small businesses : Innovation + Job News

Earlier this year we wrote about JOLT, a technology accelerator created by the folks at MaRS Discovery District. Back then, executive director Susan McGill explained that the goal was to facilitate the rapid and efficient development of startups by funding and mentoring them in groups, rather than one by one.

Last week McGill unveiled the first group of startups that have been selected to participate in JOLT. Each will receive $30,000 in seed funding, as well as work space, design and development support, and guidance from an advisor. The participanting start-ups are:
•  tout.it, a social media platform aimed at sports fans
•  SlingRide, a tool for connecting drivers and passengers who want to cut costs by ridesharing
•  eProf, which creates "interactive virtual classrooms"
•  Venngage, a user-friendly tool for creating infographics
•  ShelfLife, a socially-driven e-commerce platform for collectibles
•  Greengage, which wants to help employers help their employees become more environmentally friendly

"These startups beat out dozens of other applicants from all over Canada," wrote McGill in a note introducing the first JOLT group last week.

In a few months they'll try to build on that success, taking what they learn at MaRS in order to pitch venture capitalists on the services and products they've been refining.

Writer: Hamutal Dotan
Source: Susan McGill, Executive Director, JOLT

It was just three months ago that we first wrote about ShopLocket, when the startup launched a beta version of their ecommerce platform. It turns out co-founders Katherine Hague and Andrew Louis were onto something with their idea.

It's an embeddable tool that you can add to your website, blog, Facebook page—just about anywhere you might be creating content online—and sell something quickly and easily, without needing to go to a third party site (like eBay) or take on the trouble and expense of setting up a full-fledged online storefront. ShopLocket announced recently that they've closed their first round of seed funding: $1 million from several venture capital groups and private investors.

Hague and Louis's first step, upon learning that financing would be forthcoming: staffing up. When they started, it was just the two of them, plus a paid intern who served as a community manager. They've since added two positions—one business development and one software engineer—and will have a graphic designer joining them in the fall. Louis says they also plan to add some contract positions.

"We get the biggest bang for the buck by using the money to hire people," says Louis, "but now there's also room to start using paid advertising and promotions." Then he adds, intriguingly: "The key is finding ways to make the most of a still pretty limited budget. We can't do TV advertising, but we can spend a bit of money cooking up a promotional stunt."

Louis says it's still early days for startup economy here. "Canada has had some companies do really well, but nothing at the scale of Facebook or PayPal. So generally, [we found fewer] people able to help a startup out at the very early stages, both in terms of early investment or mentorship."

But that's getting better and has been balanced out by the fact that the region remains relatively strong. It's one of the reasons ShopLocket was able to go from beta to financing so quickly, in fact. The company is partly financed by US investors who were "actively looking outside of their own country" for opportunities, and found Canada's stable economy appealing.

Toronto also has "an educated and talented population, and access to large markets" Louis points out—both very useful when you're trying to grow quickly. 

Writer: Hamutal Dotan
Source: Andrew Louis, Co-founder, ShopLocket

The GTA has always had investors ready to put their money behind local startups, but that community has never been more organized, more communicative, or more active, says Bryan J. Watson, executive director of the National Angel Capital Organization (NACO).

NACO recently released the results of a national survey it conducted to assess the level of activity among angel investors in Canada; they found that a whopping 80 per cent of all investments made in 2011 across the country were made in Ontario, with a large percentage of that activity taking place in the Toronto region. (NACO won't provide city-by-city breakdowns due to privacy concerns; the value of some specific deals might be identifiable if they did so.)

This is a marked increase over 2010, when 62 per cent of investments were made in Ontario.

"The biggest difference," Watson says, "is that the GTA [investment] community is much more organized say four years ago—even a year ago." It's only in the last year that angel investment "has gone from an activity that was one promoted... to one that started to occur naturally." (The full study results are available online [PDF].)

The most attractive area for investment, unsurprisingly, is in the information and communications technology sector, which Watson says continues to be "pretty hot." Following on Ontario's green energy push there is "still a lot of interest in clean tech—often with enabling technology, often with a little bit of web and control systems."

The technological theme emerged again in the third sector Watson cited as being attractive for those looking to invest GTA startups: medical technology: "Specficially the devices and diagnostics side of things." Toronto investors are also expressing "a lot of interest in web-enabled technology or big data tecnology—using online infrastructure and analytics" to develop new tools and platforms.

Writer: Hamutal Dotan
Source: Bryan J. Watson, Executive Director, National Angel Capital Organization

Like many startups, Shopcastr is learning to roll with the punches.

Founder Matt O'Leary began his adventures in online shopping experimentation in July 2011, with an idea called Hipsell. His idea was to create a "beautiful shopping experience in the classified space"—essentially to "disrupt" existing sites like Kijiji and Craigslist and help users "unleash the power of [their] basements." What he quickly learned, however, is that the stock in people's basements runs out very quickly; it's retailers who have the capacity to meet ongoing consumer demand.

At least, they have the products to do so. Putting those products online, however, isn't the easiest task. Order satisfaction, suppy management, keeping listings updated—there are a host of new tasks that come with opening an online version of your shop, tasks which can be difficult and expensive for small retailers to manage. And so after conducting a series of customer-discovery interviews, O'Leary changed his approach and developed Shopcastr, a platform that enables small Toronto retailers to easily conduct online sales. He's racked up more than 600 participating stores so far, with the help of an initial $150,000 round of seed funding.

Now Shopcastr is planning to take its model of hyperlocal online shopping to new cities. They've just announced $1 million in new financing from a number of investors, including initial backer Mantella Venture Partners (MVP) and the MaRS Investment Accelerator Fund.

First on the expansion list: sites for New York and San Francisco, which O'Leary is aiming to do by the end of the year. His next Canadian target is Vancouver.

To accomodate this growth, Shopcastr is hiring, hoping to double their current staff complement of six within the year.

"We are in desperate need of some additional support on the tech side more than anything else," O'Leary says; they are looking for at least one more developer and some design talent to start in the coming months.

Writer: Hamutal Dotan
Source: Matt O'Leary, Founder & CEO, Shopcastr

Shipping isn't, let's face it, a particularly rivetting subject. Parcels and waybills and tracking numbers are hardly the stuff entrepreneurs' dreams are made of. They are, however, necessary in every business: shipping is one of those mundane but utterly essential services companies need in order to function effectively.

Responding to that need is FedEx, which officially opened a new 89,000-square-foot facility in Markham earlier this month. Markham—itself getting used to its new role as a city, having just graduated from being a town—is now home to nearly 900 high-tech companies and 400 other company headquarters.

Its needs, in short, are growing.

"It's not by any mistake that we found ourselves in Markham," says Jason Anderson, a spokesperson for FedEx. "A lot of business [in the GTA], we're finding. is coming directly out of the Markham area." That business will be served by 150 staff working at the new site, which has been in development for 18 months and is built to accommodate further growth in the coming years.

While it's not yet clear just what kinds of companies will be most contributing to that growth, it is certainly the case that when shipping companies get busier, it's a sign of economic health. As Anderson puts it: "FedEx is a good economic bellwether."

Writer: Hamutal Dotan
Source: Jason Anderson, Media Relations, FedEx Express Canada

Co-location has, in recent years, become increasingly prevalent in the small business and non-profit sectors. It's a useful alternative for enterprises that are smaller or just starting out. Pooling costs for essentials like office space and phone service helps keep overhead costs down, not to mention cutting down the time time spent managing infrastructure and logistics.

Stepping into the co-location world is consulting firm Ideacia ONE Inc., which has just launched a space specifically geared to innovative businesses. The 3,000-square-foot facility is located in Markham, in an office tower at Woodbine and Steeles; they are currently accepting applications from prospective tenants.

Ideacia's aim, says co-founder Jennifer Powers, is to create a middle ground between "typical business centres where you can rent space, [but] if you walk through the aisles everyone has their door closed" on the one hand, and intervention-oriented government incubators on the other. Ideacia's Innovation Centre, if things go according to plan, will "bring [a] diverse group together into an environment that's very open… that will really encourage them to share ideas and support each other in their growth."

Powers says prospective tenants will be screened to ensure than none are in direct competition with each other. The founders hope tenants will eventually develop business relationships with each other as an organic outcome of sharing physical space.

Ideacia's current roster of clients—about 150 in total—ranges from companies that have worked with NASA to smaller entrepreneurs who want help streamlining their day-to-day operations. On this effort, Ideacia is specifically seeking technological enterprises and other small businesses that provide relevant support services.

As for the "innovation" in "Innovation Centre," Powers emphasizes that it's important not to invest the word with some sort of mythic weight. Innovation, she says, "doesn't necessarily have to be incredibly earth-shattering. People can absolutely use innovation in every sector, every business—it's really a mind-shift."

Writer: Hamutal Dotan
Source: Jennifer Powers, Principal and Co-Founder, Ideacia ONE Inc.

Mississauga's Research Innovation Commercialization (RIC) Centre announced the launch of its VentureStart program last week. The program will help entrepreneurs and innovators in Mississauga, Brampton and Caledon launch their businesses with training and matching seed financing grants of up to $30,000.

In announcing the program, Pam Banks, executive director of the RIC Centre, said "it adds another dimension to our services in helping emerging entrepreneurs shorten the path to market success." The RIC Centre was launched in 2008 to support and incubate innovative businesses in the Peel region, and claims to have since helped more than 150 companies get their start; RIC stats show 46 per cent of those companies have gone on to find funding.

VentureStart got its own seed financing from the federal government, which provided a grant of just under $5 million to launch the program. Gary Goodyear, the minister in charge of FedDev, said that fostering innovation through grants like this one will lead to new jobs and a higher quality of life.

"How do we improve lives, create jobs and economic growth? Innovation. Our government recognizes the importance of investing in the ideas of graduates and providing them with the skills necessary to become innovators and successful entrepreneurs," Goodyear said in his statement. "Because innovation is about finding a solution to a problem, taking that idea and bringing it to market and getting it adopted by customers."

Writer: Edward Keenan
Sources: Stephanie Thomas, office of Gary Goodyear; RIC Centre

A program that Ontario Minister of Economic Development and Innovation Brad Duguid says will "foster tomorrow's business leaders" offers enterprising students looking for a summer job the chance to create their own.

The Summer Company initiative offers students aged between 15 and 29 funding of $3,000, alongside training and business coaching, to start their own business.

Those accepted into the program get $1,500 up front in seed money, as well as $1,500 upon completion of the program. They're also partnered with a business mentor to help them implement their business plan. Program guidelines say that almost any type of business can qualify, as long as it is owned and operated independently by the applicant and is a new startup. It is a competitive program with limited spaces—students wishing to apply can visit the Summer Company website for information on how to register.

The program is one of a few initiatives by the province to aid students looking for summer employment. Others include job listings and a $2-per-hour subsidy for employers.

Writer: Edward Keenan
Source: Andrew Block, Office of the Minister of Economic Development and Innovation

Toronto-based software company Wave Accounting, which sets out to offer completely free software to small business owners, recently received an investment of just over $755,000 from the federal government's economic development agency, FedDev Ontario. "Anybody in a startup is going to sometimes have to focus on keeping the wolves at bay," says company spokesperson Rob Maurin. "This investment allows us to play in a more strategic way, developing the business with an eye to long-term growth and profitability instead of trying to monetize as quickly as possible."

Launched just over a year ago, in November 2010, the company offers full-service accounting software to small business owners and freelancers. The software produces business intelligence and reports suitable for filing tax returns and managing a business. Maurin says, "It's 100 per cent free, there's no premium features, no limit on transactions, no cap on the size of business." Maurin says founders Kirk Simpson and James Lochrie noticed that almost two-thirds of small business owners--those with fewer than 10 employees--use any kind of accounting software at all, and saw a huge potential market of 29 million such businesses across North America.

Wave makes its money by using aggregated business information from clients--while, stresses Maurin, vigilantly protecting their privacy and information--to offer them targeted deals from other companies. "Let's say we saw that 10,000 small business owners in Canada were each spending $120 a month with cell phone carrier A," he says. "We might go to cell phone carrier B and say, 'Can we facilitate an introduction, if you're able to offer these business owners a savings?'"

Wave is also developing other business software on a for-pay model--Maurin says they are launching payroll management software this month--that clients might fight useful to complement their accounting package.

In one year, the staff has gone from 7 to 21. Maurin says they are still hiring now. "I wouldn't be surprised if next year at this time our staff has doubled again," he says.

Writer: Edward Keenan
Source: Rob Maurin, Director of Community and Marketing, Wave Accounting