StartupNorth

Author: Jevon MacDonald

  • 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

  • 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.

  • Startup’s Razor

    Here’s is a lesson I (almost) learnt the hard way.

    Back in 2006, I met a talented developer who had built a novelty web telephony product. We caught up for a tea and discussed applications for the technology. One ambitious idea was to create something akin to Yahoo Pipes with the Asterisk open source PBX. Pretty awesome, right?

    With one developer and one designer we got started with a simple proof of concept. Then he broke (and almost lost) his leg snowboarding – out of commission for months, the project got dropped. Had he not wrapped his leg around a tree, in retrospect I am fairly certain the project might still have been left in the dust… read on.

    There is a principle known as Occam’s Razor, which has been tabled by many great minds. It goes something like this:

    Frustra fit per plura quod potest fieri per pauciora. – William of Ockham

    Make things as simple as possible, but not simpler. – Albert Einstein

    Keep it simple stupid. – Kelly Johnson

    Fast forward to 2009, along came Twilio, an IP telephony platform exposed as a service via a simple API (it rocks, check it out). Fact: an API is far less complex than building a drag and drop pipes type solution.

    The simplest solution, all else being equal, wins.

    Why? The simplest solution is fastest to implement (aka Minimum Viable Product). The simplest solution addresses the broadest possible set of customer use cases. The simplest solution leaves the most capital to direct into the drivers of growth other than product development.

    Can your product be too simple? Can you cut too much? Sure. That said, I’d bet you need to keep shaving (we did).

     

  • Hunting Elephants

    Recent news of the GoDaddy Elephant Hunt (warning graphic video) offers two lessons for startups. The first is obvious, as CEO your personal brand is inescapably linked to your company. The second is perhaps somewhat less obvious in the cloud of outrage… YOU SHOULD BE HUNTING ELEPHANTS.

    Allow me to explain:

    1. No one will care if you go on a mosquito hunt. If your startup is pursuing a tiny market, no one will notice, no one will invest, and no one will join the hunt.

    2. The elephant hunt will feed a village. Even if your startup is successful, if the market is minuscule you have failed.

    3. An elephant is easier to see than a mosquito. Finding customers for your startup is half the battle.

    4. Elephant hunts are more dangerous. There is nothing quite like the thrill of competing in a dynamic market.

    5. You will love telling the story about the elephant stampede through camp. Even if you don’t end up revolutionizing a market, you’ll learn an industry and build a strong network.

    Are you hunting elephants?

     

    In case you missed the point entirely, this post was about markets not mammals. Species and habitats are essential to a healthy planet. Please don’t go around shooting elephants with artillery for sport, there is nothing sportsmanlike about it. Instead consider making a donation to the World Wildlife Fund and become a partner in conservation.

  • Rewardli in first 500 Startups accelerator class

    The first cohort to join 500 Startups accelerator has just been announced. Included is a Canadian team led by George Favvas who is working on a project called Rewardli. Not many details on the startup yet, but the focus is “helping small business owners leverage their social graph in interesting ways.”

    George had this to say: “We are incredibly excited to be a part of the first batch of startups to go through the program. Dave McClure is obviously a very visible leader but there is an entire team behind him, not to mention a network of over 100 mentors who actively help and hold office hours in the accelerator. Unlike YCombinator, all 500 Startups accelerator companies share physical office space in Mountain View, which I think is a good idea as you can sense the energy just by walking into the room. There are events, talks, and workshops which often focus on the core themes of design, data and distribution. At the end of the program, we expect to have iterated enough to have a minimum viable product that addresses a real pain point, and raise a round of follow on financing.”

    Update: Real Ventures is participating in the seed round as well.

  • Why Canada? Habib Kairouz of Rho Ventures explains

  • iStopOver and PlanetEye merge raising $3M

    iStopOver, the peer-to-peer accommodation rental marketplace incubated by Brightspark, has merged with PlanetEye, the interactive travel guide spun out from Microsoft Research – in the process raising a round of up to $3M from GrowthWorks and JLA Ventures, PlanetEye’s original backers.

    The merged company is adopting the iStopOver brand and will focus on expanding the rental business. iStopOver is poised to launch in new markets, having recently validated its model by facilitating thousands of bookings (valued at $1.25M) between hosts and guests during the South Africa Soccer World Cup. It is free for hosts to list a property, iStopOver captures a booking fee of 6-15% on each reservation.

    iStopOver’s Anthony Lipschitz will serve as COO and Mark Skapinker as Executive Chairman of the company. PlanetEye’s Jonah Sigel, who will continue on as CEO, shared his thoughts on the value PlanetEye brings to the venture in addition to its development team and portfolio of patents pertaining to interactive maps:

    The unique ability to show a potential customer everything they want to know about a specific area, the restaurants, the events, the attractions, social media happenings and more will help that customer make a more informed booking decision.

    With greater resources to invest in development and marketing, iStopOver is well positioned to compete with AirBnB in this emerging online travel segment.

  • EmpireAvenue raises seed funding from W Media Ventures

    EmpireAvenue, the world’s first influence stock market, where you can buy and sell virtual shares in your friends and brands has raised it’s first round of seed financing from W Media Ventures. Something hinted at in yesterday’s City of Champions round up.

    The Edmonton based startup, founded by former BioWare, Electronic Arts, and MySQL employees, has in a matter of months developed a robust social trading platform and attracted over 15,000 users. The new capital will allow the company to continue development and launch Avenue Rewards, a platform that connects brands with influential individuals. A similar business model is being pursued by Klout, a competitor in the influence market.

    As part of the financing, Boris Wertz of W Media Ventures will be joining EmpireAvenue’s board. Boris is easily one of the most active early stage consumer internet investors in Western Canada, with a portfolio that includes: Tynt, Suite101, Indochino, Yapta, and many more. He brings an incredible depth of experience to the venture; EmpireAvenue’s stock is rising in a major way.

  • Connect with Wired.com's Evan Hansen

    Interested in attending next Monday’s session with Wired.com’s Evan Hansen? StartupNorth has secured 20 seats, which would otherwise cost $85 each. Register for a free pass through StartupNorth while tickets are available: http://guestlistapp.com/events/24501

    Gone are the days when we scrambled to the set to catch our favourite shows in their scheduled timeslot. Today’s viewers want personalized, on-demand access and a host of high-tech innovators are giving them exactly that. Join Wired.com’s Editor in Chief, Evan Hansen for a discussion on the new realities of entertainment and all things digital.

    Date – Monday, June 21, 2010
    Location     – Events On The Park, 1095 Leslie Street, Toronto, ON
    Breakfast     – 7:30am
    Session – 8:00am to 9:00am

  • Open Coffee Ottawa – May 26

    Next Wednesday (May 26) StartupNorth is organizing an Open Coffee in Ottawa. It is an opportunity for entrepreneurs, developers, and investors to connect at an informal meetup. We’ll be heading to Bridgehead Coffeehouse (109 Bank Street, Ottawa) from 10am to 1pm.

    Open Coffee Ottawa
    Bridgehead Coffeehouse
    109 Bank Street, Ottawa
     10am to 1pm