StartupNorth

Author: Jonas Brandon

  • 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.

  • Startup Festival coming to Montreal – Why it’s important

    I know that David just posted about the upcoming Startup Festival, but I thought I would add my own thoughts:

    I have definitely been getting the feeling that the whole “startup conference” format is getting a little stale. The same formats in the same cities with most of the same speakers. The real benefit of any conference, the ability to spend time with smart people, is still enough of an incentive to keep us coming back.

    So when Philippe told me about what he is working on for the Startup Festival in Montreal, I needed a minute to re-set my thinking. When I did that however, it was clear that this would be something new.

    The announced lineup is looking great so far, but that is not the really exciting part. The entire format of the event will be much more fluid and engaging than a typical 1-2 track conference agenda.

    Philippe is engaging with the community and opening up the event as a platform for other groups to throw in and create their own events and activities during that time. We (the royal We – Startupnorth) are looking in to doing our own event one evening.

    I am excited about an event that is focused on openness and a shared sense of purpose with the community.

     

  • Year One Labs — The Perfect “Incubator”?

    I abhor the term “incubator”. I remember in fifth grade when our teacher brought in a chicken incubator to show us how chickens are born.

    We waited and waited and waited a while longer still.

    All the little Chickens were dead, it turned out. We weren’t quite sure why but most of us thought that one of the guys in our class with “anger issues” was somehow responsible.

    So to this day when I hear the term incubator, I think of a sea of dead chickens and the broken dreams of little boys and girls.

    So I was surprised when I walked in to Year One Labs today and, rather than chickens, I saw a lot of people. Not just any people either, but some of the best entrepreneurs I have met in years.

    We wrote about the launch of Year One Labs back in September 2010

    The current portfolio of Montreal based Year One Labs includes:

    High Score House

    HighScoreHouse was founded by Kyle Seaman and Theo Ephraim. The company is building a fun, entertaining solution to help parents use positive reinforcement to motivate their children.

    They have yet to launch but you can learn more at highscorehouse.com.

    Localmind

    Localmind was founded by Lenny Rachitsky and Beau Haugh. Localmind allows people (from the web or their mobile phone) to ask questions of people checked in at locations. Questions can be in real-time or not. The big vision is to empower people to know anything they need to know about any place at any time.

    Localmind is currently available online at localmind.com.

    Please Stay Calm

    Please Stay Calm was founded by Garry Seto andKen Seto. The company is building a massively co-operative location based social game with a zombie theme. They have not yet released the game, but you can sign up for news at pleasestaycalm.com.

    And you can learn more about the game and their progress on their blog.

    as well as Assemblio and one other as of yet unnamed startup.

    There are some things to love about Year One Labs:

    • The founders of Year One Labs have their own money invested
    • The founders of Year One Labs are experienced founders with good operational backgrounds. It seems clear to me that they know how to gradually disengage as the founders of resident companies get their feet under them. They aren’t constrained by awkward incubator contracts or “client service agreements” where a lot of resources go more and more unused as a startup outgrows them. That flexibility is important.
    • They have a bar built right in to the lobby

    It’s not all ice cream and pie for these guys though, from the outside it is clear to me that follow-on financing relationships are always going to be tough for groups like this and keeping the lights on does become a heavy expense over time.

    This sort of activity, much like Extreme Venture Partners in Toronto and the work that BootupLabs had been doing in Vancouver is the lifeblood of an early stage startup community. Whenever politicians give speeches and talk about things like the “IT Sector” and “knowledge workers” — this is what they are talking about. We have to find careful ways to support efforts like Year One Labs but also keep the market competitive enough that the best ones may rise to the top. In the current model of massive infusions of cash for real-estate and bureaucrats does not let the market pick the winners.

    The entrepreneurs are the ultimate customers here and they will be the ones who make or break Year One Labs and every other similar effort in Canada.

  • Salesforce acquires Radian6 for $326 Million

    This will be all over the news today so I won’t try to keep pace with the commentary, but the news that Salesforce has agreed to acquire Radian6 a Fredericton, New Brunswick company founded in 2006 ,is out.

    I won’t try to keep pace with then endless coverage that will be happening, but here are some thoughts on what is cool about this:

    • Ride the Winners: There is no doubt that Radian6 has had a lot of offers over the years. Competitors such as Techrigy, ScoutLabs and Sysomos likely sold out WAY too early. This is something Roger Chabra has been saying to me for a while: When something is working, stick with it.
    • Canadian made: Radian6 was built and financed entirely in Canada by Summerhill, BDC and Brightspark. They funded Radian6 early and they stuck with it. That’s a great and all too rare story.
    • New Brunswick made: When I tell many of you that I have moved to Halifax I sometimes get questions like “is there any startup community there?” or “Is there any talent there?” — Now I have an easy answer to what I have already found out: This region is brimming with talent and with the right leadership great things can be accomplished.

    Congrats to the entire Radian6 team as well as Summerhill, BDC and Brightspark. This is big news and a great story.

  • Ted Livingston is insane in the best sort of way

    A lot of people talked shit about the recent valuation of Kik. It all seemed a bit insane and I admit the numbers I heard seemed wild. That was until word dropped that Union Square Ventures has joined the deal alongside RRE.

    Today Techcrunch is reporting that Ted Livingston is using a chunk of the money that he took off the table in the recent financing in order to further back UWs Velocity dorm/program.

    Say what you want to but Ted Livingston gets it and the moment he had the chance to do it: he gave back. That is all too rare a thing. He obviously did well in the transaction that generated the extra $1million, but not THAT well. He is obviously just an incredibly generous person. I am totally inspired.

    If we can continue to back and inspire entrepreneurs as passionate as Ted then we just might get somewhere.

  • Indochino goes big, raises $4m in capital

    We first covered Indochino when they launched back in 2007. To say I was excited would be an understatement and anyone who knows me knows I have been advertising their stuff to anyone who will listen since then. The news has finally landed that they have closed a $4million round led by Madrona Ventures.

    Indochino is also one of the original Boris Wertz Deals™ and was further backed by Wertz’ Burda Digital relationship.

    More than anything we have seen Kyle and the team remain true to their vision over the years and while I am sure they have hit their share of bumps along the way, they have never wavered in their dedication to their concept.

  • Sales, Marketing, PR and Support in Startups

    Fred Wilson wrote a few posts about marketing in startups. He really put his unvarnished opinion out there and circled back with a bug report. Sometimes when you put your opinions on paper your expose your blind spots. Fred had a few (saas, b2b, etc) that he acknowledged in the bug report.

    Howard followed up with a great post about his experience with Stocktwits. Three years in and he is just starting to look at broad acquisition channels. It makes sense because once you have the product in the right place then you can pour some fuel on the fire. Sometimes it takes 3 years, sometimes it takes more.

    A few weeks ago I was having a conversation with Mike McDerment, the co-founder and CEO of Freshbooks. I asked him about their sales operation. I wanted to know about their inside sales operation but his response was “well, our support department is our sales department”. Ok, who is your support department then? — “everyone“.

    In the following days I had similar conversations with Ali at Well.ca and Dan Debow at Rypple. They all have different configurations but the theme was the same: We are doing this ourselves.

    Sales, Marketing, PR and Support are not seperate functions in an early stage startup. Your team DNA has to be created to allow you to execute on all of these disciplines internally and to continually improve related processes. Your developers need to be integrating marketing tools in to your product and they must understand the marketing process to do that. Marketing needs to live and die by the product and in the beginning it needs to BE the product.

    That is where I see the difference between great founder/CEOs and those who misunderstand the role. A great CEO knows that it is more painful to build these skills inside the house rather than outsourcing them, but they understand that the long term benefit is more than worth it.

    In the beginning everyone is a generalist. To some degree everyone must understand everyone elses capabilities. This creates an environment of trust, respect and transparency. Development is necessarily linked to marketing, sales, support and other functions. Making sure that this happens is difficult. It is some of the hardest work you will ever do as a leader because it means exposing your own weaknesses. It means that you too have to learn from those around you. You must become a pupil again.

    Build for speed of execution, the rest will come. Hustle is a big word. A startup with hustle is one that can execute rapidly, find weaknesses, and then execute again.

    At one of my previous startups we had raised a decent amount of capital. We had enough that you could theoretically fix any problem with money. We could have just outsourced a problem and voila— fixed. I had a partner who had been through it before though, and he knew that wasn’t the long term solution. So we built every important competency internally and it was HARD. It caused a lot of frustration and it slowed us down at times, but he put our feet to the fire and made sure we even got a little burned. In the end I believe it paid off in multiples. We got fast and efficient and when we did separate the roles out more clearly it was painless and that was years into it.

    Every startup comes to a point when they need to start separating and segregating some functions, but that should happen when you are done experimenting and you are ready to execute more broadly and deeply. We all grow up but it is dangerous if it happens too soon. The scale and timing is different for every startup. It is what Howard is doing and it is what we all have to do someday.

  • Chango closes a $4.5m Round B

    Chango has announced today that they have closed a $4.5 million B round that includes their existing investors as well as lead participation from Rho Ventures (Canada) and iNovia. Roger Chabra lead the deal for Rho and this represents his first placement since joining Rho Ventures last year.

    Christopher Dingle has also joined Chango from his role as EIR at iNovia (although he seems to have joined in October, so I am just catching up it seems). Notably absent from this round as well as the Series A is MantellaVP, who seem to be participating in the form of sweat equity but not in the form of capital placements as Duncan Hill is actively operating on the management team. Perhaps I am unclear as to Mantella’s model, I thought they were operating as a traditional fund but perhaps their model is changing. That could make sense as both Duncan Hill and Robin Axon have a lot to contribute in terms of operating capability.

    Chango is an AdWords style platform for display (banner) advertising which is focused on low-latency ad targeting and serving across networks. As inventory has become realtime they are able to distribute highly targeted ads across that inventory. This sort of targeting was not possible in past models and Chango seems to be utilizing capital to stay ahead of the curve as more players enter the space. Chango also has the unique ability to automatically generate the banner ads being served.

    The most important aspect of this deal is that Canadian capital is being put to work to power a high-potential company that otherwise likely would have closed a US focused deal. This type of growth capital was much less active just up until recently and it represents the critical role that iNovia, Rho and others are going to play in the Canadian landscape in the coming 5 years. The health of these funds is critical to our ability to create value based in Canada that can attach US and international markets with a comparable amount of resources. Albert Lai famously made a splash about the lack of growth capital in Canada in 2008 and it is my hope that the situation is now changing.

  • CIX Canadian Technology Accelerator

    When I heard about the CIX Technology Accelerator last week I asked the folks at CIX to write a guest post to tell us more about why they decided to partner with a SF based accelerator to put this package together. I’m not sure about the immigration visa issues around this arrangement, but I assume that is taken care of as well? — Jevon

    Canadian Innovation ExchangeThe Canadian Innovation Exchange (CIX) is delighted to announce that, in partnership with DFAIT and the Consulate General in San Francisco, we are launching a new program to support the innovation community in Canada – the CIX Canadian Technology Accelerator.

    The idea is simple. So many emerging Canadian tech companies – from the most early-stage start-ups to more developed players – have told us that they’re eager to develop stronger connections in Silicon Valley, but haven’t been able to find the right opportunity. Well, here it is: the Accelerator will put three qualified Canadian companies in the Plug and Play Tech Center (PnP) in the heart of the Valley for three months, rent paid, starting in June, 2011.

    What makes this program truly unique is that PnP is more than just a fully serviced work space. Selected companies will be working alongside over 150 tech start-ups from more than 20 countries while meeting experienced mentors and advisors who can guide growth and development in the Valley and beyond. The program also offers introductions to local angel networks and VC firms and dedicated access to the Canadian Trade Commissioner Service. Finally, each company will receive a complimentary pass to CIX 2011, taking place next December in Toronto, bringing back the knowledge and experience gained in California and helping to further enrich Canadian connections in the Valley.

    The program is open to any Canadian-based tech company working in Digital Media and Information and Communications Technology. Qualified companies are invited to fill out a brief profile on our website before March 11th, 2011. An expert CIX Selection Committee will review submissions, and the three selected companies will be announced in early April.

    For more info and to enter, head to our website at www.canadianinnovationexchange.com.

  • A vendetta to get you up in the morning

    I always like to say that a little vendetta is healthy for a startup. A vendetta, or keeping frenemies as Mark Suster wrote, can be a positive way to differentiate yourself if you understand the bigger picture. It is risky as part of of a company culture, but when you believe in something enough you can use it to your advantage.

    Now, the term vendetta might be a little harsh at least by the letter of its definition. Perhaps frenemies is a little more more palatable.

    The best playbook on this is Marc Benioff’s Behind the Cloud and Mark covers the rest in his post (especially the advice: Do not actually think your competition is stupid), so I will only add:

    The bigger message has to be positive

    Mark Suster mentioned Marc Benioff in his post. If you dig in on how Marc has positioned Salesforce against the rest of the industry it can, on the surface, seem very confrontational. The truth is that every jab Marc takes seems significant because he draws momentum from his very positive and forward thinking vision for Cloud Computing/SaaS.

    Without that leadership then Marc might have been less endearing, but instead he gave more positive thinking and leadership than he did negative. That meant that when Salesforce did use negative tact (their logo is an example of negative messaging), then it was easy for the customer to understand where that negative message fits in to a larger picture. Without the bigger picture? It’s just negative.

    Know what you are not

    In my most recent startup we were stacked up against a handful of competitors during a “pitch day” to the executive of the customer. It was a “must win” deal for us but it was still a longshot because we were up against some well entrenched competitors who “owned” the industry. The truth is that we had harboured a quiet vendetta against these guys for ages and it drove us to understand their business as much as possible. “Competitive intelligence” was not something we did formally, but I realized at that moment that it had become a small hobby. We would research what the competition was doing, who they had doing it, and how their customers felt about it.

    The end result was that we knew exactly how to position ourselves to differentiate away from the rest of the competition. When the customer thought about the pitches they thought about us on one side and the competition as a cluster on the other. Our value vs. theirs was implied and we didn’t have to spell it out or waste valuable time in our pitch. We knew what they were and what we didn’t want to be. We just had to believe that it was how the customer felt as well.

    Don’t be a hater

    That is all to say: Don’t be a hater. Don’t make it personal. Don’t be vindictive. Love the game of it all.

    In the end: it is a game and if you don’t realize that you will be the first to run out of steam.

    This is all especially true in enterprise software where the customers (nee users) are actually being treated like crap by your competition. A little empathy goes a long way with them.

    A lot of people like to pretend they love their competition and talk a friendly game. That is fine, it is probably your best default position, but when the time comes to walk out of that corner and start landing punches then we all expect you to make them count. Your customers will respect it, your employees will respect it and more than any other: your competition will respect it.

    Just make it count.