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Mind The Gap: Bridging the gap between invention and market

Building a company is not exactly paint-by-numbers, and there is no formula or manual out there that can effectively describe how to manage a tech start-up. Entrepreneurs that get it have often first tried, failed, and tried again before finding success. It is only by doing and having a great network of advisors around you that you can accelerate this process. Some thoughts on how to bridge the gap from MaRS Advisors and Entrepreneurs-in-Residence (EIR) across the province:

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Mind The Gap: Bridging the gap between invention and market

  1. 1. Technology entrepreneurs encounter many challenges when moving their innovation off the bench and into the hands of customers …
  2. 2. attracting funding, carving out a market, finding that lead customer, or sometimes making payroll that week.
  3. 3. Bridging the gap is not exactly paint-by-numbers, and there is no formula or manual out there that can effectively describe how to manage a tech start-up.
  4. 4. Entrepreneurs that get it have often first tried, failed, and tried again before finding success. It is only by doing and having a great network of advisors around you that you can accelerate this process.
  5. 5. Some thoughts on how to bridge the gap from MaRS Advisors and Entrepreneurs-in-Residence across the province:
  6. 6. ”How many companies get to the point where they have won something big, only to realize that they do not yet have their key supplier partners on board? Working with your customers is the key priority and one role of the CEO at all stages of a company’s growth. Close behind, especially when building a complex and custom product, is the need to build the value proposition, confidence, and capability of the supply base so that it can scale in line with the company’s growth.” Peter Becke, Entrepreneur-in- Residence Ottawa Centre for Research and Innovation, Former President & CEO, Metconnex and SiberCore Technologies, Former VP Business Services, Nortel Networks
  7. 7. ”Watch your weekly cash flow! Forecast your (cash) balance by the week. Lack of cash is what causes companies to fail, even high-growth companies. Don’t assume that your robust revenue growth is fundable. Once you actually need money in the short term, you can’t get it. Down the road, you may have to give up big chunks of future wealth in finding distress investors – wealth you should be keeping.” Ron Close, Entrepreneur-in- Residence MaRS Advisory Services, Toronto Former President, Bell New Ventures, BCE, Former President & CEO, NEXTAIR Corp.
  8. 8. ”If you’re on the verge of failure, get some sleep and don’t get consumed by the experience. Focus on the positives, especially the fact that you have been through the best business crash course around. Business failure is widely viewed as an asset because of the valuable lessons it teaches. It toughens you up and shows you that you’re fallible. Next time around (and there will be a next time) you’ll spot the warning signs earlier and will have the skills and experience to deal with a crisis.” Dennis Ensing, Entrepreneur-in- Residence Techalliance, London CFO TransGaming Inc. Former CFO Viron Therapeutics
  9. 9. ”Some of the biggest successes employed ‘asymmetric’ strategies. They zigged when everyone else zagged. The key is to offer ‘unexpected value’ to the customers not being delivered by competitors. Finding this value is elusive – but it really forms the core of customer-driven innovation. It starts with research in your target market. Don’t ask customers what they want in a product, they often don’t know. Instead, focus on the ‘jobs they need to be done’. Do better research and reinvest the saving you uncover to deliver on innovations the market really values.” Peter Evans, Venture Group Advisor MaRS Advisory Services, Toronto Former VP Marketing, Flo Network (acquired by DoubleClick), Former Director, Research and Marketing, Media Linx/Sympatico, Founder, Riverdale Partners
  10. 10. ”Rational thought might lead a customer to be interested, but emotions complete a sale. Tap into the emotions of the purchaser through: confidence in your ability to meet delivery goals; relief from a bottleneck you eliminate; and pride in the delivery of improved performance. Marketing and sales programs without emotion will not work and neither will your company.” Terry Graham, Entrepreneur-in- Residence Innovation Synergy Centre Markham, Former Chairman & CEO, Image Processing Systems (IPS), Founder of ITEC
  11. 11. ”Remember that an invention or a discovery is a product. Not all products succeed – and for reasons unrelated to their ingenuity. Know when to stop investing time, energy and money into a product with no future. Also, know your own limitations as an inventor. Respect that others with differing skill sets and experience may actually be better to lead your company into the next stage of development.” Wendy Hill, Entrepreneur-in- Residence MaRS Advisory Services, Toronto Former R&D Director, Amgen Canada Sr. Director, Clinical Research, GLYCODesign
  12. 12. ”Many think that regulatory oversight and related documentation is only important at the end of the process. Financing a company requires a business execution strategy including recognized regulatory milestones. Without this the entrepreneur has little credibility.” Greg Hines, Entrepreneur-in- Residence MaRS Advisory services, Toronto President & CEO, ArcticDx Inc. Former President & CEO Tm Bioscience
  13. 13. ”As a venture begins to grow, it can be a difficult time for everyone – for the founders who have to give up some control, for the new employees trying to contribute and for investors who are demanding the path to financial success. This is the time to establish the right culture. If the founders are having a tough time adapting and letting go, it ultimately will impede success. Remember, culture and leadership start at the top and from the very beginning.” Krista Jones, Venture Group Advisor MaRS Advisory Services, Toronto Former VP Strategic Marketing & Technology MTS Allstream. North American Bsiness Development Leader, Personeta, VP Network Metronet
  14. 14. ”Don’t chase money. Chase the skills that will make you and what you are building really great. Building a great technology company is a highly iterative process: from technology to customers, back to technology. Your business will attract money only once there is real evidence that the technology is solving someone’s problem. Chasing money alone will leave you chasing your tail.” Veronika Litinski, Director, Venture Group MaRS Advisory Services, Toronto Consultant, MMV Financial, Canada, Strategics Advisor, Selera Pharmaceutical, California, Director Venture Finance, GATX Capital, California
  15. 15. ”Too often companies undertake projects that will yield them a couple of points gross margin when operating perfectly, but because of how these projects are executed, the company is at risk in the process. Marginal projects often involve a high use of capital and human resources while taking management's focus off the keys to success in the business.” Richard Lockie, Entrepreneur-in- Residence HTX, Toronto Former Managing Director, MDS Capital, VP Finance LA Varah Inc.
  16. 16. ”There are hundreds, if not thousands, of people in the world who can help you build a successful business. Getting introduced and leveraging those people is key. How do you find them? Talk to people, lots of them. Tell them about your idea and then listen. It is incredible how opportunities arise out of the most mundane of conversations.” Dan Mathers, Entrepreneur-in- Residence Communitech, Waterloo President & CEO, eSight Corp, Former President & CEO, IceFyre Semiconductor
  17. 17. ”Everyone wants that elephant customer – the one so big that you don’t need any others. Make sure that you scale up to feed the elephant. The demands of their system, their “our way or the highway” mentality, and abusive payment practices can hammer you. By all means tackle the elephant customer, but budget for twice the cost and twice the time commitment. Evaluate the project regularly and be prepared to walk away if necessary.” John Pickard, Entrepreneur-in- Residence Bioentreprise, Guelph Former Managing Director, Accolade Innovations, Former VP Sales & Operations, AT&T Prepaid
  18. 18. ”Think about how you can build your company without raising capital. First, find out how you can get customers to finance your business through sales, or perhaps sales of services to start with. Build a business plan and business model around sales and see where that takes you. Then you can compare the sales-oriented plan to the finance- oriented plan and see which is the most effective way of generating wealth – 90% of the technology companies out there would be better off using sales vs external financing to generate growth.” Charles Plant, Managing Director, Market Readiness Program and Advisor MaRS Advisory Services, Toronto Co-founder, Former President & CEO Synamics Inc.
  19. 19. ”It’s easier to copy than to innovate. It’s easier to sell on price than to create value. But do the tough things. When you do the easy things , there is more competition. When you do the tough things there is less competition and more margin. Clearly you have to know your own capacity, but if you do the toughest thing within your capability you will have fatter profits.” Robert Quance, Entrepreneur-in- Residence MaRS Advisory Services, Toronto Former General Manager MCI Canada, Founder and Former President, Metrix Interlink
  20. 20. ”Technology entrepreneurs are most comfortable pitching their technology, not their business proposition. An investor is more interested in the business – and potential return – than in the technology per se. A customer is only interested in how the technology solves their particular problem. Too many pitches devote 90% of content to the wonders of the technology with the business value proposition squeezed in at the end. By that time, the audience has long since lost interest.” Tony Redpath, VP Partner Programs and Advisor MaRS Advisory Services, Toronto Former VP, Primaxis Technology Ventures
  21. 21. ”When you pour your blood, sweat and tears into a company consider an equity position. Focusing on the upside is what is important, and you want to share in that success when it happens. Even if it means a short-term sacrifice in the early days, it’s worth having equity in that winning lottery ticket.” James Sbrolla, Entrepreneur-in- Residence Ontario Centre for Environmental Technology Advancement (OCETA), Mississauga Chairman, Environmental Business Consultants, Former Partner Canaccord Capital
  22. 22. ”Entrepreneurs may dream of building and selling a huge dot-com, but few understand how difficult it is to run a company, let alone build it. Building a company can wear you down if you’ve developed a great technology. You might consider selling or licensing the intellectual property to a big player instead of making that long climb yourself. In an early sale, the value is in the technology rather than in the customer base.” Ron Smith, Entrepreneur-in- Residence Innovation Synergy Centre Markham Former Chairman Vicinity Corporation, President & CEO, Merisel North America
  23. 23. To get in touch with a MaRS Advisor or EIR contact: