StartupNorth

Category: Ontario

  • Red flags

    Red Flag Warning - Some rights reserved by Bob AuBuchon CC-NC-BY-SA
    AttributionNoncommercialNo Derivative Works     Some rights reserved by Bob AuBuchon

    This is an unfortunate story that entrepreneurs should read and understand.

    We start companies for a number of different reasons. We want to change the world. We want to solve problems. We are unemployable. We are crazy. And we stay up at night worrying about taking care of our employees, our customers, our investors.

    So it is hard to understand how well regarded funds wind down companies without providing information to employees.

    Investor immorality: The strange case of Blue Noodle

    Start-ups fail all the time. But there is a right way and a wrong way to do it. This is an example of the wrong way.

    On Monday, most employees of social media startup Blue Noodle didn’t get paid. They called their lead venture capital firm, which wouldn’t discuss the situation with them. They called their former CEO, who refused to pick up the phone. They called their lender, who said to call the venture capital firm. And thus the circle began anew.

    “In my more than 20 years of working in Silicon Valley, I’ve been involved on more failed companies than I’d like to admit, but there is always an orderly win-down process,” says John Montgomery, chairman of law firm Montgomery & Hansen. “It sounds like the VCs in this case are treating the company like a car they abandon in a parking lot with the keys in the ignition.”

    Read on…

  • The Story of Quack.com and How It Changed the Canadian Startup Ecosystem

    A few weeks past I posted about the hockey stick growth of exit in Canadian startups. Well, let me give some interesting colour to some of the cause of that growth.

    Quack.com is a company that most of you probably know very little about, despite its relative fame in the hey-day of the dot com boom. Back in the day when I was a student at Waterloo, I remembered Quack.com coming on compass and having some great recruitment events at the local pub, The Bomber. That was the last I heard of them. Little did I know that Quack.com would eventually help permanently alter the Canadian eco-system.

    Quack.com was a Silicon Valley based company. They built a really cool IVR service, cutting edge stuff in 1998 when they were founded. Steven Woods was co-founder, CTO and Chief Product Officer at Quack.com. Dan Servos later joined quack as its SVP Alliances and Sales. In the year 2000, they sold to AOL for a hefty $200mm price tag. Big exit, even by that era’s standard.

    A few years later Steven Woods & Dan Servos were at it again. Classic serial entrepreneurs – Steven started another company, NeoEdge which Dan joined. Not quite as big a success as Quack.com, but not every venture leads to a $200mm sale of your company.

    Fast forward to 2008. Dragged from the startup world kicking and screaming, Google steals Steven Woods and hires him as site manager and engineering lead for Google Waterloo. You have to understand how big this is. Steven Woods is a 2x entrepreneur with a big, big exit under his belt, also serving as an advisor & investor to several startups. He is a big deal in Silicon Valley, let alone in Waterloo where he should be recognized as an entrepreneurial god. Only the duo at 295 Philip St hold more entrepreneurial street cred than him in Waterloo. Not only is his startup background a big deal, but he has a fricking phd in computer science. An immense example of reverse brain drain if I’ve seen one. Which is ironic, since Quack.com/Steven Woods was famously ripped as being a big cause of Canadian brain drain when they hired 50 Waterloo grads in 10 months before selling to AOL.

    Check out what started to happen shortly after he came to Google Waterloo:

    1. Google acquires Toronto-based company BumpTop for $30m.

    2. Steven Wood’s old colleague, Dan Servos, ends up as CEO of Social Deck.

    3. Shortly thereafter, Toronto-based Social Deck gets acquired by Google.

    4. Toronto-based Zetawire gets acquired by Google.

    5. Toronto-based Pushlife gets acquired by Google for $25mm.

    6. Waterloo-based Postrank gets acquired by Google.

    (and now Dan Servos lands as COO of Locationary. Hmmmmm…)

    Steven Woods & Dan Servos have been machines, invigorating the Canadian startup ecosystem with new possibilities. Via his role at Google, Steven Woods has provided a real source of opportunity for entrepreneurs in Canada to do something with their company other than “move to the Valley”. 6 exits probably at near $100m in total money in under 2 years. Dan Servos has provided huge leadership to Canadian startups like Social Deck, Locationary, etc. This should be massive motivation to entrepreneurs. If you have success, find ways to be like Steven Woods and Dan Servos and help the ecosystem continue to grow. Don’t be like this.

  • Can’t make it to GrowConf? Try TechTalksTO

    Tech Talks TOWe’re big fans of all of the technical community efforts going on across the country. I have the privilege of going to Vancouver next week for GrowConf, but we want to return the favor to local entrepreneurs and students in the GTA. We have 5 tickets for TechTalksTO.

    The effort to encourage participation by local students was led by the team at Uken Games.

    Uken is planning on sponsoring tickets for 3-4 students to attend http://underground.techtalksto.com/. We’ll also be sponsoring the event in general. I was wondering if we could promote this giveaway through an article on StartUpNorth. We haven’t figured out the criteria for selection but we’re thinking either a short paragraph of why we should choose you and a short code puzzle.

    I have purchased my ticket for the event, but I am unable to attend. We will give away one ticket per day starting today until all 5 tickets are gone. Someone else can figure out when that is.

    Uken Games

    How to win a ticket TechTalksTO?

    To win these passes tweet the following until Thursday:

    RT to enter! “Hey @startupnorth @ukengames – Please send me to the @techtalksTO Underground ($INSERT_LINK_TO_YOUR_BLOG/COMPANY).”

    This is a great local event. For developers by developers. Must attend, like the venerable events like FutureRuby and RubyFringe. It is great to see Toronto Ruby Brigade, TechTalksTO, TechnologicTO, AndroidTO, HTML5 Web App Developers and others engaging and supporting the community.

  • Hacker House in Waterloo

    HackerHouse.caLooks like Waterloo is about to get an addition to the already existing hacker houses and VeloCity residence that are happening around campus.

    Does anyone remember Plurk? Plurk was the site that MSN China copied over 80% of the user experience and code for Juku (see the official Microsoft statement).  Plurk is a place where people lurk. It has been compared to Twitter. It generates most of its traffic from Taiwan.

    And now it looks like they are opening a more “mercenary/hustler driven” approach to a student dorm. Hopefully, this is the compensation they received from a Microsoft settlement, maybe it is a recruiting tactic – hiring developer talent is a challenge and finding entrepreneurial hackers for the cost of a mortgage payment + utilities is actually a really cheap acquisition tactic. With none of the overhead of the coop program and you’ve already skirted any labour laws by making them work for their own companies. Nice.

    The program aims to bring in 3-5 students and run them through the gauntlet.  Here is one of the welcome letters:

    I’m Kan [looks like Kan Kan (LinkedIn)], and I’m one of the founders of Plurk. We’re a Twitter type service and the largest microblogging service in many parts of Asia and one of Canada’s most innovative startups (heck, even Microsoft copied us in China!).  Me and two other very successful under-30Southern Ontario area entrepreneurs just recently (earlier this month) announced the launch of our Hacker House (www.hackerhouse.ca) program, inspired by the very cool Grotto (www.sfgrotto.org) and Y Combinator programs in San Francisco.

    Basically, we plan to find 3-5 of the best and brightest entrepreneurially minded, technology focused students from the Universities of Laurier and Waterloo, bring them together in a collaborative environment, and then let the magic with the support of a team of guys (us) who have fostered and executed on some of the most successful startups on the web.

    While we’re not affiliated with the university in any way, we offer a couple of BIG benefits over Velocity:

    1. If you’re accepted, we provide your living accommodations  absolutely free in a sweet pad just steps from the university for the term/year.

    2. We take more of a cooperative mercenary/hustler driven approach, providing access to server space, mentorship, capital (in exchange for the option to buy equity into your venture) and other resources necessary to launch either (a) your own venture, (b) collaborate and percolate on ideas with other participants in the program during the term or (c) get hands on experience working on cutting edge projects (particularly in the social, mobile, geo-local, gaming, data mining & search spaces) in various stages of development.

    3. While we may not have the visibility of Velocity, I can unequivocally say that the upside and quality of the experience would be far superior for those who want to execute and iterate on ideas at breakneck speed in a constantly changing market and shoot for the moon.

    Our first cycle commences at the start of the Fall ’11 school term (September 2011) and we plan to take in 3-5 students and finalize our selection process by the middle of August.  If you haven’t already finalized your living accommodations for the Fall term and like what you hear so far, I’d encourage you to check us out on www.hackerhouse.ca for more details or get in touch with me directly.

    It is a very different approach to residence during the school year. Their focus seems to be very much competitive to UW VeloCity (full disclosure: I am the EiR at UW VeloCity and will be helping the students at UW get access, build products, etc.), but it is a very different approach. The UW VeloCity program houses 70 students, provides access to University and community resources, and for all intensive purposes is opt-in. Many students get into the residence looking for a place to live and learn about entrepreneurship and high tech startups as a career path. The goal is to provide a familiarization to hands-on entrepreneurship.

    Hacker House

    It is great to see others dedicated to continuing to build the community in Waterloo.

  • 11 Lessons for Early Stage CEOs

    Editor’s Note: Daniel Klass (LinkedIn, @klasscapital) is an experienced private equity investor having spent time at TD Capital and EdgeStone Capital Partners before raising his fund Klass Capital. Daniel and the team at Klass Capital focus on small to mid sized web-enabled businesses seeking to invest $500,000 to $5,000,000 of growth capital. While none of the entrepreneurs or CEOs are named in Daniel’s post, you can be assured some of these stories are direct lessons from portfolio companies like Firmex and Nulogy. You can follow Daniel on twitter @klasscapital and read his additional early-stage tips for entrepreneurs.

    CC-BY-NC-SA Some rights reserved by Stéfan http://www.flickr.com/photos/st3f4n/4193370268/in/photostream/
    AttributionNoncommercialShare Alike     Some rights reserved by Stéfan

    Klass Capital’s 11 Lessons for Early Stage CEOs

    1. Don’t overbuild your product or build your product in a vacuum.
      We learned one of our best lessons from a CEO that told us that he was going to “sell the shit” out of his product and build a great product later. Five years later, the business does in excess of $30mm SaaS revenues. The best products are built with customers and not for customers.
    2. Understand your cost of customer acquisition.
      We often gravitate towards build an external sales team, spending money on expensive tradeshows and not understanding the cost and pay back of these initiatives. Our best in class online businesses all started out that way and have moved to an online and inside sales and marketing engine. The metric we live by is a ratio of life-time value of a customer to cost of acquiring the customer of no less than 3:1.
    3. Religiously measure your churn by cohort.
      Early stage CEOs are fixated on sales and do not fully understand monthly churn. Service, support and innovate. You will learn a lot from your customers and lowering churn will significantly reduce CAC. To truly understand your churn and see if you are making progress, start measuring churn by cohort. Once your company matures, churn should not exceed 10% and upselling existing customers should significantly eat into this churn.
    4. Too many CEOs rely on the success of channel partners.
      We rarely see channel partners work and at least from our perspective the risk and time commitment invested in these partnerships rarely makes sense.
    5. Raise more money than you need.
      The fund raising markets are not always open and raising capital is a distraction. Choose the right partner, the right structure and raise 1.5x-2x the capital you need. Build a strong advisory board that can help guide you through this process and use the board to lever off their relationships.
    6. Learn from your competitors, learn from your customers and don’t be defensive.
      Almost every portfolio Company we have has significantly evolved and only slightly resembles its initial existence.
    7. Define and redefine roles when looking for people.
      Hire managers who are player-coaches and not scared to roll up their sleeves.
    8. Build a financial plan that you can measure yourself against on a monthly basis.
      Record and measure your key metrics monthly. Constantly refine these metrics and keep your feet to the fire. For all our businesses we use monthly, if not weekly, flash reports. We measure everything from churn, usage, MRR, new customers, renewals, average revenue by customer, etc. Share these metrics with your advisors and make yourself accountable.
    9. Make sure that all your heated discussions with team members, board members, and advisors are constructive.
      Do not be defensive and take your time to respond. These discussions, even if you are correct, almost always result in a better outcome.
    10. Choose your target markets carefully.
      It’s easier to have customers with deep pockets and large markets. This will significantly increase your exit value.
    11. Build businesses where you can take advantage of the network effect. Lots of good things happen with scale. Best in class businesses find you to launch their products, data mining opportunities become available, and you gain domain expertise.

    Editor’s Note: Daniel Klass (LinkedIn, @klasscapital) is an experienced private equity investor having spent time at TD Capital and EdgeStone Capital Partners before raising his fund Klass Capital. Daniel and the team at Klass Capital focus on small to mid sized web-enabled businesses seeking to invest $500,000 to $5,000,000 of growth capital. While none of the entrepreneurs or CEOs are named in Daniel’s post, you can be assured some of these stories are direct lessons from portfolio companies like Firmex and Nulogy. You can follow Daniel on twitter @klasscapital and read his additional early-stage tips for entrepreneurs.

  • TechTalksTO Underground

    Tech Talks TOAlong with the team at FreshBooks, StartupNorth is proud to support TechTalksTO. TechTalksTO previous put together a series of speakers at the Gladstone Hotel on West Queen West that feature some great talks about technology for Toronto developer community. We’re very happy to be a Sponsor and Media Sponsor of their upcoming conference event on August 13, 2011. It’s a great group of front-end, back-end and devops focused entrepreneurial technologists.

    What a great way to spend a Saturday before flying out to GrowConf later in the week.

    The Details

    When: Saturday, August 13, 2011
    Where:  Toronto Underground Cinema, Spadina Avenue.
    What:  All-day conference + After-Party

    Speaker Lineup

    After Party

    One of the best parts about our previous TechTalksTO events were the unofficial gatherings afterward. They were always a great opportunity to network and have some great conversations. We enjoy it so much, we figured for this event, we’d make it an official part of the day so your ticket will include admission, food, and drinks at the exclusive after-party Saturday evening to be held at a nearby establishment.

    Tickets

    Tickets are available NOW!.  Alas, due to the size and scope of this undertaking, we have to charge actual money for tickets for this one but we think you’ll totally get your money’s worth. Tickets will be priced at $150, including admission to the after-party, which will also get you a couple of drinks and some food. We also plan to have some food and drinks available throughout the day at the conference venue.

  • Teaching Software Engineering and Startups at UofT


    AttributionNoncommercialNo Derivative Works Some rights reserved by SteveGarfield

    About 5 years ago I was asked to teach a 4th year undergrad software engineering course at the University of Toronto. The course had been previously cancelled due to low enrollment; in an era dubbed the “Software Gold Rush” a cancelled course indicated something was wrong…

    Software engineering is difficult to teach
    Students are expected to learn how to avoid mistakes they never made. A great divide results from the instructor talking about concepts suitable for a mature organization when students are all about working their ass off and getting things done the night before. We borrowed several lessons from startups, having been personally involved with two startups over a dozen years. The way startups work are much closer to students ways of doing things. Since launch, course enrolment has tripled and two Y Combinator applications have been submitted based on class projects. Here is what we have learned so far:

    1. Use a startup software process
    Students are all about getting things done the night before; similar to how startups work. Teaching a heavyweight process feels foreign because students haven’t made the mistakes to understand reasons for the overhead!

    2. Change the project every year
    There is nothing more of a turnoff than a make-work project with antiquated technology. Instructors that use the same project over and over are sleepwalking. A new project each year puts the instructor and students on equal footing, solving problems together. Make the class goal to have someone apply to Y Combinator. Discuss the non-technical issues of software such has how people are going to use the product, how are you going to sell it, what is the competition like, what is the business plan. One big class project brings issues into the classroom better resembling the real world. This also allows non-trivial projects to be developed and students to test-out roles (e.g. project management) that would not otherwise exist.

    3. Allow controlled crashes
    Let the students make mistakes. For example, let them avoid source control. A student who looses code because of clobbered checkins will be a lesson learned for the entire class. However, when crashes occur, it is the instructor’s responsibility to manage and fix it. After the mistakes have been made, teach them about process. Keep things light and give them references for their future travels. During lectures on process, tie them into the mistakes that were made. Make process real.

    4. Demo early and often
    Create a culture where the principal deliverable is working software rather than documentation. Use early demos to correct mistakes and give guidance rather than having them worry about their grades.

    5. Instructors should code
    The instructor-student relationship changes dramatically if the instructor contributes code. Everyone becomes a peer instantly. This improve communication and follows the startup philosophy that even managers should write code.

    Next steps
    The course has been well received by the students at UofT. I have much more regular contract with students from this class than the other courses I have taught at UofT and UofW. I am interested in hearing from anyone who is interested in providing continuity to the students; a partner that would provide input on the project at the beginning, stay involved with it during the course, and offer a path forward for interested students ready to commit to a startup.

  • Why Wasn’t BackType Funded in Canada?

    This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting.

    BacktypeFor those of us who work in the Canadian social media and startup circles, there was some celebrating earlier this week when BackType announced it had been sold to Twitter.

    Lots of credit goes to founders Christopher Golda and Mike Montano, who have made BackType one of the leading services to track and analyze social media activity.

    Without raining on the BackType parade, a question that begs to be asked is whether BackType should have been funded in Canada as opposed to the U.S.

    To provide some background, Golda and Montano were electrical engineering graduates from the University of Toronto, who showed their entrepreneurial chops by starting a service called iPartee. While the business didn’t succeed, Golda and Montano proceeded to start BackType in 2008 as a way to search for blog comments.

    To jump-start the business, they applied and were accepted into Paul Graham’s YCombinator startup program in Silicon Valley, which coughed up $15,000 for a 6% in BackType. This let Golda and Montano create a prototype they could pitch to investors. Over the next three years, BackType raised $1.3-million and expanded into Twitter search.

    In hindsight, BackType is a big fish that got away from Canadian investors. I would hazard to guess that in 2008 getting seed capital from Canadian investors was a remote possibility for Golda and Montano, which is likely one of the reasons they applied for the YCombinator program.

    The question is whether BackType would get funded today in Canada. It appears the seed and startup investment landscape has changed with the emergence of new funds such as Real Ventures. Meanwhile, there has been a growing number of startup acquisitions, which should bolster the confidence of investors and entrepreneurs.

    Do Canadian investors now have the ability and willingness to finance smart entrepreneurs with ideas? Or do Canadian investors still need to see traction such as a finished product, customers or revenue?

    For more on the BackType story, check out this TechVibes story.

  • Win $5000 – Kik Launches In-Phone SDK and Competition

    In February this year, Fred Wilson wrote a great piece about the need for mobile app “glue” (my words). Here is the exact phrasing:

    “When I was at the music hackday a few weekends ago, I noticed that it was easy to build something interesting by simply snapping together a few web apps and then building some light glue between them. I suspect it will be even easier to do that on mobile and the era of “meta apps” that deliver functionality across multiple apps is upon us. And I think that has the potential to create some new startup opportunities.”

    Well, Kik has become one of the first gluemakers. Read their blog post – The Kik SDK: Build Real-Time Sharing into Your App in 10 Minutes.

    Kik has provided a device resident SDK so that application developers can build sharing into their apps. It is such a powerful idea – sharing done on the device. Until now, if a mobile app developer wanted to do sharing, that capability had to be basically hosted “in the cloud”. Think about picplz & instagram. They have had to use Facebook, Twitter and other “web” platforms, and connect to them via some cloud servers. Well, with Kik’s SDK, mobile apps can now share “natively” on their mobile platform. No more cloud – huzzah!

    ‘Everything is better with friends’ By giving your users the ability to share with each other in real time, your app will be that much more fun and compelling (see the Sketchee story below). Sharing can also give a big boost in adoption – when a user who doesn’t have your app receives a Kik content message from it, Kik offers to take them directly to your download page where they can install it. All of a sudden you aren’t asking your users to share your app with their friends, but to share content from your app with their friends – content that requires them to get your app to view and interact with it. It’s the difference between inviting someone to join a social network vs. tagging a photo of them that requires them to join the social network to view it. And best of all, it will only take you 10 minutes to add this kind of functionality to your app.

    On top of all that, Kik is giving away $5000 to each of the top three applications built on their SDK. Finish your app by August 8th and you can get in on that.

  • Under the Hood – Chango

    I am always curious at what startups are using for the technology under the hood. It helps define the technologies that frontend and backend developers looking for jobs might start using. It helps understand what skills are being developed in the ecosystem and where competition or coopetition for talent may exist. And I am always curious at the emerging trends of technology adoption by local firms.

    I have enjoyed the coverage of the technology at Toronto-born startups like BackType and the work of the team at BostonInno (in particular Kevin McCarthy’s The Tech Behind) and Phil Whelan in Vancouver. Dan Morel (@dpmorel) has started looking at the development processes used at Canadian startups (see: Supersize your Startup Dev Productivity & One is the Loneliest Number). If you are a Canadian startup that is building “interesting” technology, we’re actively looking for startups to profile.

    Chango

    We start the series with Chango and technical Q&A with Chris Sukornyk (LinkedIn, @sukornyk) and Mazdak Rezvani (LinkedIn, @mazdak) looking at the technology and the evolution of Chango platform. Chango closed $4.25MM in a Series B financing round led by Rho Canada and included iNovia Capital, Metamorphic Ventures, Extreme Venture Partners and others. The Chango team has doubled over the last 6 months, they are roughly 25 people (including Hot Sh!t List member Josh Davey).

    The online advertising landscape is changing rapidly, Chango is taking advantage of Real-Time Bidding to allow marketers to buy ads on the web in real-time. It means big data where time is critical because small fluctuations in price or users can have big impact on the overall effectiveness or cost.  The best analogy is a stock market, where instead of stocks, marketers can buy billions of ads each day based on how they think that websites ad slots will perform for them. The cool part about RTB is that you can combine data to put the right ad in front of the right user. This requires huge data processing skills and Chango processes information on about 60,000 ads a second.

    What does Chango do?

    We are an ad-buying platform that is built for online marketers looking to find new customers using display (banner ads). Our main goal is to eliminate wasted marketing dollars through smarter targeting. Specifically we show ads to people based on what they’ve searched for in the past – a technique we are pioneering called “Search Retargeting“.

    Unlike traditional ad networks we exclusively buy ads using real-time bidding, a new technology that is rapidly changing the Display advertising industry and allowing marketers to layer data on top of their media buys.

    Chango is unique in that it has access to billions of search terms, billions of incoming ad impressions, and has devised machine learning techniques for combining data from different sources to deliver more efficient and better-targeted campaigns for our advertisers.

    What does your product architecture look like?

    Software development that deals with “Big Data” typically has two types of challenges: big volume, or low latency. Chango has to deal with both of these issues simultaneously.

    We receive over 90,000 requests per second (and growing monthly) from our ad exchange and data partners at peak times of the day. To make matters more interesting, we have approximately 80ms to respond to any incoming bid requests. Unfortunately 30-50ms of this limit is used up because of unavoidable network latency, this leaves us only 30ms to process each bid request. As a result, we have to constantly optimize our bidder subsystem around this challenge.

    What are some of the tools and technologies you use?

    Open Source is at the heart of our technology stack. Python is the common thread that binds all of our subsystems. Our entire infrastructure is written in Python. We use a (modified version of) the Tornado Web Server for our realtime servers, and Django for the front-end.

    When dealing with super fast response times it’s critical to have a super-fast datastore at your disposal. That’s why we use a NoSQL database technology based on the proven memcached server.

    The unsung open source hero of our infrastructure is HAProxy. HAProxy handles our load-balancing across the board. We use the “keepalived” feature of Linux to keep these servers in high-availability mode.

    As far as our architecture is concerned we try to not have any major dependencies on any specific features of the third-party systems we choose. They just happen to work well for our current environment.

    How did you get here?

    Scalability is as much an art as it’s a science, but most importantly, it’s about keeping things simple. It took years of hard work, and careful tuning and measurement to arrive at where we are.

    Originally we used Java for all server-side development and Ruby on Rails for front end development. The thinking was that we needed a rock-solid language for server architecture and a rapid development environment for front-end work. This concept served us well for a little while; however, in early 2010 we realized that Java was drastically slowing down our ability to iterate quickly and effectively. A single feature was taking days to build, test and deploy.

    We bit the bullet and rebuilt the platform entirely in Python and it was probably the best decision we ever made. Not only do we have a consistent language across front end and server side development but it has enabled us to rapidly add features or test new ideas. We are fortunate to have access to the fantastic ecosystem created by the Python community.

    Where do you host?

    Our first approach back in 2009 was to leverage Amazon Web Services EC2 as a scaleable and cheap way to prototype the platform. That served us well for a while; however, the shared virtual environment meant that we had wildly variable server resources.

    We shifted to Hosting.com knowing that we ultimately needed our own equipment and if we wanted a VM environment we would need to set one up ourselves. While Hosting.com provided good support at the time we wanted the rapid provisioning we were used to at EC2 with the power of dedicated hosting.

    Ultimately we chose SoftLayer as our hosting provider of choice. SoftLayer offers a VM environment in addition with their “express” service that allows us to get 10s of new servers provisioned in about 3-4 hours! They have been extremely good about allowing us to occasionally provision a whole new parallel cluster as we do capacity planning.

    How do you monitor your systems?

    Monitoring is done through a combination of Nagios, PagerDuty, and Circonus among others. We have also built a real-time data visualization system that let’s us monitor both infrastructure, and campaign performance. We use this dashboard as our own NOC system hooked up to a TV that is mounted right in the engineering area!

    What are your biggest development challenges?

    We’ve got two distinct challenges. Our real-time, data processing, and systems engineering teams deal with problems of scalability and big data. As our business continues to grow, we need to re-examine our infrastructure and design choices. We have a very healthy culture of team collaboration, code-review, and refactoring.

    Our Dashboard team has a different set of challenges. Our self-serve ad platform is very much like Adwords in that marketers can put down a credit card and launch a campaign themselves. We need to make this an extremely user-friendly system, while keeping it powerful enough to enable people to perform sophisticated reporting and campaign optimization.

    How do you win?

    The Chango business is all about putting the right ad in front of the right user at the right time. We made an early decision that data you know about a user (ie. search data) is only effective if it is combined with a proprietary bidding engine that can make decisions in real time.

    Almost every DSP, data provider or ad network out there today does this by storing information about users in a client-browser “cookie”. They call this a user segment. The problem with user segments is that they are pre-computed and stored within the users browser. If you decide half way through your campaign that you need to adjust your audience (due to lack of performance) there is no way to do so since the information is hard coded in the users browser. The only option is to continue serving ads to this under-performing group of users and wait for that cookie to expire (typically 30 days).

    At Chango we’ve decided to make everything real-time, including our decision about who to bid on, and how much to bid. Nothing about the user is pre-computed. So the Chango ‘cookie’ contains nothing more than a unique identifier that anonymously points to all the raw data we know about that person in our database.

    Chango is hiring!

    Python Developers! There are multiple open positions in Toronto, New York & San Francisco. But if I could have anything it would be talented developers that either know python or want to learn Python.

    Interested in being profiled in our Under the Hood series, we are actively looking for Canadian startups building “interesting” technologies and solving “interesting” problems. Contact me by completing your initial Under the Hood submission.