StartupNorth

  • 2011 CIX Top 20 Nominations

    CIX Top 20 ApplicationWe’ve written about the work that CIX is doing in building Canadian Technology Accelerator with ties to the US. They continue to build a showcase for Canadian startups in a variety of emerging fields. They have recently announced the nomination process for companies to the Top 20 competition for 2011.

    Robert Montgomery (LinkedIn), Mark Greenspan (LinkedIn, @markgreenspan) and the team at Achilles Media has been working hard to deliver value to the startups that participate in CIX. And we’re seeing a number of past winners have success, traction and exits. Cognovision, the 2009 winner, was acquired by Intel. The 2010 winners included:

    It’s a great opportunity to get access to some of the movers and shakers in digital media and ICT in Canada. And hey, the press coverage doesn’t hurt either. The 2010 short list of 20 companies included an impressive set of digital media and software (ICT in larger player lingo), including:

    Hopefully the entrants for the 2011 cohort will be just as impressive.  If you are a Canadian startup working in Digital Media or Technology and have less than Cdn$10MM in revenue, you should consider applying.

  • What’s the point of following rules?

    Editor’s note: This is a guest post by serial entrepreneur Hiten Shah who’s latest startup is KISSmetrics. Follow him on Twitter @hnshah. This post was originally published June 4, 2011 via his email newsletter Hitenism which you should definitely sign up for!

    By Antony Turner

    When we were kids, rules were used to teach us basic right and wrong; when we got to grade school, we were taught to follow them no matter what. By the time we become adults, playing by the rules is so ingrained in us that we never question why some rules exist, but you should, especially if you’re an entrepreneur.

    Why? Because if you’re an entrepreneur, rules aren’t your friend. Rules are designed to make you blend in, when as an entrepreneur, what you really want to do is stand out from the crowd.

    The sooner you learn that, the better off you’ll be. Just ask Richard Branson; he’s been breaking lots of rules and things have turned out well for him over the years (he runs that little company you may have heard of… Virgin). He believes so fiercely in breaking the rules that he thinks you should empower employees to do the same, believing it drives business forward.

    Breaking the rules isn’t about being a trouble-maker, it’s about seeing the world as a series of norms and identifying places where you can disrupt things for the greater good: a better product, a smarter solution, a streamlined process. Flouting the social order can mean innovation, change, and even success.

  • Week in Review

  • DemoCamp Toronto 29 Wrapup

    Last night marked amazingly the 29th event of Toronto’s increasingly supernumerative DemoCamp scene. To warm up the crowd we had a little help from legendary Canadian investor and the man with a few more twitter followers than you, @howardlindzon. In case you didn’t make it, here’s my notes for you, of varying coherency, of the course of the evening.

      The job of entrepreneurs is to get in the way of trends. You don’t need to predict the future you just need to get in the way of trends. The larger and longer the trend the better. Lindzon is not a value investor, he’s a momentum and sentiment investor.

      Lindzon started his company through social leverage. But it didn’t come over night, he met Fred Wilson over the course of a year and becoming friends before starting Wallstrip which they sold to CBS. And gained some more cred. But once you sell your company you lose control of your vision. Then he passed on Twitter at 20M valuation. You don’t always catch the winner. You make mistakes. But he could see when he was wrong so he was, by force of will, able to get into Tweetdeck, Bit.ly and others, the idea was to put himself in the way of the trend. I didn’t understand Twitter but I knew it was a trend and was able to buy everything around Twitter. You have to use social leverage to find investors that understand your domain and understand your passion.

      Raising money is an art. We’re in a great environment to raise money but that doesn’t entitle you. You have to have a great angle of attack against your competitors, you have to be great at telling your story. You have to explain the benefits of the product not the features.
      Dashboards, I want to get my life down to as few screens as possible. Also I read Hackernews and TechMeme in order to understand the sentiment of my industry.

    On to the Demos:

    500 pixels – Oleg Gutsol @500px
    There are many picture websites like it, but this one is ours. Very pretty pictures. We promote the best pictures in the world. Recently closed funding, getting some media buzz. Also a premium themed galleries for photographers. What we nailed was not just the product but the community. Something that they doing better than Flickr “Flickr has become a dump site” 500px is an art site.

    TitanFile
    Sending secure files, slick interface. Common demo gods, Soo… “lets assume that you received the email…”. No, wait it’s there, to the adulation of the crowd, stupid Gmail delay. You send an notification email and then it also calls you to IVR read you a passcode. Then everything is tracked. Wants to thank Assange for helping to push their business forward. Accountants, lawyers anyone who needs to make sure their documents get there every single time. And delivery receipt is an added value.

    High Score House – turn household chores into a game for your kids
    Great playful signup screen that sets the tone. Brilliant super obvious reminders and rewards for doing stuff like making a bookmark and remembering your PIN. App awards virtual currency (stars) that parents can set the price for like what the value of helping to make dinner and what points are worth for tv time or a new toy. The Ah Ha! moment is when kids are running up the stairs to do clean their room. Also great for kindness points, what have you done that’s kind today? Cool! You rock! You earned it! This app really rocks and has so much character. App works great on the ipad. Beta testing is spending just a tiny bit of money a day on facebook to bring on 10 moms at a time. Key dashboard metric number of exclamation points in emails from moms. Lookout ClubPenguin, with a little work, High Score House could will be the next big exit that gets Canada to a billion dollar year. Judging by Twitter response, High Score House wins Democamp this round.

    Money quotes: we’ve got moms all over loving us, but like, in the acceptable way
    Top question: Can you make a version that works on spouses? [I don’t know, but in our household we’re already debating who’d the “parent” side of the account…]

    Vizualize.me – is a startup that won startup weekend. It’s a 5 day old startup.
    Problem is how do you display yourself in a different way than a resume. It’s an infographic that scrapes your linkedin profile and makes really pretty graphs. Sign-up rate they just hi 12 thousand users 5 days after launching the company… [holy crap] Product itself is nicely viral because you post your infographic to twitter or facebook or linked and other people see it and feel compelled to create their own. Feemium businessmodel. We want to be the site you go to brand yourself visually and socially. Could easily expand into other personal visual branding applications… but that can wait at least until next week.

    WeAreTOTech – A new community service launched by @Michele_Perras, @LeilaBoujnane & @AprilDunford
    A Toronto-based Directory that will profile, showcase, promote and connect profiles of local tech heros in Toronto, to help you make connections, to help you find advisors, mentors and conference speakers. Inspired by WeAreTechNY and “in the hopes of connecting everyone, shining a spotlight on developers, CEOs and founders, executive, hackers who make our tech community what it is, we decided to give you We Are TO Tech.” This is a fantastic idea, and what they need right now is you if you fit the description to fill out this form here.

    Xtremelabs – Alpha Slides demoed by James Woods
    Remove some of the failings of presentations, by making a simple mobile app that broadcasts slide decks to everyone in your audience’s devices simultaneously. Works in a coffee shop, boardroom or conference. Alpha Slides is in the App Store now. I can cast a mini slide deck from one mobile device to another. When I slide a slide it slides on your slide too. Cross platform is the key (apple now has mobile keynote for iphone but only does iphones). Business model is to sell app space, and freemium features. You can follow a conference when not at a conference or I can follow a conference when I’m at one even if I can’t get close to the screen and take it with me when I’m done. A company like Dell could have their own secure instance if they want to as an internal meeting tool. App has potential, could see this taking off in the enterprise as well as the personal or conference usage.

    That’s it folks. Awesome caliber of demos again this round. We’re now looking forward to the big DemoCampTO 3-oh. You know what they say, thirty is flirty.

    Further reading: @Sachac’s nifty sketchnotes of DemoCamp Toronto 29

  • WaveAccounting raises from INKEF Capital

    WaveAccountingOur friends at WaveAccounting announced yesterday that they had raised a $1.5MM seed investment from INKEF Captial. We’re big fans of WaveAccounting, in fact, it’s what we use to manage the receipts and books for StartupNorth. It means that others see the huge potential with this application. And we’re happy that our accounting provider continues to grow and demonstrate traction. I like stability 😉

    Wave also announced the addition of 2 new senior managers: Scott Zandbergen (LinkedIn) formerly of Sage Software and Stephen Dixon (LinkedIn, @sdixonhalloween) formerly of Deloitte & Touche. Looks like to great additions to the senior management team.

    This is the first investment from Peter Carrescia (LinkedIn, @pcarrescia) who is one of the two new Managing Directors at the INKEF Capital fund which is a ~$200MM fund from OMERS and ABP pension funds. This is really interesting for a variety of reasons. It means that INKEF is now capable of actively deploying funds, they have set up the necessary funding vehicles and mechanisms to be live. This is fantastic news. It also means that John Ruffolo (LinkedIn, @ruffoloj) has hired a team and is actively seeking out Canadian deals. This is great news to for entrepreneurs. John and Peter are well respected and very entrepreneur friendly, this is a plus for entrepreneurs. And simply additional growth capital is a good thing.

    Congratulations Kirk, Jame, and the WaveAccounting team.

  • DEMO Innovation tour returns

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    The Demo Innovation is Everywhere tour is coming back to Canada with stops in Toronto & Montreal. The event includes 2 parts, a chance to pitch/present to local VCs (Rogers Ventures) and a social party. Last years event was fantastic.

    We invite you to submit an application for a 30 minute private meeting with the DEMO team and leading Venture capitals in a city near you. We have ten spots available per tour stop. Each company selected will also have the opportunity to address a larger audience at the DEMO Tour party in the evening open to the entire DEMO community of VCs, investors, media and PR professionals.

    Location Date Register
    Vancouver, BC Canada June 23rd, 2011
    Toronto, ON Canada June 28th, 2011

  • Customer Retention: 7 Ideas for Marketers

    Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in June 9, 2011 on RocketWatcher.com.

    Photo by Sindy Kids - Some rights reserved
    AttributionShare Alike Some rights reserved by s?ndy°

    As marketers we are often so focused on new customer acquisition that we sometime forget to pay attention to the customers that we already have. That would be a massive mistake.

    It costs 6-7 times more to acquire a new customer than it does to keep an existing one. You are 4 times more likely to close business with an existing customer than you are with a new prospect.

    I recently brainstormed with a CEO about programs for their current customers both to improve customer retention as well as to drive new business – here are some of the ideas we came up with:

    1/ Give your Newsletter a Kick in the Pants – We all get too much email. Your newsletter is going to have to kick ass just to get folks to open it, let alone take action. What could you give customers that would be so interesting, awesome or remarkable that they’ll say, “Yippie, the newsletter arrived today!” What works for you will depend on your market but I’ve seen good results with sample code, a customer spotlight feature, sharing industry data your customers don’t have access to, interviews with industry experts and video snippets of product managers or support folks sharing their favorite tips and tricks. I’m sure you could come up with a hundred other ideas. If your newsletter doesn’t feel like hard work to create, you could probably do better.

    2/ Campaign to your Lost Customers – You are twice as likely to close business with a lost customer than you are with a new prospect. With close rates like that, you should be treating these folks like hot leads. Doing win-loss interviews can help you identify patterns around what went wrong in the first place and get clues as to what to offer them to come back.

    3/ Campaign to your Inactive Accounts – These folks are like a loveless marriage – they haven’t divorced you yet but the thrill is gone. Maybe they stopped paying for maintenance during the downturn because of cost-cutting, or needed a feature you didn’t have (or they didn’t know you had), maybe there weren’t enough people signed up at the time to make the service interesting or maybe they were never really “activated” customers in the first place. Similar to a win-loss analysis you’ll want to get on the phone with a bunch of these folks to figure out what the patterns are and how you might get them to, ah, renew their vows with you.

    4/ Get Marketing and Customer Service Talking to Each Other – Only 10% of your unhappy customers will tell you. The others tell their friends. Your communications to your customer base can help keep customers informed and that’s a good reason to get marketing and customer service talking to each other. Marketing can help communicate workarounds for common problems or information about expected fix dates for known issues. And don’t forget to make it easy for people to complain via any of your communications channels (including the marketing ones). The sooner you know, the sooner you can do something about it.

    5/ Expand Inside Accounts – Think about ways to expand your reach inside larger accounts if you sell B2B. I once convinced a big retailer that had done a small deal with us to let us do a free coffee and donuts event in their cafeteria that turned into 2 six-figure deals. Don’t be shy about asking your sponsor inside a large account about how you might start a conversation with other groups.

    6/ Help Customers Promote Themselves – Smaller companies are looking for ways to promote their products and services and drive links back to their own sites. I once had a Fortune 500 CIO agree to do a video testimonial with me mainly because he was a new CIO and wanted to raise his own personal profile for his next job. I always wonder why companies don’t give more awardsto their customers and partners. Everyone loves to get an award no matter who’s giving it out and when they brag about winning the “Excellence in Accounting Software Deployment” award, they’ll likely mention your name too.

    7/ Show Them the Love (at least 20% of them anyway) – A few months ago I signed up for a pre-launch list for a new service.  I was asked to Tweet about it as part of the sign-up, which I did.  After the launch I got a form email thanking me for being a top driver of referrals (plus a t-shirt if I sent them my address). A personal email would have made a MUCH bigger impact on me, and how much time would it have taken? I bet I could write 100 of them in a day. I don’t want a t-shirt (side note–if your customers include women, you might want to re-think the whole t-shirt thing), I want to be thanked like a person and not some a faceless “top referrer.” Your business makes 80% of it’s revenue from 20% of your customers. Quit being so lazy – pick up the phone and pucker up.

    Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in June 9, 2011 on RocketWatcher.com.

  • iMessage & The Canadian Impact

    The launch of iMessage was an announcement with pretty significant impact on a few big/hot tech companies in Canada. Kik has obviously built a private messenger service around iPhone, RIM has taken an aggressive stance on promoting BBM, and of course lets not forget all the Canadian telecos.

    Being an investor in Kik and some others impacted by the new iOS announcements, Fred Wilson wrote a brilliant post analyzing the impact. “Expect platform owners to work against you”.

    In fact it was so interesting, that the product manager for RIM’s BBM service re-tweeted it (note that Theban is a good friend).

    ThebanGanesh

    Fred Wilson to devs: Expect platform owners to work against you | Tech News and Analysis http://bit.ly/m42nZC
    12 hours ago

    Which prompted this amusing exchange between him and I.

    dpmorel

    @ThebanGanesh you sir… are an ass… re-tweeting this as a “platform owner”

    ThebanGanesh

    @dpmorel lol – it’s a balancing act. Platforms need to protect themselves from the ‘tragedy of the commons’

    It is a fascinating lens into how RIM thinks of BBM and their own platforms. Despite my “ass” comment, I agree with him. Innovation often comes from the community who build things for the platform. The platform then needs to pull the best ideas back into the mothership – sometimes as an acquisition, sometimes they build it themselves and take on the “incumbent” in the community. This is in theory a good thing. We want the best innovations to be widely adopted. We want private messenger everywhere so we can all stop paying atrocious rates for SMS.

    And those atrocious SMS rates charged by carriers, brings me to my next conversation. A good friend of mine runs messaging at a major Canadian carrier. Him and I have had the debate several times over the past few months on whether or not private messenger is a big threat today and now for them.

    What i mean is that the argument about building SMS over data to drive costs down will go away in a few years as soon as LTE is deployed so ideally I want to invest in a solution I can leverage for more than a couple of years or so…

    Customer experience and scalability are key for me. If I am spending money to improve the customer experience, it has to be open to all subs without having to invite people, therefore is has to scale.

    The problem I have with the kik, textplus and the likes is that they are closed communities of 100,000 in 30 different countries or so and only address their own P2P niche market whereas SMS is an open community of a couple billion compatible devices; no need to register, invite friends, etc… While P2P SMS is plateau’ing in Europe, A2P SMS traffic is growing at a 25% rate yoy. In Canada P2P SMS is still growing at a 20% rate yoy and the A2P side of the business is still non existent.

    P2P = peer 2 peer (i.e. customer to customer), A2P = application 2 peer (i.e. app to customer).

    That list contains some some big, big knocks on ALL private messenger services – iMessage, BBM, Kik, TextPlus, etc. They are closed communities!! Meanwhile, with SMS, I can literally text ANYBODY in the world. Also, private messenger solutions don’t (yet) provide a solution for applications to talk to customers (A2P). And the carriers have a very real solution coming – LTE with better SMS clients on phones. SMS was literally one of the best services ever created – open, standards driven, no registration, etc. Awe-inspiring engineering. And with LTE the carriers will be able to take advantage of the cost savings of routing SMS over data, and they’ll have the biggest community (5b GSM users) and simply the best solution.

    Buuuutttt… its not here yet. And thats what this is all about. Messaging is in transition and there’s an opportunity to own “messages over data”. Richer messages, more social messages, better user experiences, more cost effective for customers, etc. Its a fat, fat bazillion dollar market. And thats why this has happened:

    • Apple launched iMessage, Facetime, etc
    • Facebook bought Beluga
    • Google + GoogleVoice + GoogleChat + Android push notifications
    • RIM doubles down on BBM
    • Venture industry putting big money into potential disruptors like Kik, Textplus, Color, etc

    By the time carriers get LTE out the door with new devices in market, the top end of this market may have already been won to the tune of 200-500 million users.

    There is maybe some good news for Kik out of this announcement. For a startup the biggest problem is almost never a competitor. The biggest problem is typically non-adoption. Nobody knows there is something better than texting available. Nobody knows that Kik exists. Well, Apple & iMessage are about to blow up the “private messenger” space. In an ideal world, as the market grows, Kik goes along with it.

    It’d be amazing if Kik & RIM (or others from up north) could figure out how to own this market. There are huge opportunities still – the A2P problem, the “interconnect” problem, etc. Lets hope they can figure them out and build ginormous services.

  • 2011, The 1 Billion Dollar Year??

    Edit 1 – Techvibe just put together a more comprehensive list than mine – http://www.techvibes.com/blog/techvibes-comprehensive-list-of-canadian-tech-acquisitions-50-and-counting-2011-06-08. It is an even a bigger year than I thought!

    Edit 2 – I have been corrected that the Coradiant acquisition was more likely $100m-$150m. Updated below. Bigger than I thought! Glad to see I was “under-reporting”

    Interesting first 6 months to 2011. Check out this list of exits:

    Radian6 – $326mm
    Coradiant – $100mm (guess – this one has been tougher to size, some searching shows them to be around 100 employees with 10mm revenue?? That Akamai partnership feels pretty strategic though…)
    Pushlife – $25mm
    Tungle – $20mm (guess off of last raise/valuation)
    PostRank – $15mm (consensus guess from asking around)
    CoverItLive – $10mm (big guess)
    tinyHippos – < $1mm (4 employees)
    ———————————-
    About $495mm. Give or take $25mm depending on my math.

    Firstly, this is a perfect example of how VC exit math works and the power of a fundmaker like Radian6.

    But get this, we are exactly 6 months in and almost half way to…. well… July/August/December all kind of suck for doing deals… buuuutttt… maybe… maybe if I utter the amount… people will dream and we could maybe dreamily hit 1 BILLION DOLLARS in returns this year. Wow, 1 BILLION. Thats nine 0’s.

    The Net Value of All Exits for 2011?? (by Adam Crowe, some rights reserved)

    We’d need another big mama ala Radian6, and another 4 $20-$30mm exits. I could hazard a guess at a few companies that could exit for $20mm+ today and now, but the big, big question is, where will the big exit come from?

    Kobo Books (@kobo)

    They just raised $50mm. Not sure about the valuation, but we could size it at say $150mm – $300mm (I’d go higher because they are very young and having a $50mm raise means they have a vertigo inducing growth/revenue curve). And lets not forget the mainstream press chatting about an Apple acquisition. This could be a high 9 figure to billion dollar plus exit if something happens.

    Freshbooks (@freshbooks)

    They state over 2mm users on their home page. Lets say 10% are paying customers and they pay on average $30/month (looking at their pricing plans). 200k * $30/month * 12 months = $72mm in annual revenue. Even at 5% freemium conversion they are at $36mm. Thats a big customer base and a big chunky, sticky subscription revenue base.

    Would love to hear from folks. What other startups do we have hanging about that could do a big exit? Am I missing any of the 2011 exits to date?

  • 7 Startup Customer Discovery Questions

    Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in April 26, 2010 on RocketWatcher.com.

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    Folks at startups have different levels of experience when it comes to working with customers.  At the early stages when you are identifying the problem to solve, the key features of the solution and the customer segments that are the right fit for the solution, you’re spending a lot of time with customers trying to tease out as much information as you can.  Last week I was asked by a new founder what types of questions he should be asking in these meetings.  Here are a few suggestions:

    1. What does your typical day look like? – This one is especially useful at the earliest stages when you are still trying to get a deep understanding of the space, the customers and what the key pain points are for those customers.
    2. If you could change anything at all, what would it be? – This is a good one to get at the most pressing problem that a person is experiencing with a particular task or process.
    3. What is the biggest pain you have today? – This will have to be framed within the context of the broader space you are looking at of course. The key with this question is to probe around the characteristics of the pain.  Why is it painful? What is the measure of that pain (time, effort, etc.)?
    4. How are you solving this problem today? – Again, try to ask a lot of open-ended questions around this one too.  When was the solution implemented?  Why was it done like that? Who made the decision?
    5. What is this problem costing you? (lost revenue, lost customers, increased service costs, etc.)? – This is your first indication of how the customer might measure ROI no a solution in this space.
    6. Who would you expect to solve this problem? – I like this one because it tells me a bit about how a customer would define the solution in terms of market space and also starts telling me something about channels.  For example, in a recent set of interviews I did the customers said they would expect their phone carrier to deliver the solution to the problem (vs. getting it directly from a software provider) or they would expect to get it from a local VAR.  In another set of interviews I did for a different product the answers were IBM, Oracle and Microsoft – with clearly a different set of expectations around that for service, price, etc.
    7. Who else has this problem? – This might be different groups in an enterprise or different groups of consumers.  It’s an interesting question to ask to see what else the customer is seeing in the space.

    Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in April 26, 2010 on RocketWatcher.com.