StartupNorth

Month: June 2011

  • Emerging Market Opportunities

    So I just finished a big tour de Southeast Asia. There is really only one story going on over there – Mobile. Check out this research from BCG (BRICI = Brazil, Russia, India, China, Indonesia):

    • 1.2B new internet users coming from BRICI countries by 2015
    • Mostly coming from mobile, much of that will be advanced feature phones (not smart phones)
    • Social in Indonesia & Brazil, Email in India, IM in China (QQ FTW!!!)
    • That will only result in 20% internet penetration in those countries (i.e. lots more to come!)

    All of this is happening here and now. There are huge opportunities for any mobile startups to break into these countries. Let me give you a taste of Indonesia.

    Two years ago Nokia had 60% of the phone market. A retailer called Nexian had just started up with the idea of importing and reselling Chinese manufactured phones and branding them as Nexian phones.

    Fast forward to today. Nokia is down to 30% of the market!!! Nexian is one of the dominant retailers, they just sold to the Spice Mobile family (large conglomerate in India exploding across Asia, Middle East and Africa). You can get a stylish QWERTY phone with a big display with pre-loaded apps including email, Opera Mini, Facebook, Twitter, Mig33, Nimbuzz IM, private messenger, widgets, news reader, etc, all for < $40 (in some cases closer to $20). You can also get a Nexian Android phone for $150-$200. [caption id="attachment_9327" align="alignleft" width="640" caption="This Bad Boy = $20"][/caption]

    Everybody is ripping off Nexian’s go to market strategy. The telecos have launched new brands to sell these phones. The retailers have gone to China, sourced phones and are re-selling them. The Chinese manufacturers have opened up retail in Indonesia (Huaiwei has their own stores!). On top of that I counted at least 20 Nexian clones, small companies with the same strategy as Nexian.

    Blueberry Probably Outsells BlackBerry 2:1 In Indonesia

    Nexian has countered by offering apps & services on these $20-$40 phones. People don’t have data plans, so Nexian does micro-billing via the carriers. 10c/week for Facebook, 5c/day for IM, $3/month for chat as examples. It works, they make millions a month from it.

    There are roughly 170M phone users in Indonesia.

    For Canadian startups, this means that there has never been a better opportunity to build mobile apps and “go global”. Check out if your app has a competitor in markets like Indonesia. All these phones in Indonesia (and China and India) are on a single platform with a single OS -> MediaTek. Port your app to MediaTek and go get deals with any of the manufacturers, the Nexians and their clones, the operators, etc. You can either try and get a royalty up front with your app pre-installed on the phone, or you can work out a rev share agreement on the service, or whatever other monetization scheme you have in mind.

    There are plenty of folks who can help you with local business development. For instance, if you are a mobile app startup and you think Indonesia looks hot, Andy Zain runs the Indonesian Mobile Monday and Founder’s Institute. He is incredibly well connected in the teleco scene and he has helped startups like mig33 and Payfone (you are also free to reach out to me for contacts and info as well). In every country there are guys or companies like him. A bit of research and networking and you can find them.

    Next week I’ll have some more on the start-up scene in Singapore, including some info from the leading startup blog over there (sgentrepreneurs.com).

  • Pre-Launch Marketing for Stealthy Startups

    Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in January 3, 2010 on RocketWatcher.com.

    CC BY-NC-SA Some rights reserved by Stuck in Customs
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    Some products and services don’t have a pre-launch phase.  For companies where building a minimum viable product isn’t a months-long effort, it makes sense to just launch a beta and then start talking about it.  For other companies however, the product might take a bit longer to develop and talking about it before it’s been released in some form could be pointless (because you don’t have a call to action yet), risky (competitors position against you or customers get confused because there aren’t enough details) or both.

    One of the techniques that I’ve used in the past is to engage with the market by talking about the business problem that your product or service is going to solve, without getting into exactly how you plan on solving it.  At IBM we sometimes referred to this as “market preparation”.

    For larger companies this often entails spending a lot of time (and money) with industry analysts and industry leaders sharing your company’s unique point of view on the market and why it is currently being under-served.  If you do this properly you’ll come to a point where your point of view starts to align well with that of the influential folks you’ve been working with.  By the time you launch, these folks will be standing behind you saying that your view of the market is one customers should consider.

    Pre-launch startups generally don’t have the time, clout or cash to change the way Gartner Group thinks about a market but that shouldn’t stop you from taking your message out directly to the market you care about.  There’s never been a better time for startups to get the message out.  Here are some considerations:

    1. Create a clear message about your market point of view – you will need to create a set of messages that clearly illustrate what the unmet need is the in market and why that need has not been met by existing players.  You can go so far as to talk about the characteristics of the needed solution (without getting into the gorey details of exactly how you plan to solve it).
    2. Develop case studies that illustrate the pain you will be solving – Gather a set of real examples of customers you have worked with that have the problem and clearly illustrate the need for a new type of solution on the market.
    3. Spread the word – Launch a blog, write guest posts for other blogs, comment on relevant blog posts,  write articles, write an e-book, speak at conferences and events, open a Twitter account and start sharing information that illustrates your point of view.  There’s no end of ways to get your message out there.  Do your homework and find out where your market hangs out.  What forums do they participate in?  What blogs and newsletters do they read?  Get your message in front of them in the places where they already are.
    4. Engage and gather feedback – Starting a dialog with your potential customers about how you see the market gives you a chance to test your messages and see what resonates and what doesn’t.  You’ve made a set of assumptions (backed up by customer research hopefully), the more folks in the market you can talk to the more you can fine-tune your market story.
    5. Capture where you can – If it makes sense you can start capturing a list of potential beta customers or a mailing list that you can use when you launch.

    Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in January 3, 2010 on RocketWatcher.com.

  • Founder Fuel Jam Session in TO

    FounderFuel

    Nothing like the last minute planning around here. Ian Jeffrey (LinkedIn, @ianmtl) from FounderFuel is planning on being in Toronto today (June 27, 2011) and tomorrow (June 28, 2011). He is planning on meeting with startups and founders to share his experiences launching FounderFuel, the mentorship and incubation/acceleration plan for participating startups and to talk about tech startups generally. If you are interested in talking with one of the emerging technology company incubators/accelerators you should come and talk to Ian and learn about what is being offered in Montreal. There is a lot of choice in the marketplace for entrepreneurs, and the best way to see the differences are to connect with the people behind the scenes like Ian and the FounderFuel team. This is a great way to evaluate the program, get introduced to the people, and connect.

    FounderFuel Jam Session

    Date:
    June 28, 2011
    Time:
    7 PM EDT – Presentation & Overview
    8 PM EDT – Startup 1-on-1s and discussion
    Location:
    Camaraderie Coworking, 102 Adelaide Street East, Toronto, ON, Canada [map]
    Register to attend:

    From the looks of Alexa Clark’s (@alexaclark) photo exposition at Camaraderie, it is a great space to host a startup. I know that Matt (@mattskilly) and Aron (@defrex) at Hipsell have their startup offices there. It is a great space for startups requiring a great work space, a central location, and the benefits of an enabled coworking culture.

    Beer Station at Camaraderie - Some rights reserved by LexnGer
    AttributionNoncommercial Some rights reserved by LexnGer

  • Week in Review

  • Let’s remove “entrepreneur” from the dictionary

    Editors Note: This is a guest post by Brian Sharwood (LinkedIn, @bsharwood). Brian is the President of Homestars (@homestars), the leading online free listing and rating company for Home Improvement specialists. Prior to HomeStars, he was a research analyst and principal of SeaBoard Group. Brian holds an MBA from Babson College in Boston and a bachelor of Arts from the University of British Columbia.

    CC BY-NC-ND Some rights reserved by ohmann alianne
    AttributionNoncommercialNo Derivative Works Some rights reserved by ohmann alianne

    I hate the word entrepreneur. It is overused. It has lost all meaning. Everyone is an entrepreneur these days. From the increasing attendance at DemoCamp, Startup Drinks, and Sprouter events around Toronto and across Canada you can find “entrepreneurs” that are people with ideas, corporate PR folks, lawyers, wedding businesses, etc. It ranges from founders of tech ventures to people looking for get rich quick schemes. In short who is an entrepreneur? Well just about everyone.

    The term entrepreneur is meaningless.

    I propose we split the people who live under the current word “entrepreneur” into three new words (which I won’t attempt to coin) which help us understand who these so-called “entrepreneurs” really are.

    The Entrepreneur as Artist

    These are the people with the great ideas. They are ones that are trying to change the world with something that’s never been done or seen before. In the tech world, they are often the hackers, who build a new web application with a vague idea of how they might make money for it. They might be the business person who sees a better process and sets it up, either on their own or within an existing enterprise. They are building something not for the money because it’s satisfying for them to create something that others love.  I constantly run across great ideas and great web apps that I say ‘that’s great, but I wouldn’t pay for it’, or I might just appreciate it for the sheer ingenuity of it, or it might be something to purchase to incorporate into another larger product. These are the creators of the ideas for the new economy.

    The Entrepreneur as Small Business Owner

    This is probably the group of people that encompass most of the people we encounter who label themselves entrepreneurs. They build businesses and run from from the consultants like April Dunford, bringing marketing insights and analysis to growing tech companies, to Jarrett Jastal, one of our clients, who runs StoneCote, a stone flooring company out of Hamilton. Running a small business is tough, and these people deserve to be lauded for taking risks and building companies. Often scrambling to meet payroll, watching a bank account dwindle, and trying to solve the many problems of operations. But many, if not most of these businesses are relatively small and non-scalable. They often rely on the skills and expertise of the founders and operators of the company rather than a product or brand. Another key ingredient to growth is risk, and these are our risk-takers.

    The Entrepreneur as Visionary Executor.

    The last group are the visionary executors. These are the people that the venture capitalists are looking for. The people who see the great idea, and know how to turn that idea into a business. They don’t necessarily need to be the founders, or even the people with the idea, although they often are. They are the ones who take that idea and make it into a business. Ted Rogers didn’t invent the products he sells, but he is the business visionary and executor who took a lot of great products and made them into a business through vision, foresight and understanding the market. Our innovation economy is driven by these people who take ideas, see opportunities and make businesses.

    It’s the visionary executor that we want in this country, building world leading businesses, taking great products and building businesses out of them. The small business people, and the artists are the required support. They provide the ingredients for the visionary to work with.

    So let’s forget the word entrepreneur or even founder, and define the term so we can understand who really changes the economy of this country.

    Editors Note: This is a guest post by Brian Sharwood (LinkedIn, @bsharwood). Brian is the President of Homestars (@homestars), the leading online free listing and rating company for Home Improvement specialists. Prior to HomeStars, he was a research analyst and principal of SeaBoard Group. Brian holds an MBA from Babson College in Boston and a bachelor of Arts from the University of British Columbia.

  • The Gravedancer Fund

    It’s painfully obvious and we should stop ignoring the facts: RIM is cratering and there is nothing that can be done to save them, short of firing the confused people who are running the show these days.

    I won’t comment on what exactly is happening at RIM, there are more than enough people doing that these days, but instead I think it is time for Canada to think about how to mitigate our losses here as the attrition continues. I am more interested in how we go in to damage mitigation mode. I think there is an obvious thesis developing for one or two new funds to camp out in Waterloo and focus on extracting the value locked up in RIM.

    A gravedancer fund would focus specifically on leveraging the talent and IP as it spins out of RIM in Waterloo. It would hasten the gutting, no doubt, but somebody has to do it and it may as well be someone based in Waterloo.

    So, who is going to raise the Gravedancer Fund and where do I sign? Waterloo is on it’s way to becoming the center of startup activity in Canada and the death spiral of RIM needs to be seen as an opportunity, not a threat.

  • Desperately seeking early adopters

    Editors Note: This is a guest post by first-time entrepreneur Mike Potter (LinkedIn, @mike_j_potter) who previously was a Marketing Manager at Adobe, a project manager at Mozilla and an engineer at an Ottawa area startup. Mike has spent time running marketing programs for a large organization and has realized that power he held for many early-stage startups.

    It has been 5 months since I left my job at Adobe and started my own company, Arkli. We are building software to help create and measure integrated marketing campaigns. If I’d known how little it takes to help a startup, I would have tried to do far more when I was Adobe. It has been the experience of starting my own business, and demonstrating customer traction to potential investors and potential customers that I’ve come to realize how important 1 or 2 early customers like Adobe can be for a startup.

    Traction is the new black

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    Demonstrating customer traction even in small numbers (particularly for enterprise or B2B startups) is the thing that helps you get the next meeting, the next introduction or the conversation that can really help your startup. For example, we’ve been in business for less than 7 months and we have 2 customers. When I was at Adobe, I would have said only 2 customers – that’s all you have? We had tens of thousands of customers. It was unclear that 2 customers could matter on the scale and scope of Adobe. Now running a startup, I look at it and say “wow, 2 customers, that’s great!”  Investors say the same thing.  Someone recently commented, “I’m impressed you’ve gotten customers without outside investment.” And it’s not just me, a panelist on BNN’s The Pitch congratulate Dalia Asterbadi (LinkedIn, @d_asterra) of realSociable on her partners and her user numbers. The best part is RealSociable hasn’t launched  yet!

    The reality is that getting customers to pay for something is really hard. Which is why when you’re starting out, everyone says going to take twice as long and cost twice as much as what you think. And it does, because its really hard to get early adopters. Silicon Valley is full of early adopters who help give traction startups. We need more of them in Canada.

    Getting to the chasm

    CC-BY - Some rights reserved by Original Nomad
    Attribution Some rights reserved by Original Nomad

    I really believe that the best thing a community can do to help local economy is to support local businesses and startups. We can argue about how much companies like RIM matter to startups. But it doesn’t have to be all mergers, acquisitions and corporate venture capital funds. It is not about new headcount or stock price. It’s about curiosity to seek out new solutions to your existing business problems.

    If you’re reading this, you’re probably interested in startups. Are you a founder? Do you work for a startup? Are you working for a larger organization? Here’s how you can help:

    Taking selfish advantage of an economic situation

    Look at your everyday problems. Are you struggling with accounting software, check out WaveAccounting. Everybody hates HR, have you checked out TribeHR? Can’t get your kids to do their chores, maybe HighScoreHouse can help make chores a game. Did you experience downtime because EC2 was offline for 5 days, maybe VMFarms can support you local and on EC2. There are a ton of startups with solutions to consumer and enterprise problems. It can be a struggle as a startup to raise your awareness event with early adopters. [Editor’s Note: There were 42 submissions and 5 accepted demos at the most recent DemoCamp. You can tune into the startup news sources like StartupNorth, NextMontreal, TechVibes and others. It can be a challenge but we’re working on better ways to discover Canadian startups. You can find early access to our redesigned StartupNorth Index of companies. It is currently running on our staging server, but the data model is solid an we’ll move all entered data to the production instance in the coming weeks.]

    We need to build and embrace a culture of early adopters. Look at your business operations, where are things not working as smoothly as you’d like. This is where you might be able to find a startup that you can take a flier on to help you improve the broken process. This is a chance to help an early stage startup.

    Become an early adopter of a startups product. Use it for 6 months and give it a shot. When you’re working for a fairly large company (employs more than 10 or so), you’ve got nothing to lose. [Editor’s note: Nothing to lose, other than your job ;-)]. Hopefully you will have found a product that makes you day-to-day responsibilities easier, smarter, faster, more enjoyable. You get to go home at the end of the day with a pay cheque, and hopefully fixed a broken part of your job with very little risk or cost.

    And you might have helped seed a startup. It takes so very little to help a startup demonstrate traction. A few customers which can lead to new investors which can lead into job creation in the community.  It’s a cycle of early adoption in that we desperately need to start in Canada.

    Embrace your role as an early adopter

    Rethinking crossing the chasm - Copyright Tara Hunt

    Nobody ever gets fired for buying IBM. This might be true. But you’ll be giving a lifeline and valuable feedback to an entrepreneur by choosing their products. One of the great thing about being a startup is that many of us are innovators and early adopters. Our mail has been in the cloud since 2005, when we embraced GMail (for the massive storage). The iPhone seemed like the best way to stop carrying an iPod and a Blackberry in 2007. We constantly seek out new and improved technology products. We need to embrace the same eagerness to try personal technologies in our organizations. Whether it’s new technology like Node.js or Cassandra, or a new way to track real-time team performance (looking at your Rypple).

    For startups traction is the new black. And it’s up us as middle managers and executives to seek out novel solutions. And in becoming a customer you might have just helped the next Facebook/Google/Oracle/Microsoft/Apple/etc.

    What new products are you using that are reshaping your business?

    Editors Note: This is a guest post by first-time entrepreneur Mike Potter (LinkedIn, @mike_j_potter) who previously was a Marketing Manager at Adobe, a project manager at Mozilla and an engineer at an Ottawa area startup. Mike has spent time running marketing programs for a large organization and has realized that power he held for many early-stage startups.

  • Week in Review

  • Does RIM Matter to Startups?

    If you haven’t heard by now, RIM is having a horrible year. Their earnings meeting yesterday was chock full of bad news:

    Q1 revenue: $4.9 billion vs. $5.15 billion consensus
    Q1 EPS: $1.33 vs. $1.32 consensus
    Q1 shipments: 13.2 million vs. 13.5 million units expected
    Q2 revenue: $4.2-$4.8 billion vs. $5.46 billion consensus
    Q2 EPS: $0.75-$1.05 vs. $1.40 consensus
    Q2 shipments: None given vs. 13.5-14 million units expectation

    One caption I read put it best – RIIMMMMMBEEEERRRRRRR.

    Out of the downfall the Globe and Mail was hypothesizing that the fall of RIM was catastrophic for Canada’s tech eco-system. The article was a bit light on fact as to why it would rip apart the Canadian eco-system, and my initial gut reaction was “RIM has almost no impact on any of the startups I know.” But then I decided to go and look at the facts.

    Since roughly 2008 RIM has bought the following Canadian startups:

    So they’ve probably flushed about $60mm-$80mm into the Toronto ecosystem over 3 years in exits. On top of that they have the BlackBerry Partners Fund (with about $150mm in cash) which has invested in several Canadian startups. Lets also not forget that the eco-system around their partners. BlackBerry’s platform has created opportunity for mobile dev shop’s like Fivemobile and Xtremelabs to exist. But it feels like those guys do most of their business in iPhone and Android.

    So between exits and investment via BB partner funds they have probably kicked in about $100mm to the Canadian startup eco-system over the past 2-3 years. Which is not something to sneeze at. Having said that, Google (not HQ’d in Canada) has kicked in probably close to $100mm in the past 12 months… just in exits. So maybe its also not something to brag about either.

    Putting these numbers together, makes me feel more ambivalent about RIM’s impact on the tech eco-system in Canada. Lets be clear, we’re talking about a decline in the short to medium term, not a total shutdown. In that decline I expect RIM to take an even lesser role in the eco-system than before. And I’m not sure it matters.

    (Small end note as a UW alumnus. I’m not sure RIM’s downfall will have that big an impact on the school either. Big companies like Microsoft, Google, Facebook are still going to fight over UW’s top talent – their won’t a shortage of jobs for UW’s engineering community anytime soon. Maybe Laurier’s business & marketing grads… oh low blow).

  • Launch at GROW

    Ready to launch this summer? The clock is ticking on a great opportunity to launch your startup at the GROW conference.

    Startups from across Canada can compete for a chance to Launch at GROW. 15 startups will be chosen to showoff on August 17 and the 4 most popular startups will have the opportunity to pitch on stage at the full day conference August 18. Over 600 attendees including top tier investors, entrepreneurs, and influencers from Canada and Silicon Valley are attending.

    Less than 48 hours remain to submit a pitch. Upload a short video or photo with a description of your company here: http://launchatgrow.strutta.com

    See you on stage.