Category: entrepreneurship


Startup Drinks – May 27, 2009

It’s great to see so many startup enthusiasts out in force and we’re set to do it all again, as we do on the last Wednesday of every month. You are most welcome to bring friends and colleagues. We’ve been seeing 60+ people through the doors and I would love to keep the pace!

Let the drinks and networking begin at Brutopia this Wednesday, 27 May from 5:30pm until whenever.

You can register soon at techentreprise! Techentreprise helps you to connect with the people you meet and even post your own items.  But wait, there’s more! You also get a gorgeous name tag on the night and satisfaction of knowing that you’re helping us to plan the best event possible.


Project Olympus: A University Incubator That Works

It’s rare that I come across a tech incubator that can claim any more success than the square footage they’ve rented out. It’s not that incubators can’t work, it’s that most confuse office space with synergy. Others try to do too much and end up competing with the entrepreneurial ecosystem around them, e.g. by bulking up on paid advisors and other “experts”.

Given my bias, I was pleasantly surprised to meet with Dr. Lenore Blum

, founder of Project Olympus, a two-year old incubator based out of Carnegie Mellon University in Pittsburgh. With a shoestring budget that would make certain government funded incubators blush, Dr. Blum has created a model that will be of interest to anyone trying to figure out how to better commercialize university research.

Here are some key facts about Project Olympus:

Two things stand out as key to Olympus’ early success:

PROBES (Problem Oriented Explorations)

Probes are deep explorations into technologies and their potential as new ventures. Entrepreneurs work with the Project Olympus team as well as its volunteer Advisory Cabinet (which I’m very please to be a part of) to develop avenues of commercialization for the technology as well as to give entrepreneurs hands-on practical training. What impresses me about this method is that it focuses on hands-on ideation rather than business plan writing. The sooner entrepreneurs work with other people and get their feedback the better the chance of success. Regular “show and tell” sessions ensure that entrepreneurs get feedback early and often.

Integration with the Tech Ecosystem

Knowing where an incubator starts and ends is something that many incubators have struggled with. An incubator can’t duplicate or replace an entire ecosystem so “playing well with others” is very important. As the following (somewhat complicated!) diagram shows, Project Olympus has a very clear idea of where they fit. They have one foot in university research labs and the other in the area just before seed funding. This is the perfect spot for a university incubator to occupy because they are increasing the number of entrepreneurs entering the ecosystem (i.e. increasing the size of the funnel at the top).

(click to enlarge)

Once projects graduate from Olympus there are other organizations to pick them up, including Idea Foundry (a non-profit investor and incubator), Innovation Works

(a state-run seed fund and support organization), The Tech Collaborative (a non-profit tech economic development org) as well as local VCs such as Meakem Becker.

Overall, this is a great example of the many pieces at play in a vibrant tech ecosystem, and a rare dose of good judgement for an incubator such as Olympus to find its ideal spot. When the ecosystem works it not only creates great companies but can build and support local communities.

I think universities, especially those outside of Silicon Valley and Boston, could learn a great deal from Project Olympus. I also think this is an important model to study for any city trying to build a functioning tech ecosystem.

What do you think? Would this model work in other universities and communities?


Business Planning Without Business Plans

I recently ran a couple of business planning seminars at the 5th Annual Inventing the Future Conference put on by Young Inventors

. Since it was a no Powerpoint affair (yeah!) I have no slides to share but here is a quick summary:

Business Plans DO NOT EQUAL Business Planning

By The Scott (Creative Commons)

By The Scott (Creative Commons)

It’s amazing how much stock we put in business plans considering they are works of fiction. Few startups really know their precise target market, product, pricing or cost structure. How could they? I guess writing a business plan is a good exercise in research and discipline but only if it doesn’t distract you from real business planning. My personal favorite is figuring out the size of a market. Any time there is 3rd party research on market size your product is probably too late. You can’t really size a market you’re creating from scratch so don’t sweat the details. Just show an intelligent attempt and that will be impressive enough. A recent WSJ article claims that Business Plans Don’t Matter to VCs (though not all agree).

All Customers Are Not Created Equal

There’s not much I can write about targeting specific customers that hasn’t been covered by Geoffrey A. Moore in Crossing the Chasm. If you haven’t read it please stop reading this blog and buy the book! If you have, a re-read will remind you how it still holds true in so many cases. Startups should realize that there is no such thing as a generic customer. When you’re planning, it’s important to find a niche where you can find customers with specific pain points. Even within this niche you have to figure out how to target early adopters, i.e. people who are willing to take a risk on a startup. Targeting the early majority (i.e. more practically-minded people who need proof before they buy) is a waste of time until you have bona fides with early adopters.

From Wikimedia Commons

From Wikimedia Commons

Real-world planning tip: Create fictional caricatures of your customers (e.g. “Joe the plumber”, or more precisely “Joe the small residential plumber looking for ways to level the playing field against bigger rivals”). You should have one caricature for each of your customer types. Then keep these ‘people’ in mind every time you make a strategic decision in your company.

Find The Value

Business plans make us believe that commercializing new products is a linear progress of steps leading outwards from the original idea. Reality is a lot less linear. Sure you may have a breakthrough technology or a wonderful idea and have a great plan to push it to market, but it has to pass the “Who Cares?” test first. It’s easy to convince yourself that people (especially generic people…) will buy your product. It’s a lot harder to go out and talk to them. I always ask entrepreneurs if they’ve talked to 100 prospective customers of their products. This actually takes less time than writing a business plan!

Real-world planning tip: Get to the core of your idea by figuring out if you have a vitamin or a painkiller. The good news is that this early in the game it’s not expensive to start over.

Real-world planning tip: Since Frederick Winslow Taylor invented time and motion studies people have been measuring and analyzing user behavior. Though I’m not recommending startups take up cameras and stopwatches, I am recommending you quantify the value you purportedly add. Think your solution saves time? Detail exactly how much time, in minutes or seconds. This presumes you know what your customers were doing before they bought your product. Once you have a convincing argument bring it to a customer and try to convince them. Then on to 99 more.

Write Once, Don’t-Survive-Battlefield Everywhere

To summarize, I’m not saying that business plans are evil. Sometimes it’s good for entrepreneurs to work out ideas on paper before committing time and capital to them. Other times you have no choice, e.g. for banks or VCs. But don’t confuse writing a plan with real business planning. A plan is something you write, print, file away and celebrate with a pint. Business planning is a continuous discpline you’ll use throughout the life of your business.


Students Invent the Future at Young Inventors Conference

Nobody needs to be reminded how important students are to our startup ecosystem. I started my first Web consulting company in the McGill Music computer lab (which was probably against the rules!) along with two friends who were also students. Yet most universities privately admit they’re not doing a great job turning research projects into commercial products or students into CEOs.

It always surprises me that we see so few students at startup events. There are some but just not very many. At ConnectMcGill, a recent student event in Montreal, most students had never heard of the meetups, mixers and startups surrounding them. We need to do something about this!

One group that’s actively helping young entrepreneurs and inventors is Young Inventors International. Founded by Anne Swift, YII’s mission is…

…to work with leading universities, organizations, and entrepreneurs around the world to educate student inventors and entrepreneurs on how to create new ventures and social enterprises, build intellectual property portfolios, and acquire transferable professional skills. With more than 2,000 members who own almost 700 patented and patent-pending technologies, YII is the leading not-for-profit organization providing a comprehensive network for education and skill training specifically for student innovators and entrepreneurs in North America.

I ran a business planning session at their 5th annual Inventing the Future conference held recently in Pittsburgh at Carnegie-Mellon University. 120 students took part in a gruelling (ok, probably not that gruelling) “commercialisation marathon” that was kicked off by Regis McKenna of Kleiner Perkins fame. You can see some pictures and videos on the YII blog.

One of the highlights for me was something called BrainBuzz(tm) which was a 3-hour intensive brainstorming session. Small teams were formed and each tackled problems e.g. how to design a more effective passive solar energy collector or how to market a dancing robot (click the link, trust me). What’s amazing is the quality of ideas that flow, even from people without training in a particular field. BrainBuzz not only gives students confidence in their ideas but gives them a taste of the idea generation “buzz” that all startup entrepreneurs feel. That’s one way to get them hooked on becoming entrepreneurs.

If you are (or know) a student thinking about becoming an entrepreneur, I highly recommend you join Young Inventors and get involved. You’ll be joining a community already over 2000 strong, and growing.


Students to Startups: A great kick-off event at McGill

ConnectMcGill, the inaugural tech entrepreneurship event at McGill was a huge success. Two computer science students, Nicolae Rusan and Ladan Mahabadi, had the idea of organizing an on-campus meetup for students interested in entrepreneurship. I was immediately interested in getting involved, especially to try to help bring people from the startup scene to mingle with students. We had over 80 participants and a lot of enthusiasm for making this a regular event.

James Duncan

(from Joyent) and I gave brief presentations on getting started in entrepreneurship but the real highlight of the event was seeing students mingling with Montreal startup folks. I believe that one of the most important things you can do to encourage students to become entrepreneurs is to give them access to people who are actually doing it. Half an hour spent chatting with a startup CEO is worth 40 hours plugging away at a business plan, in my opinion.

We’ll be organizing our next event with the involvement of students from the other Montreal universities as well. If you are a student, a startup, an investor or a mentor, contact me

and we’ll get you involved.


Reminder: Startup Drinks this Wednesday!

Mark it in your calendar folks:  Startup Drinks month at Brutopia (Crescent St, just south of Ste-Catherine), on March 25 from 5:30pm.  Look forward to seeing you there!

Register now at TechEntreprise!


March Startup Drinks – Spring Into Action!

Startup Drinks is back this month at Brutopia (Crescent St, just south of Ste-Catherine), on March 25 from 5:30pm.  Happy hour prices will be in effect and maybe – just maybe – we can get a taste of their terasse.

There are no presentations to distract people from making their own fun.   If you think you’ve got a good idea, this is the place to find a sounding board.  If you want to get a taste of the tech community generally and the startup community specifically, this is your spot.  Everyone is welcome!

Registrations are open soon at TechEntreprise!

Hope to see you there,



Join a startup! Launching Flow’s Startup Jobs site

It’s a reminder of the great little innovation bubble we live in that we always hear about startups trying to grow while the rest of the business world seems to be shrinking. Sure, startups are affected by the recession but that doesn’t mean firing is a bigger concern than hiring. Just the opposite.

We’ve just launched a new section of our site where we’ll be highlighting jobs at great startups in the Flow Ventures network (our investments, our clients and our friends). We’ll also be promoting entrepreneurs who are looking to find co-founders. If you’re looking for co-founders (no matter where you are), send us a bit about yourself and who you’re looking for. We’ll help get the word out.

Take a look:

by kandyjaxx (Creative Commons)

by kandyjaxx (Creative Commons)

At Flow Ventures, we have the privilege of working with startups from the idea stage to periods of rapid growth. One thing experienced entrepreneurs know is that there isn’t anything more important than building a great team. But it’s not easy. You have to find people with a combination of skill, passion (bordering on fanaticism), and humor. When you’re trying to find co-founders, you need people who understand that your project is a long-term commitment.

We’re launching with postings for a senior C# Web developer, two front-end developers (here and here), a project manager, and a PHP developer/founder for a file-sharing startup. Stay tuned for more.


Skills Entrepreneurs Lack: Part 2 – Negotiating

As Monty Python taught us in the Life of Brian

, entrepreneurs really have no choice but to negotiate. You’ll negotiate how much equity to give your partners, your pre-money valuation, the salary of your first employee, the deal terms of a strategic sale, etc. But most people are terrible negotiators. Recognize yourself in any of the following?

  • The Robot – You state your position and keep repeating it until you get what you want or walk away
  • Mr. Nice Guy – People love negotiating with you, mostly because they always win
  • Type A – You win the negotiations but lose the relationship

Learning effective negotiating skills will allow you to create true win-win scenarios. The best book I’ve ever come across about negotiations is called Getting to Yes

. It’s $10, will take you less than an afternoon to read and is considered the classic text on how to negotiate. There are few books that will do more to improve your skills. The Wikipedia entry has a great summary of the five key points (but please read the book):

  1. Don’t bargain over positions – Unless you’re buying a house, the traditional offer-counter offer style of negotiating doesn’t work.
  2. Separate people from the problem – Don’t let emotions and styles ruin your negotiation.
  3. Focus on interests – Figure out what people really want, there’s often overlap with what you want.
  4. Invent options for mutual gain – Make sure the other side wins as well.
  5. Insist on using objective criteria – De-personalize negotiations using facts and figures

If reading Getting to Yes makes you realize that negotiating is not the same as improvising, then it’ll be the best $10 you ever spent.

Variaciones 95 (Diarios de Pániker 2)

Skills Entrepreneurs Lack: Part 1 – Accounting

I’ve had a lot of thought-provoking conversations lately about how to develop the skills entrepreneurs need to be successful. Although building a successful startup depends on luck, timing and passion, it also depends on skill.

#1 on my list is accounting (finance is also important but it’s further down the list). If you’re a founder/CEO you should never leave “the numbers” to your accountant. You don’t need to master double-entry bookkeeping by hand (unless you want to impress a very select group of people) but you need to grasp the fundamentals. For example:

Jim Frazier (Creative Commons)

Jim Frazier (Creative Commons)

  • The difference between profit and cash flow (hint: profitable companies can and do go bankrupt because you pay rent with cash, not profit)
  • Budgeting and forecasting (i.e. using accounting to gain control your business)
  • The balance sheet (i.e. knowing whether you or your creditors own your business)

If you think this should be the domain of your CFO or accountant, you’re mistaken. Running a business without a good grasp of accounting means you’re flying blind. You won’t know where you’re leaking cash or how to control your expenses. You won’t recognize which products or services make or lose money. You’ll risk running out of money even when things are running smoothly.

Here are 3 suggestions on how you can improve your accounting skills:

  1. Take an entry-level accounting course at a local business school or an online school. You may not enjoy learning about debits and credits but a semester’s worth of evenings and weekends will buy you a true understanding of the relationship between money and your business.
  2. If you’re an autodidact, work your way through books like Accounting for Non-Accountants, The 36-Hour Accounting Course, or for true beginners, The Accounting Game. Don’t try this at home if you aren’t a self-studier. Sleepiness will ensue.
  3. Do your own accounting (under the supervision of a chartered accountant) and prepare your own financial statements. You should be able to make entries, reconcile your bank statements, and make sense of your income statement, cash flow statement and balance sheet, at least for a few months. This is easy with software like Quickbooks and Simply Accounting but you’ll still be learning the basics while gaining a new found respect for your bookkeeper.

The language of accounting is used whenever you raise money, get a bank loan, communicate with your Board, or measure your performance. It’s one of the fundamental skills of being a CEO.