Archive for the ‘Features’ Category

Newer Entries »

Progress for Women in Canada Doesn’t Show up in Tech

Wednesday, June 1st, 2016

“Most of the people making decisions about venture capital are still men,” Julie Steiner, CEO and founder of Percy3D explains. “As a result, I know many women in the startup tech industry here in Canada who have struggled to get venture capital.”

Steiner is one of the lucky ones. She has an angel investor for her personalized video start-up, and has not had to go the VC route.

Venture capital investments for Canadian companies hit a record high in the first quarter of 2016 according to the latest report by the Canadian Venture Capital & Private Equity Association, nearly doubling 2015’s Q1 numbers. Of 40 confirmed speakers at the industry association and advocacy group’s recent annual conference, less than 30 percent are women.

That is actually a high number compared to the number of venture capitalists who are women in Canada. According to a recent article in Canadian Business, less than 15 percent of venture capitalists in Canada are women. Meanwhile, women hold one-third of senior management positions overall in Canada.

In a country where the prime minister has made a concerted effort to equalize the genders in his cabinet and restructure government ministries to link innovation, science and economic development, the continued gender imbalance in tech stands out.

techPortfolio_Quote_May_31 - 1

The connection between the gender of the VC and the gender of the person looking for financial support is important, according to Dr. Diana Parry, an associate professor and campus lead for the University of Waterloo’s ‘HeForShe’ campaign. “Part of the problem is connected to unconscious biases, the biases that people bring to the table that they are unaware of.”

The ‘HeForShe’ campaign is a global initiative launched by UN women and seeks to engage males in the fight for gender equality on many fronts. In early 2015, University of Waterloo’s President Feridun Hamdullahpur accepted an invitation from the campaign to participate in their Impact 10x10x10 framework, a pilot project involving universities, governments and corporations.

“It’s sometimes just a matter of like investing in like,” says Cathy Connett, one of five women managing the Sofia Fund – an angel investment fund in the U.S. that aims to get more women investing in startups.

“One of our potential investors actually asked us how many of the companies we invested in before establishing the Sofia Fund were women-led. Out of curiosity, we went back and looked at the data and found that out of our 37 personal investments, 52 per cent were women-led. As private investors, the five of us had not purposely set out to invest in women-led companies, but we had, which supports that whole like-invests-in-like idea.”

It’s not just women who recognize the value of female leadership in tech.

techPortfolio_Quote_May_31 - 2

“I’ve worked with both female and male entrepreneurs, and in terms of skills and experience, there’s no differences between them. This level of entrepreneurs are driven, focused, visionaries,” says Mark Evans, a start-up marketing consultant with 20 years of experience in the industry.

“One of the realities of dealing with venture capitalists is that it’s all about the money. A lot of them want to nurture and support entrepreneurs, sure, but at the end of the day, they are investing to make a return for their investors. Whether you’re a man or a woman, that’s the way the game is played.”

“A lot of the time, it comes down to the fact that women aren’t asked ‘to play,’ in both the venture capital and angel investment worlds” says Connett, “you have to make an effort to reach out to women, and when you do, you see results.”

Evans says that change can’t come too soon. “Canada really needs to double-down on becoming an innovation-driven economy, we need more people at the table to drive growth, and that means we need to be pulling from the whole population rather than just half of it.”

Tags:
Posted in Features, Focus | Comments Off on Progress for Women in Canada Doesn’t Show up in Tech

Numbers Still Don’t Add Up for Women in Tech

Wednesday, June 1st, 2016

We’re leaning in as far as we can and the numbers still don’t add up.

More women are graduating from North American Universities with business and technology degrees than ever before, and yet when you look around at the industry, men continue to dominate from cubicle to boardroom to podium.

The male skew persists despite findings from multiple studies showing better financial performance among firms with more gender-equal C-suites. If any industry should respond to studies like these, it’s the data-driven tech sector.

But the shift is still not happening enough.

“Often times as a woman developer in the startup world, it can be lonely,” says Julie Haché, a long-time developer who currently leads Shopify’s onboarding team. “Starting out, it affected my confidence, especially in those smaller companies as a junior developer.”

techPortfolio_Quote_May_31 - 4

It’s been a few years since the hard data started coming out from companies like Facebook, Google and Dell that put actual numbers to the stereotype that the tech industry is still very much a boy’s club.

The number of women in the tech workforce still hovers around 30 per cent mark despite internal and external initiatives. That number gets even smaller when you look inside the boardroom, as the Korn/Ferry Institute did in 2013. They found that in the top 100 tech firms, only three women were CEOs, and only three chair the boards they are on.

Julie Steiner is one of those few female CEOs. She founded Percy3D, a video personalization platform that allows people to insert messages and photos directly into video.

techPortfolio_Fact_May_31 - 1

“I’m used to being the only girl in the room,” says Steiner, “I’m used to bringing my VP of Operations, who is a wonderful guy who is about 10 years older than me, to meetings and people immediately talking to him, assuming he is the boss.”

When Vubble’s co-founders made their first inquiries into the venture capital world, they found that same attitude and purposefully pushed away from it. Vubble is an Ontario start-up that curates video playlists for people, brands and organizations. “It’s a lot of middle-aged people with a lot of bravado, just based on my limited experience,” says co-founder Tessa Sproule,

“We didn’t spend much time in that space because it didn’t feel right for us. It felt like it was more of ‘How can you make the most money you can and then what’s your exit plan?’ Meanwhile, we wanted to build a sustainable company that provides value to customers. We didn’t match up.”

Step outside the office and that disparity is reflected at conferences and in schools and universities.

“Attracting more women to the STEM (Science, Technology, Engineering and Math) disciplines is key, and then keeping them there, keeping them engaged and excited is so important.” says Dr. Diana Parry, associate professor and campus lead for the University of Waterloo’s HeForShe campaign. “We need to put measures in place to ensure that diversity because it’s not happening naturally.”

techPortfolio_Quote_May_31 - 3

Dr. Parry cites a few reasons for the dearth of women in STEM, some that start as early as childhood with the parents’ influence, and some that don’t happen until a woman is in the workforce and finds herself alone, unsupported and without mentors.

A 2012 randomized, double-blind study cited in a Harvard Business Review report helps to reveal the challenge women in STEM face in the workplace. Researchers gave science faculty the application materials of a fictitious student randomly assigned a male or female name, “and found that both male and female faculty rated the male applicant as more competent and hirable than the woman with identical application materials.”

“It’s not just about bringing women into the space, it’s about working collectively,” Dr. Parry says. “Gender issues aren’t women’s issues, they are everybody’s issues. We need to engage men in the conversation as much as women. We need to open up the dialogue, review good gender equity, and highlight inclusive workplaces.”

Mohammed Asaduallah created the twitter account ‪@womenandcolor‪ to track that disparity, both for women and people of color in the tech industry at large. Every tweet from the account quantifies the reality of representation on panels and at conferences in Toronto.

“I started the account because I wasn’t seeing myself or the people I work with up on those stages at conferences,” says Asaduallah, a Product Manager & Digital Producer at Format.com. “Diversity of voices makes a stronger company,” he says, an opinion repeated by many others in the tech industry.

“There is a lot of research to support the fact that the more diverse your company is, the more effective it is, the more productive it is, the more money it makes,” agrees Dr. Parry.

Studies on Gender Equality

A now famous study released by the Peterson Institute for International Economics, found that firms that started out with no female leaders had a 15 percent increase in revenue when they increased female representation by just 30 percent. The study surveyed 21,980 firms from 91 countries to conclude that hiring women into leadership positions improved both the performance of the company and the revenue taken in.

They aren’t the first to make such a claim. In 2015, the McKinsey Global Institute estimated that “a ‘best in region’ scenario in which all countries match the rate of improvement of the fastest-improving country in their region could add as much as $12 trillion, or 11 percent, in annual GDP in 2025.” 

Achieving that kind of parity in the industry has to start all the way back with parents, says Dr. Parry. “There’s a lot of research that demonstrates that around STEM that we don’t just need to change girls and young women’s perceptions, but also the parents perceptions because they have a huge influence in terms of what their daughters pursue in their academic careers.”

techPortfolio_Fact_May_31 - 2

 

Once that pipeline is delivering more women into the industry, it’s the responsibility of everyone, of every gender to make sure they feel welcome and that starts with role models and mentors, something Julie Haché has been thinking about more and more.

“I’ve been thinking about is going back into engineering more in a leadership role because I think we need more role models, there’s not enough women in leadership at all in technology.”

“The only conference I’ve been asked to speak at was BlogHer,” says Julie Stein, reflecting Mohammed Asaduallah’s real-time tracking of women asked to speak on panels and at conferences, something he encourages others to take notice of and change.

“Companies ignore us at their peril,” says Steiner of the lack of women in the tech industry, “It is a colossal waste of talent.”

Tags:
Posted in Features | Comments Off on Numbers Still Don’t Add Up for Women in Tech

Cockroaches Rise, Unicorns Fall as Venture Capital Plays Moneyball

Tuesday, May 3rd, 2016

Two straight quarters of declines in VC funding globally show how tech sector money has pulled away from growth-at-all-costs unicorns in favor of the slow-and-steady “cockroaches.”

Now that sobriety has set in, the tech world sees in hindsight how a nearly indestructible creature, able to live on dust, would be more attractive to investors than something that doesn’t exist – like profits among some of the most well-known tech plays of the past few years. Think Pinterest, Yelp, etc.

“We like businesses that are able to fuel their own growth,” said David Crow, a tech industry consultant and former OMERS Ventures Director. “The ones that are able to show strong unit economics, strong margins and strong customer growth.”

techPortfolio_Fact_May_2_1

Leading the devaluation charge, Fidelity Investments wrote down unicorns including Dropbox and Cloudera, companies that had gorged on VC money for putting growth ahead of profitability.

To qualify as a unicorn, a private startup must have achieved $1 billion in pre-IPO funding. A cockroach, by contrast, is a business that builds slowly, focusing on the fundamentals, keeping a close eye on revenues and profits, and limiting spending on fixed assets so that it can withstand economic and competitive headwinds. Shopify, which took 11 years to get to unicorn status, is a classic example.

The pivot away from unicorns has been quick. According to KPMG, only 5 new VC-backed companies entered the unicorn club in the first quarter of this year – less than half that of any of the first three quarters in 2015. And not one VC-backed tech IPO made it to market. Aggregate VC activity fell to 1,829 deals, the lowest since Q2 2013. Total VC funding globally dropped 33 percent from a quarterly high of $39 billion in Q3 2015 to $25.5 billion in Q1 2016.

Sex in the Stairwells

Zenefits is emblematic of the trend. One of the fastest growing startups ever, the online insurance broker went from launch in 2013 to $583 million in funding and 500 employees by the beginning of 2015. By September that year head count had exploded to 1,600.  The story of its decline – the parties, the power struggles, the flawed products and processes, the lack of legal compliance, the lies told to clients, the sex in the stairwells – is just waiting to be turned into a Netflix series.

By February 2016, Fidelity had marked down Zenefits by nearly two-thirds below what it paid for its stake in the company less than a year earlier.

VCs are looking at startups with more  attention to business fundamentals than they did in the heady days of mid-2015. The difference between then and now is like the difference between New York Yankees owner George Steinbrenner and Oakland A’s manager Billy Beane.

techPortfolio_Quote_May_2_2

In the late ‘90s, Steinbrenner had the financial clout to swing for the upper decks in pursuit of baseball’s biggest hitters. But the financially strapped Beane (whose story was the basis of the film Moneyball) focused on signing lesser players with one thing in common: a high on-base percentage. The crew he assembled went on to win 20 straight games in their first season together. In the 2016 game of startup investing,  investors are looking for Billy Beanes.

In the words of KPMG/CB Insights’ Venture Plus Q1 2016, it’s the startups with positive margins, controlled expenses and a clear path to profitability that will get the funding. In other words, well-grounded, like cockroaches.

Andrew Light, Managing Partner for the Americas at Melbourne-based VC firm EatonSquare, echoes the sentiment. “For us it always comes down to people on the management team. Have they done this before? Did they have success? Is the business solid enough to inspire the confidence of investors? For a lot of venture capitalists, taking on early-stage stuff is too risky because if it doesn’t turn out it damages their reputation and makes it harder to sell the next bet.”

Cybersecurity

So where does one find these low-lying, long-lasting diamonds in the rough? One place where cockroaches seem to congregate is the cybersecurity space. Network and enterprise security provider Paloalto Networks took 7 years to get to IPO, while threat forensics and malware protection firm FireEye took 10 years.

Managed security services provider Trustwave, which was just acquired by Singtel, was founded in 1995. Trustwave launched its first managed security product in 2002 and spent the next 13 years slowly building out a global infrastructure of operations centers while growing its customer base.

Up and comers to watch in this space include smartphone security firm Lookout and cloud-based network security service firm Cloudflare.

techPortfolio_Quote_April_29_2

It’s no surprise that many cockroaches are innovating in the cyber security space as opposed to social sharing or other areas that aren’t obvious bets when it comes to monetization. Global spending on information security is expected to more than double to $170 billion by 2020 from $75 billion in 2015, according to estimates compiled by Forbes.

Companies innovating successfully on expensive problems that require solutions as a legal imperative will have more luck getting funded than those coming up with gimmicks.

As Flickr founder Caterina Fake warns in her widely shared article The Age of the Cockroach: Companies that want to outlast the coming funding crisis will need to “plan for a future without much money in it.”

 

Tags:
Posted in Features, Funding | Comments Off on Cockroaches Rise, Unicorns Fall as Venture Capital Plays Moneyball

When did the Cockroach Crawl into Tech Sector Parlance?

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, which are startups with pre-IPO valuations of $1 billion or more. The Irish Times describes the tech cockroach as “a startup consisting of hard-working founders who keep survival at the core of their business strategy.”

The cockroach has also been described as having the ability to quickly become frugal and run lean, although there are no financial parameters for that definition. David Cummings offered a list of characteristics that includes “little-to-no salaries for the entrepreneurs”.

So where did this term first gain traction online?

The earliest published reference we could find was from Dave McClure, founding partner at venture fund and seed accelerator 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 monetise them.” The article goes on:

[McClure] “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.’”

Traction with SlideShare

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 data. 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 her piece, 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 six 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 surfaced in Business Insider‘s “Startups are realizing there’s no Plan B: They have to survive the bad times like ‘cockroaches’“.

We expect the term to continue resonating as VC funding tightens. Read Cockroaches Rise, Unicorns Fall as Venture Capital Plays Moneyball — our own take on this new phase in the tech startup space.

Tags: ,
Posted in Features | Comments Off on When did the Cockroach Crawl into Tech Sector Parlance?

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’“. 

Tags: ,
Posted in Features, Profiles, Technology | Comments Off on Where Did the Term Cockroach Come From?

Toronto is a Cockroach Nest

Sunday, May 1st, 2016

The University of Toronto and RBC recently announced ONRamp, an initiative that will include a startup incubator meant to help entrepreneurs network with investors and each other. ONRamp’s RBC Innovation Hub is the newest among many multilaterally funded programs meant to help startups in a city endowed with world-class academic and financial resources.  

Toronto distinguishes itself as Canada’s financial center, the fourth-largest metropolis in North America, and its namesake university ranks in the world’s top-20. Toronto is also one of the most ethnically diverse cities in the world, a metric that McKinsey & Co. says supports corporate success.

So where are the Toronto-bred unicorns?

techPortfolio_Serbinis_Quote_May_2_1

Ranked 17 in the 2015 Global Startup Ecosystem Report by Compass, Toronto has yet to produce a pre-IPO company valued at $1 billion or more. There’s no unicorn pasture in Toronto; it’s more of a “cockroach” nest. But given the shift away from frenzied VC funding of any startup that grew its user base, this might be a good thing.

Toronto’s Flixel exemplifies the cockroach, a moniker for startups that prioritize revenues over users when it comes to growth. Others include UberFlip and Wattpad. The city has also produced a number of reputable exits, including Kobo, which was bought by Japan’s Ratuken for $315 million, XE.com, and VerticalScope.

“It’s about shots on net, and muscling the good shots through i.e. you need a healthy number of seed/A stage companies, and when it comes to scaling you need growth capital,” says Kobo’s founder Michael Serbinis. “Toronto-Waterloo has the former now, but there are few funds here that can write big, later stage cheques.”

Serbinis currently serves as board director for the Toronto-based MaRS Discovery District, an innovation hub that connects startups with investors and corporations and is a founder of LEAGUE, a personal health management platform.

Endangered Species

If VC funding in the first quarter of 2016 is any indication of what’s in store for startups this year, unicorns are becoming an endangered species. KPMG’s latest Venture Pulse report noted that the first quarter of 2016 saw $25.5 billion invested across 1,829 deals, marking the second-straight quarter in which investors dialed back VC funding and activity.

Only 5 new unicorns were minted world-wide in the first quarter of 2016. By comparison, the fourth quarter of 2015 produced 13, while the second and third quarter each produced 25.

techPortfolio_Quote_April_29_1 (2)

Mark Skapinker, co-founder and managing partner at  Brightspark Ventures, says: “If you look at locations outside of Silicon Valley that have had huge successful companies, it is quite devastating to the surrounding market if they fail at a later stage [like] Nortel in Ottawa, Nokia in Sweden, Blackberry in Waterloo. So, having a unicorn is not always amazing for a city.”

The tougher funding environment will play to Canada’s strengths. The country’s banking system withstood the global financial crisis that began in 2008 while U.S. financial institutions went bust or survived on government support. However, the robust regulatory regime that kept Canada strong throughout the turmoil is a reflection of the conservatism that makes it difficult for all but the most self-sufficient startups – cockroaches, in other words – to get funded.

“Toronto does have a number of cockroach-type companies,” Skapinker said. “It is much harder to get funded in Toronto than somewhere like Silicon Valley and we have a [startup financing] infrastructure that is not very ‘robust’ so companies need to work much harder and be ready for hard times at every stage. That makes them ‘cockroach’ like.”

 

Tags: , , , , ,
Posted in Features, Funding, Marketing, Startups | Comments Off on Toronto is a Cockroach Nest

Startups Eat Into The $4.7 Trillion Financial Services Industry

Wednesday, April 20th, 2016

When Mark Andreessen of venture capital firm, Andreessen Horowitz, declared in 2011 that  ‘software is eating the world’, few predicted that banks – the bedrock institutions of economic activity – would be on the menu.

If Goldman Sachs is correct, fintech – which generally refers to “point solutions” created by startups to make payments, loans, and other financial transactions easier than what’s offered by incumbent banks –  could displace $4.7 trillion in revenue for financial services firms.

In Canada, fintech adoption is set to triple in the next year as startups like Wave and Trulioo unbundle banking services and products. In the U.S., Lending Club, one of the world’s largest fintech startups, has grown its loan portfolio rapidly since the San Francisco-based company went public in 2014. 

Angela Strange, an Andreessen Horowitz partner said in a keynote presentation at the Canadian Fintech Summit 2016 at MaRS Discovery District in Toronto that 75% of millennials would rather go to the dentist than listen to a bank’s message, and prefer financial services from the likes of Google, Amazon, and PayPal over those provided by banks.

Other stats Strange highlighted: Half of millennials think all banks are the same, and two-thirds of them don’t have credit cards.

Hundreds of Billions

The term fintech originally referred to the back-end processes of setting up servers and software applications for the front-end of traditional banking institutions. The definition has since evolved to include any tech solution that provides a financial service or competes with the offerings of financial institutions.

As an indication of the scale of this industry, these services generate more than $200 billion in returns for a group of 25 large banks analyzed by consulting firm Oliver Wyman.

And the competition is ramping up. A recent KPMG report reveals a booming North American alternative finance market. Transaction volume soared to $36.38 billion in 2015, up 213 percent on year.

fintech-fact

Moreover, senior executives in the financial services industry surveyed by PwC for a recent report say 23 percent of their business is vulnerable to further developments in fintech, and fintech founders say they’re targeting about a third of the incumbents’ business.

Another key insight from the Canadian Fintech Summit 2016 is that the future of money and banking is not a matter of big banks battling startups.

Established tech giants like Apple have entered the space with solutions like Apple Pay, and Samsung isn’t far behind. The future of money and banking will likely be a hybrid model that merges the distribution channels and trusted relationships forged by banks with the user-centric sensibility of startups.

Regulation and governance will continue to be concerns in the future. Strange may have said it best: “Fintech startups that will succeed in Canada are the ones that take regulations seriously. Think customers don’t care about anti-money laundering? You’ll end up in jail.”

Apart from shifting demographics and an evolving competitive landscape, other factors such as the use of digital currency and emerging technology will play a role in shaping the future of money.

Fintechs and big banks, for example, are both trying to determine how to adopt and govern blockchain, the structure that eliminates the need for a central clearinghouse to verify transactions.

Robo-advisors are expanding the fintech market, serving those who either do not want or cannot find a financial advisor.

Advancements in virtual reality, augmented reality, biometrics, and artificial intelligence will also offer new opportunities for further innovation.

Overall though, startups have the advantage in deploying innovations because they don’t need to work around legacy IT systems that aren’t easy to abandon because of the huge amount of data that becomes vulnerable in any migration. Meanwhile, millennials are looking for the easiest robo-advisors and automated savings apps.

Like hotels and publishers, the big banks have billions to lose if they don’t provide solutions that mobile-driven, brand-agnostic millennials want.

Tags: , ,
Posted in Features, Technology | Comments Off on Startups Eat Into The $4.7 Trillion Financial Services Industry

Halliburton Chooses IBM Cloud to Help Cut Oilfield Development Costs

Wednesday, April 20th, 2016

Halliburton, the global oilfield services company that works with many of the world’s largest oil and gas players, has adopted IBM Cloud to run more detailed reservoir simulations, which may help struggling producers cut costs.

Record low oil prices, caused by strong output among oil producing nations amid weaker global demand, have put pressure on producers of the fossil fuel to lower extraction costs. Crude oil prices have fallen by more than half in the past two years, and talks between OPEC and Russia aimed at curbing production have stalled.

“Using high performance computing of the IBM Cloud, we can run very detailed simulation models and evaluate a wide range of field development options, which translates into better field development plans for our clients and a competitive advantage for our business,” Steven Knabe, a Halliburton Consulting director, said in an IBM statement.

The world’s biggest oil companies are expected to report their worst quarterly earnings in more than a decade because the industry’s cost-cutting efforts haven’t yet offset the decline in crude prices, Bloomberg reported. This adds pressure on producers to leverage technology to help plan reservoir development in a way that maximizes returns.

Like many industries, oil and gas companies are turning to technical advances available through cloud computing, data analytics, and machine learning to boost productivity.

And there is room for growth. “While some oil and gas companies have invested in their analytics capabilities, many struggle to get their arms around this powerful new opportunity,” consulting firm Bain & Company said in a report titled “Big Data analytics in oil and gas.”

Adopting IBM Cloud technology allows Halliburton to “quickly run hundreds of simulation cases to forecast the possible behavior of complex oil and gas fields,” according to the IBM statement, which doesn’t disclose terms for the company’s usage of IBM Cloud.

IBM markets a range of solutions for enhancing production, improving processing efficiency, and optimizing global operations for the oil and gas industry.

Halliburton Consulting specializes in formulating development plans for both new and mature fields.

Tags: , ,
Posted in Features, IBM, Technology | Comments Off on Halliburton Chooses IBM Cloud to Help Cut Oilfield Development Costs

Canada’s Big Banks Turn to Hackers for Innovation

Thursday, March 31st, 2016

Canada’s banking system emerged largely unscathed by the global financial meltdown that started in 2008, earning the country so much credit that the Bank of England drafted Mark Carney, the Bank of Canada’s governor throughout the crisis, to be its leader.

Prudent Canadian lending practices, however, haven’t translated into innovation. According to MaRS, the Toronto-based non-profit that commercializes home-grown tech, Canada’s financial center and largest city is ranked ninth globally for fintech innovation. Global investment in fintech ventures jumped to about $12.2 billion in 2014, according to a report from management consultancy firm Accenture, making it a key area for any city aiming to stand out as a tech ecosystem.

“The big banks are a little late to the game, but we have the major ingredients for a strong fintech ecosystem,” says Robert Antoniades, general partner and co-founder of Information Venture Partners, a Toronto-based venture capital firm.

Hackathon

Go Grassroots

One way for big institutions to engage with the next generation of innovators is through grassroots meetups. Scotiabank recently delved into hackathons for the first time, hosting their Debt Challenge, where 100 coders and designers crammed into the bank’s boardroom for a 40-hour competition.

“I met my team for the first time in the conference room,” says Mohit Kishore, a 23-year-old computer science student at York University in Toronto. Kishore had been to hackathons before with Royal Bank of Canada (RBC) and coder meetups. “I prefer to work with new people,” he says. “Working with those you know doesn’t always produce new ideas.”

Mohit’s team created SCOTTY (Scotiabank Optimization Tool for You), a personal financial advisor built with Android, IBM’s Watson—which leveraged its powerful machine-learning capabilities—and their cloud platform Bluemix.

SCOTTY scored the team second place. Piggly, a Tamagotchi-like piggy bank where users have to spend real money to keep it alive, won the $15,000 grand prize.

 

hackathon2

“One of the guys on the team saw a similar concept discussed on Reddit,” says Cassandra Hui of the winning team, who developed the idea in advance. Hui even sat down with credit counselors to figure out how to gamify paying off debt. They’re now in talks with Scotiabank over how to potentially implement Piggly through the bank’s Digital Lab.

Be Aggressive

Hackathons are one way Canadian banks can innovate but they still need to share ideas and be more aggressive, says Antoniades.

“What I like is that each big institution now has an innovation strategy,” he says. “We’re still seeing banks wanting exclusivity.

“Banks need to be able to make quicker decisions with a technology. But it’s only a matter of time before that changes.”

Are you a developer looking to innovate? Try IBM’s Bluemix for free for 30 days.

Tags: ,
Posted in Features, IBM, Technology | Comments Off on Canada’s Big Banks Turn to Hackers for Innovation

We’re Calling It: Startups Have Ended the Industrial Era

Thursday, March 31st, 2016

The world’s economic map is being redrawn. Industries dominant since the 19th century with support from government institutions and political alliances are now a drag on the global economy. Meanwhile, tech startups — disregarded by many of the bureaucracies and political offices that perpetuated the old industrial order — are creating growth.

In this new epoch, cities, countries, and entire regions have the opportunity to advance economically by creating the conditions that attract information and communications technology talent and the investors willing to fund them. Outcomes are no longer determined by factors such as access to natural resources, military power, and international treaties.

Instead, economies are increasingly influenced by advances in processing speeds, storage capacity, and connectivity, which have spurred the migration of the enterprise onto cloud-based platforms developed by startups.

Reflecting this trend, technology mergers and acquisitions announced in 2015 reached a record high of $313 billion, up 82% compared to the $171.6 billion announced in 2014, VentureBeat reported recently, citing a PriceWaterhouseCoopers report.

And according to the 2015 Global Startup Ecosystem Report by Compass, a significant portion of U.S. job and economic growth in the past 15 years has come from high-growth technology companies such as Apple, Amazon, Facebook, and Zynga. These companies barely existed two decades ago and yet the nine largest tech companies have created almost a trillion dollars in new wealth.

Net New Job Growth

Companies in the startup space are disrupting and outperforming traditional industries — think Airbnb versus the hotel industry. A 2010 study by the Kauffman Foundation illustrates the economic importance of startups best: In the 28-year period ended in 2005, startups created the only net new job growth in the U.S. while “industrial era” companies collectively shed jobs. And the number of billion-dollar-plus tech companies have only multiplied in the years since the Kauffman study, further underscoring the shift in the balance of power towards startups.

Most importantly, young workers are embracing the new tech startup paradigm.

Smarting from years of diminished long-term and permanent employment prospects, millennials — who will drive economic growth in the first half of this century — are being both pushed and pulled into joining or founding these mini-factories of industrial disruption.

As a result, 32% of self-employed millennials are running startups, versus just 9% of boomers, according to a recent report by Global Risk Insights.

To be sure, confidence about startup prospects might waver amid recent write-downs and “down rounds.” However, few industry pundits are calling the volatility a repeat of the dot.com collapse of 2000. Mark Suster, managing partner at Upfront Ventures, calls what’s currently happening with valuations “a reversion to the mean.”

“The valuations were high; they’ve come back to the historical norm, so we could call that failure or we could just say that companies were overvalued for the past two years,” Suster said in an interview with TechCrunch.

Given the degree to which most people spend their lives online, the current correction might just make the startup ecosystem healthier because it’s making valuations more realistic.

Although Silicon Valley still dominates, burgeoning pockets of innovation are rising up globally and making their mark on the economies they operate within. Governments can choose to support or restrain their growth, but as processing capabilities speed up, smart devices proliferate, and connectivity continues to expand into all of the things people interact with, the latter choice becomes increasingly difficult to sustain.

Below are a few examples of tech ecosystems cited in the Compass report, and their economic impact.

Singapore (#10)

Jumping 7 spots from the 2012 rankings, Singapore’s tech ecosystem has experienced a meteoric rise. With its eyes set on becoming the world’s first ‘Smart Nation,’ tech startups are an integral component of the city-state’s long-term economic plans. This tech ecosystem is an excellent example of how risk aversion can serve as a competitive advantage. Rather than take a reactionary stance, Singapore-based multinational corporations (MNCs) are investing in their own disruption by seeking out startups, incubators and accelerators to fund, in order to minimize the risk of being displaced by younger, leaner competitors in the future. Risk aversion also underlies the government’s $1 billion Technopreneurship Investment Fund, which offers up to $2 million in funding to individual tech startups, and also shoulders some of the upfront costs associated with launching a tech startup. As a result, MNCs and Singapore’s government are redistributing risk within the tech ecosystem and shifting the burden from startups, creating a scenario in which risk is reduced for stakeholders, while potential gains remain high. The program not only bolsters homegrown startups, it is also attracting foreign entrepreneurs.

Singapore is also one of the 12 countries participating in the Trans-Pacific Partnership, a free-trade zone similar to NAFTA. These 12 economies have a combined GDP of $28.5 trillion, which accounts for nearly 40% of global GDP. Free trade with countries that have other powerful tech ecosystems such as Silicon Valley, Sydney, and Toronto could help bolster an already strong economy through perks such as the reduction or elimination of tariffs. By having greater access to North American markets, Singapore will also gain an edge over its biggest competitor, China.

Berlin (#9)

No other tech ecosystem has experienced more growth in the past two years than Berlin. Earning a 10 out of 10, Berlin’s growth index is now double that of its closest contender, Bangalore (4.9), and almost 5 times greater than Silicon Valley. Its stand-out growth can be attributed to a rise in exits, VC funding, and the notable back-to-back $6 billion IPOs of Zalando and Rocket Internet, which kicked Berlin’s tech ecosystem into high gear. High-valued exits aren’t the only signals of growth. According to a McKinsey & Company report, Berlin could gain 100,000 jobs between 2010 and 2020 as a result of initiatives focused on strengthening the local startup scene. Furthermore, the German Patent and Trade Mark Office received almost 66,000 patent applications in 2014 alone, a good indication that the city is thriving as an innovation hub.

Having signed a recent partnership with Tel Aviv — another highly-rated tech ecosystem — Berlin shows no signs of slowing down. The city’s startups will gain access to mentorships, coworking spaces, networking events, and more in Tel Aviv, exposing them to greater learning opportunities and allowing them to expand their market reach outside of Germany. The value and economic impact of the partnership will reveal itself in the next few years, and should contribute to Berlin’s continued upward climb.

Tel Aviv (#5)

Berlin’s tech ecosystem partner ranks at number 5, making Tel Aviv the top tech ecosystem outside of the U.S. Tel Aviv’s lead talent is molded by higher education, and military conscription which instills discipline and a sense of camaraderie, while also providing future entrepreneurs with opportunities to connect and collaborate. Combined with the availability of VC funding, these factors contribute to Tel Aviv’s entrepreneurial success. With an estimated 3,100 to 4,200 active tech startups, the city’s density allows for greater collisions and benefits from the cluster effect. Connected and experienced, its startups attract more foreign capital than any other European tech ecosystem (38% more than the European average). And its economic impact extends far beyond Israel; Tel Aviv startups rank first in Global Market Reach, having twice the percentage of foreign customers as Silicon Valley.

Tel Aviv is poised for greater economic success as growth in big data, IoT, cybersecurity, and digital currency accelerates.

Montreal (#20)

New to the list, Montreal has made considerable headway in positioning itself as a tech ecosystem worthy of global attention. The 2015 Global Startup Ecosystem Report ranks Montreal startups third in Global Market Reach, with a 57% foreign customer base (35% above the North American average) and an average number of product languages of 2.4 (24% above the North American average). This tight-knit startup community has experienced steady increases in success. ICT companies like Amaya Inc. and Budge Studios, have five-year growth rates of close to 3,650% and 2,500% respectively. High growth rates tend to be accompanied by hiring sprees, and Montreal startups have the added benefit of access to the most inexpensive tech talent amongst the top 20 tech ecosystems. Montreal’s gains on this front are crucial for Canada, which has been economically hamstrung by weak oil prices over the past two years. The fact that Montreal’s Series A funding is 11% higher than any other tech ecosystem only helps.

Alhough it’s a relatively young innovation hub, Montreal’s talent is making the most of what the city has to offer. When large tech companies like Ubisoft set up satellite offices in Montreal, they provide a springboard for talent who can also use that experience to launch their own companies, increasing Montreal’s contribution to Canada’s GDP.

Lead or Lag

As power continues to shift in this tech-driven epoch, it is the success of startups, not established companies, that will support and grow economies. How governments and private industries invest in startups will determine future GDP, international competitiveness, and whether or not they lead or lag on the global economic stage. 

 

Tags: ,
Posted in Features | Comments Off on We’re Calling It: Startups Have Ended the Industrial Era

VIDEO: Military Experience Powers Tel Aviv Startup Ecosystem

Thursday, March 31st, 2016

With more startups per capita than anywhere in the world, Tel Aviv is consistently ranked among the world’s leading tech cities, making it a formidable competitor to Silicon Valley, London and Berlin.

At the same time, Israeli startups command an outsized presence on the most important equity exchanges. After the U.S. and Canada, Nasdaq has more Israeli companies than from any other country, and London boasts more Israeli IPOs than from any other foreign nation.

Avichay Nissenbaum, general partner at Tel Aviv-based Venture Capital firm Lool Ventures, and other members of the city’s startup community talk about why Tel Aviv works.  

https://youtu.be/XdYdcSzejkw

Tags: ,
Posted in Features, Startups, Technology | Comments Off on VIDEO: Military Experience Powers Tel Aviv Startup Ecosystem

Newer Entries »