[Editor’s note: This is a guest post by Brydon Gilliss. Brydon has held a number of roles but most recently he is the driving force behind lots of awesome in Guelph including a coworking space, ThreeFortyNine; a personal accelerator, Startupify.me; events, DemoCampGuelph; and a startup, 20Skaters.]
Have you ever wished for just another minute or two for that elevator pitch you delivered? What if, instead of an elevator ride, you were locked on a train with that investor?
Nowhere to run, nowhere to hide!
For the third year running, the Ontario Startup Train is back on July 9th. We will have several private, chartered cars on a VIA train with first class service and our own bar car where we’ll host our on-train events. We pack the train with startups, investors, and various players in our startup community and travel together to attend The International Startup Festival in Montreal.
“The concentration of the opportunities and discussions on the train blew me away. By the time we got to Montreal, referrals were flying.” Lloyd Longfield
Tickets include first class travel to Montreal from Toronto, our on-train activities, full conference access, and time in our Ontario Startup Tent at the festival to showcase your startup. If you already have your festival ticket, we do have train-only tickets.
If it were only that easy. You can ask Pebble, InteraXon, Thalmic, Bionym, PUSH Strength, Kiwi Wearables, ClearPath Robotics among others about the challenges of designing, testing, manufacturing and distributing a hardware-based company. There are a lot of subtle , unexpected complexity in moving from bits to atoms. And one of the best ways to learn about complexity is from operators made mistakes and found a way to do it.
There is a Toronto based event happening called the Hardware Workshop happening May 2-3, 2014. The event is hosted by Marc Barros (Moment) and organized locally by Katherine Hague (Shoplocket) and Zak Homuth (Upverter). It features an amazing set of people with real world experience in all aspects of building hardware-based businesses, including:
It looks like a great workshop at an amazing price. Looks like the workshop costs are covering the out-of-pocket expense of the organizers for food to allow participants to focus on the content and learning opportunity. (Seriously, do the math $75 * 75 = $5,625 barely covers the catering costs).
“What makes this workshop unique is the quality of the content, the deep operational experience of the teachers, and the long term connections you will make. Hand curated, each teacher covers a unique topic that falls within the startup’s life cycle from an idea to reaching market fit.”
If you’re interested in learning about building a hardware startup and about the mistakes that others have made (so you can avoid them). This should be a fun 2 days. Apply to attend.
[Editor’s note: This is a guest post by Bob Stratton and Andrew Currier of PCK IP about patents and patent strategy for Canadian startups. And while “traction is the new IP”, this is one very cost effective strategy for startups, but is it the right one for you? ]
Seriously, patents? Are patents really an effective strategy for startups? It’s an almost Shakespearean dilemma for founders, to patent or not to patent.
There is a real tension between the long term benefit which must be balanced against the short term need to manage cash burn carefully and the management time required for a successful patent program and the immediate need for focus on getting product out the door.
Understandably, early in the corporate development lifecycle most startups choose to focus on building and shipping product and growing traction and revenues. We’ve heard that traction is the new IP. There are unintended consequences to this decision, that founders need to be aware of that have impact on the business down the road.
The refusal to even consider patents can be left for another conversation.
We present an analytical approach for founders to consider performing an upfront analysis of: “Are patents an important part of my business plan?? and “When do I start pursuing a patent strategy?”. Here are some starting points.
Timing is Critical
There are a couple of unpleasant patent facts that we must be considered:
If you disclose the invention before filing a patent application, you lose the ability to patent it in most of the world. (A short list of countries, including Canada and the US, forgive your prior disclosure for as long as a year, and let you still file a patent application before the expiry of that year);Prior disclosure is an issue because you may have to disclose your invention to a variety of people such as investors, potential customers, suppliers, etc. – who refuse to sign a non-disclosure agreement.It is also an issue because your successful launch of your product/service is a disclosure.
The first inventor who files an application at the patent office blocks any subsequent inventor who files for the same invention.First to file is an issue as someone else can beat you to the patent office, at best blocking you from filing your application and at worst blocking you from running your business. It actually happens that two or more people independently invent the same thing at roughly the same time, especially in the tech space wherein technological advances may suddenly enable a new product or business.
In view of (a) and (b), pretty clearly the correct answer is to file “as soon as possible”, but patents cost money and start ups, in particular, should defer expenditures as long as possible until their valuation has increased, to make raising money less expensive. Again the short term and long term are at odds with each other.
Patents Cost Money, Defer or Spend?
So, what do you do? It depends? Or there is no easy answer. It requires a founder to be able to use their experience and interpret the market signals to make informed decisions about spend.
Our suggested set of analytic steps is:
Determine which aspects of your product/device/system/business might be patentable.
Determine which of those aspects might be worth patenting from a business perspective.
Determine when those patentable aspects will be first disclosed.
Determine when you can afford to file patents.
Compare 1, 2, 3 and 4 to identify critical dates (disclosure of invention vs. available funding) and decide what to file and when.
Unfortunately steps 1-5 sound simple, but of course there is a fair amount of dependency upon specific fact situations.
For example, you may have several possible inventions identified at step 1, but whether they provide a commercially significant advantage to your business (step 2) will vary widely and can be hard to predict given that your goal is to create an entirely new market and how that market unfolds is not predictable with complete confidence. You may also require some professional advice to help with step 1, as it is not always straightforward to identify developments which are patentable from those which are merely clever.
For step 2, some inventions may have a limited useful lifetime: e.g. the first implementation is web-based, but you expect that most of your revenue will be generated from a custom mobile app – once you can build and deploy it. So, you may forgo protecting the web-based version to save the expense, knowing that you are leaving the possibility of web-based competitors in the future. Other fact-specific scenarios abound.
Depending on the outcomes of steps 1, 2, and 3, step 4 can be made somewhat easier by deciding upon an appropriate filing strategy to manage the trade-offs between expenditures and protections. For example, you may decide to limit the countries in which you file for patent protection and/or you may decide to “beat” a disclosure by filing a provisional patent application, rather than a complete application, to reduce immediate costs.
You may also identify, at step 2, different classes of inventions: i.e. – those which are fundamental to your business and which should be patented as broadly as possible/reasonable and those which are mere “nice to haves” which can be deferred or allowed to be lost to manage costs.
Seek Informed Advice
We believe that the patent analysis is really just an adjunct to the kind of big-picture business case analysis that is necessary to achieve long term success. Founders must know their market and have the vision to see that their startup investment has a real potential of a long term payoff.
Founders are already faced with complex crystal ball gazing business decisions such as: What is my product road map? What investment do I need? Who should be on my management team? How can I monetize my product? Who is my competition? Where founders don’t know the answer to these questions they seek out a number of excellent, unbiased resources to help them. A patent analysis can be added to the other analyses both at the outset and at each milestone, and the results fed back into the planning process to best manage the path to immediate and to long term success.
Reach out to Andrew or Bob for a conversation about your startup.
It starts like a joke, did you hear the one about the marketer, the lawyer, the journalist, the founder and travel guy? These guys are all successful in their own right. And they continue to bring together a unique viewpoint that is different than the corporate marketing events and tradeshows. This is something about the underlying currents at the intersection of technology, marketing, politics and culture. I’m hoping they continue to bring people who challenge existing ideas and frameworks. (My keynote invite would go to Shanley Kane of Model View Culture.)
One of the interesting additions to the program has been a separate startup track. I’d like to see a little more overlap in the participating startups with the audience and attendees interest. It is great to see early-stage companies getting local support to reach the Mesh audience. The Mesh 14 Hosted Startup Program provides:
Zombie Startup of the Year Award – Recognizing a Canadian startup that continues to live on the brains of its’ founders, but not customers.
The Snapchat Award – Recognizing a Canadian startup that won’t sell to Facebook, even if the offer was for more than $4B.
Stop the Gravy Train Award – Recognizing sketchiest use of tax payer money in our burgeoning startup ecosystem.
The Twerk It Award – Recognizing the media accomplishments of an exemplanary Canadian entrepreneur, who is getting as much coverage as Miley Cyrus in 2013.
Keeping up with the Kanadians Award – Recognizing the startup that has watched previous episodes of startup reality TV but failed to comprehend the complex plot lines.
We’ll be announcing the awards before Christmas…And we need your help. Send us a tweet, leave a comment, or just drop us an email with a suggestion for the awards. Or just leave an anonymous nomination.
I’ve written about CIX Top 20 Follow @CIXCommunity in 2008, 2009, 2010, 2011 and 2012. To follow my pattern here is my post for 2013. Full disclosure: I sit on the Advisory Board for CIX.
There are 3 core events in the Canadian startup calendar:
Each of the above events is optimized for different audience needs. CIX brings the viewpoint of Canadian investors (if you care). The advisory board is primarily venture capitalists (a few lawyers, a couple of CEOs and one evangelist):
Roger Chabra, Rho Ventures
Boris Wertz, Version One Ventures
Mark MacLeod, Freshbooks (recovering VC)
Barry Gekiere, IAF
Joe Catalfamo, Summerhill VP
Justin LaFayette, Georgian Partners
The advisory board is 44 people big. And approximately 30 are doing some form of investment. It’s almost 70% are actively making investments in technology companies. There is very strong Canadian VC and investor representation in the group that advise and plan the conference content.
And it shows in the content, of the 67 scheduled speakers (as of Nov 14), 19 of the speakers are from the advisory board – that’s 28% of the content. (It’s even higher if you include partners and others from firms of advisory board members). If you want to know what Canadian VCs and investors are thinking, this is the best way to see what is important. They define this conference. They provide the content and the voices at the conference.
So why go?
CIX gives you insight in to the types of companies, IP and traction that Canadian investors are currently looking for. It is the barometer of the “high potential growth technology companies” in Canada. It will be interesting to see what everyone thinks are the hot companies and trends. The panels and policy discussions are the things that Canadian investors are grasping and struggling with. It will be interesting to hear the conversations.
You might argue that as an entrepreneur you don’t care about these conversations. They don’t help you grow your business, build your product, or acquire customers. But they do provide you insight into the mind set of the people you are trying to raise money from. That might be the thing that gives you an unfair advantage in understanding their decision making process this year.
I love that 2 of my personal investments Upverter and OpenCare made the Top 20. Full disclosure: My employer, OMERS Ventures, is an investor in 360 incentives. I’m also excited to check in on Breather, Bionym, Axonify, Hubba and others. The CIX Top 20 has turned out some of the best companies in the past 5 years.
The other day Fred Wilson posted an opinion and some tips on Investor/Mentor Whiplash. He took the position that that is a big problem for accelerators as well as early stage and seed environments. Brad Feld took this as a bit of a misunderstanding on accelerators, he insists that TechStars creates an environment where early stage companies can learn to manage the whiplash. Brad Feld states:
I disagree with Fred. It’s not a big problem. It’s the essence of one of things an accelerator program is trying to teach the entrepreneurs going through it. Specifically, building muscle around processing data and feedback, and making your own decisions.
On the surface this seems correct. A problem (one of many) new founders face is the overwhelming barrage of mentorship (good and bad) and information mixed with the inability to filter. An accelerator should be able to provide the environment where a strong group of peers with some guidance can help to build the “muscle around processing data and feedback.” In the last 6 years I have noticed that is a common problem founders face and their ability to manage it is important to their success. It wasn’t until I experienced the whiplash myself a 2nd and 3rd time that I fully appreciated the damage it can do even if you are prepared for it.
Generally what I tell early stage founders:
Only talk to customers once you have something to show them — but that shouldn’t take you a long time, don’t go heads down for months. Asking people what they want and not focusing on something specific they can touch/feel is a path to busy work and infinite sadness.
Avoid the mentor parties/socialization. Find two (or three) good people with opposing views and bounce specific data off them but only when you have done something that requires fresh eyes to advise you how to interpret the results.
Focus on what isn’t working when getting feedback from mentors. Founders need to be positive but you need to focus on the bad things when talking to your close mentors that have been through it already. If they can’t help you with the tough stuff why are you spending a lot of time with them?
Don’t expect a direct answer. Experienced mentors know you are the best person to run your company, not them, and they have developed a way of not telling you what or how to do things but instead challenge you to figure it out in a positive way.
Whiplash from mentors doesn’t just happen in startups, it happens everywhere people are giving you advice or have something to gain by influencing the decisions you are about to make or the opinion you develop on something.
Being prepared and learning to manage the whiplash isn’t just the essence of accelerator programs, it is the essence of education that culminates in the top level you can achieve to filter information – a phd program. At the phd level the filter muscle is almost too strong but that is a topic of a whole other blog post.
The scary thing for entrepreneurs is that accelerator programs are too often run by people that don’t know how to effectively educate people and/or they have something to gain financially by the decisions founders make.
I think this *is* a big problem in accelerators. I wonder if the ability to teach that skill to founders (or select founders that already have that skill) is the difference between a successful accelerator (which is really only TechStars and YC) and one that isn’t (pretty much everyone else)?
[Editor’s note: This post was originally posted on Jesse Rodgers’ Who You Calling a Jesse blog on July 31, 2013.]
To fast prototype and create brand new music apps (web, mobile or physical) in just 24hrs.
To bring together the music industry and the developer community.
To highlight and showcase the platforms and API’s of companies working in and around music tech.
To foster cross-platform and cross-device innovation.
Looks like a great event for local startups and developers to get access to APIs and hopefully distribution.
Music Hack Day Toronto will be held on August 10th-11th, 2013 at the The Glass Factory, 99 Sudbury St.
If you are interested in participating in the fast prototyping and creation of brand new and innovative music apps, be sure to register (tickets are free) for Music Hack Day Toronto today.
First, a quick quiz…For this quiz, time is important as we want your gut instinct so you only have five seconds to answer before the submit button goes away. It’s multiple choice, there are only two options and you simply need to select one.
When you’re ready, go take the quiz and make sure to return here…
Pricing, Business Models and Virtual Goods
The topic of free and freemium pricing models is a regular one in startup land.While I’m sure it comes up on occasion in more traditional businesses, I have a feeling it’s much less the case. I don’t recall Mark pondering the option of offering free drinks and meals for the first six months at OX Restaurant. Or Beth considering just giving sweatshop free clothes away for the first three months at Grey Rock Clothing.
“When something is FREE! we forget the downside….we just can’t resist the gravitational pull of FREE!”
Over in startup land, it’s almost universal that first time founders plan to launch their product initially for free. While the free excuse list is almost infinite, a few samples include….
We really want to get people in and using it, get them hooked on the app before we start charging.
Because this is such a new innovative way of doing things, we can’t charge them, they just won’t pay until they use it.
Once we have enough users, we’ll start monetizing through ads but we can’t sell ads until we have the users.
A FREE image!
To be clear I’m not advocating against free or freemium models. In some cases they make great sense, however those cases are rare. What I am advocating is that you make that decision explicitly and can back up your reasoning. I have yet to speak with a new founder who plans on offering free initially AND has a good reason for it. Someone who’s explicitly thought it through and has clear, sound reasoning why they’re starting with free.
Making an Economic Choice
In new product development, what is much more important than free users are the hard no’s. What’s a hard no?
“Here’s a pink stuffed animal I made, do you like it?”
“Yes, it looks awesome, you’re a lovely human being, let me hug you…”
“Will you buy this pink stuffed animal from me? Will you please give me 20 of your hard earned dollars for this pink stuffed animal I made?”
“You want me to give you 20 bucks for this crappy stuffy you stitched together? Are you mad?”
There, that’s a hard no. It’s someone saying no, I don’t see enough value in this exchange for me. Hard no’s are money in the bank for startups, if you leverage them. You have to chase down every hard no and ask why, why, why? Why don’t you love me anymore? Why doesn’t my value proposition work for you? Would you pay $10? What if I included a lifetime warranty? What if it was $5 plus a lifetime warranty?
Starting with free removes your ability to get to those valuable hard no’s almost entirely. Now rewind the above conversation…..
“You want me to give you 20 bucks for this crappy stuffy you stitched together? Are you mad?”
“I’m just kidding, we’re giving them away for free as part of launching our new company, here it’s yours!”
“Thank you! I love you again, that was a close one”
See the difference? Few people can resist the power of free. You feel great about your pink stuffed animal, love is in the air, everybody happy, happy, happy.
What happens to the pink stuffed animal? The same thing that happens to most free software apps, it’s neglected and dies a slow quiet death in a dusty basement. Dad never says “hey, why aren’t you loving that pink stuffed animal? I paid $20 for that you know?!”
Here’s the thing you must realize, free is a reality distortion field of it’s own. We can’t control ourselves around free. Remember the quiz at the top of this post? I’m quite confident that greater than 75% of you chose the free option even though it’s not a rational choice. A $30 giftcard for $5 offers you $25 in value. A free $20 giftcard offers $20. That doesn’t matter since we go bonkers around free!
“Zero is not just another discount. Zero is a different place. The difference between two cents and one cent is small. But the difference between one cent and zero is huge!”
Clearly the rational choice is the $30 giftcard but free messes with our minds. In the book Predictably Irrational: The Hidden Forces That Shape Our Decisions, the author Dan Ariely digs into the details of how we tend to apply either market norms or social norms in these situations. Free confuses your customer into applying social norms instead of market norms. This will certainly increase your user count but if you’re building a business you need to iterate to a value proposition that works when customer’s apply market norms to them.
If it makes good sense, free it up! Just be aware how powerful free can be. Depending on how you use it, it can help or hinder you. Offering free prevents your customers from applying market norms to your offering. Having customers applying social norms can distort your offering in ways you may never recover from. Good luck selling those $20 pink stuffed animals six months from now!
We’re heading to Grow Conference in Vancouver. You should join us at the Portside Pub on August 14, 2013.
With our friends at Communitech, we are hosting Ontario Startup House during Grow Conference. The goals is to build a “house party” that highlights the amazing things that are going on in Ontario.
The details are starting to shape up, but here is the plan as it stands. We’re aiming to bring all things that are amazing and Ontario with us to Vancouver. We’ll be brining amazing startups, amazing founders, and amazing investors with us. We’ve managed to secure an amazing venue, The Portside PubFollow @ThePortsidePubGoogle+, in Gastown.
“On August 14, we’re taking over the hottest bars and restaurants in the historic Gastown area, home to Vancouver’s tech scene, and inviting you to host your very own “House Party” to show off the very best your technology community has to offer. All Houses will be within walking distance so attendees can easily move from House-to-House. Who doesn’t love a good house party?”
We are looking for startups and sponsors. We have great partners in Communitech, OMERS Ventures and we are actively looking for others that want to participate.We have the biggest and best venue for startups and founders to congregate during GrowConf. We’re aiming to bring the best startups, the best founders, the best beer, the best band, the best crowd to celebrate in Vancouver.
The event is open. We’ll have amazing startups, founders and investors hanging out – guarranteed. We’re planning a few surprises that should make for an exciting night.
Details
When: August 14, 2013
Where: Portside Pub, 7 Alexander Street, Vancouver, BC V6A 1E9
What: House party featuring the best startups in Ontario at GrowConf
For the third year running, the Ontario Startup Train is back on July 9th. We will have several private, chartered cars on a VIA train with first class service and our own bar car where we’ll host our on-train events. We pack the train with startups, investors, and various players in our startup community and travel together to attend The International Startup Festival in Montreal.
Apply Now | 60 days left
