Mar

6

Microsoft Acquires Technology and Team from Montreal-based Credentica

Filed Under Blogroll, Entrepreneurship, Microsoft | Leave a Comment

Credentica logoMicrosoft this morning announced that it has acquired the technology and patents of Credentica, a Montreal-based provider of identity management solutions. The team, led by Stefan Brands, will join Microsoft’s Identity and Access Group.

(More blog coverage from Microsofties Kim Cameron and Adam Shostack, and on Stefan Brands‘ own blog)

Brands is the inventor of private credentials technology which allows a user to prove something about their identity without disclosing more information than is absolutely necessary. For example, a voter can prove unequivocally that they have the right to vote in the state of California, without having to disclose their name or other personal information. As more and more of our lives moves online, privacy is increasingly becoming an issue that cannot be ignored. Most solutions require that you trust a third party (such as your bank, government, or Google), while Brands’ approach uses advanced cryptographic techniques that do not re.

The technology has previously found temporary homes at now defunct DigiCash and then Zero-Knowledge Systems, neither of which were able to succeed in commercializing the patents. But our plan is to integrateMicrosoft says it plans to integrate Credentica’s U-Prove technology into both the Windows Communication Foundation (WCF) and CardSpace.

I’ve known Stefan personally for nearly a decade now, and wish him the best of luck in this new chapter of his professional life.

Update: I’ll be writing a follow up post with an interview from Stefan focusing more on the personal side of his journey as an entrepreneur. Watch my blog for more.

Feb

29

Regulators force Canadian P2P lender IOU Central to suspend activity

Filed Under Banking, Blogroll, Entrepreneurship | 1 Comment

Over the past five or so years, the Internet has radically changed the way most industries (from content, to music, to travel) function. Central to this wave of change is a shift of power from large institutions to consumers. The financial industry is one of the last bastions where old-school business models still reign supreme.

But that’s changing.

Sites like SmartHippo empower consumers with tools and the information on the best available rates that they previously did not have access to. Peer to peer (P2P) lending sites such as Prosper and Lending Club empower consumers to bypass banks and lend directly to each other, with the promise of better rates on both sides of the equation. Where technology now provides a scalable way for consumers to exchange information and capital between themselves, the middlemen of the past are no longer as relevant.

Needless to say I’m a but fan of P2P lenders so I was quick to sign up with IOU Central was the first Canadian company to launch in the space. (I tried signing up with Prosper, but the site is restricted to US residents with a Social Security Number.) Lo and behold I logged into IOU Central today to start using the site only to be greeted by the message that “IOU Central is now operating with limited functionality.” Translation: No new loans on IOU Central, at least for now. Startup North was the first to report on this here.

I just spoke with Phil Marleau, their President and CEO, and he told me the action was taken at the request of the Autorité des marchés financiers, Quebec’s securities regulator. The agency is infamous for its impotence in front of real issues that should be under its control, such as its abysmal failure to help the 1,600 investors who lost $130 million in the Mount Real scam back in 2005.

He told me the AMF paid a visit to IOU Central yesterday and asked them to halt operations. It turns out that individuals using the site to lend money are making an investment, so IOU could be construed as selling securities.

“The important thing is that we’re working with the regulators and want to comply,” Marleau said.

According to Marleau, IOU Central had received legal advice stating they did not have to be regulated. This was based on the fact that their model was closely based on the way Prosper and Lending Club operate in the U.S., as well as Zopa in the UK. Based on this legal advice, IOU Central did not bother to even brief regulators on what they were doing.

Canada’s other P2P lender, CommunityLend, hit the scene with a lot of noise when they announced in December they had raised $2.5 million in financing. However, they have yet to have launched, citing the needs to properly address regulatory compliance issues first.

When IOU Central launched earlier this month, it looked like they had come out of nowhere and one-upped CommunityLend. CommunityLend must be gloating now.

“Our approach has been to build a viable and sustainable company, that will appeal to Canadians, and their desire for security with anything financial,” Colin Henderson, CommunityLend’s CTO told me via email. “There are no shortcuts with peoples money, and we have been working hard with the regulators for over 8 months, on over 40 Licences to ensure we can satisfy the needs of Canadians, by the time we launch.”

Marleau, to his credit, at least put on positive spin on the events: “When we’re back up, it’s going to be a better model. Because we’ll be regulated and that adds credibility and confidence.”

Here’s hoping it happens quickly. Canada’s financial system, an oligopoly if I’ve ever seen one, badly needs some shaking up.

Jan

8

Montreal Tech Events for January

Filed Under Blogroll, Conferences, Entrepreneurship, SmartHippo, Web 2.0 | 2 Comments

January’s a busy month for Montreal techno-geeks. Here are some of the events going on:

Speaking of web building, here’s a video about just that subject:

Jan

4

Reflex CRM is now Reflexity, Inc.

Filed Under Blogroll, Reflexity, SmartHippo | Leave a Comment

Reflex CRM is now officially Reflexity, Inc. More on the name change in this blog post on the Reflexity web site.:

After a few years we drifted away from our original starting point as a company (read we followed our clients’ needs and the money) plus we didn’t have anything to do with Customer Relationship Management (CRM) anymore.

Although we still deal with customers everyday, our focal point and passion moved to new horizons (and new buzzwords); marketing, optimization, targeting, social networks, intent, scent, social marketing, crowd sourcing, behaviour, etc.

In a nutshell, we are now more than ever finding new ways to build new relationships with consumers for their benefit and the companies serving them. In a few more words, we are providing campaign management and lead generation, customers acquisition, marketing and revenue optimization services to large and mid size companies in the United States with a strong core in financial services.

Reflexity continues to push the boundaries and redefine the way consumers and financial service providers connect. One such example is the beta launch last fall of SmartHippo, with the participation of banks such as Quicken Loans, Bank of Internet and Countrywide Bank. And you can get community-contributed rates and reviews on almost any bank imaginable, from national banks such as Wells Fargo or ING Direct to regional or local players like Boston Pacific Mortgage or Safe Harbor Mortgage.

2008 is already off to a great start, so stayed tuned for many more developments. And in case you were wondering, yes, we’re hiring.

Jan

3

Starting up in 2008 — Do You Really Need External Funding?

Filed Under Blogroll, Entrepreneurship, SEM, Web 2.0 | 4 Comments

There’s a debate brewing on the state of startup funding in Canada.

This got me wondering how many startup entrepreneurs think their bottleneck is a lack of financing when in actuality it’s not (or doesn’t have to be). I was reminded of this Business 2.0 article from 2005 in which entrepreneur Joe Kraus compared the costs involved in launching Excite in 1995 with what it cost to launch Jotspot exactly a decade later.

It took $3 million to take Excite from concept to launch, versus $100k for Jotspot exactly one decade later. I thought it would be interesting to extract some of his comments and see what has changed just three years later:

1. Hardware has become insanely cheap. As Kraus recalls, Excite ran on Sun servers that cost as much as $60,000 a pop. “Today JotSpot runs on commodity hardware–Intel chips inside boxes with no corporate logo, made by companies no one’s heard of.” And instead of $60,000, those anonymous boxes cost $1,000 each.

2008 Update: Even cheaper today with Amazon S3.

2. Infrastructure software is even cheaper. Excite paid a vast amount of money to companies such as Oracle just to license the software needed to build its service. “We must have spent $250,000 before we’d written a line of code,” Kraus says. But now open-source–Apache, Linux, MySQL, Tomcat, and so on–has reduced that cost to zero.

2008 Update: Zero is still zero, although the tools you can get for that price have improved.

3. The labor market has gone global. In the 1990s, only monster companies like IBM had tapped into offshoring. Today JotSpot, using Elance and RentACoder, has programmers on the payroll in Germany, India, Romania, and Russia–at a fraction of what they’d cost in the Valley.

2008 Update: Still holds true as ever. If you’re still at the stage where your concept is not yet proven in the marketplace and you’re raising money to hire a bunch of local developers, you probably don’t get it.

4. Search has rewritten the rules of marketing. Before Google, advertising on the Web was all about big marketers paying big bucks to reach as many eyeballs as possible. “But now,” Kraus says, “pay-per-click advertising, placed in an automated fashion, with no money spent on creative, lets me reach small or medium-size markets incredibly efficiently.”

2008 Update: Search Engine Marketing is no longer the panacea. In fact, in can be downright dangerous to rely on it exclusively as competition for your keywords and even Adwords’ algorithm itself are out of your control and can have a significant effect on your campaigns. Today’s successful startups are ones that harness communities, and hence thrive on the fact that their very own customers refer others to the site.

$100k is still a chunk of money, but it’s arguably within the reach of entrepreneurs with a bit of creativity.

Venture Capital still does and always will have a role to play. But I’ve seen entrepreneurs spend a year trying unsuccessfully to raise capital for a new concept, time they may have been able to better spend getting much further along their product roadmap before seeking out external funding. (OK, I’ve been that entrepreneur.)

What do you think? Post your feedback in the comments below.

Sep

10

Red Herring Canada 2007 roundup

Filed Under Blogroll, Entrepreneurship, Red Herring Canada 2007 | 4 Comments

Red Herring’s inaugural Canadian event, Innovation Illuminated, took place September 5-7th in Montreal. The event took place against the backdrop of persistent rumours of financial problems at Red Herring.

Some key trends based on observations from the conference:

  • China rising (and India, too): These are big markets and only going to get bigger. The US market is no longer the sole destination for tech firms from Canada and elsewhere.
  • The emergence of Israel as an innovation hub: The level of technology innovation coming out of Israel is by any measure way disproportionate to their population size. Israeli venture capitalist Orna Berry shared some interesting insight, arguing that while the stereotype of Israel excelling in the security area (witness CheckPoint Software), they also do well in other technology sectors due to their having practically no natural resources.
  • Cleantech: Lots of presentations, but these company founders clearly have little experience pitching investors. Please don’t make me sit through 10 minutes and 15 slides talking about how your energy conservation system is manufactured before showing the slide on how you tested it in a real office building and reduced their power consumption by 2/3. This sector is still dependant on the regulatory environment and I don’t see it really taking off until a cap and trade market is finally instituted – which will happen eventually. Still, until governments wake up and do it, investors will be placing their chips and making some early bets in this sector.

Feedback on the conference organization itself:

  • The good

    • Company presentations: You don’t go to conferences for the boring talks, do you? My personal favourites were Mobivox and EQO, both mobile plays
    • Red Herring CEO Alex Vieux’s ego: He’s not shy to ask direct questions and push his presenters. From “When will you reach $100M?” to “Will Israel ever make peace with the Palestinians?” nothing is taboo.

The bad:

    • Disappearing speakers: You could not find a better disappearing act even if it were put on by the Cirque du Soleil. Gérard Lopez (of Mangrove Partners) was scheduled to give a “fireside chat.” Alas, there was no fire, and no chat. Salman Ullah (Director of Corporate Development at Google) was quietly dropped from the program and Sean Wise (From Dragon’s Den show on CBC) didn’t show because he had a paid gig elsewhere. Worse yet, some speakers such as Louise Guay (MyVirtualModel) and half of the four VC’s on the “Meet the money” panel just didn’t show when it was time for their talk or panel, with no explanation.
    • The price tag: Definitely not worth the $2500 ticket.
    • Alex Vieux’s ego: He hogged the stage, moderating most of the panels and boring the audience with his endless mentions of how he’s been “good buddies” for decades with Bill Gates, Tim Draper, John Doerr, etc etc, etc. He could have made things a lot more interesting and engaging by at least taking questions from the audience. Instead, conference goers deserted the main track presentations in droves, opting instead to network amoungst each other in the hallways.

Read more blog coverage on the event from Mat Balez (here, here, and here), Roberto Rocha (here, here and here) and Alec Saunders. (By the way, Alec has a cool new Facebook conference call application.)

Oh, and I presented the first public preview of SmartHippo.com, which is currently in closed beta. SmartHippo is a consumer-powered marketplace for financial services. Here’s the video I opened with:

May

3

Advice to tech entrepreneurs: do something bricks and mortar (just for a while)

Filed Under Blogroll, Entrepreneurship, Web 2.0 | 1 Comment

Sometimes, while working in the web industry, it’s easy to lose sight of what’s important. I realized this recently while helping my fiancée with the opening of a new spa here in Montreal.

Actual customers walk in the door. They receive a service for which they pay money. They leave happy, and often bring their friends and family with them the next time they come back.

In order to make it work, you need to think about how you will attract your clientele, offer them a great, memorable experience and make money doing so.

It’s old-school business 101, but many web 2.0 entrepreneurs forget (or, worse still, consciously choose to ignore) these fundamental building blocks. So, my advice to tech entrepreneurs is: step out of your comfort zone. Turn your computer off for a week and try your hand at running or working in a clothing store, a coffee shop.. heck, even a lemonade stand.

You might be surprised at what you learn, and at how it impacts the business decisions you’ll make with your tech venture.

Mar

31

BumpTop woos DemoCamp Montreal crowd

Filed Under Blogroll, DemoCamp, Entrepreneurship | Leave a Comment

This post was originally going to be a round up of this past Thursday’s DemoCamp Montreal, but others beat me to it, so I decided instead to focus on one presentation in particular.

[For those of you who don’t know, DemoCamp is an informal gathering of people who have interesting technology or products to showcase and which have not yet reached the mainstream. Of course some of them never will, but part of the fun is getting to see things that are still “raw” before they either make it or sink into oblivion.

Kudos go to Austin Hill for helping organize this event and for the significant increase in the quality of the presentations this event (not to mention for throwing a cool party, which he’s always excelled at).]

By far the most impressive presentation of the night was BumpTop from UofT Master’s student Anand Agarawala. BumpTop is a user interface which renders your PC’s workspace as 3-D desktop where you can push, throw, flip, pile and even crumple documents, just as you would in the physical world. Here’s a demo.

Different people have different ways of organizing their workspace. Some people a virtually naked desk with everything neatly labelled and stored away in alphabetically sorted folders. I, on the other hand, have a somewhat more cluttered desk and work area (at times refered to by epithets such as messy or disorganized). There’s no right or wrong organizational system, just different ones for different people. 

A BumpTop desktop would let me organize my computer the way I think and work, rather than the other way around. Judging from the reaction from the audience – which burst into spontaneous applause at several points in the presentation – I’m not alone.

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Oct

20

No Asss 4 U

Filed Under Blogroll | 1 Comment

Échangeur Parc Pins - Pine Park Exchange

Saw this sign on the drive home yesterday, heading East on Pine Avenue. Unfortunately, the only shot I could get was from a sub-par phone camera, so you’ll have to take my word when I tell you it says “NO ASSS 4 U.” I’m not quite sure what asss is, and if I’m the U who’s not getting any, but temporary signage aside I do think the city of Montreal is doing a great job with nearly-done redesign of the Park/Pine interchange.