Judges weigh in on the importance of understanding customers, market potential and the problems that need to be solved.
Judges of 2017 Venture’Challenge.
Innovate Manitoba’s sixth annual Lift’Off event, held June 20 at the Fort Garry Hotel, was cause for celebration, clearly showing that the innovation incubator had succeeded in what it set out to do from day one.
Jan Lederman, president of Innovate Manitoba since its inception in 2012, recalled how back at the beginning nobody in the province was talking about high growth startups. “We saw this in markets like San Francisco, Boston, Toronto and Vancouver, but nobody was talking about that here in Manitoba. Our goal was to change that.”
“We saw it as incumbent on the business community to gain a better understanding of how to attract these kinds of businesses and the investors that follow them. Investors will invest in a business with a strong growth trajectory. We needed to provide our entrepreneurs the tools to accelerate growth and attract risk capital.”
80 startups, 538 entrepreneurs, and over $113 million in risk capital later, Innovate Manitoba has achieved its goal. Add to that the fact that the startups coming through the Innovate Manitoba’s Launch’Pad bootcamp and Venture’Challenge system have raised an average of $500,000 in their first 18 months. These are true Manitoba-made success stories.
The five companies participating in the Venture’Challenge segment of Lift’Off are further proof that Innovate Manitoba is continuing to help develop Manitoba companies that are scalable and have global potential.
All five qualified by participating in Innovate Manitoba’s intensive 3.5 day Launch’Pad Startup Skills Bootcamp in May. Each had 20 minutes to sway the judges with their pitch that needed to convey a strong management team, understanding of their customer, market and competition, a clear business model, a quality product and sound financials. While the cash prize component was sweet— including $20,000, $7,500 and $3,500 for 1st, 2nd, and 3rd prize respectively—most agreed that it was the judges’ feedback, exposure and in-kind prizes that really was the icing for participants. See more about the prizes.
Venture’Challenge 2016 winner Heather Urquhart, huna Natural Apothecary put it like this. “I love this event. It’s a chance to get out and share your company not just for potential investors but also to get feedback on your business model and where you need to take it to become investor-ready. You’re also able to talk to other entrepreneurs and make great connections.”
As in past years, Lederman emphasized the importance of timing for those in the winner’s circle. “This event is occurring at a particular point in time and the winners are usually those companies that are a little further along in their business model. That doesn’t mean however that one of the other companies might not leapfrog the winners over the next several months.” She added, “The startups pitching here have already demonstrated what it takes to become scalable, global success stories.”
Three Very Different Winners
1st Place: Callia— The best new way to send flowers, shaking up the floral industry with a lean, quality supply chain and strong digital brand.
Callia founder Catherine Metrycki wowed the judges at Pitch’Day 2016 and did a repeat performance during her time on stage for Venture’Challenge 2017. All of the judges, including serial entrepreneur and innovator Michael Sikorsky were clearly impressed. “’Flowers’ won because it was an overall better pitch, overall better thinking, and book end to book end thought through,” he said. “You got ‘I’m going to be a global brand let’s do this!’” This “clarity of thought” was a winning factor for the pitch according to Sikorsky and the other judges.
Metrycki was both thrilled and humbled by the win. “We’ve all worked so hard and I’m so proud to be in the same group as these other businesses.” She laughs, “We’ve become partners through the ‘valley of death’.” This is a reference to the “Trough of Sorrow” described in Sikorsky’s keynote presentation — a place where too many startups either stay or fail.
That likely won’t be the case for Callia, having exceeded all projections with sales of over $100,000 in less than a year. Metrycki shared that the win will allow the company to grow more quickly into the almost $8 billion floral gifting industry. “This will be key for us in getting into new markets and making some key hires and bringing the people and resources we need onboard to expand. We are raising a round right now and the exposure from this will be instrumental to helping us get to that next level.”
The company prides itself in creating better experiences to enhance the emotional connections of sending flowers by making it easier, providing a better, fresher and sexier product, with its unique bouquet in a box.
She added that the May Launch’Pad Bootcamp was pivotal. “We were at a certain level and now are really thinking about what that trajectory should be.”
She knows the road won’t always be easy but is up to the challenge. “It means a lot to me to be a part of this community.”
2nd Place: Fastnet Communications — Putting new energy into the telecommunications industry with a network-based solution for Real. Fast. Internet.
Launch’Pad Bootcamp was also paramount for Fastnet founder Mark Loewen. “It was great to get validation outside the marketplace and hear that we’re on the right track even though we have some things to figure out. Bootcamp took us 30,000 feet up and made us stare at the business from up top.”
The company is shooting to become one of the top six companies that are controlling 84 per cent of a $47.8 billion internet market. Its focus is largely on providing the fastest internet speeds as well as faster installation to apartment suites, condominiums and businesses.
The Venture’Challenge win helped further validate the business concept. “ We’ve always known we had something and the more times we do this, the clearer it all becomes.” Loewen wasn’t surprised by any of the judges’ questions, except for one about valuation.” That was posed by Sikorsky on why Loewen was asking for so little, just $250,000 in investment, for such a big idea. Loewen attributes this to a confidence issue. “I already thought the number on the board was pretty lofty. If the biggest concern was that we weren’t thinking big enough, that’s a pretty good problem to have to solve.”
3rd place: Canada Plow — A state of the art solution to neighbourhood snow clearing using shovel-less, patented technology.
Canada Plow’s Bryce Brousseau started his pitch with a tongue in cheek reference to providing a snow removal solution that has the customer’s back. The patented Zamboni-like machine his company uses can clear a driveway in less than 20 seconds. An entire season of snow removal is offered at 1/3 of the price of current alternatives and uses a non-toxic, environmentally friendly de-icing product that is also safe for pets. Brousseau describes the de-icing process as the “secret sauce” that stacks the company against the competition.
The company’s sales approach includes direct sales, social and philanthropic methods of attracting customers in communities built since 1980. This includes supporting the Heart & Stroke Foundation, citing the dangers of shoveling to many Canadians in terms of personal injury and heart attacks.
Each machine does about 600 driveways every time it snows, amounting to over $7 million in snow removal in the Manitoba market and there’s room to grow. Brousseau stated, “There’s no innovation in driveway snow clearing across North America. We are it.”
Tough Questions and Invaluable Feedback
The panel of judges was again comprised of some standout entrepreneurs and investors. Michael Sikorsky is a San Diego-based strategist, innovator and pioneer in the mobile tech space. His startup Robots and Pencils has been named the 34th fastest growing company by Deloitte for a growth rate of almost 5,000 per cent. Kerry Green is a successful local entrepreneur and investor who exited Wolf Trax, a company he co-founded in 2014, for $95 million. He continues to support early stage agricultural technologies through his March Agricultural Ltd. The panel was rounded out by Kristina Milke, president of VA Angels, one of Canada’s most active angel investing groups.
Milke emphasized that in events like this (she has judged many), judges are most likely to vote for the companies that provide clear messaging, an easy to follow presentation, and a clear understanding of who the customer is and the problem they’re solving. One of the gaps she saw in the days’ pitches was what she described as unclear customer acknowledgement. “It makes it very difficult to define your business model when you’re not sure what you’re selling or who you’re selling it to.”
Overall however, Milke thought the quality of the companies was impressive. “They were well prepared, and I didn’t see anyone fumble up there.” “This is great exposure, free PR, gets your name out there, and makes investors more aware of who you are.”
Green reiterated the importance of strong presentations that show that the startup is clear about where they are positioned in the market. He also felt that there was generally a need to focus more and provide a better idea of what they needed from an investor to make them successful and assist them with their future growth.
Sikorsky believes that Innovate Manitoba is providing outstanding value. “You guys have a standout program. The part I love the most about what Innovate Manitoba is doing is that no one is talking about square footage. No one is saying ‘come and hang out at my innovation lab’. That doesn’t build better businesses, that builds better tours. You’re not changing anyone’s life, you’re just buying square footage and putting on a show.”
Those who didn’t make it into the prizes were still left feeling like they’d gained some incredible feedback and exposure. Matthew Johnson of M3 Aerial Productions, a unique service providing training for drone pilots and marketing of their services in an online centralized location, said his company will continue full steam ahead. “It’s a roller coaster that’s going to continue. We went to Bootcamp to get some advice in that space and see this as a fantastic opportunity. While we don’t fully understand the scope of this yet, we’re waiting to see how it all goes. A lot of good will come of this.”
Kristen Klassen founded Brickstorming, a standardized and systematized train-the-trainer program that uses manuals, customized Lego kits and online tools to enable trained laypersons to impact the global problem of mental health, specifically in workplaces. “I’m still looking at this as a scalable model. This is a new innovation for mental health so I’m looking at different avenues for getting that to market.” She describes her aha moment in Bootcamp. “I come from an academic background and live in my head. I didn’t know how to talk the business language. It was a huge moment for me when I finally got that.”
She sends kudos to Innovate Manitoba, the judges and the local startup community. “I’m so grateful for the opportunity and it has really pushed me to get things going a lot more quickly than I would have been able to do on my own. It’s an amazing opportunity and I hope it continues to be supported within Manitoba.”
2017 Lift’Off Photo Gallery