An amazing year
2011 was an amazing year – made 10 new investments (most ever!), sold one company (Sparkbuy to Google) and started GrowLab with an exceptional team of co-founders.
But more importantly, it was an amazing year for Canada’s start-up ecosystem – there is a new generation of angels and VC’s emerging in this country, more and more US VC’s are leading large financings rounds in Canadian start-ups, local start-ups are nailing it in SaaS, a few wordclass incubators have sprung up, organizations like the C100 are starting to make a real impact, and we have had a very healthy M&A activity this past year. What we still don’t have – and are probably many years away – are enough anchor companies.
2012 will most likely be a much tougher year for start-ups worldwide. We might have seen the end of the easy access to early-stage money and a recession might be around the corner in Europe and North-America. But despite these short-term challenges, I remain extremely bullish on the opportunities for Internet companies. We are still only at the very beginning of the Internet cycle so keep your heads down, focus on your long-term vision, build product, listen to your customers – and build those missing anchor companies!
Happy holidays to all of you and to an even better 2012!
New investment: Unbounce, A/B testing made super-easy
Image via CrunchBase
Unbounce makes building, publishing and A/B testing of landing pages super-easy. It does not require any IT involvement and puts the marketer into the driver seat. This makes the product so successful and is the basic SaaS value proposition: let the user be the buyer and offer him a risk-free monthly subscription plan.
I have watched the team over the years bootstrapping their business – heads-down building product, listening to customers and building a great reputation in the marketplace. Now they felt it was the right time to raise money to scale the business even faster and they assembled a top notch group of investors led by Mark MacLeod from Real Ventures.
I really hope that many other start-ups look at Unbounce as a role model for their focus on solving a real problem, understanding customer needs and building a great product. Congrats, Unbounce team, well done – excited to be aboard!
P.S.: Funding announcement happened 2 weeks ago but only got around to blogging about it now.
Related articles
- Canada – land of SaaS? (wmediaventures.com)
New investment: Edmodo, social learning network for teachers and students
Image via CrunchBase
Education is – besides health care – one of the verticals with the most amount of opportunity still left in the digital world. And still a lot of innovation in this space in the past few years was rather incremental (e.g. online test prep, language learning) than ground breaking.
Things are starting to change and I was very excited that I got the opportunity earlier this year to invest alongside Union Square Ventures in Edmodo, a social learning network for teachers, students and schools. Edmodo “provides classrooms a safe and easy way to connect and collaborate, offering a real-time platform to exchange ideas, share content, and access homework, grades and school notices”. It has the power to help teachers engage students and allow students to reach their potential.
Education in the digital world feels like the 2nd or 3rd inning of a 9 innings baseball game and there is a realistic chance that we will not only be able to redefine in the next decade how students learn but make education universally accessible. I hope that Edmodo can play a crucial role in that process.
The company announced today a huge Series B round led by Matt Cohler from Benchmark and Reid Hoffman from Greylock with both joining the Edmodo board, helping the company to execute even faster on its vision to build the educational graph for learning.
Related articles
- Edmodo:The Total Classroom Solution (freetech4teachers.com)
- Innovation in Education (usv.com)
- Greylock And Benchmark Lead $15M Round In Social Collaboration Platform For Classrooms Edmodo (techcrunch.com)
- Edmodo Wants To Make Social Networking A Learning Experience (forbes.com)
Canada – land of SaaS?
When Bessemer Venture Partners recently published their map of major cloud players, I was surprised to see so many Canadian companies on there. Shopify, TribeHR, Unbounce, Clio, Hootsuite, Radian6 and Freshbooks made the list and a few others (like Wave Accounting) probably should have been on there as well. So why are Canadian companies so much better represented in SaaS than in consumer internet? I can mainly see two reasons for that:
- SaaS companies (like e-commerce companies) have a much easier time to monetize their product than most consumer internet plays as monetization doesn’t depend on scale like every ad driven monetization. This means that those companies require way less funding and most of them can be built on smaller seed and angel rounds which is ideal for the sometimes restrictive funding environment we face in Canada. Unbounce, a company I recently invested in, even bootstrapped their business to thousands of paying customers before they took funding to scale their business.
- The second reason is linked to sales & marketing. Traditionally, purchasing decisions for enterprise software were driven by IT departments which translates into a lengthly and costly sales process favouring those software companies that have the strongest relationships into the decision makers at the buyer. Geographical proximity plays a large role in building those relationships which in turn makes it very hard to build large enterprise software companies outside of the Silicon Valley. SaaS starts to remove IT from the purchasing process, meaning the user and the buyer are, increasingly, the same person – the product quality is now much more important than relationships and the chances of building a big SaaS company anywhere in the world have increased dramatically.
Related articles
- New investment: SilkStart, SaaS for membership organizations (wmediaventures.com)
- Forrester: SaaS Providers Should Go Vertical (devx.com)
- Why Human Resources Software Start-Ups Are On Cloud 9 (blogs.wsj.com)
Demo Day
Image by miketippett via Flickr
Today is GrowLab‘s first demo day with the 5 companies from the first cohort showing to over 50 investors what they have worked on since mid August. I am incredibly proud of all of the teams – they worked very, very hard for this moment and I have no doubt that all of them will nail their pitches today.
Reflecting on the past few months with the GrowLab companies, I am reminded of a few things:
- Never ever underestimate the power of a strong and engaged network of mentors – especially as first-time entrepreneurs you can avoid an incredible amount of pitfalls if you get the right advice as the right time.
- Never ever underestimate the power of a great pitch – most entrepreneurs don’t spend enough time creating (and telling) the story of why their start-up is worthwhile investing into. A great pitch doesn’t get created over night but is the result of many, many refinements, trial pitches and feed-back loops. Don’t treat it as a side project, it is one of the most important things a CEO should focus on.
- And last but not least, never ever underestimate the power of a platform that elevates you above the noise of the ever increasing start-up activity – we have seen an explosion of the numbers of start-ups in the past couple of years and it is becoming more and more important to find ways to break through the noise and leave a mark. Accelerators with a good reputation are probably the best platform to do so these days.
Related articles
- Finding Signal In The Noise Of Demo Days (avc.com)
- What the BC technology industry really needs (wmediaventures.com)
- GrowLab announces startups of its ‘accelerator program’ (canada.com)
