StartupNorth

Month: May 2011

  • Summer Lovin’

    It feels like come the lazy days of July and August most of Canada shuts down for summer vacation. There are no new deals to be done. There are meetings, lunches, maybe even a golf foursome but not new deals. So why not take the opportunity to attend one of the local events with other geeks, entrepreneurs to learn and share your experiences.

    DemoCamp

    DemoCamp
    The next Toronto DemoCamp is happening June 9, 2011. We are very lucky to have Howard Lindzon keynoting. Howard is a long time friend of StartupNorth. He has been kind enough to attend StartupEmpire and even kinder to let us republish some of his posts here. This will be an awesome session focused on helping entrepreneurs.

    There are local DemoCamps happening in Guelph, Edmonton, Calgary, there are LaunchParties and New Tech Demos. These are great ways to get out of the office/garage/basement/cube and start talking to real people, hustling for attention and gathering feedback.

    StartupFestival

    Montreal is an awesome city in the summer time. There is the Comedy Festival. There is the Jazz Festival. There is the Grand Prix du Canada. The event is being hosted by Dave McClure who knows a thing about making making new opportunities. He runs 500Startups and the ultimate startup travel event, Geeks on a Plane. StartupFestival is a great opportunity to visit a historic city, and plan on building new relationships and discovering new business opportunities.

    Grow Conference

    Grow Conference - August 17-19, 2011 - Vancouver, BCAnd just in case you didn’t have enough of Canada’s favorite entrepreneurial bad boy, Howard Lindzon, you can see him again in Vancouver at Grow Conf 2011. This was one of my favourite events in 2010. Debbie Landa and the team at Dealmaker Media have put together a great event that mixes Canadian entrepreneurs (Brian Wong, Garrett Camp, Howard Lindzon, Leonard Brody) with decision makers from Silicon Valley (Wesley Chan – Google Ventures, Mike Parker – TribalDDB, Mike Ghaffary – Yelp, Rob Hayes – First Round Capital). I had the opportunity to talk to Minister Clement at the cocktail hour about brain drain, homecoming, funding, angel investing and other things. It was a great conference focused on helping Canadian entrepreneurs.

    Making Lemonade

    Rather than lament about the downtime. There is an awesome opportunity to use the dog days of summer in Canada to keep networking and connecting with other entrepreneurs, with investors from the US, and to set up opportunities that might come to fruition later in the year. I love the program goals of Geeks on a Plane.

    • Meet startups, geeks, and investors in cities around the world.
    • Learn about trends in internet, mobile, and other tech platforms.
    • Gain insight into local markets, demographics, business models.
    • Meet cool people, new ventures, have fun on planes, trains, buses.

    My advice, is you should stop bitching about the travel costs and figure out how to make an investment in yourself, your startup and the community and figure out how to attend one of these events and get back more than you put into travel and lost opportunity. There are lots of great opportunities to meet customers, potential investors, to find new partnerships, and to grow your business. If you don’t see an opportunity, try making one, host a party, do a customer event, plan a launch. Make it work. Debbie and Philippe and everyone involved with both StartupFestival and Grow Conference are dedicated to making great startup conf0erences in Canada, but they are not going to do it all for you. Use these events to make an opportunity.

  • Clark Kent works at CPPIB


    AttributionNoncommercialNo Derivative Works Some rights reserved photo by Greenog

    By now you have heard Microsoft is purchasing Skype for $8.5B, a company which was spun out from eBay in 2009 for $2.75B. In 18 months nearly $6B of value was created for investors, many of whom are Canadian pensioners. Faster than a speeding bullet, a courageous $300M investment in Skype has turned into nearly $1.1B. I for one would like to know who to thank at CPPIB.

    This is not an apples to apples comparison, but the Skype investment tops the results of every fund CPPIB has invested in. If one factored in IRR this deal would blow everyone out of the water. Other Canadian pension funds are ramping up venture funds (e.g. INKEF). Wonderful news given the paucity of capital available in the Canadian ecosystem, however I would argue that Silver Lake, Andreessen Horowitz, and Index Ventures were important stakeholders – so perhaps what we’re really looking at is the Fantastic Four. It follows that Canadian LPs should concurrently invest into independent funds who will source opportunities and ensure alignment with entrepreneurs.

    CPPIB Returns

  • Week in Review

  • Natural Resources


    AttributionNoncommercial Some rights reserved photo by Chealion

    Ask a miner “What is Canada’s most precious natural resource?” and you’ll be sure to stump. The answer is easy… Canadians.

    One of the tricks to Silicon Valley’s winning streak is that they back not only repeat entrepreneurs, but repeat teams. Just like one of those wonderful chocolate fountains you occasionally fortune upon at weddings, Silicon Valley recycles people. A team forms, builds a successful enterprise, people move on to try some new things, and projects that find traction attract back the core crew.

    Is Canada effectively recycling people? Think long and hard, because if we aren’t the fountain is drying up – end of the party. I can name a handful who have ventured abroad and returned: John Green (@johnphilipgreen), Malgosia Green (@HeyGosia), Dan Morel (@dpmorel), Farhan Thawar (@fnthawar), David Crow (@davidcrow), Jeese Rasch, Zak Homuth (@zakhomuth)… the list goes on, but it could be longer. Maybe our friend Howard Lindzon (@howardlindzon) will start his next company in Canada?

    What is bringing them back? Visa issues, sometimes. Spouses, more often. Schools for children, okay I’ll take it. But it would be much better if what brought our best and brightest home was opportunity. And the crazy part is, it is knocking. We have a safe multicultural inclusive country, close to major markets, with investment matching funds up the wazoo, and here is the most beautiful part – our nation is brimming with high caliber engineers (who are getting scooped up by Twitter, Facebook, and Google as you read this post).

    Part of the challenge is funding. Canadian entrepreneurs are picking up and moving to New York, San Francisco, Boston, Boulder, and even Santiago (yes you read that right, Chile – in the southern hemisphere) for minuscule sums of seed financing so they can focus 100% on their startups vs their day jobs. Just ask Ken Seville (@civisidedotcom).

    Myopic policies might attempt to discourage cross border exits, which are vital and create deep new linkages. Instead what we need to learn is that the opportunity is keeping the founders engaged once they head for warmer climates. I can guarantee, foreign direct investment will not thrive in the absence of results. To generate returns we need to recycle teams.

    I am particularly excited about a handful of intiatives that address this gap including: Toronto Homecoming, C100, and Startup Visa. Let’s find ways to support their efforts.

  • The Backwardization of Risk/Reward in Startups

    I’ve always thought it weird that there is a perception that risk is front-loaded for startups, i.e. the person(s) who start it take all the risk. In some ways, the risk of starting a company (especially a web startup) is lower than ever:

    • there are great grant/tax credit programs like IRAP and SRED
    • there are more incubators, angels and providers of small seed funds than ever
    • its faster than ever to go from concept to commercialization -> you can have paying customers in < 6 months

    It just isn’t as hard as it once was to raise $20-$50k and/or have a company generating a few thousand dollars in revenue to cover the early founder(s) costs. The big “risk” is that your life & business align to this cost structure. Your business needs to be able to run with only 1-3 people at first. Your life – no fancy sports cars, no big mortgage, no massive piles of credit card debt, etc. I’d hypothesize, there is a strong parallel between managing personal finances and being able to start a company.

    Another big “de-risker”. You have control as the early founder! Only you can lay yourself off. And you control the culture and lifestyle of the company, i.e. you are a lot less likely to hate your job or get fired for hating your job or leave suddenly or have a heart attack or just generally hate life.

    I won
    some rights reserved Search Engine People Blog

    Reward-wise, you have a huge chunk of the reward. Shares, not options. Big founders cut. Maybe no vesting. Dividends. There are a lot of paths for you being well rewarded for the risk you took. On top of that, your experience as a first-time entrepreneur will make the second time around all that much smoother, it’ll be easier to raise money, easier to hire, easier to find business partners, and so on. You can have a career as an entrepreneur.

    Now, lets compare that to what is traditionally thought of as the “low-risk” employee, lets say employee #8. Poor employee #8 takes on massive life risk, and often gets very little in reward.

    Reward-wise, they get something like .5% of the company, so on a typical $20-$30mm exit they get $100-$150k. Hardly life-changing money. If you are a super-star in the company you may get granted up to 1 or 2% but they’ll be vested over an annoyingly stupid schedule such that you’ll have to be at the company for 6-8 years to “earn” them.

    Now compare that to all the risks of being employee #8:

    • you are far more likely to get laid off than any of the founding team
    • you are far more likely to get laid off than a non-startup job
    • you may simply not get paid a few times… missed payroll is no uncommon event
    • you probably in fact took a pay cut, or at best, you’ll miss out on bonuses when there are a few tight years
    • you will likely work a lot longer hours
    • there’s no “fast” trade-off, you’ll need to work there 4-7 years to earn your $100-$150k stock option reward, and you may have given up way more than that in time & salary to get there

    So, in summary, its a lot better to start your own company than to be employed by a startup. And in many ways its less-risky and better to start your own company than to “have a job”. And I wish I could make more people take the entrepreneurial leap themselves because its simply not as scary as it seems.

  • The Next 10 Years…

    Editor’s note: This is a guest post by serial entrepreneur and investor Howard Lindzon of StockTwits andSocialLeverage. He was born and raised in Toronto and has a soft spot for his hometown and Canadian entrepreneurs.  You can find this post on Howard’s blog and to stay up to date you can follow him on Twitter @howardlindzon or StockTwits @howardlindzon.

    Nobody knows!

    Nobody knows what the next 10 minutes will be like, let alone the next 10 years.

    It used to be no one cared what the next 10 minutes were going to be like. Twitter has changed that for good at this point.

    What we can do is look back for patterns and try to project them into the future or as we do in the stock market all day, spot patterns that are upon us or emerging.

    It’s a fantastic business to be in.

    William Quigley has a really good post up hypothesizing on the next 10 years in web, tech and VC land. Here is some meat:

    Let’s also keep in mind that public companies are generally a lot less risky than private ones. Less work and lower risk. That is how it used to be for public shareholders, but that era has ended for good. Let me give you some perspective on how much things have changed since the last tech cycle.

    Amazon.com, the world’s largest Internet retailer, went public at a $440 million valuation. Hard to believe, isn’t it? A company worth $90 billion today was worth just over $400 million when it went public in 1997. That skimpy valuation represented less than one times its forward 12 months of revenues, a multiple more closely associated with a corrugated cardboard manufacturer than the most important innovator in retailing in the past 100 years.

    eBay went public at a $650 million valuation, representing less than three times its forward revenues. Amazingly, this valuation was considered adequate even though at the time of its IPO, eBay had already established itself as the pre-eminent auction site on the web. Go back to the earlier part of the 1990s, and it gets even more extreme. Cisco, the most important company in computer networking infrastructure, went public at $225 million, a valuation representing just over one time its annual revenues.

    William is talking my book so I totally agree but I always have one foot out the door. I have been called to task often over my years managing money for being too risk averse.

    I consider myself ‘liquidity averse‘. I don’t mind paying up for the highest momentum public companies for the liquidity they provide and I won’t pay up for start-ups for the liquidity denied. I assume liquidity is a miracle and need to maximize my upside for that risk. STARTUPS ARE HARD! No matter what happens the next 10 years, you need to read this post and remember the miracle of effort needed to make a start-up succeed.

    Not many people I have run across in my 13 years of managing money deploy my strategy or thinking and that emboldens me. I believe the two ends of the investing spectrum are very connected and I am fascinated by the ‘tells’ I see by watching the all-time high list and Angel List.

    While I am not sure of the next 10 minutes, let alone the next 10 years, I am confident in my work that thousands of web entrepreneurs will take notice and follow my strategy in the years ahead.

  • Week in Review

  • The VeloCity Venture Fund

    Some rights reserved Photo by Thomas Hawk
    AttributionNoncommercial Some rights reserved by Thomas Hawk

    Remember Ted Livingston’s insanely great donation to UW VeloCity, well it looks like it is being put to good use. The VeloCity team announced The Velocity Venture Fund. The University of Waterloo and the team at VeloCity are working to put that capital to use for students in the VeloCity residence. It looks like they are both testing their ideas (love this) to make sure students are interested before the full launch of a fund. They are running a contest for UWaterloo students that provides a seed grant of $25,000 + office space + incorporation.

    It’s pretty cool. I am hoping to learn more about the Fund that is launching in the fall. Jesse Rodgers is a huge asset to UW.

    What does this first version of the funding contest look like?

    • A hack weekend followed by a pitch night where 5 teams are selected and given $500
    • Those 5 teams come back in a month or so and have a chance to compete for $25 000 + incorporation + office space on their next co-op work term or following term (so for spring that will be fall)
    • That is all.

    To qualify for the competition:

    • A current student at the University of Waterloo
    • Do you have to live in VeloCity? No. But it would give you an advantage.

     

  • OCE Discovery + Special DemoCamp + One Day Pass

    Editor’s Note: This post is written by Paul Vice. Paul works the OCE team to enable special projects. This includes community outreach with groups like StartupNorth and DemoCamp. OCE has been a proud sponsor of DemoCamp and other StartupNorth events for the last 4 years. We’ve written about OCE Discovery in the past and the support that OCE has offered local startups like Bumptop, Verold, and others is unparalleled. We are excited to be able to offer StartupNorth readers access to OCE Discovery 11 » see below for details about ticketing. – David

    The Ontario Centres of Excellence (OCE) has teamed up with the StartupNorth team to present a special DemoCamp on May 19th at 3:30pm at the Toronto Metro Convention Centre as part of the Discovery 11 conference.  It is a chance to put DemoCamp in front of a different audience, drawing all the Discovery attendees. In 2010 we had a standing room only crowd. We have space for 300+ this year.

    Discovery is the annual showcase of the best of innovations in Ontario hosted by OCE. Recently named Canada’s Best Trade Show 2010, Discovery has become the premier innovation and commercialization showcase in Canada with over 2500 attendees & over 300 exhibitors.

    OCE Discovery picture of show floor

    Some of the highlights of Discovery this year:

    • Bill Buxton, Principal Researcher at Microsoft Research and author of Sketching User Experiences is the keynote speaker on the morning of May 19
    • A hot panel on the direction of mobile app development in Canada, moderated by Kunal Gupta, CEO and Founder of Polar Mobile.
    • A full track on Stereoscopic 3D technology including S3D gaming development
    • Indra Laksono from Toronto’s own ViXS Systems on the future of digital technology in the home. (btw, ViXS is a very cool company, check them out.)
    • The return of the Elevator Pitch competition – Dejero Labs and Gridcentric were past award winners.

    Check out the full agenda.

    DemoCamp at Discovery

    Moderated by David Crow (@davidcrow), with guest speaker Anand Agarwala from Bumptop (now at Google) kicks things off with a unique “Art of the Hustle” (Street Smarts for the Startup World) presentation, followed by a showcase of 5 unique selected startups to pitch in front of an audience of over 300 participants, including panel members:

    Discovery is not the usual DemoCamp venue. But, we are looking to accomplish 2 goals:

    • Put some interesting, exciting new DemoCamp start-ups in front of an new audience; and,
    • Put DemoCamp in front of that new audience and inspire some of them to join future DemoCamps

    Want to demo?

    We are looking for up to 5 startups or entrepreneurs to demo a new technology. Selected presenters get 5 minutes to show us the best of their application and then ask the audience for feedback, coaching, and insight from a highly connected, if occasionally cynical, crowd. You get market advice, technology advice, and pitch advice and the opportunity to deal with the hecklers.

    Apply to Demo

    Want join the audience, offer advice, heckle and get to explore the full conference floor?

    Discovery is a full conference and trade show at the MTCC with all the typical costs and overheads. We run it on a cost recovery basis with a lot of very generous help from sponsors, but costs are a lot more than your typical Democamp.

    But, we want you there. You can join us at DemoCamp and visit Discovery  with a one day pass May 19 for $250 if you use the promotion code DC250 when you register. (The full price for the 2 days is $895, $75 for students with ID.)

    OCE Discovery 11 May 18-19, 2011

  • The Hot Sh!t List

    Some rights reserved by ALL CHROME
    AttributionNoncommercialShare Alike Some rights reserved Photo by ALL CHROME

    There is a lot of crazy young talent kicking around. We’ve seen that great talent that UW Velocity is producing with Ted Livingston(@ted_livingston) at Kik. There are the Christopher (@golda) and Michael (@michaelmontano) at BackType. There is the stupidly awesome team at Extreme Venture Partners (@avarma, @fnthawar, @sundeep).

    I thought I’d throw together a quick list of designers, developers and entrepreneurs that are young, hot, kicking ass and taking names. There is an amazing amount of talent in Canada. And this is who I’m watching because they are hot sh!t.

    1. Dan McGrady (@dmix, LinkedIn), CareLogger
    2. Kaitlyn MacLachlan (LinkedIn), AskItOnline & Yellow Pages Group
    3. Casper Wong (@wongcasper, LinkedIn), CommunityLend
    4. Jennifer Fong-Adwent (@ednapiranha, LinkedIn), Rocketr
    5. Josh Davey (@joshdavey, LinkedIn), BurstN & Chango
    6. Alex Black (@waterlooalexjo, LinkedIn), SnapSort
    7. Cody Fauser (@codyfauser, LinkedIn), Shopify
    8. Vincent Cheung (@veenix, LinkedIn), ShapeCollage
    9. Wes Bos (@wesbos, LinkedIn), DealPage
    10. Michael Litt (@michaelrlitt, LinkedIn), Vidyard
    11. James Stewart (@JamesStewartUXD, LinkedIn), PostRank & TribeHR
    12. Julie Haché (@juliehache, LinkedIn), Shopify
    13. Duleepa “Dups” Wijayawardhana (@dups, LinkedIn), EmpireAvenue
    14. Joseph Fung (@josephfung, LinkedIn), TribeHR
    15. Andrew Peek (@drupeek, LinkedIn), Rocketr
    16. Simon Law (@sfllaw, LinkedIn), TrustCentric
    17. Eric Diep (@ediep, LinkedIn), A Thinking Ape
    18. James Blair (@jamesblair, LinkedIn)
    19. Edward Ocampo-Gooding (@edwardog, LinkedIn), Shopify
    20. Satish Kanwar (@skanwar, LinkedIn), Jet Cooper
    21. Jesse Miller (@jesse_miller, LinkedIn), Attachments.me
    22. Josh Merchant (@joshmerchant, LinkedIn), Lymbix
    23. Boris Chan (@borisc, LinkedIn), XtremeLabs
    24. Tyler Galpin (@TylerGalpin, LinkedIn)

    This list is incomplete

    I am completely aware that this list is incomplete. But who are the tastemakers that are building the next generation of emerging technology companies that no one knows about in Canada. Help me find great talents that are under 40 (this is irrelevant, who are the entrepreneurs, designers and developers that are shaping things) and based in Canada.

    [gravityform id=3 name=HotShit List Nomination ajax=true]