StartupNorth

Year: 2012

  • GrowConf’s Entrepreneurs: Breakdowns & Breakthroughs

    This video is part of an ongoing project where Debbie Landa and the folks at Dealmaker Media ask entrepreneurs and founders about their greatest fears, failures, and the lessons learned.

    It’s a great watch.

  • The gale of Creative Destruction at University of Toronto

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    University’s play a role in startup communities. Brad Feld’s Boulder Thesis (and I bring it up because he is coming to Toronto on October 30th) says that the people that attend and work at the university are the most important contribution to the startup community a university can make. The institutional components (labs, programs, and technology transfer offices) are less important according to Feld and when they are done wrong they are more damaging than helpful to startups.

    In Toronto you have a number of schools to feed the community; Ryerson, George Brown, York, OCAD, Sheridan, and of course the University of Toronto.

    The University of Toronto is the top ranked school in Canada and around the top 20 mark globally according to various rankings. As one of the oldest institutes of higher learning in Canada where some of the proudest scientific discoveries in the country’s history have been made (Insulin, stem cells, etc) there is a lot to talk about in terms of research. It is 21st globally in engineering and computer science yet it feels like it is hardly part of the conversation with regards to the startup community in Canada. That should be ok, they are a feeder to the community as Brad Feld defines it. I disagree with it being ok. I believe if there is a lack on entrepreneurial activity on campus that campus likely does not feed the community anywhere close to its potential.

    Beyond those that would feed the community there are many potential leaders on the campus from faculty (many have founded companies and had exits) to students that are confined by the silos that naturally occur in large institutions. Outsiders might point to MaRS as the main effort related to the university, it’s not, although it certainly has helped. There are a load of new programs that are working on building entrepreneurial culture on campus. The following is a non-comprehensive list:

    • Hatchery – The Entrepreneurship Hatchery is a hothouse for the best ideas of entrepreneurial undergraduate engineers.
    • UofT Hackers – a community of University of Toronto students who build great products.
    • Techno – “the flagship event of the IOS’s entrepreneurship education program, which also includes year-round programming for physical sciences and engineering students, faculty, and alumni at the University of Toronto.” This program has some amazing science focused companies.
    • Techna – “to shorten the time interval from technology discovery and development to application of such technologies for the benefit of patients and the health care system, and to facilitate the convergence of basic investigation, technology development and translational research”
    • UTEST – recently announcing it’s first cohort, UTEST “provides nascent software companies with start-up funding, work space, mentoring and business strategy support.”
    • Creative Destruction Lab at Rotman – Is focused on helping people build massively scalable companies. Folks like Nigel Stokes, Dan Debow, Dan Shimmerman, Tomi Poutanen, Dennis Bennie, Nick Koudas.

    All of these programs represent a positive focus on entrepreneurship and commercialization that is gaining momentum. The last one, Creative Destruction Lab, is particularly interesting (disclaimer, I am involved there) because it is located in the Rotman School of Management and is being designed to build a bridge across the silos as well as into the Toronto startup community. It also hosted a DemoCamp event at Rotman for the University community that attracted over 300 people (two thirds engineers) and 44 people applied to present in September. More are being planned and applications to be part of the lab program itself are open to all UofT students and Alumni until October 14th.

    As the entrepreneurial momentum builds on the University of Toronto campus I believe it will fill one of the gaps that currently exists in Toronto’s startup community by both educating students that feed the community and attracting faculty (and their spouses) from abroad that could be globally connected leaders in the community.

     

  • The Boulder Thesis – A Sketchbook

    The folks at the Kauffman foundation have put together a Sketchbook video of Brad Feld talking about the Boulder Thesis. We’re hosting a conversation with Brad Feld on October 30, 2012. We hope that you will join us. Tickets are $25 and include a copy of Brad’s book. My recommendation before attending is that everyone watch the sketchbook, it provides an effective overview of the book, and the basis to participate in the conversation.

    I love this book. It captures many of my thoughts and philosophies, that I have not been able to articulate as succinctly or clearly as Brad. I have worked in high potential growth software since I joined Trilogy Software back in 1997. This was 15 years ago. I hope that I will still be working in high growth software in 15 years (that’s 2027 for those keeping track). I love the opportunities that I have had in Toronto. I am very happy to see new world-class startups that are scaling and growing in this city and across the country (go read my post on the Toronto Startup Ecosystem). I’m excited to see many entrepreneurs trying to build massive companies and stay in Canada.

    We have both leaders and feeders participating in the conversation. We hope that you will join us to learn more about what Feld says sustainable entrepreneurial communities MUST HAVE:

    • Two types of people: leaders (entrepreneurs) and feeders (people who support startups, such as government agencies, funders, service providers). While the “feeders” are the very fabric of the community, the entrepreneurs must be in the lead.
    • A long-term view and commitment to building this community
    • A philosophy of inclusiveness that welcomes everyone with an interest, not just entrepreneurs
    • Substantive activities that engage the entire community to help startups move forward

    Join us on October 30, 2012. I was speaking with Katherine Roos at Enterprise Toronto and we were talking about who should participate? Who do you think should attend?

  • Crowdfunding for Notman House


    We’re big fans of Montreal.

    There is a lot of really exciting things going on in Montreal. Founder Fuel. Real Ventures. c2mtl. Rho Ventures. iNovia Capital. MtlNewTech. Next Montreal. Grand Prix du Canada.  And Notman.

    Notman is conceived as a community space for the web community in Montreal. I remember John Stokes talking about his vision for this space in 2006. And how the efforts of Montreal Startup have demonstrated the value and benefits to the city when founders, entrepreneurs, designers, developers and others have something to rally around. Montreal doesn’t have a Communitech or a MaRS. This is the efforts by local entrepreneurs to bootstrap a central place. John, Alan, Mark, JS and Austin have led this vision for over 6 years. And it’s very close.

    Over the last year the Notman House  has hosted over 125 events, including user group meet-ups, hackathons, and learning events, been home to over 50 Startups, and been visited by over 10,000 entrepreneurs, investors, students, and others involved in the growing Montreal tech scene. It’s an incredible place.

    Our top priority is to connect the already existing community. Hundreds of groups, meetups and events are being created and take place every year in Montreal. They are loosely connected and aware of each other, but still essentially fragmented. The Notman House wants to bring them all together.

    We want to bring startups, students, investors, developers and artists all together in the same spirit that characterized the Montreal of the past.

    Notman and OSMO Foundation is looking to raise $100k in private funding. They need to raise this $100k to unlock the a combined $1.7M in grants from the municipal, provincial, and federal government. In addition a $4.3M loan has been committed by Investissement Quebec and the BDC. However, to access these grants we need to raise $1.1M in private contributions. $1M of this is being pledged by corporate entities such as Teralys Capital, Claridge, Telesystem, McCarthy Tetrault, and Fasken Martineau.  We are looking to the community to help close the $100K gap currently faced in the funding process.

  • A Conversation with Brad Feld – Oct 30, 2012 in Toronto

    A Conversation with Brad Feld on Startup Communities - Oct 30, 2012 in Toronto

    On October 30, 2012 we are hosting an event with Brad. The event starts at 6:00pm. It is at the Toronto Reference Library. Tickets start at $25/ticket and include a copy of the book (either hardcopy or a DRM protected PDF). We will have a few cocktails, some networking, and a discussion about how we make Toronto a better place for startups. We’re just working out the details for the event.

    Great list of sponsors and supporters:

    We’re excited to hear more about the Boulder method and the efforts of Brad Feld , . We’re huge fans of this book, check out William Mougayar’s review. The Don’t Panic: A Guide to the Toronto Startup Ecosystem post was inspired inspired by the desire to (see Brad’s comments on StartupRev).

    The first step is joining in the conversation.

    Buy a ticket

  • Brokers, Smokers and Midnight Tokers

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    In the past couple of days, I have seen a few emails from what could be best called funding brokers. They “facilitate” deals between early stage companies and potential investors. All for a consulting fee, usually for a percentage of the amount of funding raised. They have connections to high net worth angel investors and relationships with venture capitalists. Typically the fees and the engagement are model on investment banking particularly as related to later stage M&A deals.

    It’s not a surprise. It’s a well established model. The Lehman model (we all know how well Lehman Brothers worked out for the rest of us) is 5% on the first $1MM raised, 4% on the second $1MM, 3% on the third $1MM, and 1% for capital above $4MM. It changes with equity versus debt financing, reducing to a 0.5-2% fee on debt rounds.

    And particularly in later stage deals and M&A it is probably more accepted (acceptable?). In the transaction there are 3 potential parties:

    • Startup
    • Funder
    • Broker/Finder

    Typically the person contracting the broker pays the fees. This means that it’s either the VC paying the fee, but if you are the startup it means that you’re paying the fee. And that fee is either increasing your dilution or decreasing the amount of the round. You can look at it as just paying fees like you pay your accountant or lawyer.But why, oh, why are you willing to give up chunks of your company this early to do things you are capable of doing yourself.

    What does a VC think about brokers/finders?

    Jason Mendelson published his take on “finders” back in 2007:

    “Most venture firms don’t like the idea of brokers being involved and most venture financing documents have a clause that the company warrants that there are no brokers involved. Remember, the company’s money that is paying the broker is, in fact, the VC’s money that they invest in you.”

    Jason continues “good VCs have plenty of proprietary deal flow, so they aren’t relying on brokers to show them deals”. If you can’t get in front the right investors, you are probably doing it wrong. There are a very limited set of high tech, emerging business model, high potential growth investors in Canada. Need a ‘show me the money’ list? There are other ways to raise your profile as a startup and get in front of investors. Andy Yang wrote a great piece about getting the most out of AngelList as a startup. If these channels aren’t working for you, you might want to go back and ask yourself is it the funders or is it me? What do I need to do to make my company more attractive to potential investors? Customer development? Product development? Etc.

    How do you spell MBA?

    We love to heckle MBAs, mostly because we’re all jealous that we don’t have one. But is it a requirement to raise funding.

    “On the other hand, skills i bet won’t be important as much in the future:

    • having (only) a big rolodex or (offline) network
    • having a traditional MBA or investment banking background

    Both of these are still important, but will become commoditized and marginalized by the availability of such information from online systems for social networks & reputation, and by the relentless advance of access to capital from a variety of channels.” – Dave McClure

    No one is arguing that brokers shouldn’t get paid. The model is relevant. People work hard to build trust, reputation, networks and knowledge. With later stage deals the relationship, private placements, increased valuations, connections with CEOs and funders, it makes sense. But as Dave McClure rightly points out the value of the specific skills are changing. Particularly at the very earliest stage.

    There is a great discussion on OnStartups about the finder’s fees. You can see the tension between entrepreneurs and investment bankers.

    Social Anti-Proof

    I don’t like finder’s fees for early investment rounds. Whether you call that seed and series A, I don’t know. I just don’t like seeing that capital taken out of the hands of the entrepreneur from operations. So just don’t do it.

    As the company matures, the existing investment banking model doesn’t feel wrong. Many of the relationships, matchmaking, guidance feels like something you pay for, only after the deal closes. I feel like really early stage companies that have hired a broker must be broken, i.e., there must be something fundamentally wrong with the  team, the market, the advisors, etc. if they are unable that might explain why they are having difficulty raising an early round.

    So it’s very wrong early. Ok later.

  • Toronto Startup Event List Fall 2012

    Getting ready for startup event fatigue? Toronto is an active ecosystem (based on total activity in the Startup Genome database). But there are a lot of upcoming events, here is my inital tracking of Toronto startup events list for fall 2012. The question is which events to attend and which ones to stay heads down and work. An actual guide would breakdown the benefits of each of these events. But I’m being lazy, I’ll add some commentary around each event. Or please feel free to add events and commentary. I’ll update the post.

    And for those of you thinking about attending everything, go read Mark Suster’s Be Careful not to become a Conference Ho.

    September 2012

    October 2012

    November 2012

    December 2012

  • Waterloo Region StartupFest

    Update: The team at Communitech recognize the gafoo. They are rebranding the event Tektoberfest (which I think is an amazing fun brand that is a fun play on Oktoberfest). Great work by Phil, Iain and a group of people that should be collaborating. 

    Update 2: Looks like the Communitech folks have updated their branding. Calling the event Techtoberfest and the previously mentioned Tektoberfest. They’ve also rounded out the line up with more great speakers including Devon Galloway and Michael Litt from Vidyard, Carol Leaman of Axonify. This means you’ll get 2 Hot Sh!t Listers (Devon and Eric) and 2 more incredible CEOs as part of the line up. Shaping up to be a great event.

    Techtoberfest, Waterloo Region, Oct 11-13, 2012

    Apparently the Communitech team went to the rip, mix and burn school of branding. Founders & Funders – check. StartupFest – check. I guess imitation is the sincerest form of flattery. I gave permission for the Communitech team my support for using Founders & Funders in Waterloo Region. No bitching about that. Not sure how Phil Telio feels about his trademark being reused. I’d be upset. But I digress, maybe serves as evidence that more of the operational money goes directly to entrepreneurs and companies that Communitech helps, because it’s not going into new branding.

    It looks like an amazing event!

    They have a great line up featuring:

    Given the strong history of Entrepreneur Week. And the speakers and types of events lined up, it is set to be a fantastic week.

  • Waterloo mafia invade Toronto

    I’m guessing this is confirmation that Waterloo Region is really just part of the Toronto ecosystem.

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    I have seen The Communitech HubSpot space. Not a bad name given the facility that houses Communitech is called The Hub, calling a smaller zone in Toronto “The HubSpot” would make sense. Other than one of the leading CRM vendors based in Boston that has raised a combined $65MM in financing is also called HubSpot. That’s got to be bad for SEO.

    I first saw the Communitech HubSpot space when I looked at moving the Maintenance Assistant offices earlier this year. It’s space located on the 2nd floor of 170 University Ave, that doubles as offices for Phil Deck. Phil was previously the CEO and Chairman of MKS Inc. which was acquired by PLC for $305MM in 2011. Phil is also on the Board at Communitech, which features other key players in the Waterloo and Toronto ecosystem including John Ruffolo of OMERS Ventures, Carol Leaman of Axonify, Ali Asaria of Well.ca and John Baker of Desire2Learn.

    “It’s been a lot of hard work and even more fun putting Waterloo Region tech on the map with the help of a hugely supportive community.”
    Iain Klugman, Communitech Marks 15 Year Anniversary of Supporting Waterloo Tech

    Communitech in Toronto

    It’s great news as Well.ca already has offices in Toronto. Previously Waterloo-based companies like Top Hat Monocle have moved to Toronto. There are a large number of Waterloo alums actively working in the Toronto startup ecosystem (I’m a UWaterloo alum along with Farhan Thawar, Zak Homuth, Zach Aysan, John Phillip Green, Dan Holowack, Oshoma Momoh, Bruce Chin, Garry Seto, Mike Rhemtulla, Monica Goyal and that’s just off the top of my head).

    Too bad they chose to leverage an existing StartupNorth brand for the event. The least they could have done was invite us. Oh well, they stuck with our own “invite only” model.

     

  • For Startups, Target Audiences can be a Challenge

    Bullseye by Joe Prosperi (prosperij) on 500px.com
    Bullseye by Joe Prosperi

    Within a marketing strategy, it goes without saying that target audiences are a key consideration.

    For all the focus on nurturing an idea, addressing a point of pain and developing a product, the ability to achieve traction hinges on the ability to connect with target audiences. Again, it’s an obvious statement.

    The trick and challenge is identifying target audiences, their demographics, needs and buying behaviour. For some products, target audiences can be straightforward, while other products appeal to a variety of target audiences with slightly different needs.

    For startups, getting a good grasp on target audiences can be a challenge because they may not have the resources to conduct in-depth research – be it through surveys, interviews, focus groups, etc.

    It means developing target audiences can be a quasi-guessing game that include a number of assumptions. In an ideal world, these assumption are pretty accurate so a startup’s sales and marketing activities are aimed in the right direction.

    It also possible the target audiences that had been identified are either not right or a startup attract customers who weren’t originally identified or seen as a priority.

    It is important to continually get as much information about their customers. Who are they? How did they find you? What are their needs and motivations? How did you find you? What alternatives or competitors did they consider?

    Getting this information provides valuable insight that can confirm target audiences or deliver eye-opening information about new customers and new sales opportunities.

    So how does a startup begin the target audience process?

    It begins with creating personas that identify a customer’s age, education, needs, goals, purchase risks, how they get information and do research, and the buying process. This will help you create a pretty good buyer profile. Keep in mind, there can be multiple buyer personas for your products.

    Buyer personas provide direction and insight into the ways to reach the different parts of your target audiences. If possible, you can interview people who fall into these buyer personas to test your assumptions and, if necessary, tweak or overhaul them.

    The reality for startups is nailing their target audiences can be difficult to achieve out of their gate. But by taking the right approach, you can establish a good foundation upon which to build.

    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 Sept 18, 2012 on MarkEvansTech.com.