Blog | Year One Labs

Year One Labs Completes its Five Investments

by Benjamin Yoskovitz | March 8, 2011

As mentioned the other day, we’ve completed our fifth and final investment. The five deals have taken about 6 months to do, starting in September 2010. Our plan has always been to create five companies in the lab this year. And with that complete, our attention turns towards helping our entrepreneurs build their startups as quickly as possible. The balancing act between recruiting startups into Year One Labs and working with the existing portfolio has definitely been challenging at times; and now we get to have a more singular, aggressive focus.

So what does this mean for other startups that still want to pitch us?

By all means, go ahead. We’re all about helping entrepreneurs, always have been, always will be. We will not however, be able to invest in your startup at this time. That may change in the future, but if funding is what you’re looking for immediately, we won’t be in a position to help. Still, don’t hesitate to get in touch.

There is a very good chance that our startups will be looking for talented people to join them. Two of our startups already have additional team members beyond the founders helping build their core products. If you’re interested in learning more about our portfolio and want to stay in touch about potential opportunities, please do so.

We are planning to share more of our learning about the process to-date, and certainly about how things go in the future. So stay tuned…

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Year One Labs Invests in Assemblio Founded by Jon Abrams and Elan Dubrofsky

by Benjamin Yoskovitz | March 7, 2011

We’ve just completed our fifth and final investment in a startup called Assemblio. The company is founded by Jon Abrams and Elan Dubrofsky. Both of them hail from Ottawa.

Assemblio is in the event planning space. We don’t have much more to share at this point, except that we’re extremely excited to have Jon and Elan on board.

We first met them when they pitched a different idea to us. We encouraged them to come and meet us at the Google Hackathon. They came to the Hackathon and worked on something else entirely. During the hackathon we could see their enthusiasm and tenacity, but also their thoughtful approach to tackling a manageable and interesting problem in a 1-day event.

Discussions and brainstorming ensued, and we landed on Assemblio as the project worth pursuing. It’s particularly interesting to us because of Alistair’s deep insight, network and experience in the event / conference space. He was recently co-chair of Strata and is currently in Silicon Valley running Cloud Connect. Alistair has been running things at Interop for 10 years and is the founder of Bitnorth, which is now in its fourth year.

Jon and Elan showed an ability to throw a bunch of ideas around, dig into the interesting ones, stay flexible, dump the stuff that didn’t make sense and stay open minded, while remaining opportunistic and passionate. That gave us the confidence to make the investment in them and Assemblio.

Posted in Assemblio, Blog | 4 Comments »

Year One Labs Invests in Customer Support Startup Founded by Dov and Mitch Amihod

by Benjamin Yoskovitz | February 28, 2011

Year One Labs is pleased to announce our investment in Dov and Mitch Amihod. This is our fourth investment.

For now, their company is unnamed. We can tell you that the brothers are tackling big problems in the world of customer service. It’s fair to say that very few of us regularly have great customer support experiences; there’s no shortage of opportunity that Dov and Mitch are exploring.

We met Dov and Mitch at the Google Hackathon that took place in January, 2011. We were impressed with their effort: the thinking that went behind it, the work, the ability to get something “completed” for presentation. They may be first time entrepreneurs but they’ve got lots of life experience, along with a level of maturity and intensity that says to us, “They’ve got Founder DNA.”

You can learn more about Mitch at mitchell.amihod.com. What you’ll see immediately is how much he likes to hack, get stuff built, and try things out. Dov’s also online at dov.amihod.com. Dov has a deep technical background as well.

It’s early, but you can expect a lot of news from Mitch and Dov Amihod soon as they join Year One Labs and get started!

Posted in Blog | 2 Comments »

Three questions all marketers must answer

by Alistair Croll | February 8, 2011

Often, a company will undertake marketing activities because they feel like they should. I spend a lot of time writing marketing content for conferences, startups, and other projects, and I’m usually willing to do it. But I always have three questions I require that the other person answer before I start. I realized this a few years ago, and if I had to teach one lesson about marketing, this would be it.

The three questions are:

Who’s the audience?
What specific action do you want them to take?
Why will they take that action? What’s their motivation?

Some examples:

This sign is for hotel guests to get them to leave the building fast or they will burn to death.
This blog post is for realtors to get them to attend this conference or they will price houses badly and lose money.
This interview is for politicians so that they will look into a bad piece of legislation and change it to avoid being voted out of office next election.
This newspaper article is for hockey fans to encourage them to watch tonight’s game or they will miss an amazing moment in sporting history.
This Google ad is for single moms to convince them they should try my babysitting service so they can have an evening at a movie and relax.

In my experience, few people are disciplined enough to ask these three questions. They do a press release because it’s the thing to do (and since that means it’s aimed at everyone, with no particular goal, it usually sucks.) On the other hand, asking these three questions does several things:

It makes your message targeted and to the point. You can write in a tone your audience will appreciate.
You can test it more easily. Rather than saying, “please proofread this,” you can ask reviewers who they think it’s for and what one point it makes. Better yet, you can find reviewers who are in your target audience and ensure that it communicates the right message.
It allows you to segment the audience. Compared to other people, did single moms try the service more?
It allows you to measure the effectiveness. How many tickets did you sell? Did all guests get out of the building alive?
It allows you to understand their motivations. When we survey the moms, was an evening of relaxation their top motivation? Or was there another reason for it? Did the politicians act to protect their seat, or because they genuinely thought the legislation was flawed?

Being able to analyze the results of the activity tells you whether you should do it more, abandon it, or adjust your strategy to a different audience, action, or motivation. It’s the basis of a lean approach to marketing, and these three questions force a marketer to tell you the scope and hypothesis you’re testing.

Posted in Blog | 2 Comments »

Are you a free electron? Co-founders wanted!

by Raymond Luk | February 2, 2011

At Year One Labs we’ve come to appreciate the value of “free electrons,” i.e. people who may not be the originator of the Big Idea but who have founder DNA. It’s easy to fall into the trap of believing that the most important founders are those who came up with the idea. But this doesn’t make sense in a Lean Startup world. Remember that most plans don’t survive first contact with customers! Most ideas go through so many rapid iterations that they’re quickly unrecognizable (read Founders at Work for some great examples). Ideas are important but successful startups need great teams more than they need great ideas.

Photo by Alistair Croll

This is what investors mean when they say “I’d rather invest in an A team with a B idea” rather than vice versa.

We think there are plenty of talented entrepreneurs out there who haven’t co-founded a startup because they feel they missed the boat if they weren’t there when the idea was formed. If you’re one of these lurkers, reach out to us at Year One Labs. Come participate in one of our Hackathons or talk to us about one of our startups (or the long list of ideas we’re always incubating).

Ideally you’re a monster coder, a brilliant UX designer or just kick-ass at pounding the pavement and making sales. If you’re talented and have a passion for solving problems, you’re already founder material. We may pair you up with other founders, enroll you in a Hackathon, get you out there doing customer interviews or cranking out an iPhone app. You’ll get a taste of what startup life is all about.

Who knows, along the way you may just come up with the next big thing…

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Year One Labs Invests in nCentiv.es

by Benjamin Yoskovitz | January 26, 2011

Ncentive logo Year One Labs is pleased to announce its investment in nCentiv. It’s our third investment to-date.

The company was founded by Theo Ephraim and Kyle Seaman. Theo is an experienced web developer with a particular interest in interface design. He’s a recent McGill University grad where he focused his academic research on computer vision techniques to enable new methods of human computer interaction and projector-camera systems. Having said that, nCentiv has nothing to do with that (at least not yet!)

Kyle is as entrepreneurial as they come, having started his first business at 14. He’s been involved in a host of projects, from tourism to grocery delivery to technology. He also helped start Startupifier, a student-run organization to promote entrepreneurship across multiple universities in Montreal.

As with our previous investment announcements (Endloop X and Localmind) it’s very early and so we don’t have much information to share about nCentiv. The name provides some clues, but it wouldn’t surprise me if that changes at some point in the future.

Posted in HighScore House, Year One Labs | 6 Comments »

The Importance of Timing, Grabbing Opportunities and Surviving – an Interview with Adrian Schauer

by Benjamin Yoskovitz | January 24, 2011

Adrian Schauer is an investor and mentor at Year One Labs. He’s shared his entrepreneurial story in a quick Q&A. This is part of our ongoing series of interviews with our investors and mentors. You can check out the previous interviews with Tobias Lutke, Mike Montero, Jeremy Edberg, Randy Smerik, Ash Maurya and Luc Levesque.

It’s interesting to see how Adrian and his partner, Brady Murphy (also an investor & mentor in Year One Labs), discovered a market opportunity for their startup Vortex Mobile (which also spun out Vortex Connect.) There’s some interesting wisdom and insight with respect to co-founder dynamics and selling your company. And Adrian is very honest about the struggles his company faced during the financial crisis.

What’s your entrepreneurial background? How did you get started?

Adrian: My father is an engineer / entrepreneur (see www.proceco.com) so from an early age I saw starting a business as a great way to get leverage, add value, and have a good quality of life. After graduating my M.A.Sc. in Photonics at UofT in 2003 I toyed with some business ideas, the leading candidate being an energy efficiency consulting business. However, when my prospective partner decided to go back to grad school I took a job at Rogers Wireless in New Product Development. This allowed me to see the early stages of the cross-carrier SMS marketplace in Canada which seemed to be burgeoning with opportunity. After only a couple of months on the job I began discussing business ideas with a friend Brady Murphy, who I’d met playing varsity basketball in CEGEP. After 9 months of revisions on an idea that started as building an SMS nightlife community to supplant the club flyering model, we settled on the idea of becoming a full-fledged mobile marketing provider. Brady quit his job in Oct 2004 and began pitching our offering. Our first software was written by a friend on my ultimate frisbee team. $20,000 of personal savings financed our first year and by September 2005 we had enough business coming in for me to quit Rogers and go at Vortxt Interactive full-time with Brady. We grew organically from there eating what we killed and hiring alternately developers and account people as the business required. Until Q1 2009 we never had a quarter with less revenue than the previous quarter.

Originally, the company was called Vortxt Interactive but we rebranded to Vortex Mobile in the summer of 2007. The reason for this rebrand was that we had started doing much more than SMS marketing (Facebook, mobile web, apps, etc.) and so the “txt” reference became limiting.

What happened around Q1 2009 that impacted the business negatively?

Adrian: Here I’m referring to the period from November 2008 to February 2009. This is when the financial crisis hit “main street” for us. Our revenue in Nov 2008 dropped 60% vs. the previous month. Customers just stopped signing deals because no one knew how bad things were going to get economically and mobile marketing was a “discretionary” spend. At the time, we were also very dependent on agencies as channel partners and when their volume of business dropped so quickly they found themselves overstaffed and unwilling to outsource any work.

We implemented an austerity plan (staff took 15% pay cuts, management took 30%, 2 people were laid off, and 3 support staff were put onto 3 day workweeks). At the end of January we were making payroll out of our personal lines of credit. We redoubled our sales efforts, collected our receivables aggressively and stretched our payables. Then, as quickly as the crisis hit, by February it had passed. Everyone went back up to full pay and support staff came back full-time.

After this crisis we became a bit more conservative in our growth plans and more diligent with our cashflow.

Vortex Mobile was acquired by Transcontinental – what was that experience like?

Adrian: The process from initial meeting to closing was 4 months. We had decided that given the market and company dynamics, it was time to shop the business and we had hired an M&A advisor to run a process for us. However, before we went to market with our pitch Transcontinental emerged as a suitor. We thought the fit was great and so held off on involving other prospective buyers provided that they were fair and moved quickly. This proved to be the case.

From the 2 months it took to negotiate the LOI to the 2 months of due diligence and back-and-forth on the SPA the sales process was an exhausting affair. With Brady focused on delivering good final quarter numbers and in the interest of keeping him out of antagonistic interactions with his future bosses, most of the work landed on my shoulders at the same time as Vortex Connect was going through a period of rapid evolution. When the SPA signed on Friday and the money hit the accounts on Monday there was a great sense of relief for both Brady and me. The fit was so good that both parties felt like they’d gotten a good deal.

We both celebrated a successful exit financially, a great end to an era, a significant de-risking, and the fact that we came through some stressful times with our friendship stronger than ever. I was happy to now be able to focus on just one business, and Brady was happy to be in a great situation with executive support and extremely positive relationships with Transcontinental leadership.

Instead of working at Transcontinental, you spun off Vortex Connect, which is in the B2B space. Why?

Adrian: We had spun off Vortex Connect, the B2B enterprise software division of Vortex Mobile in Feb 2009 specifically because we believed that the two business lines would ultimately have different acquirers. It also allowed Brady and me to run separate businesses more in line with our diverging risk tolerances. Connect was a higher risk proposition with the potential for greater upside since it is more truly scalable as a product company. It was also a riskier bet that could (and still can) miss the mark. Vortex Mobile was more established and was growing strongly in a market leading position but was not looking for >100% year-over-year growth anymore.

The final chapter on Vortex Connect has not been written, but so far one could say things are going according to plan.

How did you get into the mobile workforce management business with Vortex Connect?

Adrian: It began with a single concept, using SMS to fill shifts on short notice, which became the Shiftex product. We came up with the idea while pitching one of McDonald’s agencies when we were challenged to solve some business problems outside of promotions. Although the idea didn’t go anywhere through that agency, we liked the idea enough to build a prototype and start pitching it. Tim Horton’s signed up shortly thereafter followed by McDonald’s. The mobile workforce management business line was born.

Although you’re the CEO & President of Vortex Connect, you’re an engineer by trade, how did you find the transition from a tech focus to business focus?

Adrian: The transition was a natural one for me. I enjoy complex problems and running a tech start-up offers plenty of those. When Brady and I started he was more sales focused and I was more product focused but over time managing people became the most important skill for both of us.

What drives you?

Adrian: I enjoy building companies in emerging spaces. Finding a niche, conceiving of a product and go-to-marketing strategy, and finding and motivating great people are the most rewarding parts of entrepreneurship for me. Although it’s nice to make money, it’s more about building something of value. Creating jobs and producing products that fill a need fit well with how I want to be in the world, but it’s the challenge of the game that really drives me.

What have been the most important lessons you’ve learned as an entrepreneur?

Adrian: It’s all about the people.

If you can sell the rest will follow.

Make sure you’re in the right space and the right business model will find you. This works better than being rigid about your business model and hoping the market comes to you.

Any predictions for what will happen in the mobile market over the next 12 months?

Adrian: The barrier to entry for building mobile apps is coming WAY down. Mobile companies have to find a way to add value over and above having mobile development competence.

The browser will start to take over from apps for everything except gaming.

What are your goals for working with Year One Labs and the startups we bring in?

Adrian: I am keen to see lots of different business models: B2C, freemium, infrastructure plays, … and learn how applicable the lessons I’ve learned in my entrepreneurial career are. I’m also on the hunt for the business I will one day run which is guaranteed to succeed, will make all stakeholders hugely wealthy, is free from ups and downs, and takes very little effort to run. *grin* There may be some clues at Year One Labs.

Posted in Advisors, Blog | Comments Off

Google Hackathon recap

by Alistair Croll | January 24, 2011

Last Saturday, roughly 55 people spent the day at RPM, where we’re based, building applications. While a couple of participants had prepared in advance, most of the projects were thought up, designed, and presented within twelve hours. Google’s Sean Lynch, as well as some of his colleagues from Google’s Montreal office, were on hand to steer people through the intricacies of Google’s developer stack.

It was an amazing day, with a ton of effort and some really inventive new applications. In the end, we built eighteen apps. Judges, including Sean Lynch, Ray Luk, the Montreal Gazette’s Jason Magder, podcaster and event organizer Bob Goyetche, and Band of Coders’ Brydon Gilliss, had a tough job ahead of them. But they prevailed, awarding books and T-Shirts for a variety of achievements.

Evotune, where users vote for computer-generated snippets of music they like best, and genetic algorithms try to evolve the next great loop from the results. It’s live for you to try, and won the coveted “most rhythm” award.
Incidental Traveller, which picks a random destination for you and tells you about it.
My First Email, a really simple e-mail for tech luddites. This won the “largest font” award.
Wallpaper of the Week, which crowdsources desktop designs
Local Nose, using Google Earth to ask questions about a location (and reminding Y1L startup Localmind that competitors are always just a step behind you!)
Interpretdreamz, which shows and tells you the meaning of your dreams. Won the “unfortunately viral” prize, partly because the pictures it chooses to match the words in your dreams aren’t always easy to look at.
Stalk your Customers, helping local businesses better understand their clients and competitors. Built in a day by Localmind’s Lenny Rachitsky with the help of Briac Guibert, this won the “most easily monetizable” prize. Plus, it’s live and running.
Cabnearme, which helps you find the closest cab, fast. Also live.
Twitfinance, an experiment to see if Twitter chatter and stock prices are related.
Himalaya, a front-end for Google Analytics to make it easier to see who’s sending traffic to your site.
eeSenter, which uses tree views and App Engine to structure lists of data like bookmarks.
GTacts, which mimics etacts functionality within GMail to track and update contacts automatically. Built by folks who are about to become new residents of Year One Labs (stay tuned!) Tons of interest in using this to fix contacts from all of the participants, too.
GDocs Mail, a search tool to find and preview documents quickly across GMail and Google Docs. Built by the Dokdok team, who are residents of the RPM co-working space and recentl additions to the Real Ventures portfolio.
Cupid-meter, an experiment in sentiment analysis trying to show whether Montreal or Toronto is more romantic.
P2P Library, a way to scan, track, and share your things with your friends in a lending library. This team of brothers won the “we would use that” award.
Phrasealign, a tool for disambiguating formal translation.
Pocketcomics, like an RSS reader for online comics that crops and sizes them to mobile phone formats.
Nudgely, an email tool to generate lists of tasks and remind you about them in the future.

The event succeeded far beyond what we’d hoped, with dozens of people contributing time, money, and travel to make it possible. We’re already fielding calls about doing another one in the coming months, this time focusing on Big Data. We’d also like to thank Leila Boujnane and the rest of the crew who ran the #HackMtl event here a few months ago, for showing us how to put one of these together so smoothly; and Pete Taylor and Liesl Barrell for devoting their weekend to coordinating, feeding, and entertaining us.

(More shots of the event, in full size, are available on Flickr.)

Posted in Blog, Year One Labs | 7 Comments »

Mike Montero’s Lessons Learned as a 3-Time Entrepreneur

by Benjamin Yoskovitz | January 11, 2011

Mike Montero is a serial entrepreneur with two successful exits under his belt and a third startup in-the-works called CrowdTwist. Mike is also an investor in VYou and Year One Labs. He’s recently published a blog post entitled, 11 Observations the Third Time Around, reflecting on his past experience and current experience building his latest startup. It’s a must-read; for entrepreneurs in the thick of things I expect you’ll nod your head throughout in agreement. For those that are thinking about jumping into startup life, you’ll get a great sense of how serial entrepreneurs attack things.

I’ve included a quick synopsis on a few of the points that stood out for me:

Craigslist remains an effective place for recruiting startup talent. Mike points out that he met his co-founders Irving Fain and Josh Bowen through the post. And CrowdTwist has hired two people as a result of postings Mike made in Craigslist.
Mike remains paranoid about his competition. Before going to sleep he’s panicking that the competition is working harder and catching up. He does admit that things are a bit more balanced these days with the confidence he’s accrued after having two successful startup exits. He writes, “I’m confident I will be paranoid tonight before bed but I’m also confident that I’m going to lead.”
Don’t get attached to what you just built because it’s going to be rewritten many times over. Mike makes a note that he’s amazed at how many times he’s rewritten the Crowdtwist product (and they’re still an early startup). Being able to scrap things and redo them is critical.
The Front End Developer role is becoming more and more important: “being able to put together world class HTML, CSS and JavaScript is an essential part of building Web applications now and HTML 5 is going to require even stronger skills.”

And finally, Mike gives a shout out to NYC and what’s going on there in terms of the respect the startup ecosystem is building. Things are definitely moving in New York, although there’s a lot of work still do to. Charlie O’Donnell’s recent post 250 Developers calls for the addition of 250 developers into startups. Fred Wilson adds his thoughts in a post, Talent and Bandwidth, addressing the talent shortage in the city. Things are happening in other cities too, and I think it’s a good sign that more people feel like starting a Web startup is becoming a legitimate alternative to getting a “day” job.

Go check out Mike’s post: 11 Observations the Third Time Around.

Posted in Advisors, Blog | 2 Comments »

Year One Labs “Office Hours” – Meeting Entrepreneurs and Co-Founders

by Benjamin Yoskovitz | January 10, 2011

Year One Labs is always looking to meet entrepreneurs and potential entrepreneurs. We’re always interested in meeting technical co-founders too; people who have yet to start a company, may not have an idea they want to jump on, but are interested in running a startup. We have startups that need co-founders. And some of the most interesting, talented and passionate people are those that have yet to make the leap, but want to, with the right idea and team.

So that’s what Office Hours is all about. Every Wednesday from 9am-11am we schedule quick 30-minute meetings with entrepreneurs and potential co-founders. We’re happy to listen to your pitch, and we’re equally happy to just get to know you and what you’re interested in. So come meet us.

Here’s the sign-up link: http://y1lofficehours.eventbrite.com/

Pick a day and we’ll schedule a time. Most meetings are with two partners from Year One Labs. You don’t need to come with a polished pitch deck. If you’re interested in startups, want to run one (whether it’s your own idea or someone else’s) and you’re itching to get started … come meet us.

Posted in Blog, Year One Labs | 3 Comments »

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