February 2010

"A minute's success pays the failure of years."

Robert Browning, prologue from Apollo and the Fates

The objective of this article is to highlight nine creative companies that are part of Lead to Win and describe how they benefit from this vendor-neutral business ecosystem.

This paper is organized into three sections. The first section provides an overview on technical entrepreneurship, creative companies and business ecosystems. The second section describes nine startups located in Canada’s National Region and identifies how their founders benefit from Lead to Win. The third section provides key takeaway messages about technical entrepreneurship and business ecosystems.

Technical Entrepreneurs

Technical entrepreneurs assemble and lever resources, relationships, reputations, and money in an effort to transform technical innovations into economic goods. Frequently, they disrupt existing order by introducing new products, services and solutions, creating new forms of organizations or exploiting new technologies.

Technical entrepreneurs perceive an opportunity and create an organization to pursue it. These organizations range in scale from projects that involve only the entrepreneur part-time to major businesses that create many job opportunities.

The most obvious form of technical entrepreneurship is that of starting new businesses. Some of these new businesses are referred to as creative companies. A creative company harnesses creative individuals and organizations worldwide to develop and sell market offers for which their customers are willing to pay.

Creative companies are small, innovative, flexible and deliver value to customers, partners, themselves, and their communities. They also rely on business ecosystems to grow. Creative companies that lever business ecosystems will do well in the new economy.

Creative Companies and Business Ecosystems

Every creative company is part of one or more ecosystems. Each ecosystem, in turn, is comprised of companies and individuals that concurrently collaborate and compete to solve significant customer problems. A sure formula for killing a small technology company is to ignore the ecosystems of which it is a part. Small technology companies perform better when they are able to add value to their customers and partners by levering key resources in their ecosystems and incorporating ecosystem realities into their products and services and go-to-market strategies.

In a healthy business ecosystem, companies and individuals concurrently collaborate in the production of common assets and use these assets to develop market offers they sell in the marketplace.

Founders who don't understand their company's ecosystem operate at a significant disadvantage. Typically, they don't realize this until it's too late. These founders select small and obscure niches, work to solve the wrong problems, develop products with no customer in mind, are unable to grow revenue, take too long to launch products and services, and can't tell whether another company is a competitor or a complementor.

How you perceive your business is an important mental construct, because it drives what you do.

In a business ecosystem, the organization responsible for providing the out-of-the-box platform is referred to as a keystone. A keystone organization attracts talented volunteers to collaborate in the production of the assets and delivery of services required by the creative companies, provides ecosystem governance, and maintains the health of the ecosystem.

But an ecosystem, like any organism, is nothing without its health. A healthy ecosystem must have a large number of diverse participants, attract investment, be stable, and create new niche markets. Keystones of healthy ecosystems are lean and effective. An ecosystem is successful when companies and individuals can generate greater profitable revenue with it than without it.

Visualizing and Shaping Business Ecosystems

Understanding business ecosystems is core to a company’s success in the creative economy. Today, a company's business ecosystem is hard to conventionally visualize and much harder to shape in a firm's favour. But to grow a company and reduce its business risk, its management team needs to figure out the best way to leverage the ecosystem in which the company is a player.

Selecting the best strategies to capitalize on an ecosystem is a difficult task, for at least three reasons:

  1. We live in an era where the number and diversity of players in an ecosystem is large. Even larger is the number of ways incumbent and emerging players can concurrently co-operate and compete.

  1. There are multiple, and often conflicting, perspectives of whom the relevant players in an ecosystem are and how they connect. Manual drawings of players using whiteboards or spreadsheets are impractical and provide limited value. Frequently, critical issues are left unresolved or undiscovered and the environment is only partially represented.

  1. Companies operate in a fast-moving and uncertain environment where decisions are often made based on incomplete information and misinformation. Frequently, many founders of technology companies operate in a fog.

The need to visualize and shape business ecosystems creates new opportunities for small technology companies.

Lead to Win

Lead to Win is a vendor-neutral business ecosystem designed to grow creative companies for the purpose of generating technology and knowledge jobs in Canada's Capital Region. Each company in the business ecosystem is committed to creating a minimum of six technology or knowledge jobs over three years.

As of January 2010, sixty technology companies are part of Lead to Win. To join the ecosystem, founders must successfully complete a six-day opportunity development program referred to as Phase II.

Below we highlight some of the companies that are part of the Lead to Win business ecosystem and describe how they benefit from it.

Zeebu Mobile: Zeebu's two founders, Dan Gagliardi and Anthony Rizk, are out to create a new market niche. Zeebu’s founders use the Lead to Win business ecosystem to identify talent to hire, increase the value of their brand, expand their network, and prepare better applications to government funding sources.

Zeebu’s applications turn smartphones into toys that engage, entertain and educate kids from 0-9 years of age. Their distribution platform allows partners to reach targeted smartphone users. The company wants to turn smartphones from a business tool into an educational and entertaining device that can be shared with children.

BabyGO!, is one of Zeebu Mobile's applications. It entertains children using an object that often distances parents from their young children: the BlackBerry. The application, which was developed in consultation with early childhood education (ECE) experts, intercepts all key presses, including incoming phone calls and e-mails, and displays colorful images of the letters while announcing their names and sounds.

As parents of young children, the two founders experienced firsthand the need for entertaining diversions. By observing their own children's fascination with BlackBerry devices, Anthony and Dan realized the potential for a completely new family of mobile applications. Extensive discussions with other users, parents and caregivers confirmed the concept.

RideShark: RideShark is a creative Ottawa-based organization that understands its ecosystem and levers it to create value for its customers, partners, community, and themselves. The company was founded by two local engineers, Sharon and Tom Lewinson.

RideShark has developed the most advanced ridesharing and ridematching software system on the market today. Rideshark sells a low-cost, fully hosted service that allows users in a geography or an enterprise to find carpool partners and cycling buddies, track and monitor travel-related emissions, manage priority carpool parking, and operate sustainable transportation incentive programs.

The company founders have positioned RideShark as a player in a ridematching solutions niche that collaborates with thousands of other companies, hundreds of governments, and millions of individuals to reduce greenhouse gas emissions. In contrast, many of its competitors perceive themselves as simply suppliers of software and services to people who want to carpool.

RideShark is sought out by eco-organizations around the world. This increases the number and diversity of the company's customer base, and reduces RideShark's marketing costs. Individuals who are concerned about the planet champion the adoption of RideShark in their organizations. This increases Ride Shark's sales and reduces selling costs.

The time required to develop a new feature or customize an existing one is an important and fundamental value provided by the company. RideShark engages companies in the various ecosystems with a similar environmental worldview to develop new concepts, speed customization, and accelerate new feature development. As a result, code development never stops and new features are added continually, so the product maintains its technological lead in the market. Feature innovation is a differentiator for which RideShark's customers are willing to pay.

RideShark customers are also attracted to the technology's security and privacy. RideShark levers the ecosystem anchored around the Microsoft Gold Certified Partnership Program and forthcoming ISO27002 certification to deliver privacy and security.

EventuSix: EventuSix is an example of a local company solving a real problem and capitalizing on the creation of business ecosystems at the same time. EventuSix is led by Reg Simpson and has six co-founders. The company is an innovator in business environment insight, and makes its money by allowing management teams to visualize their business ecosystems.

EventuSix has prepared an aggressive growth plan based on satisfying the global demand for state-of-the-art visualization tools and processes that help management teams produce a shared view of their ecosystems, and shape it to the company's advantage. The firm, which has partnered with Carleton University researchers, is developing a process and software visualization tool to enable the mapping of complex business environments. The process and visualization tool will be hosted online, to enable interactive building and analysis of ecosystems. Support, workshops and templates are provided throughout the process to achieve timely and high-quality results.

The methodology is anchored around three functions: "map," "shape" and "profit." The map function provides a visual map of customers, collaborators, and competitors. The shape function is a strategic data discovery playground, where users perform a range of static data analysis, plus "what-if" simulations based on game theory. The profit function is about plan implementation - the steps needed to implement the to-do list from the shape function are spelled out in a prioritized list.

TechnoDevelop: While most of the companies in the Lead to Win business ecosystem generate revenue selling products, services or solutions, a few also sell the intellectual property (IP) they develop. TechnoDevelop sells licences for its IP related to biomedical devices and paperless business-to-consumer communications. Prakash Naidu – a leader in design for automation with decades of experience in biotechnology, robotics, design and manufacturing in Canada, the U.S., and abroad – and Kshirsagar Naidu, a Carleton University alumnus with specialization in software, control and systems engineering technologies, are the founders.

TechnoDevelop is developing a thermal pixel array device that can be used in pain research, human machine interfaces and infotainment as well as by business, government and emergency organizations to communicate with households without using paper. Field trials for the hospital environment are taking place in Toronto. Other applications are under development.

The business-to-consumer communications process is anchored around a network of electronic billboards that bring flyers into peoples’ homes, eliminating the use of paper. Businesses and government organizations can send advertising, promotional, or informative flyers to households under the system. Emergency service providers can send pictorial information to senior citizens, those with hearing or small text reading challenges, people who can’t read an official language or have difficulties interpreting accents.

To succeed, a company engaged in IP entrepreneurship must identify technology gaps quickly, reduce the cost of developing and testing the prototypes that fill these technology gaps, work around IP developed by others, protect the IP it develops, and deliver compelling value to go-to-market partners.

TechnoDevelop interacts with suppliers and buyers of new technology that are part of the Lead to Win ecosystem to identify technology gaps and acts quickly to fill them. TechnoDevelop’s customers gain from the company’s competitive cost-benefit value proposition. While founders of innovative companies may have an innovative business or technology idea, it may not be possible to commercialize it unless the company can overcome the expensive barriers of IP protection.

A vendor-neutral business ecosystem must fulfill the diverse needs of its habitats, and IP entrepreneurship increases the health of a business ecosystem by increasing company and market offer diversity. IP entrepreneurship also introduces new challenges to the business ecosystem – founders of companies engaged in IP entrepreneurship perceive the relevance of the mechanics of patent drafting, IP rights protection and the relationship between IP professionals and company founders differently than do top management teams of small companies that develop and sell products, services, and solutions.

SCTi: SCTi is helping top management teams improve the power efficiency of their data centres and offers its customers: lower energy consumption, lower operating costs, a smaller carbon footprint, prolonged life of centre facilities, and decrease in infrastructure investment.

Arnold Murphy and Luke Connolly are the founders of SCTi. Their company uses new smart metering technology to make the operating costs of data centres visible. To provide an accurate and complete view of a data centre’s operations and to identify the areas of inefficiency, the company monitors total power consumption as well as consumption of individual pieces of equipment.

Working with the client, SCTi develops a roadmap for changes to the data centre operations that reduce energy consumption. In some cases, SCTi is able to identify and rectify inefficiencies that may have existed for years but were never apparent until detailed measurements were taken and understood by top management teams.

SCTi is working with Hydro Ottawa to extend and increase the success of their incentive program for new markets.

Acire Systems: Randy Jones founded Acire Systems in September 2008. The company’s goal is to improve workforce productivity by developing mobile applications that make it easier and more appealing to do business while "on the go”.

Acire Systems’ mobile applications enable business people to use their smart phones to invoice clients and report time and expenses at the time they occur. Acire Systems offers ReportAway!, a BlackBerry application which, when used with the online book keeping service FreshBooks, provides an effective mobile invoicing solution. ReportAway! is the first commercially available BlackBerry application for FreshBooks.

Founders of companies that develop mobile applications benefit from the Lead to Win business ecosystem in at least four ways. First, company founders interact with serial entrepreneurs and community experts to harden and strengthen their companies’ business opportunities. Randy Jones credits the feedback from the reviewers of his opportunity for helping him improve his company’s value proposition to both end users and partners such as FreshBooks.

Second, company founders have access to Lead to Win experts. Randy Jones was able to obtain advice from experts in product positioning, Internet sales, and inbound marketing.

Third, Lead to Win brings together founders of mobile applications companies that operate in Canada’s Capital region. The mobile applications group shares experiences, thoughts, and resources in areas critical to their success. Company founders compare various monetization options and examine best ways to engage customers through third party online distribution channels such as the Apple App Store and BlackBerry App World.

Fourth, company founders benefit from the commercial activity among companies that are part of Lead to Win. Through networking events, company founders identify ways to combine their companies’ offers to create strong whole product solutions and barter products and solutions to help each other.

In the case of Acire Systems, ReportAway! for FreshBooks provides an ideal solution for many of the companies that are part of the Lead to Win ecosystem that need to account for their time for the purpose of their submissions to the Scientific Research and Experimental Development (SR&ED, http://www.cra-arc.gc.ca/sred/) Tax Incentive Program. Acire Systems receives valuable product feedback from company founders who use the system and, in return, participating founders receive an effective time management and invoicing solution at a preferred rate.

Data Bridge Digital: The two founders of Data Bridge Digital are Glenn Carley and Dave Burden. Both have considerable experience in physical and electronic media distribution. Teaming up Data Bridge Digital’s electronic distribution capabilities with Glenn's existing media production and distribution company allows the company to satisfy the complete spectrum of distribution needs from USB drives to CD/DVD to printing, data distribution, streaming video and mobile device distribution.

Many large companies now totally distribute using electronic downloading. To distribute software or content electronically worldwide, the distribution process must be able to handle peak volumes. Bandwidth performance issues and crashes result in poor customer service or lost revenue.

Data Bridge Digital offers distribution services to organizations that have limited electronic distribution capability in-house and wish to experience the same customer service enhancement, revenue growth and cost reductions enjoyed by larger companies. Data Bridge Digital allows its customers to pay only for the distribution services that they use.

The benefits that Data Bridge Digital delivers its clients include lower distribution costs, better performance and greater worldwide customer penetration. Data Bridge Digital distribution services also provide streaming high-definition full screen video with no “hourglass buffering”, mobile device distribution with little configuration, and configuration of on-line libraries and distribution centres.

MarketingMuse: Anthony Mar, Rod Story and Tom Phillips are the co-founders of Marketing Muse, a company that improves the referral rate for healthcare practices, measures their marketing effectiveness, and contributes branded custom websites to support overall marketing effort.

MarketingMuse uses a traditional approach, customer feedback surveys, with a twist: referral marketing. Feedback surveys are a simple way to sustain a dialogue with your clients, but are only effective if the results can be actioned.

MarketingMuse’s approach is based on over 20 years of academic research in universities worldwide and one of the areas of specialization for Rod Story, a Ph.D. student at the Sprott School of Business, Carleton University. Until recently, it has been only large, Fortune 1000 sized companies who have been able to run the advanced statistical models that underlie action-ability. MarketingMuse uses web-enabled technology to bring this benefit to small and medium sized companies.

MarketingMuse uses the Lead to Win business ecosystem to prepare proposals for funding, expand its network, develop prototypes of communications enabled applications, and access resources.

InfoGlutton: InfoGlutton, founded by David Nadeu, helps restaurant owners monitor and improve their reputation. Online reputation is a combination of what a company says about itself and what its customers say about it anywhere online. To monitor real time reputation, InfoGlutton aggregates online customer feedback and automatically classifies comments into raves and rants. With knowledge of rants, a company can protect its online reputation by monitoring viral negative messages before they cause damage.

The technology is based on social media analytics, search engine optimization techniques and language technology research emerging from the National Research Council and the University of Ottawa.

The online reputation management industry is growing fast, including significant acquisitions and multi-million dollar funding rounds for reputation management software firms.

InfoGlutton uses the Lead to Win business ecosystem to meet potential customers and investors, secure student resources, develop working prototypes of communications enabled applications, and expand its network.

Key Takeaways

The key messages to take away from the article are:

Technical entrepreneurs who ignore the ecosystems of which their companies are a part at their peril. A company can’t succeed working alone.

To grow, creative companies must lever business ecosystems, and sometimes shape them.

The need to better understand and visualize business ecosystems drives business opportunities for creative companies.

Founders of creative companies benefit from a vendor neutral ecosystem in a variety of ways. The main benefits of a vendor neutral ecosystem to technical entrepreneurs include: i) accelerates time to cash; ii) increases the size and diversity of the network; iii) increases brand value; iv) increases the likelihood of success when submitting proposals for government funding; v) provides access to more and better business opportunities and requisite resources; vi) reduces the time required to build working prototypes of new products and services; and vii) provides access to understanding first customers who can help develop a better product or service.

This article benefits from a series of articles written for the Ottawa Business Journal. The original articles were produced in collaboration with the technical entrepreneurs identified above and the newspaper’s editorial staff.

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