Blogmatic

I had the opportunity to attend a session this morning at City Hall regarding Innovation and the knowledge based sector in Ottawa. The session was well attended and there were probably 30ish folks representing a number of different groups around the table doing a SWOT (Strength, Weaknesses, Opportunities and Threats) exercise. There was one gentlemen (whose name I didn’t catch) sitting at the end of the table that made an interesting comment. It went something like this;

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“I would rather have one well funded organization doing ED than spreading things around and giving everyone peanut butter.”

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Here are my thoughts on peanut butter. First of all I like peanut butter. Peanut butter has plenty of protein which is great for building muscle. Peanut butter is relatively inexpensive, a jar can make a lot of sandwiches and if times are tough peanut butter can go a long way. I like peanut butter and personally my preference would be to have an equitable system where everyone gets to share.

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Interesting to see what comes out of this SWOT review. In a recession we need to be thrifty and peanut butter for everyone sounds far more appealing than more Twinkies and cupcakes for the pudgy kid.

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Cheers,
Ian Graham

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It is not the strongest of the species that survive,
nor the most intelligent,
but the ones most responsive to change.

— Charles Darwin

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There is a very cool idea called Vencorp being championed by Sean Wise of Wise Mentor Capital. I had previously seen reference to Vencorp on Startup North and there is a recent article in Profit Magazine that gives a more detailed overview of the venture.

What I like about this approach to funding start-ups is that it takes into consideration that starting a business today is less capital intensive and the fund also leverages the wisdom of crowds to determine which companies receive funding. Rather than have a fixed board or serial entrepreneur judging the merits of a proposal the Vencorp community vote on a monthly basis to determine which start-ups are fund worthy. To become a member of the Vencorp community all one has to do is sign up and membership is free. There are incentives and points awarded to community members based on their track record of contribution and success. Community members can use points for various items  within the Vencorp site.

I really like this idea and wish them success. This is a very timely initiative that addresses the needs of the start-up community and provides a merit based system for awards. Vencorp is providing an innovative service to entrepreneurs, start-ups and the community at large. Perhaps a matching contribution from the provincial government could be leveraged to deliver some much needed value to the start-up community. Personally I would much rather see all levels of government supporting initiatives like Vencorp with matching funds than building bureacratic boondoggles.

Cheers,
Ian Graham

PS, also posted on TCF blog but thought this is such a great idea I would double dip.

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Had an interesting conversation with a local entrepreneur this morning. One topic of keen personal interest that came up was how outdated the current VC funding model has become and is it in fact an anachronism to a bye gone time, much like the Jurassic period is to the dinosaur. The funding environment has changed significantly since the bubble burst; however, the VC funding model has remained relatively, at least from my perspective, the same. My simplistic take is that the Jurassic VC funding model (Series A to X) is built on funding companies that will reach the $100M revenue in five years homerun.

The problem with this model is that the number of companies capable of reaching $100M in revenue within 5 years is miniscule. Of the 300 – 400 companies I have meet in the past two years there is maybe one that would be $100M in 5 years. This adds some more fodder to the Funding Paradox series of posts. I have, however, met plenty of companies that would and/or could be $20M to $50M companies within 5 – 7 years. Therefore alternatives to the VC funding model would seem to make a whole lot of sense if you are serious about building a strong local economy. I have chatted about this in previous posts and will bring it up again; Mini-Financing makes a whole lot of sense.

What is Mini-Financing?

Mini-Financing is akin to micro-financing with a bigger payload suitable to starting a team based business. The loans would ideally be a convertible debenture in the $250k to $500k range targeting growth companies. The funds would be managed by a volunteer board that made selections based on merit. More dreaming and pondering to come soon.

Cheers,
Ian Graham

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In building any business you want to think about how to develop your competitive advantage. Many businesses particularly knowledge based tend to use technology as the key differentiator. Basically when you are building your business you will want to think of how to raise the bar and make it more challenging for competitors to enter the market. If you are building a business where there are no barriers to entry or few low effort barriers to entry then you may want to think about how defensible your business idea is and how you will be able to create a sustainable business in the face of competition.

There are a few key competitive advantage builders that anyone can apply to any business.  Here is my short list of ways to build competitive advantage.

Hard work
Relationships
Intelligence

I will dedicate a post to each of these topics over the next week or two.

Cheers,
Ian Graham

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Carleton University is presenting the second  in the TIM Lecture Series to promote the transfer of knowledge from university research to technology company executives and entrepreneurs.
 
Mr. Douglas Levin, President and CEO of Black Duck Software, will deliver the next lecture of the TIM Lecture Series from 4 to 6 p.m. on Wednesday April 16th in room 3275 of the Mackenzie Building (Engineering building), Carleton University, Ottawa. 
 
If you will attend the April 16 lecture, please add your name to the list which is at:

http://www.talentfirstnetwork.org/wiki/index.php?title=TIM_Lecture_Series 
 
To add your name, you need to register first.  Before you save the page with your name on it you need to perform the computation on the top of the screen.
 
Hope to see you on Wednesday April 16th.  Please check out the active TIM community and the other lectures scheduled for 2008.

cheers,

Ian Graham

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My Grandfather owned a restaurant in Saint John, New Brunswick called Graham’s Restaurant.  When we used to visit Saint John my cousin and I would work in the restaurant washing dishes for the princely sum of $2 per day which at the time was a lot of money when you consider that; this would buy several comic books or plenty of candy or a water gun with change left over.

I remember one day “Bumpy” my grandfather took me with him to visit with his suppliers. We stopped in at one produce supplier that had provided some sub-standard carrots (IIRC) to the restaurant. My grandfather had a rather heated discussion with this particular vendor and after sometime wrung a concession out of the produce supplier. After the discussion Bumpy and I got back in the car and he said to me “you need to keep your suppliers honest”. For whatever reason these words of wisdom have been etched in my memory.

As I go about setting up TheCodeFactory infrastructure I am finding that, yes in fact you do want to keep your suppliers honest. The question is how you do this in a constructive way. First of all I think letting your suppliers know that there is competition is a good thing. Make sure that your requirements are well documented and clearly understood by all of the suppliers bidding on a particular project. If you are not clear about what you want you will receive different bids that are not an apple to apple comparison, more of apples to orange. Be specific. Be prepared to negotiate. As Canadians we are conditioned to pay the price that is on the tag, however, there is always room for negotiations.

Cheers,
Ian Graham

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Are entrepreneurs downright stupid or perhaps stupid passionate? Stupid passionate is being so passionate about bringing their idea or product that the obstacles that seem insurmountable to any other rationale person are merely a speed bump to the stupefied entrepreneur.  Stupid passion gives that numbness and drive to get past the obstacle.

Stupid passion is a desire to “gitter done” that is virtually blind to anything that gets in the way of the goal. Where would the world be if Wilber and Orville Wright had listened to their contemporaries? What if someone had said to John F. Kennedy it is impossible to send a man to the moon? That dogged determination that characterizes stupid passion is the key.

Entrepreneurs that exhibit stupid passion are the ones that facilitate real change and revolutionary new developments. Stupid passionate entrepreneurs have no common sense and they tend to be unreasonable. Stupid passionate entrepreneurs are also the ones that change the world.

Cheers,
Ian Graham

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Something’s missing in Canada’s tech community - the chance to informally interact with VCs, learn about what it is exactly that they do and how the funding process works.

The VC Roundtable series aims to fill this gap, by hosting small (free!) get togethers across Canada’s major cities where Rick Segal, JLA Ventures Partner and VC blogger (http://ricksegal.typepad.com) will walk through what getting involved with VCs is all about.

Rick Segal will be hosting the Ottawa edition of the VC travelling roundtable on April 16th from 11am to 1pm at everyones favorite pub TheClockTower at 575 Bank Street. If you would like to attend sign up on the link below.

http://ottawa-vcroundtable.eventbrite.com/

cheers,
Ian Graham

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Yet another Blogmatic double-double coupe (see my about page for more on double-double). I believe I am the first person to coin the phrase Guerrilla NDA and just did a Google search and nothing came up.
What is a Guerrilla NDA?

A Guerrilla NDA is a no cost common sense sort of NDA that a start-up of limited financial means can easily implement. The bonus is that the probability of the person you are going to speak with whether and investor or partner could easily agree to the terms. If they don’t agree I would be concerned.

How does it work?
When someone wants to see your business plan offer them a hard copy and send them an email stating that:
- The information is for their personal use only
- The business plan is not to be electronically copied in any manner (scan, photocopy, fax, …)
- The plan will be returned to you on request

Ask for a reply that they acknowledge and agree to these terms. These are essentially the conditions under which you have provided them with your business plan. While this is not bullet proof it is a step in the right direction in terms of protecting your idea and business plan. When in doubt consult legal advice.

Cheers,
Ian Graham

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