Author Archive

Format changes

March 29, 2008

You might have noticed some format changes to the Startups Forum.

That’s ’cause we have switched ‘blog providers. When we started the forum, we weren’t quite sure of the exact shape it would take. We wanted a place where entrepreneurs, investors, and coaches could exchange comments and ideas about what’s happening on the Calgary Tech Startup scene. In particular, we wanted the forum to be a collection of resources that’d help take some of the bumps out of the startup road.

Once we had a few posts under our belt, we realize we’d chosen the wrong feature set. We weren’t stressed: this happens all the time … with blog hosts, sales VPs, rottweilers in your apartment, and jeans that don’t really fit … but we needed to make an adjustment.

So we have migrated to a new blogging host. We brought all the old material with us, and we are settled into our new toolset. But part of the consequence of the move is that the authorship of some of our historical posts is a bit less clear. As we moved the old posts over, we re-posted them, but did so from our admin account. Each original author has a properly conspicuous by-line, but the posts all look as though they had come from a single account … the account we used to do the transfer. But from this point on, everything should look good.

Thanks, BTW, to CTI’s Jesse Hollis. He engineered the entire move, and executed the whole thing without a single bump. The guy’s massively competent: if it were up to the rest of us, we’d still be figuring out how to log in, and nothing would have happened.

One other thing: the blogging service we’re using is much more powerful, but it’s also pretty popular … which means it’s subject to a lot of blogspam and cross-postings. We’ll do our best to keep these under control and weed them out. If you post a comment and it doesn’t show up, that’s ’cause we have introduced an editorial approval step that will delay things a bit, but help keep annoying blurbs about Nigerian business opportunities and body-part enhancement out of the way. Or mostly out of the way, anyway.

So, now, on with the forum.

–Kelly

Startup Money Tricks #1: Cash on the Table

March 10, 2008
We’re going to be doing a finance series over the next few weeks titled “Startup Money Tricks“.

This is based on an observation from my tenure as EIR at Calgary technologies: at least 80% of startups have ignored significant untapped sources of cash when they start to look for equity financing.

Here are 10 reasons to look at as much alternative financing as you can before you go for venture money:

  1. Tactical Advantage: The more your company is worth when you start to talk to angels and venture capitalists, the better you do in negotiations. Every cent of cash you can bring in before negotiations improves your bargaining position.
  2. Better Investors: Sad but true: the unusual investor who will give you large amounts of cash early isn’t always the best partner for you. Of course, good investors will be a superb asset to you, and will bring much more than money to the table. But, with some conspicuous exceptions, the more you can validate the fundamental hypothesis at the core of your business, the better investors you’ll be able to attract. Many companies who attract very early investors live to regret it: the investors often wind up with board seats they’ve bought for a pittance, and they throw their weight around in ill-considered ways that create all kinds of problems. Often, early investors are poor investors because they don’t have the same skills that other, more-conservative investors exercise. The term “cram” was coined almost exclusively to describe how later investors have to deal with these rapid shareholders. Of course, your scheme might be SO interesting that you can interest a visionary, experienced investor in your idea at an early stage. But, by virtue of their very experience, they’ll “hose you”: see number 1.
  3. Sign of Competence: If you’ve been careful and ingenious in the ways you’ve financed the early stages of your venture, you signal to potential investors that you are, as my great-granny would put it, “Canny lads and lasses”. But if your potential partners see you have left promising sources of cash untapped, they’ll look at you with those squinty VC-eyes, and you’ll know you’re toast. Gives me shivers just thinking about it.
  4. Conservation of Management Time: The hunt for equity financing is often a huge time suck. If you want Angel or VC financing, you’re going to turn your management team into a road show: you’ll be going from city to city with your laptop and projector in hand to find money. And, once you do find it, you’ll be put through the time-consuming and expensive dual wringers of negotiation and due diligence. It’s not at all uncommon to see newly-funded companies who have lost their market advantage because they didn’t have the necessary execution power during the months they needed to get equity financing.
  5. Clarity of Concept Non-equity financing is often much easier to get, but it don’t, as they say, come easy. Just as you’ll need a business plan, some financial projections, and a presentation to talk to Angels and VCs, you’ll probably need them to secure most other forms of financing … you’ll even need them for some grants and government loans. There’s no faster way to turn a VC off than to put green, half-formed concepts and childish, badly-written documents on the desk. Look at the prep work for early, non-equity forms of financing as proving grounds in which you will refine your concept and message in front of less-particular but still-sophisticated audiences.
  6. Stealth: Not everybody has to worry about this one: VC money and Angel money can be noisy money. The VCs and the Angels aren’t noisy themselves: but the very act of trotting about with PPTs and business plans puts a buzz on the street. Buzz doesn’t always work to your advantage. While you can raise equity cash quietly, word eventually gets out about which companies want to raise money for which ideas. Other forms of financing can be much, much more private and more discrete.
  7. Focus and Control: As you move more deeply into equity partnerships with financiers, more people will influence how your company makes decisions. Anyone who has had a startup will tell you that the pre-investor stage is sweet, because you get to focus solely on the customer problem you’re trying to solve. When you can put the entire company in a Mini Cooper and go for Ethiopian at lunch, the firm can behave in a focused, obsessed manner that you’ll grow to miss. (Of course, you may not be able to afford the Ethiopian food when you get there…). Once the authority and control mechanisms of your company are spread throughout a larger group, you’ll spend more time dealing with that group and less with your problem domain … no matter HOW good the large group is.
  8. Network Growth: If you have a good idea, your network grows as you work on it. Inevitably, during this growth you’ll meet well-connected people who understand your problem set. If you’re lucky, this will lead to quiet introductions to VCs or angels who can see and appreciate what you’re doing … which means you don’t have to put on a road show, distract your management team, and make a whole bunch of indiscrete noise to attract investors. Usually a pretty good idea.
  9. *The “Bootstrap Gambit”: Absolutely the best time to negotiate for funding is when you don’t need it. You’ll get better partners, give away less, and raise more money if you can somehow get your company to the point where customers are giving you money and your basic hypothesis is proven. The best investor pitches contain the sentence “We have a conservative business plan that would allow us to do very well, but we think we can dominate the market almost overnight with your money and connections.”
  10. You’re An Idiot If You Don’t: If non-equity money is relatively easy to get, doesn’t vastly increase your risk, extends your operational capabilities, puts you in a better position in front of VCs, and lets you afford the odd Ethiopian lunch, why wouldn’t you do it?

Next entry: working the government grant structure in Canada.

The Eagle Has Landed

March 5, 2008
I crossed the classic entrepreneur’s divide earlier today. I had been steadily cleaning out my office over the past couple of weeks, knowing the day was drawing near when I would walk out the door, maybe for good. Then, it was announced our work group had been re-organized, a new boss had been hired (about 10 years my junior), our reporting structure had changed, and I knew it was my time to go.

I scraped up all the vacation I had owing to me — six calendar weeks — and with the blessing of my current boss, will spend the time pursuing my life-long dream of a start up. As I said to him “I just can’t shake this feeling that I want to change the world.“ I was somewhat flattered when he seemed a little disappointed, and not really all that surprised when he didn’t try and stop me, either. I think we both knew it had been in the works for a long, long time.

It gives me six weeks to get some traction on prototype development, and maybe even get started on the fund-raising process that I formally started at the Financing Your Vision seminar a little while back. To this point, I have been attempting to keep both my full-time job and the start up plates in the air at the same time. However, it felt as if each day that went by when the start up ideas weren’t moving ahead quickly, was a day when opportunities were slipping away.

I was surprised to find myself feeling a little melancholy — which is not what I expected, at all. I felt I contributed a lot over the course of my eight years with my current employer. As the last couple of hours ticked away, my ego allowed me to believe someone would rush through the door and say they couldn’t live without me. But that visit never came. I sent out a note to my co-workers, put a ‘gone fishin’ sign under my office number, filled out the vacation request, and just walked out the door. If this current chapter of my career really is over, it was a really weird, last day.

At the end of the six weeks, I’ll be at another fork in the road; given one final opportunity to decide which way to go. Return to the Dilbert world of beige cubicles, performance evaluations and office politics, or follow the yellow brick road. However, like a corny commercial that is running on TV at the moment; “Sometimes to move ahead, you have to leave something behind.“ That’s exactly how it felt today. But tomorrow, it’s on to the business of creating value, building brand and becoming the new, new thing.

March 4, 2008 | Unregistered CommenterButzi

The Challenges of Designing Electronics for the Aviation Industry

March 4, 2008
You are probably wondering how a tiny electronics firm from Calgary got involved in designing first class passenger seat systems for the aircraft industry. The short: Timing and luck! Her is a brief history. Back in 1998 I was working with Innovage Microsystems in Calgary who had designed a clip-on microprocessor tester that was used to test the microprocessors while running. A small company, “Boeing” had expressed an interest in the product for testing the multiple processors on their aircraft. In working with Boeing, Innovage learned that a seat manufacturer was building first class lie-flat sleeper seats and had no way of testing the finished seats or the seat electronics. When the controller manufacturer said there was no way to test the seats, Innovage jumped at the opportunity and brought me in as a consultant to design a “test interface box (TIB)”. Within two years, the TIB was installed and flying!

Designing for the airline industry present a whole lot of unique challenges. Software must be carefully monitored using version control and meet DO178-B safety standards. The FAA established DO178-B as the accepted means of certifying all new aviation software. The targeted DO178 certification level is either A, B, C, D, or E. Correspondingly, these DO178-B levels describe the consequences of a potential failure of the software: catastrophic, hazardous-severe, major, minor, or no-effect. The cost to test and certify safety critical software is directly proportional to the level of safety criticality. This can quickly drive you design cost sky high.

Hardware presents similar challenges and must meet the requirements set out by the FAA DO160 specifications. This standard defines a series of minimum standard environmental test conditions and applicable test procedures for airborne equipment. The purpose of these tests is to determine the performance characteristics of airborne equipment in environmental conditions representative of those which may be encountered in airborne operation of the equipment. Temperature, humidity, vibration, lightning and EMI are just a few of the test parameters. Manufacturing must also meet rigorous standards with every part; every resistor, capacitor or screw must be traceable back to the manufacturer.

In the final seat design, wire routing and serviceability of components must also be carefully considered. When an aircraft lands, there is only a 4-hour window to fix or replace faulty components. Electronic systems now have Built-In-Test capability that identifies component failures. This information is passed along to the ground while the aircraft is still in the air so that the maintenance crews have the parts and equipment ready to repair the systems as soon as the aircraft lands.

One of the many challenges of designing systems for aircraft was highlighted during a demonstration of a seat and suite to one of the airline representatives. The suite had been designed for installation on the Airbus A380. The demo was for the installation of the suite on the Boeing 777. The suite included a small closet that opened into the aisle. The airline representative asked if the hinges on the closet door could be switched to the other side to allow for easier access. I thought that this should not be a big issue however it was quickly pointed out that the way the closet door swung into the aisle may impede the exit of passengers in an emergency. The change would have to be carefully reviewed with respect to the location of emergency exits on the different aircraft! This meant new drawings, new approvals and associated costs.

I hope this article has enlightened you on a few of the challenges in designing system for the aviation industry. At least you should have a better understanding why a screwdriver can cost $300!

November 1, 2007 | Unregistered CommenterKen Stewart-Smith

The future of TV

March 4, 2008
Now I’m sure most of you have heard of Joost…the IPTV company making waves over the last several months…but here is something that will make IPTV a true contender to step up and compete with conventional TV. Its called Miro and it goes into its 1.0 public release TODAY! ~KD

http://blogs.business2.com/netly/2007/11/the-future-of-t.html

November 13, 2007 | Unregistered Commenterkraftdinner

Win a MacBook with CIRA!

March 4, 2008
The Canadian Internet Registration Authority (CIRA) wants to hear about how you’re using your .CA domain name and is giving away Apple MacBooks to the five best stories. What do you use your dot-ca domain name for? Your blog, your business, your photos? Complete the contest entry form before this Friday, February 8th and you could win one of five MacBooks. More importantly if you’re a business, your story and website will appear as part of a national campaign to celebrate the registration of the Millionth .CA domain name.

Check out the complete details here:

http://www.techvibes.com/blog/do-you-own-a-ca-domain-name/

KD

February 6, 2008 | Unregistered Commenterkraftdinner

When should a company start blogging?

March 4, 2008
Recently I’ve been talking to a few friends about corporate blogging. And I thought this may make a good blog entry. So here it goes.

My current thinking is that a company should start blogging as soon as it is known to the public (i.e. out of stealth mode) and have insights to share with its customers, potential customers, and the public at large.

Should a company wait for the “perfect moment”, “perfect blog entry”, “perfect …” to start blogging? I don’t think a company should wait as I think Bruce Mau got it right in his An Incomplete Manifesto for Growth,

9. Begin anywhere. John Cage tells us that not knowing where to begin is a common form of paralysis. His advice: begin anywhere.

I don’t think there is a “right way” to corporate blog. There are as many ways to blog as there are different companies, different personalities and personal tastes, preferences, etc. for different blog writers and companies. Ultimately, companies will find their own voices in time. The voice should be identifiable (there has to be a person behind a blog entry, not just the anonymous “corporation”), and this voice has to be real, authentic, and passionate.

Here are some of the corporate blogs that I read. It should come as no surprises that they can be very different from each others,

  1. The Legal Thing – by Mike Dillon (Sun Microsystems’ General Counsel) (first entry – This should be interesting)
  2. KR Connect – by Kevin Roberts (CEO Worldwide of Saatchi & Saatchi) (first entry – One From The Heart)
  3. The Google Official Blog – by various Google executives
  4. OpenSkies – by Dale Moss (Managing Director of OpenSkies, a new British Airways subsidiary flying transatlantic flights) (first entry – It’s official! Project Lauren becomes OpenSkies.)
  5. Photo Matt – by Matt Mullenweg (Founding Developer of WordPress)
  6. on the Java Road – by James Gosling (Father of the Java Programming language)

Start blogging now to share your insights with your customers, potential customers, and the general public at large. It’s not just a blog, it is a conversation.

Begin anywhere.

P.S. I hope you’ve enjoyed and learned something from my first entry at infoport. If not, well, there is always the next blog entry. (smile)

February 7, 2008 | Registered CommenterKempton

Meaningful Play – Akoha

March 4, 2008
Congrats to my friend Austin Hill, as his latest venture Akoha is finally coming out from behind curtain. Also checkout their blog, which is a perfect example of blogging as soon as a company is coming out of stealth mode.

Looking forward to some Play It Forward and Meaningful Play from Akoha. (note: Love these two wonderful catch-phrases. Creative and to-the-point.)

P.S. I am also very much looking forward to Austin’s own blog entries as he has now promised to blog more. Hey Austin, I am going to hold you to that promise. (smile)

February 7, 2008 | Registered CommenterKempton

Telehealth Adoption Could Save $4.2 Billion Annually

March 4, 2008
Wow…no wonder this sector is getting so much media and investor attention!

Here is the link: http://www.citl.org/research/PtoP_Telehealth.htm

The study examined the overall value of three telehealth technology systems: store-and-forward, real-time video, and a hybrid model that combining the first two. The analysis looks at the cost-benefit of using telehealth technologies in four healthcare settings including:

Reducing emergency department transfers
Reducing transfers from correctional facilities to emergency departments and physician offices
Reducing transfers from nursing home facilities to emergency departments and physician offices
Replacing in-person consults with virtual consults
Reducing redundant and unnecessary laboratory tests

CITL projects the hybrid model to be the most cost-effective system of the three technologies. By reducing face-to-face visits and redundant and unnecessary tests alone, the hybrid system can save $3.61 billion annually. In addition, of the 142 million referral visits in the United States each year, a reduction in patient travel from mileage costs alone could save $912 million. Nationally implemented hybrid systems could save $4.28 billion annually.

November 20, 2007 | Unregistered Commenterkraftdinner

Snoring and Sleep Apnea

March 4, 2008
Snoring and sleep apnea are all too common sleep disorders which carry serious medical and social consequences. It is estimated that 30-60% of the adult population over the age of 30 years suffers from “problematic” snoring, with 4-6% of this population being further complicated by obstructive sleep apnea (OSA). OSA is a serious condition in which patients experience partial or complete cessation of breathing during sleep, which leads to reduced blood oxygen levels, sleep fragmentation, excessive daytime sleepiness, heart disease and depression.

Despite its high prevalence and serious medical and social implications, many problematic snorers and OSA patients will not seek diagnosis and treatment of the condition. It is estimated that 2% of patients will seek advice/treatment through sleep specialists or dentists, with the remaining 98% simply ignoring symptoms or seeking over the counter remedies, which lack clinical efficacy and are generally regarded by the medical community as “snake oil”.

What do you do to treat your snoring or sleep apnea condition?

November 20, 2007 | Registered CommenterNancy Markley