During personal housecleaning, I came across a file folder, with the overhead acetates of a Powerpoint presentation I had thought long vanished.
Back in 1993, Yvan Couture and I co-founded a CEO group for Waterloo area (then including Guelph) technology industry CEOs, later known as Atlas Group,. By our second year, we had all gained immensely from a forum where we could learn together in a peer-to-peer mechanism. And as most of us were jet-setting, high export business leaders, it was good to reflect on what we could share locally in our community. As we compared notes, we realized that we needed to work together to better tell our story, including to various levels of government who had yet to fully understand the transformative potential of the new knowledge-based business paradigm we represented.
On October 27, 1994, we chartered 2 small planes from Waterloo International Airport to fly 15 of us to Ottawa to tell our story to the federal government. Assisted by the late Andrew Telegdi, Waterloo MP at the time, we booked meetings with John Manley, the iconic Minister of Industry, Jean Chrétien, Canada’s Prime Minister, and Ottawa tech leaders, such as Michael Cowpland.
We collectively developed the following Powerpoint to present up in Ottawa, and the group asked me to present to our leaders. The featured image on this posting is a photo taken in the Speaker’s Library in the House of Commons.
The following is the recently uncovered Powerpoint from October 1994.
The following is a scan of the base data used in preparing the Powerpoint, giving an impressive 5 year growth trajectory.
To make it easier to read, I have re-entered the data in a table below.
Company
Employees
Employees
Employees
R&D
Sales
Exports
1989
1992
1994
($M)
($M)
(%)
Advanced Scientific Computing
8
13
50
2.00
3.5
92
EMJ Datasystems
30
50
140
0.00
70.0
30
Focus Automation
10
12
35
0.75
3.0
97
MKS
15
47
120
3.50
15.0
97
Navtech
8
22
40
1.25
3.0
83
Open Text
0
10
40
1.50
5.0
96
Research In Motion
7
11
50
3.50
5.0
98
Sofware AG
80
120
130
2.00
16.0
20
Spicer
10
35
45
1.80
4.0
92
S-S Technologies
25
45
120
2.00
20.0
50
Taaz Corporation
0
4
38
0.15
3.0
25
Thinkage
0
10
15
1.50
2.0
98
Watcom
35
60
140
4.00
20.0
97
Willow
0
12
22
0.35
3.0
80
Waterloo Maple
5
21
65
2.80
10.0
97
TOTAL
233
472
1050
27.10
182.5
92
Some observations that are reflective of those times:
It is clear that even over 30 years ago, Microsoft Office tools, including Powerpoint, were in widespread use.
Before LCD projectors, or large flat panel screens, people still used overhead projectors on which these printed ‘acetates’ were shown. Time has wrought some damage, as you can see, where the paper spacers get ‘stuck’ to the acetates.
It is notable that there were fewer women in the senior ranks, numbering between 10 and 15%. I am proud to say that in my company, MKS, women made up 3 of the 7 member C-suite by the mid 1990s. I was always surprised that this wasn’t common as strong gender diversity through our ranks immensely strengthened our people capabilities.
Since Waterloo’s tech industry started in the early to mid 1990s, it took a decade for this first generation cohort to gain critical mass, and also to start to do major financings. Within 1-2 years of our Ottawa trip, the majority of us had done an IPO, Special Warrant Transaction or were acquired.
The second part of the Powerpoint presentation talks about a proposed “Internet 2000 Consortium”. Although I’m hoping someone can remind what ultimately happened to this visionary proposal, the idea was to get the entire Waterloo community (business, government, schools, etc) working together to make the region an internet powerhouse. For example, MKS was shortly to release MKS Internet Anywhere, followed by the world’s first Web Content Management product MKS Web Integrity. Open Text produced Open Text Web Index one of the world’s first internet search engines which was sadly outspent first by Digital Equipment Corporation‘s Altavistaand later Google. Although we reserved our domain (mks.com back in 1985, the internet was still dialup in nature. To transcdnd that, several of us shared costs of a T1 (a fixed broadband connection at a blazing fast 1.5MB/sec rate).
Collectively, the presentation highlights rapid growth and economic impact, and predicts big things ahead:
Employment in just these 15 leading tech companies had grown almost 5 times over 5 years to 1050. We were predicting, if we could keep the momentum, that the tech industry would be over 5000 people, back when the population was 400,000.
Exports were the notable at an average of 92% of revenues. Canada remains challenged to transcend its oil, gas and resource economy driven by transformative knowledge-based global leading businesses, with a high export orientation.
R&D spend is high at $27M and that is a major key to keeping corporate leadership.
Sales at $182M was poised to surpass $1B by the year 2000.
This delegation proved that the Waterloo tech phenomenon had moved beyond a few visionary entrepreneurs to becoming a true force in the Canadian, and global, economies.
The Atlas Group continued for several more years — eventually passing its peer-to-peer leadership torch by building an organization bigger than any one of our companies. The group wrote a business plan and also wrote cheques (and yes people still used paper cheques back then) to fund a year long experiment they named Communitech. That legacy of entrepreneurs trying to collectively move the needle on a tech growth engine for both the region and Canada, lives on today.
In mid-April, I attended the 10th annual ACA Summit hosted by Angel Capital Associationin San Diego. With about 600 people in attendance from dozens of countries, it was an excellent chance to get tuned into the latest trends happening in angel world at large.
And since Angel Investing is now a global phenomenon, it is interesting to note that ACA Summit can have two faces. On one hand, it is a very international gathering of Angel investors and yet sometimes the content reflects the fact that ACA is primarily an association of US Angel investors, for example by showing trends without regard that Canadian angels are just across the border.
The international range of attendees was striking, with many delegations from various European countries; Latin American countries like Mexico, Chile and Barbados; India; a particular concentration from Australia and New Zealand and of course Canada. Regarding this antipodean concentration, one attendee found it odd that there were more of participants from halfway around the world than from Canada.
I am a member of the program committee for Canada’s own 2015 NACO Summitwhich is being held October 6-8 in Niagara-on-the-Lake, Ontario, right on the US frontier. I see a huge opportunity to learn and connect with more US and global angels.
Each year, the Angel Resource Institute publishes statistical information and trends in US Angel investing and at ACA released their 2014 Halo Report.
I’ve chosen some personally curated highlights both of that report and the overall conference:
Overall US Angel investment was about US$25 billion in 2014, surpassing venture capital investments. This represents over 300,000 investors in over 70,000 deals. We continue to have less comprehensive data for Canada, but we still lag on a per capita basis, but the gap is narrowing.
Although Crowdfunding was a major topic of discussion, it is still less than 2% of the above $25 billion figure, definitely lagging places like the UK where it is already at 5%.
Median deal size grew over 10% to $2 million in 2014, when co-investment is included. Median pre-money valuation grew 20% to $3 million.
The largest region for deal dollars (17.2%) was the Great Lakes Region (from Wisconsin to Ohio), surprising to those who thought most deals happen in California. Further, almost 50% of all deals are in states on the Canadian border, clearly presenting cross-border syndication opportunities.
Perhaps because of high valuations in the tech “hot spots”, such as New York City and California, more syndication across greater distances was reported, which goes against the traditional notion of investors focusing within a one-hour drive. Again, while the studies of greater cross-country syndication didn’t extend into Canada, it is easy to extend this trend cross-border. A drive could be to focus on those sectors requiring specialized skills such as medical technologies and life sciences.
There were a lot of great sessions on emerging, and ongoing, issues, such as crowdfunding, the new SEC Regulation A+ (mandated by the JOBS Act to simplify raises up to $20 million even from non-accredited investors), an ever increasing push to build new and innovative Angel Funds and even post investment Board governance.
In that vein, I ran an open panel on “Best Practices to Build a Private Equity Portfolio – Tools and Strategies”. What was notable was how primitive such angel portfolio management really was. One participant suggested angels portfolio management was comparable to that of public company portfolios 100 years ago. As Angels learn that a passive approach with little portfolio management is sub-optimal, leading Superangels, the advanced Angel groups and the trend to angel funds are all pushing for more professional portfolio management. Although historically they have worked separately, the increased involvement of Family Offices in the world of angels is also starting to drive greater portfolio discipline. New software tools are emerging to help here as well, such as Seraf – Portfolio Management for Angel Investorswhich was built by angels unable to find a way to automate their portfolio management.
In summary, ACA Summit 2015 was a fabulous opportunity to meet, network and learn from some of the best global angels and understand about emerging models and best practices. Many side bar conversations, dinners and drinks in the garden were packed with wisdom from around the world.
In October, our own NACO Summit will be a great opportunity for Canadians to similarly share and learn and to connect with a more global perspective as our Angel ecosystem continues to grow from strength to strength.
The acquisition of MKS by PTC in 2011, caused me to reflect a bit on what good acquisitions might look like and what they might teach us about building (sometimes elusive) long term shareholder value. As a result, over the last 6 months, I’ve progressively assembled a collection on the most significant acquisitions in the Waterloo area. To my knowledge, such information has hitherto never been collected. We all love to speculate, but it is more productive to ground that speculation with facts.
The following table is intended to summarize value creation through the lens of several key benchmarks.
Rank
Company
Acquiror
Acquisition Price [4] (US$M)
Date Acquired
Date Founded
Company Age (years)
Employees
LTM Sales (US$M)
NOTES
1
Pixstream
Cisco
369
Dec 21, 2000
1996
4
196
5.4
2
2
Dalsa
Teledyne Technologies
341
Feb 14, 2011
1980
31
1000
200
3
3
MKS
PTC
304
May 31, 2011
May 1, 1984
27
360
75
4
Mitra Imaging
AGFA Healthcare
252
Jan 3, 2002
1990
12
400
50
5
Bluegill
Checkfree
250
Apr 28, 2000
1996
4
150
20
5
6
Unitron
Phonak
91
Nov 22, 2000
1965
35
300
63
5
7
SlipStream
RIM
91
Jun 1, 2006
2000
6
120
13
7
8
Tsavo Media
Cyberplex
75
Jun 10, 2010
2001
9
120
110
8
9
Watcom
Powersoft
74
Feb 11, 1994
1981
13
100
8.0
9
10
LivePage
Janna Systems
68
Sep 20, 1999
1990
9
12
1.0
10
11
EMJ
Synnex Canada
64
Jul 14, 2004
1979
25
350
303
12
12
DspFactory
AMI Semiconductor
51
Sep 9, 2004
1998
6
75
16
13
Maplesoft
Cybernet Systems
50
Sep 1, 2009
Apr 30, 1998
21
50
12
13
14
PrinterOn
Samsung
40
Sep 2, 2014
2000
14
50
10
15
SS Technologies
Woodhead Industries
35
Jul 31, 1998
1991
7
75
50
14
16
Reqwireless
Google
32
Jun 23, 2005
2001
4
15
1
17
TribeHR
NetSuite
30
Oct 22, 2013
2009
4
24
4.5
18
18
GBG
HighJump Software
26
Nov 1, 2006
1991
15
200
22
11
19
PostRank
Google
25
Jun 3, 2011
Mar 1, 2007
4
20
0
20
Kaparel (Pixstream)
Rittal
21
Dec 10, 2000
1996
4
30
7.1
17
21
VideoLocus
LSI Logic
20
Nov 14, 2002
May 1, 2001
2
17
0
22
RapidMind
Intel
19
Aug 19, 2009
2004
5
25
3
23
BufferBox
Google
17.5
Dec 30, 2012
2011
2
10
0
24
Software Metrics
Equitrac
8
Feb 1, 2000
Sep 1, 1992
8
35
3
16
25
Volker Craig
NABU
5.9
1981
1973
8
45
5.9
TOTALS
2 364
11.2
3 779
983
NOTES:
Sources: public records, internet, personal recollections and interviews with 25 key ecosystem participants. In the interests of data utility, I welcome any revisions or comments regarding accuracy or completeness.
All data are “normalized” into US Dollars, using an exchange rate current on the date of the acquisition. The use of US$ reflects the fact that most technology companies are really valued in US$ and hence that makes comparisons, both across the data and to other jurisdictions, more meaningful.
The sample set is limited to my sense of what a technology company is – your mileage may vary.
Acquisition PRICE includes cash, stock and post deal incentives, including earn outs.
Several companies were re-acquired after the first acquisition (e.g. WatCom and LivePage). These follow on transactions are not reflected in this data.
Some companies spun out several acquisitions, such as Kaparel which was sold out of Pixstream or SS Technologies, originally spun out of Sutherland Shultz.
AGE represents the time in years from founding to the (first) acquisition.
EMPLOYEES is the world wide count.
SALES, given the high growth nature of many of these businesses, levels generally reflect the run rate at acquisition, rather than purely using an LTM (“Last Twelve Months”) measure.
CONCLUSIONS
The above data suggests a lot of trends and insights. It contains a wealth of insights, and also the individual narratives of each of these companies is, in itself, worthy of more discussion and analysis. In aggregate, however, the data suggest some key ideas to me:
Acquisition prices are a great proxy for long term shareholder value, precisely because leading global technology companies provide an informed, third party valuation that likely has way more science than most earlier stage technology company valuation.
Building larger companies takes time. The myth of the “quick flip” startup is (mostly) just that.
As I discuss in my next post, building major technology companies is hard. We don’t (yet) seem to have “cracked the code” on this and need to learn how to build more over time.
The aggregate scale of these companies, at the time of their acquisition, is materially significant to our region – almost 4 000 employees and almost $1 billion in revenue.
Companies take much longer to build than most would expect. While the range in ages from 2 to 35 years is quite diverse, the average age of 11.2 years shows the time, resources and hard work to build real businesses.
Acquisitions are good for our economy. Many people consider acquisitions to be a bad thing, but for those companies that were already at reasonable scale, most have continued to grow post acquisition. In addition to the wealth generated and its spinoffs, the acquirors bring new ideas and often jobs to our region. This is yet another reason why building larger technology companies is so important.
I am hoping that this data collection regarding acquisitions, and my initial take on conclusions, might stimulate further discussion around the notion of building significant value in businesses.
Please feel free to comment, or even contact me, with insights, questions and corrections.
“Expectation is the mother of all frustration.” – Antonio Banderas
Meeting requests are an amazing invention. Pioneered, and standardized, almost 20 years ago by companies like Microsoft (as part of Outlook/Exchange), Novell (Groupwise) and Lotus (now part of IBM Lotus Notes) this innovation had great promise to automate an essential, yet completely routine, aspect of modern life.
The ascendency of meeting request usage, also rides several trends:
In the 1990s, I had an Executive Assistant who scheduled my time, acted as a “gatekeeper” and also worked on many projects. She was a master tactician who managed to keep 3 or more Type A executives productively multi-tasking. In many ways, sadly, such personal assistance is being subsumed by..
Increasing computational power means that automation of routine tasks, personalized to the needs of individuals is much more of a reality,
The mobile revolution has made meetings much more multi-modal and virtual, but also means that most executives must be productive even while being mobile nomads, and
Calendars have migrated from paper – I switched about 20 years ago – to desktop computers using Outlook and the like, and now to the ubiquitous smartphone and tablet devices. Such mobile devices are both convenient for calendars, but also frustratingly fiddly places to enter complex meeting details.
Thus, enter the humble Meeting Request which has swelled in popularity. I received my first such request from an Outlook/Exchange user around 2000 and they remained rare until perhaps the last 5-10 years. Now they seem to be everywhere.
In homage to my friend and colleague, Jim Estill, the quintessential time management guru, I ought to be cheering this time saving invention.
And, yet my enthusiasm is sorely tinged by a frustrating implementation resulting in suboptimal user experience …
Top 10 Meeting Request FAILs:
Trojan Horse: It has always seemed odd to me that a third party inviting me to a meeting could embed their own meeting information in my calendar, and yet I am unable to edit this “foreign” request that has invaded my calendar.
Split Personality: If Jennifer invites me, Randall, to a meeting, then why does my meeting title say “Meeting with Randall” instead of “Meeting with Jennifer”? Computers are designed to automate routine tasks so there is absolutely no excuse for this one.
No Annotation: I write comments in the notes fields of my calendar all the time. Why can’t I say, for example, “Joe is a bit dodgy” or “First met back in 2001”?
Duplication: Many times I receive a meeting request for a meeting that I have already carefully crafted an entry in my own calendar. Again, computers are supposed to be smart enough to figure these things out and merge them in an intelligent way.
Bad Versioning: Many times when meeting information is changed, such as time or venue, the update isn’t seamless. For example, it is common to have both the original and the updated version lingering in my calendar.
No Scheduling: Meeting requests are often used as trial balloons in trying to schedule busy people into meetings. The endless rounds of “Accept”, “Maybe” or “Decline” responses can end up being quite frustrating, especially for many person meetings. These, often fruitless, interchanges underscore the fact that meeting requests don’t automate routine scheduling. Instead, people have to resort to tools like Doodle to vote on alternatives, and then manually schedule the winning result.
Verbosity by having superfluous words in the limited real estate of the meeting subject line. E.g. pre-pending “Invitation:” or “Updated Invitation:” onto the front of a subject, effectively burying the important words. Many times they are put there to increase the impact and readability of the email subject line to ensure opening, but distract in the actual Calendar entry.
Invitations from GoogleEnterprise Apps or GMail tend to be the most arcane and ugly. Originally, I chalked this up to Google Calendar‘s relative immaturity compared to Outlook, but the brutally long notes and long subject lines continue to stand out as worst in class, almost to the point that I dread getting invited by Google users.
Lack of Anticipatory Computing: in an age where mobile devices know location, existing meetings and other personal habits, the trend to predictive intelligence could be incorporated into smarter meeting requests. For example, combining meeting requests with shared “Free/Busy” data could remove many manual scheduling steps.
No Personalization: Like my contact list, I put a fair bit of thought into crafting a calendar that is both useful now, but also provides a detailed audit trail of my business interactions. To do this, I use conventions, categories and other techniques that, sadly, cannot be injected into these un-editable meeting requests that instead reflect the third party initiator’s preferences.
Do let me know in comments if I missed any major points.
Given the power of networked computing to automate, why is there such a lack of excellence and progress in this particular area?
In fairness, I believe that part of the problem lies in the interplay between competition and the vagaries of formal industry standards. That said, this should be no excuse.
It is admirable that, unlike word processing formats, the various pioneers started to develop standards call iCalendar (and later vCalendar) around 1997 to standardize file formats (like .ical and .ics) and email server interactions. I do know the Microsoft attempted to extend the functionality with some very useful things around that time. But, for some reason, a great idea got off to a good start, but seems frozen at an almost Beta level of functionality.
To conclude, please read this post, not as a gripe, but instead as a call to action to developers to help take the humble meeting request to the next level of user experience. Any takers?
At the NACO Summit in Québec City, it was truly humbling to receive the Canadian Angel of the Year Award. I see this partly as a calling to be an ambassador to continue to help raise the Angel bar in Canada in the coming years. I wish to thank all those kind colleagues who, unbeknownst to me, wrote letters of nomination. Also, this is all based on the remarkable people at GTAN and in the Waterloo and Canadian ecosystem generally.
In response to the award, and recognizing the opportunity to build on current success, I shared the following observations and future challenges at the closing Keynote on Friday 3 October, 2014.
“TODAY’S CRITICAL MASS CAN POWER A QUANTUM LEAP”
Closing Keynote NACO Summit, Québec City Friday 2 October, 2014
Bonjours, mesdames et messieurs. Good morning, ladies and Gentlemen.
I hope that Yuri was aware of what he was unleashing by inviting me to share perspectives and future challenges of Angel investing in Canada! Not unlike a startup running on “fumes”, Canada’s angel sector reminds me of the quip from cartoonist Bill Hoest: “I just need enough money to tide me over until I need more”. I’ll start by looking back to help us paint a future directional context.
As Angel investors, we’ve watched a powerful people-driven engine, coming from nowhere, to become a key enabler of Canada’s future prosperity. As Angels, we fuel innovation companies with our capital and mentorship, ultimately creating some of the highest value jobs for 21st century Canada. What’s not to like about that?
Let’s turn the clock back about 5 years. In 2009, the global economy endured the infamous credit crunch, perhaps the worst economic correction since the Great Depression. I observed this to be the final nail in the coffin for a large number of Canadian venture capital firms, for years struggling to generate viable returns. The seeming extinction of venture capital A-rounds and the bleak landscape for young, emerging companies, compelled me, as a seasoned tech investor, to get involved with the founders at Golden Triangle AngelNet (GTAN) in Waterloo-Guelph-Wellington-Stratford area. In a pattern surely repeated across Canada, Angel Groups from a slow start quietly and persistently worked to fill the funding gap through a labour-intensive “syndication” of Angel capital, with other groups and with government co-investment. In Ontario, this meant repurposing MaRS IAF from its origins as a VC on-ramp to co-investment in Angel rounds, lobbying that ultimately led to the Feddev “Investing in Business Innovation” (IBI) program, and BDC convertible notes.
A typical syndication for a top tier investee company might entail half a million dollars of Angel money being spun into $1.5 million or more. I used to describe this approach as providing “half the money of a VC A round for 10 times the effort”. At the time, I imagined this to be a strategy for a short term “bridge” of Canada’s innovation ecosystem to a more sustainable future. How did this market correction turn out for Canadian Angels?
NACO stats show a remarkable growth in total Angel investment. Between 2012 and 2013 alone, Canadian Angel group direct investments grew a stellar 120% from $40 million to $89 million. Of course, this doesn’t capture the aforementioned co-investment leverage that Angel investors attract nor does it cover investments outside of NACO members. All of us rightfully deserve to be proud of such collective impact.
But is it enough? Both from my own international investing and available statistics, it would appear that Canada’s Angel ecosystem is ahead of Europe on the maturity curve. I would estimate Canada has a 3-5 year head start on Europe. On the other hand, our American friends are definitely well ahead in maturity, deal dollars and information gathering. Angel Capital Association (ACA) data shows almost $25 billion of total US angel investment in 2013. To be at this level, on a per capita GDP basis, Canada would need about $2.8 billion of annual Angel investment. Even counting all the leverage, Canadian angel investment needs to grow 5 to 10 times over the coming years just to achieve parity with the US.
In Waterloo, home of Perimeter Institute, we tend to love Quantum Mechanics metaphors. Thus, propelling today’s critical mass through a quantum leap is a mission all of us need to work on collectively and individually, whether as angels, angel groups, NACO, governments, venture capitalists, sponsors, in fact, each and every ecosystem participant.
So, I will conclude by identifying just five of the gaps that we collectively need to fill:
Scaling: Recently, my friend Steve Currie, VP Strategy at Communitech, observed “Canada is great at starting companies, but not so good at growing them beyond the 5 year horizon.” This means less job creation but also smaller exits. In a study of 183 recent high tech exits versus 2300 comparable US exits, the average US valuation was US$384 million versus US$100 million for the Canadian companies. I don’t know about you, but I find it simply tragic to leave so much value on the table. Angels have a huge role both in mentoring management skills around scaling, but also pivotal to financing that scaling. And, bigger exits, will in a virtuous circle, drive more Angel investment.
Giving Back: We need more of our successful serial entrepreneurs to become (super) angels and continue to start new ventures. In the Silicon Valley, Paypal alone had 14 serial entrepreneurs like Peter Thiel and Max Levchin whose experience and wealth helped build legends like LinkedIn, YouTube, Tesla, Kiva and Yelp. While we do have a few super angels, we have yet to spawn someone like Ron Conway whose 600 investments include Google, Facebook and Twitter. Canada needs more titans like Mike Volker and Jim Estill.
Deal Discipline: Great companies grow and scale partly because of external motivations. In the 1990’s the hottest companies all wanted to do an IPO and that involved a playbook of enhanced management, systems and processes that also helped the companies scale into better organizations. VCs also played a part, but today, this role often falls onto Angel investors, hence requiring a more “institutional” approach versus becoming just another retail asset class.
Co-investment: Government funding has been critical to our success and it is key that funding increasingly backs Angel choices rather than governments having to choose winners. That said, there is plenty of room for more. For example, our Feddev IBI program in Ontario provides a 50% match while the almost identical “Double Equity” program in Austria does a 100% match to angels. And, the Angel Tax Credit, so common internationally, in parts of the US and in BC, would provide a much-needed boost to overall Angel resources.
Operational Innovation: Currently, most angel groups run as nonprofits using largely committed volunteer deal structuring and with little automation of the process. A big reason for this is Securities Regulations, especially in Ontario, that put a chill on innovations that might trigger an expensive regulatory burden. While there is some hope that the proposed Equity Crowd Funding rules might provide the clarity for such innovations, there is also the risk that this is a force that further pushes deals into a retail mode when what we need instead is more institutional discipline.
With these key points in mind, and assuming the right environment, I have no doubt that greater innovation in business models will fuel growth of a larger and more sustainable Canadian angel landscape. All of us can play our part. To dial up our game, will be an aggressive, yet I believe achievable challenge. And, we need even better measurement so we can regularly monitor, and report back to ecosystem participants, our progress.
The road forward isn’t just about traditional business. Because Angel investors’ motivations uniquely straddle the ever-blurring boundary between “passion capital” and Wall Street-style finance, Angel investing will increasingly be a great exemplar of Social Innovation. To me, the culture of collegiality and sharing resembles my experiences in nation-building around charitable foundations.
The last five years have witnessed an unprecedented expansion of Canadian Angel investing and we are poised for even more remarkable growth in the next five. In the words of the incomparable Alan Turing,
“We can only see a short distance ahead, but we can see plenty there that needs to be done”.
Almost four and a half years ago, I penned what some called the obituary of Blackberry (see “How You Gonna Keep ‘Em Down on the Farm”). My intentions in writing that missive were, in fact, quite the opposite. Back in 2008, a year after the first iPhone, Blackberry didn’t appear to be heeding the threat of major market disruption, let alone making a response. I thought that writing such a post might incite some action. Sadly, while I got loads of reaction from all over the world, the one missing piece was that this was singularly not registering inside the “Faraday Cage” of RIM headquarters at Philip and Columbia in Waterloo.
For many years, to continuously hone my expertise as an investor and participant in the next generation mobile ecosystem at VERDEXUS, I have maintained a “production” device and a “testing” device which allows me to sample the greatest number of new applications and platforms in my daily business and personal life. At the time of the 2008 blog, I switched from Blackberry as production device and iPhone as testing device. At that time, I promoted iPhone to production and introduced an early Android device into the testing status.
The four and one-half years since then, representing four to five mobile device generations at the rapid pace in which these are deployed, has seen a lot of innovation and change in the mobile universe. The first production version of Android occurred one month after the aforementioned post. Today, over nine releases later, Android 4.2, known as Jelly Bean, is a mature and polished mobile platform.
Mobile user experience has, as it were, come up from the Farm and we are now definitely in Paree. It’s hard to imagine how things could get much better, yet an even more exciting future in mobile will undoubtedly unfold. The pace of change has been almost mind boggling, with Android appearing to move almost twice as fast as iOS, the more proprietary Apple platform running iPhone and iPad.
As a young platform, Android has long shown promise. Being an open source operating system primarily developed by Google, but customized by various device manufacturers, not to mention the ever-meddling carriers, has been both a blessing and a curse. Initially, Android seemed “rougher around the edges” and more techie in feel than the uber-polished and legendary iPhone experience, which is produced end to end by Apple.
Conversely, the limitations of the Apple closed ecosystem approach are starting overtake the advantages. There are numerous examples. If you simply want to plug in your device via USB and load music and other files, Android shines by bypassing the need to go through iTunes. While iTuneshas its advantages, many of us simply want more control over our cross-device media file deployments. Another even more telling example is the recent debacle in which Apple turfed the tried and true Google Maps application in favour of a badly implemented and incomplete version of their own. This is but a single example of where Apple’s legendary quest for control is wearing thin.
While giving more control to mobile application developers has its challenges, it is clear that no one company, no matter how sainted, can determine, let alone sully serve, the desires and needs of the entire mobile universe.
It is a combination of this clear advantage, coupled with the incredible progress inAndroid and its handset manufacturers, that has led me to promote my newest device to production and render the formerly top-billed iPhone second tier status of my test device.
For me that device is the Samsung Galaxy Note 2, which with its 5.5″ screen is sometimes dubbed a “phablet” (ie. a combination of phone and tablet). Essentially a super-sized Galaxy S3, this phone is nimble, fast in computational processing and with speedy network connectivity. I first saw Europeans use it a few months ago, a cool and capable device, but perhaps an acquired taste for some
Perhaps it is simply my poor vision, but the large screen size is versatile and a joy to work with for all sorts of browsing, content and documents. The S Penstylus, even for those who don’t want to do handwriting or line drawings, transforms the mobile browsing experience by removing the navigation problems on many sites with menus which are small on mobile screens. Samsung has even developed an SDK around the S Pen which could create a whole new application ecosystem, assuming this next generation stylus gains sufficient market traction.
Is my recent promotion of Android to top device spot the end of my quest for mobile perfection? Absolutely not! In fact, only one week ago, I personally promised my colleague Alec Saunders, the ubitquitous and transformational new VP of Developer Relations for Research In Motion, that I will definitely give the new Blackberry BB10 devices a serious try. And, not just because “Devs, Blackberrry Is Going to Keep on Loving You”. I truly do like much of what I’m hearing about their capabilities.
Stay tuned – the mobile world is a fascinating and ever changing one.
In the world of wine, the concept of terroir describes a centuries long process in which the climate, soil, grape varieties and dedicated vintners, symbiotically develop a unique “sense of place” for a wine region. A favourite of mine, the garrulous and quintessential Californian vintner, Randall Grahm, while trying to establish the old World notion of terroir in California postulates that it is a long term proposition and can take centuries to develop.
As both a wine lover and serial tech entrepreneur, I firmly believe that building a tech cluster is similarly a very long term process. Ironically, the epicentre of tech clusters is in California. The Silicon Valley, which got its start in the 1950s remains the major cluster worldwide as “… no other place as yet has the Valley’s scale and resilience.”
Although I started my tech startup career in the US, it was in the Canada’s leading tech cluster of Waterloo where I built major companies and was one person who got that cluster started. Like Silicon Valley’s origins in Stanford University, the Waterloo cluster was initially fuelled by University of Waterloo. Over time, a combination of executive and programming talent, capital and professional services capabilites led to the current state of almost 1000 technology companies. By contrast to Silicon Valley, Waterloo is a must younger cluster, having started just over 25 years ago compared to the 60 years of Silicon Valley. It continues to mature around some key ingredients such as global strategic marketing capabilities and sufficient capital to fund on a globally competitive basis. Experienced people may well be the most important ingredient in a cluster’s maturation.
Further, I feel that all who have been fortunate to build wealth and experience in business, owe an obligation to “pay it forward” to the next generation. My own contributions include significant startup mentoring, Board and strategic roles in organizations like Communitech and Innovation Guelph, and for the last 3 years a Board role and chairing Selection Committee for the Golden Triangle AngelNet (GTAN). In just 3 years, GTAN has grown to about 150 paid accredited investor members who bring a wealth of experience to the 25 funding transactions to date. And, it goes without saying, that many of those financings might not have happened without GTAN having emerged to fill a significant funding gap as VC’s became largely extinct. Acting as a superangel to syndicate angel network deals is a tremendously labour intensive exercise, but one that I and others believe will pay off in the long term economic prosperity of our region.
I firmly believe knowledge-based companies to be the key ingredient of our future economic prosperity, so such company-building competence is mission critical for our region, province, country and globally. As globalization occurs, we see more and more regions clambering to reap the riches of the innovative, tech startup world.
To that end, at Verdexus, we have always taken a transatlantic perspective, primarily to have a more global window on building companies that can achieve world leadership in their chosen businesses. Over the years, I’ve worked with startups across the United States and Europe in the dominant clusters such as Boston, Chicago, Silicon Valley, London, Munich, Berlin, Stockholm and more. To round out my experience, over the last few years, I’ve sampled some key emerging regions by volunteering as an expert judge in places as diverse as Brussels area, Warsaw and Torino. A week ago, I had the opportunity to judge startups associated with the European Space Agency in Toulouse France as well as in Istanbul, Turkey. The latter Istanbul venue, EU Venture Forum was jointly sponsored by EUREKA (the pan-European research and development funding and coordination organization) and Europe Unlimited from Brussels. Collectively, these more than a dozen regional events ultimately feed into a pan-European venture prize in Berlin in December.
It has been very instructive to visit various clusters. This grassroots view, from the perspective of startups, reveals much in common globally but also a few surprises. Based solely on interacting with local startups, on a global perspective, it is clear that culture and experience vary greatly across various Euroopean regions. For example, I was pleasantly surprised that Warsaw had some of the smartest and most sophisticated business startups I’d seen anywhere. And, remember, they are pitching in English which is not their native language. Conversely, the cluster around Torino appeared to have a long way to go before its startups would begin to measure up globally.
Pitching in Istanbul
Similarly, the startups I saw in Istanbul were impressive. Some companies, following a model also common to the emerging markets of Central and Eastern Europe, were essentially cloning an existing business model into the 80 million strong Turkish market. More significantly others were clearly building globally strong technology startups. One pleasant surprise was that, of the eight companies that I coached the day before the forum, three had women CEOs. This was a surprise for Turkey, but sadly women-led companies remain all to rare in Canada
The calibre of engineering and basic technology talent was very impressive. That said, it was also clear that the level of support ecosystem around these startups is very limited – at least compared to what we see here in North America. One direct challenge was that in Europe companies appear to receive generous R&D funding which seems to encourage more of an engineering mentality than a market-driven one. In essence, projects stay too long as “science projects” and the culture and skills to get projects to market seem to suffer as a result. Although this is a generalization, there are many exceptions.
In the area of capital, the meltdown in Venture Capital A Round investments is about 3-4 years behind what already occurred in Canada. One particularly European challenge is that more and more of the VC funds have moved their offices and focus from regional markets to London, meaning that companies in the regions often have less direct access to capital. Conversely, the growing role of Angel Networks and Superangels to fill the gap is still in its infancy in Europe. I suspect that will change over the next two or three years. Venture funders like to either be close (1 hour travel) to their portfolio companies or, at the very least, to have a local investor who can “provide adult supervision”. Increasingly, experienced serial entrepreneurs will be called on to fill that key local role as Angels and Superangels. It is clear that the notion of Tim Draper going to Estonia and finding Skype is definitely the exception rather than the rule.
And that takes me right back to the notion of “tech terroir”. As global innovation increases, and people around the world vie to build ever stronger tech startup ecosystems, it is the dedicates entrepreneurs in the sector who magically nurture these maturing ecosystems. As one of the entrepreneurs that I coached mentioned, she wants to:
“make innovation easier in Turkey and to make life easier for entrepreneurs”
So, in addition to building a great global business, she also takes time to help move the needle of her local ecosystem forward. It’s a very encouraging sign that continues to inspire me as I engage with the new globalized world of tech startups.
This summer I took time to re-read an oft-overlooked volume that I believe to be the essential to anyone working in marketing and innovation. In this review, I’ll provide a few examples of why this book needs more attention, particularly here in Canada where we definitely need to up our game in marketing of innovation and technology.
Clayton Christensen, as Associate Professor of Business Administration at Harvard Business School, is a leading academic researcher on innovation. Yet, he still manages to provide practical and pragmatic strategies that real companies can use. And, most importantly, his theoretical groundwork is based on extensive, data intensive research over longer period of time with real companies and markets going through disruptive innovation.
The latter term is often thrown around lightly in technology company circles. A Disruptive technology (or innovation) typically has worse product performance in mainstream markets while having key features that interest fringe and merging markets. By contrast, sustaining technologies provide improved product performance (and often price) in mainstream markets.
The book covers real markets, including the various generations of disk drives starting with 14″ drives in the 1970’s to today’s 2.5″ (and smaller) drives. By studying hundreds of companies that emerged, thrived and failed over a 25 year period, some clear patterns emerge. Further examples across a broad range of markets, include he microprocessor market, the transition from cable diggers to hydraulic “backhoes”, accounting software and even the transition of industrial motor controllers from mechanical to electronic programmable models.
The key message of the book is that the playbook for normal (“sustaining”) technology innovation must be thrown away for disruptive technologies. Disruptive technologies break traditional rules in many, often counter-intuitive ways:
Financial – typically disruptive technologies are more expensive and have lower performance than existing products. This effect causes financial managers to kill many such innovations.
Marketing: the normal rule to “listen to your customers” must be thrown away – instead many educated guesses with repeated failures are the only path forward.
Organization: given the ability of normal strategies to reject disruptive innovations, such practices as heavyweight teams (which silo the team with more autonomy) and even spin-outs are the order of the day.
Entrepreneurial writings, not to mention my own experience, encourage us to celebrate failure. Beyond the power of learning by trial and error, The Innovator’s Dilemma, for the first time, provides an analytical framework as to why such failure is so critical in new markets.
One area where the book could provide more guidance is that of differentiating disruptive from sustaining technologies. Such discrimination is absolutely critical to ensure the right strategic approach to the new technology is adopted. Generally easy with the benefit of hindsight, such determination can be very tricky, and error prone, when first confronted with such new technologies.
This is a book that anyone working with products in fast moving markets needs to re-read regularly. It surprises me that, 15 years after publication, how few product marketers and senior executives appear to have benefited from the deep wisdom Christensen imparts.
After welcoming people to the 050th Reunion of the ‘Bunand other 1970’s computing at University of Waterloo in mid-August 2012, I’ve gathered together a photo album, the brief presentation from the Gala and the many comments received outside of the earlier blog post.
Before the Gala, almost 100 photos were gathered which have grown to almost 250 contributed by various attendees. Enjoy browsing the memories.
Dave conroy
Sytem controller
Card Reader
Line Printer
Removable Disc Driver
Randall Howard
Dave Buckingham
Charles Forsyth @ Math/Unix
Eric Manning
Dave Martindale
Robert Biddle
Mark Niemiec
Jim Gardner
Vic DiCiccio
Dave Martindale
Peter & Sylvia Raynham
Wendy Nabert Williams
Rohan Jayasekera
Hide Tokuda & San-Qui Li
Dave + Randall @ Mark Williams
Alex White
Randall @ MKS
The Hacks @ Randall&Judy Wedding
Math Building
Morven Gentleman
Morven Gentleman
Eric Manning
Eric Manning
Ciaran O’Donnell
Michael Dillon
Peter & Flaurie Stevens
Rick Beach
Rick Beach
Brad Templeton
Brad Templeton
Brad Templeton
Ian Chaprin
Ron & Amy Hansen
Jon Livesey
Johan George
Kelly Booth
Mike Malcolm
Ian! Allen
Linda Carson
Linda Carson
Dan Dodge
Dave Huron
R Anne Smith
Trevor J Tho,mpson
Math Building
I’ve also included the brief presentation from the Gala on Saturday 18 August, 2012 in case anyone wants to see that:
Finally, there was a lively discussion via email,Facebook, Google+, LinkedIn and Twitter both from attendees and those who were unable to join us. The following is a summary of some of those reflections and comments:
Morven Gentleman
Randall,
The first story that comes to mind is how we got the Bun in the first place.
In 1971, Eric Manning and myself as young faculty members felt that it was embarrassing that a university which wanted to pride itself on Computer Science did not have any time-sharing capability, as all the major Computer Science schools did.
At the time, the Faculty of Mathematics was paying roughly $29,000/month to IBM for a IBM 360/50, which was hardly used at all – it apparently had originally been intended for process control, but that never happened. (Perhaps the 360/50 had been obtained at the same time as the 360/75 – I never knew.) So Eric and I approached the dean with a proposal to see if those funds could be diverted to be spent instead on obtaining time-sharing service. The dean approved us proceeding to investigate the options.
The popular time-sharing machine of the day in universities was the DEC PDP-10, so we wired a spec to get one, but issued the RFP to all vendors. In the end, we received bids from IBM, Control Data, Univac, DEC, and Honeywell. IBM bid a 360/67 running TSS 360 at more than twice what we were paying for the 360/50, and at the time only the University of Michigan’s MTS software actually worked at all on the machine: the bid was easily dismissed. Control Data bid a CDC 6400 at above our budget, but at the time didn’t have working time-sharing software: again easily dismissed. Univac bid an 1106, again above our budget, and although its OS, Exec 8, had some nice aspects as a batch system, we had no awareness of time-sharing on it: so we dismissed it too. DEC bid a KA 10 almost exactly at our budget: this was what we originally wanted, so it made the short list. Honeywell bid the 6050 for $24000/month, notable savings for the Faculty, and since I had used GCOS III at Bell Labs, I knew that even if not ideal, it would be acceptable: again on the short list.
Announcing the short list had a dramatic effect. DEC was so sure that they would win that they revealed that, as was their common practice in that day, they had low-balled the bid, and a viable system was actually going to cost $32,000/month.
Honeywell instead sweetened their bid – more for the same money, and the opportunity for direct involvement with Honeywell’s engineering group in Phoenix. Whereas with DEC we would be perhaps thousandth university in line, and unlikely to have any special relationship, Honeywell only had three other university customers: MIT, who were engrossed with Multics; Dartmouth, who had built their own DTSS system; and the University of Kansas, who had no aspirations in software development – we would be their GCOS partner.
The consequence was there was no contest. The Faculty cancelled the 360/50 contract and accepted Honeywell’s bid. I agreed to take on the additional responsibility for running the new time-sharing system. The machine had already been warehoused in Toronto, so it was installed as soon as the machine room on the third floor could be prepared.
Morven (aka wmgentleman)
Eric Manning
Hi Randall
Yes, all’s well here. I was mandatorily retired from UVic but continue to work on various projects for the Engineering Faculty, and a bit of consulting etc. Engineering has no end of interesting things to work on. I’m very sorry that I can’t attend your Unix/Bun/CCNG celebration; the mark we made certainly should be celebrated!
I’m distressed about the crash & burn of Nortel and now RIM, and I certainly wish you well in keeping the tech sector alive and well. Rocks, logs and banks alone do not a healthy economy make.
All the best
Eric
Gary Sager
Randall,
Unfortunately I have to be in Seattle at that time. It does sound like a good time will be had. I would especially like to go to the Heidelberg again (which I did have the occasion to do in 2001 [or so]).
After Waterloo, I did time at BTL (in Denver, working on real-time systems) then wound up at Sun in charge of the Operating Systems and Networking group — putting me in charge of what was arguably the best set of UNIX people ever assembled. Had a number of other adventures after Sun, and finally decided to retire when the people I was hiring were more interested in how much money they could make than in what they would be doing. Guess I was spoiled by the Sun people I managed.
I have a “blog” updated quarterly for friends and family: http://bclodge.com/index.htm
Do look us up if you are ever in this area (Bozeman, MT). Some memories:
One day some malicious (and uncreative) person copied down a script that was known to crash UNIX by making it essentially unusable. It went something like:
while true do mkdir crash cd crash done
Some subset of the hacks (I forget which) spent a great deal of time trying to figure out how to undo the damage. The obvious things did not work. They finally decided to go to dinner and think about it. I stayed and thought of a way to fix the problem; I finished the fix just as they returned. They wanted to know how I did it. I never told them and am still holding the secret (it was a truly disgusting hack).
Anyhow, the hacks I most remember (other than yourself) were Ciaran O’Donnell (on LinkedIn), Dave Conroy, the underage Indian kid whose name escapes me at the moment, and one more Dave (Martindale?).
Some more stories:
Someone from Bell Labs came to give a talk about text to voice and gave a demo by logging in via phone modem to the Bell Labs computers. The hacks looked at the phone records and figured out how to log in to the BTL system. Suddenly our Math/UNIX system was getting all the latest new UNIX features before they were released (by means unbeknownst to me). The BTL people weren’t terribly happy when they found out, but they were happy to accept a guarantee it would stop.
We kept trying to use the IBM system to do printing with a connection to one of their channels (I think they were called). It would frequently stop working and someone would have to call the operator and say “restart channel 5” (or some other jargon). I had a meeting with the IBM staff to see if we could get the problem fixed. At that meeting I recall one of the staff was incredulous that our system did not reboot when they rebooted the IBM mainframe. Anyhow, they were reluctant to fix the problem so I told them I would fix it by buying a voice synthesizer (as demonstrated by BTL) and have our system call their operator to instruct them to “restart channel 5”. They fixed the problem.
The worst security problem I recall someone finding in the ‘Bun’ was to do an execute doubleword where the second word was another execute doubleword. Execute double word disabled interrupts — this was a way of
executing indivisible sequences of instructions. By chaining this way for exactly the right amount of time (1/60 second I think) and doing a system call as the last instruction, there would be a fault in the OS for disabling interrupts too long and the system would crash. I don’t know if anyone ever figured out a fix since this was essentially hardwired into the machine.
I assume there will be pictures, etc from the event….
Gary (aka grsager)
Richard Sexton
Richard Sexton: I still used the ‘bun for a few months when I moved to LA in 79 (x.25 ftw). I’d love to be there but can’t make it that day but I promise when there’s a similar event for math unix I will be there; that was the first (and I sometimes think only) decent computer I ever used.
When I worked with Dave Conroy summers at Teklogix, we worked for Ted Thorpe who was the Digital sales guy running around selling the same machine to six different universities just so they could sign for it at the shipping dock and get it on *this* years budget. Ted would then take the machine to the next school until Digital has actually made enough they could ship all the ones that had actually been ordered.
Stefan Vorkoetter: Wow! I remember using that machine in the 80s. It must have been kept alive for quite a while if it was installed 40 years ago.
Judy McMullan: It was decommissioned Apr 23, 1992 Brenda Parsons: The 6050 or the Level 66 or the DPS8 — wasn’t there a hardware change in there somewhere before ’92?
Jan Gray: Thanks for explaining the S.C. Johnson connection. I had no idea how the Unix culture came to Waterloo.
I was just a young twerp user, but I fondly remember the Telerays and particularly rmcrook/adv/hstar. As well as this dialog (approximate) :-
Sorry, colossal cave is closed now. > WIZARD Prove you’re a wizard? What’s the password? > XXXXX Foo, you are nothing but a charlatan.
c .r ..a …s ….h_
Ciaran O’Donnell
Random musings from the desk of Ciaran O’Donnell when he should be working
I would especially like to thank my dear friend Judy McMullan for organizing this wonderful reunion.
I am so glad to have gone to a University that was born the same year as me, that taught you Mathematics, that did not force you to program in Cobol or use an IBM-360, and that paid people like Reinaldo Braga to write a B compiler. It was nice to have L.J. Dickey teach you about APL in a world before Excel and to learn logic and geometry.
It was so nice to go to university, to not have to own a credit card or a car, to be able to wash floors at the co-op residence, and to pay tuition for the price of a 3-G iPad today. It was not so bad either not to get arrested for smoking pot or crashing the Honeywell main frame even though one was quite a nuisance, or to play politics on the Chevron.
It was so neat to be mentored by people like Ernie Chang and Jay Majithia. The University of Waterloo in the 1970s is an unsung place of great programming. I just have to look at what people like Ron Hansen accomplished designing a chess program or what David Conroy has become. As for myself, I have actually learned C++ and Java which proves that you can teach an old dog new tricks.
How things have changed. Back then, we kicked the Marxist-Leninists off the Chevron. Nowadays, communist officials from China can come to America and get a heroes welcome at a Los Angeles Lakers game. All I will say about my life since 1979 is that I have been in France is … “I KNOW NOTHING” like Sgt. Schultz from Hogan’s Heroes.
I am especially grateful to Steven C Johnson for having inspired me to get into compilers and to Sunil Saxena for having encouraged me to come to California.
There are a lot of fun people down here from Waterloo including myself, Peter Stevens, Rick Beach, Sanjay Rhadia, David Cheriton, Dave Conroy, Kent Peacock, Sunil Saxena, John Williamson, and a whole bunch of others.
Ciaran (aka cgodonnell)
Dave Conroy
Sadly, I am not going to make it. It was touch and go right to the end, but I have to go to DC to be a witness in an ITC dispute.
Lynn and I will try and sync with the group online on Saturday.
Building larger technology companies is critical for our future economic well being, yet somehow we seem to pay more attention to the seed and startup phase. This post and a subsequent missive, Wisdom from Recent Waterloo Technology Acquisitions, aim to analyze some recipes for building technology businesses to scale first from the perspective of recent companies and then specifically through the lens of local acquisitions. This pair of posts will be based on extensive data, but the findings are intended to start discussion rather than be the last word.
The importance of building new, innovative, and large, companies can’t be underestimated regionally, provincially and nationally. Here in Waterloo, with perhaps 10 000 jobs at a single behemoth, Research in Motion, the notion of job creation is particularly topical simply to lessen our dependency on such a large company.
My sense is that, of late, most of the focus centres around making startups: small, energetic and entrepreneurial software, web and mobile companies, some simply building a mobile application. And, even with the current notion of Lean Startups or our Venture 2.0approach, there is no question that building such early stage companies is probably an order of magnitude cheaper than it was back in the 1990’s While undoubtedly a good thing for all concerned – founders, investors and consumers all have so much more choice – has this led to a corresponding increase in new major businesses in the technology sector?
I see this as more of a discussion than a simple answer, and thus to start, I include the following table of my sense of how the numbers have changed over time. The following table provides some idea of how company formation has trended over the last 25 years, through the lens of scale rather than acquisitions:
[table “” not found /]
NOTES ON DATA:
Sources: public records, internet, personal recollections and interviews with 20 key ecosystem participants.
The definition of “big” is purposely somewhat arbitrary (and perhaps vague). I am using a threshold of 50 employees or $10 million in revenues, which is probably more indicative of these startups becoming mid-sized businesses.
INITIAL INSIGHTS:
This data, while helpful, can never provide a complete answer. However, it can guide the conversation around what I see to be an important economic mission for our region and country – that is, building more significant technology businesses. I’m sure there are no easy answers, but in shaping policy, it is important to base decisions on informed debate and research.
To that end, I would offer the following thoughts:
The current plethora of “lean startups” does not (necessarily) represent a clear path to growing those startups into larger businesses.
I suspect that, in some ways, multiplying small startups can retard the growth of larger companies. That said, the data are insufficient to prove cause and effect.
At the ecosystem level, we need to focus resource allocation beyond simple startup creation to include building more long term, and larger, technology businesses. Instead of spreading talent and other resources thinly, key gaps in senior management talent (especially marketing) and access to capital (B rounds and beyond) need to be resolved.
Even in day to day discussion, the narrative must shift so that entrepreneurism isn’t just about startups, to make company building cool again.
Canada holds many smart, creative and hardworking entrepreneurs who will undoubtedly rise to the challenge of building our next generation economy. Meanwhile, I’d welcome comments, suggestions and feedback on how we can build dozens or more, instead of a handful, of larger technology companies in our region.
rd party inviting me to a meeting could embed their own meeting information in my calendar, and yet I am unable to edit this “foreign” request that has invaded my calendar.
Mobile user experience has, as it were, come up from the Farm and we are now definitely in Paree. It’s hard to imagine how things could get much better, yet an even more exciting future in mobile will undoubtedly unfold. The pace of change has been almost mind boggling, with Android appearing to move almost twice as fast as iOS, the more proprietary Apple platform running iPhone and iPad.
Pitching in Istanbul
Eric Manning
Gary Sager
Richard Sexton
Stefan Vorkoetter: Wow! I remember using that machine in the 80s. It must have been kept alive for quite a while if it was installed 40 years ago.
Judy McMullan: It was decommissioned Apr 23, 1992
Brenda Parsons: The 6050 or the Level 66 or the DPS8 — wasn’t there a hardware change in there somewhere before ’92?
Jan Gray: Thanks for explaining the S.C. Johnson connection. I had no idea how the Unix culture came to Waterloo.
Ciaran O’Donnell
Dave Conroy
2 Jan 2025
0 CommentsWaterloo Tech – Ancient Acetates from the Early Years
Happy New Year, 2025!
During personal housecleaning, I came across a file folder, with the overhead acetates of a Powerpoint presentation I had thought long vanished.
Back in 1993, Yvan Couture and I co-founded a CEO group for Waterloo area (then including Guelph) technology industry CEOs, later known as Atlas Group,. By our second year, we had all gained immensely from a forum where we could learn together in a peer-to-peer mechanism. And as most of us were jet-setting, high export business leaders, it was good to reflect on what we could share locally in our community. As we compared notes, we realized that we needed to work together to better tell our story, including to various levels of government who had yet to fully understand the transformative potential of the new knowledge-based business paradigm we represented.
On October 27, 1994, we chartered 2 small planes from Waterloo International Airport to fly 15 of us to Ottawa to tell our story to the federal government. Assisted by the late Andrew Telegdi, Waterloo MP at the time, we booked meetings with John Manley, the iconic Minister of Industry, Jean Chrétien, Canada’s Prime Minister, and Ottawa tech leaders, such as Michael Cowpland.
We collectively developed the following Powerpoint to present up in Ottawa, and the group asked me to present to our leaders. The featured image on this posting is a photo taken in the Speaker’s Library in the House of Commons.
The following is the recently uncovered Powerpoint from October 1994.
Ottawa Delegation Powerpoint Oct 1994The following is a scan of the base data used in preparing the Powerpoint, giving an impressive 5 year growth trajectory.
To make it easier to read, I have re-entered the data in a table below.
Some observations that are reflective of those times:
Since Waterloo’s tech industry started in the early to mid 1990s, it took a decade for this first generation cohort to gain critical mass, and also to start to do major financings. Within 1-2 years of our Ottawa trip, the majority of us had done an IPO, Special Warrant Transaction or were acquired.
The second part of the Powerpoint presentation talks about a proposed “Internet 2000 Consortium”. Although I’m hoping someone can remind what ultimately happened to this visionary proposal, the idea was to get the entire Waterloo community (business, government, schools, etc) working together to make the region an internet powerhouse. For example, MKS was shortly to release MKS Internet Anywhere, followed by the world’s first Web Content Management product MKS Web Integrity. Open Text produced Open Text Web Index one of the world’s first internet search engines which was sadly outspent first by Digital Equipment Corporation‘s Altavista and later Google. Although we reserved our domain (mks.com back in 1985, the internet was still dialup in nature. To transcdnd that, several of us shared costs of a T1 (a fixed broadband connection at a blazing fast 1.5MB/sec rate).
Collectively, the presentation highlights rapid growth and economic impact, and predicts big things ahead:
This delegation proved that the Waterloo tech phenomenon had moved beyond a few visionary entrepreneurs to becoming a true force in the Canadian, and global, economies.
The Atlas Group continued for several more years — eventually passing its peer-to-peer leadership torch by building an organization bigger than any one of our companies. The group wrote a business plan and also wrote cheques (and yes people still used paper cheques back then) to fund a year long experiment they named Communitech. That legacy of entrepreneurs trying to collectively move the needle on a tech growth engine for both the region and Canada, lives on today.