StartupNorth

Category: Startups

  • A year in the life

    GuestlistHappy 1st Birthday Guestlist!

    Guestlist has had a couple of weeks. On July 12, 2010 they launched their paid service which finally allows the company to generate fees for the great service they provide. We started using Guestlist for events starting on September 24, 2009 for DemoCamp Toronto # 22 aka An Evening with Yossi Vardi.

    “What began as a dare between three friends to actually finish a software product has turned into full-fledged web service that has helped hundreds of event organizers sell tickets online and keep tabs on their cash flow. Over that period we’ve collected half a million dollars on behalf of our users, a near-majority of which was delivered directly to charities. All powered by word of mouth.” – Ben Vinegar, Guestlistapp

    It’s been a great year for Guestlist enabling over $500,000 in transaction revenue. This is great traction for the small team. Sure it’s only $10,000 using the 2% paid service fee. But this is fantastic traction given that this is a part time project with all 3 team members working other jobs. The demonstrated traction helped the team realize the potential of Guestlist as a business.

    “That’s the story of what our team put together, part time, over one year. We can’t say it was easy; building and maintaining a quality application part-time requires a lot of dedication and free time. That’s why we’re excited to announce that 2/3s of our team has opted to work full-time on Guestlist going forward.”

    If you’re planning an event and you want a great event application, I can highly recommend Guestlist.

  • State of VC in five years?

    Canada has a great financial sector, a growing economy, tons of smart people and a bunch of pretty snazzy exits recently. Yet, with all this Deloitte and the National Venture Capital Association still predict that the number of VC firms in Canada will continue to decline (hat tip: TechCrunch).

    ?

    Sure, Canada is doing better than US and Europe but we’re not doing so well versus the BIC. The first reaction may be that it is now conventional wisdom that China, India and (lately added) Brazil will  take over the world so it stands to follow more VC will set up in those countries. Fair enough.

    But deconstruct this a little further. The Canadian VC industry has already been decimated over the course of the past few year and yet, according to this survey, over a quarter of the respondents think it will shrink further. (The VC industry’s shrinkage in the US is a good thing I and many other would argue. Too much dead weight)

    And VCs follow exits, well recently Canadian companies have exited to Apple, Google and not to mention a pretty killer IPO. That should bode well for the VC industry over the next five years, but it appears that it doesn’t (Yes, these exits happened after the survey was held, but still….)

    In fact, it seems that achieving exits in Canada  is the number one barrier to expanded investments in the minds of VCs when they think about Canada.  Number 2 barrier is “lack of established venture capital community” which seems like a bit of a vicious circle.

    So what do you think? Should Canada be worried? What can be done to improve the five-year outlook on the Canadian VC scene?

  • Vancouver based Layerboom acquired by Joyent (?)

    A few hours ago Techvibes reported that Vancouver based Layerboom has been acquired by Joyent.

    The post was subsequently taken down however, but once you tweet it, it is there for the world to see. I assume Techvibes was asked to take down the post as they jumped the gun on posting. We always respect embargo’s and I am sure this was a mistake, but I am happy to take the jump and push the speculation along.


    Joyent, which started as a shared hosting provider and online office suite, has long had a Vancouver office. Toronto native Rod Boothby has been part of the early Joyent team and is currently their Vice President, International. As soon as he starts picking up his cellphone I hope to have confirmation on the acquisition.

    This win could be two-fold for Vancouver: Layerboom is a Bootup Labs incubated company and competes with Toronto based Enomoly, among others.

    Layerboom provides hosting companies with a comprehensive solution which enables them to build and sell virtual private server clouds. After installing Layerboom software, hosting companies can manage their physical and virtual server inventory, customer accounts, define virtual machine sizes, packages, and pricing, as well as customize a hosted dashboard.

    Bootup Labs has recently had their share of problems and Boris Wertz, Vancouver’s rockstar angel and early stage investor, has stepped in to turn it around with original Bootup partner Danny Robinson. This could mark a turning point which would help Bootup regain needed credibility in the Vancouver startup community.

    You heard it here first folks.

  • Quebec City based Poly9 group acquired by Apple

    Techcrunch is reporting that Quebec City based Poly9 group has been acquired by apple. Details are thin and it looks like the team has gone dormant.

    It will be interesting to find out exactly what has transacted in this case. Just last night I was telling David that Quebec City is consistently underrated for startup potential in Canada.

    We have been tracking Poly9 since they added themselves to the startupindex.

    Poly9 is a technology studio in Quebec City specializing in 2D & 3D web mapping, and interactive media.

    Since 2005, we have designed and developed some of the most exciting and popular web mapping applications for major clients. We are also behind highly visible Google Gadgets, running on iGoogle and the Google Gadget Ads platforms. Take a look for yourself at the Our work page.

    Our company’s flagship product, Poly9 FreeEarth, is the first geographic 3D globe that works in all browsers, and does not require any download or installation.

  • Beyond the Rack raises $12million

    MontrealStartup is reporting that their portfolio company, Beyond the Rack, has secured a new round of financing with BDC Venture Capital and Highland Capital Partners.

    I have been watching Beyond the Rack since Montreal Startup’s initial investment, but I had no idea they were getting so much traction. The company is just under two years old and is led by Yona Shtern, who was an employee at My Virtual Model, one of the bubble-era startups that swept through Montreal. More recently Yona was the Chief Marketing Officer at Ice.com.

    The Montreal Startup team recently secured the first commitments for Founder Fuel, which will be a larger sister-fund to Montreal Startup. Their early stage investment in Beyond the Rack will hopefully make it easier to secure the remaining commitments for the new fund, and this puts the team squarely in the top-tier of early and seed stage investors in Canada along with Extreme Ventures and Scott Pelton at Growthworks.

    This also represents one of the most significant follow-on rounds for a Canadian micro-fund. The fact that BDC Venture Capital was able to participate and keep some of that action in-country is nice.

  • Dayforce secures an additional $10million

    VentureBeat is reporting that Dayforce has secured an additional $10million in financing, bringing their total pool of raise capital to $20million.

    This isn’t a major surprise for anyone who has been watching David Ossip over the last 3 years. After selling Workbrain for $227million in 2007, David only seemed to get more ambitious. Perhaps the acquisition left him with just enough of a taste to want more, or perhaps he felt like he didn’t get the job done with Workbrain. Either way, after sitting around waiting for his non-compete to expire, he got back in the game with Dayforce. So here we are.

    David is the entrepreneur’s entrepreneur, and I am happy to see that he is able to get the resource together to build Dayforce in Canada. His desire to contribute back to the startup community has set him apart in recent years. We have previously published a profile of Workbrain spinoff companies. This also represents a significant additional step for Bridgescale Partners, and represents their first deal in Canada since their merger with Edgestone in May. Edgestone was one of the original investors in Workbrain up until it went public in 2003.

    We will add more details as we get them.

  • Getting Traction

    Photo by Bierlos http://www.flickr.com/photos/bierlos/4591931914/
    Photo by Bierlos

    Traction trumps everything for angel investors. Traction is the proxy by which you can determine how well a startup is doing. It demonstrates that the team is able to execute together. That the product has a market with real customers.

    “Traction is real customers. If you charge for your product, it’s real paying customers. If your product is free, it’s a real user base. In other words, traction is a signal that your team can produce real results in a real market.” – Gabriel Weinberg

    Traction means a lot of different things. Is traction revenue? Maybe. Is traction number of uniques? Depends. Is traction conversion rate? Sometimes. Traction differs at different points in a company’s lifecycle, but it designed to show that there is a demand for the product/service you are building. And it’s not always revenue. There are different milestones for startups at different stages of development. The goal is to get to product/market fit quickly with a minimum viable product. Then establish metrics to measure and evaluate product performance.Dave McClure‘s Startup Metrics for Pirates is a great summary of the types of metrics startups can build into their applications and marketing analysis to track the effectiveness of their ability to attract, convert and retain customers.

    Startup Metrics for PiratesView more presentations from Dave McClure.

    How do you avoid expensive build, market and fail attempts?

    Elements of a Startup Growth Curve by Sean Ellis
    Elements of a Startup Growth Curve by Sean Ellis

    Now you’ve got your metrics. You validated your minimum viable product. How do you get traction without spending a ton of cash?

    Go figure out what you can do for zilch. That’s right nothing. Nada. Zip. Zero. Zilch. Assume you’ve got a marketing budget that is zero dollars. Then go figure out how you’re going to spend it to find, convert and retain customers. Pick a big, ostentatious goal. A million uniques. A million dollars in revenue. 25 new paying customers. The actual numbers are going to be specific to your startup. But the goal is to drive those numbers for as little (think $0) as possible using:

    • Extreme customer service
    • Inbound marketing
    • Conference submissions
    • Social media engagement
    • Blogging

    There are a lot off different activities that startups can do to help drive customers. Go drive real traction. Get to’er.

    Need some inspiration. Check out:

    What are your favourite examples of startup marketing on the cheap?

  • Sysomos acquired

    News has leaked out today that Toronto-based Sysomos, a social media monitoring firm, has been acquired by MarketWire.

    As usual, the terms of the deal are not being disclosed, but we do know that, like BumpTop, Sysomos was funded out of the Growthworks Commercialization fund. That would put this deal at well north of $25million, likely landing in at around $35million.  Sysomos was also funded by Ontario Centres of Excellence, who were also instrumental in supporting BumpTop. In fact, like Bumptop, Sysomos also originated at the University of  Toronto and does retain some useful and unique IP.

    This is the second exit for Scott Pelton, who only took over managing the Growthwork’s comm fund in 2008. By Canadian VC standards (or any for that matter), he is on fire and, by my estimate, is chalking up one of the best IRRs that the business has seen yet in this country. Who says VC is dead?

    Sysomos has made rapid progress since taking investment and has managed to consistently raise the bar of social media monitoring standards. No doubt that MarketWire is looking for ways to develop beyond their more traditional media monitoring solution to something that offers more social media coverage. Sysomos’ strong analytics capability will no doubt be useful to MarketWire customers as well.

  • Day 1 as Entrepreneur in Residence

    I am starting my new role as Entrepreneur in Residence at Innovacorp today.

    While a lot of the details of what that means still need to be worked out, I can tell you what it means for me in the short term:

    • I will be home. I have been traveling a lot in the last year. 85,000 miles in the last 6 months. That kills your creativity and I am looking forward to having my feet on the ground more often.
    • I will be reconnected. Some of you may of noticed that I basically fell off the face of the earth in January 2009. David Crow picked up the slack in blogging here. After selling Firestoker and joining Dachis Group, I felt that I had no time to stay connected to the community. I am looking forward to getting re-engaged and to start moving some of the conversation about what it means to be a startup in Canada forward again.
    • I will be working with startups. Innovacorp has invested in some pretty great startups here in Nova Scotia, and I am going to work with a few of them and help as best I can. I will be working with Ben Forcier and the Investment team, as well as Stephen Hartlan, the CEO. I have had a chance to get to know Ben, Stephen, Patrick and many of the other folks at Innovacorp in the last few months and I have been impressed with all of them. I love digging in to startups and figuring out what makes them tick and that was a big part of why I agreed to join as EIR.
    • I’ll be building my own startup again. I can’t help it. Let me at it! This will be my focus.
    • I’ll be blogging more. Enough said.

    The decision to leave Dachis Group was a tough one and certainly the most bittersweet thing I have ever done. I had a chance to work with some of the most devoted, brilliant and kind people I have ever been lucky enough to be involved with. In a year and a half we went from 4 of us sitting in a board room in Austin to 150+ employees, 2 major acquisitions, offices in 5 cities and we were able to count the largest companies in the world as our customers. Looking back on it, it seems wild, but the truth is that it feels like Dachis Group is just getting started. As the company hits milestones and continues to grow, I will feel proud every step of the way, and I will continue to contribute in every way I can.

    Things have been changing quickly here in Canada however, and I am glad to be part of the community again. The momentum is building slowly but steadily: The Job Board has more startups than ever looking to fill positions, we are seeing more and more new financings, and we are seeing some of the first exits from members of the community. The Canadian economy is also strong relative to foreign markets and the quality of talent available in Canada means that we should be able to be more competitive internationally than ever. Access to capital is still “complicated” in many ways, but we are seeing significant changes in availability and the sophistication of the investors deploying capital in the country. I hope that that shakeout continues.

    This is an incredibly rich place to build a startup, and I plan to make the best of it.

    Have something interesting? An idea or a new startup? Get in touch and let’s make it happen.

  • Riding a Mega-Trend Isn’t the Same as Solving a Real Problem

    Ben Yoskovitz just nailed a big issue that a lot of startups need to come to terms with: A trend is not a marketplace

    But be careful. Riding a mega-trend isn’t the same as solving a real problem. Big, bold statements are great. Startups can very effectively align themselves with mega-trends. But it’s equally important to peel away the big numbers, inevitable trends, and macro factors that seemingly drive opportunity — and get into the nitty gritty details.

    Trends can be powerful and they can distract you from building a sustainable business before you even realize they are, in fact, just a trend. Like platforms, developing on top of a trend takes a certain skill, and a lot of good timing.

    There are a few people who are able to see through a trend to the core problem that sits at the middle of it. Howard Lindzon is someone I admire for his ability cut through the bullshit of a trend and also when to get off the wave.