StartupNorth

Category: Canada

  • Jonas Brandon joins Rogers Ventures

    I am happy to let you all know that Jonas Brandon, a co-founder of StartupNorth, has recently taken a position as Director at Rogers Ventures, who we profiled last year. He will be working with Mike Lee and the team to look at new deals and work with existing Rogers Ventures portfolio companies.

    Jonas is a bit of a natural investor, with a consistently good eye for startups that have a shot at making it, he has always impressed me over the years and is a regular source of good advice. We have held court many evenings at the library.

    Jonas also recently got married to his wonderful girlfriend Ana. That’s a big Q1!

    I had dinner with Mike Lee early this year, and the thing that I am most excited about is the desire at Rogers Ventures to be neither a typical corporate VC fund, or a typical fund at all (my words, not theirs). Having Jonas in this role at Rogers is good news for startups all over Canada and I think it speaks to the foresight of the team at Rogers Ventures.

    Founder Fuel, Extreme Ventures, Bootup Labs, Mantella Ventures, iNovia and now Rogers Ventures. Come on. Let’s get this show on the road. Let’s save venture capital in Canada.

  • SxSW fallout – you should attend MeshU

    There’s been a lot of bitching about the state of SxSWi and why it sucks!

    “Too many people, not enough tech.”

    Jay Baer provides the best observations about what is working, what is broken, and some general themes from the event.

    1. There is more than one SxSW
    2. Bigger Isn’t Necessarily Better
    3. The Conference isn’t that Good
    4. The Periphery Exceeds the Core

    The great news is that there are fantastic opportunities for entrepreneurs in Toronto (and across Canada, but we’ll come back to that). There are a number of small focused events. MeshU and Mesh are firecode limited at MaRS to 450 attendees. They are excellent opportunities to connect with entrepreneurs, designers, developers, marketers and funders. The event is tight and there are multiple tracks, however, the core keeps getting stronger every year. The core speakers are fantastic.

    MeshU is a one day event. Perfect. My attention span can’t handle 5 days (never mind the 5 nights). It is happening Monday, May 17, 2010 which is right before Mesh Conference and OCE Discovery. MeshU is the supporting event to these 2 larger events. The supporting role has allowed it to focus on delivering great value.

    Education-based aka the strong core

    MeshU, May 17, 2010, Toronto, ON
    MeshU, Toronto, ON May 17, 2010

    The mesh team has always put on a great set of events, however in 2010 they have added one speaker that will justify the entire price of the ticket for me. Sean Ellis runs Startup-Marketing.com and 12in6 Inc.

    12in6 specializes in helping startups unlock their full growth potential.  Our metrics, survey and experiment driven approach has evolved over 15 years of taking startups to market as VP marketing, interim VP marketing and as an outside advisor/consultant.  The first five startups our principal (Sean Ellis) helped take to market were:

    1. Uproar (IPO)
    2. LogMeIn (IPO)
    3. Xobni (Khosla Ventures – rapid user and revenue growth)
    4. Eventbrite (Sequoia Ventures – rapid user and revenue growth)
    5. Dropbox (Sequoia Ventures – rapid user and revenue growth)

    5 projects that include 2 IPOs, and fuding from Khosla and Sequoia Ventures. Startups that have opportunity to learn about the Customer Development methodology from one of the best executors. This session will justify the price of the MeshU ticket for most startups.

    There are other fantastic speakers including Aza Raskin from Mozilla Labs, Joe Stump from Digg, and Meredith Noble from Usability Matters.

  • More seed funding for Canada – Founder Fuel gets their first commitment

    I first met John Stokes a few years ago when he landed on to the Canadian startup scene and started talking about his new fund Montreal Start-up. In March 2008 they raised a small initial fund which they quickly deployed in to some nice deals in Montreal including Status.net and Whatsnexx.

    John and the team, which includes Austin Hill, announced today that they will be taking commitments from the Quebec Government (through Investissement Quebec) at $50 milion, Solidarity Fund QFL, which is investing $33 million, and by FIER Partners, which plans to invest $17 million.

    The fund still needs to raise over $8million directly from LPs, which Investissement Quebec seems to think will be a snap and done in 4 months, but I am not so sure. I hope I am proven wrong.

    In case any potential LPs are reading this right now, here is my advice: Do this one. Do it because this team is going to do more than just pass the time humming over deals — you will get hustle, an aggressive attitude and a group that understands that Canada needs more hustle and less of the same old.

    John and the team are connected and tuned in to the community. Early stage entrepreneurs trust this team and they are the kind of guys who can get your money in to some great opportunities.

    Congrats and good luck.

  • Q&A with RedFlagDeals

    I had the opportunity to ask Derek and Ryan of Clear Sky Media a few questions about the YPG acquisition.

    When did YPG approach you to buy RedFlagDeals.com/Clear Sky Media?

    Derek: We had spoken with YPG over the years about syndicating/sharing data, but things really started to gain momentum in the fall.  Clear Sky Media had traditionally been very focused on national and online offers, but we all recognized the opportunity with local deals and coupons and helping consumers make better buying decisions more broadly. Things moved very swiftly from there and we completed the deal in early February.  YPG is serious about expanding their online presence and they have a scale that will allow us to broaden our reach nationally and at the same time tackle the local space that would have been impossible for us otherwise.

    What is the plan for RedFlagDeals.com and other properties in the YPG portfolio?

    Ryan: As Derek mentioned, the deal makes a lot of sense for both parties.  Local is an area we had always been interested in, but as successful as we had been, we were nowhere near the scale to properly address it.  YPG has over 1000 sales people and direct relationships with about 385,000 businesses in Canada.  Now that we have the scale and the resources, we’re staying on to see how big we can make this.

    It was only four and a half years ago that it was just Derek and I working in a 200sqft office above an Internet café.  It’s very exciting.

    Derek: Beyond local, we’re also looking at what we can do in the shopping search space with PriceCanada.com and we’ll continue to invest heavily and accelerate the growth of RedFlagDeals.com and Scarlett Lounge – more to come!

    What are you going to do next?

    Derek: In the short term there’s a lot of work to do.  We’re keeping our downtown Toronto office and our entire team, but we’ll be expanding rapidly.  Longer term, I think we have an opportunity here to create something that is much greater than the sum of its parts.  No one has really figured out local search and shopping yet.  It’s a challenge, but it’s one that we’re now in a place to take on directly.

    What is one thing would you tell other startups about the acquisition process?

    Derek: Even though this was, in many ways, a very streamlined acquisition, it was very time consuming and sometimes very frustrating.  There is a lot of back and forth on seemingly minor items, but it’s a necessary part of the process. Having lawyers and accountants that you trust who have worked through it before is huge.

    What is one thing you would do differently?

    Derek: Because of the timeline we were working on, it might not have been possible in our specific case, but before the Letter Of Intent was signed, I would have had a more detailed discussion about what exactly the due diligence required and what we would need to do to close.  In our case, we had a short period for all of this and in hindsight, I would have given ourselves more time.

    Ryan: The timeline also meant that the initial transition has been a bit bumpy.  If we had had more time, I would have liked to have had our accounting, HR, and PR processes in line.  All things considered, it’s gone well, but we could have saved ourselves time and headaches with a better fleshed out transition plan.

    Final thoughts?

    Ryan: We’re really proud to have been involved in the Canadian startup scene over the past 5 years.  It’s not always easy being a Canadian startup; really, it’s a pain in the ass a lot of the time, but you can be successful in Canada.  In the areas where Canada is behind the US, there are opportunities.  Plus, you have one of the most supportive communities I’ve seen anywhere rooting for you.  It’s been awesome.  Thanks everyone!

  • 10 Things Happening on the Canadian Tech Scene

    I was reading Curbed.com’s Lockhart Steele’s presentation on Ten Things Happening on the New York Tech Scene in ’10 and I thought we shouldn’t be left out. So I started to compile a list of things that I’ve been tracking about the Canadian tech scene leading in to 2010.

    10 Things Happening on NYC Tech Scene in ’10

    View more presentations from lockloct.

    So here’s my list of what’s going on in the Canadian tech startup scene in no particular order (and I know I’ve a few things like cloud with enomaly and vm6). I probably need to do a little more analysis to get this down to a regional analysis, i.e., Toronto, Montreal, Ottawa, Waterloo, Calgary, Vancouver.

    What else did I miss?

    10. The Changing Funding environment

    9. Existing Players aka the Big Guys

    8. Open Data

    7. Social Analytics

    6. Social Gaming

    5. Social Media Channels and Advertising Networks

    4. Real-time data and analysis

    3. Mobile

    2. Blogs

    1. Social Places

  • The Value of Community

    Are you curious about what being a startup is really about? Do you think there are too many events in Toronto?

    “Being in the community is important to you, but being in front of your customers is what is important to your startup.” –  Jevon MacDonald

    Well, we’re trying to help connect entrepreneurs, designers, developers and others interested in starting new high potential growth companies. Why? Check out Paul Graham’s What Startups Are Really Like. In particular, 17. The Value of Community. We’re trying to create a peer group, people that are facing similar obstacles in creating new tech, software, mobile, social Internet startups.

    “One of the most surprising things I saw was the willingness of people to help us. Even people who had nothing to gain went out of their way to help our startup succeed…The surprise for me was how accessible important and interesting people are. It’s amazing how easily you can reach out to people and get immediate feedback.” – comments on What Startups Are Really Like

    I want a vibrant, connected, accessible community of founders, investors, advisors and others in Canada. And I’m not alone. There are great communities across the country in Ottawa, Montreal, Waterloo, Guelph, Edmonton, Calgary, and Vancouver (and be sure to check out StartupDrinks).  Here’s what we’re doing locally:

    1. Consider attending DemoCamp Toronto # 25 on January 27, 2010.
    2. Are you looking for a social opportunity to connect with the individuals that fund high potential growth startups in Canada? You should consider applying to attend Founders & Funders on February 15, 2010.
    3. StartupEmpire is happening on May 20, 2010. Stay tuned for details.

    So it’s not about partying, but it is about finding others facing similar challenges and those that might be able to help your startup.

    I hope you decide to participate.

  • Interview with John Green of Savvica

    jumbotests I had an opportunity to catch up recently with John Green, cofounder of Savvica, and over an early morning breakfast got schooled on what’s new at LearnHub and JumboTests.

    StartupNorth: What is JumboTests.com? What’s the relationship to LearnHub.com?

    John Green: JumboTests is an extraction of core test preparation technology and content from LearnHub, and factored for a different audience and user acquisition model. Both sites are run by the same content, engineering, and community management teams here at Savvica Inc.

    SN: So what is the change in target audience with JumboTests?

    JG: LearnHub, although useful to English speakers everywhere, is targeted at the Indian student market. More than half of Savvica’s employees are in fact in our marketing team, which is based in Delhi, India.

    JumboTests, on the other hand, is not focused on any particularly geography; it is equally useful to anyone studying for the standardized tests covered on the site (including GMAT, GRE, SAT, TOEFL, and others). This makes JumboTests especially relevant in the US and other Western countries which have the majority of the test takers every year.

    SN: How are the user acquisition models different?

    JG: Visitors to LearnHub mostly come through search engines. LearnHub has several hundred thousand pages indexed by Google and other search engines, and we rank at the top for hundreds of popular search terms. The site has a mix of user generated content and content made by our expert staff. For instance, LearnHub has the world’s largest free GMAT question bank, which has thousands of questions developed by us and our community. It is very popular.

    Search engine traffic is less of a factor for JumboTests. Instead we are growing through strategic partnerships. Sites with existing, large, and relevant user bases (such as job sites, education sites, or portals) essentially embed JumboTests into their site using our partner platform. Our partners get hundreds of high quality practice tests that drive engagement, page views, and a split of the revenue.

    Since the JumboTests launch 3 months ago, we have entered into long term relationships with 3 partners, all top in their categories: TalentEgg, India.com, and The Globe & Mail. All of these integrations are already deployed and online.

    SN: So what’s next?

    JG: We feel both properties have a bright future. Between the 2 sites, we help over 350,000 students a month with test prep, university applications, and career advice. That’s a lot, but there are many more students that aren’t on our sites but should be.

    LearnHub is the largest education website in India, excluding reference sites like Wikipedia. But India has a long way to go in terms of Internet penetration. It has about 2x the Internet users as Canada, but it also has over 1 billion people. The number of Internet users in India doubled last year to 50-60 million. We are pegging our growth to outpace the Indian Internet penetration rate over the next 5 years.

    JumboTests is tackling a more mature market. That is why we are growing it primarily through partnerships. There are a lot of established online channels whose audiences would benefit from our unique content and delivery technology.

  • StartupNorth Jobs

    GarageCollageThe hours at a startup might be long and the pay might just cover a six inch sub, but there is nothing more rewarding than being part of a team out to change the world.

    We’ve added a job board on StartupNorth to help Canadian entrepreneurs find great people to bring on.

    Since launching a couple weeks back we’ve had 26 postings, 2667 views, 129 applications, and 16 referrals.

    Companies looking to grow their team include: FreshBooks, Well.ca, Tungle, LearnHub, Fixmo, ThoughtFarmer, iNovia, and Xtreme, obviously some amazing opportunities.

    It is free to search and post, so head on over and check out: StartupNorth Jobs at http://jobs.StartupNorth.ca

  • Compared to others

    “With the proper level of ambition, talent, and opportunity, even a small, islolated company can turn the world into its market” – Michael Cusumano, Dealing with the Venture Capital Crisis

    I’m reading Michael Cusumano’s Dealing with the Venture Capital Crisis in the October 2009 issue of Communications of the ACM, I’m struck by the idea that our geographical proximity to the US, advanced economy, good universities and strong intellectual property rights might be the spawning ground for new ventures, sources of wealth, social welfare and employment. The article proposed 4 markets that meet these requirements including:

    • Israel
      Estimated 2009 Population: 7.4 million
      2008 Venture: 483 investments totaling US$2.08B, $780M from local VCs (Cdn$2.54B/Cdn$904.84M)  (IVA) 
      Investment-to-GDP: 0.0125/0.0045
    • Finland
      Estimated 2009 Population: 5.3 million
      2008 Venture: 406 investments totaling 360M euros (Cdn$620.55M) (FVCA)
      Investment-to-GDP: 0.0032
    • Ireland
      Estimated 2009 Population: 4.9 million
      2008 Venture: 160 investments totaling 243M euros (Cdn$418.87M) (IVCA)
      Investment-to-GDP: 0.0022
    • New Zealand
      Estimated 2009 Population: 4.3 million
      2008 Venture: 52 investments totaling NZ$66.1M (Cdn$46.81M) (NZVCA)
      Investment-to-GDP: 0.0004

    Well these are great numbers, how does this compare to Canada?

    • Canada
      Estimated 2009 Population: 33.8 million
      2008 Venture: 371 investments totaling Cdn$1.3B (CVCA)
      Investment-to-GDP: 0.001

    When compared to the US and Israel, Canada looks like a poor third cousin. What is the appropriate measure here? Investment as a percentage of GDP? Well we fall somewhere between New Zealand and Ireland. Maybe things aren’t as bad as we’d like to think. We have more venture money than New Zealand. We’re closer to a larger market. Maybe we should start to look at the positive factors and exploit the constraints to build opportunities.

    • Advanced economies
    • Sophisticated customers
    • Good universities
    • Strong intellectual property rights
    • Favorable tax laws
    • Vibrant entrepreneurial cultures

    What’s an entrepreneur to do?

    In my opinion, there are only 2 items on the above list that are directly impacted and influenced by entrepreneurs: Sophisticated customers; and Vibrant entrepreneurial cultures. Sure, the net result of a more positive entrepreneurial environment is a advanced economy that produces good universities. We can lobby politicians for strong intellectual property rights (and consumer freedoms) and favorable tax laws. But there are advocacy groups like the National Angel Capital Organization and the Canadian Venture Capital Association that more directly benefit and are better funded to act on the behalf of entrepreneurial financing. This is not some that necessarily deserve any additional attention than you currently dedicate to the political process. I’m arguing the entrepreneurs should build companies and leave this to the pundits, advocates, policy wonks and politicians.

    Sophisticated customers

    For entrepreneurs,we need to work on helping develop sophisticated customers. Often these customers are located near where the entrepreneur is building their product or service offering. However, this is not a requirement. Entrepreneur should look for sophisticated customers around the globe. Including customers in your product design and development process is key to creating products that meet customer needs and to develop more sophisticated customers. Steve Blank and Eric Reis have proposed the Customer Development Manifesto and Lean Startup as ways for founders to engage customers in the earliest work. All startups should read these posts.

    Vibrant entrepreneurial cultures

    Isn’t this what we’re trying to do? Read our thoughts on:

    Part of the reason that we are luck enough to have Dave McClure in Toronto (and he had a great time). First Round Capital had office hours with Chris Fralic and Phin Barnes. We continue to see folks from Atlas Ventures, General Catalyst, and Microsoft (Don Dodge presented at StartupEmpire and will be presenting at CIX). This is a result of your participation. Canadian cities have a lot of buzz and attention based on the things that are going on.

    It’s cumulative!

    It is the force of a thousands of butterflies flapping their wings. All of the blogging, twittering, attending conferences, showing up to events, participating online. It’s about the DemoCamps, Launch Parties, StartupDrinks, Social Media Breakfasts, Third Tuesdays, Founders & Funders, NEWTECH, SproutUps, Meshes, and everything else.  It is a cumulative effect. It doesn’t take a lot of extra effort, but it adds up to the rest of the world paying attention to the noise.

    We have great spokespersons like Saul Colt, Mathew Ingram, Mike Lee, Michael McDerment, Leila Boujnane, Brian Sharwood, Sarah Prevette, Pema Hagen, Bryan Watson, Anand Agarawala and others running around the world telling their stories of being a startup and the reasons they are doing it in Toronto. In Vancouver there’s Robert Scales, Kris Krug, Boris Mann, BootupLabs, Boris Wertz, Andre Charland, amd others. In Montreal it’s Austin Hill, Heri Rakotomalala, John Stokes, George Favvas, Ben Yoskovitz, Fred Ngo, Pinny Gniwisch, Ray Luk and others. Let’s not forget Social Media Breakfast, StartupOttawa, Scott Lake, Allan Isfan, Jacqui Murphy, and everyone that I’ve missed (it’s on purpose, because I don’t like you any more and I hate your startups).

    But it is up to us to make noise. It’s up to us to build successful companies. It’s up to us to make Canada a better place for startups. No one is going to walk in and make it easier. We all have to participate and build a vibrant entrepreneurial culture. We need to talk about entrepreneurship as a career path. We need to talk to politicians about policy decisions.

    So the first rule of being an entrepreneur is to reach out. Invite a friend. Make a connection. Tell a customer. Most of all, do the things that make the ecosystem better for you.

  • GigPark.com acquired by CanPages

    Gigpark logoIt’s hard not to like Pema and Noah. The two founders of GigPark have been two of the hardest working and (more importantly) most focused founders to have come out of Toronto in the last few years.

    We first covered GigPark in February 2008. I loved the site, and the focus on maintaining the integrity of the social network, but I wondered whether they could build the mass needed to go from walled garden to healthy ecosystem. Then, earlier this year GigPark partnered with Metro, a free national newspaper.

    Today CanPages is announcing that they have acquired GigPark. The deal also received a nice mention in the Globe and Mail.

    Pema and Noah are examples of what a laser focus on product will get you. They released early and they continued to develop GigPark with regular releases and improvements. The key here though is that they got the product out early and didn’t try to come up with the perfect product from day one.

    When I first started using GigPark, I didn’t remember to go back to the site regularly, but over time GigPark became an integral part of how I found new places to eat and businesses to call. As my network slowly grew, it became not just useful, but critical.

    I am feeling especially proud to know these guys and to have had the chance to watch them grow from first release to acquisition. They have been behind-the-scene supporters of a lot of the community and have always encouraged the entire Toronto community.

    Noah and Pema will be staying in the CanPages family for a little while, but I am sure it won’t be long before they are back in action.