Highlights from Red Herring Canada 08

By Francis Moran

I already wrote a post at Dangletech.com, where I try to contribute weekly, about the most fascinating highlight the Red Herring Canada 08 conference held earlier this week at Mont Tremblant. For my money, the best entertainment was the riveting behaviour of Red Herring publisher and CEO Alex Vieux who dominated the event with his bewildering mix of brilliant observation, insightful analysis and boorish, insulting and condescending treatment of those who paid big bucks to attend.

But there was, fortunately, more of value beyond Vieux’s theatrics and here, in no particular order other than how they appear in my notebook, are some of the better gems from nearly two days of presentations, round tables and corridor chitchat at an event focused on technology startups and the venture capitalists they pursue for funding.

Miranda Technology Inc. chairman Brian Edwards said there is a “liquidity crisis in Canada,” leading many funds-seeking companies to consider going the capital pool company route on the TSX-Venture Exchange. “That’s pretty scary to me.” And while he applauded that lots of government money is going into research in Canadian universities, he said there is “very little management of that money. … We need to bet on the creation” of new companies.

Jacques Bernier, senior vice-president at Fonds de solidarité FTQ, was equally skeptical of the temptations of an early or inadequate IPO. “We won’t touch” a company that goes public on the venture exchange for its first million dollars or so and then comes to his firm looking for more. Being public “puts the focus entirely on the wrong place,” he said.

Mike Grandinetti, a senior lecturer at MIT Sloan School of Management, said too many companies looking for funding have “an unhealthy focus on not wanting to dilute” the founders’ ownership. If you’re in it to win, he said, retaining less than 50% ownership — sometimes much less — should not be an issue. As for the view that markets are too unsettled or times are too tough, “turbulence creates opportunity,” he said.

RBC Venture Partners managing director Robert Antoniades agreed with Grandinetti on founders accepting lower stakes in their companies, saying, “You can be a very successful entrepreneur with 10% ownership.” He cautioned founders not to try to remake a “VC process (that) is well understood.”

The critical role marketing plays in the early development and revenue growth of a young company was emphasized by Yahoo Canada general manager Kerry Munro. He encouraged companies to boost their marketing spend when the economy turns sour. “Marketing is the first thing you cut in times of trouble,” he said. “It should be the first thing you invest in in times of opportunity.”

The challenge, he added, is to see marketing in a new light. “Most companies in Canada look at it as a cost and not as an investment.”

One Ottawa CEO who successfully found venture backing earlier this year told the conference he did not share any belief that money is not available, so long as the idea being pitched is worthy. “If you want to raise VC money, you’d better come up with an idea that’s VC-fundable,” said OverlayTV’s Rob Lane, something he defined as having the potential of being worth $100 million some day.

July Roundup: Good tips, bad slips and farewell to Linda

By inmedia

In case you missed these posts the first time around, here’s a recap of everything we published in July.

Linda:
July 3: Blogging about blogging
July 9: A post for the word nerds
July 11: iPhone frenzy!
July 18: How times have changed
July 21: Marketing to different age groups
July 25: Home is where the workplace is
July 25: Everyone needs an editor (reprise)
July 29: How not to make a big PR splash
July 31: Over and out

Danny:
July 2: Keep on keeping on
July 9: Be proactive, but be visible
July 16: Media monitoring – can you really get it all?
July 23: Keeping your cool in the summer

Francis:
July 8: I wanna be on Page 1 tomorrow
July 11: Welcome to Post Number 250!
July 15: What internet advertising needs to do

Leo:
July 10: PR insights from the wise and otherwise
July 16: Community manager: A job title or a state of mind?
July 22: If the telegram is still around, then …
July 23: Test drilling and mining the network
July 24: Mediums for the message
July 28: Just the facts … no, these facts
July 31: Oh, the sweet serenity of white space

Community manager: A job title or a state of mind?

By Leo Valiquette

Over at ReadWriteWeb, there’s an interesting discussion underway about the concept of a “community manager” and the need for this entity early on at a startup company.

The question, however, is whether this job description is simply an extension of the PR department or a separate, if complimentary, position. In addition, in the early days of a startup, how much money should be devoted to this kind of role when cash is scarce and the company founder should be taking a leading role in cultivating the company’s community?

If you look at any component of a comprehensive and strategic public relations strategy, having a person dedicated to a particular role or set of responsibilities is definitely more effective than a scattergun approach in which one person is challenged to wear several different hats. In addition, how you manage relationships with your community should also be conveyed in a philosophy that is permeated throughout the entire culture of your organization at every level.

What do you think?

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June Roundup: Brevity, sales and social media

By inmedia

In case you missed any of these posts the first time around, here’s a recap of everything we published in June.

Francis:
June 11: The interview’s never over…
June 24: The best earbud ever and outstanding customer service, too

Linda:
June 5: When it comes to pitching, brevity is the soul of wit
June 10: Where to focus your PR efforts
June 13: Revisiting a few recent posts…
June 18: The ‘hurry up and wait’ game
June 27:
Those lazy, hazy, crazy days of summer

Guest Blogger – Eliot Burdett:
June 17: Sales: From afterthought to forethought

The customer is your friend

By Leo Valiquette

Despite common misperception, Ottawa is home to entrepreneurs seasoned in the school of hard knocks who understand that the road to success is more often paved with customer interaction than it is by venture capital dollars or a preoccupation with product development behind closed doors.

Jay Litkey is one such entrepreneur. He took centre stage last week (or at least, the centre of the boardroom floor) at the last Startup Drop-in of the season at the offices of Labarge Weinstein.

Jay is co-founder and CEO of Embotics, a company he and the management team built from the ashes of Symbium, which met its end after a venture capital deal went sour a few minutes past the 11th hour.

Embotics has a relatively simple value proposition. As virtualization becomes more and more popular in the server farms of large organizations, it can be a challenge to efficiently manage it. Embotics’ V-Commander product helps organizations manage and monitor their virtual machines (VMs).

As Jay summed it up in an interview with the OBJ last fall:

“With the products of companies like Microsoft and VMWare, all you have to do is click a button and create a new server, and that leads to what is called ‘virtual machine sprawl,’” he said. “There’s exponential growth in the number of servers since you no longer have to buy a physical computer (to deploy a new server), and that’s a bad thing for enterprises when they can’t know who did what and what’s happening.”

Clear market, clear value proposition. The trick for Embotics has been keeping its cards close to its chest while the market matured enough for there to be substantial demand for its product. Before v1.0 of V-Commander became commercially available last fall, it was in beta with large enterprises in key verticals such as pharmaceutical, telecommunications, internet hosting, financial services and manufacturing sectors. With v2.0, the company is again taking that beta approach.

And as Jay emphasized this week, that kind of customer engagement throughout the product-development cycle is key. There is no other way to get the pulse of your market and understand whether or not your product addresses the right pain points and offers the features most valued by potential customers.

From the perspective of what we do here at inmedia, at some point that would likely involve a calculated public relations campaign targeted at those key trade media that reach these potential customers. And nothing gives the story more punch than testimonials from existing customers, but I digress.

Coming back to what Jay had to say, to drive a product through from idea to market adoption, he offered the following points:

1. Your first great idea is always full of holes. The sooner you can accept that and the more willing you are to seek out and absorb candid feedback and criticism, the quicker you’ll move ahead. So be humble.

2. Customer feedback is the only sure way to find out where you’re wrong, which means that …

3. Your focus out of the gate should be on customer interaction, rather than chasing VC dollars. Nothing gets the attention of investors faster than early traction with potential customers. (Embotics, by the way, has no VC investment.)

4. Adopt a philosophy that’s been evangelized by the titans in the Valley—fast failure. Failure is the path to wisdom and insight. Countless corporate icons have an impressive list of failures to their credit.

Perhaps you agree with Jay, perhaps you don’t. Feel free to comment one way or the other. What’s important is that there is dialogue in the local community on how to grow successful companies in Ottawa. What works, what doesn’t and what can we try next.

But I wholeheartedly agree with Jay — the primary focus out of the gate must always be on the end user, the customer. Product development for its own sake has no place in private enterprise. Engineers in the Valley get that and appreciate the value of early customer engagement. It’s the difference between being product or service focused, between saying “I have a product you should buy,” or “I have this solution to your problem. “ As long as we remain product-focused, the outlook for this region’s tech economy will be uncertain at best.

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