Five Reasons to be Bullish About Canadian Startups

By Mark Evans in Startups 2 Comments Tags: , ,

As we head into 2012, there’s been a lot of back-slapping and congratulatory talk about the number of Canadian startups and more mature technology companies purchased this year – a back of the napkin calculation pegs it as more than $2-billion.

While deals are exciting, I think there are other, more significant reasons to be bullish about the Canadian startup landscape. My list includes the following:

1. There are more startups being established as businesses as opposed to projects. They’re being created by entrepreneurs who have a pretty good idea about how they will make money by selling products that meeet a need. This stands in contrast to startups that are more projects and/or features than businesses. To me, it signals the growing maturity of the startup community and a recognition that just because it’s less expensive to do a startup, it doesn’t mean there should be any less focus on building a business.

2. The infusion of more seed capital from a growing number of players has filled a huge void in the marketplace. In the process, it has allowed entrepreneurs to capitalize on strong ideas as opposed to watch them stay unrealized due to a lack of capital. The only way Canada is going to build a vibrant and robust high-tech community is making sure entrepreneurs can develop, grow and take risks so they can have a good shot at being successful.

3. The emergence of more serial entrepreneurs who have jumped back into the fray after being successful. This includes people such as Dan Debow, Mark Ruddock and Marcel Lebrun, who bring experience, skills, personal capital and a powerful network into a new opportunity.

4. More walk as opposed to talk. It wasn’t that long ago that there high-tech events were teeming with wanna-be entrepreneurs who would leave their corporate jobs if they could only get some seed capital, or if there would other people who wanted to join them, or if starting a business wasn’t as expensive. Today, there’s a new wave of entrepreneurs happily willing to take a shot, including younger people who may not have a lot of experience but are loaded to confidence and enthusiasm.

5. The maturation and growth of the startup community. When David Crow started DemoCamp, it, in many ways, was flying solo. Today, there’s a fast-growing community that has shown a willingness to support each other. This includes organizations such as MaRS, the growing number of incubators, and many people who share their time and energy with other entrepreneurs.

While the startup community must continue to evolve and there’s still a need for more growth capital, there are plenty of reasons to be bullish about the landscape and the ecosystem. There was great progress made in 2011 that, hopefully, will be used as a foundation for even better things in 2012.

The Golden Age of Tech Blogging is Over. Not a Chance!

By Mark Evans in Blogs 1 Comment Tags: , ,

Apparently, the “golden age” of tech blogging is over. Yup, that’s it. Just six years after blogging caught fire, Jeremiah Owyang has declared tech blogging has arrived at a sad juncture.

It has something to do with a few large tech blogs (TechCrunch, ReadWriteWeb and Engadget) being acquired, several burnt-out bloggers (Ben Parr, Marshall Kirkpatrick, etc.) leaving for greener pastures, shorter attention spans among consumers, and new business models that make it more difficult for tech bloggers to carve out a living.

You have to give Owyang credit for publishing a post with a catchy headline during a slow news week, but I’ll politely take issue with his thesis. While it has been amazing to see such vibrant and extensive coverage of technology over the past years, how does Owyang know it was the “golden age”?

What we’ve seen is thousands of new players offer extensive coverage of a fast-moving industry. Having written about tech since 1995, it has been great to see so much activity for a sector that I’ve been so enthusiastic about and involved in.

But just because a few large blogs get acquired, which I think spawned Owyang’s thesis, doesn’t mean tech blogging landscape is dramatically changing or it’s entering a less interesting or lucrative period.

Change is Constant

The realty about technology is change is constant. Nothing stays the same or lasts forever. Companies come and go, blogs emerge out of nowhere and then disappear. Tech analysts become big stars, and then fade in the background. It’s the nature of the beast.

Rather than buying into the idea, the “golden age” has come to an end, I think the tech blogging market is evolving after a terrific run. It’s natural to see some more large blogs be acquired because success attracts higher valuations, which rewards entrepreneurs for all their hard work.

It’s completely understandable that some high-profile bloggers are moving on given the pressure of having to generate multiple posts a day because the business models of many large blogs hinge on volume, volume and more volume.

And shouldn’t be surprising to see business models evolve but, truth be told, most bloggers don’t blog to make money, and those who do will find new ways to generate revenue.

Another Golden Age?

Finally, there will be a new breed of tech blogs that will replace the old guard and revitalize the tech blogosphere. They will approach the market with new energy, enthusiasm and ideas, which could create another “golden age” of tech blogging.

That’s the funny thing about the tech world – just when you think nothing could top what has unfolded, it just keeps on getting better.

Given the time of year, perhaps Owyang is feeling sentimental about the “good old days” of blogging but as someone who has been hammering away here since 2004, I can tell you that blogs come and go, stars are made and flame out, and tech blogging has never stayed in one place too long.

Will Canadian Tech Be As Hot in 2012?

By Mark Evans in Startups No Comments Tags: , , ,

As many Canadian shoppers head out the door to battle the crowds for Boxing Day deals (a strange and bizarre activity in my opinion!), it is interesting to look at back at how many Canadian high-tech companies were snapped up this year.

According to Techvibes, there were 34 high-tech companies acquired – two each by RIM, Google, Zynga and Salesforce.com. The total dollars that flowed to Canadian entrepreneurs and investors was more than $2-billion, fuelled by mega-deals for Kobo, Radian6, Coradiant, MKS and Algorithmics.

Without a doubt, it was an awesome year for anyone involved in the high-tech, startups, entrepreneur and venture capital sectors. After being an M&A wasteland for many years, Canadian technology finally attracted serious and much-deserved attention, which will hopefully encourage more acquisitions and, as important, provide Canadian entrepreneurs with the cash to do it all over again.

An Anomaly or the New Normal?

A key question is whether 2011 was an anomaly or an indication the Canadian high-tech landscape has evolved. In 2011, there were several established and fast-growing companies purchased such as Rypple and Radian6. There were also many emerging startups snapped up such as Zite, Tungle and Pushlife.

With so many high-tech cash acquired, did it flush out the most attractive M&A target or is there another wave of attractive startups on the horizon?

My take is it’s probably the latter given the number of interesting startups that were funded this year, many of them businesses making revenue as opposed to ideas requiring capital to be nurtured.

Buy vs. Build Alive & Well

At the same time, the buy vs. build landscape is still very much alive and well. In a fast-moving world, companies such as Google, Zynga, Facebook and Twitter don’t have time to develop new ideas and features internally so buying technology and, as important, teams/people has become standard operating procedure.

The key issue for Canadian startups is how much capital they’re able to get before the buyers coming calling. If Canadian startups are well financed, it will give them more time to gain more traction, customers and sales to attract a higher valuation. If they’re not able to attract growth capital, many startups could get snapped up prematurely and, as a result, leave a lot of money on the table.

While there was a flurry of seed financing (less than $2-million) this year, I would argue the Canadian high-tech landscape will not be able to take the next step forward without players who can provide startups with $5-million to $10-million. There are small signs of activity, most notably OMERS’ $180-million fund, but it’s just a drop in the bucket for what’s needed.

As someone who spends a lot of time working with startups, it was an exciting and busy year. To me, it was the year that we really walked the walk as opposed to just talking the talk. For too many years, Canadian entrepreneurs talked about the possibilities and the problems they faced; in 2011, they started to make things happen in a major way.

So, what do you think? Is 2012 going to be as active and exciting for Canadian startups? Who do you think are the most attractive acquisition targets?

For more thoughts on the year that was, Jevon MacDonald has a post on StartupNorth encouraging startups, entrepreneurs and investors to “get to work”.

Startups, Fussball and the Value of Play

By Mark Evans in Startups 6 Comments Tags: , , , ,

I’m working with a startup that recently purchased a used fussball table for $200. To me, it was a brilliant decision by senior management.

While you may accuse me of being overly dramatic, the reality is the fussball table has made a huge impact on the corporate culture and, arguably, employee morale and productivity.

In the pre-fussball days (aka PFB), employees would socialize by getting together in the kitchen or by going out for coffee. Now, they gather around the fussball table.

The office is louder but it’s also more fun, collegial and energy-filled. In a work environment in which people are expected to work hard and produce, the fussball table has become the perfect social break in the action.

What I find fascinating about startups and their willingness to install fussball tables, ping-pong tables, video games and pinball machines is how play is part of the work scene.

No one bats an eye when a startup encourages employees to take a break to play games during the day. It’s almost as if it is a bad thing if you don’t want to play.

It makes you wonder why most large companies are anti-play.

At the big company, people are expected to work. They sit at their desks or perhaps in meeting rooms so they can do important work. Once a day, they are released into the wild to descend upon the food court or the local strip mall to consume fast food.

So why is it you don’t find ping-pong tables or fussball tables at large companies, where as startups, which operate a lot leaner and meaner, have them as standard equipment?

Why do startups embrace fun while larger businesses have a no-fun policy, unless you count gathering around the water cooler as fun?

It may have to do with expectations. At a startup, failure is a very real possibility so it may be important to create outlets so people can take a break in the action. At large companies, there is less risk and far more structure so why give people an outlet that would be distracting and anti-work?

If I were the CEO of a large company, which is highly unlikely, I’d install fussball tables on every floor, and encourage people to take a play break. Not only would it make work more fun but I bet that employees morale and productivity would go way up.

What do you think? Why do startups let people play games? What’s in it for startups? What’s in for employees?

The Elevator Pitch: What do You do? Why Should I Care?

By Mark Evans in Advertising/Marketing, Startups No Comments Tags: ,

Most people have heard about the “elevator pitch”, which succinctly describes what your company does and the benefits it offers users. It’s a two or three-line statement that, in theory, compels people to ask for more information.

Now, you would think that creating an elevator pitch is a simple exercise but it is surprising how many companies have ones that are bad, inaccurate or confusing. The big problem is there’s so much information they want to include, they lose sight of the fact it is supposed to be short and sweet.

The other issue is the people creating an elevator pitch live and breathe their company and products every day. It gives them tremendous knowledge but little external perspective or context. As a result, elevator pitches often reflect what a company wants to tell people as opposed to what people want to hear. It’s a subtle but important difference that often gets dismissed.

So what are the keys to a successful elevator pitch?

It starts by being as simple and to-the-point as possible. We do/make “X” that helps customers do “Y”. It’s a sentence anyone can understand immediately. There’s no industry acronyms or lingo. Again, think simple because we live in a fast-moving world in which people don’t want to work to get what your company does.

Second, make it abundantly clear how your product meets the needs of users. How does it make their lives more convenient or productive? Does it save them time or make their lives easier? Again, think about what the target audience wants or needs; not what you want to tell them.

Third, you need to think about adding a little sales sizzle by showing how your product is different from the competition. It doesn’t have to be a multi-pronged, technical kind of thing but a sentence that spells out why your product stands out from the crowd. Again, it’s not about blowing your own horn but making it clear to users that you’re not just selling another widget but something that rivals don’t do or offer.

The truth is creating an effective elevator pitch takes time and effort. It is an iterative process that can evolve from your original idea. It should also involve external testing, including people who do not have any involvement with your company to generate honest and frank feedback.

The other reality about elevator pitch is they change over time as your company, the marketplace, economy and customers change. It means making sure your elevator pitch is tested or updated on a regular basis.

For companies that have great elevator pitch, life is so much easier because every employee is reading off the same page, which provides consistency across the board.

If you’re looking for help with elevator pitches, messaging and other digital marketing needs, my company, ME Consulting, offers these services to startups and entrepreneurs.

Why Startups Shouldn’t be Afraid of Competition

By Mark Evans in Startups 3 Comments Tags: , ,

When I jumped into the startup world in 2000 with Blanketware, we truly believed we had an idea no one else had discovered. So, it was a shock when we stumbled on other startups also focused on the giving users an easy way to find and online services.

Despite our entrepreneurial enthusiasm, the idea of competition, while a reality, wasn’t something we had considered. After all, our idea was so unique and novel, and we were so smart, it was hard to believe someone else could come up with a similar concept.

At first, we were spooked. The open road with no competition had suddenly evaporated. Suddenly, we were looking at companies that were better than us or getting traction we weren’t experiencing. It put us on our collective heels.

In time, however, we recognized competition is one of the harsh realities of doing a startup. While you may like to think no one else has developed a better mousetrap, there are lots people working on the same idea.

I was recently reminded about the realities of the competitive landscape by a friend who has a startup making impressive progress. Over the past few weeks, he has discovered several competitors, including one that has attracted significant users and brands.

In looking at these rivals, my initial reaction was “interesting but not surprising”. To not have competition would be a concern because it suggests the idea may be ahead of its time, it hasn’t resonated with users, or there is no demand for your product.

Competition is healthy because it forces a startup to be aggressive, pro-active and focused on doing a better and/or different job to meet the needs of customers. A good idea will only get a startup so far, it’s how you develop and push the idea that matters.

Another important consideration is having an idea and starting a company is the easy part. In the scheme of things, it’s easy to develop technology, hire employees, create a slick logo and raise some money.

The hard part is execution, which involves the combination of technology, marketing and sales to create a viable business. This is where many startups with great ideas go off the rails because they can’t make the leap from idea to business.

For startups, it means while there might be rivals with impressive looking Web sites and customers, it doesn’t necessarily mean they’re executing. At the end of the day, he or she who executes the best wins.

Bottom line: Don’t be afraid of competition. Recognize it, learn from it, leverage it…and focus on executing better.

Related Posts Plugin for WordPress, Blogger...
1 2 3