Wake me up when it’s over

At SXSW this year they had an Irish wake for dead startups. It’s one of those things you do when there’s nothing left to do but laugh or cry.

While gallows humour isn’t the exclusive province of the Irish, we’re damn good at it! We Irish are also adept at surviving in the stupidest and most difficult circumstances. As a character in the Departed put it, the Irish will “put up with something being wrong for the rest of their lives.”

Startups don’t have that kind of time though.

Unlike the reporter who covered this wake, I don’t consider it brilliant. It seems more like a way to acknowledge the truth- a lot of startups don’t make it. It also seems like a good choice for those people who lived through startups that didn’t make it. Have a wake, raise a glass, and move on with your lives.

And may the road rise to meet you.

~J

March 24th, 2016

We went to a wake for dead startups at SXSW – and it was brilliant

The long oily slide to the bottom

Private equity has emerged as the lender of last resort for energy firms trying to survive.

The key reason is probably that they’re having a hard time with the banks. Why, you say? Well, many oil companies collateralized loans against the estimated values of their reserves, and those reserves are worth sweet patootie right now. That’s why.

If I had a line of credit with these sorts of folks, I’d be asking them to pay up too. Banks don’t like standing around when the music stops.

Net result: Huge opportunity for investors who are well positioned to buy on the fear. PE is coming in, institutional investors have bought up significant royalties, and Imperial just sold off hundreds of gas stations.

What happens to the economy and the country as a result remain to be seen. It’s a massive redistribution of wealth.

~J

March 23, 2016

https://www.pehub.com/2016/03/private-equity-emerges-as-lender-of-last-resort-for-u-s-energy-firms-reuters/

There is a better way

There is a better way than waiting around and hoping the next big thing makes some money sometime- and what might that be? Being an early stage investor and picking a company that has real growth potential.

Now that may sound a bit obvious, but apparently this point of view is becoming fashionable once again, as exemplified by this article in the New York Times.

Apparently “About three-quarters of the top 20 [venture capitalists worldwide] are investors who put money into start-ups during their early rounds of financing.”

Food for thought, eh?

~J

March 22, 2016

Coffee power

Ten Thousand coffees is a networking platform that’s designed to bring Canadian mentors together with aspiring entrepreneurs.

It seems like an excellent idea, and it serves a need. Can they consolidate the conversation and become a significant go-to point of reference? Can they make money at it? Those are open questions. Please check them out if you’re in this space and form your own opinion.

~J

March 21, 2016

Canadian entrepreneurs need Ten Thousand Coffees to compete with the U.S

What was and what may yet come true

Fintech in Canada was beginning to see some ‘major momentum’ in February of 2015. This post includes a lovely infographic about the rosy outlook. That was then.

Mogo, a Vancouver based lender did a $50 million IPO at $10 a share right around the time this infographic was posted. Where’s Mogo now? On Friday March 18th of 2016, a Mogo share was worth $3.15. Yee-ouch.

While it’s unfair to characterize Mogo’s results as representative of the fintech class in any way, I will hazard a guess that there won’t be a whole lot of Canadian fintech IPO’s until Q4 2016 at the earliest.

~J

http://www.informationvp.com/news/canadas-emerging-fintech-landscape

March 18, 2016

A Mighty Wind

Startups are facing some tough times, perhaps. Once again we’re looking at downrounds and belt tightening in this post. Stats released by KPMG and CBInsights, as well as info from Bloomberg tell us the news.

Not that it’s news, generally speaking. The significant drop in oil prices has led to belt tightening, credit concerns and changes all across the economic spectrum. Startups often are financed with discretionary funds, so they’re more vulnerable to changes in economic outlook than businesses with well established models.

Birchbox has laid off 45 people and closed its doors in Canada. This is unfortunate- it seems to have a viable business model. SurveyMonkey has laid off 100 people and their service has definitely suffered as a result.

Just a few examples of how timing relative to macroeconomic events can affect a startup.

~J

March 17, 2016

http://www.businessinsider.com/birchbox-ceo-katia-beauchamp-on-startup-funding-2016-3

Zuckerberg, we have a problem

“Interest in virtual reality technology is virtually non-existent among the vast majority of Americans, according to new consumer research released today by Horizon Media.”

So saith this article on MediaPost.com. I wonder if a puny online survey of 3,000 Americans is enough to make the great and powerful Zuckerberg reassess his investment in Oculus Rift?

Probably not.

Then again, I have enough years of following this stuff to remember that VR has been ‘almost here’ for the consumer market for over 20 years. Maybe the reason it isn’t here yet has to do with this survey. Maybe it’s because the average consumer doesn’t want it. Time will tell.

~J

http://www.mediapost.com/publications/article/270596/agency-finds-consumer-interest-in-vr-virtually-non.html

March 16, 2016

With Glasses like these

With glasses like these, what do I need laser surgery for? For that matter, why would I bother with lens regeneration surgery of the sort we covered last week?

One key issue in evaluating startups and ventures in general in the rapidly developing technological world of today is trying to establish which product out of a bunch is going to be the one that ends up being a profitable venture in a useful time frame. Often that has less to do with the innovation than factors like marketing or the developers and financiers of said innovation. Does anyone here remember Sony Betamax?

Developments in optics are only one example. There are often multiple offerings and attempts to disrupt economies from different sources and standpoints.

~J

Self-adjusting lenses adapt to user needs

March 15, 2016

Cola

New apps that I’d actually use are fairly rare. Cola may well be the next one that fits the bill. It’s an elegant and straightforward concept: Cola is an extensible operating system for text messaging. Pure genius.

With 9 staff and beta testing complete, Cola has now been released on the app store. If you’re looking for the next big thing you can use whatever animal metaphor you like. Call it a rhino or unicorn or hockey stick giraffe if you want, the outcome will still probably be the same. This company is probably going to get pretty big, pretty quickly. Somebody like Twitter should drop a few hundred million and buy them out right this minute. Best of luck with it, Cola people, we’ll keep an eye out and see how things go.

~J

March 14th, 2016

http://www.businesswire.com/news/home/20160310005053/en/Text-Cola-Launches-iOS-App-Store

www.cola.io

Lens Regeneration

US and Chinese doctors have pioneered a procedure that can restore the lens in your eye. It’s especially useful for cataract surgery. This is just one of what I hope will be many biotech revolutions achieved through stem cell research.

So how will this affect entrepreneurs? Well it will probably create a lucrative worldwide market for lens regeneration surgery. Since there isn’t a current treatment for cataracts, it isn’ a disruptive technology per se. It may displace some of the products currently used to help people live with their cataracts though.

From an entrepreneurial perspective, this biotech breakthrough has some interesting dimensions as a thought experiment. Put yourself in the place of the businesspeople responsible for developing the procedure into a product and taking it to the market.

Do you patent some key aspect of it immediately or give it away for the good of humanity? Probably the former. What then? Knowing that millions of people’s lives would be transformed if they could only afford it, do you scale up immediately and monetize it on a low cost-high volume basis? Is that the humane thing to do? Or Is it better to commercialize it on a smaller scale, knowing that you can charge a queen’s ransom for giving it to a select few that can pay? After all, it may not be easy or economically viable to scale too fast. So how about licensing the procedure?

I don’t know the answer to these questions, but it’s worth asking yourself: Are there ethical and moral dimensions to your business? How are they getting taken into account?

~J

March 10, 2016

http://www.bbc.com/news/health-35762713

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