I spent some time last week in London (UK) where I had the opportunity to spend a day at Seedcamp and get involved in mentoring some of Europe’s up and coming web and wireless businesses.

There were 20 companies and about 80 mentors !

Mentors were split into groups of eight and each group spent about 30 mins each with 8 of the 20 companies. The feedback on the event from the mentors and the entrepreneurs was really positive and I personally can’t wait to do it again.

Seedcamp runs a number of mini-Seedcamps in 6 European cities and then hosts "the full monty" once a year (to date this has been held in London).This is structually different to the other "feed capital" programs and may work well in Canada.

Interestingly the type of mentors invited were very broad. Of course there were investors and experienced entrepreneurs, but there were also a number of people from industry and some recent grads from the Seedcamp program. I think that this only adds support to the feedback that comes from all the feed capital programs, showing that knowledge transfer between smart founders plays as much a role as knowledge gained from mentors / advisors.

I’ve now been to a Seedcamp event, a Y-Combinator event and Alan MacIntosh (one of MSU’s other Partners) has also been involved in Launch Box Digital. I can honestly say that the raw quality of entrepreneurs and ideas that we see in Montreal (and this also applies to the limited number of entrepreneurs I’ve met in other parts of Canada) are as good as anywhere else; but our entrepreneurs must continually compete and co-operate in order to push themselves harder (ie smarter).

Whenever possible MSU tries to get the Founders of its portfolio companies to get together and engage in some co-opetition. We will continue to do more of this and we are now also looking to find ways in which we can get other funded and "to-be-funded" entrepreneurs in Canada involved in these sessions.

Look out for some upcoming MSU out-reach events!

Here are some more of Y-Combinator’s Summer 2008 intake and where appropriate a mention of Montreal companies I am aware of that are competitive or complimentary.

Youlicit

Youlicit automatically generate simple, link only web sites that are supposed to be at least as relevant as those generated by human editors – time will tell if the automation as good as a real person produces but it should generate them plenty of free organic traffic that is very monetizable. Do people want this ? I’m not sure but it may well be one of the more commercially viable companies presenting.

Job Alchemist

As the name would suggest, these guys are in the online recruitment space. They have two offerings that are somewhat related . The first is a series of niche job boards and some white label software to roll out more job boards. The second is a syndicated distribution network for jobs that will try and place job adverts on blogs, forums, networks etc. They say they "want to fix on-line recruitment " – but, whilst I admit they have have done some great work in a short time, I don’t think they are going to fix anything – they are just adding to the current melting pot of offerings. (We are investors in Standout Jobs .)

Slinkset

Slinkset is another company that is providing software to enable not programmers to launch a white label version of a well know offering – in this case you can create your own version of  Reddit /Digg (social news site) and brand it as you like – with no coding necessary. I guess that they must have been caught out by Reddit going open-source.

Frogmetrics

Frogmetrics have developed software solution for doing mobile survey response that tracks responses in real time. I don’t see anything new in this business but they have taken the Apple approach of delivering a smooth, polished, end to end solution that includes both hardware and software – in this case they were demo’ing on Nokia hardware. I really see this as a systems integration play.

Anyvite

Competition for E-vite. Nothing new per se, but well done and less of a hassle to use than E-vite. Not sure how they plan to gain main stream awareness – always the problem with a ME2 product, but if it is that much better .. who knows.

Ididwork

Ididwork enbales you to share your work log with co-workers and managers. Nice implementation but I think they could look to incorporate some of the thinking from the team at Timmy on time - developed by a couple of young guys from Trois Rivieres (almost Montreal!).

Popcuts

Think pyramid marketing scheme meets indie music. The earlier you buy a song the more "revenue share" you will get when (if) the song takes off. I don’t think this is going to fly using financial incentives but it could evolve into something interesting. 

BackType

BackType was the only Canadian team presenting ( a second team are still in "stealth mode") and one of the reasons we wanted to go to Demo Day. They refer to themselves as the Google of comments. Simple idea; they provide a search service that allows you to search the Web for comments by a particular author or on a given topic. Let’s see if they end up in Montreal or the Valley .

That’s it for the reviews – the next post will draw some conclusions about my trip to Demo Day.

Twenty startup’s were in Y-Combinator’s Summer 2008 funding batch. Here is my take on the first half of them (the rest will be in the next post) and where appropriate a mention of Montreal companies I am aware of that are competitive or complimentary.

Posterous

A hosted blogging platform that allows you to post many different media types via e-mail. Great software, ultimate in simplicity – but perhaps it could have worked even better as a Worpress or Typepad plugin ? Nice software.

Ticket Stumbler

Vertical (sports tickets) search technology with a referrals based revenue model – nothing innovative per se, but there is a chance of success if they can simplify a complex issue that enough people have – it certainly worked for Kayak. Montreal’s TIBConcerts does a similar thing for concert listings.

A N Other Company

A company yet to launch but with a similar concept as Montreal’s BoostCast which already has over 17,000 communities (according to it’s website). These guys (who did seem smart and capable in general) made the mistake of starting their presentation by saying they were the “only one’s able to simple generate video-sharing site”. Anyone making a pitch to investors please remember that we see deals all the time and it’s just too risky to say you’re the only one – because it’s EXTREMELY rare that you are.

A N Other Company

A company yet to launch that may benefit from the progress being made at Montreal based Identi.ca , a company that has developed a version of Twitter that runs on the Laconi.ca open source micro-blogging platform (Our very own Evan Prodromou of Wiki-Travel fame is the driving force behind it’s development). The guys had heard of Identi.ca and were excited by the possibilities that could arise from having many vertically focused, but networked, micro-blogging sites.

People and Pages

Website builder (another one!) with member management. Just screams me2. The most interesting business I’ve seen in this space in Montreal (well the CEO is based here) is Kyube.

A N Other Company

PhD brainpower put to good use. This company yet to launch may have some interingsting synergies with Reasonably Smart, a Montreal based startup that is looking to make a name for itself in the cloud computing space.

PicWing

An integrated hardware and software solution for delivering photos (and in the future other media …. interesting possibilities) directly to an electronic picture frame. I’d be contacting Kodak and Fuji Film to start a bidding war !

MeetCast

Web-based video-conferencing and screen sharing solution. It’s a competitive / crowded space but no solution out there does it all yet. Very similar in functionality to Montreal’s Oneeko (previously Camwii) – whom I hear will soon have some very interesting news on getting their solution more widely distributed!

CO2 Stats

These guys can actually measure the environmental footprint of your website. It seemed like a gimmicky business at first but, once explained, it actually struck me as pretty complex to do accurately. It might actually fly !

More reviews to follow but I’d be happy to hear about any other Montreal based startups that are complementary or competitive to the companies profiled above.

(NOTE: This page has been edited to remove references to companies that have yet to launch)

I was fortunate enough to be invited down to Cambridge, MA to attend yesterday’s demo day for Y-Combinator’s latest batch of companies.

Paul Graham and Jessica Livingston acted as both the gracious hosts for the event and the concerned parents for the Founders as they exposed their ideas to an external audience for the first time (for the most part).

(Sorry about the photo quality – but I had just shaken Paul’s hand )

We decided to send someone down there for a few reasons;

Firstly, there were a couple of companies founded by Canadians that we had been talking to and wanted to catch up with and let them know that their was an alternative to heading to the Valley – Montreal ! Speaking to the guys from BackType,(one of the better company’s there ) it seems that long term Visa issues are always going to be a problem for Canadian founders of start-up founders in US.

Secondly, we wanted to get a sense for the overall quality of the ideas and entrepreneurs. We have met with many Montreal based start-up’s over the past few months and have a good sense of the calibre of ideas and entrepreneurs on offer. We wanted to be able to compare what we see with what was on show at (if you believe the hype) the Mecca of web-startup’s.

Thirdly, we wanted to understand the size and quality of the VC eco-system that exists for follow-on (Seed or A-Round) investment in companies as they move from Beta 2 Business.

And finally, as we push ahead with developing our own FounderFuel investment program, we wanted to get a better insight into some of the practicalities of running the Y-Combinator program.

So they were the goals – I’ll let you know how I got on in the next post …………

Philippe Chrun of MyCarPoolStation wrote an interesting post last Fall. It’s a brutally honest assessment of his performance as a first-time founder and CEO of a startup that failed to gain traction. He’s learned some precious lessons in the past 18 months that can’t be taught in school. It’s a pity though, that he had to learn the hard way: on his own and burning through love money. Although, this has been a common path aspiring entrepreneurs have trod, Feed Capital promises a shorter, easier route.

feed capital [noun]: 1. a small financial investment in a startup venture, so called because the investment barely provides the founders with enough money to eat and keep a roof over their heads; 2. an investment whose primary value lies in access to people and their business networks.

The original feed capital program was of course YCombinator (currently accepting applications), but Seedcamp and TechStars (also accepting applications for summer ‘08) have since popped up and, rumour has it, something is in the works for the Great White North as well. These programs select the best entrepreneurs and ideas from the many applications they receive, match them up with experienced mentors and provide them with advice and introductions they would otherwise have a hard time obtaining. They then have a few months to leverage that support and build a company. When the program ends, it is sink or swim time; hopefully, the company has achieved take-off velocity and is able to raise its next round of funding. If not, it dies a quick death and the founders, wiser and with a solid network behind them, are free to move on to their next venture. Fail fast is becoming the new tech entrepreneur mantra.

So, how much equity are you willing to give up in exchange for access to the right people?

Y-Combinator’s Paul Graham has raised the hackles of a Brit or two recently by suggesting that startups would do better if they moved to Silicon Valley!

In as much as Silicon Valley has a greater density of all the aspects of a start-up hub – great human networks, a willingness to support innovation, a community appreciation of the lessons gained from failure, an acceptance of startups inherent risk/reward ratios and large amounts of seed capital – he is of course right….

…. but Mr.Graham is really talking philosophically, as the biggest problem in moving to Silicon Valley is US immigration !

The point he really means to drive home is that “the more of a startup hub a place is, the better startups will do there” and that the biggest startup hub in the world is Silicon Valley – thus – “go west young (wo)man”.

Whilst he makes a valid point conceptually, I believe that his extrapolation of this point to the nth degree fails to consider one major issue – access. Whilst a willingness to support innovation, a community appreciation of the lessons gained from failure, an acceptance of startups inherent risk/reward ratios and large amounts of seed capital are essential to a start-up hub, they are only of benefit to an entrepreneur after he/she has access to human networks.

What “founder fuel” programs like Y-Combinator, Tech Stars and Seedcamp offer are a bit of “feed capital”, but more importantly they provide a clear and simple path for entrepreneurs to access a great human network. Provided that a city genuinely has all the aspects of a good startup hub mentioned before then the benefit gained from going to a bigger startup hub will almost definitely be outweighed by the difficulties of (and importantly the time spent) trying to gain access to the network.

Given the immigration difficulties of moving to Canada as a young entrepreneur, I would like to tailor the following recommendations to Canadians.

If you are in a Canadian city that has, in volume, all the aspects of a start-up hub, and you have good access to a strong human network – then you don’t need to move to Silicon Valley to startup – go there (with the help of your network) to expand or when you want to sell !

(For a self-professed geek, Mr. Graham does a great job at creating PR – but more on that in another post.)

Y-Combinator has been getting a lot of press recently. I would go as far as to say that it has reached the stage where its hype has run ahead of what it has delivered. This is not the fault of Y-Combinator and its founders but of technology / investment journalists looking for the next big thing.

What Y-Combinator has implemented is a new take on a tried and tested business development formula – the three C’s of success ….

Confidence, Commitment and Connections

These three things can take any individual or company (including Y-Combinator itself) a long way, no matter what the industry, or stage of business.

Confidence

In the start-up world many people will bash your ideas and thus your confidence. Once you have been selected as a Y-Combinator company your confidence should be at such a high that any bashing will just become “noise” that you filter out on your way to success.

Commitment

By asking the founders of a start-up to move to a new environment it tests their commitment to the idea and to the process of starting a new business. Much has been said of the benefit of moving to centres of entrepreneurship (Silicon Valley or Boston) but just as important is the “bootcamp” mentality that such a move can generate.

Connections

In the internet world it is rare that any idea is completely unique. Someone, somewhere is probably considering something similar. Success of one implementation over another is often a factor of brand awareness. The strength of your connections (and their connections) will have a big impact on how quicly your company can achieve critical awareness with customers, partners and financiers.

Y-Combinator has achieved a unique position in the venture capital world and the benefits of its structure should influence how other start-up funders structure their funds and investments. I don’t think that replicating their model in a place like Montreal is the way to go – but I do think that we do need to find our unique way of replicating the three C’s of success.