StartupNorth

  • 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.

  • Going global from day one

    Arguably, two of the most important centers of innovation outside of Silicon Valley are in India and Israel. The reasons of why this is are numerous and could form basis of someone’s PhD thesis but for the purpose of brevity I’ll only highlight one: global from day one.

    You talk to entrepreneurs from either India or Israel and they’ll surely weave great yarns about their companies (these are also two great storytelling cultures) but one thread that will be consistent is when the entrepreneur founded their company, they were immediately thinking of the global marketplace.

    In Israel, it is because the domestic market is too small and there are limited opportunities to sell regionally. The story in India is that while population is huge, it is very poor so the actual local market for technology or technology services.

    Faced with these challenges, Indian and Israeli companies would market to the US and Europe and often place key personnel in those geographies. Overseas became their across the street.

    In the past year, Canada has been thrust upon the global stage several times. Whether it is praise for our banking system, our brave forces, our Gold-medaled athletes, or our ability to throw a party, Canada as a country has been seen as a global leader.

    Will our entrepreneurs follow suit? Sometimes it seems that cross-cultural expansion from a Canadian perspective is an Alberta company selling into Quebec.

    Unfortunately, as often as you hear of grand global ambitions from Israeli, Indian (and American!) entrepreneurs, you hear of relatively modest ambitions from Canadian ones.

    All too often global expansion = US expansion. That is not the right formula.

    Here’s a fact that is sometimes a bit uncomfortable, many American companies consider Canada as part of their domestic market. The effort and planning these companies put into Canada is the same one they put into Wyoming. (OK, maybe I’m overstating the point)

    But here’s a suggestion, we should return the favor. Canadian companies shouldn’t think of the US as a “global” market but rather just an extension of the domestic one. When Canadian companies say global, they should mean it and have Asia, Latin America, the Middle East and Africa dead in their sights. These regions all have burgeoning and tech-savvy populations and are eager to get online.

    So whether we’re talking about consumer, enterprise, SMB or SP services or products, let’s see Canadian entrepreneurs putting the “world” into their WorldWideWeb plans. Canada’s got the world stage for the moment. Entrepreneurs, make your entrance.

  • 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.

  • Week in Review

  • 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.

  • The Entrepreneur’s Guide to Customer Development

    The Entrepreneur's Guide to Customer DevelopmentI was reading Eric Reis’ Lessons Learned blog yesterday and he talked about The Entrepreneur’s Guide to Customer Development. I begrudgingly read Steve Blank‘s Four Steps to the Epiphany, which is a must read for any entrepreneur (begrudgingly read because it is not the easiest reading). It is a great book, but it’s tough reading.

    “And Steve is the first to admit that it’s a “turgid” read, without a great deal of narrative flow. It’s part workbook, part war story compendium, part theoretical treatise, and part manifesto. It’s trying to do way too many things at once. On the plus side, that means it’s a great deal. On the minus side, that has made it a wee bit hard to understand.” Eric Reis

    I bought a copy yesterday based on Eric’s recommendation. It is a phenomenal resource for learning Customer Development. Patrick and Brant have done a great job writing an understanable how-to guide for using Customer Development and Agile Development in a Lean Startup. The book includes a shout out to our friends Dan Martell at Flowtown and Sean Ellis at 12in6.  

    The book incorporates the wisdom and experience of real world practitioners of Customer Development in the 5 years since the inital publication of The Four Steps. For the first time a lot of entrepreneurs will hopefully begin to understand a technology adoption lifecycle and the marketing of products/services. I wrote a chapter in Cost-Justifying Usability back in 2005 where I had first encountered Steve’s Customer Development Methodology from his course notes in 2004 at Stanford (yeah, I know that’s crazy). In the chapter, titled “Valuing Usability for Startups”, I argued that getting out talking to customers and testing your hypotheses were key to success. However, I proposed using the Bell/Mason Diagnostic for evaluating the stage of corporate development in order to calculate Return-on-Investment of usability. In hindsight, I probably should have instructed entrepreneurs and usability professionals to look at processes like Customer Development to search for a “repeatable and scalable business model”.

    The Entrepreneur’s Guide to Customer Development is a short mandatory introduction to using customer and agile development to search for a  repeatable and scalable business model.

    Discount for StartupNorth Readers

    A few quick emails to Patrick today, and he offered to provide StartupNorth readers a 25% discount on any version of the book. First ten StartupNorth readers to go to CustDev.com can use the discount code.

    Discount code: STARTUPNORTH (limited to the first 10 users)

    Good luck!

  • 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.