In addition to Steve Jobs, there are other bigger-than-life technology players in Silicon Valley. One of them is Paul Graham, who is creating – or has created – an aura as a startup guru with the amazing things happening at his YCombinator incubator.
It’s a brilliant model in which aspiring entrepreneurs receive $15,000 to $25,000 in seed funding and about 12 weeks of mentorship and product development help. In return, YCombinator takes about a 6% stake in each company. It’s a volume-based business model that has generated a tremendous return on investment.
One of its success stories is BackType, which was started by two Canadian entrepreneurs, Christopher Golda and Mike Montano. In July, BackType was acquired by Twitter.
For anyone not convinced about what YCombinator is doing, the evidence was on full display earlier this month when it held a demo day featuring 63 start-ups and about 200 drooling investors chomping at the bit for new opportunities.
Who know how many of these start-ups will be even modestly successful but they’re getting an opportunity to be successful by getting a little bit of money and a lot of valuable mentorship and support. For many start-ups, this may be all they need to take an idea from the back of a napkin or their parent’s basement into a company with a shot at getting some traction. Then, anything can happen.
In Canada, the incubator model is starting to gain a some traction with new funds emerging that operate along the lines of YCombinator by providing a modest amount of financial support and other supports such as office space and advisors.
It’s definitely encouraging but it’s just a start for a sector that needs a lot of support for Canada to become a start-up hotbed. In many respects, Canada needs a Paul Graham who can lead the charge with a combination of personality, money and influence.
We need someone who can champion Canada’s thriving start-up landscape that is teeming with entrepreneurs doing all kinds of interesting things. Without being too dramatic, I can honestly say this is the most exciting time I have seen since I have been involved with start-ups as a reporter, founder/employee and consultant over the past 15 years.
Given this landscape, a Paul Graham or someone like Paul Graham could do wonders for Canadian start-ups that need a small amount of support to go from good to great.