Archive for the ‘Highlighted’ Category

Tech’s Gender Problem Means Money Lost

Monday, June 13th, 2016

Only 17% of Fortune 500 CIOs are women, according to data released this year by the National Center for Women and Information Technology. The stat is roughly in line with a 2014 study showing that women account for only 11% of executive positions at top Silicon Valley companies.

While Facebook COO Sheryl Sandberg and HP CEO Meg Whitman are well known, the overall lack of female founders, executives, and venture capitalists limits the value of the tech sector.

Female entrepreneurs generate 20 percent greater revenue than their male counterparts, while receiving 50 percent less VC funding, according to a 2012 report in Harvard Business Review, citing Kauffman Foundation data.

Explanations for the under-representation of women in tech abound. Some cite an over-reliance by VCs on existing networks, who are mostly male. Others bring the problem back to elementary and secondary education, when girls may get less encouragement in STEM courses.

Whatever the case, the under-representation of women is an economic detriment, regardless of the industry.

$28 Trillion

A recent McKinsey report stated: “In a ‘full potential’ scenario in which women play an identical role in labor markets to that of men, as much as $28 trillion, or 26 percent, could be added to global annual GDP by 2025.”

Given the numbers, gender equality should be a funding priority in tech ecosystems across the world. So why isn’t it?

Craig Newmark, founder of Craigslist, argues that venture capitalists in tech ecosystems are not putting their money where their mouths are, citing issues such as a lack of female-led startups when the data doesn’t support those claims.

Though acknowledging the true problems is an important first step, systemic, measurable changes are needed: from STEM education, to recruitment processes, to funding. Otherwise, we hinder both social and economic progress.

VIDEO: Cognitive Technology Needs the Cloud

Sunday, June 5th, 2016

Cognitive solutions have developed beyond traditional AI capabilities into machine thinking, and startups can now leverage cognitive technologies like IBM Watson through the cloud to offer better solutions to their customers.

IBM’s Watson can digest and reason through information, and come up with solutions. This allows startups to offer their customers APIs like natural language processing without the obstacles that prevent easy, robust and responsive user experiences.

Placing this advanced technology in the cloud provides the resources that cognitive needs to function smoothly, and for it to be accessible through platforms including IBM Bluemix.

For more on this, here’s part of our recent interview with IBM’s Nevil Knupp, Vice President of Cloud, IBM Canada.

For a free trial of IBM Bluemix click here.

For a free trial of IBM Watson Analytics click here.

Early-Stage Startups Need More than Tech to Impress Investors

Tuesday, May 31st, 2016

TechPORTFOLIO interviewed investors, financiers, and academics and asked them what they look for in early stage startups – and how they define success. Here are their answers.

It’s sales and growth. But also the product

Chris Arsenault, managing partner at iNovia Capital, says that the most successful companies he has backed early-on have made sales and growth a priority: “It’s often easier for a startup to be 100% focused on the product, while sales take a back seat.” One of the biggest barriers facing startups is lack of sales-focused management teams, he says.


However, he stresses, the product roadmap needs to incorporate upgrades and new features according to customer needs. The best practice is to find your customers and then develop your product in the early stages with their feedback.

“You can fill faster and iterate better by leveraging customers early in the startup process,” says Dr. Sean Wise, Associate Professor, Entrepreneurship, Ted Rogers School of Management at Ryerson University.

It’s the journey. But also the destination

“Success for me is not necessarily the same as what an entrepreneur defines as success,” says Matt Roberts, associate director at the IT Venture Fund at Business Development Bank of Canada. His aim is to build all the internal processes to allow the company to grow up and then get it set up to access series A funding.

“I want my companies to have the wherewithal to attract other outside capital, to continue to grow, and execute on the business,” he says.


Michelle McBane, investment director at MaRS Investment Accelerator Fund, agrees. When the companies leave the stage of working on their key product and customers “then our companies are graduated, so that means they’ve passed the baton to the series A/B investors. That’s success for us.”

Your team, and the people around your team

“Diversity helps ensure there are different perspectives around the table, driving better decision making that will ultimately lead to better long term performance,” says Will Hutchins, Managing Director of Espresso Capital. “I believe this is true at all stages of a company’s growth–from startups to mature companies.”

“Startups have more needs than they have resources. Leveraging your community allows you to leverage what little resources you have,” says Dr. Sean Wise. A dense community offers cheaper and easier talent acquisition and, of course, more investors.

VIDEO: IBM’s Watson Offers Cognitive Technology Out of the Box

Saturday, May 28th, 2016

Not all startups can afford artificial intelligence and the associated infrastructure, but thanks to IBM’s Bluemix platform, the cognitive capabilities of IBM Watson can be a ‘call’ away. Apps developed on the platform will be able to make requests from Watson.

This will give startups access to functions that analyze data streams or translate text into language that either a machine or another person can understand.

For more on this, here’s part of our recent interview with IBM’s Nevil Knupp, Vice President of Cloud, IBM Canada.

Tech Sector Leaders on Funding Challenges Facing Canadian Startups

Friday, May 27th, 2016

Startup founders need to think about funding options at all stages of growth. What kind of funding is available – or not – at which stages? We talked to investors, tech community leaders, and founders about the challenges attracting startup investment, cultural fit, and how some have negotiated funding issues.

While everyone we spoke to said there are challenges getting funding, there’s little consensus on where exactly those holes are – or how they should be filled.

Matt Roberts, Associate Director, IT Ventures, Business Development Canada

There are still gaps in the ecosystem. The gaps have narrowed significantly over the past five years but they’re still there. So it’s incredibly difficult for startups to find the first $500K or $1 million of investment.

There’s a reason for that. A lot of what we would call super angels are small seed funds. After they’ve done one seed fund they want to raise another seed fund. And they want it to be a little bit bigger, so they can get bigger fees and get a better paycheque. Because of that they can’t do the number of deals they were going to do before. They need bigger cheque sizes so they need to do bigger deals, and they move themselves out of the early seed market.

There’s a bunch of us in mid- to late-seed, and companies post-revenue, who do deals there. But there’s not a heck of a lot of companies that do early seed.

Traditionally there’s been a perception that there’s a gap in what we call late series B, maybe series C investments, the $100m+ valuation. I’d say that’s not as pronounced as it was two or three years ago.

David Hamilton, Founder of Lab T.O., a coworking space

I think we’re seeing entrepreneurs consider the benefits of bootstrapping based on their business model. Given the time and effort it takes to secure funding, a startup could lose its competitive advantage by seeking venture capital.

We’re also seeing companies use government grants, accelerators, tax credits, and other monetary and non-monetary resources to reduce their burn rate.


Dr. Sean Wise, Associate Professor of Entrepreneurship at Ryerson University’s Ted Rogers School of Management

It is always a better idea to bootstrap. However if you’re going to raise initial funding the best thing you can do is do it through crowdsourcing. By crowdfunding your venture not only do you save equity but you gain access to early adopters.

Michelle McBane, Director, Investment Accelerator Fund, Toronto

The right companies are getting funded. Will I say that they’re getting funded as highly as they should? No. They’re always undercapitalized versus our US counterparts.

A similar company in the US would raise one to two to three times more than a company at this stage would. They’d likely get a higher valuation, which mean they could get a bit more money in. The bigger issue is that we’ve chronically underfunded our companies.

Sonia Strimban, Manager Venture Operations, MaRS Discovery District

Funding is challenging in Canada. There’s a government funding crunch – it’s not as abundant as in the US.

It’s a lot easier to get seed funding. There’s definitely a series A crunch. There aren’t that many funds able to hand out that capital. Post series A there’s almost nothing in Canada unless you’re going private equity or public.

There’s a trend to alternative financing. Business Development Bank of Canada are creating some interesting structures. Business are forced to be creative because of the funding structures here.

Will Hutchins, Managing Director, Espresso Capital

Canada’s technology sector has long suffered from chronic underfunding with the vast majority of early-stage companies relying on modest sums from friends, family and angel investors, or bootstrapping growth. But not all companies are fully aware of their funding options.

Our firm seeks to provide alternative sources of capital – in the form of debt financing – to support early and growth stage companies to achieve their growth objectives. It’s important that companies assess all potential funding sources – equity and debt – in developing their funding strategies.


Chris Arsenault, Managing Partner, iNovia Capital

The funding cycles for tech companies across Canada have positively evolved over the last decade but still do not meet the startup to growth funding needs. To create a strong innovation ecosystem we need to be able to provide support, financial or otherwise, for startups and incentivize investment at all levels of their companies’ lifecycle. And we are not there yet–there is still a general lack of later-stage funding for Canadian tech companies.

We have upped the bar at the angel and early-stage funding levels, but when it comes to raising Series B round funding and upward to support growth for example, Canadian tech companies are still raising most of their capital from the USA. Canadian investors are missing out on generating returns by not backing the next generation of large high growth tech companies in their own backyard.

We will be that much more successful once we close this full-cycle funding gap.

Gregory Melchior, Founder of 4D Virtual Space

We’ve all invested our own money. We are now at series A financing but we have a reverse takeover structure to become a public company in Canada. We feel that the markets are the most efficient space to value your company–not by some mechanism that obfuscates financials.

We went to the small VC companies in Canada and it just wasn’t a fit. I’ve been in the global capital markets for 20 years, and if there isn’t a fit with the shareholders, it’s not going to work.

[Investors] in the very early stages are no more than a bunch of people that are retired and have invested $10-30,000. The last thing I want is to talk to is some retiree every single day because they invested in 4D Virtual Space.

Toronto Diversity Strengthens the “Cockroach Nest”

Wednesday, May 25th, 2016

Toronto was recently named the most diverse city in the world, and this status might help to explain the success of companies like Wattpad and other startups that have helped form the city’s cockroach nest.

A study by the BBC says that while Dubai has 83% of its population hailing from abroad, Toronto has a far wider spread of nationalities – 230 in all – so wide that it took one artist a year to find and photograph one person from each of these countries.


Why Diversity Matters, a report by management consulting firm McKinsey & Co. reveals a strong correlation between diversity and financial success: companies in the top quartile for racial and ethnic diversity are 35% more likely to have above average returns.

Chris Arsenault, managing partner at iNovia Capital, says that companies that prize diversity within their own culture make better hires and have more fully engaged employees.

“As a diverse workforce understands and relates to its customer base, it can also serve to drive innovation, being better equipped to design and develop products and services that meet the needs of a diverse market,” he adds.


WattPad, a Toronto-based community publishing and e-book distribution platform, is following that exact strategy.

“The majority of Wattpad employees can speak a second or third language,” the company’s founder, Allen Lau, explains in a Globe and Mail editorial. “They are world travellers, having lived in 76 different cities around the world. Many are immigrants or first-generation Canadians. The perspective they bring is invaluable.”

WattPad’s initial growth in English only was slow, but when he started hiring country managers who could not only translate language but understand cultural norms, he was able to expand and adapt his product, tailoring it to content creators depending on nationality. This has resulted, for instance, in WattPad stories being adapted for Filipino media.



“I believe that Toronto’s diversity gives me an unfair advantage,” says Lau.

“Local startups are now global on day one,” adds Dr. Sean Wise, Associate Professor of Entrepreneurship at the Ted Rogers School of Management.  “Not only does diversity lead to innovation through an exchange of ideas, diversity can allow you to go global.”

For more on the opportunities and challenges facing Toronto as a tech startup ecosystem, read our in-depth analysis, Shopify Takes Vacant Blackberry Throne – And What’s Next for Ontario.

Tech Investors and Founders Identify Bankable Technologies

Tuesday, May 24th, 2016

“Whenever a market or a technology changes, thereʼs a huge opportunity for new businesses,” author and entrepreneur Seth Godin said in The Bootstrapper’s Bible.

Godin’s comment from more than a decade ago, which addresses what’s now generally referred to as “disruption,” resonates among entrepreneurs more than ever. To address this, we asked each of our launch week interviewees what technology is going to be the most bankable in the next few years? Here’s a selection of their answers.

Artificial Intelligence

“We’re at that tipping point,” says Sonia Strimban, Manager of Venture Operations at MarS Discovery District. Artificial intelligence is already ubiquitous and will grow. “That tech is coming exponentially. Deep learning is really accelerating the pace of applications, not just the core but the application layer of what AI can do.”

“There’s a lot of public misconceptions. There’s already so much AI that some people don’t realize,” she says. Films such as Spike Jonze’s Her, for example, might talk about AI, but don’t really represent its real-life use.

Michelle McBane, director of the Investment Accelerator Fund, which is based at MaRS, noted that some entrepreneurs are deliberately adding machine learning to their startups to get noticed.

Virtual Reality

Matt Roberts, associate director at the IT Venture Fund at BDC Capital, says VR is worth watching in the longer term. “Everybody’s gotten a bit of a hype cycle going for it. We’re really going to start seeing excitement around VR in the next 2 to 3 years.”

“It’ll be like the Wii was for a generation,” he added. “A complete change of how people interact with technology.”

Self-driving cars

Bill Jacobson, founder and CEO of Boston-area startup space Workbar, says self-driving cars and the effect they have on transportation will be profound. “I have kids and I feel like they’re likely not going to own a car,” he says.

The technology could be coming a lot more quickly than we think, Jacobson added. “From a safety standpoint we’re in this middle ground where we have a driver that is highly distracted behind the wheel… that’s likely more dangerous than handing over control to a computer.”

Amir Azhari, president of AOMS – a Waterloo, Ontario-based fiber optic solutions startup, also identified self-driving cars. Azhari said AI’s rapid development is linked to autonomous vehicles’ success and regulations will catch up, even though “there are now just regulations and government laws that limit accessibility.”


VIDEO: IBM’s Ontario Research Consortium Partnership

Tuesday, May 24th, 2016

IBM provided a $200+ million “sandbox” and access to the country’s biggest supercomputer, along with an abundance of analytical tools as the company’s contribution to Southern Ontario Smart Computing Innovation Platform (SOSCIP), a research and development consortium that now includes 14 universities and 2 colleges.

The result? The partnership has generated $2 billion in pipeline revenue by helping university researchers and startups get to market.

This innovation model, facilitating collaboration between IBM, academic institutions, Ontario Centre of Excellence, and SMEs aims to help establish Ontario as a leading global centre for driving innovation in information technology, health, and urban infrastructure (water, energy, transportation).

By partnering with private enterprise, academic institutions can leverage cutting-edge technology and experience. Learn more about SOSCIP and its economic impact:

What IBM’s Watson Thinks of HBO’s Game of Thrones Characters

Friday, May 20th, 2016

When we found out we could access IBM’s Watson to analyze conversation tone, obviously our first idea was to apply it to HBO’s Game of Thrones.

So we coded a scraper and extracted the dialogue on Wikiquote of all the main characters. We then unleashed Watson’s Tone Analyzer — a tool for understanding the emotional impact of text — to assess five core emotions, as well as overall emotional stability, confidence, and agreeableness.

The Tone Analyzer is part of IBM’s Watson suite that includes several tools for textual analysis, such as concept search and linking, visual comprehension, and language translation. It’s accessible through an API on the IBM Bluemix cloud platform.

It’s no surprise no one in Westeros turned out to be especially emotionally stable (we’re looking at you Ramsay Bolton). In fact, the majority of characters we tested, from the Khaleesi herself to Jon Snow and even jolly old Tyrion Lannister, turned out to be mainly very angry and not at all joyful.

But the results we did find – some expected, some not – reveal a bit more about a few of the players.

Here’s our (spoiler free of season six, we promise) analysis.

CHARACTER: Joffrey Baratheon



Rage is the overriding emotion for Joffrey the False. Interestingly, though, no one particular line in our textual analysis stands out as being obviously furious or malicious. This, of course, is worse because it just shows the continual burning rage inside the boy king.

CHARACTER: Sansa Stark

RESULT: Even ANGRIER than Joffrey


Sansa’s incandescent fury is clear at several points – and the Tone Analyzer has picked up on this. Her reputation among fans as a passive flower is completely undeserved. There’s not a great deal going on with conscientiousness, which could suggest machinations to come.

Combine this with her sky-high confidence and it seems we have identified that Sansa is a rising power player in the battle for the Iron Throne.


RESULT: Low confidence


A girl has no name…or confidence. Arya rates very low on the confidence scale for a Game of Thrones character. In fact, there are only four lines in her entire script that rate as confident. The rest don’t score anything at all. It looks like the first step of Faceless Man assassin training is breaking the spirit.

Still angrier than a burning nest of wasps, though. Just ask Meryn Trant.

CHARACTER: Varys, Master of Whispers

RESULT: Calm and in control


Varys once said: “The storms come and go, the waves crash overhead, the big fish eat the little fish, and I keep on paddling.” With lines like this, we’re not shocked to see the tone analysis of his language shows he rarely raises his voice. He’s unique in Westeros in being able to regulate his emotions and keep his cards close to his chest. Clearly, he’s perfectly suited to his role as spymaster regardless of who he serves.

Is there a character you want to analyze? Try the Tone Analyzer now.

If you want to incorporate IBM’s Watson into your own application hosted in the cloud, click here.

“Silicon Forest” Attracts Talent from the Mother of all Tech Ecosystems

Thursday, May 19th, 2016

Tech disruption happens geographically as much as it happens across industries.

Portland, now known in the tech community as “Silicon Forest,” is becoming a big draw for developers as Bay Area high rents make Silicon Valley – arguably the most hallowed of startup ecosystems – less attractive.

As an indication of the trend, the region’s talent pool grew 28 percent between 2010 and 2013, compared to 20.8 percent in Silicon Valley.

Pacific Northwest Benefits

Portland’s affordability is major factor behind the growth experienced in the high tech sector, and resulting increased salaries are contributing back to the city’s wealth. And this benefits the U.S. Pacific Northwest as a whole.

While prospective migrants are attracted to the low cost of living and work-life balance offered by the region, Portland and Seattle, it’s neighbor to the north, are benefitting from employee exits at tech giants.

A tech ecosystem map from Madrona Venture Capital demonstrates how the University of Washington, Amazon, Microsoft and other notable contributors to the ecosystem have spurred the creation of startups, including now established Real Networks and Expedia.

With Google setting up a larger office space in Portland, this trend should continue to bolster the region’s startup prowess and ability to compete with other tech ecosystems around the world.