Author Archive for Jason Flick

You really can achieve great things when industry, academia work together

As part of our ongoing series examining the ecosystem necessary to bring technology to market, we asked serial entrepreneur Jason Flick to share some of his insights. This is his next commentary and we welcome your feedback

FM Series banner headART 1 300x145 You really can achieve great things when industry, academia work togetherBy Jason Flick

According to Statistics Canada, expenditures by Canadian universities on research and development totaled $11 billion in 2009-2010, up about 0.8 percent from the year before. Spending by Canada’s top 100 R&D companies, meanwhile, fell 9.4 percent in 2010 to $9.4 billion. Compare that university R&D figure to total VC funding for Canadian companies in 2010, which was less than $1 billion.

If these numbers are a surprise to you then I hope I have your interest. What I will talk about here are the successful adventures I have had with my companies levering this vast pool of IP and perhaps suggest a way for you to see some alternate funding options for your venture.

In my last post, “Breaching academia’s ivory towers,” I spoke of the challenges a startup faces if it wants to work with universities. I was very pleased with the discussions that it started. My hope for that article was to help the two sides understand each other a bit better. And I say two sides as there is very little overlap of these two silos of $9 billion plus. Canadian schools have one of the highest rates of paper publishing as a percentage of GDP but relatively low monetization. So we know we are researching technically interesting and valuable stuff, we just need to do a better job of commercializing it.

Enabling informed consent

My first story is about a vision we had many years ago at Flick Software to put relevant multimedia content into peoples’ hands when and where they needed it. Our first customer back in 2003 was the Canadian Museum of Civilization, which helped us define and test a very early prototype.

Our challenge was that we had lots of technology but we lacked the ability to create the content and put it into a compelling interface. We also knew that a big part of this was usability – it had to be intuitive for every age group. Remember, this is way before the iPhone turned smartphones into something fun and easy to use.

Enter the University of Memphis and its Center for Multimedia Arts (CMA), led by Michael Schmidt. This match was made through one of our partners, Arius3D. Arius3D had also been working with the CMA on scanning objects in 3D, something it had acquired from the NRC, another large pool of IP in Canada where fantastic things are being created. (How one gets access to that pool is another blog post, one I couldn’t write but would love to read.)

Michael had a very appealing medical project that needed multimedia content enabling informed consent to be delivered to families when one of their children was undergoing cancer treatment. Flick Software saw an opportunity to give something back to a great cause as the project was linked to St. Jude Children’s Research Hospital. It also provided us with the opportunity to have a great user interface designed by an amazing team at the university. The CMA had some funding from The Greenwall Foundation, while we had a bit of IRAP and SR&ED funding. Together we built an amazing prototype. This project, in turn, led to two others that we worked on for museums and the aboriginal community.

The success factors here were of course the introduction from our partner, Arius3D, which shared board members with the university, and our patience in working through the complex timing and process of both their and our funding vehicles. Both sides had to move ahead with the project in hopes the funding would arrive – that leap of faith on both sides was key. In the end we had a world-class customer (St. Jude), and a much deeper knowledge of, and even templates for, what an innovative UI for a multimedia education system on a mobile device would look like.

The simple pleasure of surfing the Web

A little closer to home is a very cool project that we completed in 2009 with the University of Toronto and Tom Chau, associate professor in the field of biomedical engineering and senior researcher for the Bloorview Research Institute at the Holland Bloorview Kids Rehabilitation Hospital.

Tom had a vision that we believed in and the project allowed us to dig deeper into Bluetooth and the more radical uses of it. In this case, Tom called us and he was fortunate to have the MaRS Centre help him with many of the details. There was no funding in it for us but there was lots of flexibility on the IP and go-to-market, so we jumped.

As with the first story, we were found before the funding was secured and in this case before the fundraising had even started. This means that, from our perspective, nothing was happening for months at a time. Patience was key. One advantage of MaRS’ involvement was that it covered Tom’s costs, so we were sheltered from much of the funding work. As a benefit to Tom’s role at the hospital, we again had a great first customer.

Our project was to replace a large computer on a cart that was very expensive and hard to setup with a simple mobile device for surfing the Web; the initial audience was disabled children who might be bedridden for months. Tom brought the hardware skills to build a custom Bluetooth device for the child and we brought the communications and UI development.

One piece we lacked was a user interface that would allow a patient to surf the Web with a single wireless device. For this project it was assumed the patient had very limited use of their limbs, perhaps only able to make an elbow or chin movement. We already knew the great team over in Memphis at the CMA, so we contracted them to build a user interface for this device. They did a great job and in the end we saw four organizations rally to solve a very large technical challenge.

In hindsight

One failure of both projects was the lack of marketing and funding to bring the product to fruition – this is something I would like to hear from others about. Do you have any examples of projects you saw continue on?

These small, low-risk but tangible projects, where each party brings contacts, expertise and funding, is a critical first step to building this bridge between academia and business. I don’t believe enough of this is happening and that puts Canada (and the $9 billion plus silo) at a disadvantage to other countries where this is more common. Once we have more of this collaboration, the second challenge arises, and I look forward to having that problem – where we have so many companies doing so many working prototypes that the government sees enough of a need to step in with some kind of supporting program.

For example, I applaud CATA for the initiative it is taking to address Canada’s so-called “commercialization gap” and lobby the federal government to take action.

Here is what I have learned through these and other projects that were not so successful:

  • You need a third-party dating and funding assistance organization. The exception for this is large companies like IBM or Siemens, but, ironically, they do get lots of help and I can’t blame the universities for chasing the short-term money.
  • Both sides need patience and understanding. Be frank and open about why and how this project is being done and why each of you is participating in it. As you saw from my stories above, each organization had a different objective, but we were able to meet them all in harmony.
  • Work out what success looks like short-term and long-term early on in the project, discuss the potential for failure as well and how you determine that.
  • Ideally, you share the same vision and understand what committing to the project means. If you are doing this purely for money it can be hard to measure short-term success. Mix in marketing goals, community benefits and the learning your will gain.

Jason Flick is co-founder and president of YOUi Labs and Flick Software, a successful serial entrepreneur and product visionary. Jason has founded half a dozen companies in the past 18 years and is advisor and executive to nearly a dozen software companies. He is passionate about the disruption mobility has created and how businesses can lever it.

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Jason Flick

Posted by: Jason Flick on January 31, 2012

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Posted in: Commercialization ecosystem, Financing and fundraising, Startups — 1 Comment

Breaching academia’s ivory towers

As part of our ongoing series examining the ecosystem necessary to bring technology to market, we asked serial entrepreneur Jason Flick to share some of his insights. This is his next commentary and we welcome your feedback.

FM Series banner headART 1 300x145 Breaching academia’s ivory towersBy Jason Flick

Past posts in this series have explored the complexities of turning intellectual property created in a university into a flourishing business. Some of the issues are specific to Canada, but, generally speaking, there is no reason why we can’t do more with what we have. My biggest complaint is that by my estimation – and I have also heard the number elsewhere – 80 percent of startups in Silicon Valley have a close working relationship with a university, while in Canada, the number is much closer to 20 percent. To be honest, I think that Canadian figure is optimistic. I would love to hear examples of productive relationships between universities, colleges and startups.

How do we fix this and why is it happening? I have invested a fair bit of time working with, and trying to work with, our academic institutions. Let’s start with why we so rarely lever their strengths to support startups here in Canada.

Not on the same page

It may seem obvious, but it wasn’t to me when I first began dealing with universities. Professors in this context have two goals – funding and publishing papers. An entrepreneur has two goals as well – acquire or boost his IP and accelerate his product to market. These goals are in direct conflict with each other, and putting this on the table early on is key. Unfortunately, this is where many relationships stop. The funding language and deadlines from organizations such as NSERC (a major funder of academic R&D work), which universities must follow, quickly confuses and disillusions a startup that just wants to get going.

The current tech transfer offices are ill equipped to deal with a large number of small companies

I have gone through the official channels for working with our local universities and they just don’t work. Tech transfer staff can handle an IBM or Siemens because they can have five projects in parallel with a full-time staff member exclusively committed to managing the relationship with the university. When a startup shows up and they don’t see solid progress in every meeting, they will disengage very early on. Few startups can afford to have their CEO or CTO busy filling out paperwork and having four or five meetings trying to narrow down the right professor and project.

This is not intended as a slight toward our local tech transfer offices, but when a professor was put forward for a project we were trying to get off of the ground, it was apparent they had been coerced. We appreciate that tech transfer staff are pushing professors into these types of relationships, but the professors have to want to work with the private sector. My concern is that professors positively predisposed to working with the private sector are already doing so with $1 million in funding from a multinational such as IBM, with a five-year plan where the multinational also provides a year of government lobbying to boost next year’s budget. The odds of securing funding as a result of this kind of partnership with a large company are very good. Of course, these projects rarely make it to market and they do not add to the financial future of Canada if the multinational isn’t based here.

Funding, funding, funding – the little guys just don’t have it

When a startup engages with university staff and the first or second thing they hear is “matching funds” before the startup even knows what the project is and how it could add value, it is again another serious road block. Luckily, there are “in-kind” arrangements, such as having your staff work on the project for free or loaning equipment. Cash is king for a startup and a joint project is a high-risk proposition; there needs to be an assumption with any initial project that there will be an in-kind arrangement in lieu of cash. For future projects, a startup can be a great funding stream for an academic institution, but they need to get past that first project and both parties need to experience an early win to fund the next one.

How can we fix this?

There is no silver bullet. I think what must be addressed are the general attitudes among faculty towards partnering with startups and the lack of success stories. Startups must also understand that academic institutions are driven by different outcomes and they need to carefully select projects that fit them. However, both of these issues can be resolved if we can drive some successful outcomes. I am focused on how we can do that at the ground level.

Lack of startup entrepreneurs and professor ‘dating services’

One of the biggest challenges I face in trying to succeed is the relationship with the professor. We have had three successful joint projects with universities. Ironically, none were local. In every instance, the success of the project came down to the individual professor. Is their R&D in line with yours? Are they a professor who wants to work with the private sector, and, preferably, have done so before? Academic institutions and professors will post “active” areas of interest on their websites, which is somewhat useful but often far out of date. The onus still rests on the startup’s shoulders to research opportunities and qualify potential partners.

What I think we need is more university open houses, ones just for startups, where the professors can showcase what they are doing and what they will be working on next. Or – and this is an idea for an entrepreneur listening out there – a social media website not unlike a dating site where you can match founders to professors.

Government funding

I don’t believe the government needs to add more funding, but it must do a more effective job of educating startups on the funding that is available. First, raise awareness of the funding sources that are available then increase funding levels as the results speak for themselves.

Co-ops

At both of my businesses, we often have co-op students working on site. They learn so much about what it takes to build a company and the cool projects we are working on, but this information doesn’t seem to be filtering up to their professors. I would love to someday receive a call from a professor to discuss his student’s work and how we could create some kind of strategic partnership. It’s never happened to me. Has it happened to you? I think there is a resource pool here which universities are not accessing.

I would love to hear your success stories, and your ideas. I think Canadian startups are at a significant disadvantage against their U.S. counterparts if we don’t build more linkages with colleges and universities. Our academic institutions hold a wealth of knowledge and intelligence and are equipped with multimillion-dollar labs. It just doesn’t seem right that only big companies, which typically have a poor track record in efficiently commercializing R&D, have access to these resources.

Jason Flick is co-founder and president of YOU i Labs and Flick Software, a successful serial entrepreneur and product visionary. Jason has founded half a dozen companies in the past 18 years and is advisor and executive to nearly a dozen software companies. He is passionate about the disruption mobility has created and how businesses can leverage it.

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Jason Flick

Posted by: Jason Flick on November 7, 2011

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Posted in: Commercialization ecosystem, Financing and fundraising, Startups — 3 Comments

Why companies must incubate

As part of our ongoing series examining the ecosystem necessary to bring technology to market, we asked Jason Flick, Co-founder and President of You i Labs and President and CEO of Flick Software, to share some of his insights. This is the third of his commentaries and we welcome your feedback.

FM Series banner headART 1 300x145 Why companies must incubateBy Jason Flick

Over the past couple of years, incubators inspired by organizations such as Y Combinator and TechStars (see TechStars harnesses the power of mentorship) have taken the limelight and become hotbeds for angel investment and innovation. Montreal alone has seen at least six new incubators created so far in 2011. It is being done and it makes sense. In contrast, large enterprises often invest thousands of times more in R&D than the typical web or mobile startup needs to get to market, with questionable results.

Nokia could have had 5,000 startups for the price of 19,000 R&D employees. Its total R&D budget was $7.8 billion in 2010, more than Google’s or IBM’s. Nokia’s output for that R&D spending has been “visibly disappointing,” read a recent story from Businessweek. Nokia is losing significant market share despite $23 billion invested in a smartphone platform that should be in its prime now that smartphones are outselling PCs. This is but one example of a huge R&D expenditure that has offered a poor return. There must be a better way for an established enterprise to develop and bring new technology to market, but what is it?

The answer is incubation. Let’s explore it from the perspective of three considerations that must be addressed to provide a win-win for all involved:

1) Where do you want to innovate and how are you going to enable this new entity to efficiently innovate for you?

Internal R&D by a large organization is excellent at red ocean innovation, where competitors crowd the market and wage fierce battles on features. Startups allow you to embrace a blue ocean where there are few if any competitors. This strategy provides opportunities which often have higher profit margins and larger growth opportunities. Yellow Tail Wine is the stereotypical example of this type of performance; it went after an unsophisticated beer-drinking market with wine and was quite successful. To succeed, you must be able to visualize the end result without prejudice and imagine new ways to bring your product to market faster.

When we look at our own experience with YOU i Labs, it would have been great if it had been incubated by Nuance, a company that is a leader in licensing input technologies. With its structure, tools and market access, it would have cut YOU i Labs’ cost and time to market in half.

2) Operations relationship – three ways we’ve seen companies successfully incubate

Hands-off

This is the most common approach still being used today by large enterprises, where they have a small team with a fund that invests in companies that they feel could increase their market share. This typically involves investing in a company you know is focusing on a challenge that you or your customers need solved. This brings to mind Intel Capital, Samsung Ventures and Qualcomm Ventures.

Hands-on

You hire the staff into a shell in your offices and feed them weekly updates on how and where they need to take their product. This is still a completely separate entity on paper and the individuals are incented upon success, but they would feel very much part of the day-to-day operations of the patron company. In the most extreme cases, it is outsourced product development in an area where there is limited internal expertise. This enables the company to hire top talent into an environment with a faster development cycle.

Mentoring

The third option is a hybrid in which your organization creates a formal framework for startup innovation. This framework lays out how your company creates an incubator and establishes some minimum guidelines for one-, two- and three-year goals, but the startup entity runs completely independent from a day-to-day perspective. It has limited governance around what it can do with IP and who it can do business with.

As the patron, you have to consider how close you should bring this fledgling to your organization. It has to be separate or it can’t be dynamic and adaptive, but close enough to lever your resources and institutional knowledge. As the startup, you have to consider how the incubation agreement is structured. The patron company is providing you with money, information, tools and support. What are you providing in return? An agreement that is fair and equitable is key to everyone’s success.

3) Establishing the framework

True blue ocean innovation is very difficult inside an established organization. As I said earlier, fresh thinking free of prejudice is crucial. If the entrenched culture, biases and assumptions of the patron organization has too much influence on the new venture, it will be all but impossible to achieve true blue ocean innovation. What often happens is that profitable products end up accelerated to their end of life before their full commercial potential is realized.

That’s why it is important to have a framework which is structured very much like a formal incubator, with a separate physical location. There must also be a clear roadmap in place to determine:

  • How many startups can be supported at any one time
  • How capital and resources will be deployed
  • What the exit strategy will be
  • The return that will be paid back to the patron company
  • What kind of governance structure will be put in place

Some of this can be gleaned from existing incubators with a roster of successful graduates, but much of it needs to be tailored to the specific objectives of the patron company.

Final assumptions

There is seldom a correlation between what a company invests in R&D and its future success in terms of revenue. Startups are famous for having successful technology R&D because they can iterate and adapt so quickly and tend to be closer to the ground – e.g. the customer. Rather than invest billions in internal R&D, many of our large technology enterprises may find their money better spent if they put a percentage into incubating startups. The most effective way to support this kind of activity is to physically remove that startup from the prevailing culture and provide it with some degree of autonomy. This is the best way to create a win-win for both the burgeoning offspring and the diligent parent.

Jason Flick is co-founder and president of YOU i Labs and Flick Software, a successful serial entrepreneur and product visionary. Jason has founded half a dozen companies in the past 18 years and is advisor and executive to nearly a dozen software companies. He is passionate about the disruption mobility has created and how businesses can leverage it.

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Jason Flick

Posted by: Jason Flick on June 29, 2011

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Posted in: Commercialization ecosystem, Financing and fundraising, Marketing strategy, Product marketing, Startups, Technology marketing — Leave a comment

How to define, embrace and lever your startup DNA

As part of our ongoing series examining the ecosystem necessary to bring technology to market, we asked serial entrepreneur Jason Flick to share some of his insights on getting technology to market. This is the second of his commentaries and we welcome your feedback.

FM Series banner headART 1 300x145 How to define, embrace and lever your startup DNABy Jason Flick

As I mentioned in my last post, startups don’t have a common culture. This is a myth that’s been created, perhaps intentionally, by the 95 percent of people who’ve never worked for a startup.

Who would want to search out and work for a company that can’t pay much, if anything, in salaries, expects you to work 12-hour days and in the end, has a 50 percent chance of failure? Over the past 21 years I have created four startups, been employed by five others, and mentored and worked with nearly 100. None of them has fit this mould, or any other.

Startups have DNA, just like people. It may not surprise you to hear that a startup’s DNA is in part a mixture of its leaders’ DNA. If you think you merely have “startup culture,” then you’re not driving your business, it’s driving you.

What I will cover here is a process to determine, embrace and lever your DNA. This process is really a distillation of what bigger companies do, except startups can do it without the red tape, months of meetings to bring everyone on board, etc. When I run this exercise in my companies, employees attest that it’s “motivating,” “fun” and “just what we needed.”

Keeping your lean mean startup machine on track

I give much credit for my current success to TEC Canada, a group that I have been a member of for five years. It’s a big part of why I’ve staved off so many opportunities for failure. This process is something other CEOs in this group, our chair and I have worked with and evolved. We feel it’s just the right mixture of vision, goals and tactical actions.

We know you’re very busy, but you need to take time with your key staff – all your staff, if you can – and spend a day on the business rather than in the business. Preferably take everyone off-site; for one of my companies I swapped our services for catering and a meeting room at a nice local ski resort. In my experience, this will be the best thing you’ve ever done for your company. The steps are quite simple, and you can grab the template I use here.

Two quotes that help frame the mind set for your staff:

Roy Rogers said, “I try to avoid lengthy business plans – too much detail clouds simple concepts.” And with credit to architect Ludwig Mies van der Rohe, “Less is more.”

Ask everyone to do a little homework. Each person attending needs to think about the business and put down one to three points under each of the following headings: Strength, Weakness, Opportunity and Threat. Some of you will know of this as SWOT and it forms the basis for the entire day, so take this part seriously. Read up a little; SWOT Wikipedia will help you frame things if you need a refresher. Have someone on your team collect all of these points and put them on sticky notes for the big day.

Here is how that day looks:

1) Who you are now. Here you discuss your company SWOT. Choose someone from the team to facilitate the discussion of each letter and display the results visually. The dialog here is as useful as the end result, so don’t rush it. This will take a fair bit of the morning. The template at the link above includes a sample agenda. Narrow it down to three or four ideas per letter; this is where the sticky notes come in handy.

2) The future. Discuss the beliefs and the economic trends you think are driving your business. For example, at YOU i Labs we believe touch screens will proliferate and be the preferred method of input. If you can’t garner any of these, jump to a coffee break, submit your resignation and run! Startups need passion to succeed through the dark days, and this is that stuff. Expect and drive some good heated debate here.

3) Vision. Look at where you want to be in three or five years. You envision what success looks like — which, by the way, is one of the quickest ways to measure the success of a startup. If they don’t have a vision, failure is imminent. And if your team doesn’t know and agree on what the end game looks like, they are likely running in circles. This is also one of the most motivating pieces of the process. Brian Scudamore, CEO of GOT JUNK, started with one truck and in 2009 was the fastest growing company in North America, with offices around the world. With his team, he painted a clear picture of what success means. It included appearing on Oprah and in what year that would happen. They achieved their goals and he credits the picture they collectively painted as the primary reason why.

4) 10 key strategic imperatives. Having invested the time going through the process above, you are now going to be surprised how the imperatives almost jump out at you. For Flick Software, some of ours were to grow our channel partnerships and hire someone to run them, establish revenue growth targets, and refocus on our target market. At this point, it’s good to go back to the SWOT and make sure each of the three items has an imperative that levers it.

5) This year’s execution priorities. Things start to get tactical here, and the team starts appreciating the link between steps one and five and what they are doing day-to-day in the office. Again, you will find these coming out fast and furious. This could (and should) involve some social media items as well, social media being a great level playing field for startups. For example, commit to 10 new blog posts and five videos, two customers in trials for the new product, new office space, and so on.

6) Goals for the next 90 days. Here the team starts to see why they need to, and want to, rush back to the office and get to work. This is also the piece that’s the easiest and the one I hear the most positive feedback about. In some cases, it’s just your one-year items divided by four; in other cases, it’s a more refined next step for the one-year goals.

Of course you need to compile this in a one or two pager (I have provided a format for you) and you should post the 90-day priorities up on a big whiteboard in the office. Maybe even have a bell you can ring as you accomplish them. Then come back to the one-year goals in 90 days, grab another list and repeat the entire exercise every 12 months.

As a leader in the organization that has completed this process, you can assure yourself that you now have a firm grip on the steering wheel of your high-performance startup and your odds of success have doubled.

Get out there and create some amazing companies!

Jason Flick is co-Founder and President of YOU i Labs and President and CEO of Flick Software, a successful serial entrepreneur and product visionary. Jason has founded half a dozen companies in the past 18 years and is advisor and executive to nearly a dozen software companies. He is passionate about the disruption mobility has created and how businesses can lever it.

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Jason Flick

Posted by: Jason Flick on May 4, 2011

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Posted in: Commercialization ecosystem, Startups — 2 Comments

Lean startup: It’s the Canadian way

As part of our ongoing series examining the ecosystem necessary to bring technology to market, we asked serial entrepreneur Jason Flick to share some of his insights on getting tech to market with lean thinking. This is the first of his commentaries and we welcome your feedback.

FM Series banner headART 1 300x145 Lean startup: It’s the Canadian wayBy Jason Flick

You would have to be living under a rock not to have heard about the billions in venture capital flooding into the Valley. Venture firms raised over $60 billion in Q1 2011 alone. Some companies are ramping from zero to billions in revenue in years rather than decades. Students fresh out of school are being offered six-figure salaries, four-month signing bonuses and iPads to come on board. (VentureBeat summed it up well in this recent story.)

Of course, these stories seldom report that for every company like this, there are 99 others that flounder and end up as large financial craters.

Here in Canada we would of course like to have billions in venture capital, but would we like all the headache of a “home run or nothing” mindset? Or what about young hires with salaries greater than that of a senior developer, who, spoiled by a culture of “gimme gimme,” move on to the next hot company without so much as a thank you when the perks stop coming? I wouldn’t. I would like a place where people work hard and have aspirations to build amazing businesses with growth plans that don’t require a $1 million round followed in six months by another $5 million and then of course the much needed $30 to $100 million round.

So let’s assume you are operating in a bubbling area, but you have a great business idea. How do you get it rolling? I think you need two things. The first is a method to self-fund your project. The second is a process to keep all the varied team members engaged when you may not be able to pay competitive full-time salaries (we will explore this point next week in Part II of this post).

How do you fund your unfunded company?

On Monday Francis and Leo wrote about lean startup. Here’s my take on the lean approach to getting your unfunded company funded and your product to market.

If you have an idea that solves a customer’s problem, preferably a large customer, then you should be able secure “funding” from them. This funding might come in the form of services, prepayment on the product or even as a strategic investment. While you are out doing your market research—the part where you actually talk to potential customers—seek out these types and arrange meetings by being open about the concept product you are working on and your interest in their feedback.

Being honest and upfront starts the relationship off on the right foot and encourages them to be open with you. If your product idea is indeed a fit for them, a contract will develop from it, provided you give them added incentive to take the risk. Offer them the first mover advantage with a price point that will be half of what your product will cost in full commercial release. You can also take advantage of this time to have them prepay some of the royalties, device costs and so forth up front. Remember, if you’ve made it to the negotiations stage, you’ve done very well and hold far more power than you may think.

A few dollars more

Once you have this first customer, it isn’t time to just buckle down and work hard on the deliverable. Rather, this is the best time to go in search of additional funding from government sources, angels, and friends and family. Don’t wait until the few dollars you’ve secured from the customer are running out to start this search.

Government programs such as IRAP, the Investment Accelerator Fund managed by MaRS, and Ontario Centres of Excellence are amazing resources if you are based in Canada. And don’t forget BDC and EDC. For every dollar you pull in, you can find another dollar or two from the government to match it. At YOU i Labs we were able to secure, through five different programs, well over $1 million in government grants and loans on a very small upfront investment, much of which was sweat equity. There is a very long list of programs and organizations that can help you such as Communitech, DemoCamp, Ryerson University’s DMZ, OCRI, Toronto Tech Meetup and Mobile Experience Innovation Centre.

I don’t recommend you formally ask for their help until you have that very interested, preferably signed, first customer. There are thousands of great ideas that people are trying to bring to life, but securing that first customer raises you above the noise and into the top five percent. If you start off on the wrong foot with these organizations it can be hard to build up the momentum later.

Startup isn’t a culture, startups have DNA

This road of services-to-product is fraught with traps. Many startups turn into lifestyle businesses, which are great, but it’s unlikely you’re reading this if that’s your goal. The challenge is that if a company wants to be a product company, it needs to have a culture of product and a product-oriented team even though it may be operating with a services model in those first years. With a services model, billings will be low but often the customers will be very happy. The other risk is that you build a product for that first big customer that isn’t what the larger market wants.

While you are building and deploying to your first customer you are often re-selling across their organization to secure buy-in from other decision makers. As you’re going through this process you are building the DNA for your startup. Most entrepreneurs don’t appreciate how fundamental that DNA is to their everyday operations.

A company run by a friend of mine sold its software to a very large tier one company, but when a new opportunity came up in a smaller and more nimble market where the technology was a perfect fit, they pounced. Two years later my friend and his team came to realize they couldn’t sell their process into smaller organizations. Their model just couldn’t be scaled back and simplified enough to succeed in this market. But other startups with a very different model and a lower price point where able to fly in and successfully deploy a similar technology. After this experience my friend’s company refocused and found success with tier one customers.

At Flick Software, we know we are best at large and complex mobile solutions and poor at small marketing applications that often also require creativity. We know our DNA. Know yours.

Next week I’ll help you measure your DNA and use that to keep everything on track.

Get out there and create some amazing companies!

Jason Flick is co-Founder and President of YOU i Labs and President and CEO of Flick Software, a successful serial entrepreneur and product visionary. Jason has founded half a dozen companies in the past 18 years and is advisor and executive to nearly a dozen software companies. He is passionate about the disruption mobility has created and how businesses can lever it.

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Jason Flick

Posted by: Jason Flick on April 20, 2011

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Posted in: Commercialization ecosystem, Financing and fundraising, Marketing strategy, Product marketing, Startups, Technology marketing — Leave a comment

Bootstrapping a start-up no longer a choice

guest blogger2 Bootstrapping a start up no longer a choice

By Jason Flick

Jason Flick, CEO of mobile application-development company Flick Software, shared some of his experiences at last night’s Start-up Drop-in of The Ottawa Network. Following is an edited version of his notes.

I have led or started eight companies in the past 17 years, three bootstrapped, two VC-funded, and three angel-only companies. Not a huge sampling but the stats I have show that in the end, the non-VC funded companies brought more value to share holders. Bootstrapping is something you should want to do as opposed to most start-ups that seem to feel you need that VC money to prove you have a great idea. Prove your great idea with a couple of customers.

Below I hope there is some useful advice for you if you are at that early stage, and a few pointers for bootstrapped companies that are a couple of years into it.

1. Services

There is always a service you can find that you can wrap around a yet-to-be-built product, or that will help get you to a product. Start there. Don’t start with a glossy brochure promising a full features product; promise a custom solution built to meet your customers’ needs. Selling a product out of the gate is much harder for a boot-strapped company as customers often place significantly extra demands on you such as demos, feature assessments and product certifications.

2. Could you help me?

For your first few accounts, don’t be afraid to tell potential customers you are working on a product, and that you are looking for someone to validate and give advice on your idea. This works best if you start with the CEO or decision maker. (Don’t try this approach from the bottom up.) They are just as likely to become your customer if your idea is solid, the market is not that mature, and they can look up your competitors in the yellow pages.

3. Avoid one product for one customer

While selling your service and product combo, be careful with developing a product or features that only one customer wants. Some companies you think might have a need others have, might be just one unusual company and your product will be skewed to the needs of a one-customer problem. Be careful not to lose your product vision for your first customer’s needs. Talk to lots of potential customers.

4. Web site and search engine optimization.

If I had only $1,000 to start my company, I’d spend it all on the website. Your company is perceived through your website, and having a nice website, even if it’s built by you, is something that is easy to do and, in fact, a must. At a minimum, have a professional create a logo, and then build your website around that. Search out the top 10 SEO tips and tricks. If you can afford it, this is something you might want to outsource.

5. Google ads

There is a reason Google is worth billions. Flick Software gets 90% of its business because of Google. You can spend as little as just two cents a click if you really focus your keywords, and with the wizard Google has, even a monkey could set up an ad campaign in under an hour.

6. Watch the service-to-product tipping point

In most cases, the bootstrapping plan involves services to get to product. It requires some careful planning so that your service can eventually be wrapped around your product that initially doesn’t exist. In many cases, if you are solving a real need, there is a service you can run to fill that need until the product can be built.

The tricky part, and where most bootstrapped companies fail, is in the transition from being primarily a service company to being primarily a product company. It is different for each company, but you must constantly measure the demand and your investment in product and make the move carefully. The investments you put into product trade shows, websites, branding and so on could take many months to produce revenues. They say cash flow is what kills a company, but it is often the decision to put too much into the product before the market is ready.

7. At size 25

For the more mature bootstrapped companies, a professional services department pulled from engineering is important. Initially, you need to do your service and product development from the same core team, but at some point that won’t scale, and services will be conflicting with product deadlines. I find the tipping point occurs at 25 staff.

8. Look into government programs.

There are programs that can help give your company a small boost, and consider SEEB, IRAP and of course SR&ED in Canada. Use your network of other start-up entrepreneurs to be sure which is best for you; some programs sound good on paper sound but prove not to be in practice.

9. Watch your cash flow

Seek a relationship with the right people at your bank. For me the bank was my single biggest hindrance until I found the high-tech division at the Royal Bank of Canada. Now, my banking relationship is the reason Flick Software is still here.

10. Be partnership friendly

Focus just as much on partners as customers, know the full ecosystem for your business.

Be careful how many other start-up companies with whom you partner. If you have four other partners that are all also only a year old, it can make a lot of work for nothing as each of them will change direction 10 times and many won’t be around in two years. Ideally, try to partner with established companies that you could help move into new markets.

11. I spoke to my wife about my top 10 list and it is now a top 11.

Get your other half’s buy-in. This was my wife’s suggestion. I could go on for awhile on the top 10 tricks for staying married while running a start-up, but first start by getting her buy in.

Over his 17 years in the high-tech sector, Jason has been actively involved in all aspects of starting, running and growing small and large software companies. He currently is founder and CEO of Flick Software.

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Jason Flick

Posted by: Jason Flick on April 24, 2008

Posted in: Startups, Technology marketing — 1 Comment