EMSAT’s Environmental Monitoring

Reducing emissions from industrial processes sounds like a great idea, but does anyone know for sure that industry is actually producing fewer emissions?

Dan Brake does.

What’s more, he’s also working on a system that can soon accurately predict in the future where, how and why contaminants might seep into the environment from industrial projects.

Brake is CEO of EMSAT Corp., a St. John’s startup that has developed software to analyze in real time environmental data picked up by sensors placed near industrial sites, pipelines, and the like. By placing sensors in and around a site just about anywhere, EMSAT can collect data on such environmental factors as levels of carbon dioxide, sulphur oxides, nitrous oxides or particulates, whether in the air, soil or water.

The company can transmit the data by land line, cellular or satellite communication. EMSAT analyzes them and presents charts, graphs or raw numbers, as the customer requires.

 “We’re like an ADT system for the environment,” he said over breakfast at the recent Face2Face conference in Baddeck.

The company, which operates out of the Genesis Centre at Memorial University of Newfoundland, began in 2010 when Brake returned to Newfoundland from stints in California, Australia and the U.K. and teamed up with co-founders Philippe LeBlanc and Ron Thistle. They landed angel funding from environmental entrepreneur Paul Antle, and launched the company.

EMSAT is now conducting a pilot project with Alberta Innovates Technology Futures, a quasi-governmental body that encourages innovation in the resource-rich province. Brake said working with the Alberta agency is great because it could introduce the company to a vast number of clients in the oil patch.

The agency and EMSAT have placed sensors around a test site, which collect information and transmit it so it can be analyzed by the EMSAT software. They have completed the first phase of the project and are discussing plans for Phase 2.

The St. John’s company is now working on predictive analytic solutions that could warn where an incident might occur and why in the future.

It is also working on a scalable solution for various sectors, so it can operate with sensors in water to monitor the conditions around, for example, fish farms. One challenge it faces is determining whether the product needs to be customized for each client.

 “Each industry sector has to be customized,” said Brake. “What we’re trying to figure out now is (what) customization is needed for each client.”

EMSAT, which has received support from the National Research Council, the Research Development Corp., and the Newfoundland and Labrador Department of Innovation, Business and Rural Development, is now looking to hire one or two developers. It is in discussions with a PhD candidate specializing in environment sciences surrounding greenhouse gases.

Brake said the company will likely have to raise more financing at some point, but it is premature to say when.

AIF Funds Chelation, Medusa, Others

The Atlantic Canada Opportunities Agency has awarded a total of $11.3 million from the Atlantic Innovation Fund to five companies or organizations in Nova Scotia to finance the development and commercialization of new technology.

The loans are part of a total AIF award this year of $39.9 million, which is being channeled into projects that – including funding from other sources – are worth a total of $71.1 million.

“Our Government is committed to helping Atlantic Canada’s businesses to move innovative ideas from the lab to the marketplace,” said Defence Minister Peter MacKay in a statement announcing the funding. “Investments in innovation help build our country’s commercialization capacity and strengthen our economy by creating high quality jobs and generating economic wealth.”

Drug discovery company Chelation Partners Inc. of Halifax, received a loan of $2.8 million to fund the Phase I trials of its additive product that is designed to fight drug-resistant microbial populations, such as superbugs. The product is delivered with existing antibiotics, essentially depriving the micro-organism of iron to weaken it so that the antibiotic is more effective.

Healthcare IT company Medusa Medical Technologies Inc., also of Halifax, will receive $2.6 million to develop a new version of its Siren ePCR Suite, which allows paramedics to report data electronically to hospitals.  The new version, to be developed over the next two years, will offer more features and greater flexibility to paramedics.

Green Power Labs Inc., a Dartmouth cleantech company, received $2.4 million for a project that will use solar radiation monitoring and forecasting to help design more energy-efficient buildings. Specifically, the project will develop advanced control technology for building energy management for heating, ventilation, and cooling.

The AIF also awarded $1.6 million to the Capital District Health Authority to develop diagnostic and monitoring tools that will help to improve orthopaedic patient outcomes, and $2 million to General Dynamics Canada Ltd. to develop an enhanced maritime communications system. AIF awards are handed out annually and companies applying for the 2014 program must submit a letter of intent by August 14, 2013.

Allen’s New Smartphone Switchboard

Good things can happen when entrepreneurs have a problem. Cory Allen proved that point with SmartPhone Switchboard.

Allen is the founder and CEO of Fredericton-based CloudLinx, a profitable start-up that handles the server functions for small businesses with a cloud-based solution. His four employees use cellphones rather than land lines to communicate.

They use an answering service to channel office calls to their cellphones, but Allen realized that the Halifax-based answering-service staff had no way of knowing whether they were available, talking on their phones, or in meetings and couldn’t be disturbed. So he searched for an app that could solve the problem, but none existed.

Now, it’s not hard to tell where this story is going.

Using his love of programming, Allen spent a bit of time creating an app that signalled on a web page when he was on his cellphone. “In about a day, I had a framework up and running that would signal when I was on the phone,” he says.

Then he enhanced it to signal that he was in a meeting and shouldn’t be disturbed, and tinkered with it so it could be used on his colleague’s BlackBerry, as well as his own Android device. It worked well for the four CloudLinx employees, and he thought other people could benefit from it. So he put it on LinkedIn for anyone to use free if they had a similar need. Any company that has a central phone system and employees with cellphones could use it, he believed. “We posted it on LinkedIn, and holy jumpin’—I didn’t expect so many people to order it in just a few days,” says Allen.

It turned out that many people had the same problem as CloudLinx. In the first 10 days, 921 people registered to use the app with no publicity at all. Allen has had to manually help each one sign in, so he’s now working on an automated process that will handle the sign-in step.

The big question has been where to go with SmartPhone Switchboard. CloudLinx’s business has been soaring, and Allen is determined to continue focusing on that business. So he’s working out a system that will let people have access to SmartPhone Switchboard and benefit the community.

Allen is partnering with his friend Rob Frenette, who is on the boards of Bullying Canada and AIDS New Brunswick, on a way to roll out the app to benefit charities. The system would allow people to download the app for free but request that they make donations to charities in return for using the service. Frenette’s two charities will be among those highlighted, and Allen would like to name a charity in each province to help encourage the rollout across the country.

Meanwhile, Allen is continuing to ramp up CloudLinx, whose customer base has doubled to 400 users since it was featured on Entrevestor in late January. CloudLinx lets small business staff use any computer anywhere and instantly access all the data and software they have on their home or office computer.

Allen’s sister, Jayne Wilson, had been handling sales and marketing part-time for CloudLinx since late 2011 and will now be joining full-time. With the marketing effort expanded, Allen expects the company will double sales again by the middle of 2014.

The development of CloudLinx and the charitable rollout of SmartPhone Switchboard is a good-news story for a guy who has been through the wars. Allen came up with the idea for CloudLinx while he was recovering from cancer three years ago, and now he’s growing a viable business and giving back to the community.

Atlantic Venture Forum to Launch

The first Atlantic Venture Forum takes place Wednesday and Thursday this week at the Westin Nova Scotian in Halifax, offering a rare opportunity for meetings between local founders and come-from-away funders.

Critical Path Group, which organizes other conferences such as the Banff Venture Forum and the Canadian Financing Forum in Vancouver, has selected 22 Atlantic Canadian startups to present at the event. I’ve spoken to a few impressive companies that didn’t make the cut, and several plan to attend the conference regardless.

Launched with the Atlantic Canada Opportunities Agency as a founding sponsor, the conference is designed to bring outside investors to the region to witness what all the buzz is about in the Atlantic Canadian startup world.

In addition to local investors, the funders speaking at the AVF include: Scott MacDonald, McRock Capital; Antoine Michaud, Tandem Expansion Fund; Mark Hatfield, Fairhaven Capital; Gaurav Jain, Founder Collective; Henry Kay, Boston Harbor Angels; Ron Warburton, BDC Venture Capital; Gerard Buckley, Jaguar Capital; Scott Pelton, Round13 Capital; Chris Legg, Progress Ventures; Paul Singh, 500 Startups; Charley Lax, GrandBanks Capital; and Brian Underdown, Lumira Capital.

Ben Yoskovitz, the Co-Author of Lean Analytics and VP of Product at Halifax-based GoInstant, will deliver the final keynote address.

One added feature of the conference is that it will host the official launch of Canadian Entrepreneurs in New England – a mentoring and introduction group that will serve the same function in the Boston region that C100 does in Silicon Valley.

The Atlantic Canadian companies presenting at the AVF are: 

Early Stage -- ABK Biomedical, Halifax; Analyze Re, Halifax; Ara Labs, Fredericton; Densitas, Halifax; Mindful Scientific, Halifax; OneLobby, Fredericton; Performance Genomics, Truro, NS; RUMAnalytics, Quispamsis, NB; Shopulse, Moncton; Spinzo, Saint John; The Rounds, Halifax.

Growth Stage – BlueLight Analytics, Halifax;  CarbonCure Technologies, Halifax; Celtx, St. John’s; Chelation Partners, Halifax;  InNetwork, Halifax; Measurely, Moncton; Novawise, Halifax; Oris4, Halifax; Scene Sharp, Halifax;  UserEvents, Fredericton; and Zaptap, Fredericton.

For details on all these companies -- except Ara Labs, BlueLight and Chelation, which sadly we haven’t reported on yet – please use the search function to the right of this blog.

Pond’s 4 Keys to Ecosystem Success

I usually cite 10 recommendations to improve the start-up ecosystem in Atlantic Canada, but there are four that I feel passionately about. My comments refer largely to the technology sector, but I think they apply to the entire start-up community.

Mentorship. The key ingredient in developing start-ups is having enough good mentors. Yes, capital is important, but the do-or-die element in the ecosystem is mentorship. And the most important—and hard to find—component is quality mentorship. We just can’t get enough of that, and I believe it’s the hallmark of a start-up community.

We’re finding it tough to get enough quality mentors. It really is no different than any other talent: there are people who are good at it and others who aren’t quite so good. It’s not a simple matter of bringing in someone with business experience, or even entrepreneurial experience, and saying he or she is a mentor. It’s a matter of finding the right people and matching them with the right companies.

A good mentor is difficult to develop. What we’re doing at Propel ICT, the region’s private sector-led accelerator, is working on developing mentors. And the Wallace McCain Institute is building this peer-to-peer support group, which is good for fostering mentorship. We’re getting there, but we’re not there yet.

International sales and marketing. Including product management for technology companies, we have big problems in taking products to international markets. It’s a real skill shortage in the region, and it’s hurting a lot of our innovative companies. They’re all export oriented, and they have to sell overseas or even in the U.S. What we lack is a training ground for these people because we don’t have the big companies like Cisco or Google here to train people in selling software in foreign markets. When we do hire people in these roles, they’re usually expats looking to come back to Atlantic Canada who have worked for some of these companies. We don’t have too many like them here to draw from. 

Most of the people in sales in this region haven’t experienced work in fast-growth economies or haven’t been to Asia. That means that they’re not, for instance, familiar with intellectual property rules in China. They don’t know how to operate and protect themselves in that climate. We need people who can operate in these markets. You can’t just say we’re not going to sell in China; it’s too big a market to pass up.

There’s a shortage of people in the world who have international sales experience in software. We need to get better at developing them. I’ve asked universities when they’re going to make international sales—not just marketing, but sales—a specialization in their curriculum, and I’ve been told they’re considering it. Of course, some private schools teach sales and they’re good, but we need to be more serious about it. Our companies are going to stumble until we get a higher quality of sales talent.

Access to capital. In particular, we need to find funding for companies before they’re cash flow-positive and in what we call “the valley of death.” They aren’t looking for huge amounts of money, but they need enough to finance a lean operation until they build their revenues. The easiest, most cost-effective way to do this would be to liberalize the Equity Tax Credits (ETCs) across the region so they apply to investors who live in different jurisdictions from the companies they’re funding. This is something we’ve been requesting for a long time.

Judging from the responses we get from provincial finance departments, they seem to be of the opinion that they aren’t part of the economic development programs of the governments they serve. It’s as if it’s someone else’s job. One advantage of enhanced ETC programs is they cost the government very little to administer. There’s a simple application process, and we don’t need armies of civil servants to oversee the program. I don’t see why we can’t be the best in Canada in ETCs.

In fairness, the ETCs in the region are as good as most others across the country. But we need to grow businesses at a faster rate than other provinces, so we need some unique programs. I’m saying these ETCs in Atlantic Canada can be better than other provinces. It wouldn’t cost the governments any money if you believe that new-business formation results in government revenue. And I’ve seen that it does.

Less overlap in government. We need more co-operation and less overlap among provincial bodies. Do we really need the cost of four security commissions? Do we really get any benefit from having four separate agencies? In several economic development functions, we have four little departments doing exactly the same thing when we’d all be better served by one large department. What we should do is pick the strongest elements of departments in each province and bring them to one pan-regional department.

I understand this is difficult to achieve on a political level. Provincial governments say they can’t offer services to residents and businesses of other provinces. But I think we have to chip away at such thinking. We’re losing a lot of money because of administrative duplication.

There are other things I could recommend, but I don’t feel as passionate about them as these four. If we could master mentorship, international sales, access to capital, and less governmental overhead, we could go a long way to developing the regional start-up ecosystem.

 [Editor's note: Gerry Pond, a founding member of East Valley Ventures, contributed this column to Progress Media and Entrevestor's supplement on the Atlantic Canadian Ecosystem.]

SimplyCast Launches Flagship Product

After three years of work, SimplyCast has launched its 360 Automation Manager, the flagship product of the Dartmouth multi-channel marketing company.

President and CEO Saeed El-Darahali unveiled the product last night at a reception in the company’s new office off Main Street in Dartmouth. In the interests of transparency, I must declare that I have been working with SimplyCast on promoting the launch. But this news is big enough that I want to describe the product and make a few observations.

There’s a lot of buzz about the 360 Automation Manager because it can do what no marketing tool in the world can do. It’s easy to use, even for people without a technical background, and its analytical tools allow it to decide what messages to send customers based on their individual preferences. It automatically responds to clients’ online actions through any number of communications channels, messaging them in the form they prefer. The platform even sends customers targeted messages at special times, such as their birthdays.

SimplyCast has developed a translation feature, so it can be exported around the world (SimplyCast already has clients in 175 countries) and is effective in bilingual markets, such as the English-Spanish markets in the southern U.S.

Here’s what impresses me most about SimplyCast: its sensational bootstrapping skills and its employee development.

El-Darahali raised $758,000 in angel financing in 2009, and that was it for several years. By focusing on sales and the reinvestment of income, he was able to grow his staff and develop the 360 Automation Manager. He’s now up to 30 employees and is planning to add more.

One of the unappreciated features of the East Coast startup community is how much mileage its entrepreneurs get out of a few drops of equity financing. It’s a good thing because capital is scarce here. Few exemplify that trait better than El-Darahali.

The second facet is the way El-Darahali develops the competency of his staff. When he introduces a staff member, he usually stresses how lucky the company is to have this particular individual. He’s a great believer in co-op programs, and ensures all co-op students are challenged by the tasks they must perform. The company this year even launched a co-op program for high school students.

Several startups in the region are transitioning into bona fide corporations, and SimplyCast has achieved that step largely because it has paid so much attention to human resources.

HotSpot Parking Prepares for Pilot

People visiting downtown Fredericton and Saint John this summer will be given the opportunity to pay parking meters with their smartphones, thanks to a startup generating a lot of buzz in New Brunswick.

HotSpot Parking is developing cellphone apps that will allow people to pay their parking meter charges electronically. CEO and founder Phillip Curley said the company has been developing relationships with the two New Brunswick cities and is planning a pilot project for its hometown of Fredericton on Aug. 1 and for Saint John later that month. He plans to spend about six weeks monitoring the project, upgrading the technology and preparing for a rollout across Canada later this year.

 “Hot Spot Parking is basically a parking service that allows retailers to connect with people who are parking,” Curley said in a phone interview from Fredericton. “We want to create a pay-by-phone service for small municipalities.”

Pay-by-phone parking is already a reality in larger cities such as Vancouver, and has been proven to actually increase parking meter revenue because people can pay without standing next to their car. It’s also great for retailers, who lose sales when customers have to dash out of a store to feed the parking meter. The idea is that if sales staff are working with client on a sale, the salespeople can pay the parking with their phones and retain the client. The goal is to help the municipality and local businesses.

Curley, an engineering student at  University of New Brunswick, began to work on the project last December. He made contact with parking officials in Fredericton and Saint John, which he described as very progressive cities, and began to sit in on conferences to learn about their processes and issues.

Hotspot Parking then drew notice in March when it was the darling of the Startup Weekend event in Fredericton, drawing plaudits on Twitter from New Brunswick Innovation Foundation CFO Nicole LeBlanc.

By the end of the weekend, Curley had attracted a team of partners and $15,000 in angel funding that have helped him develop the project. He also won the Startup Weekend event, in which entrepreneurs have 54 hours to launch a business.

He has since broadened his relationships with the innovation foundation, which has invited him to several events, and the Pond-Deshpande Centre for Innovation and Entrepreneurship at UNB.

Curley said the company will have to raise more money once it finishes the pilot projects and completes its parking meter product.

 “At that point, we’ll be looking to get it into things other than parking meters, like parking garages, parking lots,” said Curley. “We’ll be able to do things like tell them how much space there is left, all on their phone.”

He added there are about 160 cities in Canada alone that could use pay-by-phone parking services, and only 12 now do so. The product will be free to consumers during the trial phase and will charge a 20 per cent premium once it is rolled out to other cities. It is free to the municipality.

Raised Media’s Deadliest Catch Win

This is an Atlantic Canadian story of rugged people braving northern oceans and hauling in huge catches of fish.

But unlike so many business stories about the fishery, this one is set in an elegant office with exposed brick and movie posters on Barrington Street in downtown Halifax.

The office is the home of Raised Media, the Halifax digital media company that has masterminded the Deadliest Catch game on Discovery Channel’s website. (Check out the trailer.)

Raised Media has quietly been winning contracts for major clients (like Pearson plc, Discovery, HarperCollins, and BlackBerry) for eight years with the goal of using absolutely cutting-edge technology to develop games or activities that speak to people as humans.

 “One aspect of what we do is we believe that if you’re part of an audience, you’re still a human being,” said president and co-founder Mike Rizkalla in an interview in the company’s boardroom. “We talk to human beings through technology.”

An interview with Rizkalla is an entertaining and edifying experience, as he regales the listener with tales about his experience as the creative director of Collideascope Digital Productions Inc., his music career in the band Bucket Truck, and the time he met the director William Friedkin. But above all, he chronicles a great success story by telling how his 12-person company from Halifax won the Deadliest Catch game contract against huge competition and delivered an almost flawless product.

Earlier this year, Rizkalla and his co-founder Andrew Wilson learned that Discovery wanted an online game to go along with its hit reality TV series Deadliest Catch, the story of valiant fishermen battling the elements to catch fish. The good news was Raised Media had worked with Discovery Channel before, so they were invited to showcase a proposal before Discovery at the South by Southwest Conference in March. The bad news was they had only two weeks to prepare the pitch.

Rizkalla and Wilson knew they would be up against huge multi-media agencies, so they went in with a “non-pitch,” stressing the human element, the interactivity, integrity and social networking involved in their work.

The good news: they won. The bad news: they had two months to deliver the game.

Discovery wanted to launch the game when the ninth season of Deadliest Catch began in late April, so Rizkalla made sure all parties agreed on all the details in the initial stages. “We define the project and get down to what’s important to the client,” he said. “It’s not a matter of throwing bodies at something. It’s a matter of understanding how to get it done.”

The result was that less than two per cent of the order had to be revised and the game launched on time.

Raised Media produced a fantasy game that ties in with the TV story so players choose their teams of fishermen and win if their team lands the biggest catch. They can play against people they know on social networks, and Discovery awards weekly prizes to top players.

The game now has 50,000 registered users. The average visit lasts seven minutes, far longer than the industry average.

 “Deadliest Catch fans are among the most passionate, and the fantasy game is bringing them even closer to the action and deepening their engagement with Discovery,” Jason Robey, digital executive producer, Discovery Channel, said in an email. “With more than 50,000 registered users and average visit times of seven minutes, the fans have clearly spoken.”

With the Deadliest Catch game, Raised Media has scored a massive win to add to its long line of successful commissions. Rizkalla said the company is now at a crossroads. Most immediately, it is looking for about three developers, including a front-end developer. But in the longer term, the company wants to morph from designing projects for clients to developing its own products.

Rizkalla is coy about what exactly the proprietary product will look like, but he did say Raised Media will remain a tight group of highly focused people.

“We’ve worked with companies with 200 people and that’s not for me,” he said. “Our company is going to get better and better as a small company.”

Angel Funding Soared in 2012

Heimdall Networks CEO Jim DeLeskie declined to be interviewed about his company until January of 2013, preferring to quietly develop his software for about a year without any publicity. Sydney, N.S.-based Heimdall is developing a product that protects corporations and governments against distributed denial-of-service attacks, the type of stuff that the Anonymous group does to shut down websites. Heimdall’s market is a high-growth, high-interest sector with a lot of players and rapid advances in technology. DeLeskie didn’t want to tip his hand to competitors by going public too soon.

But here’s the interesting thing about Heimdall: By the time DeLeskie granted an interview, he had already raised more than $1 million in angel funding from a single investor. He didn’t use a formal network. And he didn’t leave Nova Scotia to secure the funding. A single individual invested $1 million-plus in the company, signalling something curious that’s happening in the region.

 “I was lucky to be able to work with an angel who could and would fund my start-up,” says DeLeskie.  “I not only saved time beating the bushes but was also able to walk away from what would have been not so good deals for me as a founder.”

Angels are loosely defined as individuals who invest in companies during the early stages, and they’re becoming a more and more important factor in the financing of Atlantic Canadian young companies. The successful exits of such companies as Radian6, Q1 Labs, and GoInstant has piqued the interest of wealthy individuals in regional start-ups. There was a time when such people would invest mainly through the First Angel Network, which has channelled about $9 million into 23 companies over eight years. More recently other groups, such as the Newfoundland and Labrador Angel Network and East Valley Ventures, have leant structure to angel financing.

But increasingly, Atlantic Canadian founders are approaching angel investors and getting more from outside an organized group. According to data collected by Entrevestor, 43 Atlantic Canadian companies received at least $17.9 million in 2012, which excluded funding by Clarity because it featured VC and angel funding. The previous year, 11 companies  reported raising at least $8.4 million. These figures include funding by founders, including the $3.6 million that CEO Chuck Cartmill invested in LED Roadway Lighting in 2011. (We admit that data on angel funding is never complete because so many investments are made quietly. These figures reflect investments that were reported to Entrevestor.)

One important factor in angel-funding growth is that 21 companies brought in money from individuals outside the region last year. That’s important because young companies in Atlantic Canada need to expand their networks and increase sales overseas. Attracting outside investors helps expand contacts in other markets.

In broader terms, the rising trend of angel investing helps because it tends to be less complicated than attracting money from a venture capital firm; there’s less legal work and fewer hoops. Generally speaking, you can save time and resources by finding early stage funding through angels.

DeLeskie has a single funder, meaning he can keep in touch with his source of funds with one phone call. “I believe it will produce a better end result, in terms of meeting and managing expectations and my time,” he says. “And every founder knows that time is the one thing even more scarce than money.” [Editor's note: this is the latest in the series of articles taken from Progress Media and Entrevestor's supplement on the Atlantic Canadian Ecosystem.]

New Intelligence Project with Progress

Progress Magazine and Entrevestor today are launching our first joint supplement on the Atlantic Canadian ecosystem. We have just posted the first article from the publication on Entrevestor, and a PDF for the full supplement is available by clicking the “Entrevestor Intelligence Reports” tab on our home page. The supplement appeared in Vol. 20 of Progress Magazine.

We will continue to post articles from it in the coming days on Entrevestor and the Progress Media website.

We’ve been collaborating with Progress for years, and have enjoyed a great partnership with Publisher Neville Gilfoy and Editor Pamela Scott-Crace. We’re really happy to be working with them on these supplements, which will delve into the startup segment of the Atlantic Canadian economy.

We’re already at work on our next Entrevestor Intelligence supplement.

Many thanks to our sponsors: Innovacorp, East Valley Ventures, Nova Scotia Business Inc., ABM Integrated Solutions, and Nautel. They made it possible to bring you the most in-depth examination yet of what’s happening in the Atlantic Canadian startup space.

Assessing the Regional Ecosytem

If there’s a date on which the Atlantic Canadian start-up community was born, it was June 26, 2012. The location was Dieppe, N.B., and the event was the Demo Day of Propel ICT’s Launch36 accelerator, at which community members from across the region and beyond witnessed 11 companies delivering tremendous pitches.

The really interesting things took place away from the stage that night. At the pub afterward, Propel ICT chair David Baxter and executive director Trevor MacAusland swore that the New Brunswick-based accelerator, which had graduated one Nova Scotia company, would grow by becoming more regional in the future. Scott MacIntosh of Fredericton-based tech consultancy SwiftRadius Inc. was introducing Chad Griffin, the CEO of the new Charlottetown start-up Adeptio Health that would soon be spun out of SwiftRadius. And Jordan Smith of Halifax-based OneLobby met Brian Dunphy of Fredericton and Todd Murphy of Saint John; the trio agreed to work together on OneLobby in Fredericton.

The gestation period of the regional community had lasted several years, but on that summer night in suburban Moncton, the vision became a reality. “It was the first time I saw the whole horizon of collaboration that would uniquely make us great at new venture creation across the region,” says Baxter.

Although the distance from Newfoundland and Labrador makes it difficult to host regular events in all of the Atlantic provinces, the rapid development of the start-up community in the Maritimes is astonishing. Start-up communities have become a hot topic for entrepreneurs, investors, and their global support agencies. The discussion was elevated last year by the publishing of serial entrepreneur Brad Feld’s book, Startup Communities, which said these societies must be led by investors buttressed by universities, support agencies, entrepreneurs, mentors, governments, and “flagpole industries.”

The Atlantic Canadian start-up community is coming together in many of the ways Feld outlined but is still in its infancy; many of its key components didn’t exist two years ago. More than anything, the community is being led by the success of a few companies. The recent exits of Radian6 and Q1 Labs of Fredericton, GoInstant of Halifax, Ocean Nutrition Canada of Dartmouth, and BioVectra Inc. of Charlottetown have stoked interest in regional start-ups.

That has helped several companies announce some impressive fundraising deals in the past two years: Unique Solutions of Dartmouth and LED Roadway Lighting of Halifax both attracted eight-figure financing in 2011. And last year high-profile financing was secured by Clarity of Moncton, IntroHive of Fredericton, and Leadsift of Halifax. There was nothing in 2012 approaching Unique’s $30-million funding from Northwater Capital Management Inc. of Toronto, but overall start-ups and innovative companies attracted more money than in 2011.

Tech, biotech, cleantech, and other innovative companies in Atlantic Canada raised at least $59.1 million in 2012, up from at least $55.9 million the previous year, according to data collected by Entrevestor. We use the term “at least” because so many companies and investors are vague about their funding. Some will say they’ve raised money without naming the amount; others will say they’ve raised more than a certain figure. Having canvassed start-ups across the region, we can state that these companies sold at least $59.1 million in equity last year, although our estimate is closer to $60.5 million.

What was interesting about fundraising in 2012 is the domination of seed funding. People across the region seemed to be stirring from slumber, having been awakened by the Radian6 and Q1 Labs exits and rising to start companies. Some 65 companies received funding, averaging just over $900,000 each. The previous year, only 24 companies had raised equity funding. Does that mean more money was raised on average in 2011? It would be misleading to believe so. As we mentioned, the $30-million Unique funding dominated the market in 2011, and the $11.6-million financing by LED Roadway also contributed to the total. If you strip out those two deals, the average funding in 2011 was worth about $650,000.

So in 2012, we funded almost three times as many companies across the region as the previous year, and for the most part those companies were able to raise more money than they had in 2011. Yet there’s a cautionary note here: such a flood of seed funding means there will be an even larger flood of companies looking for follow-on funding, leading to multimillion-dollar rounds in the next few years. That will lead to increasing pressure to find more money from outside the region.

Much work has been done to attract more venture capital from outside the region, but it didn’t show up in vast quantities in 2012. One of the quirks of the last year’s funding story is that 20 different companies attracted angel funding from outside the region, up from only three a year earlier. But the VC funding was dominated by funding from local bodies, either the provincially owned VC agencies or GrowthWorks Atlantic Venture Fund. Only five companies attracted venture capital backing from outside the region in 2012. 

The increased flow of money into these young companies is part and parcel of the enhanced ecosystem and development of the start-up community. The community depends on access to this capital, and investors feel reassured putting money into these companies because their chances of success increase as the community develops.

But funding bodies are only part of the equation. Underpinning the community are the institutions that span the entire region, including Newfoundland and Labrador. The Atlantic Canada Opportunities Agency is pre-eminent in that category. And Springboard Atlantic, which ushers university research to the broader economy, works with 18 institutions throughout the region. Invest Atlantic, the premier entrepreneurial conference in the region, has strived from the outset to represent all four provinces; its Pitch101 series is holding events in each province. East Coast Start-up Week included representation from the Maritimes but also from Fogo Island off Newfoundland.

Within the Maritimes, more is being done because the cities are within driving distance of each other. Launch36’s latest cohort is balanced evenly among the provinces. Events such as MentorCamp and DemoCamp have worked hard to attract people from across the region. As the community grows, the emphasis may not be on greater geographic expanse or new programs so much as managerial mentoring. The region has done a fantastic job of channelling seed funding into a range of companies with great prospects. The challenge may now be to convert great ideas, people, and entrepreneurs into mature managers. The goal is to teach them the changes that are needed to go from managing five employees to overseeing 50.

David Baxter says there may even need to be an evolution of Propel ICT’s focus beyond its accelerator program, Launch36. Because the distances are daunting, rather than a group of companies meeting once a week for five months in a central location, the organization should create “mentor townships,” where mentors within communities would guide young companies to bona fide businesses.

“Sometimes I find that an accelerator’s focus on launching new ventures alone results in start-up orphans, and then what do you do?” says Baxter. “Maybe we become a regional network of mentoring capacity to help entrepreneurs grow their companies from launch to their full potential.” Clearly, the regional community is established but it’s continuing to mature.

Startup House News: Sally Ng, ACOA

The appointment of Sally Ng to head the new startup working space in Fredericton means that Atlantic Canada suddenly has a network of startup pods across the region, led by passionate and energetic people.

Fredericton-based Knowledge Park Inc. last week announced that Ng would become Executive Director of the Commercialization Environment for Advanced Learning Technologies, or CEALT, and its ACcelR8 program.

Like Volta in Halifax and Common Ground in St. John’s, CEALT will provide working space for startups and organize events and peer-to-peer support activities to help the young companies along the path to profitability. ACcelr8 will develop the programs offered through the centre – programs that Ng hopes will radiate throughout New Brunswick and the region.

“I don’t want to offer programs that other people around the region are already offering,” said Ng in an interview Tuesday. She said her priorities in the position – which officially begins June 17 – will be to develop a financially sustainable working space, to strike partnerships with other groups and to plan events for the whole community.  She added the floors of the space in Knowledge Park are still concrete, so it will take a few months to fit out the space then name eight to 10 startups as tenants.

The three working spaces are not really accelerators, and all reject such a title. They are places where startups can rent space on the cheap and work with one another and facilitators to grow their businesses. And like Ng, all of them are striking partnerships with other parties to enhance their efforts.

Still in her mid-twenties, Ng has assembled an impressive resume. The native of Malaysia holds a commercial pilot’s licence and has facilitated startup weekends in Fredericton and Shanhai. She is a lieutenant in the Canadian Forces Reserves and has participated in an intercultural exchange in Tanzania.

Ng has already toured Volta and met with its Executive Director Milan Vrekic. She has also reached out to Chris Gardner at Common Ground about discussing collaboration.  Vrekic said that a group “will be attending Montreal Startup Festival and GROW conference in Vancouver in an organized fashion as a region.”

On Monday, Volta and the Atlantic Canada Opportunities Agency joined forces to improve the assistance they bring to startup founders in the region.

ACOA staff will help Volta companies enter new markets, commercialize research and assist them in business development activities. ACOA will contribute $170,000 to Volta over the lifetime of the project.

Meanwhile, Memorial University’s Genesis Centre, the granddaddy of incubating spaces in the region, is preparing a ceremony to mark the graduation of one of its leading companies, Solace Power. Genesis will hold a ceremony June 19 to say farewell to the wireless energy transfer company, which is moving to new office space in the Mount Pearl district.

CarbonCure Lines Up More Clients

CarbonCure Technologies, the Halifax cleantech company dedicated to low-carbon concrete products, has signed a licensing agreement with Northfield Block, a division of publicly listed Oldcastle Inc., the largest producer of concrete masonry and precast products in North America.

Taken together with recent agreements with Central Concrete Supply Inc. of California and Midland, Ont.-based concrete manufacturer Atlas Block, the Northfield agreement shows that CarbonCure is attracting clients that should soon generate top-line growth.

The ultimate parent of Northfield is Dublin, Ireland-based CRH plc, one of the world’s leading building products and materials companies. Listed on the New York Stock Exchange, CRH is the parent of Oldcastle, which has 35,000 employees. Its Oldcastle Architectural Products Group (which includes Northfield) is the leading North American manufacturer of concrete masonry, precast, lawn, garden and paving products and a regional leader in clay brick.

“This agreement with Northfield means that we will be completing a demo at their plant in Morris, IL., in the next few weeks,” said CarbonCure Vice-President Marketing Jennifer Wagner. “Once we run the demo, Northfield will be given the chance to decide whether to proceed with the full installation. If Northfield agrees to the full installation, then we can anticipate a revenue stream through royalties.”

Last month, Central Concrete announced it had partnered with Basalite Concrete Products and CarbonCure to produce many first-of-its-kind sustainable design and construction products in the Jess S. Jackson Sustainable Winery at the University of California at Davis.

In January, Atlas signed a licensing agreement with CarbonCure to make its products available in Ontario. The two companies had been testing the technology for several months.

CarbonCure’s process cures concrete blocks by injecting waste carbon into them, thereby seriously reducing the CO2 emissions in the manufacture of concrete products.  Concrete is the most widely used construction material in the world, and is responsible for about 5 percent of total greenhouse gas emissions.

CarbonCure recently received a "positive" rating from Lux Research, which will help it in its bid to raise $1 million to $3 million by the autumn.The company previously secured an investment from 350 Capital of Toronto, though CarbonCure has declined to say how much 350 Capital invested.

The company successfully raised its first round of funding in February 2012, landing a $1.1 million investment from Innovacorp, and $400,000 from private investors, mainly from Atlantic Canada.

Research Ave.: Big Data for Healthcare

Big Data evangelists often say data analytics will improve and lower the cost of health care, and Research Avenue of St. John’s is working each day to make it so.

Research Avenue is a bioinformatics startup that is commercializing research at Memorial University of Newfoundland by analyzing genetic data to develop algorithms for predicting risks of developing diseases. The initial target is colon cancer, but the system could apply to other diseases.

Company president Tyler Wish said in an interview at the recent Face2Face conference in Baddeck that Research Avenue is examining a range of potential risk factors, including genetics, to determine whether individuals and families are at increased risk of developing specific diseases. The goal is to provide more effective preventive health care by screening high-risk patients more frequently and low-risk people less often, saving money while improving early detection.

“We are very interested in developing solutions for personalized medicine — providing the right treatment to the right patient at the right time,” said Wish.

A native of Vancouver, Wish himself is in the right place (St. John’s) at the right time (2013) to build a bioinformatics and diagnostics business.

Not only has modern medicine cracked the genome code, but the time and cost of analyzing the human genome has plunged dramatically, so a project that cost about $3 billion a decade ago can be completed for $3,000 to $5,000 today. As well, it has become possible to gain more insight from these complex data sets with the recent advent of powerful data-mining tools and machine learning approaches.

As well, Newfoundland and Labrador is an ideal location for genetic research because of its founder population — a unique, homogeneous population that is highly conducive to investigating medical genetics.

The province also has a high level of colon cancer, which means Wish and his collaborators at Memorial University have been able to assemble a very rich data set containing genetic and epidemiological information for a large number of colorectal cancer patients from Newfoundland and Labrador. There are more than one billion pieces of data.

“We have a really nice R&D platform here in our backyard, and data continues to be generated,” Wish said.

Research Avenue is spending the next six months conducting a bioinformatics project to assess its ability to assess colorectal cancer patients and rank them according to risk profile. If successful, they will look to validate their technology in other population-based data sets, perhaps with collaborators in Toronto, Utah and New York.

Research Avenue, based at the Genesis Centre at Memorial University, has been conducting medical research with collaborators and on behalf of private clients, to develop and commercialize innovative health care technologies.

It is performing clinical studies for Vancouver-based biotech Eupraxia Pharmaceuticals.

Research Avenue is looking to partner with the National Research Council and other groups, such as Genome Atlantic.

Wish said the company will likely need some angel or venture capital financing, although it is unlikely to make a decision until it finishes its discovery study.

NBIF Cherishes Expanded Role

New Brunswick has decided that innovation is going to be its engine of economic growth, and the New Brunswick Innovation Foundation is the engineer making sure the machine runs smoothly.Already this year, New Brunswick Premier David Alward has announced a new program highlighted by a commitment to fund innovation initiatives with $80 million over five years, as well as the creation of the New Brunswick Research and Innovation Council. And he has signaled that NBIF will play a key role in implementing the programs.

NBIF president and CEO Calvin Milbury says the enhanced mandate will mean a larger role for the 10-year-old agency, but both the institution and the community it serves are ready for the expanded duties. 

“We’re gaining momentum, in part because of the success of companies like Q1 Labs and Radian6,” says Milbury. Those companies had huge exits two years ago, and their success has drawn more entrepreneurs into the system, many of whom are developing great companies. “It all means we’ll be able to place more investments without lowering the bar in terms of quality.”

NBIF is already coming off a record year, having sunk an unprecedented $5.35 million into the innovation economy. That includes $1.95 million in venture capital financing, comprising 12 deals—all record levels for the agency.

Milbury says the group is ready to contribute larger amounts to companies it believes in. For example, investments last year included financings of $500,000 each in Pennfield-based sustainable caviar company Breviro Caviar and energy-efficiency software company RtTech Software of Riverview. NBIF is already launching new initiatives or renewing successful programs through the program. It has announced $500,000 in funding over three years to allow seven university researchers to hire research technicians, which was matched by each research organization.

Since 2003, NBIF and the New Brunswick Department of Post-Secondary Education, Training, and Labour have awarded $4.5 million to create 67 new positions under the Research Technician Initiative, and more than half are still in these jobs.

NBIF has also launched its new $7.25-million Innovation Voucher Fund, in which all New Brunswick-based SMEs can receive as much as $80,000 to fund a project that leads to revenue growth or cost savings. To obtain a voucher, companies must collaborate with a New Brunswick applied researcher or research organization and contribute a minimum of 20% of the total cost of the project.

As recently as June 6, NBIF awarded $460,000 to University of New Brunswick researcher Felipe Chibante to develop composites that can harness solar energy while cutting 65% from the cost of fullerenes, a key ingredient in plastic solar cells. The result would be solar cells that are less expensive to produce and more accessible to everyday consumers. “Companies making plastic solar cells say the fullerenes are the most expensive component of this technology and a lower cost could bring a real benefit,” Chibante said in a statement. “We are hoping this technology will start an industry here in this province.”

Milbury says more announcements are scheduled to round out the innovation program. New Brunswick already hosted the Big Data Congress this year, marking its place in the development of the burgeoning field of data analytics. NBIF held its successful Breakthru business-plan competition and has just begun planning for its next R-3 competition, which rewards research.

One of the hallmarks of the new innovation policy is the deep involvement of the government to ensure that the program continues and thrives, even during an era of government cuts. It’s noteworthy that Alward himself is co-chair of the council on research and innovation. But it’s also worth noting that one council seat is given to Opposition leader Brian Gallant.

The idea is that this program must last at least five years, even if the government changes in two years. New Brunswick officialdom is serious about this program, and its capacity for commercialization should increase as a result.

Startup Monthly Looks at Accelerators

Once again, I've got together with my friends at Startup Kitchen for Startup Monthly, and round-table discussion of what's going on in the region.

In addition to Suhaim Abdussamad and Robert Foley, we're joined this month by Jason Janes, a founding member of Startup St. John’s. Jason brings great insight to the panel and broadens our reach beyond the Maritimes.

Our topics this month are the wave of accelerators hitting the region and a look a few exciting young companies. Enjoy.

Genesis Tech Modernizes US Jails

As you read this, prison inmates in Minnesota, Kansas, South Dakota and Alabama are ordering basic consumer goods, doing financial transactions or sending messages using technology developed in Nova Scotia.

Genesis Technology of Halifax has developed a system that allows inmates to organize their finances, communicate and order basic products, all from a kiosk in portions of jails that are open to the prison population. The company has installations in numerous facilities in the U.S., and CEO Chris Barker said the company’s target is to be in dozens of new institutions over the coming year.

The path has not been an easy one for Genesis. Barker, a programming geek with a business degree from Dalhousie University, started the company in 2001 and developed the worked with an American partner to design systems for prisons. The two parties parted ways in 2004-2005.

Barker managed to keep the company afloat for several years, working to launch his product eXpress in 2009, securing partnerships with a handful of other vendors. (Vendors are private companies that sell services to prison systems, and Genesis’s partners tend to target county jails, which have less paperwork than state and federal institutions.)

What Genesis has sold is a system that reduces the manpower needed to give inmates the products and services they need. Barker stressed that every prison has unique processes, but essentially the Genesis system revolves around a kiosk in a common area.

The prisoner can use the kiosk, which resembles a bank ATM, to access his own money, downloading it on a smart card, and the system allows family and friends to deposit money for him. The inmate can use the smart card to buy cold drinks at a vending machine. Or he can order things he needs, such as toiletries, snacks or other items. The software used in the kiosk serves as the bank for the inmates, keeping records of all their transactions.

The inmates can use the system to communicate outside the facility (say with an attorney) or internally with the prison staff. Staff can monitor and control all the external communications.

“By putting a kiosk in place, we can give (prisoners) all the services they need on a self-serve basis,” said Barker.

The Genesis system reduces costs by freeing prison staff from doing manual chores like ordering soap and shampoo for prisoners. It improves performance by installing a banking system that prison officials can monitor without having to know about accounting. Its message system can cut out the need for a mailroom, which could be a conduit into the prison for contraband items.

Barker added that he hopes to develop new products – first for the corrections system, and then potentially for other market segments. Genesis has never raised funds, and Barker said he does not need to do so in the near future.

Changes Sought to NS Digital Credit

The interactive media industry in Nova Scotia is pressing the provincial government to review the terms and duration of its current digital media tax credit, saying it is difficult to develop long-term strategies without knowing if the credit will exist in a few years.

The credit for developers of video games, interactive training videos and the like expired after a five-year stint at the end of 2012, and the government extended it for one year.

The industry expects that at the end of this year it will be extended for another year, forming a pattern of annual renewal. However, accountants and industry executives say it’s difficult to plan to grow a business without the assurance the credits will exist beyond the current year.

 “If you had a long-life project it would be of concern,” said one CFO. “You wouldn’t want to get a year into something and then realize your tax credit is gone.”

The digital media credit was introduced in 2007 as an incentive for companies that were active in neither film (which are eligible for the Nova Scotia film tax credit) nor in software development (which can apply to the federal government’s scientific research and experimental development program), but somewhere between the two segments.

It gives companies a credit worth 50 percent of the Nova Scotia labour used in a project, or 25 percent of the total cost of a project, whichever is lower. There is a larger credit for companies employing people outside the Halifax area.

Though most of the claimants have been in the video game industry, digital media or interactive media also includes such businesses as training material, e-learning, augmented reality and the like.

One contentious point about the credit is figuring out what companies are eligible for it. Last year, Stitch Media closed its Halifax office and moved to Toronto because it had failed to qualify for the credit, which it said cost the company about $100,000.

The Nova Scotia Supreme Court later ruled the provincial Finance Department failed to do its due diligence in disallowing the credit for the company.

People inside the industry said several companies and individuals have been holding informal talks with the government on the matter.

Spokesmen for the departments of Finance and Economic and Rural Development and Tourism declined to provide specifics on the future of the credit.

One referred to a news release issued last year that said the one-year extension would “allow the province to work with partners on how the credit can best serve the industry.”

One proposal that has been discussed among accountants is the possibility of extending the credit to a broader range of businesses but lower the overall rate on the credit. The goal is to support more companies without surrendering more government revenue.

The fear within the industry is that a provincial election could be called in the autumn, which means a resolution would be delayed until the election is over and may not happen until next year. All the discussions may have to begin anew if a new government is elected.

Rho, Innovacorp Sink $4M into Karma

With its customer list growing, Karma Gaming of Halifax has announced the $4 million first closing of its Series A round of venture capital in what is believed to be Atlantic Canada’s biggest VC financing from outside the region in almost two years.

The developer of video games for regulated lotteries has received $2.5 million from Rho Canada Ventures, the Canadian arm of Rho Capital Partners, which has offices in Palo Alto, Calif., New York and Montreal, and $1.5 million from Innovacorp, the Nova Scotia innovation agency. Paul LeBlanc, co-founder and CEO of Karma Gaming, said there is a chance the company would raise additional equity financing in the current round.

The deal is important for Karma itself because the company has signed deals in Australia, Mexico, Canada and the U.S., and will roll out its first product in the U.S. in September. The company has pioneered video games for regulated lotteries, but the regulatory, technical and commercial complexity of the deals creates a long turn-around time. The funding will help to accelerate development and cover corporate operations until revenue begins to roll in.

“We have to scale up,” said LeBlanc. “This will allow us to expedite the pipeline  . . . and allow us to scale up our sales channel.” He added that company now employs 10 people in Nova Scotia and the current financing and sales deals will allow it to double that number.

“This is a tremendous product and a tremendous team and a tremendous investment opportunity,” said Innovacorp CEO Stephen Duff in an interview. He said his agency is always interested in joining a VC deal in Nova Scotia in which the lead investor is a fund from outside the region.

Atlantic Canadian startups have done a great job of attracting seed financing (usually amounts of up to $1 million) in the past two years, and now there are dozens of companies in search of follow-on funding, usually in amounts between $3 million and $10 million. The funding bodies in the region simply don’t have the capacity to meet all the demand for funds, so there has been a concerted effort by Innovacorp and others to increase funding from outside VCs.

Though the region’s startups received strong funding last year, with 65 companies stating they had received a total of at least $59.1 million, one shortfall was the paucity of VC funding from outside the region. Only about five companies reported VC investments from outside Atlantic Canada, including LeadSift’s $500,000 funding from OMERS Ventures of Toronto and CarbonCure’s funding from Toronto-based 350 Capital, whose value was never publicized.

The last multi-million-dollar external VC funding announced in the region was Unique Solution’s $30 million funding by Northwater Capital of Toronto.

Jeff Grammer, the  Rho exec who led the investment, has traveled to the region repeatedly in the past few years, and met LeBlanc at DemoCamp Halifax last September. He and Thomas Rankin, Investment Director at Innovacorp, will both join the Karma Gaming board.

Karma has devised a solution for a problem that afflicts regulated lottery companies around the world: their clientele is aging, and young people are not interested in buying weekly lottery tickets. So the company is developing video games that will include a modest cash prize. In September, Karma signed an agreement with Brisbane, Australia-based lottery operator Jumbo, under which the Halifax company will launch an interactive game that users could play to pick lottery numbers.

CTO Jay Aird said recently Karma has since signed three more major clients, though he is barred by confidentiality agreements from revealing their names.

The startup had previously received about $750,000 in seed financing from a selection of angels, including $250,000 from Groupon CTO and Dalhousie University alumnus Paul Gauthier. It has leveraged those investments with loans from the Atlantic Canada Opportunities Agency.

Virtual Marine Sales Up 500% in 2 Years

Virtual Marine Technology, the St. John’s, N.L., developer of simulated training systems for maritime industries, has quintupled its revenues in the last two years with its drive into export markets.

And president Anthony Patterson says that move into foreign markets will only continue in the future.

Since emerging from Memorial University of Newfoundland nine years ago, the company has become a cornerstone of the St. John’s oceans industry cluster. But like so many startups, the challenge has been to grow revenues in a meaningful way.

It had been targeting two market segments — oil and gas and defence industries — within Canada for several years, and the change came in 2010. Its installations with a few Canadian clients drew the attention of clients in the Gulf of Mexico, the North Sea and scattered markets like Brazil and Germany.

In all, the company’s sales have risen 500 per cent in two years now that it’s hit export markets.

VMT began in the wake of the 1982 sinking of the oil rig Ocean Ranger. After the disaster, which claimed the lives of 84 people, Memorial began research into virtual training techniques that simulate extreme conditions but do not subject crews to danger or companies to undue expense during the training.

Working with the university’s Genesis Group, which commercializes the institution’s research, the university was able to license its intellectual property to VMT, which was then spun off as an independent company.

Patterson said the simulated training not only saves lives but also reduces costs because training people in real-life harsh conditions such as storms is expensive as well as dangerous.

 “The people that we deal with are compliant with all of the rules,” he said. “But to meet these requirements can be very expensive.”

In some cases, he said, it’s impossible to recreate the conditions associated with a catastrophe unless you’re using a simulated system, so VMT offers the most thorough training available.

 “Our training systems are very efficient,” Patterson said.

The company expects its greatest expansion will be in export markets, and Patterson says that soon more than half its sales will be outside Canada. It is concentrating on marine-based industries for now, but Patterson said it will likely move into products for other industries eventually.

The company has raised a total of $3.2 million from private investors, led by GrowthWorks Atlantic. It has also received financing from the Business Development Bank of Canada and the Atlantic Canada Opportunities Agency.

Patterson said VMT is not seeking financing because it is meeting operational costs through cash flow.

Stars of 4Front: Startups, Universities

But there were two interesting standouts that played supporting roles at the conference, which was held in Halifax on May 30: the region’s start-ups and its universities.

The final conference in the 4Front series wrapped up with the 250 delegates taking pledges on what they would do to improve the region’s economic morass. These included such promises as hiring students and immigrants and exporting more.

The discussion was framed against Barton’s keynote address, which delved into revolutionary changes in Asia, where he lived for more than a decade. Led by emerging markets in Asia and elsewhere, the global economy in the next 20 years will undergo a transformation that, says Barton, will make the industrial revolution look like “a speed bump.”

Barton unveiled a string of astonishing statistics, such as that 200,000 Chinese are moving from the country to cities each week and that Chinese consumption will reach $22 trillion by 2025. As a Canadian, Barton is discouraged that so many Canadians fail to recognize the economic opportunities posed by the Asian economic miracle.

Barton included Atlantic Canadians in that criticism. He mentioned in his morning speech that Atlantic universities now host just over 6,000 international students, and that that number is too small given that three million qualified people in China want to come to Canada to study. He seemed to ruminate on that figure throughout the day, returning to it during the closing session. “I’m a big fan of getting more students to come here, and I’d like to see more than 10,000 [foreign] students here,” he said. “I think it would really raise the Atlantic Canada brand. Ten thousand is miniscule number. I’m going to double it. I want to move the dial.”

As a group of participants pledged what they would do to help Atlantic Canada, Barton pledged to do whatever he could to work with the region’s universities to increase the attraction of overseas students.

Universities were highlighted throughout the day, mainly because they attract badly needed immigrants, train talented people and are centres of innovation – meeting several of the critical shortfalls in the region.
The breath of fresh air in the room was the number of young people, especially the founders of start-ups. “You see nothing but energy, enthusiasm, can-do attitude, [and a willingness to] take on the world,” said Clearwater Seafoods founder John Risley of this valued group. “And that’s what we have to see throughout the community.”

New Brunswick investor Gerry Pond told the audience that he hoped the region would develop a unified ecosystem for start-ups, something he has been working toward for years. Risley paid homage to those efforts when he said, “What Gerry Pond is doing in New Brunswick is fantastic because it's not about dispensing a bunch of paycheques. It’s about dispensing advice and leadership.”

The conference also focused on what individuals and corporations can do to improve the economy, and there was scant discussion the role of government—especially in such intractable problems as reducing public debt, lowering taxes, and improving public education.

One of the few speakers to mention government costs was Ian Thompson, the associate publisher of The Chronicle Herald and the former deputy minister of Economic and Rural Development and Tourism in Nova Scotia, who called for more efficient public programs. “Is it not possible to find more ways of delivering better education to more kids at less cost?” he asked.

Newman: What Israel Can Teach Us

[Editor’s Note: Perry B. Newman is a consultant in Portland, Maine. We were discussing how Entrevestor could write more about startups in Maine when he proposed a guest column on what we in this region could learn from Israel. Here's the result.]

There’s much to be said for collaboration and coordination in both entrepreneurial and economic development efforts. We get ideas from each other. We share resources, and we create critical mass that enhances the potential for our success. We build virtual teams and virtual companies, and we construct paradigms that allow us to punch above our weight.

In general we seek to marry the resources we have with those that we lack, and our culture celebrates the fact that we come together in a supportive environment. After all, the mantra goes, we’re small and isolated; if we don’t band together, we will never make progress.

Yet even as we join hands and congratulate ourselves on our successes, we should be asking ourselves, Is this the best we can do? With all the resources at our disposal – public, private and political – shouldn’t we be doing even better?

Anyone who has been to Israel or is familiar with that country’s stunning innovation and entrepreneurial success would say we have a long way to go.

Israel is a country of only 7.7 million people, surrounded by antagonists and reviled by much of the world. It has almost no water, and for its entire 65 year history has had to import all of its energy, other than what it has been able to harness from the sun. Many of its neighbors deny its existence, forbid its citizens entry, forbid its commercial aircraft to fly overhead, and actively seek to destroy it.

Yet there are more Israeli companies traded on the NASDAQ than those of every other country except the United States and China. There are more start-ups per capita in Israel than anywhere else in the world, and more start-ups in absolute numbers than any country except the United States. There are more scientific papers published per capita and more Ph.D.’s per capita in Israel than any country in the word.

Google, Microsoft, Intel, SAP, HP, GE and many other global leaders have R&D centers in Israel.

The 2013 United Nations Human Development Report lists Israel in its Human Development Index as the 16^th highest ranking nation in the world (the United States is #6; Canada is #11; Singapore is #19; France is #20; United Kingdom is #27.)

So striking is Israel’s economic transformation that if Israel had any water to speak of, it would be natural to wonder just what’s in it.  

In fact, many are beginning to investigate the Israeli economic miracle. Beginning with Dan Senor and Saul Singer’s best-seller, Start-up Nation, Israel’s remarkable ascent into the first rank of highly developed countries has been the subject of numerous articles and, more recently, study visits by political leaders and universities alike.

Most would agree that there are a number of factors that contribute to Israel’s success, but perhaps most striking among these are a culture that supports risk-taking, a national sense of necessity, pride in national achievement, a willingness to go it alone and what Dr. Martin Luther King, Jr., the American civil rights leader, termed “the fierce urgency of now.”

Of course, it has taken more than guts for Israel to achieve technology glory. Outstanding universities, enlightened government technology support and an influx of serious talent (notably emancipated Soviet Jewish scientists in the 1970s) continue to contribute to what may be the world’s finest technology ecosystem.

Above all, however, Israel has shown that grit and the defining cultural characteristic of chutzpah, characteristics common to all successful entrepreneurs, may be more decisive and determinative of success than the collaborations we are all so keen to achieve.

The message from Israel is therefore both inspiring and cautionary: Build the networks and share the resources, but never be afraid to go it alone. Cooperate and collaborate, but relish your independence. When you fall, get back up, and when you fail, never give up. Refuse to lose and remember – no one is going to get it done but you.

Perry B. Newman is founder and president of Atlantica Group LLC, an international business development firm based in Portland, Maine and active throughout North America, Israel, France and India. More information available at http://www.perrybnewman.com<./p>

Profitable Island Abbey Eyes Pharma

With a $1.9-million loan from the Atlantic Innovation Fund, Island Abbey Foods of Charlottetown is tripling its research staff and pioneering the delivery of health supplements and pharmaceuticals through its honey-based products.

The company is famous for its honey-based candies and lozenges, and for walking away from a $600,000 funding agreement with four dragons from CBC’s Dragons’ Den. The collapse of that deal was the dragons’ loss because Island Abbey now appears to be in the midst of its second straight year of 100 per cent revenue growth, and is not only cash-flow positive but profitable.

The company was in the news earlier this month when the Atlantic Canada Opportunities Agency announced it would receive a $1.9-million Atlantic Innovation Fund loan over four years to help finance a $4-million research and development project. With that money it will build its three-member R&D staff up to nine or 10 positions.

For several years, Island Abbey has been moving into health supplements to complement its food products, and in March, released a new line of honey-based vitamin products. It is now proceeding into over-the-counter drugs and then pharmaceuticals, all using the honey-based delivery system.

“We’re literally working with the top 10 pharmaceutical companies in the world,” said Island Abbey CEO John Rowe in an interview. “We have the first all-natural delivery system for their product and that’s why they’re interested. People are demanding this sort of product.”

There are several reasons for combining medicinal products with the honey-based delivery system, said Rowe, including the fact that it tastes good. Honey itself has curative properties, and there are health synergies from combining a medicine with honey. And the alternative to mixing medicine with honey is to use processed sugar or put it in a synthetic capsule, both of which turn off some customers.

Rowe said the company is now working its way up the regulatory ladder: it has approval to sell food and health supplements and is working toward receiving certification for over-the-counter drugs, and then pharmaceuticals. Within five years, it hopes to be manufacturing prescription drugs delivered through its solidified honey technology.

“We can literally imbed any type of therapeutic ingredient in our honey-based platform,” he said.

While the move into new markets is exciting, the company is making vast headway with its existing products. Its candies and lozenges were sold in about 2,000 Canadian outlets at the end of 2011, and a year later that number had risen to 4,500. Rowe said that by the end of this year, including export markets, the products will be sold at 10,000 stores.

Island Abbey raised about $1 million by selling preferred shares to angel investors from P.E.I. in early 2012, but Rowe said there are no plans to sell more equity now that the company is profitable and has received funding from the Atlantic Innovation Fund.

Rowe also attributed a lot of Island Abbey’s success to the fact it is based in Charlottetown, meaning it benefits from the wealth of expertise and research resources in the food, health and life sciences segments. He said the company has benefited from its relationship with the National Research Council, University of P.E.I. and the growing private sector.

“We wouldn’t be able to do this elsewhere,” he said. “The bioscience community here is as good as anywhere I’ve seen in the world.”

4Front Calls for Collaboration

Answer this quickly: What’s the one thing that private enterprise in Atlantic Canada wants governments to do to improve our competitiveness?

Did you answer, “Lower taxes”? It would have been my guess.

But we’d both be wrong.

The top business leaders in Atlantic Canada have spent more than two years studying the weak economic performance on Canada’s East Coast as part of the 4Front Atlantic series of conferences. Ahead of the third and final 4Front gathering on Thursday, the heads of the five working groups that wrote the 4Front report assembled Friday to brief the media on their recommendations. And a call for lower taxes was nowhere to be found.

Rather, the overarching theme of this complex report is that the four governments – five, if you toss in the Feds – must work more closely together to reduce regulation and increase prosperity across the region.

“If we can coordinate and cooperate, we can take down the costs of all four governments so less money is needed, so then it follows that taxes can come down,” said George Cooper, the McInnes Cooper Counsel who chaired the event.

The emphasis on collaboration rather than cuts is prudent. From its outset, 4Front has been a private sector-led initiative, meaning that businesspeople were trying to find solutions to our economic underperformance. But in order to achieve these goals, they had to come up with recommendations that are palatable to government. The call for lower taxes would have had a broken record quality. By calling for collaboration, they’re offering the Premiers a policy they can chew on without choking.

That is not to say the groups ignored tax policy. The Access to Capital group led by New Brunswick investor Gerry Pond advocated strongly for a regional tax credit that would channel more money into fast-growing companies. “I think we should be the best in Canada [in ETCs] so we can catch up with the rest of the world,” said Pond. (Full disclosure: on a volunteer basis, I helped to write the Access to Capital subcommittee report.)

That regional ETC would most likely require some interprovincial cooperation, and so would a lot of the other recommendations. The Talent group, chaired by BMO Financial Group Vice Chair Kevin Lynch, called for education that is more responsive to the job market, and for a greater push for immigration. Again, these are initiatives that will require action by several governments.

What the 4Front recommendations do NOT do is just pile all the blame for the region’s woes on government. Stephen Hartlen, Dalhousie University’s Assistant Vice-President  of Industry Relations and the head of the Innovation and Productivity group, said both universities and corporations perpetuate a stand-offish relationship that must be overcome. And the head of the Going Global group, Ian Smith, CEO of Clearwater Seafoods Ltd. called on government and industry to focus on strategic sectors and key markets for an integrated export policy.

The heads of 4Front are showing leadership by demanding as much of their corporate peers as of the governments in the region. What they ask of the four governments is simply to work together to produce more efficient government. Cooper, a former MP, admitted it is difficult for a politician in one province to advocate policies that benefit another, but the time has come for new thinking and new practices.

The Atlantic Provinces have a poor record of working together – ridiculously so when you consider how well the people of the four provinces get along. It’s time for the premiers to examine the recommendations and map out a mechanism that would allow the implementation of the better 4front ideas.

The Premiers may choose to ignore the recommendations. Who knows? What they cannot do is claim that the business community has brought them the same stale complaints that have been heard a million times before.

HPX Links to MentorCamp, DemoCamp

Halifax Pop Explosion, the autumn event that started 21 years ago as a forum for local music, plans to expand its digital component this year so it will become a marketplace and mentorship lab for East Coast technology.

HPX last year added HPX Digital to highlight the technology that goes hand in hand with the pop phenomenon, focusing mainly on such segments as the Internet, gaming, mobile and startups.

The reaction has been positive, and the organizers have decided to expand the tech side of the festival, said executive director Jonny Stevens in an interview.

The festival this year will include MentorCamp and DemoCamp events, and HPX organizers have invited 20 to 25 international tech buyers and investors to attend the festival. These venture capital investors, chief technical officers of corporations and digital agencies will meet with local entrepreneurs, with the goal of improving the business prospects of local start-ups and showcasing the tech community in the region.

 “If you shine a light on a local company, that’s great,” said Stevens. “But if you shine a great big spotlight all at once on the whole landscape, then it really highlights what’s going on around here.”

The week-long series of events will begin Oct. 21 with MentorCamp Halifax, which will subject about eight startups to an intense mentoring session with more than 30 international mentors.

Founder Permjot Valia said in an interview from London that he has already chosen three companies for MentorCamp — RUMAnalytics of Quispamsis, N.B., and Analyze Re and UpMyGame, both of Halifax. In the coming months, he will add more companies, including some from outside Atlantic Canada, with the only criteria being the quality of the enterprise.

Though he hopes some companies will be able to raise investment through the event, Valia said the “focus will be more on mentorship” than on fundraising.

DemoCamp Halifax, which will take place Oct. 23, is also in its third year and has grown quickly into a gathering spot for startups and their acquaintances.

The idea is for a range of startups — about 30 have participated in the first two years — to present their product in a five-minute presentation.

The HPX Digital events, including speeches, workshops and networking sessions, will take place Oct. 24 and 25, the same time as the 50 or so concerts featured in the Pop Explosion.

HPX, MentorCamp and DemoCamp comprise simply one segment of a season of startup-related activities in Halifax. The fourth annual Invest Atlantic will be held Sept. 25 in Halifax, and BioNova, the conference for the life science industries, will take place there Oct. 9 and 10, with a theme of big ideas leading to big opportunities.

The events calendar in the region is evolving so startup events are taking place in the spring in New Brunswick – such as East Coast Startup Week -- and in the autumn in Halifax.

WMI Names Leadership Cohort

The Wallace McCain Institute at the University of New Brunswick has named the 16 participants in the sixth cohort of its Entrepreneurial Leaders Program.

After an intense two-day process it calls "The Choosing", the institute selected a range of entrepreneurs from the three Maritime Provinces who Executive Director Nancy Mathis described as representing “the regions highest growth potential entrepreneurs.”

The 16 people who will participate in the program over the next year are:  

1. Monica Adair, ACRE Architects Inc., Saint John;

2. Sarah Albert, PGYIN Holding Inc., Moncton ;

3. Laura Araneda, Vic Progressive Diamond Drilling Inc., Sussex, NB;

4. Keith Brideau, Historica Group of Companies, Saint John;

5. Pam Cooley, CarShare Atlantic Ltd, Halifax;

6. Mike Cormier, Crandall Engineering Ltd., Moncton;

7. Michel Gauvin, Kurius Intelligent Homes & Buildings, Dieppe, NB;

8. Guy Haché, West End Sports, Beresford, NB;

9. Brandon Kolybaba, Sheepdog, Cloud A Halifax;

10. Levi Lawrence, Real Food Connections Ltd., Fredericton;

11. Brent MacDonald, Xiplinx Technologies Ltd., Saint John;

12. Jason MacDonald, MJL Enterprises Inc., Charlottetown;

13. Andy Osburn, Equals6.com, Halifax;

14. Sébastien Pitre, V. Pitre Fondation, Robertville, NB;

15. Ryan Roberts, Managed Markets Rx Solutions, Inc., Saint John;

16. And Kirsten Simonsen, The Eastern Prosthetic Clinic, Moncton.

VetHealth Global Set for PEI June 10-12

At least nine startups or organizations working in the area of animal health will attend a MentorCamp affiliated with the VetHealth Global conference in Charlottetown on June 10.

The participants in the one-day mentoring session include two groups operating in Atlantic Canada — the Moncton-based Atlantic Cancer Research Institute and Delivra Inc., a Burlington, Ont., biotech that has a research and development facility in Charlottetown.

This is the first year of collaboration between VetHealth Global, one of the leading conferences in North America for animal medicine, and MentorCamp, a Halifax-based organization that exposes startups to international mentoring for an intense one-day training session. The idea is to bring the young companies into the training process on June 10 and then have them participate with multinational players at the full conference June 11 and 12.

 “We’ve managed to attract the kings and queens of the industry in attracting the bigger players, and we’ve also brought in the newer companies in the innovation sector,” said Rory Francis, the executive director of the PEI BioAlliance, which is organizing VetHealth Global.

For several years, Prince Edward Island has been carving out a niche in animal health, buttressed by the veterinary college at UPEI. It’s an attractive market because animal health has far easier regulatory requirements, so products can be brought to market much easier.

The province has held VetHealth Global every second year since 2007, and it has grown into one of the pre-eminent veterinary health conference on the continent, attended by such multinational companies as Novartis AG, Pfizer Inc., and Nestle-Purina. Charlottetown recently partnered with Kansas City, the home of the other leading vet health event, so they can collaborate.

Francis said that VetHealth Global features three tracks: presentations by startups, partnering sessions with large companies and speakers. To enhance the role of startups this year, VetHealth Global is working with MentorCamp to help train the participating companies. MentorCamp was founded by Permjot Valia, a London-based investor with several investments in Atlantic Canada, and has organized events in all four Atlantic provinces.

The Atlantic Cancer Research Institute is a 15-year-old non-profit organization housed at the Dr. Georges-L.-Dumont University Hospital Centre in Moncton, which is researching the genetic origins of cancer and pursuing detection, diagnosis, and treatment of the disease.

Delivra manufactures LivRelief and LivSport pain relief medication. The company has a research facility in P.E.I. and last week received a $2.86-million loan from the Atlantic Canada Opportunities Agency’s Atlantic Innovation Fund. It will use the money to strengthen and expand the delivery system in the medications.

The other startups going through the MentorCamp will include: AbCelex Technologies Inc., Toronto; Kane Biotech Inc., Winnipeg; Microsentisis Canada; Vital Herd Inc., Fetch Pharma, and Karyopharm Therapeutics, all of the U.S.; and Yissum Research Development Company Ltd., Israel. Other companies may be added.

MentorCamp, MTEI Link with Volta

Volta, the co-working space for startups in downtown Halifax, has yet to complete its first month of operation, but it is already fleshing out its programs and partnerships, which will benefit young companies in the region.

The “startup house”, as its founders have dubbed it, has struck partnerships with MentorCamp and with St. Mary’s University’s new Masters of Technology, Entrepreneurship and Innovation program. Executive Director Milan Vrekic has also unveiled the list of programs for the startup community.

About 13 tech startups now occupy the shared office space on Spring Garden Road, which is also the home for Build Ventures, the $50 million regional venture capital fund that happened to launch at about the same time as Volta.

Volta and MTEI announced today that those students in the program who are working full-time for a startup will be granted space in the facility, where they will have an opportunity to interact with the more experienced entrepreneurs. MTEI, which will begin in September, is a single-year Master’s program that works with entrepreneurs and business execs who want to adopt innovation to push their businesses forward.

“The energy in the Volta space and the diffusion of it to technology entrepreneurs will be enormously value-creating,” said Dawn Jutla, the Director of the MTEI program. ”Our students will be working with real issues in the trenches and with unsurpassable community support.”

MentorCamp Founder Permjot Valia said over the weekend that his Halifax-based company’s head office will be in Volta, where it can advise young companies. MentorCamp organizes one-day events in which dozens of international mentors come together to work with six to 10 startups. Since beginning in Halifax in 2011, MentorCamp has organized events in all Atlantic Provinces and is moving into South Africa, Turkey, Arkansas and other locations.

Meanwhile, the organizers are developing a range of programs for the startup community, including lectures and discussions, “Peer 2 Peer Meetups” (in which a Volta member leads a discussion on a subject) and even movie nights. Details are available on the Volta website.

Volta grew out of discussions between GoInstant Co-Founder Jevon MacDonald, the Atlantic Canadian Opportunities Agency and others, and is supported by a range of sponsors.

Soricimed Tests SOR-C13 in Texas

Sackville, N.B.-based biotech Soricimed Biopharma Inc. has signed a contract to conduct Phase I clinical trials at The University of Texas MD Anderson Cancer Center in Houston, Texas, meaning its drug candidate SOR-C13 will be tested at three North American facilities.

The drug has been in trials since last autumn at two Canadian facilities – the Juravinski Cancer Centre in Hamilton, Ont., and the nearby London Health Science Centre. In an interview yesterday, Chairman and Chief Scientific Officer Jack Stewart said the Phase I trials should take about a year.

SOR-C13 is a targeted peptide, or a small protein. This particular peptide can stop growth in cervical, bone and lung cancer cells. Pre-clinical studies have shown that SOR-C13 induces apoptosis (cell death), inhibits cell proliferation and reduces tumor volume while minimizing side effects associated with typical chemotherapy.

The Phase I trials are designed to show that humans can use the drug safely, and determine what size of dose can be comfortably tolerated by the human body. Stewart said the company will also be monitoring the tests closely to see what indications there are on the efficacy of the drug.

He said the plan for several years has been to seek regulatory approval simultaneously in Canada and the U.S., and Soricimed’s regulatory team has designed the trials to meet the conditions of approval for both the Food and Drug Administration in the U.S. and Health Canada.

By expanding to MD Anderson – where testing began on Wednesday – the company is basing its testing in facilities in both countries.

“You can’t get much better than Anderson based on credibility,” said Stewart. “It is probably one of the top three, four or five research institutes on the planet.”

In a usual biotech timeline, Phase I trials are followed by the more expensive Phase II trials, which are designed to establish the efficacy of a drug. Warning events always crop up to extend a timeline, Stewart said the Phase I trial should wrap up in 2014, after which the company will reveal its Phase II plans. Soricimed hopes that SOR-C13 could get to market in the next three to five years.

Soricimed has raised a total of more than $12 million in dilutive and non-dilutive funding.

“At the moment, we are looking at ways to raise more non-dilutive money,” said CEO Paul Gunn, referring to capital such as grants and awards, which do not dilute the equity base of the company. “Depending on how successful we are, we may look at raising more equity as well.” 

Soricimed has said previously it plans to find a large drug company to partner with for the second and third phases, which together can cost hundreds of millions of dollars.

As of late 2011, Soricimed had raised almost $6 million from private investors in New Brunswick,and almost $5 million through the programs of Atlantic Canada Opportunities Agency and the National Research Council.

GrowthWorks, BDC Back ClearRisk

ClearRisk Inc., the St. John’s SAAS venture that helps mid-level insurance brokers assess risk, has closed a follow-on round of funding from GrowthWorks Atlantic and an arm of the Business Development Bank of Canada to help it continue its rapid growth.

CEO Craig Rowe said in an interview last night the company has raised $500,000 in venture capital funding from existing investor GrowthWorks Atlantic, and has raised additional financing from BDC Capital.

The company previously raised $1.2 million from GrowthWorks Atlantic and the First Angel Network in 2011.

Rowe, who said that GrowthWorks has been an “exceptional” partner, declined to say how long he expects the latest funding to last, but did say that he has no plans to raise more money any time soon.

 “We’ve created solutions for risk management for insurance,” said Rowe. “In an industry that’s very traditional, we’ve taken a modern tool and applied it to existing software so we sell to all the parties in an insurance transaction – brokers, underwriters, customers. So there is a common platform and language and they can all relate to it.”

Rowe said the company is now selling its cloud-based risk assessment tool to medium-sized and large insurance companies, mainly in Canada and the U.S. It also has customers in Europe, Asia and Australia. He added the company is not doing a lot of product development, other than to respond to client requests.

“We’re all about focus right now,” said Rowe. “We’re at the point now where we’ve got a scalable and repeatable model and we’re scaling it and repeating it.”

He added that the company is still growing rapidly and is in the early stages in terms of market penetration.

ClearRisk, which started almost seven years ago, has had about 15 employees for several years, and is now taking on a few sales people. Some of the sales team is in Ontatrio, home to about 80 percent of the Canadian insurance industry. Most of the staff is based in the headquarters in St. John’s.

Oris4 Hires Sales VP from Salesforce

Oris4, the Halifax software company that has developed a cloud-based document organization system, has hired Salesforce.com veteran Wade McCallum to lead the company’s sales team.

McCallum had been Salesforce’s vice-president of enterprise sales, having held a senior sales position with Fredericton-based Radian6, which San Francisco-based Salesforce bought for $326 million in 2011.

His title at Oris4 will be vice-president of sales.

 “It’s a big move for us,” said co-founder Andrew Doyle in an interview. He said he and partner Peter Hickey “can’t focus on everything 100 per cent of the time so we’re adding specialists who can handle important jobs.”

Oris4, which began life as 2nd Act Innovations two years ago, has developed the Oris4 Enterprise Content Manager, which allows organizations to quickly and easily organize, store and find their documents.

The company has been adding senior executives to strengthen its corporate structure. Earlier this year, it hired two Silicon Valley veterans to fill senior management roles: Reza Kazemipour as chief executive and Guillaume Oget as chief technology officer. They formed a four-member executive team with Doyle and Hickey.

Earlier this month, the company announced its new chief financial officer would be Keith Abriel, who has worked with such other high-growth companies as BlueLight Analytics Inc., CarbonCure Technologies Inc. and DHX Media Ltd.

The important point about the McCallum hire is that Oris4 is bulking up its sales team. New Brunswick investor Gerry Pond says one staffing area that Atlantic Canadian startups have to improve is their sales teams, and Oris4 is doing just that.

Doyle said McCallum has the experience to know how to make sales to multinational companies and is bringing the structure and discipline to the Oris4 sales team to foster those sorts of deals.

 “I’m an entrepreneur at heart,” said McCallum in a news release. “Oris4 gives me the opportunity to build on the great strides the team has made to date. We will build another international software success story from right here in Halifax.”

The other important point about developing the sales team is that Oris4 is hoping to close a funding round of about $5 million to $7 million this year, and needs to show venture capital funds that it is generating revenue. If it can book some large customers, the company will have greater success in attracting investors. What’s more, sales will bring money into the company, allowing more time to find just the right investors at just the right valuation.

Oris4 last year secured $1.1 million in funding, including equity investments of $250,000 each from Innovacorp, Nova Scotia’s innovation agency, and GrowthWorks Atlantic, the venture capital fund. The Atlantic Canada Opportunities Agency lent the company $150,000, and a group of angel investors rounded out the funding. Precipice Capital, a Dartmouth investment boutique led by Chris Dobbin, advised 2nd Act on the financing.

Innovacorp and Growthworks added additional funding earlier this year.

I Cover Kitchener; The Star Covers NB

In the last 24 hours, the largest-circulation newspapers in both Canada and the U.S. have run articles on Canadian tech hubs. 

USA Today has printed my story on the tech community in Kitchener-Waterloo. I've already posted a few articles from that trip, such as the report Magnet Forensics and Iain Klugman's comments on whether we should aim for a regional or local startup community. The USA Today piece features Tony Abou-Assaleh from TitanFile, which is based in Halifax and Kitchener.

Meanwhile, the Toronto Star has published a story by Max Mertons on New Brunswick becoming Canada's next tech hub. I was interested that he quoted Guyverson Vernous of iCubemedia of Moncton, an entrepreneur who really impressed me when he went through the McKenzie Accelerator.

Check out both stories. They're both worth a read.

Magnet Is All A Startup Should Be

Magnet Forensics is everything a start-up should be.

The company is lean, produce incredibly strong revenue growth and grows by retaining earnings, not seeking investment. But what makes it stand out is that the company’s technology offers a massive benefit to society.

Magnet, based in Waterloo, Ont., recovers deleted information from a computer. It’s used to help police find information that a suspect thought had been deleted. This could be communications between people, financial records, or even contraband photos. It’s particularly effective in the fight against child pornography.

“We’ve developed forensic software to recover internet-related communications from computers and mobile devises,” says CEO Adam Belsher. “Anything you’re doing on your computer to communicate—uploading pictures, going to chat rooms—there’s a good chance we can find it.”

I met Belsher last month when I was doing a story on the tech community in Kitchener-Waterloo for USA Today, and was amazed by the company. I usually only cover Atlantic Canadian companies, but here is a look at a Canadian company that can serve as a role model for others. And it started out as a free service.

The story began when a 26-year-old police officer called Jad Saliba contracted Hodgkin’s lymphoma and took a leave of absence to recover. When he returned, he was taken away from his beat work to become a digital forensics investigator and thrived at the position. He developed software that could recover deleted material from hard drives, and for two years gave it out free to other police forces.

In 2009, he left the police to launch the company, which was originally called JADsoftware. The company solved an extreme problem in the police department because it reduced the manual work needed in retrieving deleted files and greatly increased the amount of material that could be brought back.

Today, the company’s 1,500 clients include law enforcement agencies in almost 100 countries, such as the FBI and the office of Homeland Security in the U.S. The company’s revenues have increased 1,800% over the past two years and last year it captured the No. 16 spot on Profit magazine’s list of Canada’s fastest-growing companies. Belsher expects to improve on that position this year.

As it outgrows the police business, Magnet Forensics is looking for more corporate clients, and is already making headway in that market. When employees leave a company and sue for wrongful dismissal, they typically leave behind their desktop computers. Magnet’s technology can dig up material that can establish why the employee was let go and help to protect the employer.

Belsher, a former Research in Motion exec, joined the company in September 2011, and continued to grow the company. The company now has 30 employees and he expects to increase the work force in the coming year.

One interesting fact about the company is it has never raised equity investment, which means that it has preserved the founder’s capital and allowed the CEO to focus on the business rather than on fundraising.

Above all, Belsher and his colleagues thrive on knowing that they have helped fight the abuse of children. In the middle of our interview, the CEO whipped out his cell phone to read an email he had received the day before from a police officer in the U.S. who had just prosecuted a pedophile because of evidence retrieved with Magnet’s software. “If we can save just one kid’s life or stop the abuse of a child,” he says. “That’s what makes us tick, really.”

Progress Loves the Startup Community

The Progress Magazine "People We Love" issue is now on the news stands, and it is rich in material about the startup community.

We'll be featuring more on the issue later, but several prominent people in the startup community made the People list this year. I wrote up three items, featuring: SimplyCast CEO Saeed El-Darahali; Build Ventures Co-Manager Patrick Keefe; and a joint piece on Dalhousie University's lean entrepreneurship profs Ed Leach and Mary Kilfoil.

When we asked Danielle Fong -- a Dartmouth native who now runs Lightsail Energy in California -- to appear on the list, she declined saying we should instead choose "a real hero of the NS cleantech scene" Thomas Rankin, an investment manager at Innovacorp. Progress was a step ahead of her and Rankin is on the list.

The other people featured include T4G CEO and Big Data evangelist Geoff Flood; McInnes Cooper's startup lawyer Rob Cowan; Picomole CEO John Cormier and Clarity CEO Dan Martell.

I was especially pleased to see education advocate Paul Bennett on the list. Paul was my Grade 9 Geography teacher. It was his first year out of York University. He taught me Twentieth Century history the next year, and I still benefit from how thorough that course was.

Compilr Revs Up the Revenues

Patrick Hankinson is not a guy who wears his heart on his sleeve, but he does post his business metrics by his door.

Hankinson is a soft-spoken entrepreneurial whiz who runs Compilr, an online development environment that allows users to learn, write and test code in the cloud.

Earlier this month, Compilr moved into Volta, the new co-working space for startups in Halifax. Beside the door of the company’s new office, Hankinson has posted two rows of printouts, one labelled The Good, and the other The Ugly. They show the company’s good and bad news over the past two years.

The prominent printout in the Good category is a chart showing the company’s soaring revenues, which have increased 57 per cent this month and are on track for a 720 per cent annual increase. It’s been a long time coming.

Two years ago, the company was one of two Canadian companies selected to participate in the Seedcamp New York accelerator, and it was then selected for the international Seedcamp event in London. (It was, I believe, the first company news ever posted on Entrevestor.)  

Hankinson and his team have been working away at making Compilr the place where techies will come to write code and pay for the privilege of doing so.

They did really well on the first part. One printout in The Good category states about 200,000 users (most of whom use it free) are registered at the site, including Google, Microsoft, Samsung and students from Harvard, Stanford and the Massachusetts Institute of Technology.

It’s that second part — bringing in revenue — that has dogged the Compilr team.

Until recently.

In October, the company decided the time had come to get money out of its existing customers rather than adding new ones. So it began an email campaign to its clients advertising its premium products, and it upped the subscription price from $4.95 to $10. There was an immediate jump in revenue, which shows up on the chart posted by the office door.

Then three weeks ago, Compilr decided it would no longer offer the free service to new clients (other than a 14-day trial period) to provide a better initial impression of the product instead of offering a crippled freemium product. Hence the massive jump in revenues.

So what’s the Ugly?

 “We’ve been rejected by more than 35 venture capital funds,” Hankinson told the crowd at Volta’s opening bash Friday night.

The good-natured line brought in gales of laughter, but the posts by the door show the serious side of these rejections. Compilr’s three main competitors, all based in San Francisco, have been able to raise capital from VC funds. Codenvy and Koding.com raised $10 million each and Cloud9 IDE attracted $5.5 million.

But this lack of funding is becoming less of a problem because revenue is growing so quickly. The company is on track to be cash-flow positive next month, meaning it can finance operations just from the revenue coming in.

 “The first few times we tried to raise capital it was purely for survival,” said Hankinson. “Now we’re at a stage where external capital would accelerate the business. But if it doesn’t happen, our revenue will allow us to grow naturally.”

Hankinson thinks the team can accelerate revenues even faster with a focus on revamping its educational platform, which teaches users coding languages. It’s also working on a computer science platform that would allow university clients to teach courses on Compilr.

It seems The Good column is outflanking The Ugly column quickly at Compilr.

We Need Computer Science Reform

Jonathan Robichaud recently completed a private tutorial on writing computer code with Java-Script, and he can’t wait to move on to Python.

In his Java-Script course, he received a full day of lessons from Connor Bell, a Dalhousie computer science student and co-founder of Execute Technologies Inc. But Java-Script is used mainly for designing websites, and he really wants to sink his teeth into Python because that’s the language used in designing games. Eventually, he and his friends want to move on to larger engineering projects.

 “We’d like to build an airplane,” he said as he enjoyed a hot chocolate at a Halifax coffee shop. “We’re probably going to make that when we’re in our twenties. We’re probably too young to do it now.”

Jonathan, you see, is only eight, yet he already possesses an enthusiasm for computers that is breathtaking. And the sad thing is, according to the official curriculum of the Nova Scotia Education Department, he should more than double his age to enrol in a programming course at a Nova Scotia school. Computer programming is taught as a single optional program in Grade 12.

I’m more familiar with Nova Scotia than the other Atlantic provinces, but the tech community across the region is pleading for computer science in schools, not just in high schools, but to younger kids as well. Kids like Jonathan.

In the absence of formalized education, the private sector is introducing initiatives to teach people coding. Jonathan took his course from Ladies Learning Code, a national initiative that was recently brought into Nova Scotia. As its name suggests, it wants to encourage females to move into the technology world, but it’s open to all genders, all ages.

Jonathan was one of four people attending its most recent session who were too young to drive themselves to it. This summer, Jonathan will attend CompCamp, a Halifax-based summer camp for computer enthusiasts. CompCamp is expanding in its second summer, and its founders organized the Girls Tech League over the winter.

The New Brunswick Information Technology Council has just launched its Class of 2013 program, in which several companies guarantee to give 25 high school grads a job as long as they promise to complete a degree all parties agree on. In St. John’s, the Newfoundland and Labrador chapter of the Canadian Information Processing Society, holds Women in IT events targeting Grade 9 girls, and almost 500 people attended last year.

These are just a few of the initiatives going on outside the public education system to encourage young people and others to train for jobs in the fastest-growing segment of the economy. The point is the initiative is coming from outside of the education departments, and it’s time for governments to respond.

It’s not an easy fix. Computer science must be taught by teachers fluent in computer languages and coding. And if the curriculum is increased at a provincial level, there would have to be teachers in all schools able to teach the courses.

What’s more, if the governments mandate more computer science, then some other courses will have to be dropped.

But the overall economy is demanding stronger education in technical subjects. Each week, I talk to tech entrepreneurs who can’t find programmers. The economy needs these people and our schools should do more to educate them.

JKN Spun Off To Be Private Company

A decade after starting as a research project at Holland College in Charlottetown, the Justice Knowledge Network is being spun off into a for-profit eLearning company called JKN Inc.

Executive Director Sandy Sweet said in an interview yesterday that Charlottetown-based JKN incorporated about three months ago and is in the process of becoming a private company designed to harvest profits for its single shareholder, Holland College. The company, which now has about 20 employees, is eagerly developing new markets for its eLearning systems outside of its traditional base of programs for law enforcement.

“I would like to think that we’ll grow to 25 people in the next 12 to 18 months,” he said in a phone interview. “But our goal is not to grow too huge. We’re happy for now with a high-volume, low-margin model.”

The slow-but-steady philosophy has worked well for this organization, which grew out of Holland College’s expertise in educating law enforcement officers at the Atlantic Police Academy. In 2003, the Atlantic Canada Opportunities Agency awarded Holland College $6.5 million in funding under the very first Atlantic Innovation Fund tranche in order to develop an eLearning program for police officers.

Sweet was brought in for 12- to 18-month contract, and ended up staying for a decade, overseeing the development of the organization.

Working with other Canadian colleges, the Justice Knowledge Network gave birth to the Canadian Police Knowledge Network, which used the JKN technology to develop a line of eLearning material for the training of police officers for departments across Canada.

The Justice Knowledge Network was soon branching into complementary segments, such as training materials for prison guards and private security firms.  Then it did a safety course for a non-profit called Parachute Canada.

Recently, JKN did something completely new. It was approached by a network of real estate professionals from western Canada, inquiring about how to get some eLearning programs made, said Sweet. They were so impressed with the JKN operation that they contracted the P.E.I. organization to make the training programs for them.

“We now have about 120 courses in our catalogue,” said Sweet.

Sweet said the company is looking to expand into new market segments, and has chosen the name JKN to honour its heritage in police training programs but not to become typecast as solely a provider of law enforcement instruction.

As it looks forward to an independent future, the company realizes that its market is changing and it is adapting to the development of programs delivered to mobile devices and the use of gaming in training materials.  Springboard Atlantic, the organization that aids commercialization at Atlantic Canadian universities and colleges, recently introduced JKN to a Charlottetown company called Telos International, which is helping to develop games for training programs.

Sweet also said that the new company could alter its philosophy and strategy toward a higher growth model if it ever needs to bring in investors or if it gets a takeover offer.

ABK’s O’Connor Is a Medtech Star

In the midst of interviewing ABK Biomedical's new CEO Pat O’Connor on the Halifax company’s direction, I realized that the story I should write was about O’Connor himself.

Last October, the company announced it had raised $1.25 million in funding from the Atlantic Canada Opportunities Agency, Innovacorp and a variety of sources, and co-founder and chief scientific officer Daniel Boyd said, almost parenthetically, that it had also hired a new chief executive from Ireland, a man called Pat O’Connor, a former executive with Boston Scientific Corp., a worldwide developer, manufacturer and marketer of medical devices.

When I finally interviewed him this month, I was astonished by his savvy and industry knowledge as he explained that ABK is at a critical juncture. The company, which is mainly focused on treating uterine fibroids, or benign tumours in a woman’s uterus, is now completing important development testing in preparation for applying for regulatory approval in Europe, the U.S. and/or Canada.

With the support of Springboard Atlantic, an organization that aids commercialization of university research, ABK a few years ago developed OccluRad — tiny bio-compatible glass beads that can treat uterine fibroids. About 40 per cent of women over 35 worldwide develop these tumours, and many require a hysterectomy. Yet radiologists are now tackling this problem in a minimally invasive manner by injecting beads into a target area and essentially blocking the area around the fibroid and starving it of blood.

The problem is that the beads now used in this procedure aren’t visible under fluoroscopy (an imaging technique that uses X-rays to obtain real-time moving images), so the radiologists have to introduce a dye that is visible to confirm that the right blood vessels are blocked.

ABK Biomedical’s innovation is the development of new particles, or to use the clinical term, radiopaque embolic beads, that are visible under fluoroscopy so the dye is no longer needed. That reduces costs, makes the procedure quicker and eliminates the risk of a toxic reaction from the dye.

O’Connor explained that the company now has its corporate structure in place, has lined up manufacturers and partners and is now assessing where it should first seek regulatory approval. The options being assessed are the U.S., Canada and the European Union, or any combination of the three.

The company will begin design verification testing, which includes such things as pre-clinical study, bio-compatibility testing and design verification bench testing, in August, for completion around January 2014.

Preliminary indications reveal the company may be able to receive approval for some applications with rigorous pre-clinical tests rather than full clinical trials. That means regulatory approval in whatever market it chooses first could come in mid-2014.

However, O’Connor added that that does not mean the company won’t proceed with clinical trials later in 2014 — depending on a couple of factors. “Even if you don’t need it (a clinical trial) for regulatory approval, it’s very powerful in gaining market approval,” said O’Connor. Also, patients with uterine fibroids are otherwise healthy and this will drive the requirement for ABK to generate clinical data for regulatory approval in some regions.

What O’Connor was displaying was a knowledge of the medical device development understood by few people — if any — in the Halifax medical device community. For example, when we discussed the continuing research that Boyd and his team was doing at Dalhousie University, and how this could lead to new products, O’Connor explained the challenges of bringing a product from the R&D stage to the market. These include not only safety and efficacy, but the market opportunity, the routes to market, the cost of making the product and what price it could bring in.

The trick, therefore, is not just to develop a device that improves health outcomes and is safe, but also one that can be manufactured and sold with acceptable margins. Any technology selected for development within ABK will be assessed with all those factors in mind.

O’Connor, who has worked for such medical device giants as Boston Scientific and Stryker Orthopaedics, is happy to share his knowledge with others in the medical device community. He hopes to be involved in a biotech mentoring session to be held by Springboard Atlantic and First Angel Network, June 12 and 13, at the Innovacorp Enterprise Centre in Halifax.

AIF Backs BioVectra, Island Abbey

Charlottetown drug manufacturer BioVectra Inc. said Tuesday it had received a $3 million funding from the Atlantic Canada Opportunities Agency’s Atlantic Innovation Fund, which will help to finance a $5 million expansion project for the company.

The announcement was one of three AIF funding announcements that Prime Minister Stephen Harper made Tuesday during a visit to P.E.I. The others were $2.9 million for Delivra Inc. to support its research on topical creams to relieve pain and $1.9 million for Island Abbey Foods Ltd., the maker of the Honibe line of products, to expand a line of honey-based products for therapeutic purposes.

The BioVectra announcement is significant because it’s the first major move by the company since it sold out to Questcor Pharmaceuticals of Anaheim, Calif., for up to $100 million in cash and deferred payments in January.  The fact that the new owners are investing $2 million (as well as the AIF funding) in the new project indicates their commitment to grow the business in P.E.I.

BioVectra plans to develop products using sustained-release technology in partnership with a multi-national drug company.  “This project will be instrumental in supporting an entirely new capability in pharmaceutical manufacturing to BioVectra which can be applied to both future contract manufacturing, and drug development investments,” said the company in a statement.

It added it will hire five additional people to carry out the work.

The federal government said the announcement was part of a wider renewal of the Atlantic Innovation Fund for 2012-13, in which $39.9 million will be allotted to 17 projects across Atlantic Canada.

The government plans to announce the other 14 projects in the coming weeks, with $11.4 million for New Brunswick, $11.3 million for Nova Scotia and $9.4 million for Newfoundland and Labrador.

Since 2006, companies and institutions throughout Atlantic Canada have received $503.8 million for 216 projects from the Atlantic Innovation Fund.

Build Ventures Eyes 1st Investment

Build Ventures, the new Atlantic Canadian venture capital fund, launched Tuesday with a new name, new headquarters, new co-manager and $48.5 million in committed capital.

And soon it will have its first investment in its portfolio.

“We’re in the process of closing our first investment,” co-manager Patrick Keefe said in an interview, without naming the company nor its home province or sector.

Build Ventures – which until now has been known simply as the regional fund – is operating out of the new Volta co-working space on Spring Garden Road in Halifax, where it can offer mentorship to the 10 or so young companies that share the space.

Keefe, who spent the last several years as Vice-President Investment with Innovacorp, is co-managing the fund with Rob Barbara, also a seasoned investment manager. Barbara is a Halifax native who has moved back home after spending  11 years with Burgundy Asset Management, a Toronto-based global investment management firm. The pair will be joint heads of the new fund.

One of Build Ventures’ early decisions has been to sponsor Entrevestor, and we appreciate their support of this site.

The fund will be allotting as much as $5 million to about 10 companies in the first few years. That will translate into initial funding of $500,000 to $2 million for each company, setting aside some money for follow-on rounds.

“We don’t have a top-down investment philosophy about focusing on one sector at the expense of another,” said Keefe. “It’s an entrepreneur-led investment strategy.”

The fund’s launch has been two years in the making, as it was mid-2011 when Premier Darrell Dexter of Nova Scotia announced that province would invest $15 million in an Atlantic Provinces VC fund and invited other provinces and private investors to join in.

In the end, the fund received commitments from New Brunswick ($15 million), Prince Edward Island ($2.5 million), BDC Venture Capital ($10 million), Moncton-based Technology Venture Corp. ($5 million), and the fund managers ($1 million).

The managers have said they hope for more funding in the future, and several people in the startup community have expressed the hope that Newfoundland and Labrador will contribute to the fund.

“I hope NL Government joins this fund,” Mark Dobbin, the Founder and CEO of Killick Capital in St. John’s tweeted after the announcement yesterday. “Many local companies could benefit; VC investment drives growth.”

Build has launched as the Atlantic Canadian startup community has been attracting more financing from both VC funds and angels. Though the funding has been light so far in 2013, there are deals in the works by VC funds in both New Brunswick and Nova Scotia, including the first deal by Build Ventures.

Last year, there were 29 VC deals in Atlantic Canada amounting to more than $27 million. But only five of those deals involved funding from firms outside the region, and Build Ventures, Innovacorp and others aim to attract more co-investors in deals in the region.

So far in 2013, the Atlantic Canadian firms that have attracted VC financing (including family offices) have included: Xiplinx Technologies, $100,000 from the New Brunswick Innovation Foundation; TotalPave, Store-it Squirrel and Black Magic for winning the NBIF Breakthru Competition; Health Outcomes Worldwide, $1.5 million from NSBI Ventures; Neurodyn, from the Regis Duffy BioScience Fund Inc. of Charlottetown and Mertz Holdings, a family-owned investment fund based in Houston, Texas.

Touesnard’s WordPress Data Tool

Brad Touesnard exemplifies a segment of the startup world that is too rarely celebrated — the folks who work on their own or in small groups and soldier on from one venture to another until something works out.

Three weeks ago, the Cape Breton native, who now lives in Halifax, launched WP Migrate DB Pro, one of several ventures he has started. And he was pleased to report that the new product is already producing revenue.

 “It took four months to build it, to get it ready for the launch,” said Touesnard, who returned to Nova Scotia after a stint in Melbourne, Australia, three years ago.

 “We launched it three weeks ago and we already had sales of $17,000, with 312 orders, so it’s doing quite well. There are lots of marketing channels we haven’t tried yet.”

WP Migrate DB Pro is a tool that helps web developers or anyone else transfer data from a site developed on WordPress (used to develop websites and blogging pages) to another website. Usually, this is a cumbersome process that consumes lots of time, but WP Migrate DB Pro can do it in a single mouse click.

Its development is the latest chapter in an entrepreneurial tale that began more than a decade ago, when Touesnard began a web hosting business that is still going strong. A few years ago, he became interested in product development and began to consider his options in working with WordPress.

He received investment from two people he had worked with over the years, Adii Pienaar and Carl Hancock, and developed the WP App Store, a site at which WordPress developers could purchase applications, themes, plug-ins and the like.

The response since the April 2012 launch has been disheartening, even though people were coming to the site to download free stuff.

 “We’ve had a real challenge in getting people to convert from being free to paying customers,” admitted Touesnard.

So he and his developer, Chris Aprea, went back to the drawing board and used the tools at their disposal to investigate what product might work and how it should be priced. They began to survey their WP App Store clients, and 400 of them responded regarding what they would consider useful and what they would pay for it. Based on the feedback, Tousenard formed a new company with the wonderful name Delicious Brains, and he and Aprea designed a new product for it. The pair designed, beta-tested and launched WP Migrate DB Pro.

So far, the gambit has paid off because people are paying for the service, and Touesnard believes he can do more to win more business using more marketing channels. Although he is now on track to generate about $250,000 in sales in a year, Touesnard said he would be happy if sales in Year 1 reach $100,000. He said he always is thinking of new products, but Touesnard doubts he will launch anything soon. He sees more potential in developing new features for WP Migrate DB Pro and building out that product line in the near future.

BioNova Honours Bioimaging Group

There’s been so much going on in East-Coast-Startup-Land recently that it would be difficult to pick out just one good news story of the year. But the folks at BioNova believe they have one. It began with a seeming disaster.

Last week, BioNova, the life sciences organization for Nova Scotia, celebrated its achievements of the past year with a great reception that had the oxymoronic title “Good News & Blues.” The idea: to discuss the wonderful things that have happened in the past year while listening to—and I’m not making this up—blues music played by members of the life sciences community. The music was really good, especially ACOA’s band led by Chris Brooks.

As for the Good News Award, it went to the way that the closure of the National Research Council’s bio-imaging centre in Halifax was transformed into the creation of the Biomedical Translational Imaging Centre, or Biotic. It’s the new imaging centre in the city. To understand why it’s such an important story, a bit of context may be necessary.

Halifax punches way above its weight in bio-imaging—X-rays, MRIs, and the like. The NRC, Dalhousie University, Capital Health, IWK, the ACOA, and others have spent a decade channeling more than $50 million into these facilities, and the number of people working in the imaging segment has grown from three to 50. It improved health care and research opportunities in the region. And it led to the creation of some great young companies, such as Mindful Scientific.

Mindful, which is developing a portable device that can diagnose head trauma instantly, was selected as one of the six start-ups in the first cohort of Canadian Tech Accelerator in Boston this year, and CEO Ying Tam has so far dazzled the New Englanders. In fact, last month Mindful Scientific won the Business Pitch Competition at Harvard and Tam won the IBM Mentoring Day in Massachusetts. This month, Mindful was one of five companies accepted into the Boston’s TiE Challenge accelerator. These U.S. national awards indicate the superb quality of work done in bio-imaging in Halifax, partly because there are great facilities here.

“I often compare a standard MRI to a Toyota Camry or a Honda Civic: a dependable car that gets you from A to B,” Ryan D’Arcy told me in an interview last summer. “What we have in imaging in Halifax is Formula 1.”

 D’Arcy, who worked for years as a senior research officer with the NRC in Halifax, was the godfather of the city’s digital imaging until he left last year for a posting with Simon Frasier University in Vancouver. Then in October, the NRC announced it would be shutting down its imaging centre in Halifax. It was a shot to the heart for the entire biotech sector.

But the shot did not prove fatal. “Once word of the impending closure got out, it seemed like the entire community came together to find a solution,” says Patrick McGrath, the vice-president of research and innovation for Capital Health and the IWK. “Local and international industry, several departments, faculties at Dalhousie, and clinicians at both hospitals and government agencies worked on a plan to keep this valued resource in Halifax.”

There was a coordinated effort to find funding so the centre would continue, though not as part of the NRC. The new partners became the Nova Scotia Department of Economic and Rural Development and Tourism, the Nova Scotia Health Research Foundation, Dalhousie, BioNova, Capital Health, and the IWK. The NRC also helped in arranging for the transfer of staff and equipment.

The upside today, mushy as it may sound, there was a great deal of co-operation in the rescue, which sets a good example in a city known for its fractious nature. It is a story certainly worthy of the Good News Award.

RTV Seeks $230,000 in Crowdfunding

There’s nothing uncommon about a crowdfunding campaign to raise a few thousand dollars for a good cause, but RTV Group of Saint John is raising the bar with its charitable crowdfunding campaign.

The company, which is trying to battle drunk driving with an innovative data analytics system, has set a target of $230,000 for its Indiegogo campaign.

I can’t say for sure that it’s the biggest crowdfunding campaign in the region, but it’s the biggest I’ve heard of.

The fundraising campaign offers no equity in the company (online equity raises have yet to be approved by regulators) nor any special prizes.

What it offers is an opportunity to help with the first real technological development in the fight against drunk driving since the breathalyzer was invented 40 years ago.

“Part of this whole thing is getting the message out,” said Stephen Goddard, one of the co-founders of RTV Group. “It gets communities involved and gets youth back in the whole discussion.”

RTV, which stands for Repeat Target Vehicles, is developing predictive analytics software that can identify for police departments people who are likely to drink and drive, so the cops can warn them and dissuade them from doing so.

Current data indicates that about three per cent of drunk drivers are hard-core repeat offenders, and that they drive impaired between 80 and 2,000 times before they are caught. One main reason they do so is they believe they won’t get caught.

RTV, the brainchild of James Stewart, a former crime analyst now completing a PhD in information technology at the University of New Brunswick in Saint John, analyzes police data banks to look for markers that identify repeat drunk drivers.

When someone reports a suspected drunk driver to 911, the RTV system can identify within seconds whether the owner of the car is a likely repeat offender. If so, the police can follow up by warning him that they are watching him, thereby encouraging him not to drink and drive.

The company was recently a finalist in the New Brunswick Innovation Foundation’s Breakthru competition, but did not win any of the prize money.

So it has launched the Indiegogo campaign to cover the development costs of its product. If the company raises the full amount or more, RTV will be able to accelerate the development of the software and increase the number of communities it can work with in the first year.

Goddard said RTV will work to deploy the system early in communities that raise the most money in the crowdfunding campaign.

The founders hope to engage with people that believe in the technology’s potential to fight drunk driving, and are willing to work with groups that want to help roll it out.

And they understand that it is unusual for a startup company for ask for donations, but add this is not a usual startup.

There is no guarantee it will make money, and they believe the social benefits are as profound as a donation to any charity.

“This product is one of those rare things that comes along with the potential to benefit society,” said Joel Levesque, a veteran public relations consultant who’s helping the company with its communications.

“It takes money to do it,” Levesque said.

Computer Education To Be Rallying Cry

After attending business dinners in Halifax and Fredericton last week, it’s becoming apparent that two themes are developing in the evolution of the regional start-up community.

First, the tech crowd is going to become a pillar of the overall business community. This is already the case in New Brunswick, but it will quickly become a developing trend in Nova Scotia and, I believe, in Prince Edward Island and Newfoundland and Labrador.

Second, the start-up community is eager to join the debate on improving the business climate in the region, and the topic it wants to focus on is Primary to Grade 12 education.

In the last week, Jevon MacDonald, the co-founder of GoInstant, addressed the Halifax Chamber of Commerce’s spring dinner. And the KIRA Awards, which recognize the knowledge industry in New Brunswick, were presented for the 15th time at a glitzy affair in Fredericton.

What struck me about those events was that both united the tech community with the mainstream business community.

You could tell that that the ICT segment in New Brunswick has been an essential part of the broader business family for several years. Premier David Alward, who recently appointed an advisory committee on innovation, attended the dinner and listened to each speech, including several messages directed at him.

Such a relationship is newer in Nova Scotia and the other provinces. It’s difficult pick out a specific quote to illustrate the point, but the aura of the Halifax event was one of introduction. MacDonald explained the vast potential of the local digital economy, and the chamber seemed to be taking on board the spectacular things happening in its own backyard.

The start-up community is becoming more integrated with the business community. The start-up community is coming together like never before in St. John’s, and Digital Nova Scotia has its first full-time CEO, Ulrike Bahr-Gedalia. Gerry Pond is one of the cornerstones of 4front Atlantic. Soon, businesspeople from start-ups or former start-ups will be moving into key posts in business groups and helping shape the economic debate in the region.

The message bubbling up from the base of the tech community is that each province must modernize its teaching of computer science to produce the talent needed to compete in the global economy. MacDonald’s speech dwelt on the need for better education for high school students in Nova Scotia, saying he was appalled that only in Grade 12 is programming offered as an optional course.

A similar message was presented in New Brunswick. Several winners of the KIRA Awards called for better computer science education. David Alston, an exec at IntroHive, which won the Most Promising Start-Up Award, called on Alward to expose all high school students to even two weeks of mandatory computer science training, hoping it will spark an interest in the field.

Alston and MacDonald both stated that their lives changed when teachers placed them in front of computers and let them discover for themselves what the devices could do.

It’s important to note that this isn’t a command coming down from a centralized organization demanding that every nerd call for more computer science courses. This is a groundswell of concern from the grassroots of the tech industry that educators across the region are depriving children of the knowledge needed for the modern workplace.

This shortage is now being met outside of schools with groups such as CompCamp and Ladies Learning Code, but the time has come for education departments and school boards to go through the arduous task of improving P–12 technical education. And the process will be arduous, because it will require the co-operation of education departments, school boards, teachers’ unions, and multiple levels of government.

We should get used to hearing these demands. The tech community is determined to force this one through.

Solving Farmers’ Pain From Above

Resson Technologies has an idea for fighting crop disease that is so simple that it makes you wonder why no one thought of it before.

I first heard about the company at the New Brunswick Innovation Foundation’s Breakthru Boot Camp in January, when someone told me that co-founder Rishin Behl was using unmanned aerial craft. Behl and I spoke briefly, and he quickly corrected my vision of drones buzzing around the skies over New Brunswick.

Behl, a nuclear research engineer at the University of New Brunswick, is focused instead on lighter-than-air vessels that hover above a farm field and continuously monitor the crops below. It’s easily the most cost-effective means of assessing the health of crops in real time, said Behl, who has teamed up with MBA student Peter Goggin to launch Fredericton-based Resson.

Catching up with him again last week in Fredericton, Behl said the company is working on agricultural applications, projecting infrared beams from the lighter-than-air craft to constantly monitor the crops. The idea is that these scans capture the heat and reflective nature of the plants and can tell if any develop a disease.

“When we humans get sick our metabolism changes,” said Behl. “In plants, it shows up in less infrared absorption and greater reflection.”

Crop disease can spread quickly and costs Canadian farms hundreds of millions of dollars each year. By detecting the outbreak of disease quickly, farmers can destroy afflicted plants before the disease spreads.

Behl said the agricultural product is only the first application for Resson’s technology, and the company is exploring a military product that would allow soldiers in battle to launch a vessel and view the field from above. These two initial applications could lead to new uses for the technology.

“This is the wave of the future,” said Behl. “Fighter aircraft costs are rising rapidly but (we believe) many small, inexpensive things can be used to do the job of one expensive thing.”

The vessels would cost the user $500 to $800 each, and would be easy to use. The most complicated part is the software that’s needed to interpret the readings picked up by the scanners.

Behl and Goggin are receiving mentoring from the Pond-Deshpande Centre for Innovation and Entrepreneurship at UNB. They are trying to raise about $200,000 in seed funding to launch a prototype, complete market studies and protect their intellectual property.

Crowdfunding: Carol Moreira’s Novel

A bit of news: Entrevestor Editor Carol Moreira will release her second Young Adult novel this summer, and we’re inviting all our readers to check out her crowdfunding campaign to pre-order the book and contribute to the project.

Membrane is a fantasy book for teenagers about a bullied teen called Tanya who suddenly finds she can travel to an alternate universe and encounter another version of herself. Her alternate universe double is cool and confident, if a bit bossy, and the two strike up an unusual friendship as they face the threat of inter-universal conflict.

Membrane is published by Fierce Ink Press, which in its first year has captured the 2012 Solution Agency Startup Challenge, which recognizes great new businesses in P.E.I.  The company last year published The Night Has Teeth by Kat Kruger, which won the 34th Atlantic Writing Competition. Just this week, Kruger’s book was selected to appear in The Canadian Children’s Books Centre’s Best Books for Kids & Teens Spring Edition 2013. And Co-Publishers Colleen McKie and Kimberly Walsh are hoping for the same success for Membrane.

“From the opening lines, I was pulled into the world of Membrane, not just by the characters and the story, but by Carol's writing,” said McKie. “Kimberly and I knew that there was something special about Membrane. From the get-go, Carol has been wonderful to work with and the collaboration with her on getting Membrane ready for publication has been fun and also rewarding.”

Carol’s first novel was Charged, published by James Lorimer in 2008.

Please check out the Indiegogo campaign, which will help cover the costs of printing, designing and marketing the book. The target is $2,320 and they’ve already breached the 20 percent market, which is critical to its success. Contributing to the campaign is a great way to pre-order the book, get some really cool swag and help the publishing community.

“When I love a book I want everyone that I know to read it and share in its awesomeness,” said McKie. “I can't wait until July when everyone else will get a chance to fall in love with Membrane.”

Cloud A Launches Beta Tests

Halifax-based Cloud A, which offers a flexible infrastructure-as-a-service solution over the cloud for Canadian customers, is looking for groups to participate in its public beta test.

Cloud A was formed last year by Brandon Kolybaba, the Founder of Sheepdog Inc., and Dynamic Hosting Founder Jacob Godin , who collaborated with Dalhousie University in developing the product. They identified a need for an OpenStack-based elastic platform in which all the data is stored in Canada to take advantage of the country’s privacy laws.

“We identified the need for a true elastic compute platform in Canada early last year and have been working with OpenStack to provide a solution to clients with data residency requirements in Canada,” said Kolybaba.

OpenStack is an open-source IaaS initiative for creating and managing large groups of virtual private servers in a cloud computing environment. In the last year, several major tech companies like Dell and Microsoft have been betting on OpenStack as a way to provide the market with the type of cloud-based infrastructure developed privately by Amazon.  But no one has introduced something similar in Canada. Eventually, Kolybaba said, the big U.S. players are going to want to move into Canada, and will therefore be looking for partners or acquisition targets.

Many Canadian companies, publicly funded groups and government organizations require that their data to be stored in Canada, which gives an advantage to Canadian infrastructure companies whose clients have sensitive data. Other organizations simply want a Canadian solution to their storage needs, said Kolybaba.

Though the company has not yet done detailed market studies, Kolybaba said Cloud A has received “some indication that our challenge at this point would be keeping up with demand.”

Cloud A successfully completed its alpha trials (those conducted in-house) in 2012. In the last few months, it has gone on to conduct private beta testing, which means asking organizations it knows to try it out. Now it is looking for new groups to extend the tests.

The company has hired Sheepdog to build the infrastructure and Dynamic Hosting to administer the hosting side of the business. The company is now being bootstrapped, but Kolybaba said his goal is to move full time to the company along with Godin and two or three others in a few months. Sheepdog’s day-to-day operations are already being overseen by COO Mark Long, he said.

Cloud A is planning a full launch in about three months, and hopes to raise about $500,000 in capital at that time.

TitanFile Releases Secure Deposit Box

TitanFile Inc., the developer of a secure collaboration and document-sharing system, has unveiled new features for its product, including the TitanFile Secure Deposit Box, which makes it even easier and safer for clients to receive communications.

Based in Halifax and Kitchener, TitanFile began two years ago as a secure document-sharing platform and launched a new version last autumn that stressed ease of use and flexibility so it could operate seamlessly with other products on any device. The company is now enhancing that most recent version by adding new features.

The big advance is the Secure Deposit Box, which gives client organizations a web page that serves as an online repository for their files and messages. Rather than having clients with sensitive, time-critical messages send their correspondence and files as emails, which can end up in a spam folder, the deposit box ensures that all messages end up in a secure place, where they are organized and viewed only by the appropriate people.

What’s more, TitanFile is also introducing a feature that allows people to access files in TitanFile channels (including the deposit box) without registering. That means TitanFile users can initiate contact with their clients, collaborate and share documents with them, without requiring that they go through the bother of registering.

“The Secure Deposit Box reduces the number of steps (needed to communicate) and makes it easier for our clients to initiate contact with their customers,” CEO Tony Abou-Assaleh said in an interview. “It was driven by the demand of our clients.”

He added that clients have various requirements in terms of security and often have to apply different levels of security to one document, depending on whom they are sharing it with. The new TitanFile features allow them to tweak the application easily to suit their needs.

The other features in this release include:

•Blind Carbon Channel — This lets the TitanFile client see all conversations and files being shared in a specific channel but denies such a privilege to other people accessing the channel.

•Safe Notification — This allows clients to use TitanFile to send emails that have been stripped of all private content to protect confidential details. This feature helps organizations comply with regulations by keeping sensitive information out of potentially unsecured email accounts.

•Open Invitation — This function allows the TitanFile client to easily add or remove people from a channel, allowing greater flexibility when collaborating.

Safe Notification and Open Invitation are available to all subscribers, while the other new features are open only to enterprise subscribers.

Co-founded by Abou-Assaleh and Milan Vrekic (now the executive director of co-working space Volta in Halifax), TitanFile raised $250,000 in seed funding from Innovacorp in 2011, and last year raised more than $800,000 from Innovacorp, the First Angel Network and private investors. It also borrowed about $400,000 from the Atlantic Canada Opportunities Agency last year.

Abou-Assaleh said TitanFile will likely raise money again later this year, though it has not set a target yet.

Applications Roll in for SMU’s MTEI

St. Mary’s University’s Masters of Technology Entrepreneurship and Innovation program, which will launch this autumn, has already accepted eight students and is still receiving applications.

The Halifax university hosted its official launch of the program at the Sobey School of Business on Monday, and program head Dawn Jutla said she’s delighted with the eight students in the program so far.

“The quality has far exceeded our expectations,” said Jutla, saying some applicants have already landed patents on products they want to commercialize, while others have already started businesses or have other degrees.

The MTEI program is an accelerated graduate program that teaches people within organizations or those intent on starting their own businesses how to improve productivity through technical innovation. The program, which can admit as many as 50 students, will be the first of its kind in Atlantic Canada and only the third in the country. The others are at University of Waterloo with 50 students and McMaster University with 20. Dhirendra Shukla, the chair of University of New Brunswick’s Technology Management and Entrepreneurship program, is also working on a masters of TME at the Fredericton institution.

In the launch yesterday, St. Mary’s announced partnerships with several members of the startup community to work with the students in learning about entrepreneurship. These include SMU alumni Saeed El-Darahali of SimplyCast and Andy Osburn of Equals6.

The MTEI is designed as a masters business program tailored to the needs of aspiring entrepreneurs. A traditional MBA program takes two years and involves 20 courses, only some of them dealing with entrepreneurship. The MTEI is accelerated, taking only 16 months, and is more focused on meeting the needs of entrepreneurs and innovators.

The St. Mary’s MTEI program is targeting two groups of people – those interested in rounding out their knowledge of entrepreneurship with the goal of forming a company; and employees of existing companies who could use help to develop innovation and improve productivity within their organization.

The students will start by taking eight courses over eight months, and can then choose one of three paths – a project, a thesis or a work term -- to complete the course. Jutla has been building bridges with industry, government and other universities, and hopes to involve the broader community as much as possible.

With the project option, the student conceives and implements something that could be turned into a business, taking it through one of the region’s incubators or accelerators. Jutla has already established links to Innovacorp and the Launch36 accelerator in Moncton, which could help to develop these latent businesses.

Citrus Searching for Killer Product

Best known for its real estate website TxT2look, the team at Citrus Mobile Solutions is staffing up for a range of projects for clients and looking for that “holy-grail” product that will make its name.

The team is headed by Brian Perry and John Gallinaugh, who over the past five years have launched several ventures and projects focusing on short message service marketing applications, also known as SMS, for smartphones.

What that means is they use texting as a marketing tool.

They gained national attention during the 2010 Winter Olympics when they launched a service that sent updates on medals to people’s cellphones, but their biggest hit was the Txt2look service itself.

TxT2Look Real Estate is an SMS sales tool mainly used by the real estate market. It allows anyone to access instant information by entering two short codes into their phone when they see a sign displaying a property or item for sale or rent.

The product has been adopted by three licensing groups in Canada, including the Calgary Real Estate Board, and five in the U.S. It has signed up thousands of users over five years.

The product is only one solution developed by the group.

In an interview Friday, Perry said they have found the best business options in the past few years have been to develop SMS and mobile software on contract for clients.

To symbolize their progress beyond TxT2Look, they adopted the corporate name Citrus Mobile Solutions about six months ago. And they are definitely on the lookout for that single product that will establish them.

 “We’re still looking for that innovative technology platform, but it’s got to be something that doesn’t require hundreds of foot soldiers in the sales force,” said Perry, Citrus’s managing director.

 “It’s probably going to involve a partnership with someone who has that (sales team).”

In the short team, Citrus has landed several jobs in the U.S. this month and plans to hire four to six junior programmers.

Perry said the company is doing more work with location-based software, especially in the health, safety and construction industries.

The head mobile programmer has been based in Uruguay but is moving to Nova Scotia. Eduardo Capouya has been a full-time employee since the company launched; he now has Canadian residency status and will be immigrating to Halifax with his wife and children this summer.

His inclusion on the local team will round out the management of the company.

Perry said the company understands the potential of the mobile market and is ready to pounce when it does find that singular product. “We know mobile is not going away. It’s so exciting, what we do, but it is changing quickly.”

Atlantic Canadian Startup Monthly

Late last week, Robert Foley and Suhaim Abdussamad from Startup Kitchen posted the second Atlantic Canadian Startup Monthly, in which we discuss what's going on in the community around the region.

We've expanded the panel to include Janice MacPherson of Made in NB  who brought in some great insights on crowdfunding and East Coast Startup Week. We also touch on the Newfoundland startup scene and the KIRA awards.

Enjoy the video. It will will tell you what's going on in the startup community and deepen your understanding of why I spent my career in print.

Propel’s MacAusland Wins Kira Award

Trevor MacAusland, the Executive Director of PropelICT, won the Special Recognition Award at the 15^th annual KIRA Awards in Fredericton last night in recognition for his success in the developing the Launch36 accelerator.

Under MacAusland’s leadership, the program since late 2011 has accepted 20 startups and launched 18 of them. These companies have raised $5 million, are employing 70 fulltime staff and most are generating revenue. The accelerator has developed into a regional resource, as the graduate companies have come from all three Maritime provinces.

And MacAusland served notice that he, Propel Chairman David Baxter and their board plan to continue to grow the operation.

“We’re getting together this weekend to see how we can amplify it,” he told the crowd of about 600 people at the awards dinner.

The KIRA Awards celebrate excellence in the knowledge industries in New Brunswick, and what is noteworthy is that the innovation sector is considered a cornerstone of the province’s industry and economic strategy. Premier David Alward, who attended the entire dinner, recently named the Premier’s Advisory Council on Technology to help shape strategy on the segment, and has committed $80 million over five years to develop the industry.

The theme throughout the evening was the success New Brunswick has had in information technology, and the need to perpetuate that success. In particular, several award winners and speakers highlighted the need to train more students in computer science to meet the crying need for talent in the sector.

David Alston, an exec of IntroHive, which won the Most Promising Start-Up Award, called on the Premier to expose all high school students to even two weeks of mandatory computer science training, hoping it will spark an interest in the field in many of them.

IntroHive helps large corporations to avoid having to make cold calls – especially for sales but in developing other relationships as well – by determining who in your company already has a strong relationship with a company you want to reach.

Larry Sampson, the Executive Director of the New Brunswick Information Technology Council, announced that his organization plans to “get in front of every Grade 9 or 10 student in the province” to discuss careers in technology. He called for volunteers to speak to students or provide content for the mission.

The other winners of 2013 KIRA Awards were:  

Exporters, Green Imaging Technologies Inc.;

Technological Advancement and/or Innovation – Private Sector, Inversa Systems, whose technology can detect structural flaws through backscattered radiation techniques;

Technological Advancement and/or Innovation – Public Sector, Department of Health, Horizon Health, Vitalité & FacilicorpNB;

And Community Engagement and Industry Commitment, T4G.

Community Progress in St. John’s

The startup community in St. John’s is continuing to move forward this week with the opening of its co-working facility and a partnership with Startup Canada.

The innovation community in St. John’s ranges from 150-member multi-nationals like Verafin to single-entrepreneur startups like FundUni and dozens of companies in between. But since late last year, the community has been coming together to accelerate growth. It formed StartupNL late last year, an association that gained more than 100 members in its first few months. Now community members have formed Startup St. John’s, to become one of the first wave of Startup Canada communities , a national pilot project to support entrepreneurs.

What’s more, Common Ground, the shared office space for a range of entrepreneurs, freelancers, and creative, has opened its doors at 5 Waterford Bridge Road, St. John’s.

On Wednesday, Common Ground Coworking St. John’s – a non-profit overseen by nine volunteers -- moved into the site which will now be home to more than 15 companies. Common Ground is also actively recruiting community partners that will help outfit the space and assist/provide support to our entrepreneurial members.

“Many entrepreneurs around the city feel isolated and distracted as they work out of local coffee shops and home offices,” said Common Ground Co-Founder Chris Gardner. “Common Ground will provide small businesses with a great location, supportive community, and conveniences they need from a physical office space.”

Startup St. John's will host an open house in Common Ground on May 9.

Startup St. John’s said in a statement it will benefit from its affiliation with Startup Canada because it will link the organization to resources in 14 other Canadian cities, including Fredericton and Charlottetown.

 “By offering this entrepreneur-driven organization, startups in the St. John's area and throughout Newfoundland and Labrador will be connected to the people and resources needed to turn ideas into successes,” said Roger Power, Co-Founder of StartUp St. John's. “No doubt some very successful startups will be formed.”

The organization announced its participation in the Startup Canada project at a press conference yesterday at the offices of the Newfoundland Association of Technical Industries, at which Keith Hutchings, the Minister of Innovation, Business and Rural Development, spoke in favour of the initiative.

Economy Debate Must Feature Startups

Jevon MacDonald’s tremendous speech to the Halifax Chamber of Commerce on Tuesday night was the third reminder I had seen in a week that Atlantic Canada needs to develop the technology community.

MacDonald, the chief executive officer and co-founder of GoInstant and a Salesforce vice-president, delivered a keynote speech that outlined his own career, the development of the Halifax tech community and the need to develop that community.

As I listened to it, I couldn’t help think about two new reports that came across my computer monitor in the last week. The first was a Statistics Canada report showing that Nova Scotia’s gross domestic product had grown 0.2 per cent last year after a 0.6 per cent increase in 2011. Over two years, Nova Scotia’s GDP had grown less than one per cent, while there was negative growth in New Brunswick and Newfoundland and Labrador. During that same period, the Canadian economy grew by about 4.4 per cent.

This is a horrifying story because of factors I outlined in my 2009 book, Backwater: Nova Scotia’s Economic Decline (which Jevon was kind enough to review on Amazon years ago). The province has the oldest population in the country and is ill-prepared for the demographic crunch. I have often told people that nothing has changed since the book came out, but the Statistics Canada report shows things are worse.

The Atlantic Canadian premiers, representing all three mainstream parties, met last weekend to discuss economic development and surely must have had these figures on their mind. The result was a statement that they opposed the federal government’s recent employment insurance reforms that have already taken effect. It beggars belief that anyone thinks the region’s governments should make EI reform a priority in our economic strategy.

MacDonald certainly doesn’t think so. His speech detailed the success he and other entrepreneurs have had in creating technology companies, building them quickly, and selling them. The important thing to note is almost all the companies that have been sold have remained in the region, creating employment and wealth and driving up exports.

MacDonald said he was initially reluctant to establish a company in Halifax because he worried he wouldn’t be able to find the specialized talent a tech startup needs. It turns out the programmers he has hired here are the best he has worked with, and he has worked all over the continent.

He also said tech entrepreneurs who have sold companies in Atlantic Canada are achieving exits more quickly and at higher prices than anywhere else in the country.

Consider that for a second: Atlantic Canadians are beginning to gain the reputation in technology formerly held by our forebears who built ships.

MacDonald, 30, asked his audience to appreciate the dynamism and potential of the tech community, and to encourage one reform to help expand the sector. He asked that the government change its public school curriculum so students are taught programing at an earlier age. In Nova Scotia, students are now given the option of taking programing in Grade 12, according to the official curriculum. By starving teenagers of the chance to learn coding for so long, we are depriving the workforce of talent and our children of a career.

 “There are kids who are building $100-million companies in your own backyard and you’re not teaching programing to them until 12th grade?” he asked. “We have to start teaching kids what they need for the next 20 years, not the next two years.”

Tenants Taking Lead as Volta Opens

As Volta opens its doors for the first time this morning, the thing that really pleases its organizers is that they’re no longer the only ones doing the organizing.

That task is being undertaken more and more by the 10 tech startups occupying the shared office space on Spring Garden Road in Halifax. And that’s just fine by Jevon MacDonald, TitanFile Co-Founder Milan Vrekic, regional venture fund manager Patrick Keefe and the other people who have put the project together.

“I think the cool thing about Volta is how the community is already taking ownership of it,” said MacDonald earlier this week. “Some of the first crop of tenants have been helping renovate the space and are helping develop some programs.”

MacDonald, best known as the Co-Founder and CEO of GoInstant, formally announced the opening of Volta last night when he delivered the keynote address at the Halifax Chamber of Commerce’s Spring Dinner. It was fitting as MacDonald came up with the idea of a communal tech space around the time he was raising money for GoInstant in the summer of 2011. The speech included a passionate advertisement for the economic potential of tech startups, and the need to teach coding to students in public schools.

The idea – now coming to fruition – is that 10 to 13 startups (with two to four employees each) can all work together, learn from each other, share expertise and contacts, and accelerate their growth. The mission includes various events, such as mentoring sessions, that will help develop entrepreneurs who occupy the space.

What the founders are hoping, and what is beginning to happen, is that the tenants take charge of what these events will be and how the tiny community at 5415 Spring Garden Road will develop.

“It’s not Patrick, Jevon or me, but the community that will pick it up and run with it,” said Vrekic, who will serve as executive director of the operation.

The tenants, organizers and even the group’s lawyer, Rob Cowan of McInnes Cooper, spent time a few weekends ago knocking down walls and preparing the space for occupancy. (I knew these guys were smart but I’m amazed they found a way to get their lawyer to do manual labour.) McInnes Cooper, Deloitte, e3 Office Furniture and OMERS Ventures are locked in as sponsors of the outfit.

There is enough space at Volta for 13 companies, but they are starting with 10 to see how things work out. The first group of tenants will be: FundMetric, which is developing an automated funding system for non-profits;, Interview Rocket; Compilr; Toplog; Analyze Re; UpMyGame; Wagepoint, which provides automated payroll service); The Rounds (formerly Boondoc); Titanfile; and Illumika, a spinoff from Tim Burke’s 26ones .

Titanfile is the most mature of these companies and will likely move on in a few months, Vrekic  said. The company is there now to help guide the younger companies – the type of leadership that Volta hopes to foster.

He added: “In two years this will be a launch pad for new companies and a place where established companies can share their knowledge with the new ones.”

Why We Need A Regional Community

In the last two years, I’ve sat separately with Iain Klugman and Gerry Pond and listened to their divergent views on developing start-up communities in Atlantic Canada.

Klugman, the CEO of the Communitech accelerator in Kitchener, Ont., said in a recent interview that we should look at Halifax, not Atlantic Canada, as a start-up community because such a community has to be “something you can get your arms around.” He added that Atlantic Canada could have several communities, but they should be more localized than one big regional family.

Pond, the celebrated New Brunswick-based investor and tech advocate, has said repeatedly that the four provinces are too small to develop start-up infrastructure on their own and must work together. He’s so adamant on this point that he doesn’t like reporters highlighting what city a start-up is based in.

So we have two titans in the field with vastly conflicting views on how we should develop the Atlantic Canadian start-up community. With the greatest of respect to both experts, I agree with Gerry Pond that we have to develop a regional start-up community.

Every community is unique, and the start-up players in the Atlantic provinces face the same challenge: developing globally competitive companies in an uncompetitive economic environment. They all have to sell products and raise capital in distant places, and they all have to attract talent to a corner of the world with limited financial opportunity.

Atlantic Canadian entrepreneurs can best solve these challenges by coming together and sharing their collective brainpower, capital, facilities, and networks. In particular, the collaboration will help overcome these three important factors:

• Converting start-ups into companies. Atlantic Canada has had incredible success at seeding companies in the last two years, and now it must develop dozens of two- to five-person entities into bona fide companies. This process involves mentoring entrepreneurs so they grow from founders to CEOs, developing corporate structures, and finding specialized talent to staff key positions. No single province in the region has the know-how or talent pool to accomplish this, so we have to work together.
• International sales. Maybe the biggest need as we move from start-ups to companies is the development of teams that can sell innovation around the world. Pond likes to say that one sale in China could be better than sales in all of Canada, but there are no Atlantic Canadian tech salespeople experienced in Asian markets. If just one post-secondary institution offered training in this area, it would boost start-ups in all four provinces.
• Growing beyond Atlantic Canada. The East Coast community has to develop networks with the broader start-up and investment world in order to attract talent and capital to young companies and find customers for our products. Networks amplify exponentially. So if someone from Nova Scotia builds contacts in a foreign market, everyone that person knows in Atlantic Canada benefits. By enlarging the community to encompass all four provinces, we can accelerate the process of breaking out of our northeastern shell.

What’s preventing the development of a regional community? The obvious answers would be geographic distances and ill will among the various provinces. But those aren’t barriers right now. It’s amazing how much time we’re willing to spend in the car to attend events in other provinces.

And yes, there are regional rivalries, but they aren’t a factor in the start-up community. There’s an uplifting willingness to work together and see the virtues of each other’s ambitions. The Atlantic Canadian start-up community should be an example to other industries, and certainly to the provincial governments.

It’s impossible not to respect what Iain Klugman has achieved in Kitchener–Waterloo, and I’m awestruck by Communitech. But in this debate, I’m with Gerry Pond.

B4Checkin’s Top Line Tripled in 2012

Saar Fabrikant is careful in describing B4Checkin Ltd.’s revenue growth, but he makes it clear that the picture is rosy.

Fabrikant is the president and chief executive officer of the Halifax company, which has developed a suite of cloud-based software solutions that allow hotels and hotel chains to carry out online reservations, check-ins, feedback and other functions.

The company earns money from customizing and installing the software for its clients — most of whom have been independent hotels or small chains — and in the monthly payments hotels make for using the software.

The company will only discuss the growth of the monthly payments, and that is growing nicely — tripling in 2012 after doubling in 2011.

And that growth isn’t tapering off, because the company is selling more products and attracting larger hotel groups as it gains more credibility within the hospitality industry.

“We now have 100-plus hotels (as clients), but that number changes practically daily,” Fabrikant said over lunch Friday at Halifax’s Atlantica Hotel, which is one of those clients.

“We have a few proposals out now for groups of 50.”

B4Checkin began in 2006 when Fabrikant and chief financial officer Martin MacKinnon teamed up to produce a reservation system for hotels that were overlooked by larger providers. They have since developed a suite of 12 products and have been increasing revenues in part by cross-selling these new products to clients that initially bought just one. The company now receives as much as $2,500 per month from each client, whereas a year and a half ago the figure was $700 to $800.

Its most popular products are its online reservation, feedback and check-in systems, the last of which was awarded the 2012 Editors’ Choice Award for Best New Technology at the International Hotel, Motel + Restaurant Show in New York in November. Fabrikant said the award increased the company’s credibility in the hospitality industry and led to higher sales.

“We took an airline check-in system and we brought it to hotels,” said Fabrikant, explaining that it saves time for the hotels and helps them arrange staffing shifts.

“People are so used to using it for airlines that it’s a no-brainer to do it for hotels.”

B4Checkin employs 12 people and has another on contract outside Nova Scotia. It is looking to expand its sales team this year and is looking for people with experience in the hospitality trade.

They financed the company first with their own money, then with contributions from the Atlantic Canada Opportunities Agency, and then with a group of angel investors.

Since December 2010, these investors, which include the co-founders, former Imasco chairman Purdy Crawford, former Emera CEO David Mann and others, have sunk about $1.7 million into the company.

Fabrikant said that money is now supplementing revenues. He would not comment on whether the company is close to being cash-flow positive, which would mean it could finance its operations at the current level purely through revenues. But he did say the company has no immediate plans to raise more money.

Novawise Lands Funding from FAN

With its sales increasing rapidly, Halifax startup Novawise Inc. has closed a six-figure funding round from the First Angel Network to finance its international sales effort.

CEO David MacKinnon said Friday that the funding was worth “significant six figures”, and that the offering was oversubscribed by 50 percent. The company may end up selling its customer relationship management software to some members of the investment group, said MacKinnon, who described himself as “ecstatic” by the experience of working with FAN.  

Founded in 2011 by MacKinnon and Chief Technology Officer Steve Macdonald, Novawise is developing CRM software for pharmaceuticals and other regulated industries. The company is now completing initial sales to pharma clients and expects to soon conclude an agreement with a major reseller in Japan.

 “What First Angel has enabled us to do is to concentrate on closing those deals instead of worrying about cash flow,” said MacKinnon.

Novawise’s CRM solution collects data from sales reps in the field, allowing them to question potential purchasers and report back with the results. The system then analyses the data in reports for managers, and is flexible enough that managers can rewrite the questions while the sales people are out on their calls. Originally designed for the pharmaceutical industry, the team has enhanced the software so it is now applicable to other industries, especially those with strong regulatory oversight, including telecommunications and the oil industry.

The company grew quietly with $750,000 in seed funding in 2011, then last year added $350,000 from unnamed angel investors from the Atlantic region, and a further unspecified investment from Mariner, a diverse consulting and IT services company, and East Valley Ventures, a financing and support group for tech companies. Both Mariner and East Valley have strong links to investor Gerry Pond.

Though Novawise has built up relationships with some of the leading tech backers in the region, MacKinnon has stressed repeatedly how much he values the mentorship and connections he’s gained from Brian Lowe, Ross Finlay and the members of FAN. He was among their loudest supporters when the network was criticized earlier this year for charging companies to pitch to their investors. MacKinnon said the charges to FAN were lower than what it would have cost to fly to larger cities to meet investors, and it certainly took less time.

ExtremeOcean To Develop Prototype

Peter Gifford may have trouble finding a place to launch the working prototype of his new offshore supply vessel, even though it’s only nine metres long.

The problem: it’s 16 metres deep — same height as, for instance, an IMAX screen.

Gifford is founder and CEO of ExtremeOcean Innovation Inc., a St. John’s startup that is developing a radical new vessel to serve the burgeoning market of offshore wind turbines.

The TranSPAR Craft looks like a New York taxi on top of a telephone pole, and the unusual design is one reason it has been lauded internationally and received three rounds of funding from Carbon Trust of Great Britain.

Offshore wind farms are becoming more and more common in Britain, Germany and other European countries. But it’s difficult to serve the offshore turbines because high waves surrounding them make it difficult for maintenance crews to move from supply ships to ladders at the base of the turbines.

So Gifford and co-founder Brian Veitch three years ago came up with a design that solved the problem.

The TranSPAR Craft features a compartment on the surface large enough for eight people, including two people who operate the boat, and equipment.

And beneath this craft, there is a 10.5-metre shaft with the engine and propeller at the bottom. That shaft stabilizes the vessel in waves as high as three metres and is the reason TransSPAR is drawing strong interest from the wind energy industry.

Though there are a few options in bringing the product to market, Gifford said that the most likely route is for a large British company to buy the intellectual property and manufacture the craft.

“We’re a tech development company that could be a manufacturing company if we had to, but what we’re good at is producing innovative designs,” said Gifford.

The company, which works out of the Genesis Centre at Memorial University, has proven, in its short history, just how good it is at design.

Two years ago, it was one of 450 entrants in the Carbon Trust’s Offshore Wind Accelerator Access Competition, and was one of 13 finalists.

The Carbon Trust was impressed enough to give three rounds of investment to ExtremeOcean and introduce the company to some of its current partners, which include Scottish Power, Statoil of Norway and the German energy giants E.ON and RWE AG. The amounts of funding are undisclosed, but they were substantial.

ExtremeOcean has completed trials with a scale model, which validated the concept. Next, it must seek certain regulatory approvals and build a working prototype, the manufacture of which will likely be carried out in Atlantic Canada. Gifford, who collaborates with colleague Dean Pelley on business development, said it will probably take a year to build the prototype, after which the company will spend about eight months in prototype validation.

Klugman: Startup Community Is Local

Iain Klugman bristled when I referred to the Atlantic Canadian start-up community in a recent interview. A start-up community, explained the CEO of Kitchener, Ont.-based accelerator Communitech, is a smaller entity than something spanning four provinces. “Start-up communities define themselves, and they have to be first and foremost a place where people think they belong, where they believe they come from,” he said. “I don’t think people think of themselves as Atlantic Canadians.”

So my in-person interview in Kitchener with one of the most respected technology proponents in the country began with an assault on one of the central orthodoxies of the tech movement on the East Coast: the belief that we’re a regional community, not four provincial silos. But it was difficult to argue with Klugman because of the force of his personality, his knowledge of Atlantic Canada, and the undeniable success he has achieved in Kitchener-Waterloo.

Dressed in T-shirt and jeans, Klugman delivers opinions in short no-nonsense sentences, usually backed by strong evidence and fact. For example, he comments knowledgably on Atlantic Canada because he earned a master’s of public administration degree at Dalhousie University. He also worked one summer doing audits of Nova Scotia-based special-assistance homes, visiting every corner of the province. And he was in Halifax recently, working with the founders of the Volta shared office space.

As for evidence of his understanding of tech communities, I only had to look around me at the impressive facility he has developed in a former tannery in Kitchener. Communitech began in 1998 as an accelerator program; in 2010 it moved into its own 50,000-square-foot facility with lab and office space, meeting rooms, and an interface with support agencies and large businesses.

The facility houses 100 start-ups, a seed accelerator, a late-stage accelerator, two university incubators, and 12 large tech companies. And if that’s not enough, they’re building a satellite on the premises as part of a $22-million research project.

So when Klugman says the focus of start-up communities should be more localized, it’s difficult to argue with him. In particular, he believes Halifax is the perfect city (possibly one of about six such cities in Canada) to develop a bona fide start-up community.

That’s because Halifax offers the high level of connectivity that people need to feel in a start-up community. It’s similar in size to Kitchener–Waterloo, which has a population of about 400,000—the perfect size, according to Klugman, who believes that a start-up community should be located in a place that’s “small enough that you can get your arms around.”

In addition to its size, Klugman lists these three pro-Halifax factors:

            -- Aided by the local universities, it’s a major talent magnet, not only in business but also in engineering, the arts, computer science, and other disciplines. “You can’t situate a start-up community in a place just because there’s an engineering school,” says Klugman.

             -- It’s a place where people want to live, with good transportation links, a strong culture, a vibrant nightlife, and the lure of the ocean.

             -- It has a long heritage of entrepreneurship, producing some of the strongest entrepreneurs in Canadian history.

Klugman adds that there is a role for the rest of Atlantic Canada to play in developing start-ups in the region, and there could be several start-up communities on the East Coast, although each should be unique.

Provincial governments also have a strong role to play in fostering start-up communities. They should follow the example of Ontario in establishing the right fiscal environment, making the right investments, and supporting local communities in growing the way that entrepreneurs consider best.

Finally, government must realize that not every community can be a tech community. “Tech communities are inherently local,” says Klugman. “There’s a sense of community, belonging, accountability, and loyalty. We’re all special, and we’re all different.”

Ryan: Backing Regional Community

[Editor's note: Blair Ryan, CEO of The Rounds of Halifax, contacted Entrevestor to respond to our article on Iain Klugman’s contention – printed previously on the Progress website -- that a startup community can’t span four provinces.We're publishing his remarks in full.]

I must say, I disagree with Iain Klugman (and with full respect; his achievements are undeniable). I lean and rely on the startup community in Atlantic Canada as much as anyone, I'm sure. I looked back quickly at the last seven people I went to for help or advice:

OneLobby CEO Jordan Smith (Fredericton via Halifax)

NBIF CFO Nicole LeBlanc (Fredericton and Halifax)

26Ones CEO Tim Burke (Halifax)

Investor Gerry Pond (Saint John)

Espresso Capital Partner Ben Forcier (Halifax)

Serial Entrepreneur Daniel Burka (San Francisco via PEI)

Equals6 CEO Andy Osburn (Halifax)

As a community builder myself, I see the logic Klugman uses. In fact, I loved the quote, “small enough that you can get your arms around.” I argue, however, that we are a unique case in Atlantic Canada. Not only do I (and many others, I can comfortably say) consider myself an Atlantic Canadian, I do so with great pride.

Being an introvert and 'empathy guy', I am very keenly aware of the atmosphere of a room – the general 'feel' of a room. I've now been to startup events in Fredericton, Saint John, Moncton, and Halifax... and what I can say is that no matter the venue, the 'feeling' is the same. It's acceptance, it's comfort, it's respect, and it's interest. Maybe it's just our nature on the East Coast to be so inclusive, but I simply do not accept that what we feel (and celebrate all the time; Peter called it our ‘central orthodoxy’) at those events is anything but community.

Klugman graduated from Dalhousie, granted. At the time, GoInstant Co-Founder Gavin Uhma was five years old, Gerry Pond was the CEO of NBTel, and Google was still six years from creation. Things are different here. Too many people put too much time into ensuring that we do have a community (who cares about borders!?) to simply accept that we're not a community (even when it comes from someone with the credentials Klugman has).

I lived five years in Waterloo. I shook Jim Balsillie's hand. I don't see what all the fuss is about with Waterloo though. That doesn't suggest that the fuss is undeserved; it points, instead, to the fact that I was chasing girls and playing football while I was there. I didn't notice the community because I wasn't a part of it (read: ‘you kinda gotta be a part of it to understand’).

Those immersed in the Atlantic Canadian startup community know it well. We're so nice over here that I may not get a huge following as I stand up for it, but I see it too clearly to let it go. At DemoCamp last week, I arrived early. Half the bar was reserved, and there were five people sitting at table – OneLobby CFO Brian Dunphy (Fredericton), TitanFile Founder Milan Vrekic (Halifax), GoInstant Jevon MacDonald (Halifax via PEI), Tech evangelist David Crow (London, Ont.), and UNB Professor Alex Wilson (Fredericton). This is commonplace at these events.

Launch36 is another example. Atlantic Innovation Week. Atlantic Venture Forum. You know the rest.

We are special in Atlantic Canada… different, even.

Blair Ryan is the CEO of both the Empathy Factory and The Rounds.

Picomole’s Superb Trial Results

Moncton-based Picomole Inc., which is developing a breath analysis device that detects cancer, said yesterday its technology has produced preliminary accuracy of 98.5% in independent trials, which it believes makes it a world leader in detecting lung cancer.

The company has a working, portable prototype of its breathalyzer-like device that can detect lung cancer by identifying markers in breath samples and is spending 2013 performing clinical studies on the device and its infrared-based method of detecting cancer.

 In a press release Wednesday, the company said it had conducted a pilot study of 40 clinical samples, including those from patients with pulmonary diseases. The samples were analyzed using Laser Infrared Sample Analysis, or LISA, a new analytical method recently patented by Picomole scientists.

“The non-invasive breath test for lung cancer has a preliminary sensitivity of 100 percent and specificity of 97 percent,” said Picomole Founder and CEO John Cormier in an email. “Picomole is not aware of any test with better reported accuracy for the detection of lung cancer.”

Added Dr. Ali Mahtabifard, an expert in minimally invasive surgery for lung cancer at Cedars-Sinai Medical Center in Los Angeles: "The clinical significance of such a test cannot be overstated."

Picomole explained in the press release that most lung cancers do not cause any symptoms until they have spread too far to be cured, and that current detection technologies are inadequate for mass screening. As a result, lung cancer kills about 1.4 million people worldwide annually.

"In the foreseeable future, a Picomole breath test could become an important tool in the fight against lung cancer, one that is safe, low-cost, and does not expose patients to radiation," Michael Tripp, Picomole Vice-President of Corporate Development, said in the statement.

Picomole is now making several improvements to its methodology and will soon announce an expanded clinical study.

In an interview in January, Cormier said the company was examining launching the product in foreign markets, most likely in Latin America or Asia. He also said Picomole was working on a $1.2 million fundraising effort.

Smart Skin Lands Early Adopter

Smart Skin Technologies of Fredericton has reached an agreement with a major golf club manufacturer to help launch its new Quantifeel product, which tests the pressure points on a golfer’s grip throughout the swing.

Founder and CEO Kumaran Thillainadarajah said the parties have agreed to terms on a deal they hope to sign in the next few days. Together, they hope to finalize Quantifeel so it will be available in golf stores this year to help golfers choose just the right grip when they’re buying golf clubs.

 “We expect we will have a product out in the market later this fall,” said Thillainadarajah, who developed his company through the entrepreneurship programs at University of New Brunswick. “I’d like to see it in thousands of stores in the next 12 to 18 months.”

A native of Sri Lanka, Thillainadarajah started Smart Skin in 2008 with the idea of pioneering a pressure-sensitive skin that could serve as a second touchpad on a smartphone. In 2011, the company realized its best path to market would be a product for golf — moulding the pressure-sensitive skin into a golf grip to monitor the golfer’s grip on the club through the entire swing. The team originally planned for a training product, but as they talked to people in the golf industry, they focused more on a product that helps golfers choose the right club.

 “As we built it out, we realized that all the money in golf is in fitting, not training,” said Thillainadarajah. “The challenge was that in fitting, no one cared about grip because it was impossible to measure grip pressure. People take an hour on fitting for the right club, on things like shaft length and club head. They spend a minute on grip.”

Thillainadarajah said the challenge is to educate the market and let players, coaches and retailers know the importance of the grip in a golf swing and the new-found ability to measure it. What he’s got in his favour is that golfers are always on the lookout for the next technological advance, so the product could spread quickly.

Smart Skin is still working on the golf training product, which will allow golfers to measure their grip on the course, assess it on a device or at home on their PC and share the readings with their coaches. What’s more, once the golf products are out, Smart Skin hopes to launch similar products in sports like baseball and hockey — any sport in which manual grip determines success.

Smart Skin has been working with UNB’s Institute for Biomedical Engineering, which Thillainadarajah says is one of the world`s top facilities for prosthetics.

He added that the company is developing other products using the pressure-sensitive skin, and could make announcements on them late this year.

The company, whose workforce has grown to 10 from four in 16 months, launched a campaign two weeks ago to raise $1.5 million from angels and venture capital funds. In the first six days, existing angels from New Brunswick committed to invest $500,000. Thillainadarajah said he is now in talks with venture capital funds about investing in the company, and he could exceed the $1.5-million target.

Celtx Doubles Revenue in 3 Months

What a difference a year has made for Celtx, the St. John’s-based maker of pre-production software for the film industry.

By coincidence, I recently interviewed CEO Mark Kennedy, one year to the day after my last report on the company appeared on Entrevestor, and it was astonishing how the company had performed in that time.

In April 2012, the company had almost two million users (those who had logged in five times or more) in 170 countries operating in 34 languages. Today, Celtx has 4.6 million users, and the company has placed special emphasis on revenue growth lately so it is getting more money out of its users.

 “We started to focus on revenue late last year and it’s been really good,” said Kennedy. “We basically doubled our revenue in three months.”

First funded in 2006, Celtx’s software allows filmmakers — directors, cinematographers, writers or whatever — to do all their preparations for filming on their PC or device. Through its development it offered free software with the ability to pay for premium products, and with this model it built up market share.

In the past year and a half, it has focused more on cloud-based and device-based products, so that it now has three main channels: products for desktop, cloud and devices. And more of its clients are paying for the service.

The company now has 14 employees, of whom 10 are developers, and Kennedy said the company has been producing new apps and greater functionality in the cloud to improve the user experience.

While the company has been growing strongly for years, Kennedy said it has witnessed no slowdown in customer uptake. In fact, even when it began to produce products for the cloud and devices, its growth in desktop users continued with no decline. It now has four million in desktop use, 600,000 in the cloud and 15,000 on devices.

Celtx has also been taken up by larger and larger companies, which are interested in its enterprise products, designed for studios and major companies rather than just small filmmakers.

 “We just did a big demo for NBC Universal in the U.S. and we see large usage in the studios and that’s worldwide,” said Kennedy. He said NBC Universal has about 9,000 media subsidiaries, and Celtx has also had discussions with a couple of European conglomerates. He said the company takes the approach that it hopes the client will pursue a relationship rather than persisting with a hard sale.

Kennedy is not looking for money, though he won’t rule out doing so in the future. So far he has taken venture capital investment only from St. John’s-based Killick Capital, which backed the company in 2006 and has made a few follow-on investments. Kennedy said its total investment is “south of $2 million.”

CENE to Launch at Venture Forum

Canadian Entrepreneurs in New England, a Boston-based group dedicated to helping Canadian tech and biotech companies navigate the New England startup community, will be launched at the Atlantic Venture Forum in Halifax in June.

Critical Path, the Vancouver-based organizer of the Venture Forum, issued a brochure this week that shows the group, modelled on C100 of San Francisco, that will be unveiled at the event, June 19 and 20.

Though it shares a name with the Halifax radio station, C100 in the startup world is the name of a group of Canadian tech professionals working in Silicon Valley who are devoted to helping young Canadian companies in the valley. Though only three years old, the group has made a name for itself by helping leading Canadian startups make connections and gain mentorship in the world’s hottest tech market. Its signature event is 48 Hours in the Valley, which hosts a range of tech startups in northern California twice a year.

CENE -- pronounced the same as "scene" --  is clearly modelled on the West Coast organization in that it is a non-for-profit group whose members will help Canadian companies that need to make connections in the booming Boston market.

“CENE members are passionate about leveraging their experience, expertise and relationships to help mentor and grow a new generation of successful Canadian-led technology/life sciences companies,” notes a position paper outlining the role of the new enterprise.

The big difference in the two C100s is that the East Coast version will have a much greater emphasis on life sciences, mirroring Boston’s dominant position in medical and life sciences innovation in the U.S. But that’s not to say there won’t also be a strong emphasis on the city’s tech segment and venture capital institutions.

In the first year, CENE will comprise as many as 100 charter members, who are Canadians holding leadership positions in innovation, entrepreneurship or investment in the Boston startup community. The charter members will mentor and advise promising companies and help them build relationships in New England.

The organization will also offer open membership, which qualified people can attain by joining the CE-NE group on LinkedIn.

As well as selecting promising startups to participate, the organization will hold regular events, which range from individual mentoring sessions to networking socials to online discussions.

The group will be financed by membership dues and private and public sponsorship.

Boston is becoming a more active centre for Canadian startups. The Canadian government last month launched its Canadian Technology Accelerator in Boston, and two of the first eight companies entering the program are from Halifax: Mindful Scientific and Equals6.

The Atlantic Venture Forum is designed as a showcase for regional startups to get in front of potential investors from across Canada and the U.S.

CTA@NYC Aiding Tech Startups

When Andrew Cherwenka first showed up in New York to market his Toronto-based startup Authintic, he worked out of coffee shops, always on the lookout for a spot with free wi-fi.

Today, he’s working in shared space in the city’s Flatiron district and enrolled in one of the leading initiatives of the Canadian Department of Foreign Affairs to develop Canadian startups.

Authintic is one of six Canadian tech companies now enrolled in the Canadian Tech Accelerator at New York City, or CTA@NYC. Though none of the current participants are from Atlantic Canada, the 30 or so companies that have gone through the program thus far have included Ooka Island of Charlottetown and Adfinitum of St. John’s. (Vidcruiter of Moncton is now in a CTA program in Silicon Valley, while two Halifax companies, Mindful Scientific and Equals6, are attending the program in Boston.)

“I can’t say enough good about the program,” said Cherwenka as he concluded a tour of the facility where it’s housed last week. I was in New York on a personal visit, Cherwenka was kind enough to meet me, explain the system and show me the facility.

Through its consulates, the Canadian government now operates three accelerators in the U.S. – one in Silicon Valley, one in New York and the most recent in Boston.  The thinking behind them is that there’s nothing better for young Canadian companies than to operate for three months in some of the world’s hottest innovation markets. It allows them a chance to learn from leaders in their field, meet with potential clients and seek out funding from the world’s largest venture capital industry.

Cherwenka says he’d rather be in the New York accelerator than the others because it is the best place to meet decision-makers at corporate head offices, and therefore get the best feedback on Authintic.

“The businesses we meet here are real businesses, and you get to test [the product] out every day to see if it works,” he said.

The company helps major brands mine the data of their social media followers in order to increase sales, and it does this largely by asking followers permission to do so. Two weeks ago it launched its first campaign with the outdoor clothing maker North Face, which has 3 million followers on Facebook, and it is working with BMW as well. It works best with companies with customers that could be considered evangelists for their brand.

CTA@NYC operates out of a shared office space called the General Assembly at Broadway and 20^th Street. There are 32 companies comprising about 250 people working there at any one time. The smaller outfits (including the six Canadian companies) work at a long table in the communal area, where they can interact, bounce ideas off each other, and learn from each other. The larger companies work in other rooms portioned off from the main area. The facilities include a quiet room, conference rooms and small booths where you can make quiet phone calls.

Cherwenka said the biggest thing about the space is the space itself, because finding affordable office space is such a big deal in New York. On top of that, members of the accelerator have had a variety of mentoring events, including the three-day introductory session, which included such experts as Permjot Valia, the founder of Halifax-based MentorCamp. Miriam Leia Bekkouche, the director of CTA@NYC, attended Mentorcamp as a mentor last September.

Having spent most of her life on Prince Edward Island, Joelle MacPhee of Ooka Island said in a recent interview she was awestruck not just by Manhattan but by the experience of camping out for months on end in a bee hive of entrepreneurs. She said every day at CTA@NYC was an inspiration and helped her to understand the potential of her company’s software, which is a game that promotes literacy. “What New York opened up for me is just how many digital media companies want to break into education,” she said.

Media Spot Me Mulls Move to Halifax

Media Spot Me, a Kitchener, Ont.-based, startup that helps link journalists and experts, is considering a move to Halifax if it can make the economics of such a move work out.

The company was started two years ago by former television journalist Stavros Rougas and his technical co-founder Ebrahim Ashrafizadeh to help solve the problem journalists face in finding experts to comment on topical events. Rougas is a former TV producer, and understands the difficulty in quickly finding experts — usually academics — to speak on any given issue.

Having launched the service a month ago, Media Spot Me now has a data bank of more than 7,000 experts from across North America and in other countries, and has begun to sign up journalists. “We’ve got about 100 journalists and we’re in talks with large organizations to bring people on board,” said Rougas in an interview. He added most of the sales efforts for now are in Toronto because the national media is concentrated in the city, and it plans to expand by selling in the U.S. market.

The company in the early stages will draw revenue by selling a premium product to media companies. But in time, assuming it gains a critical mass of journalist subscribers, it could collect and analyze data on such things as what searches journalists are conducting. There could be a market for such data among, for example, public relations and opinion companies.

Working in the massive tech hot spot of Kitchener-Waterloo, Rougas and Ashrafizadeh have got to know Milan Vrekic and Tony Abou-Assaleh, co-founders of TitTiianFile, which is based in Halifax and Waterloo. Rougas said Vrekic has been telling him about the startup environment in Halifax, and he is impressed enough that he has been in contact with such organizations as Innovacorp to make enquiries.

He said he is attracted to the city because rents and salaries tend to be cheaper than in southern Ontario, and that there are strong universities turning out the type of talent the company needs. Conversely, he is concerned about some other costs. The company executives will need to be in New York and other U.S. cities in the next few years, and the cost of air travel is a concern.

Rougas said he hoped to investigate whether there are assistance programs that could help with the move, such as wage subsidies if the company hires people in Halifax. As well as programmers, Rougas is interested in hiring people with training in journalism to work with company clients.

“Because we’re young and pretty lean, us making a move could be done in a pretty timely manner,” he said.

Jenkins Pushes Federal Procurement

One of Canada’s leading specialists in innovation on Tuesday urged Atlantic Canada’s entrepreneurs to embrace federal government procurement as a means of driving their products to market.

Tom Jenkins, the Executive Chairman of Waterloo-based OpenText, told a luncheon speech at the Nova Scotia Innovation Summit in Halifax that government procurement is more effective than subsidies as a tool for encouraging innovation. And he added the good news is government procurement, especially in select sectors like defense programs, is destined to be lucrative for several decades.

“Government as a customer is going to be bigger than the Oil Sands in the next 20 years,” said Jenkins, who chaired two key advisory panels for the Prime Minister on innovation.

He was the Chair of the Research and Development Policy Review Panel, whose report in 2011 recommended a realignment of R&D spending in the country with the goal of devoting more resources to the commercialization of research. And he chaired the Military Procurement Review Panel, which recommended early this year the government adopt a Buy Canadian policy for the Department of National Defense.

Jenkins said that policy could have huge benefits for entrepreneurs in Halifax, given that the government will spend $25 billion in the city building ships over the next two decades.

“Twenty-five billion dollars,” said Jenkins. “Everyone in this room should be doing high-fives about that number, but the question is, What are you going to do with it?”

He encouraged his audience to look at the experience in his adopted home of Kitchener-Waterloo as an example of how to build an effective innovation community. He said the key to Waterloo’s success was its ability to harness the world-class attributes of the University of Waterloo, and Halifax can do the same with Dalhousie University.

Earlier in the day, Eric Grimson, the Chancellor of the Massachusetts Institute of Technology, outlined how the world-renowned engineering school aims to encourage entrepreneurship, including holding a $100,000 business plan competition for students. He said the money helps to launch young companies, but the real benefit of the competition is the acclaim the winner receives.

He also said the community has benefited from the university opening up “a sandbox” for innovators, meaning a facility with 3D printers and other tools that entrepreneurs need to explore their ideas.

One final point about MIT: all undergrads must take four communications courses through their four-year program so that they can learn to explain their ideas orally and in writing. In the first two years, they must take humanities or social sciences courses. In the third and fourth years they take specialist courses in writing for startups, such as penning an executive summary or an elevator pitch.

Though some students protest the course at first, Grimson said: “In the end, some students have come to me and said, ‘Why did we have to wait until we’re seniors to take this course?’’’

The Innovation Summit is taking place over two days, and is stressing the need for innovation in three segments – ocean industries, agriculture and forestry.

TopLog Seeks Partner to Aid Rollout

TopLog is three entrepreneurs from three countries who will soon have three doctorates in computer science.  And they have a single mission: to develop a company that makes life easier for network system administrators.

“TopLog turns system data into intelligence that can save you and your company time and money and prevent data loss,” explained Ozge Yeloglu, the president of the young Halifax-based company.

The company was developed from the doctoral thesis of Tokunbo Makanju, a Nigerian who received his PhD in computer science from Dalhousie University last year. Various people within the department believed the work had commercial potential, so he was joined by two doctoral candidates — Yeloglu, a native of Turkey, and Patrick LaRoche of Canada — to develop into a company.

Here’s how it works: companies of all sizes have active computer networks, which sometimes go down. Network system administrators must then manually dig into the log files on the network and figure out what happened.

And topLog automates a lot of these processes, solving major problems in this $1.5-billion global industry. Even before the network system collapses, topLog analyzes the events that take place over the network and learns automatically what are normal and anomalous events on the system. This knowledge can prevent the system from going down, and alert the network system administrators when anything out of the ordinary happens.

“There are many similar products on the market doing many similar things … but no one else is looking at system log data this way,” Yeloglu said.

The start-up has gone through the NextPhase mentoring course and is now working on a formula to roll the product out. The founders are hoping to build a relationship with a larger organization that could help bring the product to market. The company has validated the technology because it was the subject of a doctoral thesis, said Yeloglu.

The roll-out plans … and the question of whether the company will raise funds … will really depend on the response it receives from these larger companies and testing partners.

The company plans to move into Volta, the new shared space for technology companies in downtown Halifax, this spring. As well as working with other entrepreneurs, working at the space will give it access to a variety of mentors.

So far, topLog has been financed through the Early Stage Commercialization Fund offered by Innovacorp.

Celsius Aims High with Drifter

When Celsius Game Studios Inc. releases its space-trading game Drifter later this year, it will feature planets or star systems named after five real-life Earthlings, who have paid handsomely for the naming rights.

Based in St. John’s, N.L., Celsius has already launched three games; the most successful sold 9,000 copies.

Founder Colin Walsh wanted to do something more ambitious with his next game. To finance his plans, he launched a Kickstarter “crowdfunding” campaign last May, aiming to raise $50,000.

 (Crowdfunding is the practice of funding a venture by raising small amounts of money from a large number of people.)

In a Kickstarter campaign, a person has a month to solicit commitments from sponsors, and it can offer prizes for people who donate certain amounts.

Depending on how much they donated, the Drifter supporters received prizes, such as as the game, the soundtrack, boxed copies of the game, posters and 3-D printed models of the spaceship used in the game.

And if you donated $1,000, you received all of the above and Walsh named a planet or star system in the game after you. Five people hit the top bracket and will soon be able to visit their namesake celestial bodies online.

Those five big contributors are one reason the Kickstarter campaign was such a great success. By the time the campaign ended, the company had raised $81,304.

And that outperformance meant Walsh could become even more ambitious with the new game.

 “Originally, it was going to be space-trading lite,” he said in an interview. “I was going to keep the focus small. But the scope got bigger after that.”

Drifter allows the player to captain a spaceship that trades goods between planets and galaxies, mining on some planets, exploring new systems and eluding or fighting space pirates.

Walsh said the genre is under served and there are people who are actively looking for this type of game.

Whereas Walsh developed his previous games — Chromodyne, Chromodyne HD and Red Nova — on his own, he has been able to work with a St. John’s-based graphic designer and user interface specialist to greatly improve the look and feel of the game.

He also commissioned music composer Danny Baranowsky of Seattle to write the score for Drifter.

The game will sell for $15 for desktop computers or $5 for iOS-based devices.

Walsh, who works out of the Genesis Centre at Memorial University, hopes to sell about 10,000 units in the first year. Other than the cut taken by retailers, it will be almost pure profit as the development costs were covered by crowdfunding.

After the release, he may continue to develop the game further — if it’s successful. Even now, he’s tempted to keep working on it, though he knows he has to get it on the market.

 “It’s a game you can work on forever,” he said. “It’s like a big sandbox and you can keep adding stuff to it but I hope to have a launch by the end of the summer.”

Cowan: 7 Factors about Incorporating

A corporation or a partnership?

That’s a question facing a lot of founding teams early in their startup life, and it keeps coming up until they finally decide to incorporate.

As with so many business decisions, the correct answer depends on your circumstances. So the best advice I can give is to make sure you’ve considered all these factors before you act:

1. Do you need incorporation to receive non-dilutive funds? Some funding organizations will only allot grants, loans or other contributions to corporations and not partnerships. And in the early stages, non-dilutive financing can be the difference between launching and sputtering. When meeting with support agencies, nail down whether you have to incorporate to receive funding. It may override all other considerations.
2. Would you benefit from limited liability? There are legal risks in any enterprise, but some more so than others. If you’re soon going to be selling a product for instance, you may want to incorporate just because the company rather than the partners would assume the legal risks. Do your research though. Incorporation won’t completely protect you from all liability all the time.
3. Is there a tax advantage for incorporating? By the time your company exceeds $60,000 in revenues, the tax code will make you take a look at incorporating. The reason is that corporate income tax at that level for small business is less than personal income tax. You and your startup would likely pay less in taxes if you incorporate and draw a salary.
4. Do you need to incorporate to protect your intellectual property? No, but some founders choose to incorporate simply because a corporation is a better vehicle for holding intellectual property than a partnership.
5. Are you ready to split the equity? This may be the most complicated issue and will be the subject of an upcoming post. First, you have to nail down the initial distribution of founders` shares before you even consider incorporation. If the founders bicker about share allocation after incorporation, it will likely be damaging to the business and costly to sort out. Once you decide to incorporate, make sure you use a simple share structure. It’s okay to have a class of common shares, and a second class of non-voting shares for employees and the like. But more exotic classes, such as preferred, are generally inadvisable for a startup that is considering rounds of financing.
6. Have you decided on a federal or provincial incorporation? Incorporating federally may cost a bit more, and may prove more palatable to American investors and/or potential takeover partners. It’s not a big deal, because it is fairly easy to transfer incorporation from provincial to federal and vice versa.
7. Have you sought professional advice? Sometimes founders incorporate on their own – that is, without professional advice – and I find they usually don’t save money so much as defer payment. Quite often, they have to pay later to prepare the corporate records and undo mistakes they made by incorporating themselves. Seeking professional help to incorporate generally costs about $600-$1000 in professional fees and $300-$500 in government fees. Several law firms include incorporation as part of an affordable startup package that can help you avoid pitfalls.

In summation, don’t rush it. The incorporation process should be a relatively simple one, as long as you take the time to avoid sundry pitfalls.

Editor’s note: The Canadian Startup Lawyer blog by Rob Cowan, Partner at McInnes Cooper, appears monthly on Rob’s blogging site, StartupLawyer.ca, and Entrevestor.

Girls Tech League Finals Saturday

CompCamp, the group dedicated to teaching teens to code, has issued the following press release on its Girls Tech League championship this weekend:

Halifax, NS, April 9, 2013 – The Girls Tech League, a programing competition for junior high school girls, will hold its championship at Mount Saint Vincent University.

The four teams – from Highland Park Junior High School, Fairview Junior High School and two from Bicentennial Junior High School – have been learning computer programming in after-school sessions since early January. During this time, each team has created an app prototype using a visual programming tool called the MIT AppInventor, and has produced a business plan and short video.

On Saturday, the four teams will present their work in a closed session to a panel of three judges, comprising prominent local business and technology community members: Ulrike Bahr-Gedalia, President of Digital Nova Scotia; Suzanne Diab, Senior Marketing and Communications Advisor at Nova Scotia Business Inc.; and Sreejata Chatterjee, Co-Founder of LeadSift.

Then the winners will be named at an awards reception, is open to all (RSVP 266 2381), at the Rosaria Center at Mount Saint Vincent University, and beginning at 6:30 pm.

“We started Girls’ Tech League this year to address the crying need to encourage more young women to pursue careers in technology,” said Rose Behar, Co-Founder of CompCamp, one of the organizers of the league. “We’ve been blown away by the dedication and enthusiasm of the participants, and hope to expand the program next year.”

The first place winners will take home smartphones, and will have the chance to continue on to the international Technovation Challenge competition, at Twitter headquarters in San Francisco, if they are picked as one of four international winners out of 40 worldwide. Second place winners will take home digital point-and-shoot cameras and third place winners will win iPod shuffles.

The Girls Tech League teams were the first Canadian additions to this competition, which was previously open solely to American contestants.

CompCamp and Women in Science and Engineering, (Atlantic Region), partnered in running the program, using curriculum and resources from the U.S. organization Iridescent. The competition and awards reception is sponsored by Students in Business, a program held by Community Business Development Corporations (CBDC) that offers loans for students who are starting their own business.

Note to Editors/News Directors:

Reporter, photographers and film crews are welcome at the presentations and the awards ceremony. To make arrangements to attend the events, or for more information, contact Rose Behar at 266 2381

About Girls Tech League:

The Girls Tech League is an opportunity for Halifax-area girls in Grades 7 to 9 to explore the world of digital technology, while competing for fantastic prizes. By using visual programming to create an app, build a business plan and envision their bright ideas, the girls will learn hard skills while having fun and working in a team environment.

About CompCamp:

CompCamp provides advanced technology education to youth aged 8 to 15 in Nova Scotia. Through summer camps and winter after-school programs like the Girls Tech League, CompCamp hopes to contribute to a very important goal: giving the younger generation the digital skills they will need to thrive in their education and careers. Learn more about CompCamp programs at CompCamp.ca.

About Women in Science and Engineering (Atlantic Region):

The primary goal of WISE Atlantic is to encourage young women to consider careers in Science, Technology, Engineering and Mathematics (STEM) and to consider themselves valuable contributors to these fields. WISE Atlantic offers science retreats, camps, and will match youth to role model mentors in science related fields. Learn more about WISE Atlantic at WISEatlantic.ca.

Headspace Preps Pitch Perfect Launch

Pitch Perfect, a spinoff from Halifax consultancy Headspace Design, will make its long-awaited debut in the autumn, after its developers conduct beta tests in the next few months.

The new company allows commercial design consultants and other professionals to improve the look of their proposals to potential clients, and enjoy more flexibility and ease-of-use when collaborating on pitches. The idea is that a professional submitting a visually appealing pitch with lots of design features will have a leg up over competitors who submit bland Word documents.

Headspace design director Kyle Racki said the company has been working on the Pitch Perfect product diligently for several months, a process that was accelerated by hiring dedicated developer Jonathan Down for the spinoff.

They will begin private one- to two-month beta tests (meaning they ask people they know to test it out) in about three weeks, and are planning a public beta (that is, inviting a broad range of people new to the company to give it a whirl) in June. The full launch is slated from August or September.

 “The product is shaping up quite nicely and we’ve begun executing our marketing strategy to generate sign-ups,” said Racki in an interview. “In March, we finalized our branding of the product and relaunched an updated website.” The enhanced website contains a blog, a sneak preview of the product interface, and a sign-up form for the beta.

Racki and his Headspace co-founder Kevin Springer first showcased Pitch Perfect at the first DemoCamp Halifax in September 2011, and set out to develop it as a separate business. Then they encountered a problem common to service companies trying to produce a product: they got really busy with their consulting business, and it was difficult to find the resources to develop the product.

The hiring of Down, which Headspace achieved with support from the Atlantic Canada Opportunities Agency, overcame this problem because his job is dedicated completely to getting Pitch Perfect out the door.

What they’ve come up with is a site that allows an individual or members of an agency to work on a number of proposals for various clients, collaborating easily to produce the best pitch possible. The system has “content buckets” where the user can place content that is used in more than one proposal. And it features design themes and templates, so that each proposal is custom designed for each client.

Agencies will soon be able to sign up for a 30-day trial, after which they can subscribe to a paid account — at a discounted price during the beta test — or use the limited free account.

Headspace has incorporated a shell company for Pitch Perfect and will transfer Down, Racki and Springer to the company in time, making sure that Headspace has all the supports needed to thrive. Springer said the company is considering raising capital for Pitch Perfect, but needs to find investors who would also bring industry expertise and contacts.

 “One thing is for sure, people are very excited about Pitch Perfect,” he said. “We already have many sign-ups from all over the world and do see hitting the 1,000 mark by year’s end, to be modest.”

Kira Awards Finalists Announced

The KIRA Awards' Selection Committee yesterday announced the finalists for the 2013 Knowledge Industry Recognition and Achievement award.

The winners of the New Brunswick award will be named at a dinner May 2 at the Fredericton Convention Centre. Information on the tickets is available here.

The nominees are:

Exporters

•Green Imaging Technologies Inc. •LuminUltra •Vimsoft

Most Promising Start-Up

•IntroHive •Rt Tech Software Inc. •TotalPave

Technological Advancement and/or Innovation - Private

•Inversa Systems •Smart Skin Technologies •SPIELO International

Technological Advancement and/or Innovation - Public

•Department of Health, Horizon Health, Vitalité & FacilicorpNB •Service NB, Department of Natural Resources, Department Environment & Local Government •Vicky Chester UNB

Community Engagement and Industry Commitment

•Remsoft Inc. •Science East Science Centre •T4G

Special Recognition

•Dr. Ali Ghorbani, Dean of the UNB Faculty of Computer Science •Mary Goggin, co-founder and VP, Corporate Programs for Accreon •Trevor MacAusland, Executive Director, PropelICT

Who’s the Region’s Best Early Adopter?

The Entrepreneurs with Disabilities Network invited me to speak yesterday on a subject I hadn’t thought about much – early adopters. It led me to ask what makes a good early adopter, and who’s the best early adopter in Atlantic Canada.

It was a thoroughly unscientific exercise, but I searched through my lists of companies and old articles. When I spoke at the EDN Entrepreneur of the Year event last night, I gave the top spot to Emera of Halifax.

The first thing I was looking for was number of partnerships with startups, and Emera boasts varying degrees of involvement with at least three members of the regional startup community.  A good early adopter also has to be open to investing time and money in young companies, to be flexible enough to adjust operations with the smaller enterprise, and to be patient and candid with the partner. I think Emera fits the bill.

The Halifax-based utility is a corporate member of Equals6, the professional social network for students. It is partnering with Wicked Ideas of Saint John to host an online investigation and discussion of new energy initiatives. And most important, it invested more than $5 million in Atlantic Hydrogen of Fredericton and commissioned the company to construct its first industrial-scale CarbonSaver system at the gas-fired Bayside electricity plant near Saint John.

“We are predominantly a company of engineers and being engineers we have to be always looking for the next thing,” said spokeswoman Sasha Irving yesterday.

She said that given the company’s position as a leading utility in the region, its officials are often among the first to see new technology, and that can lead to discussions about the innovation and then to a partnership.

Kudos to Emera for being adventurous and flexible enough to work with young companies. We could certainly use more of this sort of partnering. The biggest weakness in the ecosystem in the region is the paucity of the so-called tent-pole companies – those that are large enough that they raise other companies up with them.

Tent-pole companies are invaluable because they train employees who go on to establish startups, and they become early adopters for new companies once they are founded.

Government dominates the economy of the region, especially in the Maritimes, and governments tend to be less nimble as early adopters. Innovation often saves money by replacing workers, and governments are reluctant to reduce their workforce. I think the best early adopter among government is the military – largely because military innovation, even fuel efficiency devices, can save the lives of troops in the field.

I’m sure the Irving organization is doing lots of work with startups that I’m not aware of, and its importance will increase as the Halifax shipbuilding program gears up. But in my own reporting so far, Emera comes up most often.

The Entrepreneurs with Disability Network event was great, with a healthy turnout and lots of enthusiasm. The network, which helps people with disabilities to improve their economic opportunities by starting businesses, named Keith Gelhorn, the founder of ADDvocacy ADHD & Life Skills Coaching Ltd., its Entrepreneur of the Year for establishing his coaching group that helps people deal with ADHD.

Mini DemoCamp Halifax Set for April 21

DemoCamp Halifax will hold a mini, mid-season event on the night of Sunday, April 21, at Durty Nelly’s Pub on Argyle Street.

Billed as Mini DemoCamp Halifax, the event will feature a keynote address by David Crow, a co-founder of StartupNorth and the Evangelist in Residence at OMERS Ventures in Toronto. Crow will be in Halifax for a mentoring session with Toon Nagtegaal’s NextPhase, and will finish out the weekend with his speech to a gaggle of local tech enthusiasts.

Founded by TitanFile Co-Founder Milan Vrekic, DemoCamp Halifax has been held in each of the past two years. The startups that present should be far enough along in their development that they have a product to demo for the crowd. There are no powerpoints or pitches -- only demos.

The Mini DemoCamp will feature a more intimate crowd, with 100 tickets being sold as opposed to about 300 at the regular event. And there will be three or four pitchers, rather than the 18 that signed up last September.

The fewer presenters will also allow for a question-and-answer session between each demo.

“We have a lot of events in the region but not many of them provide feedback for the companies,” said Vrekic in an interview.

The organizers said last night the event is almost sold out. You can register at eventbrite.

Equals6’s Scholarship Crowdfunding

Equals6, the Halifax-based professional social network for students, will soon launch a crowdfunding scholarship program in which people or organizations can help students raise funds for tuition over the Internet.

The two-year-old company has been active in raising money for scholarships for deserving students, amassing $40,000 for 140 Top Talent Scholarships in its brief history. What is new is the company is now adding a crowdfunding element to the scholarships, meaning other people can add to a scholarship once it’s posted on the Internet. It also means students can use the Equals6 website as a platform for campaigns to raise money for their tuition.

 “We are activating the ability for students to launch and promote their own scholarship campaigns in about four weeks,” said CEO Andy Osburn. “This feature will allow students to create their own scholarship campaign, solicit donations and then funds are paid directly to their school.”

This initial phase of the crowdfunding program will permit donations to be pooled in geographical scholarship funds and the next release will allow donations to individual student’s campaigns.

Equals6 has developed a career-related social network for students, where they can discuss job opportunities and academics with other students and potential employers. The idea is to provide a platform for students and prospective employers to link online and hold professional discussions, in contrast to a site like Facebook, which is largely social or personal. The company has registered about 30,000 students and about 200 employers or universities, and is growing by about 15 per cent per month.

As part of its mission, Equals6 has encouraged companies and organizations to provide scholarships to students, usually in the $250 to $450 range. Once the crowdfunding option is live, students will be able to create campaigns with targets of $250 to $2,000.

Supporters can still initiate a scholarship. If they commit $250, they can select the name of the scholarship and help to choose the winner. By committing $500 or more, they can direct the money to the school of their choice.

Equals6 will contribute $50 to successfully funded scholarships, manage the application and selection process and ensure that the funds are sent directly to the winner’s school.

In a press release, Osburn, who was recently appointed to the National Crowdfunding Association of Canada advisory committee, noted that student debt in the U.S. alone has topped $1 trillion. Helping to solve this problem fits with Equals6’s mission to help students find the resources they need to successfully launch their careers.

What’s interesting about the scholarships awarded so far by Equals6 is the geographic spread of the awards, which shows that the company and the program is spreading across the U.S. and Canada.

Jerelle Jones of Lindenwood University in St. Charles, Mo., received $450 to help her finance her studies in elementary teaching in kinesiology and music, while Tanja Zerulla of the University of Alberta got $250 to help finance his studies in marine biology.

Anyone who wants to initiate a scholarship can go to complete the single-page donation form here. Once it’s completed, the scholarship is launched and available for students to apply to.

Osburn is now in the midst of a three-month stint at the Canadian Technology Accelerator in Boston, at which he hopes to develop the business, meet with potential investors and help spread word about Equals6 to the city’s college community.

Mycodev Draws Chitosan from Fungus

The good patrons of Picaroons Brewtique may soon be helping to produce medical compounds each time they hoist a pint at the Fredericton microbrewery.

Picaroons is in talks with Fredericton biotech Mycodev Group Inc. on a plan to help the startup produce chitosan, a compound that has a range of industrial uses, including pharmaceutical ingredients, water treatment, fertilizer and cosmetics. Chitosan is usually extracted from the shells of shellfish, but Mycodev founder David Brown has devised a way to produce it from fungus.

“The fungus is a lot better in terms of the constant supply,” said Brown, a synthetic biologist who recently graduated from the University of Alberta. “We can grow it 365 days a year.”

He said in an interview that the big problems with chitosan production are worries about the supply of shellfish shells and the industrial waste produced by traditional methods of producing the stuff.

Brown searched for and found a form of fungus that produces a lot of chitosan, then he genetically engineered it to ensure maximum production of the fungus itself. He developed an automated system to heat the fungus and extract the chitosan.

But he still faced one problem.

 “The biggest cost for any biotech company growing fungus or bacteria is just feeding the stuff,” he said. “You can spend thousands of dollars a day feeding the fungus.”

He found his solution, as so many of us do, at his local pub.

The brewing of beer produces great amounts of waste. For each litre of beer produced, there are about six litres of wastewater, and there are yeast and barley that have to go to the landfill. Brown discussed the problem with Picaroons owner Sean Dunbar and they decided to try growing fungus from the residue of the brewing process.

Brown said he has successfully finished laboratory-scale tests, and will soon work with New Brunswick Community College with industrial-scale vats to produce the fungus. The site is near the brewery, so they can pipe the wastewater into the vat.

 “It’s free to us, which is great, and it helps the brewery,” said Brown. “They’re trying to be as green as possible.”

Mycodev expects it will be able to produce 1.2 metric tonnes of chitosan per year at the outset, valued at $500,000 to $1.5 million, depending on the grade and use. The fungal chitosan is medium quality and can be refined to produce a higher-end product.

Brown has been financing the project so far through the National Research Council’s Industrial Research Assistance Program. He was able to pitch to several potential investors last month at a Mentor Minutes competition at the Pond-Deshpande Centre at the University of New Brunswick, and walked away with the $500 first prize. He’s now continuing his fundraising with a target of $500,000.

 “It’s not very much compared to some of the other biotech companies,” he said. “And it’s not a typical biotech company where you’re waiting three to 10 years for your cash flow to become positive. We could be cash-positive quickly, possibly within … three years.”

Setting the Course at Digital NS

When I asked Ulrike Bahr-Gedalia what her three priorities will be as the new CEO of Digital Nova Scotia, she paused and answered: attracting talent, bringing women into ITC, and technical education.

Then she added advocacy for digital industries.

She looked down the list I’d jotted down, laughed and said, “I guess that’s four, isn’t it?”

That one episode from our interview Thursday gives some idea of the energy and ambition of the first full-time CEO of the association for IT industries in Nova Scotia. It also should shed some light on the magnitude of the task before her.

Digital Nova Scotia announced last month that it had hired Bahr-Gedalia as its President and CEO, landing a dynamo who speaks six languages, has worked in large corporations and startups in several countries, with depth of experience in marketing. She’s even worked in Israel, a country so proficient in tech culture that it’s known as “Startup Nation”. Her resume includes time at the Nova Scotia government and Innovacorp. And she’s female.

The IT industries in the region are on a roll with a rising number of startups and galloping growth of a few stars. But the industry is undergoing growing pains, with a series of inter-related challenges that focus on the need to find key people for specific roles in startups, huge corporations and every company in between.

“The talent shortage applies to everyone and we have to look at it closely,” she said over her morning coffee.

The need for talent – in programing, marketing, international sales, and operations to name a few areas – impacts on all the priorities that Bahr-Gedalia listed above. To attract talent, Bahr-Gedalia (who was born in Germany and moved to Nova Scotia a few years ago with her husband and young family) wants to work with the Immigration Department to encourage qualified people to move to Nova Scotia. And she wants to attract more women into the IT industries, as well as to her own board, which now features two women.

“I want to double the number of women on the board but I don’t just want numbers of women,” she said. “I want women with an IT background in leadership roles.”

The final piece in the talent search is to produce more skilled people in local institutions, and she wants Digital Nova Scotia to work with the proper authorities to improve the IT-related education, starting in grade school. And again, she is working with Canadian Women in Technology, the Girls’ Tech League and others to encourage more girls to pursue tech and computer studies.

Bahr-Gedalia’s mission in collaboration includes working with the New Brunswick Information Technology Council on joint initiatives, and dealing more closely with startups. In less than two months, she has already met with more than 50 stakeholders and brought in a few new Digital Nova Scotia members, bringing the membership to 70. She said plans to focus more on projects than events.

“I’m not doing golf tournaments,” she said. “I want to move away from event-based and move to projects.”

One event she will be involved in is the Digital Nova Scotia Annual Dinner on Wednesday at the Delta Halifax Hotel, which will feature a keynote speech by internet entrepreneur Lane Becker, co-author of Get Lucky: How to Put Planned Serendipity to Work for You and Your Business.

Bahr-Gedalia will also deliver a speech at the dinner, in which she will outline further her plans for Digital Nova Scotia.

Seeets Plans Ontario Expansion in `13

Seeets, the Charlottetown startup that operates a web-based rideshare service in the Maritimes, is setting its sights on an expansion into Ontario later this year after improving its existing service.

Seeets is the operator of Maritime Rideshare, an online marketplace that matches people driving between Maritime cities with people looking for a lift. The service has been in existence for almost a year and a half and its co-founders recently completed the Launch36 accelerator, during which they focused on an expansion strategy and ways to improve the service.

“Throughout Launch36, a lot of what we’ve been doing is thinking about how to proceed,” said Principal Aaron Lewis in an interview. “We have a plan now in terms of how we’re going to grow going forward.”

The journey has not been an easy one. It began when Islanders Scott Gallant and Nathalie Arsenault during a December 2011 bus strike launched a website that allowed people to post either where they needed a lift to or where they were driving. Lewis joined them, the site caught on and they had about 1000 users by last summer. Then they were accepted into Launch36.

Lewis and Arsenault were aware at the time that Gallant was also working on another project, called WP Status, which provides support for people who oversee websites using WordPress. By October, Gallant decided to pursue the new company and left Seeets.

Lewis said that the main problem with Gallant’s departure was the “outside perception” more than real problem with the business, but he and Arsenault focused on the task of improving and expanding their business.

They are now working on such enhancements as improving the experience for the drivers. They’re working on a scheme that would allow the driver to drive on and receive a partial payment if the rider doesn’t show up within 10 minutes of the agreed time.  

To increase registrations, they want to make visitors to their site register before scanning the rides.

Lewis said he and Arsenault now plan to enhance the business in the Maritimes for the next few months. Then they want to move into Ontario, probably in early autumn, which could be one of the most attractive markets in North America. It’s a market with several universities, and students and other young people traveling regularly between the major cities.

He said there is now only one other competitor in Canada, and that is an operation in Quebec. He believes the English Canadian market is open for expansion by Seeets. In fact, the company sees room for expansion through most of North America, with New York being the big prize.

The company is now looking for about $300,000 in investment and has spoken to a few potential investors.

RUMAnalytics Aids eCommerce Sites

When Steve Mallett entered the Launch36 accelerator last autumn, he did so as one of the most experienced entrepreneurs ever to go through the tech development program.

Based in the Saint John suburb of Quispamsis, Mallett is the CEO of RUMAnalytics, a software-as-a-service product that accelerates the speed at which browsers call up e-commerce sites so clients aren’t driven away by slow browsing before the site gets a chance to sell its wares.

It’s the product of a guy who launched his first web enterprise in 1999 — a pure-content site called OSDir.com, which provided news, blogs and discussions on open source and Linux technology. He launched that site before Google became the dominant search engine in the world, which meant it had an incredible volume of traffic because Google implicitly trusts sites that existed before it did.

As a result, OSDir.com built up 50 million pages of content and was once one of the top 4,000 most-viewed sites in the world. Mallett has also been an editor of O’Reilly Media, which publishes books and magazines about technology, and is a co-founder of the Google O’Reilly Open Source Award.

By 2008, the rest of the Internet had progressed and Mallett and his colleague Chris Clarke were looking for something new. They weren’t quite sure what they should turn to.

 “It took us another eight months to discover that what we were really good at was web performance,” said Mallett in an interview. “With 50 million documents on the Internet, we’d become exceptionally good at servicing Google.”

They got the idea for a new project when Mallett attended a conference in Las Vegas last year for people who have bootstrapped Internet companies.

He learned that e-commerce entrepreneurs have a huge problem — far bigger than you might suppose. Small and medium-sized e-commerce sites frequently lose customers because they grow impatient with the time it takes to reach the site and select products. It’s even a problem for mega-sites, which are often the worst offenders. Research has shown that Google itself would lose 20 per cent of its revenue if customers have to wait, on average, another half second to find what they’re looking for, said Mallett.

So they set to work producing RUMAnalytics, which lets e-commerce providers embed a small bit of code in their websites to analyze where the bottlenecks that slow things down are occurring. Once it identifies the problems, the software can correct them and speed up the site.

 “We help e-commerce websites that are typically very slow become a lot faster to emulate the success of Amazon and become very fast,” he said. “Amazon has created the mould of the e-commerce site in that they are incredibly fast as a first priority. Others don’t have the expertise to become fast, so they just try to look good and concentrate on marketing.”

Mallet said a couple of customers have been beta testing the product for about a month, and he’s approaching a few high-profile companies to join the beta program. He expects a full launch in about six months.

RUMAnalytics is trying to raise about $500,000 to $1 million in funding, and Mallett says it has received strong interest, though no commitments as yet.

Wicked Ideas Plans Pilot with Emera

Now that it has signed its first customer and identified its first project, Saint John-based Wicked Ideas, which is devoted to the constructive online debate of controversial issues, is looking for its first group of investors.

The company, which recently graduated from the Launch36 accelerator for start-ups, uses journalism and other content to frame a calm discussion about controversial issues with the goal of understanding them.

Founder and CEO Lisa Hrabluk says Wicked Ideas is looking for $250,000 in funding, which will help it build its website, develop its business, and pay content-providers, which include journalists, graphic designers, photographers, and videographers. “At Wicked Ideas we learn by doing, and so over the next 12 months we’re going to work with our lead customers to test and refine the product,” says Hrabluk.

The company’s first project, sponsored by Halifax-based Emera, will be an online discussion about emerging energy trends and will be held in affiliation with a conference on the subject at Cape Breton University in May. What Wicked Ideas will do, with this and other projects, is assign journalists to research the various issues and present a balanced view of the story. Once the conference begins people at and outside the conference will be invited to participate in online discussions on the topics.

Wicked Ideas will monitor the discussions and ensure that the tone is respectful then will apply sentiment analysis software to help produce a report on the emotive response and conclusion of the debate. “It’s like the externalization of a journalist’s interview,” says Hrabluk, a Saint John-based journalist.

Her test case could prove controversial. Emera is a company that evokes strong emotions in Nova Scotia, with individuals, groups, and political parties angry about the high costs charged by Emera subsidiary Nova Scotia Power Corp. and the perception that Emera’s senior officials are overpaid. There’s even a group called Power to the People that wants the provincial government to buy back Nova Scotia Power, which was privatized in the 1990s.

Hrabluk entered Launch36 last fall with a vague idea and worked with her mentors, T4G VP of innovation David Baxter and University of New Brunswick business professor Daniel Doiron; they discovered there was a demand for an online vehicle to nurture constructive public debate. “Dan and David went beyond having the patience of 10,000 men,” she says. “They listened to me and helped me turn the idea into a business.”

Companies in certain industries need to work on their “social licence.” This term, adopted from the mining industry, suggests that companies need more than regulatory or government approval to carry out their business; they also need the support of society overall. To gain that societal approval, there needs to be wide-ranging discussions in which companies not only explain their plans but also adapt those plans based on what they hear.

 “Wicked Ideas is out to change the ways in which we have conversations around big issues of public policy,” says Hrabluk. “The point of the conversation is to enable people to come together in a respectful way and try to solve these problems together.”

The company is now working on a website that will serve as a dashboard for the conversations. On it, anyone can find content produced by journalists hired by Wicked Ideas or taken from other sources, giving all perspectives of the topic in question. People are invited to read the material and join the discussion. “I’ve identified energy and mining companies as my target market and hope to work with the ones that want to have a different type of conversation with the public,” says Hrabluk.

Xiplinx Bags $500K, Eyes Total of $1M

Xiplinx Technologies, a New Brunswick company that helps manufacturers monitor compliance activities in their production lines, has drawn about $500,000 of funding, and could double that amount by early May.

All in, the company that graduated from the Launch36 accelerator’s first cohort last June is hoping to book about $1 million in equity and non-dilutive funding in its first round, said CEO Brent MacDonald in an interview.

Xiplinx (pronounced Zip-links) allows manufacturers to use hand-held devices to record and analyze in real time what is happening on the factory floor to improve such compliance activities as inspections.

Such companies have a major problem: their plant managers monitor operations with paper-based data, which is cumbersome, lacks meaningful analytics and is not cost-effective.

Xiplinx’s cost-effective technology allows workers on the factory floor to input information using mobile devices, then tabulates and analyzes the information to make sure everything is operating as it should. Then it shares the data throughout the organization, optimizing plant operations.

MacDonald said the company initially hoped to raise about $500,000 and has achieved that goal. The New Brunswick Innovation Foundation has committed $100,000, and various angels in Atlantic Canada are good for about $250,000. The company has also brought in about $150,000 from such programs as the National Research Council’s Industrial Research Assistance Program, which do not dilute the interests of equity investors.

 “We’ve done it, but we had other investors come to us and say they were interested, which gave us a pretty good shot at a million (dollars),” said MacDonald, who first announced the $500,000 target last June. “So we’re keeping the round open until the end of April, possibly until early May.”

He added that almost all the angels are from Atlantic Canada, though there may be an American backer.

MacDonald said that one thing that excited investors was the news the company attracted Joel Vautour, who had been an early employee at Q1 Labs of Fredericton. Vautour joined the company in November as COO and invested in the enterprise, which now has five employees.

Xiplinx has continued to develop the product by increasing its flexibility so it can be used by a range of industries. Its early adopters have mainly been food and beverage manufacturers but MacDonald said the company hopes to roll it out to other segments.

The company is completing beta tests with five early adopters and is in talks with each early adopter about proceeding on to pilot projects. It is also in talks with four major and three medium-sized manufacturers about doing trials.

 “Now it’s a matter of turning the corner with them to go from beta testing and going to full pilot,” said MacDonald. He added the company is proceeding prudently to make sure everything goes smoothly with each client.

Analyze Re Founders Focus on Strength

A year ago, Shivam Rajdev sat in a Halifax restaurant and explained that he and a few colleagues wanted something more exciting in life than their jobs at a reinsurance back-office consultancy.

In the year since, he and some friends have followed a winding path to arrive at their own young company that plays on their experience in the reinsurance business. They have formed Analyze Re, a highly acclaimed company whose software-as-a-service product helps reinsurers assess risk.

Reinsurers insure all or part of a normal insurer’s portfolio of policies, helping them to diversify risk. Reinsurers need analytic systems to assess all the risk within those portfolios. Analyze Re offers such systems over the cloud, providing a much-needed service for firms not large enough to develop them themselves.

 “We’re helping reinsurers to understand where their risk issues are and also to improve their profitability,” said Adrian Bentley, one of the co-founders. “We do it by offering high-end analytics through the cloud.”

The startup has been drawing accolades from a range of support agencies in the region. The team went through the Starting Lean course at Dalhousie University in Halifax, and then was accepted to PropelICT’s Launch36 accelerator. It has also been coached in the NextPhase program.

But the team did not immediately focus on this business and tried other projects before deciding that the world’s 2,500 reinsurance firms constituted the market it knew best. Even when they started a product for reinsurance, they thought the most lucrative clients may be in emerging markets. During their client discovery — the lean startup practice of canvassing customers for feedback before proceeding with a project — they discovered that emerging market clients were not the ideal initial adopters of the service.

In fairly short order, the team settled on targeting the new reinsurance firms being created each year. Until recently, there were about five reinsurers created each year. However, that number has accelerated somewhat in recent years as hedge funds, dissatisfied with the returns in traditional investments, began to open reinsurance units.

Analyze Re can help these young enterprises because its cloud-based service lets reinsurers establish themselves without buying servers or taking on technical personnel.

 “Hedge funds want to be as lean as possible,” said Rajdev.

The company is now looking for about $750,000 in seed financing and hopes to pitch to funds or individuals who specialize in financial services to tap their expertise, networks and bank books.

The team is talking to potential clients about its product and is investigating a future version that can be used on mobile phones and devices. Reinsurers want more flexibility in assessing risk in the pre-underwriting process, said Rajdev, and that is what a mobile version should allow.

FAN, Angels Back Solace Power

Armed with a new round of funding and head of business development, Kris McNeil hopes 2013 will be the year his company Solace Power lands the first customer for its wireless energy technology.

Solace Power was founded in 2007 with the goal of developing a system to deliver electricity without power cords and batteries. In its sixth year, the company has a working prototype and is now looking to license its technology to an end-user, probably in the military equipment space.

 “We’ve got a number of promising discussions on the go,” said president McNeil, ensconced in a meeting area in the Genesis Centre of Memorial University in St. John’s. “We hope to have at least one contract agreement by the end of the year.”

What Solace Power does is deliver electricity through thin air to electrical appliances, equipment or vehicles, doing away with the need for power cords. Some competitors do this through magnetic induction (meaning the electrical device has to be positioned precisely in line with a magnetic coil), but the Solace system does it with an electrical field, allowing more random positioning.

That’s important because if someone were charging, say, an electric car, it would have to be parked in exactly the same spot every time with magnetic induction, but the driver would have a bit more wiggle room with Solace.

The company, which has filed patents in Canada, the U.S. and with the World Patent Office, is exploring several applications. It is now looking most closely at a military application that would allow soldiers in the field to recharge radios, lights and other devices without having to plug them in. Having cables for recharging is just one more thing to weigh soldiers down, which can affect their mobility.

 “We’re looking at licensing a model, so we’re probably looking at licensing it to a company that serves the military,” said McNeil.

With six employees, Solace is about to graduate from the Genesis Centre and move into an office in the St. John’s suburb of Mount Pearl. It has now outgrown its two offices and demo room in the commercialization agency’s offices on the university campus.

The company has been recapitalized with undisclosed equity investments closed recently from the First Angel Network, and existing and new private investors. The company originally raised money from angel investors in 2009.

McNeil said raising money through the angel network fell into place quickly and he was pleased with the deal and contacts he got from the network.

The team is also about to grow with the hiring of Neil Chaulk, previously the vice-president of business development at Verafin, the highly successful St. John’s company that combats money laundering. Chaulk recently spent two years with Verafin, helping to increase revenues severalfold annually.

Before Verafin, he founded ICAN Ltd., a company in the military-paramilitary field that he ran for about 15 years before selling out to CNS Systems of Sweden. McNeil said that experience gave Chaulk “extensive experience and contacts in that market, which is already helping us make inroads for Solace much faster than we would have been able to do without him.”

Several St. John’s business people I spoke with last week suggested the Chaulk hiring is one reason Solace is one to watch.

GrowthWorks, CVCA Protest Cuts

Joining venture capital funds across the country, GrowthWorks Atlantic is protesting the federal government’s decision to phase out funding for Labour-Sponsored Venture Capital Corporations, saying it will hurt entrepreneurship in the outlying parts of the country.

GrowthWorks Atlantic is a Halifax-based fund that has $27 million under management, including $21 million invested in 19 Atlantic Canadian companies. It has raised money over several years by attracting funds from retail investors who are incentivized by federal and provincial tax credits.

However, the 2013 federal budget included a proposal to phase out the federal labour-sponsored VC  tax credit by 2017.

“We weren’t consulted at all on this even though we’ve been heavily involved in talks [with the federal government] on several files,” said GrowthWorks Atlantic CEO Tom Hayes on Wednesday. “We don’t think they fully understand the impact this will have, especially on the Quebec funds.”

The federal credit will remain at 15% for the next two RRSP seasons and then begin to be phased out.  The federal government will consult with stakeholders on potential changes until May 31.

Hayes said the pending cuts are inconsistent with “some of the good of the good things the federal government is doing” to channel capital to entrepreneurs, such as the $400 million it has committed to venture capital funds.

He said it will be business as usual for GrowthWorks Atlantic until the fund has time to assess the changes.  Hayes hopes the VC industry will be able to meet with the government and figure out some way to soften the blow.

Canada’s Venture Capital and Private Equity Association earlier Wednesday protested the move, saying the labour-sponsored funds are particularly active in regions outside the main centres of activity.

“We are puzzled at the Federal Government’s actions on tax credits for LSVCCs,” said association President Peter van der Velden in a statement. “It is the CVCA’s view that this budget measure poses a severe risk of constricting the supply of venture capital.”

GrowthWorks Atlantic has been active lately, joining in the investment in IntroHive of Fredericton and reinvesting in 2^nd Act Innovations of Halifax. Hayes said the fund is looking at a few follow-on investments and that Peter Clark, Vice-President Investments, is looking at funding some new companies in New Brunswick. 

Adeptio Story in Progress Magazine

Last June, after the Launch36 DemoDay in Dieppe, N.B., I met Scott MacIntosh, the CEO of SwiftRadius, and one of his employees, Chad Griffin, who was about to spin off a company called Adeptio from the software consultancy.

I didn't quite catch the significance of what they were telling me, but in subsequent interviews I learned that there is in essence an incubator for scalable businesses operating within Fredericton-based SwiftRadius.This month, in Progress Magazine, I take a look at SwiftRadius and other tech consultancies that are forming units to turn out scalable products. The consultancies are a real force in the ecosystem that often go unnoticed.

It's a great issue of Progress, featuring a few old friends. Quentin Casey, who's recently been doing some great work in Maclean's, has four stories in the magazine, including a profile of Gregg Curwin's Truleaf Sustainable Agriculture.

WP Status Lands Paying Customers

Over lunch in Charlottetown one day last summer, Scott Gallant and Jordan Patterson were grousing about one of the pains in their industry, and it resulted in the creation of their company, WP Status.

The company provides support for people who oversee websites using WordPress, and it was one of the eight companies that just graduated from the Launch36 accelerator. How it got to this stage is a great example of how a good accelerator will adapt to allow companies to change, break apart and come together.

Gallant is seasoned at web-design while Patterson’s strength is more at the back-end, such as writing code for websites. They work mainly with sites custom built on WordPress, and they understood the problems with using such sites.

People in this line of work worry about the sites being hacked, about having to back them up, and about the need for continuous updates to accommodate the evolution of the infrastructure.

“Often what happens is there is a conflict on the site because everything is so modular,” said Gallant in an interview, meaning parts of a website can work smoothly with updates and others are subject to old technology. “A lot of websites simply don’t get updated because nobody wants to deal with it.”

And so Gallant and Patterson created WP Status and its product, Guinea Pig. Guinea Pig is a tool that lets website developers using WordPress carry out all these tasks quickly and easily. They have about 150 site developers using WP Status around the world. The feedback so far is positive. In fact, 10 percent of the users that participated in the company’s beta-test are now paying customers. 

"Today I got to test it for the first time and it worked very well,” said one user, Jakob Wikstrom. “This is exactly what I have been looking for and I am sure it is going to save a lot of time and worries for me and our company.”

When the pair began working on the project, Gallant was already working with another startup called Maritime Rideshare, which lines up people needing rides between cities with people who have room in their car. Maritime Rideshare (now called Seeets) was accepted into Launch36 and learned the process of lean startups, including client discovery. Following the lean startup principals, Gallant and Patterson sent out emails to about 50 people they knew who used WordPress to solicit feedback on their idea. Almost half agreed to be interviewed.

When the Launch36 teams met lean startup guru Ash Maurya in Halifax in the autumn, Gallant spent much of the time running to the hall to interview people about the new product. The feedback he got was good. People liked the idea and wanted to be kept in the loop, possibly to test the product.

By late in the year, Gallant wanted to work on WP Status, and was able to do so and remain in Launch36. The accelerator began the cohort with one company from P.E.I. and ended up with two.

WP Status launched Guinea Pig to the public last week and will start its marketing campaign this week. The company is hoping to raise about $250,000 in financing, and would use the money to accelerate its marketing efforts. 

CEED Launches Mentorship Program

The Centre for Entrepreneurship Education and Development is looking for a few good entrepreneurs. Actually, it has 15 really good entrepreneurs and is looking for another 15 up-and-comers to learn from them.

CEED has launched a new Entrepreneurs in Residence program, in which 15 leading Nova Scotian entrepreneurs  will give one-on-one instruction to less experienced counterparts.

“CEED is 20 years old this year and one of the core principals has always centred around mentoring,” said President and CEO Heather Spidell.  “We began to wonder, how could we formalize it a bit? How can we link former alumni – seasoned entrepreneurs who’ve been in the trenches -- with others and get them to share their experience?”

Working with a few of the alumni, CEED came up with the Entrepreneur in Residence program, modeling it loosely on similar programs at universities. They chose 15 mentors, and now they’re looking for entrepreneurs to apply to work one-one-one with the veterans. Spidell said each entrant will have a chance to pitch to all the mentors on April 22 or May 22, and each mentor will pick a company to work with. Each pair will work together over a three-month period, and can carry on the relationship outside the auspices of CEED afterward if they choose.

Spidell said the mentors have the option of investing in the companies but are not required to do so. In the autumn, they will review the program and hope to repeat it again, especially in the more rural areas.

Interested parties can find an application under CEED Community on www.ceed.ca, and must apply by April 12. 

The mentors are: Jay Aird, CTO, Karma Gaming; Holly Bond, National Sales Director, Bullfrog Power; Tim Burke, CEO, 26ones; John Wesley Chisholm,  President, Arcadia Entertainment; Rachel Dodds, Founder, Sexy Girl Inc.; Lisa Drader-Murphy,  President, Turbine; Tom Hickey, businessman named Entrepreneur of the Year by E&Y and BDC; Ron Lovett, Founder, Source Security & Investigations; Brian Lowe, Co-Founder, First Angel Network; Bill McMullin, Founder, ViewPoint.ca; Robert Orr, Co-Founder and CEO, Slanmhor Pharmaceutical Inc.;  Tasha Richard, CEO, momcafé Network Inc.; Milan Vrekic, Co-Founder TitanFile; Shawn Wilkie, President,  Robotnik.com; Robert Zed, President, Zed Group.

Bonfire’s Video of Launch36 DemoDay

Allan Gates of Bonfire Stories has produced a video of the Launch36 DemoDay last week, which you can find here.

It certainly captures the excitement I remember from the first DemoDay last June. Wish I'd been there.

Shopulse Steals the Launch36 Show

Though he has yet to graduate from high school, Raphael Paulin-Daigle has no qualms discussing the global potential of his fledgling business, Shopulse. In fact, he discussed it with hundreds of tech specialists last week at the Launch36 Demo Day, and got a rousing applause.

The company is developing a retail site where small boutiques can sell surplus inventory online, saving the merchants time and not tying up prime retail space with stuff shopkeepers want to get rid of. He has another company as well, Idealinput, which helps businesses get marketing consultants to give feedback on their website.

Not bad for a 16-year-old who has yet to finish Grade 11 at Ecole Mathieu-Martin in Moncton.

“There are lots of shop-sell sites out there but none that help small businesses get rid of their overstock,” said Paulin-Daigle, his English betraying a slight Acadian accent. “We’re helping them solve that inventory problem.”

All small boutiques have a problem with overstock — the excess product that customers just aren’t buying. Usually, the merchant has to put it on sale, taking the time to move it to one of the best parts of the store and make a special sign. It’s cumbersome and costly.

What Shopulse does is give merchants an online platform to sell this excess stock at a discount. They don’t have to shift inventory around the store, and they should be able to reach a larger audience than people who physically visit their store. And by using flash sales (those with limited time), consumers are encouraged to buy promptly.

 “I’ve learned that the main reason why boutiques don’t sell online is because they just don’t have the time and money to do so,” said Paulin-Daigle. “So I’m focusing on saving them time by quickly putting the merchandise online.”

The shop will give consumers a customized shopping experience, so they will only see items that match their preferences, size, and style, said Paulin-Daigle.

So is he confident he can take the service beyond the Moncton region?

 “There are several hundred thousand specialized boutiques that could be tapped. I want to take it worldwide.”

The story of how Paulin-Daigle got to the point where he is talking about a global enterprise is quite interesting in itself. Last autumn, he already was operating Idealinput and heard that the Launch36 accelerator (which helps to nurture tech startups) was looking for candidates for its next cohort. So he went along to the pitching session.

He didn’t get in, but executive director Trevor MacAusland made him an offer: given his obvious enthusiasm, Paulin-Daigle could join in the Launch36 events and learn from all the lectures and discussions. So he attended all the weekly "fireside chats" and worked at the same tasks as the other teams. MacAusland has helped him as he moved forward on the project.

In November, he had the idea for Shopulse and canvassed enough boutique owners so that he could craft a product he believes will gain acceptance in the market.

He presented with the other Launch36 companies at Demo Day last week, and the response was overwhelming. One veteran venture capital investor who saw Paulin-Daigle’s pitch said he’s not sure he’d invest in Shopulse, but he will continue to watch Paulin-Daigle because he has so much promise as an entrepreneur.

Paulin-Daigle believes he will need about $500,000 in funding to launch the company, largely because he needs a developer to write code for him. He plans to keep working on Shopulse as he wends his way through school.

Entertainment for Tepid Sports Fans

Sitting in the audience at the Launch36 DemoDay last June, Marc Gallant turned to a friend and said, “I got to get me some of that.”

When the startup accelerator held its most recent DemoDay last week, Gallant was on stage, presenting his company Crossing Mobile, a phone app that allows the less-than-fanatical sports enthusiast to enjoy a sporting event. The excitement he found in the original DemoDay propelled him into going through the process himself.

“We realize there is a large family spend to go to a sporting event and not everyone wants to go,” said Gallant, the company’s CEO. “So we’ve come up with a product that helps out the people who might not want to be at the event. It helps the whole family enjoy it.”

Gallant and his CTO Jody Cairns initially set out to devise an app that would simply bring people together – sort of a solution for the alienation that comes from people texting in the middle of a conversation. As they worked on the business plan and talked to potential customers, they focused on sporting events and the need to help everyone enjoy the show.

What they came up with was a game played on a mobile phone that is based on the sports game people are watching. “You play the game on your phone but it tracks the game on the floor so you pay more attention,” said Gallant, whose day job is director of professional services at a mid-sized consulting company.

Its flagship product is Sports Bingo, played on a smart phone. People attending a game log in and are given an electronic Bingo card, and the numbers on the card match the players’ numbers on the floor, rink or field. Whenever a player scores, his or her number is called out. If you get three numbers in a row, you win a prize.

After the announcer in the arena tells everyone there’s a winner, the system runs three minutes of paid advertising until the Bingo player is issued a new card.  

“You’re playing Bingo on your phone, and three seats away there’s someone who is also playing Bingo, but he’s a total stranger,” said Gallant. “He knows when you’ve won. Now that’s a shared experience.”

Crossing Mobile now has a beta product which it will demo at a Moncton Wildcats game this month. Gallant has already had random individuals test the product at sports events and the feedback has been positive.

“Families 100 percent love it; they think it’s great,” said Gallant. “Real sports fans, they might be interested but they need a decent prize. One thing that surprised me is that young couples love it.”

Gallant and Cairns figure they need about $300,000 in investment to launch the product. They do the coding themselves, and will continue to give the app an extra bit of polish before the launch. They need help on the marketing side of the business.

They’re approaching sports team owners to garner their interest, and hope that the teams will help bring in sponsors that could end up advertising through the app. In the near term, Crossing Mobile will target the teams of the Quebec Major Junior Hockey League, then move on to other semi-pro and college sports in the region. Gallant hopes to be generating interest in larger markets before the end of the year.

“I want to do cricket, and rugby, and soccer,” he said. “I want this product to give me and the team a chance to travel the world, have a great ride and make a return for my investors.”

StartupNL: 100 Members in 4 Months

When Trevor Hickey began his startup in his home town of St. John’s last year, he often wished he had remained in Vancouver, or another city where there was a structured startup community and shared office facilities.

But now he’s found that such a Newfoundland-based community does exist, if only in its infancy, and there will soon be a shared office facility called Common Ground, where which startups can work in the downtown core.

“I came home and found that there wasn’t that infrastructure,” said Hickey, whose company FundUni is developing a crowdfunding site for university tuitions. “I thought maybe I should go where that infrastructure does exist. Finding that it is here has changed everything.”

Hickey has joined StartupNL, a group that began in St. John’s in December as a meeting place for the province’s rapidly growing startup community.

He’s also interested in becoming a tenant at Common Ground, a shared office space that will soon open in downtown St. John’s to provide a working space and communal environment for the creative and tech communities in the city.

StartupNL was started late last year by a group of founders and programmers who wanted to get together regularly and share advice and support, and just have some fun. It has held three meetings and in extremely short order come up with about 100 members.  The meetings have been the customary blend of social get-togethers with special speakers focusing on a specific subject. The great importance of these meetings is they give people a chance to understand who is doing what in the community and to discuss common problems.

“The supposed hurdle for startups in an area like Newfoundland is community –knowing who is out there,” said Steve Piccott, one of the founders of the group. “If I’m a backend programmer and need to find someone who’s an expert in the frontend, how do we bring them together?”

As another co-founder, Roger Power, points out, this is not a new idea. Indeed such groups exist in several cities across the region. What’s interesting about the Newfoundland group is that it drew so many members so quickly, obviously meeting a pent-up need.

The group will evolve, and one thing that they want to bring into their meetings is quick pitches by new startups at each meeting to help find talent or co-founders interested in developing an idea. Newfoundland has yet to host a startup weekend, and the members of StartupNL look forward to hosting one before too long.

But what the community is really looking forward to is the establishment of Common Ground, a shared office space that will house not only startups but also creative and manufacturing people. Founder Chris Gardner has signed a lease for a space on Waterford Bridge Road – a real coup given the tight market for commercial space in booming St. John’s.

The non-profit organization will take over its lease on April 1 and will then renovate the space, so it will likely be ready for tenancy in May or June. The space is large enough not just to handle tech startups but also artists working on larger products, or small companies doing light manufacturing. “There could be upward of 50 people at the max,” said Gardner in a phone interview from El Salvador, where he was vacationing.

What this adds up to is a changing startup scene on the rock. The Genesis Centre, Memorial University’s commercialization agency, has long served as the focal point of developing young companies in the city. It will continue to be an integral part of the community but a more nuanced community is developing very quickly, and it’s being led by entrepreneurs and techies. It’s a healthy development for the whole region.  

Packed House at Startup Weekend NB

Hot Spot Parking, an app to help cure the pain of downtown parking, won Startup Weekend New Brunswick in Fredericton yesterday, but I’m not sure that was the biggest news from the event.

The big story really took place Friday evening, when about 70 people entered the event, cramming into a room at the Pond Deshpande Centre at the University of New Brunswick. It wasn’t just students but people from every strata of the New Brunswick startup universe who showed up.

“The event was filled with an amazing energy with numerous people from the community coming in to help,” said Suhaim Abdussamad, who organized the event along with his Startup Kitchen partner Robert Foley. “Coaches from numerous local businesses and startups helped out. Even local councilors dropped by to give feedback on some ideas.”

Startup Weekend is an international organization that oversees events around the world in which people assemble on a Friday evening, share ideas, divide into teams and see who can come up with the best startup in 54 hours. The head office in Seattle dispatches a facilitator to assist with the event, and in this case it was Sally Ng, a veteran of the Moncton and Fredericton tech scenes. Startup Weekend NB was organized by Startup Kitchen, Tech South East and the Pond Deshpande Centre.

People pitched 26 ideas on Friday night, of which 11 were chosen.  And throughout the weekend you could feel the energy and excitement of the process just from reading the tweets coming out of the room. Nicole LeBlanc, the Finance Director at New Brunswick Innovation Foundation, was pleased with the number of women who attended and joined the teams. The organizers also observed Earth Day and everyone coded in the dark for an hour Saturday night.

The winner was Hot Spot Parking, which is an app that can allow people (car owners, merchants or others) to pay parking fees online to ease parking headaches in downtown areas. For example, a merchant in the middle of a sale can pay a customer’s parking online rather than losing the sale because the customer has to go feed the metre.  It was the idea of Phillip Curley, a third-year UNB civil engineering student, who received offers for funding from two angels over the weekend.

The second prize went to A.L.I.E., which stands for Artificial Lifestyle Intervention Expert. The company produces software that encourages energetic changes to an individual’s lifestyle, such as grocery-buying habits and other routines. It was the brainchild of Thom Lamb, the CEO and Head Coach at Elite Experience of Fredericton.

MindfulVIBE, an educational project initiated by Chelsea Wilson, captured the third prize.

Startup Weekend capped off the successful  East Coast Startup Week, which also featured the NBIF’s Breakthru Dinner and the Launch36 DemoDay.

MyFarmers’Market Wins Startup Sunday

MyFarmers’Market, a website and app that allow online purchases of organic food, on Thursday night won the Halifax Entrepreneurship Expo’s Startup Sunday, a $10,000 pitch competition for teams of Saint Mary’s University students and entrepreneurs.

The teams, each consisting of two business students and one entrepreneur, were given a market segment for their venture on March 10, and had only one day to create a business idea and plan.

MyFarmers’Market proposed a website and phone app service that would allow people to buy and sell organic food online. Farmers would still sell directly to shoppers, but would avoid traveling to markets, which are sometimes just too far.

“We want to think about a set of core values,” said Mandhir Singh, a Saint Mary’s MBA student, who headed the team. “We want a sustainable business that can grow in the future.”

The prize money will go towards developing the website and mobile app, he said.

The runners up were DomNom, a freeware gaming app, and Communications, who pitched a projection advertisement company that would use high-powered projectors, rather than billboards, for outdoor ad space.

“I was thinking they were all pretty close,” said Lori Cox, a judge for the event and CEO of Red Dragon Marketing. “It was really their presentation that did it for [MyFarmers’Market] --- they had clear financials. You really got a sense that there was business there in fruition.”

This was the second year for Startup Sunday, and the fourth for the Expo itself. 

The Expo this year featured “mastermind groups” --- roundtable discussions in which participants work as a team to tackle real-life business problems. The event was focused more on interaction than speeches, something event organizer Phil Calvert said he hopes to continue.

“We want to really work on mentor relationships, so we have mentors and mentees learning from each other in business and helping their businesses grow together,” said Calvert. “We’re going to take that even further next year.”

The Expo concluded with a dinner speech by Arlene Dickinson, CEO of Venture Communications and a famed dragon from the show Dragons’ Den. The dinner drew nearly 500 guests.  A “dragon” has been invited to speak each year at the closing dinner, formerly called Dine with a Dragon. Due to the noted lack of remaining dragons, however, it is now called Dine with a Legend. 

UpMyGame Ups Its Game at Launch36

Canadian triathlete Simon Whitfield tried a new piece of technology as he prepared for the 2012 Olympics in London — a video app from a Halifax startup called UpMyGame.

Training at his home in Victoria, B.C., Whitfield used UpMyGame to videotape his training and send it to his coach, Jonty Skinner, who works out of Colorado Springs. Skinner was able to review the video, make notes and diagrams on it, and discuss it with Whitfield, even though they were thousands of kilometres apart.

Skinner’s Wikipedia entry now describes him as an UpMyGame coach, meaning that he is now a high-performance coach who uses the product. It seems he’s about to be joined by others.

UpMyGame founder and CEO David Keefe has been methodically developing UpMyGame for about four years now, aiming to produce the world’s best video tool for coaches. He’s been mentored in some of the leading instruction groups in the region, including the NextPhase seminar and the Launch36 accelerator.

Keefe wants the iOS-based app to be simple to use and affordable, and to remove all the inconvenience from the process of filming athletes. And even though he is only now launching UpMyGame, he has already signed up several clients in the United Kingdom, New York, San Francisco, and Halifax that have networks comprising thousands of athletes.

 “I believe my product is the best product out there to shoot, review and share (video),” said Keefe in a recent interview. “I already have licensing deals in place that will have this in front of tens of thousands of athletes within months.”

Keefe knows that UpMyGame is not alone in this field, as there are other sports video apps, including Ubersense and Coach’s Eye. But he said that what sets UpMyGame apart is its ease of use and versatility.

Above all else, coaches want a device that doesn’t interfere with the flow of their training sessions, so UpMyGame is designed to allow the coach to point the device, shoot and instantly review it with the athlete. Or athletes can have someone film their workout or game, then share it with a coach that is a great distance away.

The coach can annotate the video with notes, or draw on it to illustrate how the athlete should alter his style. The program allows for side-by-side screens, so athletes can view their current performance with what they were doing a week or a month earlier, or compare their style to that of the best in the world.

UpMyGame is waiting for the product to be approved for sale by the Apple App Store, which will likely increase its sales. In the meantime, he has been filling out his team with hires and by bringing in colleagues from Launch36. When one of the teams decided to put its efforts on hold, Keefe took on three of its members, helping him to broaden the talent base of the company.

Keefe said he is not raising money now, though that does not mean he will not decide to do so as he grows the company.

ECSW: Launch36 at the Halfway Point

Trevor MacAusland is about half-way to his goal.

In the autumn of 2011, the Executive Director of PropelICT announced the tech advocacy group in New Brunswick would start an accelerator called Launch36 with the goal of nurturing 36 companies over three years. Last night in Fredericton, seven teams pitched to a packed auditorium and successfully completed the program. Added to the 10 teams that completed the program in June last year, Launch36 has now debuted 17 companies, meaning MacAusland is just about half way to his goal.

Of course he’s way ahead of schedule, as he’s at the half way point after only two cohorts and originally expected it would take three cohorts to reach this point. Another reason he and his board have overachieved is that the makeup of the accelerator is far more regional than he could have hoped for. And the story of how the teams in the most recent cohort kept changing shows the flexibility and inventiveness of the program.

Here’s a quick glance at the seven debutants from last night, which we’ll profile in the coming days:

• Analyze Re, Halifax, is developing cloud-based risk-assessment software for the reinsurance industry.
• Crossing Mobile, Saint John, is devising games that people can play on smart phones to enhance their experience at sports events.
• RUMAnalyltics helps ecommerce websites become fast and efficient, leading to greater conversions and increased sales.
• Seeets, Charlottetown, operates Maritime Rideshare, an online platform to help people arrange rides with one another between cities. It hopes to expand across Canada.
• UpMyGame, Halifax, has come up with an app for iOS-based phones and devices that helps coaches video their athletes and use the video as a coaching tool.
• Wicked Ideas, Saint John, will soon launch an online platform for public debate in which journalists research a controversial subject and invite the public to discuss it.
• WP Status, Charlottetown, is developing a dashboard to help people who oversee websites on WordPress back up, update and manage the sites.

There was also an observer in the latest cohort who also pitched last night – Raphael Paulin-Daigle is a 16-year-old high school student who also pitched his company Shopulse, which helps small retailers sell off excess inventory over the internet. After his pitch, Thomas Rankin of Innovacorp tweeted “Best. Pitch. Ever.”

What’s interesting is that the graduation list never quite matches the list of teams at the beginning of each cohort. One team went through the first cohort but declined to pitch for various reasons. And WP Status Co-Founder Scott Gallant actually started the cohort as part of the Seeets team. Early in the program he realized WP Status, which he was already working on, had potential and he ran with it as a different company.

Also in the most recent cohort, a team called Execute Skate was designing a piece of hardware that would provide analytics for skateboarders. The four entrepreneurs had previously gone through the Starting Lean program at Dalhousie University and learned that they worked well together, and had complementary skills. When they discovered possible roadblocks in October, team member John Gleeson stood before his classmates and declared that the four had discovered they were a great team. Even if things didn’t work out with their skateboarding device, he said, they would endeavor to continue working together because of the rapport they’d developed.

One night in January, driving back to Halifax from a Launch36 meeting in Moncton, they all agreed the problems facing Execute Skate were insurmountable for the time being, so the team would withdraw from Launch36.

Two interesting things happened. First, no one thought of the Execute withdrawal as a failure – not a hint of it. It’s part of the lean startup ethos that entrepreneurs who discover problems early on are triumphant because they avoided a huge waste of time and money. Gleeson and his teammates are still revered by their colleagues.

The second thing that happened is that Gleeson and two other Execute members, Connor Bell and Nina Nedic, joined the UpMyGame team to provide Founder David Keefe with some of the talent he needed to drive his company forward.

So is MacAusland halfway through his mandate, or maybe more than half way. If you add in the team the declined to pitch in the first cohort (and it’s still working on its project), Execute and Shopulse, a total of 20 teams have gone through Launch36 in 16 months.

And all of these teams are still working in the region in one form or another. Ponder the significance of this for a moment: almost 20 high growth companies are now at work because of this program. Not all will succeed, but some like LeadSift of Halifax are generating buzz across the country. I can’t think of any other economic development program that can boast such success so quickly with so little public money.

TotalPave Wins NBIF’s Breakthru Prize

TotalPave, a Fredericton startup founded by brothers Drew and Coady Cameron, has won the New Brunswick Innovation Foundation’s 2013 Breakthru business plan competition for its system to help cities and towns assess road conditions.

The company, whose smartphone app and analytics system help municipalities determine which roads need repairs, walked away with the top prize of $192,000, consisting of $160,000 in cash and $32,000 in professional services.

The Breakthru contest is held every second year to find the best business plan in New Brunswick. The foundation’s chief executive, Calvin Milbury, said the contest targets business plans because it wants to boost young companies and help get entrepreneurs started.

The first runner-up prize, worth $137,000 in cash and services, went to Store It Squirrel, a Saint John company that helps link people looking for short-term room for storage with householders who want to rent out space.

The $77,000 second runner-up prize went to Black Magic, also of Fredericton. Black Magic has manufactured a two-step, non-toxic solution with no abrasives that helps people wash any oil-based substance, even dried paint, from their skin.

TotalPave solves the problem of using expensive equipment in a special van to assess whether roads need repair. The solution is an app for a smartphone strapped to standard municipal vehicles; the app records road conditions as these cars and trucks drive around on their customary routes. The data is relayed to a central facility that automatically assesses it and reports on which roads most need repair.

Getting such data is critical because once a roadway starts to break down, it will do so quickly and dramatically. If a municipality detects the deterioration at the right time, it can make minor, inexpensive repairs promptly rather than paying a lot of money later for repaving.

The Cameron brothers, both students at the University of New Brunswick, are on a roll with their project, which last year won a national Nicol Entrepreneurial Award for new technology coming from a Canadian university.

Black Magic was also the winner of the CBC Viewers’ Choice award, selected by people who watch CBC in New Brunswick, where profiles of each competing team were shown. The winner of the Viewers’ Choice award will get a chance to pitch their product on CBC’s Dragons’ Den in Toronto.

In all, 47 teams sent in a one-minute video pitch last fall to enter the Breakthru competition. The winner of the best video pitch award was Jean-Philippe Olivier of Produits Pilou, which proposes erecting nets on beaches to catch red jellyfish.

The other two finalists were the RTV Group, which is developing predictive analytics software that can help police identify people who are likely to drink and drive, and CeteX, which is designing a system to help businesses clean up waste water from their factories without a massive investment in infrastructure.

Crowdfunding for University Tuitions

Trevor Hickey believes crowdfunding can solve what is becoming a huge problem for young adults -- student debt.

Hickey is on the verge of launching FundUni, a St. John's -based startup that aims to help students raise money online for their tuition, and let people with money feel they contributed to the future of a young person.

"We want to tackle student debt and we want to do it in a unique way, by connecting students with their communities," said Hickey sitting in a coffee house in St. John's on Wednesday.

Hickey is a graduate of Memorial University of Newfoundland, and his own experience has taught him how much of a burden student debt can be. He's long been interested in startups, and decided about six or seven months ago to start a company that will help students fund their tuition.

FundUni allows students to hold campaigns online that will allow people contribute to their tuition. Similar to other crowdfunding sites, students post a target that that  they want to raise to cover their tuition costs along with a video or written description of their story. The idea is to make people understand why they should help in the funding campaign. They also post a list of rewards that funders will get if they make a donation. These can range from help shoveling their driveway to a piece of artwork to a service the student is training for.

FundUni differs from a lot of other crowdfunding sites in that the students do not have to hit their targets to receive the total funds committed. Hickey said some sites make participants hit their targets as an incentive to work on their campaigns, but he believes students faced with mounting debt already are incentivized enough to raise money.

Hickey now has a test site and is using it to crowdfund for his business. He's selling cupcakes and postcards rather than equity in the company, so it is not a classic crowdfunding operation. His target is $11,300 and so far he's raised about $1800.

He is now trying to line up about five to 10 students in St. John's to do trial campaigns. He's looking for young people with a compelling story, and he wants to work with them throughout their campaigns to make sure as many of them as possible are successful. He expects those that show the most success will be those with the most compelling stories, such as young people who have overcome obstacles to gain an education.

His target is to have students from across Canada using the site within one year of the full-service launch. He hopes to travel across the country in the autumn, spreading word on campuses about the program.

Hickey will soon beging to court investors who might be interested in backing the project. His main operational goal in the near term is to find a Chief Technology Officer.  

ECSW: RTV Seeks $500,000 in Funding

RTV Group, the Saint John startup producing predictive analytics software to help fight drunk driving, is looking for about a half-million dollars in financing to get its initial product out the door.

It could take a big step in that direction tonight if it wins the New Brunswick Innovation Foundation’s Breakthru competition, which boasts a first prize of $192,000. If not, it hopes to raise the money by other means.

“Our target between now and the end of the year is to do about $500,000, which would get us to about four paid customers and one or two trials,” said Stephen Goddard, a Co-Founder of the company.

The fledgling company is one of five finalists for the Breakthru competition, the winner of which will be announced that the Breakthru Dinner in Fredericton, part of the city’s East Coast Startup Week.

RTV, which stands for Repeat Target Vehicles, is developing predictive analytics software that can identify for police departments people who are likely to drink and drive. The idea is to let them (and their families) know they have been identified so they will refrain from driving drunk.

The company is the brainchild of James Stewart, a former crime analyst now completing a PhD in information technology at University of New Brunswick in Saint John.  

Each RTV investigation begins with a call to 911, in which a citizen reports that he or she believes someone is driving drunk and gives the license plate number.  Using police databanks, the system looks up the owner of the car and runs checks on them, checking whether they have a history of anti-social behavior or a criminal record.

What few people understand is that most drunk drivers are repeat offenders, and that they are often associated with other crimes or misdemeanors. If the RTV system ticks enough boxes next to a suspect, it’s an indication he or she will likely drive drunk again. By warning individuals they are on the police radar, they will hopefully choose not to drive drunk, understanding the risk of being caught is too great.

The RTV founders are frequently asked (I asked it myself) if their software “profiles” people and could violate their civil rights, and their answer is a resounding no. The process begins with a 911 call, which triggers a police investigation – as should happen any time a citizen reports a possible crime. In the investigation, the police use the best tools they have on hand, which in this case is predictive analytics software. They don’t profile anyone but issue a warning in order to discourage a crime. 

Goddard said the company has had discussions with several possible users, and has contacted other groups that may be interested in supporting the product because part of their mission is battling drunk driving.  Even if police departments say they don’t have the money to pay for the technology, RTV is hoping these groups can help to fund the early adoption of the software.

The company needs some startup funds because it needs to write the code for the software. Not all of the $500,000 to launch the project needs to come from an equity investment as the company could find some funding in government programs. So one of the top three places in Breakthru would help substantially.

“If we don’t win we still hope to raise the money,” said Goddard, “because we think that this is something that should be in the police’s hands to combat drunk driving.”