Archive for the ‘Profiles’ Category

Where Did the Term Cockroach Come From?

Monday, May 2nd, 2016

With the glitter of tech unicorns fading, venture capitalists and investors are looking for decidedly less glamorous startups to back — and those companies have a name to match. Cockroaches.

A cockroach isn’t as clearly defined as a unicorn, startups with pre-IPO valuations of $1 billion or more. Instead, a cockroach, as the Irish Times described earlier this year, “refers to a startup consisting of hard-working founders who keep survival at the core of their business strategy.” It’s also been described as having the ability to quickly become frugal and run lean, although there are no financial parameters to that definition. David Cummings offered a list of characteristics that includes “little-to-no salaries for the entrepreneurs”.

So where did this skin-crawling term first gain traction online?

The earliest published reference we could find was from Dave McClure of 500 Startups in a Wired UK article from 2013. In the piece, McClure calls out entrepreneurs for “trying to build audiences without knowing how to monetize them.”

The article goes on: “He said that many people building startups think that engineering and design are the critical factors as to whether their business is successful. “I would challenge that. What’s missing in most startups is scalable, cash-flow profitable (costs you less to acquire the customer than you generate in revenue) distribution.””

A slideshare from McClure posted in June 2015 is the next reference to cockroaches, which has been shared 212 times across LinkedIn, Twitter, Facebook and Google+, according to Buzzsumo. In the presentation, he reiterates his message from two years earlier, that startups need to be lean and run “simpler, faster, smarter, cheaper.”

Three months later, in October 2015, Flickr co-founder Caterina Fake picks up the term for her column in Medium called “The Age of the Cockroach”.

In it, Fake points to the then looming funding crisis as the reason why unicorns will be replaced by cockroaches. She then offers this advice: “Companies that want to outlast the coming funding crisis will need to move fast, cut costs, and plan for a future without much money in it. They will have to lay off staff, move their pricy downtown office to the unsexy exurbs, pivot into revenue-generating business models, kill projects going nowhere, live with less.”

For the next four months, as investment funds continue their write downs and venture capitalists begin talking openly about a shift in their approaches, Fake’s column spread online. It has collected over 8000 shares across social media channels, according to Buzzsumo.

Finally, on February 11, 2016, the term cockroach scuttled its way into a mainstream media publication. It’s Business Insider‘s “Startups are realizing there’s no Plan B: They have to survive the bad times like ‘cockroaches’“. 

Cinemagraph Pioneer Flixel Hits a Milestone that Investors Prize

Tuesday, April 12th, 2016

Flixel, the Toronto startup recently selected as a Facebook partner for its living-photo technology known as cinemagraphs, is now funding growth through its own sales, a parameter that many investors want instead of growth-at-all-costs.

More paying customers allow Flixel, whose main product is Cinemagraph Pro, to split revenues between product development and marketing efforts channeled through Facebook.

“Since our pricing model allows us to acquire customers through targeted Facebook ads, we are able to have a healthy CAC/LTV (customer acquisition cost/ lifetime value) ratio,” says CEO and cofounder Philippe LeBlanc.

The Flixel startup story includes overcoming tough odds before finally getting their big break with the TV program America’s Next Top Model, and an investment from show’s host, supermodel Tyra Banks. The company’s success has since been propelled by the growing interest brands have in using Flixel’s cinemagraphs on social media sites such as Facebook and Instagram. The visuals are more engaging than straight stills, LeBlanc says, adding that they’re also shorter and more cost effective than video.

The Facebook association will only deepen now that Flixel’s cinemagraphs have become a free option for profile photos on the platform that boasts about 1.6 billion regular users.

Prices Rise

Flixel sells software, hosting and licensing services for customers making their own cinemagraphs, and has a creative team producing them for brands including Netflix, Panasonic, and A&E. Flixel’s apps, both iOS and Mac, have been downloaded over 1 million times, according to a spokesperson. The company won’t provide further details about their revenues.

By raising the price of its mobile app 400%, Flixel is doubling down on revenue growth as its strategy as opposed to user growth. Because the processing power of the latest iPhones and iPads allow Flixel are on par, CTO Mark Pavlidis explains, Flixel has made its iOS app equal to the Mac app in terms of functionality. Flixel also sells a subscription version for $199 a year.

“We believe the price raise will have an increase in revenue both in terms of licensing sales, but more importantly in terms of tipping the scale to go the subscription route versus licensing each of our product lines separately,” LeBlanc says. “Raising money is always easier when a) you don’t need venture money b) you can show your revenue is growing and that additional money will only serve to accelerate this growth.”

Flixel’s customers are largely Adobe Creative Cloud users, including photographers, videographers, as well as creative directors at a wide range of marketing and advertising agencies. In addition to Tyra Banks, Flixel has been funded by a handful of private investors, as well as the Business Development Bank of Canada and the New Brunswick Innovation Foundation.

F&B Startup Hungry for Growth, Eyes Big City

Thursday, March 31st, 2016

7shifts, a mobile- and web-based restaurant scheduling company based in Saskatoon, has recently established a two-person sales team in Toronto — the company’s latest move in an effort to compete with industry leader, Austin-based HotSchedules.

In addition to the expansion into Toronto, which has the density of restaurants 7shifts requires for business development, CEO Jordan Boesch is bulking out his company’s Saskatoon development team to speed up integration of 7shifts with partner platforms including TouchBistro, an iPad-based point-of-sale solution for restaurants. Boesch is using the remainder of a round of angel investment 7shifts received in 2014 to add five more developers to the team, bringing the total to 14.

“We’re slowly nipping at [HotSchedules’] heels, and getting some good traction,” Boesch said in an interview. “Stuff we’re missing to become the greatest [restaurant scheduling platform] is in development right now, especially around reporting.”

‘Looking For Apps’

The growth of 7shifts, as it competes in the sector, reflects the economic benefit at the intersection of cloud-based connectivity and demographic change. Millennials are stepping into management positions in the food and beverage sector, and “they’re looking for apps,” Boesch said. Although tiny now, 7shifts might become a significant employer for Saskatoon and Toronto if the company gets out in front of HotSchedules.

Boesch is in talks with potential investors, seeking additional capital to improve the platform. Meanwhile, 7shifts continues to bring on additional customers, about 90% of which are in the U.S. The company recently signed 90 Burger King locations in Alabama, which would bring in revenues from US$2,250 to US$6,300 per month, depending on the level of service selected.

In an increasingly cautious funding atmosphere, where analysts are writing down the values of Netflix and Hootsuite for stressing user growth over revenues, 7shifts’ conservation of seed capital while taking on paying clients will be crucial in helping the company secure additional funding.

“Founders are realizing the need to rethink prior assumptions about prioritizing growth above all else, and are increasingly focusing on burn rate, profitability and the path toward self-sufficiency,” First Round Capital said in a letter to its partners in February.

“We’ve managed to hit good revenue targets, so we’re not burning a ton of cash, which puts us in a good place for raising more capital,” Boesch said.

[soundcloud url=”″ params=”auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=true” width=”100%” height=”450″ iframe=”true” /]