleaning to do here. We are starting to pick up the pace with posts but we are still missing a lot of good stuff. A lot of it gets posted to our Twitter account but since we stopped the Weekly Reading posts, many of you are missing those.
- First off it is worth mentioning that things seem to be heating up in Waterloo, Toronto and Montreal. We are seeing acquisitions picking up pace and I think that will continue for the next year at least. The overall level of activity in these cities has been staggering
- We are tracking almost a dozen “any day now” acquisitions and look forward to posting them. Of course we are a very discreet bunch so we don’t make a peep in advance. Some people could learn from us on that front I think.
- So while things are really taking off in those cities, I am wondering what is happening everywhere else? Where is the action in Edmonton, Vancouver, Halifax, Calgary, Ottawa and Quebec City? Let’s get more of the great stories from those cities told.
- Congrats to Lymbix on closing a financing with Growthworks Atlantic. That is $1.35m more in for a total of almost $4million in. Growthworks continues to be a source of needed capital in Canada and they continue to play in places others don’t seem to have an appetite for. Thanks guys.
We have some very cool things in the pipe. Taking on sponsorship has helped us reinvest in StartupNorth and we owe a big thanks to KPMG and VMFarms for that. We have two very cool changes on the way and the result will be a very different StartupNorth. We think there is a lot of great content out there for Canadian startups now. The news and events that never used to get coverage are all well reported on both via blogs and twitter.
I see our role changing to focus more on:
- Direct support. We are going to focus more on connecting great startups with the right resources. There are a lot of great folks who have reached out to us over the years who are willing to help out and we think it is time to take them up on their offer.
- Advocacy. Startups are not on the economic or political radar in Canada. It is sad and we think there are some things we can do to change that. Our activities will piss some people off and will hopefully inspire others. Either way, are going for broke.
- Data. To advocate for startups you need a clear picture of what is happening. We have some very cool updates coming to StartupIndex and we hope it will be a powerful tool for the entire community.
- Events. Grassroots events off the beaten path. It’s what we are good at and we hope to do more.
That’s it for now.
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Coradiant acquired by BMC software
On the heels of yesterday’s acquisition of Tungle, BMC Software has announced today that they have acquired Montreal’s Coradiant, which was co-founded by Year One Labs partner Alistair Croll. We are happy that Montreal has managed to win something in the last few days.
The price is currently undisclosed, but the back of the napkin calculation tells me this was a monster one. Probably not as large as the recent Radian6 exit, but sources put this acquisition well in to the 9-figures territory.
This has been a long time in the making as Coradiant’s founding goes back to 1997 when Alistair Croll and Eric Packman founded NetworkShop.
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Riding the rails to Waterloo
Some rights reserved by Danielle Scott
Why isn’t there a commuter train from Toronto to Waterloo? Ok, you might ask actually ask why Toronto doesn’t have a train from downtown to the airport but let’s leave that for a conversation with more educated politicians and policy wonks.
I’ve spent this morning with startups in Waterloo, hanging out with people at the Communitech Hub, UW Velocity, and a crazy number of super awesome startups (TribeHR, vidyard, 17 muscles, Footloose Games, Willet, Cyborg Trading Systems, Will PWN 4 Food and others). I left Toronto at 6:15am to avoid traffic and be in Waterloo before 8am for my first meeting. The drive was approximately 116 km and took approximately 90 minutes (arrived at 7:52am). I couldn’t help think about why there isn’t a train. The distance is just a little more than SF to San Jose (~74km) and double SF to Palo Alto (~51.5km). I can get a Caltrain from San Francisco to Palo Alto or San Jose.
If the assumption is that UWaterloo is a top ranking university (possibly my alumni delusions that cause me to overlook UWaterloo’s non-placement on Times Higher Education rankings). And with more startups like Kik raising money with powerhouses like OpenText, RIM, MKS and Christie Digital. There are less reason for students to have to leave the reason. It makes it more attractive to rent an apartment for the year and stay in Waterloo to manage your costs on your coop program.
Maybe the argument is that the capital is better spent on more programs for entrepreneurs or road infrastructure. But it seems that one of the greatest assets to the Toronto startup community (UW Coop students and graduates) are disconnected by public transportation. I wonder what my UW alumni brethren like Farhan Thawar (@fnthawar), John Green (@johnphilipgreen), Amar Varma (@extremevp), Brydon Gillis (@brydon), Ali Asaria (@aliasaria), Razor Suleman (@iloverewards), Kunal Gupta (@kunalfrompolar) think about the need for better connections between Waterloo (assuming a stop in Guelph) and Toronto.
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RIM acquires Tungle
Congratulations to Marc and the Tungle team. Tungle announced their acquisition by RIM. Tungle had previously raised $1.5M from JLA, Desjardin, and angels and $5M from Commonweatlth. This is a great addition for the RIM team to continue to build out an application suite for the mobile office. Mark MacLeod (@startupcfo) provides additional thoughts and comments on the acquisition:
Clear Problem
Tungle just made sense. Finding a time to meet is a huge pain. This may not be the sexiest, flashiest market, but it is huge. Every business person feels the pain.
Pivots
We didn’t have this term back in the early days, but Tungle sure went through some pivots. When I joined it was a peer to peer client a la Skype. And it was S-L-O-W. The service today bears little resemblance to that early product.
Data-driven
All startups but especially SaaS startups should be data driven. Tungle was no exception to this. We even built our own custom system (known as Knudderforce) and tracked daily, weekly and monthly stats. Those stats triggered many actions, automated outreaches, etc.
Luck
All good outcomes have an element of luck. I am sure there are many examples in Tungle’s case, but the one that stands out for me is closing our Series A funding in September 2008 just as Lehman Brothers crashed and the markets started tanking. If we had been only a few weeks later we might have had a much tougher time closing the round.
Focus, focus, focus
I’ve seen many teams get distracted as they grow. The CEO is off attending conferences, the company moves from market to market, etc. Tungle was laser focused on solving its’ users’ scheduling needs. At one point we were doing usability sessions every day. We reached out to every new user. We just stayed focused.
Platform
When we first were getting started, investors wondered if this was a feature vs. a product. Fast forward a few years and it is on its way to being a full fledged scheduling platform with APIs for other companies to use.
Strategic engagement
An ideal startup for me is one that can develop conversations with potential strategic partners as a natural part of its goto market strategy. This presumes you are building something that is important to the big players and assumes that you have a CEO capable of establishing and building those relationships. This was definitely the case with Tungle and this announcement is just a logical outcome of this reality.
The icing on the cake for me is that this is an all-Canadian deal. The Tungle team will be staying in Canada and continuing to make things happen.
Shared calendaring continues to be a difficult problem as you move to the edge of an organization. Just think about how difficult it is to see availability and schedules of people who are not on your GApps domain or your Exchange Server. Tungle gives RIM a leg up in having tooling like BBM and email and now calendaring that blurs the edge of the organization.
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‘Punch a Banker, Hug a Developer’
Fun and quick interview I did in Montreal a few weeks back about the state of the early stage investor and entrepreneur ecosystem.
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Sponsor Post – It’s getting cloudy out there
I was approached by David Crow with an appealing proposition; we would help StartupNorth.ca by migrating their site to our infrastructure and have us manage it, and in return we will become a sponsor and have our logo placed on their site. You can read David’s post about all about it.
In addition I was also asked to be a guest author on the site and provide my thoughts on various topics on the subject of web operations and the cloud – a topic I am quite familiar with. I spent some time thinking about what I should write for my first post, but that decision was made for me late last week.
Some rights reserved Photo by Elite PhotoArt
On April 21st, Amazon’s primary storage service (Elastic Block Store or EBS) in their North Virginia Availability Zone decided to kick the bucket. This failure is the equivalent of pulling out your computer’s hard drive while it’s running. The implications were likely dramatic for many businesses running on their cloud. As I watched many of my favorite sites (HootSuite and Reddit to name a couple) showcase their 500 error pages, I couldn’t help but think about how helpless the owners felt as Amazon worked hard to get their service back up and running.
I won’t get into the details of what happened with Amazon, as you can get a good hour-by-hour breakdown of events from Amazon directly (http://status.aws.amazon.com/). Instead, I’d like to outline some of my thoughts and take-away lessons.
This failure rekindled some old fears I’ve had since the sky started clouding over. Considering the amount of resources and engineering required to build massive multi-tenant infrastructures, equally massive failures only seem imminent. Don’t get me wrong, Amazon has done a phenomenal job building arguably the world’s largest and most successful cloud deployment. They have some of the best and brightest engineers this industry has to offer, but it’s still worth thinking twice about putting your business up in the cloud.
I’m reminded of a series of meetings I attended with my previous employer in which NetApp (one of the leaders in online storage) pitched their latest and greatest cloud storage solution. We were looking to build our own cloud and hence selecting the right storage solution was absolutely critical. As the well-informed NetApp architect diagramed the proposed architecture on a whiteboard, I was struck by how many “dependency lines” were connected to the NetApp unit. Inevitably the question came up of what would happen if the unit itself failed. The answer was simple: buy 2 of them. Simple answer, but effectively doubles the price tag. And buying 2 doesn’t necessarily prevent all types of failure.
Amazon was likely bit by one of these failures (post-mortem has yet to be released). Surprisingly, this nearly 5-day outage did not breach their 99.95% uptime SLA (99.95% is equivalent to roughly 4.38 hours of downtime per year). This is because the SLA is only applicable to their EC2 service, and not EBS (http://aws.amazon.com/ec2-sla/). Amazon is not legally obligated to reimburse any of its customers. Eventually though, most will likely forgive them since their service is so revolutionary compared to the old rack-and-stack hosting model.
Some rights reserved photo by svofski
Still, some harsh realities were realized this past week. So what can be learned from all this? Below I’ve identified 4 key points, which I bring up time and time again.
- Build for Failure.
This is by far the most important point I emphasize. Whenever I advise my clients on a proposed architecture, I always ask the question “can you tolerate component X being down for a day?” Framing the question in that manner will highlight the realities of complicated systems – failure will happen, you need to plan for it. As a side note, I find it ironic that Amazon’s tightly coupled infrastructure requires application developers to do the opposite and build their application around Loosely Coupled Design. It is unfortunate that we need to change the way we deploy our applications to fit the provider but it is a necessary evil. - Read the fine print carefully.
Make sure you read through the SLA before you agree to the terms. This may seem obvious, but it’s surprising how many people gloss over this. Understand that uptime guarantees are usually not all encompassing, such as the case with Amazon. - Explore alternatives.
Not all cloud infrastructures are alike. The allure of the cloud is that it abstracts away the underlying implementation, but you should still do your homework and investigate the design decisions made by the vendor. The level of complexity should be factored into your decision making process. Like others, who worked out solutions to avoid such problems, we at VM Farms take a different approach to building redundancy into our Cloud. - Identify your Achilles Heel.
It helps to diagram your setup and draw dependency lines. If you notice any “hot spots” or “single points of failure” (SPOF), focus your engineering team on them and do what you can to mitigate those risks. Sometimes budgets or design decisions will prevent you from avoiding them. However, make sure you know what they are and incorporate this into your decision making process.
Instant resource availability will make any CTO’s mouth salivate. Just make sure you know what you’re getting into. When it rains, it pours.
- Build for Failure.
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Controlling Burn (Part 2)
I think helping failing startups is going to be a great business opportunity in the next 12-18 months. In fact, anybody want to do a startup about helping failing startups. All those overvalued frothy companies are in for an interesting surprise when they find out that their angel isn’t going to forever bridge them to nowhere.
So a few last tactics. Part 1 is here.
Pricing
There is often a fatally flawed line of reasoning , (its probably doubly fatal for subscription business models) that goes something like this “lower price, sales increase, more customers, life is better”. Its flawed, but not because sales won’t go up, but because you get crappy customers who churn off 3-4 months later and bad mouth your product. And thats probably more expensive than not getting the customer in the first place.
When you do price and offer testing, you need to include usage & churn analytics. This sucks because you may not have useful data on churn for 3-6 months. So figure out your key usage metrics and understand how they relate to churn. Customers give all kinds of warning signs before they churn (such as they stop using the product). Setup your price tests by cohorts that you can track usage data.
If anything, in a cash crunch, you want to raise price and have less better-quality (i.e. cheaper to serve) customers. But not all businesses can raise price without significant relationship repair. So an alternative is to figure out how to pull cash forward. For instance give discounts if users prepay for a year. Give discounts for closing fast to enterprise customers. Change how you bundle your pricing.
Don’t Give Up
I think this is the number one piece of advise I can give. Keep pushing forward.
I’d love to see stats on when and how founders & CEOs leave their startups. You hear horror stories about CEOs getting forced out, but from my anecdotal evidence of other startups, I’d wager that more CEOs leave than get forced out and they leave/give up right around this point. Or they get “acquired” in a great nobody benefits acquisition but the team can at least do something new.
You can’t give up. You have to survive. Smile & enjoy life, you are living to see another day.
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Does your startup need to be massive?
Editor’s note: This is a guest post by serial entrepreneur and investor Howard Lindzon of StockTwits and SocialLeverage. He was born and raised in Toronto and has a soft spot for his hometown and Canadian entrepreneurs. Follow him on Twitter @howardlindzon or StockTwits @howardlindzon.
Some rights reserved Photo by Paul (dex)
In 2008, I was using every speaking chance I was offered to preach that there was never a better time to start a web business. I also put my money where my mouth was and invested in more companies than I could afford and started Stocktwits.
Let’s assume you followed the advice and failed. Most startups do. You were Lindzon’d. Sorry.
Good news…you learned a lot and the funding market, never easy, is more open than ever.
Better yet, the mentoring system and pool of talented angel investors looking to reinvest has never been wider and deeper.
Techmeme, Hacker News, Fred Wilson, Brad Feld, LInked In, Twitter, Facebook and of course Stocktwits ….all better than ever for connecting, getting smarter about starting businesses and finding the right trends to ride. Y combinator may be too crowded, but Tech Stars, Founder Labs and Startup Weekends are open.
It is a little intimidating right now to take the first steps because of the bubble talk, startup revolution, competition and massive reach of the last group of leaders. There is not one Tiger Woods of startups, there are 5 you will ultimately stress yourself out comparing yourself too…Facebook, Twitter, Linked In, Zynga and Groupon.
Don’t get caught up in the ‘I need to be Massive’ talk. It’s a trap. Take the ‘Massive’ lessons of geniuses like Reid Hoffman from this great post and than get to work on getting massive one step at a time.
The game of Risk and world domination is won from the corners of the world unless you can roll non stop 6?s. Don’t bet on that stuff and don’t pitch your investors on stuff they won’t believe.
Editors Note: This post was originally published on HowardLindzon.com on March 23, 2011 @copy;2011 Howard Lindzon. Republished with permission.