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CNET teams with Yahoo!

By inmedia

According to widely published reports yesterday, including this excerpt from BtoB, “CNET Networks and Yahoo Thursday announced a three-year strategic partnership that includes content, advertising and search marketing components. Under the terms of the partnership, CNET.com will become a major third-party provider of technology content on Yahoo Tech and Yahoo News.”

This will provide valuable rebroadcast opportunities for those of our clients that are featured on CNET, extending our clients’ messages well beyond the readers traditionally reached by CNET alone, levering Yahoo!’s expansive reach.

Where, oh where has Ottawa gone wrong?

By Leo Valiquette

There’s a very simple, and very valid, reason why Ottawa’s flow of venture capital has slowed to an occasional spurt, Celtic House’s Andrew Waitman told his audience at OCRI’s Technology Executive Breakfast yesterday morning.

The reason is that area companies haven’t proven themselves a good investment, if one takes stock of the new companies started since 1995 and tracks the results of the investment dollars that have been pumped into them.

While the managing partner of the local VC firm insisted he’s an optimist, since it’s impossible to persevere in his business otherwise, he nonetheless considers himself a frank fellow. Taking a frank look at the numbers demonstrated that the billions of dollars in VC pumped into the Ottawa area since the mid-1990s have failed to generate a single home-grown success story that has reached the $100-million revenue mark, his benchmark for being a mid-sized company. (He raised the bar to $250 million when talking about U.S. companies.) Never mind that none of them have gotten anywhere near the kind of returns that that level of investment should have returned to the VCs.

Now, while the erosion of deal flow may be simple enough to understand in theory, why the return on investment has been so poor is infinitely more complex, Waitman said. One of the obvious reasons is the irrational exuberance of the boom and how much of that cash was pumped into startups that proved to be utter flops. That tends to skew the statistics a bit. On the other hand, the region has plenty of strong and growing companies, many of whom have done just fine without any VC cash at all, so it’s not like Ottawa is utterly inept in terms of building and sustaining a vibrant tech economy.

But while the reasons for Ottawa’s tepid performance may be complex and difficult to distill down to a few key factors, I think an underlying cause is that same old issue of executive bench strength. It’s a combination of too many executives having an engineering rather than sales and marketing-oriented background, and the complacent sense of entitlement that comes of being a government town. When I’ve harped on this before as a journalist, one reader wrote in to criticize my griping, claiming that he had spent time in Washington, D.C. and found that city to be no different than Ottawa. He suggested that the bureaucratic and corporate cultures can’t really co-exist in a city like Ottawa and expressed his preference for a sleepy old government town. “Move somewhere else, if you don’t like it,” he wrote.

For those of us who actually do care to see a strong local economy built from more than our tax dollars at work, that’s the kind of sentiment we need to escape. On the surface, it appears that it may be limited to a specific segment of our population. But Mr. Waitman’s frank assessment of Ottawa’s track record over the past decade would suggest it’s far more pervasive and caustic than we think. It’s the kind of sentiment that smothers the tenacious and scrappy attitude that defines true entrepreneurship.

I think the lack of VC dollars is a good thing, a harsh slap in the face that may prove positive. It forces startups to bootstrap, to push out into the global market to identify potential customers and generate early streams of revenue. (See our excellent guest blogger, seasoned start-up veteran Jason Flick, who wrote on this here yesterday.) In other words, become a sales and marketing-centric, rather than engineering-centric, organization. There’s already ample evidence to prove that engineering a product for it’s own sake is a recipe for disaster. It’s a fact that’s been dogging Ottawa for years. Any company today must look at itself as a services business tapped into what potential clients want and need and figure out how it can distinguish itself from the competition. And of course, that all starts with screaming its existence to the world and understanding how to get its message out.

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