StartupNorth

Tag: halifax

  • The Rise of Fashion E-Commerce and Man’s Escape from the Mall

    [Editor’s Note: This is a guest post from Thomas Rankin. It is subset of his original post, which is a collection of thoughts and research compiled during some of the earliest exploration into the Dash Hudson business model. ]

    The Set-up

    E-commerce is on a rocketship, with clothing retailers and brands using technology to create new ways to engage with customers online. In fact, clothing and accessories is the fastest growing segment of e-commerce. A study done by Emarketer projects that online sales of clothing and accessories will continue to grow year over year at a rate faster than even the electronics and books segment, with sales reaching $73 billion by 2016.

    Don’t Forget the Dudes

    Despite the trope of women as fashion-obsessed shopaholics, men also have a desire to buy things they know they’ll look good in. However, most department stores and shopping malls are designed with the female shopper in mind, leaving men to fewer clothing options, particularly for those who are sartorially-inclined. This void, combined with growing presence of internet and mobile technology in fashion e-commerce, creates a perfect storm of opportunity for online brands and retailers that offer affordable, convenient, and fashionable options for men. According to research from Rakuten Linkshare, 83% of men surveyed prefer to shop online. Not only are men flocking to online retailers to get their new threads, but according to Chris Ventry, the general manager of Gilt Groupe’s GiltMan, men are out-shopping women by 20-30% in all areas of online shopping.

    Where the Boys Are: Men’s E-Commerce Companies

    A number of men’s e-commerce companies are cashing in on men’s interest in buying fashionable and trendy clothes online. Companies such as Frank & Oak, Bombfell and Trunk Club are at the forefront of offering a curated subscription service that makes shopping efficient for guys. Subscription commerce has proven popular with men who wish to avoid the complex decision making involved with shopping. Other online-exclusive fashion companies like Bonobos, Jack Threads, and Mr. Porter offer quality men’s fashion at various prices. Bonobos is for the guy who likes the crusts cut off his peanut butter sandwich, Jack Threads for the guy who likes crusty dive bars and Mr. Porter for the socialite upper crust. J.Crew is a well-known traditional unisex offline retailer that offers an expansive online selection for men. H&M, Uniqlo and Zara compete for the disposable fashion market at a lower pricepoint. Streetwear companies like Superdry, Saturdays Surf NYC, Need Supply Co., Union Made Goods, and Stussy offer casual and weekend wear for dudes that take their looks seriously. For the slightly avant garde, it’s all about the Nordic brands: Matinique, Norse Projects and Selected Homme are doing some of the best work in men’s fashion today.

    Beautiful Matinique people from Mantinique 2010 catalog.
    Beautiful people  from Mantinique 2010 catalog.

    Just Show me the Good Stuff

    Clearly the world has changed, as there are a growing number of fashion options for men. So many that it is easy for guys to get overwhelmed, like a child lost at Nordstrom. According to research from Rakuten LinkShare, 48% of young male shoppers between the ages of 18-25 are overwhelmed by the plethora of choices with online shopping. Refinement of those options is a serious challenge. A survey conducted by Dash Hudson indicated that more than 60% of guys aged 18-24 want social validation and recommendations before buying. This contrasts with women, where over 75% want to discover content on their own. Guys readily admit that they need help looking good, and want guidance on what to buy. For the sartorially interested male, the growth in popularity of social commerce sites has been a mixed blessing. Pinterest launched in 2010, giving consumers the ability to take part in a taste-based community that curates photos of fashion, food, architecture, hairstyles and many other things. Now social shopping companies like Wanelo, Fancy, Svpply, and Fab are making it easier for fashion-conscious shoppers to curate their style, draw inspiration from other users, and connect to their favourite stores and brands. A review of Alexa data shows that each of these shopping sites is much more likely to be frequented by female shoppers, something that is evidenced in their communities and user experiences.

    Mind the Gaps in the Market

    Despite the growth of men’s fashion e-commerce, there remains a great deal of room for innovation. Although social shopping companies like Wanelo and Pinterest allow users to curate their style, the plethora of available products can be overwhelming for the male shopper. Our research at Dash Hudson indicates that over 80% of men come to a shopping platform with the intent to buy as opposed to create content. The prevalence of dead and broken links in social shopping sites often interrupts the demonstrated intent. I am Jack’s complete frustration.

    Oops

     

    So close.

    New social marketplaces must solve the problem of enabling the customer to search great content and then convert intent into purchase. This is especially important in the case of the need and immediacy-driven male shopper.

    The Future of E-Commerce Is In Your Hands – Literally

    The trend of men shopping online will continue to grow with mobile shopping becoming the newest way to efficiently discover and purchase clothing. Mobile technology can capitalize on men’s desire to shop on the go, making the fashion e-commerce experience more efficient than ever. According to Forrester, mobile currently accounts for 5 percent to 10 percent of all retail transactions. Yet for most online retailers, the big story is that mobile commerce is increasing at a rate of up to 185 percent. For men’s retailers who have caught the mobile wave (ahem, Jack Threads) this is great news. The DDB Lifestyle Survey in 2013 indicated, of men aged 18-34, 30% use shopping apps on their phone and 24% typically shop for and buy items on their smartphones. In the age of the digital urban lifestyle, convenience wins.

    Final Thoughts

    Experiences need to become tailored to how men shop by getting the best, most validated clothing in front of the shopper for their final purchasing decision. As more social shopping experiences become tailored for men, and as better retail products are built for mobile devices, male shoppers will start to feel the warmth of a market that finally understands them. At the end of the day, it’s all about being the coolest version of yourself. Finally, guys are being given the tools that make it fun and easy for this to happen.

  • Making the business case

    I have spent a lot of time in Halifax in the past year. I have been out for HPX Digital and for 2 workshops with Toon Nagtegaal (LinkedIn). It has allowed me the privilege of hanging out with Atlantic Canadian entrepreneurs. I’m going to try to spend additional time in Moncton, Saint John, Charlottetown and hopefully St. John’s (but a road trip like that will require additional planning and spousal support).

    My next 2 trip are very different. The first is another workshop with Toon. The second is to attend Atlantic Venture Forum (still working on travel plans).

    We are looking for startups that are “at the point where you have to push your business or business idea to the next level”.

    The Workshop

    Subset of PhaseMap by Toon Nagetaal

    The workshops with Toon are interesting. You can read Peter Moreira’s piece on the workshops. The workshop is a Thursday to Sunday ordeal. It’s called an Investor Readiness Workshop. The goal is to put companies through an artificially intense meat grinder and focus on building a stronger investment presentation. The goal is to walk through your business plan, your assumptions, and your traction. Toon provides his guidance from his experience funding companies in Europe and North America. I provide my experiences as an entrepreneur and what I’ve learned living for a short period of time on the other side of the table.

    The goal is to provide Atlantic Canadian founders practical advice about refining their business plan. It revolves around Toon’s PhaseMap methodology and software tools.

    The PhaseMap methodology helps define and articulate a business case around 4 questions:

    • Do customers need and want my product? = Value Proposition
    • Is there a market, big enough and ready to pay now? = Market
    • Do customers wan to buy from me? = Positioning
    • Can I deliver? = Execution

    Why?

    • Learn how focusing on your customers pain is the key to defining your value proposition, market and position. Practical real world, in the trenches advice about raising financing from both sides of the table
    • To provide the team with methods and tools they can use to learn more about customers and product/market fit.
    • Provide individual feedback to startup teams throughout the session, both to guide the iteration and strengthening of their startups and to provide strong group learning

    Who?

    Ideally, founders either written a business plan, started the investment circuit, and/or generated a few business models or a Lean Canvas or two. The target audience is companies that are actively raising investment capital. The focus is on how to make the case for your business. How good is your business case and how well you are able to present it? These are the crucial factors founders will learn in how to convince others of the quality of your plans.

    How much?

    Update: I’ve been informed that if companies are willing to cover their own travel expenses, the good folks at ACOA are willing to make exceptions for companies from across Canada.

    The workshop is sponsored by ACOA. If you are a founder based in Nova Scotia, Newfoundland, PEI or New Brunswick you are eligible for ACOA sponsorship. The ACOA team has informed me that the workshop is open to any Canadian startup willing to cover their own travel expenses to the region. The fees are divided between the founders and ACOA. Fees for founders are $750 for up to 2 founders to attend. This covers hotel and food costs. The remaining fees are covered by ACOA.

    When?

    The next workshop is June 6-9, 2013 in Halifax.

    Attend

    It’s a fun, intense weekend that is designed to help startups and founders.

    [gravityform id=”10″ name=”PhaseMap Workshop” title=”false” description=”false” ajax=”true”]

     

     

  • Atlantic Canadian Founders Deserve Better Than FAN (First Angel Network)

    CC-BY-NC-ND-20 Photo by Stephen Poff
    AttributionNoncommercialNo Derivative Works Some rights reserved by Stephen Poff

    Recently, I have had the pleasure of travelling to the East Coast and working with founders. I have seen the amazing companies and the founders across the region. Moncton, Halifax, Saint John, St. John’s and Charlottetown (among the varied cities). There are amazing companies like LeadSift (disclosure: I work for OMERS Ventures who is an investor in LeadSift), GoInstant, Verafin, Clarity.fm, Lymbix (disclosure: I sit on the Board of Directors), Introhive, InNetwork, Compilr and others.

    The region is bristling with great founders, great ideas and a lot of untapped talent. It also holds some amazing secrets like Toon Nagtegaal (LinkedIn) who runs a (also ACOA funded) program for startups that I have been lucky enough to be invited to co-teach (disclosure: this is a paid consulting gig). There are amazing people and companies across the Atlantic Region. It’s only a matter of time until there is another HUGE exit.

    However, the region also is a small community that has it’s own culture and politics. Those small town politics have allowed nepotism and crony capitalism to seep in and it has allowed terrible deal structures to be put upon unsuspecting founders and companies. This pisses me off!

    When we started StartupNorth we promised ourselves we would always stick up for founders and startups when it mattered. We continue to  support, educate and connect startups and founders with other founders, with capital, with new ideas and educational resources. We need to identify the BULLSHIT that is being allow to pass in Atlantic Canada as supporting entrepreneurs so that the amazing investors that are there don’t have to compete with a backwards and ill-conceived entity.

    First Angel Netowrk

    Who? I’m talking about First Angel Network (FAN). Why? Here is an example of the full deal they present to entrepreneurs:

    1. Startups apply to pitch the non-profit FAN which is funded and supported by ACOA and others.
      • Most of this funding goes to pay salaries as well as to cover travel expenses.
    2. If a startup is selected to pitch FAN, the startup must agree to pay $3000 to the non-profit  FAN.
    3. Startups MUST also sign a “Consulting Agreement” with a for-profit consulting company owned by Ross Finlay and Brian Lowe.
      • You can NOT pitch the non-profit UNLESS you sign the consulting agreement with the for-profit company.
    4. Startups then pitch the non-profit and if successful get a deal done
    5. If a deal is done, the consulting agreement gives the for-profit shell company and FAN organizers 8% of the total proceeds of the transaction
      • 4% in stock directly to Ross Finlay and Brian Lowe (not the consulting company, directly to the individuals)
      • 4% in cash to the consulting company

    This is so wrong! On so many different levels. This is worse than pay to pitch.

    Crony Capitalism

    The thing that pisses me off the most is that the most nefarious part of the process, the consulting company and payouts to individuals, is not listed on the FAN Funding Process page. We have individuals who collect a salary that is partially (if not completely) funded by a government agency (ACOA). First Angel Network Association received at least $1,123,411.00 in funding between 2006-2011 (nothing reported for 2012). That is an average of $224,682.20/year in funding, and that is just what we could source publicly.

    Getting paid by a government agency to source your own deals. Seriously, if you thought management fees were high, what about tax dollars going towards salaries of investors. They are using federal funding to source their own deals and cover expenses and salaries. Something is wrong here. Then they charge entrepreneurs for the privilege of their investment. Which someone already paid them to source. The cost of this capital is incredibly expensive to entrepreneurs taking this investment and to the region.

    Atlantic Canadian entrepreneurs and startups deserve better than this.

    Do Not Pay to Pitch

    Startups should not pay angels or angel networks to pitch. Jason Calacanis wrote the definitive piece on why startups should not pay angel investors to pitch.

    “It’s low-class, inappropriate and predatory for a rich person to ask an entrepreneur to PAY THEM for 15 minutes of their time. Seriously, what is the cost to the party hearing the pitch? If you answered “nothing” or “the cost of two cups of coffee” you win the prize!”

    Jason eloquently describes why this doesn’t work. It is a imbalance between cash poor startups and rich investors. The imbalance is made worst by. We have been running Founders & Funder$ events. There is no imbalance. Everyone pays the same. Founders. Funders. We try to curate the audience to ensure that only founders actively raising money attend. We also invite a limited number of funders that are actively doing deals (criteria change based on angel investor versus institutional investors). We want everyone to be on equal footing.

    And there are a lot of startups and founders that will argue that Jonas, Jevon and I have strong track records (well at least Jonas & Jevon do) and even stronger networks:

    “Now, before you go saying “Jason is connected and he has access to angels” remember that I hustled my way into this industry from nothing. I networked at free conferences and figured out a way to get on the radar of uber-angels like Ted Leonsis, Fred Wilson and Mark Cuban. They paid attention to me because I had good ideas. If my ideas had sucked, they would have ignored me. Period.”

    Our goal has been to help connect and educate founders and startups. We continue to believe that it is not government agencies, or venture capitalists, or angel networks that will build the next generation of successful Canadian companies. It is the founders and the employees of these startups. It’s the big ideas and the big execution that result from the efforts of dedicated people. They are the ones who deserve a great deal, not some middle man.

    What can you do?

    1. Do not pay to pitch. Avoid groups like First Angel Network like the plague.
    2. Tell the people who fund FAN and other angel groups who have a pay to pitch model that you believe they should cut off funding.
    3. If you know an angel investor within an angel networks that make you pay to pitch like FAN, tell them what a bad deal they are getting and offer to connect them to great founders.
    4. Help fellow entrepreneurs by making introductions to qualified angels directly
    5. Explain to your peers that an investment by networks which make you pay to pitch, such as FAN, can only be considered as a means of last resort, and taking this money will affect your future funding opportunities negatively.
    6. List your startup on AngelList, our StartupIndex, Techvibes index and other places to get exposure FOR FREE to great investors

    Atlantic Canada is generating some of the highest returns in the country right now for angel investors. The community is small but very focused on big outcomes and it is really showing. I think it’s time to cut ties with this old model and to start giving the founders in Atlantic Canada a deal worth taking.

  • Thoughts about accelerators

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    Most people love to just give advice as if it’s set in stone. These thoughts cannot be applied to every startup, use your own judgement and do you own due diligence.

    Rewind to 2009, we had a stellar year. We had created Tether.com from a simple idea to millions of dollars in revenue. I evaluated various aspects of this success and realized we were paid huge dividends because we made a significant difference in the way people were able to work. At the young age of 21, I faced two options:

    • Retire
    • Continue creating disruptive products and change the world

    Luckily (or unfortunately) I took the second option, creating products that would hopefully disrupt markets. I decided the market I wanted to disrupt was computer programming.

    CC-BY-SA-20 Some rights reserved by archer10 (Dennis)
    AttributionShare Alike Some rights reserved by archer10 (Dennis)

    Being from Nova Scotia, a small province not really known for its stellar technology, I was faced with two options:

    1. Fund my own startup out of pocket, or
    2. try to raise money.

    We’re known for lobsters, which is a far stretch from computer programming.  Raising cash locally was a stretch, particularly given the very early stage of the business. And while it feels like a feeding frenzy in the Bay area, most US-based investors wouldn’t know where Nova Scotia is on the map (while Jevon [LinkedIn, @jevon] is trying to change that, outside of Boston many might still have a hard time finding us) and putting capital into an early company in a location they don’t know felt very unlikely.

    The best option was to self-fund Compilr with the expection to go from initial idea through to revenue much like we had previously done with Tether.com. We had an idea,  we had a team that was capable of building, we had users signing up to use the service (our user base had grown 13x in a 3 month period), but we had no revenue. And we were running out of cash. Getting people to pay turned out to be very challenging. More challenging than it was with Tether.com.

    At some point, I realized that I needed help. The help probably wasn’t cash. Raising millions of dollars in funding, wouldn’t solve our problem. The money could extend our runway, give us more time to increase our output on features, bug fixes, but if no one would pay for the product – it didn’t matter.

    If money alone wasn’t the answer, maybe it was accelerators that could help (I hear there might be an incubator/accelerator bubble or something). I applied to Y-Combinator with a video from my beautiful rented apartment in Dominican Republic, but ultimately was turned down. I applied to a local entrepreneur competition, Compilr placed 3rd  but sadly there was no financial benefit. At this stage the product went to the back-burner, the development team focused on other projects, the question was: what to do next?

    “You miss 100% of the shots you don’t take” – Wayne Gretzky

    SeedCamp logoAn angel investor introduced me to Seedcamp. And while Seedcamp was Europe focused, they had a strong portfolio of very early stage software companies. Long story short: I applied, invited to pitch in New York, and was accepted to the program. Going to an incubator was a big decision. I was getting mixed advice from my mentors, with some mentors telling me “you are an idiot for valuing your company so low” and others saying “Seedcamp had over-valued the company given the traction”.

    It’s a hard decision, but ultimately I decided that the small percentage I was giving up Seedcamp was a good fit for Compilr and me. Seedcamp was providing value to help Compilr, and if I was successful we could return the favor so they can invest in other entrepreneurs. It felt good, like a fair trade.

    I’ve determined that startup accelerators can provide returns even beyond the bottom line (or the post-money valuations). Here is what entrepreneurs should expect from an incubator:

    Validation
    When an accelerator says, we like your idea and your team and want to give you a small bit of cash, this is significant validation. I think this is the death row for most startups. If your team doesn’t get any validation, will it just become a “back-burner” project. Accelerators can help provide entrepreneurs early, meaningful validation.
    Exposure
    Always insure that your accelerator is able to provide you with adequate exposure. Every time we were involved in a Seeedcamp event we saw about a 30% increase in traffic, which was easily identifiable from those particular events. Accelerators are press whores, they want just as much exposure as you. Weasel your way into anything that could be related to you.
    Accountability/Focus
    Being a single-founder with a crazy idea, accountability sometimes goes on the back-burner. As a founder/CEO sometimes you have ideas that are completely inaccurate and have no foundation. Having a team that can slap you around a bit, when you decide you want to pivot from an online IDE to an online garden center is a great asset.
    They don’t solve your problems.
    My reason for joining an accelerator was simply, if I get enough smart people looking at my business, I’d get to revenue faster. The fact is you could have the most brilliant advisers or mentors helping you, but they still can’t solve your problems. They just aren’t connected into the industry like you.  In the end you need to make strategic decisions on where you want to go.
    Competitiveness
    Joining an accelerator, is always competitive. Being apart of an accelerator provides a degree of competitiveness. When your teammate just raised $910k from top US investors and you haven’t done shit, you instantly feel like you want to go out and raise $2m.
    Prepare to insult everyone
    The worse part of having really great mentors, is when you are in a rut, they’ll tell you “they told you so”. If you didn’t follow a mentor’s advice they may shun you, they may refuse to give you advice on the “basis that you don’t follow it”. The biggest problem if you take one mentors advice, you will insult another.

    Can I help? If you think I can help, shoot me an email: [email protected]

  • A few slides for every Canadian startup

    With a little help from my friends

    I think that every Canadian startup could throw a couple of slides in their presentations and pitch decks that could help themselves and help build a stronger ecosystem in Canada. I was struck by the story of Jon Medved in Startup Nation including other startups in his pitch deck. It’s a simple thing. It demonstrates entrepreneurial density, provides social proof, and potentially helps create some FOMO in foreign investors. All from including 2 or 3 slides at the end of your presentation or pitch deck, particularly when you are travelling.

    At StartupNorth, we’ve always believed that we as entrepreneurs should help each other out. The goal here is to raise the noise around Canadian startups and your friends and colleagues when you are travelling. There is a lot of amazing stuff going on in Canada. We don’t need public sector programs and not-for-profits to support us, we already do the things to grow our companies. And a little bit of extra effort to raise the attention of those around us. It won’t hurt, it will help.

    Here are basic un-styled PowerPoint slides that include a set of recent fundings in Canada by US VCs and a second slide that lists a set of other local companies that the audience might find interesting. (I have added 24 companies I think are interesting).

    Help us. Add the following slides to your presentations.

    StartupNorth.ca Slides for Canadian Startups

    View more PowerPoint from David Crow

  • Hot Sh!t List 2012

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    Attribution Some rights reserved by kyz

    We have been tracking startups and people for a while. In 2011 was the first Hot Sh!t List, but it won’t be the last. There are a number of amazing individuals in the ecosystem like Mark MacLeod (LinkedIn, @startupcfo), Boris Wertz (LinkedIn, @bwertz), Dan Morel (LinkedIn, @dpmorel), Debbie Landa (LinkedIn, @deblanda), Chris Arsenault (LinkedIn, @chrisarsenault), Dan Martell (LinkedIn, @danmartell), Jesse Rodgers (LinkedIn, @jrodgers) and others. Over the past 7 years the community has grown, and connected, and continues to help each other.

    But this list is different.

    It’s not about the people who have raised the most money, or who have the biggest social graphs. It’s about who we expect to talk about over the next 12 months. Be it the ideas, the companies, the impact, etc. My goal was to find a mix of the unsung heroes, the founders, the developers, the doers, the troublemakers and the faces of different companies across Canada that we think are amazing/interesting. What do I mean by “interesting”? Well it depends. But these people are doing the stuff we’ll be talking about over the next 12 months.

    The list is no particular order. But there is no denying it, these folks are the:

    StartupNorth Hot Sh!t 2012 BadgeHot Sh!t List 2012

     

  • DFAIT Technology Growth Initiative Business Bootcamps

    Departement of Foreign Affairs and International TradeDFAIT is sponsoring the Technology Growth Initiative (TGI) Business Bootcamps Spring 2011 to help Canadian companies go-to-market in specific US markets (Boston, Denver, Los Angeles, New York, Palo Alto, San Diego, San Francisco/Silicon Valley and others). The program provides startups with access to webinars, a one day bootcamp session and direct connections with VCs and local entrepreneurs to share experiences and find funding.

    The one day bootcamps are being help in April and May 2011 from Halifax to London. The bootcamps are interesting, they provide entrepreneurs the opportunity to pitch and get feedback from trusted experts (yeah right I think I served as an “expert” in 2009 ;-). But it is a great opportunity to get a different set of eyes on your pitch. And it plays to the old adage, “how do you know when an entrepreneur is dead? he stops pitching”.

    Registration for One Day Business Bootcamp

    • Halifax: April 27th, 2011 – Cleantech and ICT
    • Quebec City: April 28th, 2011 – ICT
    • London: April 29th, 2011 – Cleantech, ICT, Life Sciences
    • Toronto: May 2nd, 2011 – Cleantech, ICT, Life Sciences
    • Ottawa: May 3rd, 2011 – Cleantech, ICT, Life Sciences

    There is also the upcoming April 6th, 2011 11:30EST seminar with Mike Grandinetti (he’s also a TechStars mentor) focusing on “Lean and Mean Startups”.

    April 6th: 11:30 EST (Upcoming Webinar – Soon)

    1. Lean and Mean Start-ups – Presented by: Mike Grandinetti, Managing Director, Southboro Capital, Boston.
    2. So you think you are ready? – 10 things you need to know before presentation day – A candid talk on presentations gone horribly wrong and how you avoid that – Presented by: Coby Schneider – Miller Thomson & Others.

    These are great opportunities to learn about expanding into specific US markets. The DFAIT team brings key players to local markets and makes it easy to establish relationships that allow companies to grow. There are lots of opportunity to criticize some of the efforts, but the team at DFAIT have run this program for the past few years with varied success. It’s worth the time of startups actively looking to expand their customer base (this means that you’re beyond seed stage, you probably have customers, you have a product, you’re looking for a scalable business model) to explore how DFAIT can help.

    The event is co-hosted by our sponsors and friends at KPMG are corporate partners helping DFAIT and startups. There are a lot of cross-border issues concerning corporate structure, financing, taxation and other where KPMG can leverage their experience to help early and growth stage companies.