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Get (free) advice for your startup: Call Guido!

Last week we launched a new site at Mercury Grove to reflect the new direction of our startup – a startup collective in Ottawa, Canada where entrepreneurs can build awesome stuff alongside worldclass designers, developers, and investors.

One of the pillars of our new direction is to provide personalized, professional feedback for startups on their business – not as a paid service, but for free.  Why?  For two reasons:

  1. We’re trying to recruit the best startups in Ottawa to join us.
  2. Your success = Ottawa’s success

I meet a lot of startups every week – and I love it.  But between Startupplays.com, our other apps, a growing family, travel, and the mentorship I’m doing across Canada, I just can’t meet everyone.

Meet Guido.  I’ve been impressed with Guido since we first met for his startup analysis skills and experience in this space.  A little background about him:

Guido is a young and passionate entrepreneur who just arrived in Canada from Italy. In his home country he worked with EnLabs, the first business incubator in Rome. He was responsible for structuring and launching this new incubator and was instrumental in its early success. While at EnLabs, Guido worked with some of the largest venture capital firms in Europe. He was also focused on selection and providing guidance and mentorship to startups in the program. He helped to develop and nurture the startup culture in Rome, organizing events and conferences with international speakers like Carl Schramm, former president of the Kauffman Foundation.

Guido has a Masters Degree in Entrepreneurship from LUISS University in Rome where he wrote his thesis about business incubators and early stage companies.

Guido has already met with over a dozen companies in Ottawa and all have had very positive feedback on his advice and feedback.

So I urge you to book some time with him – he’ll buy coffee, and I guarantee it will be worth your time.

(photo cred to Design Sponge)

By Scott Annan

DemoCamp Ottawa is back!

I know, I know… it’s about time!!!  The next DemoCamp is set for March 28th at Mercury Grove.

You can signup to attend or present here.

Never been to a DemoCamp?  It’s the most fabulous event in Ottawa for meeting cool startups and entrepreneurs, and seeing some really awesome apps.  Anyone can grab the stage (actually it’s limited to 6 companies for time) and show you, their peers, their cool stuff with the hopes of getting feedback and tips on how to make it epic.  It’s kinda like the Dragon’s Den tv show without the dragons, the tv, and the pressure – oh, and its a lot of fun, there’s beer, and… ok, its not really like the Dragon’s Den at all – it’s more like a house party with some cool apps on a big screen.

Still… we’re hoping to shine a spotlight on new tech and we’ll have some people who have been asking us about where to invest all their money, so if you’re looking for some internet dough, let us know and we’ll make sure you get a chance to pitch.

Looking forward to seeing you there!

By Scott Annan

IRAP’S VC Pitchfest and What It Means for Ottawa

Below is a guest post by friend and local entrepreneur Kyle McInnes, co-founder of Pretzil, who was a participant at the IRAP “PitchFest”.  The views are entirely his own and I exercised massive restraint by not changing some of his comments (but couldn’t resist the picture).

The IRAP pitchfest happened recently on Wednesday, February 8th at the new OCRI (now “Invest Ottawa”) building at 80 Aberdeen in Little Italy. I thought I’d summarise the event for those that couldn’t make it and provide a little insight into how I think the event could be improved.

When Scott first blogged on StartupOttawa about IRAP’s VC pitchfest, it obviously touched a nerve with IRAP and the Invest Ottawa crowd. During the whole application process and through the event, I probably heard it indirectly and directly referenced at least a few times. The post brings up some really valid criticisms of the pitchfest idea including the fact that there was zero transparency on the part of IRAP as to how they went about selecting companies to present. Scott’s criticism that IRAP’s mandate doesn’t include this kind of work is something I’d have to disagree with. IRAP’s explicit mandate is to “Help you grow stronger, grow faster, grow bigger through innovation and technology.” I would argue that IRAP bringing VCs to Ottawa is a clear way to fulfill its mandate.

Overall, the VC pitchfest was a fun event, but I take issue with the way it was managed. It was clear that IRAP is still figuring out how best to connect companies and investors, and as someone who went through the whole event, I can think of a few ways that it could have been run more effectively.

1. Selecting Companies – At the event, I spoke to one of the VCs in attendance to get his impression on the selection process. The VC told me that he hadn’t even been asked by IRAP or Invest Ottawa as to what kind of companies his fund was looking to invest in. Personally, I think it would have made far more sense for IRAP to ask the VCs what kind of companies they want to invest in, and then search Ottawa to connect those companies to the interested VCs.

2. Focus – The IRAP pitchfest had a wide variety of companies pitching. The pitchfest included companies pitching everything from intelligent video hardware to an online wedding registry service. It’s great to see the breadth of companies and talent here in Ottawa, but companies are more likely to get funded if you focus on an industry. IRAP needs to put hardware companies in front of investors who fund hardware companies and mobile companies in front of mobile-focused funds. This will surely increase the likelihood of someone getting funded.

3. Keep it private – The whole event was a little too public. Companies were expected to pitch to a group of investors in a room filled with other startups, IRAP representatives and Invest Ottawa employees. I’ve heard from numerous startups that have raised money that the most effective use of your time is to carefully handpick investors and meet with them to set milestones and expectations. Openly pitching to a group of investors that are possibly interested feels too much like a “spray and pray” versus “sniping” approach.

4. Feedback – IRAP was very eager to help the startups perfect their pitch. During the process, I had to do 2 mock presentations in front of a small IRAP committee as well as an IRAP rep came to my office before pitch day for a private consultation. It’s good to see IRAP so keen on helping but I would have liked to get feedback from real entrepreneurs rather than a panel of government employees. IRAP did a great job of bringing VCs into this pitchfest and it would have been helpful for them to bring in entrepreneurs with experience raising money to help the startups who were about to pitch.

The IRAP pitchfest addressed a clear issue that Ottawa has a hard time attracting VC funds to the city. IRAP proved that it can entice those investors to come to the city, but we need to make sure these investors are meeting talent they’re looking for. In the end, IRAP managed to bring almost a billion dollars to the city. IRAP should continue to work to bring this type of money to the city, but make better use of everyone’s time. For those looking to raise money, the following funds were present and worth researching:

Tandem Expansion Fund ($300M)
SummerHill Venture Partners ($200M)
Real Ventures ($25M)
Ontario Investment Accelerator Fund ($30M)
OMERS Ventures ($180M)
Extreme Venture Partners ($50)
BDC ($190M)

The next time Invest Ottawa and IRAP get involved in bringing companies and investors together, I’d like to see them connect investors and companies in a more structured, transparent and focused approach. The most important thing is that somebody gets funded, because it will send a message to other funds that Ottawa talent can’t be ignored. With enough investments, hopefully these funds will open Ottawa offices and create a strong investment community. That’s when we all win.

By Scott Annan

Sam Zaid gives you a step-by-step plan for funding via StartupPlays.com

In case you haven’t heard, StartupPlays.com is the hottest “startup for startups” with an all-star lineup of successful entrepreneurs who share their founder recipes on how to do everything from getting amazing press for your startup (Adrian Salamunovic) to building a content strategy to drive millions of readers to your blog (Dan Martell).  Past and upcoming authors include Jeremy Olson (Tapity), Cameron Herold (1-800-GOT-JUNK), and Aaron Hall (DressRush, Member of 500 Startups).

Today we launched the newest Play with local startup celebrity Sam Zaid on how to raise money for your startup.  I had the chance to sit down with Sam (CEO of Getaround.com and winner of 2011 TechCrunch Disrupt) to talk startup funding and he had some great insights on how startups should structure their business and focus on milestones to make funding much more straightforward (and successful).

Here are some of the highlights:

  • How to determine when you need money and alternative funding mechanisms
  • Do your research and hand-pick investors that will be a good fit
  • Setup milestones for your business.  Check with investors to see if they’re the right milestones
  • How to know when you’ve nailed a pitch
  • Tips on how to negotiate the best terms (and to get term sheets)

Raising money is a prerequisite for most startups – especially startups that want to scale and are working on the BIG idea.  If you’re launching a new startup or thinking about raising money in the future – you should buy this play NOW – not the night before your first pitch.

(note: I’m affiliated with the StartupPlays.com website… but I still think its ingenious!)

By Scott Annan

IRAP’s the new Dragon: VC Recruiting & Vetting

I just got an email from IRAP (who have recently been singing a familiar tune here in Ottawa: that they have no money for startups) that surprised and bothered me enough to stop building my business and write this blog post.

Here’s an excerpt from the email:

Subject: IRAP-Sponsored, VC Pitchfest Opportunity in January

Body:IRAP in the National Capital Region is organizing an event around mid-January for early stage IRAP client companies in the ICT, digital media, and mobile sectors looking for VC financing.  IRAP has arranged to have at least five Toronto VC’s available.  The Toronto VC’s feel they are missing potential investment opportunities in the Ottawa area.  Critical mass of start-ups makes it worthwhile for VC’s to come to Ottawa and see the companies in one day.

…. IRAP will select the top 25 – 30 companies based on submission of one page executive summary (see the attachment for an example).  The company selection process will be completed by IRAP ITAs who will choose the best candidates amongst their client base in the target industry sector of VC’s.

The format of the “event” is a typical dragon’s den format where each company is bestowed 5 minutes of valuable “VC time” to pitch.

I know what you’re thinking -> “Hey, awesome that IRAP is bringing money to Ottawa.  I gotta get my pitch polished up!”.  But that wasn’t my reaction.  Here’s what’s wrong with this:

  1. At what point did the government (more specifically, my tax dollars) get in the business of doing VC’s job of recruiting portfolio companies?
  2. What skills and background does IRAP have in “selecting the top 25-30 companies”?  What objective criteria will they use?  Should the government be implementing any program that is completely subjective?  How does an IRAP field officer have the VC skills to do this?
  3. Um… what does IRAP do?  Is this part of their mandate?

This falls into the same pathetic bucket as most programs run by the government and administered by government groups (see OCRI, OCE, etc…).  ”We’re just trying to help startups succeed”.  Really?  Are you?  If you looked long and hard at IRAP “client companies”, is a dragon’s den event helpful?  Is creating efficiency for VC’s the big problem we have here in Ottawa?  Or could this be a justification for continued government funding – a line item on a list of “great things we’re doing for startups”.

If you’re a great startup, you can contact those VCs directly – they’d love to talk (and I’ll make an intro).

If you’re the government, we want our money back please.

By Scott Annan

Why your startup will fail: you never (really) understood the problem

Useless solutions

I meet with 3-4 entrepreneurs per week to talk about their startups.  Each discussion starts with a very informal pitch about their business or product.  Almost every time there are two core (and maybe the most important) topics that are missing or glanced over too quickly:

  1. The specific user pain, and how BIG it is
  2. Why they’re solving it

Instead the focus of the pitch is on the brilliance of the solution.  And although the solution may be brilliant, I usually tell them they’re concentrating on the wrong thing right now.

What most startups should be focusing on in the early stages is identifying – I mean pacifically, on a nano level – is the pain they’re solving.  And then the most basic way to solve it.  By rooting everything the company does for the first year on the market problem – and not on an elegant solution – is a much more logical approach to profitable discovery, is more likely to please users, and keeps you grounded when things get tough (which they always do).

And so… yesterday we launched a premium play – a detailed step-by-step project plan – for entrepreneurs on how to test a product idea quickly and inexpensively through refining your product idea, keyword analysis, A/B split testing a landing page, and using adwords to drive targeted users to signup for their solution.

We built it based on our experience at Mercury Grove and by talking to dozens of very successful entrepreneurs (there are three new product validation tests going on right now by uber famous entrepreneurs using this methodology – I bet you can’t find / name them, because they’re doing it the right way, without attaching their names to it… yet).  Even startups who have been working on their product for months (or years) can benefit from getting a good pulse on what the market really wants.

So don’t be surprised the next time I talk to you when I suggest you go and run this play – I’m betting it will help you build a better product faster.  Or, you can go buy it first and then come and talk to me – especially right now while it’s 80% off!

Oh, and if you can guess who is running the market validation tests (and which products) in the comments below, I’ll give you the play for free.

NOTE: Regarding the second thing that startups don’t work into their pitch – “Why they’re solving the problem”… your PR will easily be 20 x more effective if you can start your pitch with a specific, personal story that puts your idea into context.  Seriously, it will make it a lot easier for journalists’ to cover you if you can do this well.

By Scott Annan

StartupPlays.com: A Great Resource for Entrepreneurs

startupPlays

As a startup entrepreneur, you have to be really good at lots of things to build a world class business – creating a business plan, raising money, IP protection, viral marketing, getting customers, etc….  I know a lot of entrepreneurs, and none of them are experts in all these areas, but they need to execute like an expert to grow their business.

So what do you do?  Well, if you’re well funded, you can hire experts with these skills.  Otherwise, you have to read a lot of blogs and books, seek out experienced mentors or advisors, and ask a lot of questions until you are an expert.  Which takes a lot of time – something no entrepreneur has enough of.

Which is why we launched StartupPlays.com.  The service incorporates concepts, advice, and recommendations from experienced entrepreneurs and packages them into executable, step by step actions that you need to take to nail a part of your business.  Each activity is called a “Play” – “How to pitch a VC Play”, “How to get on TechCrunch Play” – which when combined adds to your “Startup Playbook” of activities that you can execute.  Each Play has three sections:

  1. Brainstorming
    Full of content, videos, presentations that explain the concept and provide a place for you and your team to brainstorm ideas about the Play
  2. Tasks
    A checklist of all the specific activities you need to execute with detailed instructions on how to complete them – which can be assigned to team members with a due date
  3. Files / Templates
    Excel, powerpoint, and document templates that you and your team can collaborate on.

For example, say you wanted help Incorporating your business.  In that play there is brainstorming sections with information on choosing a name, selecting a location (federal or provincial, Canada or US), and deciding on structure (LLP, INC).  There are tasks for each of the brainstorming activities as well as filling out documents (which are in the files section), doing a name search, registering the company, and a bunch more very specific things that you can check off as you complete “the Play”.

Each Play tells you how long it should take to run, how many people you should need, and level of experience needed to execute.  The cost for a play is between free and $99.

What’s cool about it is that it can save entrepreneurs days or weeks of trying to figure this stuff out on their own, when so many other entrepreneurs have already done it.

The sites currently in closed beta.  Check it out at http://startupplays.com

sphome

By Scott Annan

Are you going to GROW?

A question every entrepreneur should be asking themselves.

Well next week is the GROW conference in Vancouver, which brings together inspiring successful entrepreneurs and – more importantly? – investors who are writing checks to Canadian entrepreneurs.

If you’re trying to build the next world class startup and are looking to grow – through connections or funding, I highly recommend you go.

Oh, and if you’re already going, please leave a comment so that we can hook up while we’re there and promote each other’s companies!

By Scott Annan

Mercury Launch: Ottawa Accelerator for Startups

I’m really excited to announce the launch of a new accelerator in Ottawa for web and mobile startups called Mercury Launch.

As I’ve often said, Ottawa has world class talent and the purpose of Mercury Launch is to rally the startup community to support entrepreneurs, build some world-class companies, and start celebrating our successes.

The program is similar to Y Combinator, TechStars, Founder Fuel, and Grow Labs with one notable exception.  You have to be in Ottawa to participate.  We’ve long been an exporter of talent in Ottawa.  It’s time we start helping ourselves and to put Ottawa on the map for the amazing companies that we build!

We will be selecting 4-5 companies to start a 3-month program beginning in September, 2011.  Each company will receive $25,000 in seed funding, a kick-ass office space (working with people like you who want to change the world), access to amazing mentors and key customers, and help launching your product on a global stage.

We’re actively seeking seasoned mentors and brilliant startups – so please check out the site, tell your friends, and be part of an exciting new chapter of the Ottawa startup scene!

We will be releasing additional information over the next couple of weeks including our all-star list of advisors, mentors, funders, and first class of startups!  You can follow the progress through our new twitter account here.

(ps. Huge cred to Robert Saric and the WhyHire.me team for building the new website.  Thanks Rob!!!)

By Scott Annan

Ruby on Rails CTO position at Network Hippo

We’re aggressively seeking a senior Ruby on Rails visionary to lead the charge at Network Hippo – an awesome product that changes how people connect and manage their relationships.  You may have heard or read about us on TechCrunch, VentureBeat, TechVibes, or This Week in Startups, but you should contact us to hear the story first hand and how together we can help create a new vibrant market.

More details below, but for the skinny, contact us at work@mercurygrove.com.

MERCURY-NINJA

By Scott Annan