startups

Snapshot of a VC Deal: TeamBuy.ca

group buying, startupWho: TeamBuy.ca, which offers group buying services in Canada.

How Much: $5-million from existing investors. Last July, the Toronto-based company raised $7-million last July from an institutional investor.

The Quote: “We’ve re-imagined the daily deal business model to fit a customer who is demanding more comprehensive and customized shopping,” said Ghassan Halazon, CEO, TeamBuy.ca. “Our current vertical offerings already account for nearly 35 per cent of our business and with the launch of the new Kids & Baby and Home sections on TeamBuy, we anticipate that this will rise to at least half of our overall product mix in the year ahead.”

Startups and the Value of Target Audiences

startups, target audiencesAs Eric Ries suggests in “The Lean Startup”, startups are a hypothesis that involve testing an idea to see if it resonates.

Using this approach, startups create a product they think will fill a need or make a customer’s life better, easier or more convenient. After the product is launched, they attempt to sell it. Sometimes, the sales pour in; sometimes, they don’t, which forces startups to pivot (which has become a sexy term these days as if it’s a positive thing).

What many startups are missing within the product development/sales process is in-depth details about their target audiences. In many respects, this explains why startups flounder even though they believe their product has a lot of potential.

The big problem is startups don’t have enough information or details about the target audiences they’ve identified. Instead, they’re guessing about what their customers want and/or they don’t have enough real-world data to really know and understand their potential customers. In other words, they are operating within an information void.

Now, you would think startups should know a lot about their potential customers, otherwise they’re working with blinkers on.

A good example of getting to know target audience is a former client that, while executing a startup, physically visited dozens of retailers to understand their needs and the thing about the proposed product that resonates with them. This exercise gave them excellent feedback and guidance, and the confidence to move ahead with a refreshed product with better prospects.

The simple lesson for startups is the need to know and understand the customers they’re targeting. Sure, it can take time and involve a lot of legwork but it’s an important pillar in establishing a foundation for success.

How Do Startups Hire Well?

hiring, startupsIn the lean world in which startups now operate, making good hires is more important than ever. In simple terms, startups can’t afford to make mistakes because the hiring process eats up a lot of valuable resources, particularly time.

For fast-moving startups that need people to drive growth, the ability to find and hire the right people is a strategic and tactical priority. This urgency, however, can be dangerous because it tempts a startup to hire for the sake of hiring. The need to move quickly means startups could hire the wrong person.

So how do startups hire smarter and better so they can avoid mistakes?

The most important consideration is making sure they have a clear idea of what job needs to be filled and the responsibilities of the position. If you’re going to be hiring a marketing person, be clear on why is it a priority and what exactly will they be doing to support growth.

As crucial is ensuring an employee is the right fit for the corporate culture. You want people who understand what it’s like to work for a startup, and who are excited about the opportunity to be part of a team building a new product. They need to get the idea startups are flexible, fast-moving and can be an all-consuming activity.

As much as startups want to hire quickly, they also need to be pragmatic about getting the right person. If a new potential hire doesn’t feel right, it probably isn’t. It’s better to wait than pulling the trigger on a new employee, only to discover they’re not it.

To find the right talent, startups should explore multiple avenues. This includes friends, their networks, investors, employees, job boards and headhunters. The more sources, the better chance of discovering the right person.

Note: Be careful about hiring friends. While they’re a convenient option, mixing the personal and professional can be a perilous combination unless they’re the right fit.

Then, there’s the interview process, which be challenging given most startups have likely not done much hiring. Rather than have someon come in for an interview, look at it as a discussion in which you’re trying to get a better handle on someone’s experience, attitude an experience.

In most cases, you should get a good idea fairly quickly about whether someone has potential to become an employee. For a small startup, potential hires should meet with several members of the senior team so there is collective sign off before an offer is made.

The bottom line is hiring is as much art than science but by approaching the process in the right way, it reduces your chance of making a mistake.

More: A couple of posts from Jeff Richards about hiring: “Always be Recruiting” and “Eight tips from founder turned VC”, which encourages people to hire the best, even if it means paying them more.

The Week in Startups (Edition #4)

Welcome to weekly recap of news from the Canadian startup landscape, as well as interesting blog posts and articles that caught my attention. If you have suggestions, tips or feedback, let me know by leaving a comment.

- Montreal-based Frank & Oak, which wants to help 20-to-35-year-old men shop for clothes, got some good coverage in TechCrunch. F&O, launched by clothing company Modasuite, is part of the Real Ventures’ portfolio

- The University of Waterloo’s Velocity blog had an interesting post on how startups should pitch, featuring a mock conversation between a pitcher and a mentor.

- The Canadian Venture Capital Association unveiled its 2011 annual report. The good news is the amount of venture capital invested and the number of deals were both up last year. The bad news fund-raising edged up just 2% to $1-billion amid rising demand. (Source: Mark Evans Tech)

- Pressly plans to roll out a new DIY service that gives Websites the same swipe-and-read feel as iPad applications. The Toronto-based startup’s clients include the Toronto Star and The Economist Group. (Source: TechCrunch)

- Engagio raised a $$540,000 seed round from a group of investors that includes Fred Wilson (aka @avc), Real Ventures and Roh Canada. Engagio, created by William Mougayar, wants to create a universal inbox for all your social media and blog comment conversations. (Source: Mark Evans Tech)

- TribeHR’s Jesse Rodgers has a lengthy blog post on StartupNorth looking at how there are two types of incubators.

- Montreal-based Uniiverse, which aims to create an online marketplace for off-line activities, launched last week, and announced it had raised $750,000 from angel investors. (Source: Globe & Mail)

- Dave Carroll, which became a YouTube sensation after a United Airlines ground crew tossed around his guitar in Chicago, is part of a new startup called Gripevine that lets consumers gripe about bad service, while giving companies a platform to respond. (Source: Globe & Mail)

- Canadian Private Equity takes a look at four Canadian incubators: GrowLab, Extreme Startups, FounderFuel and Launch36.

- Fortune had a story on Ron Conway (aka Silicon Valley startup’s best friend)

- Jason Cohen (A Smart Bear) writes about whether startups should embrace or flee trends to establish a viable business.

I’ve Signed Up for Your Startup, Now What?

For startups, attracting someone’s attention, getting them to check out their product and, finally, having them sign up can be a long but satisfying journey.

New users are celebrated because it illustrates a product has appeal, fills a need and, in some way, provides value. It explains why user growth is a key metric in determining a startup’s success.

But what happens after someone signs up for a service?

In many respects, the marketing shouldn’t stop. Instead, it has to keep going to make sure new users are embraced and convinced they have made the right decision. As well, a startup must make sure a new user is given reasons to stick around. In other words, if you invite someone into your house, you should be a good host.

So how do startups keep the loving going post-sign up?

It starts with something simple – a welcome email that thanks someone for climbing on the bandwagon, and provides them with a few ways to check out the different features. A month later, another email should be sent to ask how someone is using the service, and whether they have feedback or questions.

For new users, support is also key. This makes it important to have easy-to-find feedback widgets (I’m a particular fan of GrooveHQ and Olark), a user-friendly FAQ, mini-videos to highlight features, and responsive customer service. A good newsletter can also be a tool to maintain a regular relationship (avoiding the out of sight, out of mind syndrome) and provide useful information.

It takes a lot of work to attract new users, which makes it so important to show the love people who come on board. In other words, don’t take them for granted.

The Week in Startup Land (Edition #3)

Welcome to edition #3 of my weekly look at what’s happening within the Canadian startup landscape, as well as interesting blog posts about startups.

I’ve got blog re-design in the works so considering turning this into a weekly newsletter. If you have thoughts or feedback, let me know. If you want me to add items to the round-up, leave a comment or send me an email.

How Does a Startup Grow: a story by the Financial Post’s Quentin Casey putting the spotlight on six “Canadians with influence” within the high-tech sector:

Uniiverse launches its “collaborative living” service: The Montreal/Toronto-based company attracted an extensive review by TechCrunch’s Rip Empson. Look for a story next week on Uniiverse in my Globe & Mail “Start” column.

- WattPad, which attracted $3.5-million in venture capital last September, reported that users spent more than a billion minutes on the social reading service in January.

- There are a growing number of startup accelerators emerging in Canada. Canadian Private Equity puts the spotlight on four: GrowLab, Extreme Startups, FounderFuel and Launch36.

- Shopcastr, which makes it easy for retailers to create an online store and for consumers to discover them, launched earlier this week. I’ve been working with them for several months, which included the decision to pivot after their original idea failed to gain much traction. Here’s my blog post, as well as a story by Mike Connell in the Toronto Standard.

- Just F*%king Sell: A passionate blog post by Graphic.ly CEO Micah Baldwin in which he contends the most important metric for a startup is “building something worth selling, and selling something worth building”.

- A couple of my other blog post this week included a look at the startup roadkill that’s will no doubt materialize, and a look at how generous startups should be with stock options given the many people Facebook turned into millionaires.

- In my Globe & Mail “Start” column, I took a look at Montreal-based Buyosphere, which offers a Q&A service for shoppers.

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