The Montreal startup scene, Blitzweekend, 2nd March 2008

There is a great thread at Hacker news about the best place to startup now, outside of the U.S.

Hacker news is a social news website designed for the “ycombinator community”, and has been hailed by many (Michael Arrington among others) as a leading source of news for programming, hacking, and entrepreneurship.

I know many readers of this blog are either involved in startups, or are interested into starting or joining one. If you are part of the latter category, one of the questions you should ask yourself then what would be the best location for a startup.

Inevitably, Silicon Valley, and also Boston are shown as the reference, with its obsessive entrepreneurship culture, the abundance of investors, smart people and early adopters, which are all key ingredients of success.

There are some good news though as comments on the thread highlights many Canadian cities (Toronto, Montreal, Vancouver, Waterloo, Ottawa, Winnipeg, etc.) as great cities for a technology startup. Some positive points mentionned for Canadian cities:

• community events and growing ecosystem,
• cheap rent and cost of living for many cities,
• accessible and friendly VCs,
• not much bureaucracy, it’s easy to register a company,
• great healthcare system compared to the U.S., plus healthier people than in the U.S.

Cons mentionned by the commenters:

• apparently, many shy away from Montréal and from Québec because they “fear” French
• might be a problem for those who want sunshin all year long

There are certainly many other reasons why it’s a great place to launch a technoloy startup in Montreal, in Québec or in other cities. I’ve got many in my mind, but I fear I’ll repeat myself. So I’ll leave it up to you, if you think of other reasons, please share them, either here or on the discussion thread.

There were a half-dozen keynote speeches yesterday, sandwiched between the day’s seminars, exhibits, and the sideshows of the unconference, and the evening’s libations and mixers around the offices of San Francisco notables.

Tim O’Reilly went on stage to repeat what Bob Metcalfe and others were saying over 12 years ago, that the network is really the computer. Tacked on were two side concepts. The first idea is an invitation to tackle large common-good projects so that even failing is contributive. The second is an interesting take on the market’s valuation of centralization (Facebook, Google, etc.) even as Web 2.0 is pulling the web towards decentralization (Open APIs, shared contexts, etc.). The end-result is that market-valued centralization will happen through interoperability. The unstated conclusions are interesting though; we can’t value or buy a share in inter-operating companies, unless through a mutual fund (assuming the companies are public) or a Yahoo-style consolidation (if not). Is centralization dressed in new clothes still the same old successful maid of yore ?

The most expected talk of the day was the announcement of Microsoft Live Mesh, a long-haul project built and hyped under the supervision of Chief Software Architect Ray Ozzie. Once you take all of the buzzwords about collaboration and data synchronization out, you essentially get, as far as I can tell, a RSS-enabled shared folder with a public changelog and a programmable API. The first application of Live Mesh is one in which multiple devices can share preference and settings files (bookmarks, contacts, personal Windows settings, the kind of thing you get for a decreasing premium on certain USB keys) so that they are all using the same basic data (as long as they run Windows, although Microsoft promised wider support to a snickering audience). They claim over a hundred developers were assigned to work on this for two years. Taking into account the complexity of building shared-storage systems (instead of, say, collaborating with Amazon or acquiring the likes of Nirvanix), I wonder what the other 90 were doing.

By far the most interesting talk of the evening was a live stage interview with Max Levchin (PayPal, Slide). If you are running low on smart, well-articulated, incisive content, you can always count on Levchin to deliver. Max covered his early attempts at start-ups (4 of them until he found success with PayPal), but focused especially on the social entertainment software that is the core of Slide’s applet business. He went at length exploring the relationship between social actions and advertisers as a non-abrasive promotional vehicle; witness, for example, the addition of a wildly popular pregnancy test to be thrown at others in SuperPoke to coincide with the release of the movie Juno. He covered new ways to segment the market based on behavioral commonalities rather than demographics, an idea that the market analysts at an earlier Consumer 2.0 panel hinted at. Levchin then offered an interesting distinction between applets and traditional software: that applets draw on users’ wish to participate through one destination, made valuable through its character and popularity, unlike traditional applications which are meant to be chosen not for their intrinsic identity but rather for the predominance of certain features and qualities differentiating them from the feature lists of others; that this is what makes widget companies so valuable. Interspersed in the talk was a fourth idea on the lifecycle-prolonging value of widgets as the novelty of social networks erode. Good stuff.

Greetings from very chilly San Francisco where the 2nd edition of the SF Web 2.0 Expo, organized by O’Reilly and Techweb, is going strong. Yesterday was the kick-off to the geeky celebration of all things surrounding social computing, with a full-day of seminars and demos for those willing to shell out a few extra bucks. Attendees could choose from a whopping 14 3-hour workshops during the day. The most promising of the morning track was a presentation by Vanessa Fox (the lady who organized and promoted Google Webmaster Central) and Nathan Buggia (Program Manager for Microsoft Live Search Webmaster Center) on “SEO-friendly web application design”: tons of tips and techniques to help search engines crawl, understand and index web applications and applets, as well as a list of dangerous pitfalls to avoid. There are pages and pages of great ideas taken out of this workshop, and you can get it all for free off of the private website janeandrobot.com (an already very valuable resource to be further enriched in the near future based on workshop participant questions).

The afternoon seminar was a promising one on making innovation happen on time. The fact that it was presented by an ex-Microsoftie is somewhat ironic (as it would be if the topic had covered bug-free code or open-source), but Scott Berkun has clearly learned from the depths of the trenches and came up with a toolbox of ideas and concepts useful for firing up innovative thought processes in teams larger than an entrepreneur and a few dedicated buddies (if you lead Facebook or a corporate MIS dev team, this one was for you; for startups the material beyond idea generation was academic). The “on time” part was a trifle thin on details (it was delivered in the last 20 minutes) and basically summed up to three ideas: account for weekends and natural downtimes when planning schedules, cut features before you get late on delivery instead of after, and build in a scheduling/design/experimentation dry-run stage before the start of any project to see how your expectations about tasks and times gel together.

The evening entertainment was an eye-opener. Held in Jamie Zawinski’s technodive-ish DNA Lounge, Ignite SF was a fast-paced Demo-like presentation platform where selected speakers could come and entertain the audience for 5 minutes on a topic of their choice; they were awarded 20 slides of presentation and usually not enough time to cover them all. Topics ranged from startups’ relationships to user commentary (metblogs.com), one lady’s particular love for giant Cloverdale-like monsters, Salim Ismail’s experiment with explaining startup growth through Pirsig-like metaphysics, Christian Crumlish’s hilarious take on social anti-patterns (the bit on how to send automated friend-plea rejection notices from social networks was priceless), an exploration of the open SMS-accessible digital signage around DNA lounge, and a few oddball speeches on successful interviews, the leveraging of your user base, and search engine optimization. The event was a bit like StartUpCamp but with more presenters and no experts, a lot less presentation time than at BarCamp, and a whole lot of hecklers droned out by the chatty crowd whose discussions were lighted up by the variety of topics at hand. This is great way to get to know local techies and entrepreneurs through a wide variety of quirky angles. It is also very fun — we should have this back home.

Here is a video of Austin Hill explaining his vision and motivation behind akoha.org, a startup to launch later this year.

The akoha website already gives a glimpse of what they are trying to achieve, but I found this video much more meaningful and more powerful than all the logos and colors. A beautiful project for sure, that I found echoed in one of Paul Graham’s recent essay; the question left unanswered now is if they can change people’s behaviour.

A Tara Hunt interview.

Note: this was published a few weeks ago, but I missed it as it was published when I declared a black-outhiatus for everything related to MTW.

Lavablast, which was featured recently on MontrealTechWatch, has won last week the local round of the Québec Entrepreneurship contest, a yearly competition organized by the Chamber of Commerce and other organizations like school boards.

Lavablast won in the Technology & Innovation category, with a cash prize and a one-year membership to the Chamber of Commerce.

It’s great to see a truly innovative company and its founders recognized by the whole business community, although it occured to me that they have already closed their first year of operations and were able to present a business model which was already field-tested, unlike other competitors who were still in the business plan phase. Nevertheless, I hope Lavablast gets more exposure from what they’ve done, especially in regards to students in high school and in universities, showing the new generation in Québec that it’s possible to start a successful software company.

Congratulations to Etienne Tremblay & Jason Kealey!

LavaBlast, which was started one year ago, markets a series of tools for franchise owners, letting them to centralize operations with franchisees, taking care of sales, accounting and stock management.

The “microISV”, as the founders like to call it, follows Joel Spolsky’s philosophy, which is 1 - build a profitable company from day 1, and 2 - eat your own dog food. They also chose from the company’s beginnings not to seek any VC or angel funding.

Jason Kealey and Etienne Tremblay, the two founders who come from the software engineering program from University of Ottawa, knew that they just had to start a company dedicated on making great software. One year after the launch, it seems their business is doing great, and they are now giving back advice to anyone wanting to start a software company (part 1 - part 2 - part 3)

If you have some time today, read those posts. Some interesting excerpts:

…[the long tail] if you build and promote something worth buying, they will buy it.

The most important part of the company is not the idea but the people. A small and closely knit team of people who’ve worked together in the past is a recipe for success, regardless of the idea.

If you’re not happy in your own company, doing what you want to do, you have a problem.

because we’re self-funded, I feel we have a competitive advantage over our VC-funded competition. Our competitors want to skip the flat part of the growth phase and jump directly into the areas of highest ROI. Generally, this means developing one-size fits all software with (if you’re lucky) tons of configuration option

technology doesn’t solve conflicts

Business Plan: Before launching our company, we worked on a short business case and participated in a Technology Venture Challenge. We didn’t win, but it was a very beneficial experience because sitting down and thinking about what the hell you’re trying to accomplish is a very rewarding process.

They also explain in detail what tools they use internally to get the job done (Skype, SupportBlast, Microsoft Groove, Twiki, Lotus Unyte, MS Sharedview). They also advise Station C for any future web entrepreneur :-)

I like to see once in a while a web company that does things differently. They didn’t take any outside funding, they didn’t spend any time on financial projections or market studies, they didn’t chose the fashionable technology of the day (LavaBlast use .NET instead of your typical Ruby on Rails or Python framework), they didn’t spend time coming to our hyped camps, breakfasts and conferences, and actually shipped a product (and got solid revenues) within a year…

Maybe there is a lesson to be taken here.

Rick Segal, partner at JLA Ventures, a fund investing in emerging tech companies, is touring Canadian cities in a series of “VC Roundtables” to meet entrepreneurs and local startup community. The goal is to present and explain what really is a technology investor; and also present documents and information about the investment process.

The planned date for Montréal is Aril 16th, from 4.30 to 6.40pm.

This was the proposed format for the Roundtable:

The format will be something like this - and I’m open to suggestions:

• Evening, about 3 hours in length
• Informal/Free (super important!)
• Small Groups (super important!)
• Information on VC/Angels and the process.
• Sample Term sheets, documents, business plans, PowerPoints
• Example Pitch or Pitches to show what’s interesting/good/bad
• Open questions for a good chunk of time.

What it will not be:

• Demo/Startup/FooBar/Camp/Conference/MESH/MASH
• Me trashing your ideas
• You trashing somebody else’s ideas
• Three hours of me showing you PowerPoint slides

The hope is that at the end of the get together you will have:

• An understanding of my world
• A good set of reference documents/examples/materials
• Some of your top of mind questions answered
• A better feel for my industry and if raising third party capital is right for you.
• A good place to start

Here are some reasons why you might want to attend:
- it’s free and informal
- Rick Segal is one of the rare VCs who participate actively in the startup scene in Canada, he is an active blogger, sponsors and goes regularly to demoCamps, and is committed to support Canadia-based startups,
- you are planning to launch a startup, and looking to raise third-party capital,
- you might be an engineer/a tech guy, and clueless about term sheets and due diligence processes,
- you want to know how to approach angels and VCs and what kind of relationship to have with them,
- you want to know the business criterias (and other) that investors are looking for when investing

Registration is here. It is limited to 25 seats for each session.

There are also sessions in Ottawa on April 16th, and in Toronto the following day, if you can’t make it.

Yesterday, Branchez-vous reported that it acquired 2 niche successful websites in Québec, fanatique.ca and humourquebec.com.

I didn’t write about it, as I knew Branchez-Vous’s overall strategy is to become the #1 media destination in Québec, and their tactic is to acquire regularly new web destinations, on a bi-monthly basis, and launch new advertising partnerships. One of the websites’s price tag was $65.000, and well, for me… that was it, it closed the story.

And I moved on. It’s hard to report such a story when you hear about Bebo’s acquisition price or Meebo’s valuation.

I just read however a post that brings a new perspective about this. Jean-François Dubé thanks Émile Girard, who was behind both websites.

J’aimerais le féliciter pour cette belle réussite mais j’aimerais surtout le remercier. Pourquoi? Parce que sans même me connaitre, Émile m’a donné un solide coup de pied dans le derrière en me faisant réaliser qu’il est possible pour un jeune entrepreneur du Québec de réussir dans ce domaine de fou.

Tout comme Émile, j’aurai bientôt 24 ans et j’ai la tête (et le laptop) pleine de projets. Sans le vouloir, il vient d’envoyer un gros “FUCK YOU” à tout ceux qui n’ont pas cru en moi jusqu’à maintenant et qui m’ont dit que je devrais entrer dans une grosse boîte avant de tenter de voler de mes propres ailes.

And there I understood that this is really a meaningful symbol for new entrepreneurs. Émile Girard started both websites in his early twenties, was a solo-entrepreneur, gathered an audience, and through passion, hard, relenteless work, he made a substantial amount of money from it. The fact that we are not talking about digg or reddit.com might be even more meaningful for new entrepreneurs: it’s easier for a Montreal/Quebec/Canadian-based entrepreneur to see him/herself in Émile Girard’s shoes than say, in Kevin Rose’s, of Digg.com fame.

And I agree with Jean-François Dubé. Stories like Émile Girard’s needs to be heard more often. Yes, it’s possible to start something in Québec. Be it a “small”, dedicated website like fanatique.ca, or something big, like standoutjobs.

And I am now starting now a new section on Montreal Tech Watch, called it Technology Entrepreneurs Stars, and it will be dedicated to local entrepreneurs who succeeded, be it from a successful IPO or an acquisition. If you know anyone who fits there, feel free to comment and email at news@montrealtechwatch.com

The InterLogiq Network is holding a conference and networking event entitled Capital Innovation 2008 this afternoon and evening at the St-James Club, a “prestigious” club for “business leaders”.

The event starts at 2pm with 3 keynotes, by Dan Mothershill, president of the National Angel Organization, Austin Hill, Mario Limoges, who will talk about investment opportunities in technology.

6 projects/startups will also get to present to the audience, and a cocktail presented as a networking opportunity will close the event.

The MandelBrot project was 2nd when counting votes from attendees.

Can you present yourself? What is your background?

Ismail Negm: Ismail is a licensed options broker with nearly 5 years of experience in the industry, and is an experienced trading systems developer with a keen interest in risk management strategies. He is also completing the following designations: Derivatives Markets Specialist, Chartered Financial Analyst, Professional Risk Manager and Chartered Market Technician.

Julian Squires: Julian has been working professionally as a programmer for over a decade, and has been involved in the open source community for even longer. His professional interests include pure mathematics and optimizing compiler design.

Can you describe what is the MandelBrot project? How did you get the idea? What problem does it aim to solve?

The idea for the Mandelbrot project (working title) came through our dissatisfaction with standard methods of testing trading strategies, and specifically with the optimization phase of testing. It is standard to test a strategy using historical data for the security that is intended to be traded and to proceed with a walk-forward analysis using the optimized results, again on historical data. Using this standard method yields highly curve-fitted results which are not representative of the future performance of the system in live trading. Ideally, a trader would have access to an infinite amount of representative data on which the strategy can be tested, and that is what our project aims to produce.

What were your objectives regarding Blitzweekend? What did you expect from the event?

Our expectations were very slim: a suitable environment in which to work. Our objective was to build a framework for realistic synthetic data generation. To test our data, we also had to develop a simulation environment that could test various trading strategies on both historical data and our generated synthetic data. We achieved these objective using technologies that yielded performance and development time wins.

Can you talk us about your experience of Blitzweekend? any challenges? How did you overcome problems?

The Blitzweekend experience was wonderful in many respects. We achieved our goal in less time than was allotted to us. We also found that we had access to useful experts and that we were well fed and taken care of. The main challenge was breaking away from all the interesting people we met over the weekend to actually get more work done. We were not successful in overcoming that “problem”.

What is now your plans for MandelBrot?

We are continuing to develop an efficient, scalable commercial product that runs on a fractal-based data generation model.