Panel Members (L to R): Mathew, Thomas, Darryl, Mike

• Panel:
  • Mathew Ingram (Globe&Mail)
  • Darryl Ballantyne (Lyricfind)
  • Thomas Whitaker
  • Mike Kirkup (RIM)
• Rick Segal:
  • You can get funded
  • Good news:
    • Canada is a big market (e.g. Toronto Tourist market is $4 billion/year)
    • Canada is a friendly and ’small’ market
  • Bad news:
    • Some business are outstanding but not VC investments
    • Some plans are amazing but not on target for particular VC firms
    • Process is fairly straightforward but not fun
    • There are lots of walking wounded from the last bubble
  • Good people with good ideas will get funded
  • Used to see a lot of biz plans with ‘customer logo salad’ but now we see ‘blog logo salad’
    • TechCrunch, etc.
• What’s the problem?
  • Lyricfind: name that tune
    • Everyone can remember the words but not the name
    • People are highly engaged with song lyrics
    • Everything in music industry moving to digital (whether labels like it or not)
    • Lyrics were a wild-west of user contributed and inaccurate content
    • Could be the hook that can pull in users
    • None of the music services wanted to go to 3k publishing contents and get licensing
  • Thomas:
    • A lot of companies don’t do IT internally or adopt new applications
• What’s the solution?
  • Lyricfind:
    • We go out, get the licensing, and resell as a clearinghouse
  • Thomas:
    • Come up with a drop-dead simple tool that enables people to adopt new tech
• What’s the bet?
  • Lyricfind:
    • We knew these sites were getting serious traffic
    • We knew consumers wanted to scroll through lyrics on their iPod
    • We knew publishers would see this as a ‘free money’ add-on to their existing business
    • A lot of the deals we’re doing are ad rev share but clients aren’t going to go away
    • Everyone is spending more time at home since they don’t have money to go out so they browse our content
    • We’re inherently a content company
• What do people have to believe to go to the next step?
  • Lyricfind:
    • There’s consumer demand for the content
    • The content adds value to music delivery
• Who’s going to buy your company:
  • Lyricfind:
    • There are companies that provide music meta data or licensing
    • Digital music companies who are our clients
    • Some partners
    • Anyone who provides digital music services
• Darryl Ballantyne
  • Tried in 2002 but couldn’t get licensing
    • Music industry was trying to shut down the Internet
  • Started again in 2005
  • Freeloaded off parents to save money
  • Recruited people to the board who had contacts in the record industry
  • Went to LA to work for a label and recruited his boss to the board
    • Gave credibility without having money
  • Worked from home, then got office space in exchange for being in-house IT, setup a fake PBX and redirected to cellphones
  • Did a big deal with Real Networks by setting up fake rooms in the office they borrowing from income trust
    • Brought in all of their friends to fill in the office
    • Switched his stuff to a private office and a partner into a cube
    • Had a sign printed and put above the income trust sign
    • Had a hot friend come and be the receptionist
    • Always listed their address with a suite number to look bigger
  • Got publishers to understand this was found money they were leaving on the table
  • We’re not targeting 10m consumers, we’re targeting 100 digital music companies
    • Coverage in mainstream blogs like TechCrunch is important but not key to their business
    • Don’t turn away publicity
• Thomas Whitaker
  • SMS marketing company
  • Consulting systems integration
  • ________(current company – missed the name)
    • A lot of companies don’t do IT
    • Solutions
  • Has pitched Rick 6 times and never got him
  • Chamber of commerce, local paper, Globe&Mail is the right coverage for my customers
    • We’re members at 10 Chambers and a dozen Trade Associations
    • Wrote an article series called Get Connected about how mobile is helping SMEs
    • That audience doesn’t know that you can do things like mobile CRM on a BlackBerry
  • Organic growth starts at a grassroots
  • Ideas come from reading a lot, observing a lot, writing ideas down
    • Ideas can pop into your head just from observing: people put their phones down on tables in restaurants and bars so why aren’t they showing ads?
  • Pitching makes you better at pitching. My first pitches were horrible but they’re getting better and better
• Mathew Ingram
  • Timing is everything
    • Hitting a journalist when they’re working on a story about your industry is key
  • Humanize yourself or your solution
    • Journalists are people — you need to resonate with them
  • If someone doesn’t write about you, don’t send them an email saying they’re a moron
  • Consumer facing web apps or services should care about TechCrunch, but they’re not always right
    • Twitter has had service outages, lost features, but still running strong
    • You can overcome negative coverage from the mainstream blogs, but it’s harder
  • Better to have lots of people talking about you negatively than no one talking at all
  • One good reason to read TechCrunch: finding out if other people are doing the same thing as you
  • Wish I could do mobile payments so I wouldn’t need a wallet
  • Bill Gates thought pen computing would be big a few years ago and lots of people agreed but it wasn’t — don’t be discouraged
  • One of the problems I have is looking at what my friends are doing and thinking it’s a great market
    • Markets are much bigger than a handful of people
• Mike Kirkup
  • Humanizing is key
  • Last thing I want to see is “this will put Microsoft out of business” or “sell 100x more BlackBerries”
  • If you come to us put together and have done your homework, that resonates
  • If you get blown off the first time, call us on it
    • Timing is everything — we might blow you off the first time because we’re busy
    • Best relationships have come from people who fought back
  • If you want 1000s of people to know about your BlackBerry product, don’t send an email. Put it on BlackBerry Cool or CrackBerry
    • We watch these blogs and get leads for partners from them
    • It’s easy to feed content to those guys — give them text and pictures
  • When you go talk to companies like RIM, MS, Apple, ask them how many companies are doing the same thing
    • We have at least 6 companies who think they’re the only ones building the next generation social network for mobile differentiated by location-based services
  • Mobile and micro payments are big feature requests for us
  • Balance between lifestyle and business on the same device is also key
  • A lot of people who come to pitch us haven’t thought through the actual sales channel and mechanics of their market
    • How am I going to get people to pay for this?
• Questions:
  • Are you going to VCs for validation or for money? For the ideas you don’t get funded on, do you let them go?
    • Thomas: For money. Rick turned me down on SMS marketing but I found some Angel financing. Still made a lot of mistakes and one fatal one.
    • Rick: a lot of times, people come in and say “You think it’s a good idea?” “No, it’s stupid.” but I’m a user group of 1 and the wrong guy to ask. Most VCs will give you their personal opinion that should go into your giant pile of opinions but not carry more weight
    • Darryl: Rick didn’t fund us multiple times but eventually said “I really should have bought you the first time you came in.” so don’t take one person’s opinion

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• From Boulder CO
• I get asked to speak at a lot of stuff
• I hear more and more about Toronto
• I came here to check out the community and to meet some of the people who have applied to TechStars
• Started as a software developer/hacker/geek
• Did three startups
• Went to the darkside of investing
• I’ve bootstrapped, raised, and self-funded
  • Zoll Data Systems
    • Public safety data systems
    • Paramedics with pen-based computers
    • Dispatched about 50m ambulance calls
  • earFeeder
    • Music and RSS
  • iContact
    • Only revenue was selling the domain name to a new company
  • TechStars
    • Fourth ’startup’
• Boulder is known for:
  • Mork and Mindy
  • Skiing
  • Pot smoking
  • 125,000 people including students
  • Denver is 1m
  • Nestled right up against the mountains
• VC in Boulder
  • $311m in Q1 2008
  • $2500 available per person
  • $130m in Ontario spread across 13m people, so $23 each
• VC is broken!
  • Really it’s a chickent and egg problem
  • Entrepreneurs are waiting around for more VC to start
  • VCs are waiting around for companies to invest into
• VC is hard to get everywhere, not just here
• VC follows innovation
• Boulder had a strong telecom and data storage basis
  • Created a lot of entrepeneurs with money who stayed there
  • Created the angel economy that is the engine behind the startup world
• Angels aren’t just in it for the money
• Startups
  • Photobucket
  • Newsgator
• Techstars
  • Partners
    • Brad Feld, askthevc.com, feld.com
      • Invested in Harmonics who made Rock Band
    • Jared Polis
      • Blue Mountain Arts ($780m), ProFlowers ($477m)
      • Elected to Congress
    • David
  • Mentorship driven seed stage investment fund
  • It’s not just about the money – it’s about the network you get surrounded with
  • Bring 10 teams of (young) entrepreneurs to Boulder for the summer (out of 400 applicants)
  • Incredible mentorship experience
  • Matt Mullenweg, Jeff Clavier, Stewart Alsop, etc. all come in and spend time
  • Companies hang out and live together
  • 10k sq. ft. ‘bunker’ that everyone can work from if they want to
  • 40 sessions in 90 days on topical subjects
  • Companies pitch over and over during the summer and get better every time
  • Investor and demo day in Boulder and Silicon Valley (200 – 250 investors)
  • Goal at the end is to get just enough funding to get to the next point
  • Success:
    • Socialthing
    • Brightkite
    • intensedebate
    • Filterbox
    • 13 of 20 companies now angel or venture backed
    • 1 defunct
    • 2 positive exists (Socialthing, Intense Debate)
    • Under $600k invested in two years of the program so positive ROI to date
    • About 40 new jobs in Colarado
    • AOL office opening in Builder
    • 9 of the 20 companies stayed in Boulder (4 from there originally)
    • Boulder becoming known as a startup town
• Lessons
  • Don’t focus too much on VC. Just start executing.
  • Community can be more powerful than you imagine if it works together
  • Promote your community (blogging, speaking, etc.) when you promote your company
  • Mentorship is the scarce resource that matters (not capital). Surround yourself with the best.
• Twitter: dgcohen23, techstars

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Common wisdom suggests that RockYou is hoarding cash in preparation for a downturn in advertising budgets (which is where their revenue comes from), though they say they are planning to acquire some competitors and expand operations. They’re locked in a battle with Slide for king of social app ads, a well-funded competitor with ample experience.

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