Intranets are supposed to be a source of information that employees can use to be more effective in their jobs. They’re supposed to be but the fact is, intranets tend to be unloved and ignored. Socialcast has pulled together an infographic that demonstrates how intranets are failing to live up to their promise in most environments.
Canadian Start-Up Accelerators
I could write an entire chapter on the myriad accelerator programs (government and private) that have evolved and their relative effectiveness, or not. But for simplicity I am going to use incubator and accelerator interchangeably here and use the following based on the Wikipedia definition:
Business incubators are programs designed to accelerate the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts. Incubators vary in the way they deliver their services, in their organizational structure, and in the types of clients they serve. Many successful incubators are funded by or work in partnership with traditional venture capital firms that in return get a first look at their most promising companies.
These programs have been around since the late 1950s and have come and gone with various levels of success with each business cycle. We are undoubtedly in the middle of an accelerator renaissance that hasn’t been seen since the late ‘90s tech bubble.
Just three summers ago, three 20-something co-founders – Brian Chesky, Joe Gebbia and Nathan Blecharczyk – enrolled in the Y Combinator program after many venture capitalists passed on their idea to allow people to rent out their beds to others. That idea was Airbnb.
Airbnb became one of a string of successful startups that have emerged from accelerators and incubators and have gone on to either raise tens, or hundreds, of millions of dollars in funding, or be acquired at blockbuster valuations. Y combinatory examples alone include Scribd, reddit, Airbnb, Dropbox, Disqus, and Posterous.
Other U.S. based accelerators like Tech Stars and 500 Start-ups have equally exciting stories. Canada has somewhat lagged behind the resurgence in the U.S. but has come on strong in the last three years. Serial entrepreneur and blogger David Crow, in a recent post, highlighted the fact that just two years ago you would be hard pressed to find an active incubator in Canada. Yet in the last two years not less than 18 programs, including GrowLab, Founder Fuel, FlightPath, YearOneLabs, Extreme University and Mantella Ventures, have emerged across the country.
Howard Gwin, entrepreneur turned investor and now partner at Bridgescale, states that Canada lacks two major components that grow large outcomes: a deep bench of game-changing mentor skills and nowhere nearly enough venture capital. I will add a third major component: well defined private and public roles and partnerships to ensure we effectively support an efficient startup ecosystem.
The first critical component seems to be addressed with the new cohort of accelerators like GrowLab, Real Ventures and Extreme University. Each seems to have the right industry focus, management and director profiles to offer the mentoring skills and networks to help. Further, mentors from previously successful startups, industry veterans and academia are all vying to join these programs, providing a uniquely powerful syndicate for these startups because nobody wants to miss out on the next big idea.
Finding a solution to the second critical component, the lack of venture capital dollars, is a bigger challenge. I’m happy to see that several of the new accelerator programs are being supported financially by experienced VCs. With that assistance and level of involvement perhaps the odds of success in this generation of programs will improve.
Just recently, VC funds such as BlackBerry Partners Fund, iNovia Capital, Rho Canada, Mohr Davidow Ventures, Growth Works, BDC and Yaletown Venture Partners got behind the financing and launch of Vancouver accelerator GrowLab. Better accelerator programs may support a better set of high potential companies that ultimately will get the attention, funding and outcomes that we often see south of the border. Returns and only returns will lead to a restoration of confidence in Canadian VC funds as a good asset class and deserving of Global LP interest.
The third critical component is long-term investment by the public and private sector in more than dialogue and understanding, but in actually defining roles to play as the industry evolves. As an industry we need to define what works and what doesn’t so the market becomes conducive to attracting entrepreneurs and growing the best startups globally.
At least one view suggests that Canada needs to learn from global experience and keep the programs in the private sector. Josh Lerner, Jacob H. Schiff professor of investment banking at Harvard Business School, has pointed out that incubators predated the dot-com boom but also contributed to its excesses. Lerner also criticizes governments’ attempts, through incubators and other means, to stimulate startup businesses. Lerner writes that for each government-backed success, from Silicon Valley to Singapore and Bangalore, “there have been dozens, even hundreds, of failures, where substantial public expenditures bore no fruit.”
Amar Varma from Extreme Venture Partners also suggests that Canadian programs can be more successful when privately run, and points to their success: “With the first $1 million deployed by Extreme Venture Partners, over 150 knowledge-based industry jobs were created for people in their twenties. These are not “fake” jobs the government creates by re-paving highways to show job growth, but cutting edge “careers” that will enable Canada to be a globally competitive market in the knowledge driven economy five, 10, 25 years from now. Arguably, these folks in their twenties may work their entire career without the requirement of formal retraining like those in the manufacturing industry either have gone or are about to go through.”
Having said that, Varma also believes that government has a very important role and should “continue to focus on the programs that are working well, including SR&ED, IRAP, FedDev grants, and, if anything, sharpen the administration of those programs and double the pools of capital to further support the ecosystem.”
Michael Tippett, general manager of the newly launched accelerator GrowLab, believes there is a real opportunity to capitalize on the resurgence of these programs and to position Canada as a long-term leader in the accelerator ecosystem. The Canadian supply and demand is completely unbalanced, says Tippett. “The supply of super-talented entrepreneurs that want the mentorship and support from our program is very high. In a very short period of time, GrowLab received over 300 applications for their first cohort, exceeding both the number and quality expectations.”
Tippet believes that while Canadian accelerators are in cooperation with one another, there are pressing issues they can all work on together to ensure we do not lose these programs at the next downturn.
If Canada is going to create accelerator programs with a history of success like the U.S., then we need to attract the best and brightest entrepreneurs globally. “Canada has great brand receptivity for immigrant entrepreneurs from across the world. Collectively, we should work on an innovation visa to further attract the best global minds while reducing the friction of getting here. [This] could go a long way in creating a sustainable technology landscape,” says Tippet. To that fact, GrowLab and its founders are big supporters of the Startup Visa Canada initiative.
Some suggest that the recent accelerator activity is just a reflection of another tech bubble and that the programs will simply disappear again with the next downturn. While the jury is still out on this – and probably will be for the next three years – I’m optimistic that this is not the case.
What is different this time round? The accelerator programs largely understand that good ideas and shared office space are now commodities and that it is the acceleration of great ideas by mentorship and networks that will generate the next success stories. Domestic and U.S. VCs also seem to “get it” when it comes to Canadian seed deals and are putting money and effort into cultivating the home runs out of these programs.
Last, but not least, the teams running these accelerators today seem to have a true vision of how private and public roles can come together to create a productive startup ecosystem that can compete and win on a global scale.
