Category: Montreal

Ok, this takes guts: entering a market with a niche product where the incumbent is not only a darling of the industry, but owns the primary platform on which you are going to have to compete for users. Akismet really changed everything for bloggers. We used to spend hours a week deleting comment spam, but Akismet made that all go away.

Enter Defensio.

Defensio is coming after the same market as Akismet (going as far as to provide only a WordPress plugin so far). We are late to the game in profiling them, and while the reviews have all been really positive so far, most end with the idea that the author will probably just stick with Akismet.

It would be really easy to write off Defensio at this point. This is the part where the VC tells Carl, Mathieu and the other guys at Defensio that they aren’t differentiated, that the market is too small and that the incumbent has way too much penetration, especially with early adopters. (don’t let the door hit you on the way out)

I see it differently. The second mover has a serious chance to make it big here. Defensio’s current strategy is to charge high-volume bloggers and commercial bloggers a small fee for using Defensio’s anti-spam technology. This is potentially lucrative on its own. If Defensio can provide a higher level of integration support and a better protection product, then they will be able to win some customers over from Akismet, but it is absolutely going to be a hard-fought battle, with everyone trying to row the boat a little harder in order to win.

The real opportunity for Defensio however is to raid the markets that Akismet has left untouched. Where Akismet has proven the technology, and opened an initial market which Defensio can sell to, they are also leaving peripheral markets completely alone.

If you believe, like I do, that user generated content is, and will be even more of, a big deal, then you have to accept that SPAM is going to be an even bigger problem down the road. Where Norton and McAfee made millions selling anti-spam products for your Outlook client, Defensio has an opportunity to become the enterprise-strength anti-spam solution for user-generated content.

Review websites, corporate homepages, public wikis, all deal with serious spam problems. Considering the anti-spam market, which is speculated to be in the $2billion or higher range, still hasn’t started providing the sort of lightweight but bulletproof solutions that bloggers have grown accustomed to means that there is probably an entirely new market sitting there waiting for someone to come to the rescue.

To do this, Defensio will have to work hard on building some early partnerships, which is admittently a tough job. I am looking forward to checking in with Defensio in 6 months to see how things are going.

Contact Carl Mercier

CakeMail launched their public beta last weekend at BarCamp Montreal. The company, founded by serial entrepreneur Francois Lane, is only offering email marketing services through resellers, a pretty contrarian bet in a ?direct from the source? era. It remains to be seen whether or not offering service direct and through resellers would yield superior results, but either way there are some great lessons here for Canadian entrepreneurs.

Get other people to sell it
CakeMail is a white label email marketing platform. They are positioning themselves as wholesalers and doing everything possible to empower their resellers (marketing and web design agencies). I?m not entirely sure what keeping a per email pricelist off their site does when larger competitors publish comparison charts, but resellers probably appreciate the gesture.

Open and abstracted
CakeMail was designed from the ground up to leverage a community of developers. The UI is completely abstracted from the logic. In addition to offering reseller the ability to completely tailor the visual experience, CakeMail has opened up their API to give resellers the ability to extend the platform to their hearts content. It is a cost effective way to add functionality, experiment, and harnesses knowledge that only exists at the end user level.

Go global
Abstracting the interface has another benefit, localization. This is one area where Canadian entrepreneurs can really out do their peers south of the border. The company, based in Montreal Quebec, is a team of six, two of which are based in Eastern Europe. Count the fluencies. Localizing software is a big challenge and an even bigger opportunity (check out our recent post on Languify). CakeMail is already running in several languages, supports email in all characters, and is going to be quickly localized by end users.

Get traction? Then funding
Investors are risk averse. There is no better way to increase your funding prospects AND valuation, than by getting product out to paying customers. I asked Francois about the company?s capitalization and this is what he had to say:

?We are currently building a list of interested parties who could provide strategic synergies in addition to capital for rapid expansion into international markets. While we already have paying customers, we’d like to gain a bit more traction before starting funding negotiations in earnest.?

So take note, this guy has a recipe for success.

Mobivox, a Montreal based startup has just raised $11 Million from IDG Ventures, Brightspark Ventures, and Skypoint Capital Corp.

Mobivox is a value-added VOIP services provider focused on cell phones. They can let you connect to your own Skype account via your mobile, and can also handle your long distance calling. They also offer free calling to a huge number of countries.

In some ways, their service is a sort of glorified calling card, having you dial an access number and then patching you through, but addons like Skype access, free calling to some countries, voice recognition, SMS Call Back, Conference Calling, Mobile-to-landline transfer and Group Calling all put Mobivox way ahead.

It would be amazing if Mobivox started incorporating some GrandCentral like features, but my guess is that they will focus on building out their existing business first.

Mark Evans had some kind words in his review of their service back when they first launched in May 2007.

MontrealTechWatch got to it first, Lure Media, a Montreal based company had a busy week last week. While the rest of us were filling up on Turkey, they closed a deal to purchase IMPACT, IS, the makers of two products: Impact Designer and Impact Showroom. Before that was done however, they signed off on $2.5 Million in funding from Garage Canada.

Impact has been around for over 20 years, and is a well-established leader, Lure Media now seems set to position themselves primarily as a software provider with ancillary support services. They will also launch an entirely new piece of Business-to-Business software they are describing as: ” Business-to-Business Exchange supporting the global commercial and residential interior design industry. ETERIORS will link manufacturers of luxury lifestyle products to their respective dealers, interior design professionals and high-spend customers on a transactional, digital backbone that evolves into the standard network for electronic commerce and rich media in the global luxury lifestyle market.

It is interesting to see Garage Canada play a role you might expect more traditional private equity group to handle. While this deal is probably the size Garage Canada is more comfortable with, the deal may have just been too small for the larger equity players, leaving a nice gap for Garage to fill with what is probably a safe bet in comparison to typical VC deals. The fact that they are launching a new product out of the merger also puts the deal closer to Garage’s territory.

Weblo.com, founded by Rocky Mirza, has raised $3,300,000 in a second round of funding from Vantage Point Ventures.

Based in Montreal, Weblo is some kind of horrible cross between MySpace, Second Life, and Monopoly. You can spend real money to purchase profile pages of property (e.g. California), non-trademark domain names (e.g. Cars.com), and celebrities (e.g. William Shatner). Then as the owner of these virtual assets you get a revenue share of advertising on the profile page (usually less than a dollar). You can also sell these profile page assets to the next fool (don’t count on it).

Interested? Me neither… Weblo has all the appeal of a ponzi scheme. Listening to Sean Morrow, Weblo’s Director of Marketing, describe Weblo as a business opportunity for users makes my stomach churn. This is not to say someone isn’t making money. The first time an asset is sold all the proceeds go in Weblo’s pocket (e.g. someone purchased California according to Weblo for $53,000). Weblo hopes each of the profile pages move up in the search engine rankings to collect some SEO advertising dough. And of course members are encouraged to upgrade to a monthly paid membership to earn a larger cut of the advertising revenue. Yeah…

I am not the first one to call the site a modern version of the Brooklyn Bridge ruse, where a con man sells the Brooklyn Bridge to a sap. Yes, someone purchased the Brooklyn Bridge from Weblo.

It is not just that proclaiming oneself the virtual owner of Toronto, Madonna, or thebestpageintheuniverse.net is delusional. Weblo, essentially a collection of empty profiles pages, lacks the adventure of a 3D MMOG like Second Life. Will Weblo profile pages move up the search engine rankings and prove as indispensible as Wikipedia articles? Doubtful. Wikipedia works because everyone can contribute to a page. On Weblo each profile page is controlled by one unmotivated individual looking for easy money.

“There’s a sucker born every minute…and two to take ’em.” Prior investors in Weblo include: Richard Rosenblatt, former chairman of MySpace.com; Fred Harman, managing partner of Oak Investment; Matt Hill, founder of eForce Media; and William Woodward, managing director of Anthem Venture Partners.

Way to sell ’em Rocky.

Mighty Bids, a Montreal based auction site, is calling it quits and get this… taking the ‘eBay exit’. Pretty ironic given the site’s founders, Peter Michaud and Jeff Ramaglia, routinely criticized eBay seller fees.

The site attempted to differentiate itself by providing free basic listings, but still charged a percentage of the final sales price and premium listings fees. The free listings, promises to donate 5% of profits to charity, and silly eBay protests were not enough to pull in significant numbers of sellers from eBay. Over the past four years Mighty Bids garnered 100,000 registered members and acquired 9 domain names. In case you are interested… the eBay auction ends July 1.

Mighty Bid’s new owners will have to make some drastic changes if they plan on successfully competing with eBay. What strategy would you take if you won the auction?