carleton students and favequest: win win win

I was very fortunate to have been in a co-op program during my university years and remember clearly all the great projects I was involved in. I was given real jobs ranging from board design to building a test robot (that was the coolest!). It was an absolute thrill and helped launch my career, getting a job offer before I graduated from electrical engineering in the early nineties when jobs were scarce.

It is now time to create the same opportunity for a couple of very bright students. I am happy to announce that FaveQuest is collaborating with Carleton University and OCRI to place two students with FaveQuest starting this January. The lucky students will get to develop real products at the absolute bleeding edge of social networks, on-line video and mobile applications. On top of that, they get to be part of a real start-up that is just about to launch publicly with a large media partner. They'll get to truly experience and learn how it is done at a very early stage (and probably see some mistakes too). They'll even get to attend meetings with real customers! Wait ... it gets even better. The students will get paid and can work part-time (15-20 hrs/week). There could even be opportunities for summer work and even equity (i.e. shares). How often does a student get such an opportunity?

To be clear, I'm looking for a couple of very special individuals. They need strong software skills (idealy Java) who love writing code so much, they do it for fun! At least one applicant needs to have strong interest in the business side of things. You must also be a full time student at Carleton U or the Bachelor of IT program (in collaboration with Algonquin College) with preference given to students in 3rd or 4th year.

If you fit the bill, click on the following link to register for an event on November 17th at 4:00. Note that there is a limit of 20 people so don't wait. "You get one shot, one chance to play"

http://favequestandstudents.eventbrite.com/

I'm so excited to meet all of you and get your assitance in launching a great new Ottawa based company. C U soon.

Cheers,

Allan

why I brought Founders and Funders to Ottawa

I'm a bit nuts ... I don't stop much except to hang with my family or learn to play guitar. Between running FaveQuest, consulting, three kids, filming/producing/directing/editing "The Nasty Hockey Show" and starting to design Zoogeez ... things are interesting for sure.

With all of that going on, I decided to organize a major event taking place next week. Crazy!. Here is why.

There's a lot of complaining on both sides of the funding table and way to much negativity. Lots of bitching about lack of support from government. Constant chatter that Canadian VCs have had poor returns. While some of this may be true ... there's also another possibility which is this:

"there are many investors who are looking to place money and numerous high quality, fundable start-ups looking for investment. "

Funders and Founders need each other and an event that brings these two groups together may very well unlock the apparent frozen state of start-up investment in Canada. The Founders and Funders Dinner is a grass roots by invitation only event that brings these two groups together for an evening of hard-core networking. No presentations, no demos. This initiative was started by Austin Hill (who is coming to Ottawa for our event) and Patrick Lauzon in Montreal and similar events have sold out across the country with support from David Crow & Jevon MacDonald.

After attending the Toronto F&F last spring following an invitation from David Crow, I decided it was time to bring the event to Ottawa. With the tireless assistance of James Smith (LaBarge Weinstein), Tim Hember (thinkRF, The Ottawa Network) and Ian Graham (CodeFactory) and a long list of sponsors (LaBarge Weinstein, Ramius, Acorn Partners, Verdexus, Price Waterhouse Coopers, Royal Bank).

Within barely a week of registration, the Ottawa event being held on October 29th nearly sold out as of now (and will sell out). It is especially encouraging that roughly one third of the Ottawa registered attendees are investors (VCs, Angels, government funds, working capital ...). We have some founders and investors coming from Montreal and Toronto and many well known and new local investors will be in attendance.

This is a story about people taking action at the grass roots to make things happen while everyone else is worried and complaining about the economy.

Cheers,

Allan
BTW, if you are interested, shoot me an email at allan.isfan at favequest.com

My first triathlon

A few months ago, I realized that things were going to get crazy with consulting gigs while also heading up a new start-up so I decided to sign up for a short triathlon ... you know ... just to add to the insanity. To ensure I wouldn't die, I signed up for a try-a-tri which is a mini triathlon instead of a complete triathlon. It consists of a 200m swim, 20km bike and 5km run which is about 1/2 of a real triathlon. The date was slowly creeping up which caused me to train more and more. Like I said, there's nothing like a goal to get you going. At one point I said to my wife ... "why am I doing this to myself?". My wife answered "to push yourself" and she was bang on.

I need goals to really get fired up. I don't work out because it is good for me and the desire to look acceptable in a bathing suit is not enough of a goal. I work out because I signed up for a race and I don't want to die or be finishing the race as they are folding up the tents.

These races are set up so with different levels and age groups so that you don't feel like a complete loser. I now have an advantage ... I'm 40 and get to be in the older group. I should have claimed to be 67 and everyone would have been impressed. I got passed more times that I could count. Some people had very tight behinds and some not so tight (that's all I could see). I ended up in the group that made the top 50% possible though I was far from last. I didn't do too badly but definitely want to do better next time. More training and better tools (mountain bike with knobby tires not great ... must get proper bike) are definitely in the plan. Still, my wife and kids are very proud of me and they cheered me at every step which was pretty awesome.

Of course, I can't go a minute without drawing parallels and analogies with business. You get a lot of time to think while you're out there. In the business world, there are no age groups or tri-a-biz races. You have to either compete on a world class level or you get buried. You have to be ready for the race but you also have to get out there and start competing so you get a feel for the competition. If you are in a team sport, you'd better have a heck of a team. And you have to set aggressive goals for the company as a whole as well as everyone in the team.

So this is where we're at:

-I have set some aggressive short term and long term goals regarding what the company must achieve

-I'll be announcing a closed trial very soon for friends and family ... please let me know if you want to participate

-we have added an amazing marketing executive to our team. We now have all the key execs in place for this phase of the company. This is huge!

-we are bringing on a great development team which is already executing towards an alpha release (big party coming up!)

-we continue to have good discussions with VCs, including being accepted to present at the Ottawa Venture Technology Summit at the end of September. This is also huge and we'll knock it out of the park.

I really feel we have some good momentum behind us coming in to the fall. Funny enough, even though the triathlon finished with two uphills that weren't exactly welcome, I managed to step on the gas and sprint like a madman zipping by some of the people that had passed me earlier. So there!

BTW, I'm doing another try-a-tri in Brockville on August 19th right after a crazy week in Toronto and pitching to VCs and potential partners. Care to join me?

Cheers,

Allan Isfan

CEO, MYDYO

Asbestos Underwear and the VC Ring of Fire

Going into the VC ring of fire. Read this blog with the Johnny Cash Song "Ring of Fire" playing in your head and imagine the object of the love is a start up.

Ring Of Fire Lyrics

Love is a burning thing
and it makes a firery ring
bound by wild desire
I fell in to a ring of fire...

I fell in to a burning ring of fire
I went down,down,down
and the flames went higher.
And it burns,burns,burns
the ring of fire
the ring of fire.

The taste of love is sweet
when hearts like our's meet
I fell for you like a child
oh, but the fire went wild..

I fell in to a burning ring of fire.....[etc]

Well .... that time is now. Dates are being nailed down for a VC roadshow. I expect to have at least 3 or 4 major pitches between now and the end of April. That's nothing as far VC road trips go but it is still scary since this is the first time. No more kid gloves ... I'm expecting to come out somewhat burnt but hopefully not too bitter and ultimately successful.

There is so much to think about ... burn rate, advertising vs subscription, founders, founders, founders, advisers, patents, validation, a detailed spreadsheet that tracks everything including coffee stir sticks and toilet paper, tax credits, what makes you truly different and can you defend that, patents, partners, go to market strategy, value chain, marketing plan, sales plan, development costs and on and on and on. Add some of the consulting work to all that and the relaxation we had in Disney last week seems like months ago.

When I started this, I knew it would get crazy and have some ups and downs. I can't say that it has been easier or harder than expected though I'm entering the hardest phase imminently. We are actually aiming for a seed investment under $1M which should theoretically be easier to achieve since there is less risk. However, I falsely believed that the expectations would be lower. My expectation was that I would have to pull together a great team around a good concept and growing market. A detailed description of the concept coupled with some validation in the form of "sounds very interesting ... it could be something we would deploy because of reason X, Y and Z" from some key industry people and we're off to the races. Silly and naive. The way I perceive it, you have to plan on being just as prepared as you would for a $5M A round. The only difference is that the VC is not taking as much of a chance ... you are lowering their risk. I'm probably exaggerating a bit but not much ... but I'm not taking any chances.

It is enough to drive you to drink. The 2 AM trips to the hot tub with a glass of Drambuie are becoming a nearly daily event to clear the head and it actually works quite well ... I should be able to claim it as a tax deduction. To add to the joy, a very recent change in the founding team has led to some pieces of the puzzle falling back in my lap to scramble. Fortunately I was able to pull some favors and draft some excellent help but I hit a real low for about a day this week. This was followed by clinching some fantastic partners I've been hoping to get to sign on to the advisory board and another major exec that could really help fill out the team ... a fantastic guy ... back up to a high. Basically this week has been a roller coaster.

I was the QB of the football team in High School and I must admit I wasn't a fantastic one though I did have some great moments. If my center, good ol Fraser, got stomped on, I would ultimately feel much pain, especially on a very wet late October with mud in nearly every orifice. Things seem to hurt a lot more when you are cold and wet for some reason. I don't like pain and fortunately Fraser covered me most of the time, a big boy who ended up in RCMP I think. You have to be able to count on your team and I'm working very hard to ensure I have very good pigs and not chickens. Sometimes one is disguised as the other ... why did that pig just lay an egg??? hmmm ....

Having said all that, even though I'm exhausted and whipped, I'm more pumped than ever. I have managed to polarize some people who don't think what I'm doing will work or that people won't sign on in the quantities required. Of course, I have many on the positive side but the negatives is what I need right now to polish things. I have asked a number of knowledgeable people to sit through my pitch over the next couple of weeks and hammer me as hard as they can. Be difficult, a devil's advocate, ask nasty questions ... whatever ... tell me I'm crazy and dreaming. I best get some calluses before go time on April 10th. This is one of the reasons I have invited many of you to a big bash (other than an excuse to party with lots of fun people) on April 14th. I really need the input of the general consumers, and especially women who don't get easily swayed by cool wiz bang stuff. Plus its a good excuse to party ... not that I need one mind you but this way at least it is a tax deduction.

Well ... heading to bed before tomorrow for once ... must find my asbestos underwear.

Cheers,

Allan Isfan
CEO, MYDYO (as in My Radio + My Video = MYDYO in case you are wondering)

The kitchen table, a borrowed projector and a bed sheet

I invited the team over to my place Monday night for our first boardroom meeting. Since we don't have a boardroom (or an office for that matter) I pulled together the dining room table and the kitchen table ... enough for a dozen or so guys. I borrowed a projector, put up a white bed sheet on the wall and the kitchen was transformed into a boardroom ... endearing in its crudeness. We'll laugh at this one day ... actually kinda laughing about it already. With the beer fridge filled (we're in Canada eh!), we were set to go.

I would have liked to do it in the garage because it would have given it that romantic "started in a garage" aspect to it but nobody starts companies in their garage up here ... too damn cold ... unless you're starting an igloo business which is getting renewed interest from VC these days. With the price of gas, sled dogs are coming out of retirement and you have to keep the dogs somewhere now don't you! Makes complete sense.

The guys all arrived and the energy in the place was palpable. There is a beautiful sound when a pile of really passionate people are having simultaneous discussions. We settled down to a presentation I put together with my wife's assistance. It's great to have a professional graphic designer in the house. She tends to push me aside and takes over, fixing things up and making it look 10 times better. I shared my vision, answered questions and delved into brainstorming on some key aspects such as demos. The evening flew by and by the time I checked, it was very late. As people were heading out to their cars, several small pockets continued the conversations outside even though it was windy and freakin cold ... nobody really wanted to stop (maybe moving to California is not such a bad idea). They're in!

There was a posting I wrote earlier this fall from San Fransisco as I was sipping on a cold brewski and watching some nut in a rowboat in San Fransisco bay. They should probably put breathalyzers on Pocket PCs. At the time, I was talking to a bunch of people about the concept hoping they would join but I was still essentially alone. That is definitely no longer the case and it feels great to be in the company of fantastic people that share the vision and feed me the red pills and blue pills as necessary.

I was talking with a local t.v. producer that is considering doing a piece on me and the start-up experience as it unfolds. There is a raw realness associated with telling the story as it unfolds, without the colored filter of time, success or failure. I was recounting how I got to this point (which is still pretty well nowhere and yet still going somewhere) and realized how crazy you have to be to do what I'm doing. I quit a great well paying job in the CTO office of a large company working with people I actually really liked and I prostitute my brain through consulting gigs to feed the three little birds in the nest. I didn't even know what the hell I was actually going to build for the first six months or so but knowing that I was going to figure something out like I always had in the past. And it was going to be really good! What a nut! Skypoint Capital had some faith and provided me a fantastic role as an Entrepreneur In Residence (EIR) which has really helped me get to this point. You can't do it alone ... and so alone I am no more.

With the support of many people, a kitchen table, a borrowed projector and a bed sheet, the magic is beginning and we're captured it all on tape. Hmmm a reality show on start-ups ... nah ... would never work.

Cheers,

Allan Isfan
Nut with an Iron Ring

people and the idea pendulum

Startup concepts often feel like a pendulum. You start with one idea, you bounce it off people you can trust, they add their thoughts and it picks up momentum and speed. Next thing you know, you've diverged significantly and hit a standstill as you realize you are way off track. Before you know it, you are somewhat back to the original concept but the "bob" is now a bit shinier.

I was a little stuck until I had a chance to meet with my crew of merry men today for lunch. We had such a fantastic discussion that I believe we may have come up with some potentially revolutionary concepts ... one idea building on another and another until some really neat thing popped out. Very exciting stuff, especially since it is tied to delivery of ads (gotta leave it there ... sorry). It is great to be in the presence of smart capable people! The ingredients for the magic potion are now appearing.

Having said that, the team is missing one or two key people that are crucial. We are playing in an emerging market but it has strong roots in radio and its usually duller second cousin on the net. I am looking for assistance from some senior people out of the radio industry to provide some critical input, feedback and contribution. If you are one or know of one that wants to be involved in something revolutionary and disruptive, please contact me. Perhaps some adult supervision wouldn't hurt either (ok, I'm nearly 40 ... but I feel so young!).

You have often heard that VCs invest in teams, not ideas. In my slightly younger, more naive days I thought this was complete bull. What good is a fantastic team if there is no fantastic idea to go with it? I experienced this at my previous company (great team) when we changed our business model and struck gold. Now I'm literally living through it again. The things we came up with today, coupled with one or two key people (whom I need to find) will catapult us to new heights.

Cheers,

Allan "Bob" Isfan
PS. Those that have known me for a while know that my nickname is Bob (eastern european for Bogdan ... my middle name) so this is a bit of a funny irony relative to the whole pendulum thing.

Also note that I have added links to some blogs I think are worth checking out. I'd strongly recommend Guy Kawasaki's latest blog since it covers defensibility really well (a topic I covered in my post entitled "crush crush crush") http://blog.guykawasaki.com/

Is this legal?

Remember when you used to record radio? That was a long time ago ... at least for me ... but this fad is coming back. In the search for free music, it is amazing what amazing tools people will come up with.

A number of MP3 players with FM tuners allow you to record the radio to your local memory. This is interesting but not necessarily that exciting at first thought. However, some of the legal tools that have popped make this a potentially very useful way to get all your music for free.

I recently downloaded a trial version of a product called Replay Music from a company called Applian http://www.applian.com. The product can record the music you are streaming on the net, determine the song and artist, clip the beginning and end so that you get a neat and tidy mp3 of all the songs, complete with artist and song info! It even asks you if you want the songs added to your iTunes library!!! I tried it and was amazed by how good a job it did. With the quality from many streaming services being pretty decent, this is an amazing way to huge quantities of music for essentially nothing (except for the S/W) and all legally so far. They also have many other cool products, such as a Radio TIVO recorder.

It don't know if that's just me but this is huge once it hits the mainstream. It could certainly impact the operation of streaming services in major ways. Hints of changes are already coming. Creative recently removed a feature from their mp3 player that prevents you from recording from the built in FM tuner. This of course is pissing off lots of their customers that bought the player specifically due to that feature. Fortunately, you have to apply a "patch" for this improvement to take place. Naturally, the patch includes things some people may want so some may get suckered. There's lots of banter on the net regarding what caused Creative to pull this feature? Was it pressure from the RIAA (radio cops)? Quite likely. This is the same reason satellite radio players don't have a record function.

Before all hell breaks loose, I'm grabbing as much music as I can legally before someone shuts this down. Have fun.

Some start up stuff now. I continue to have discussions with many people, with some of the discussions being at very high levels (CEO, Chairman, VP, President, VC partner ...) and I keep being amazed about the positive feedback regarding the concept I'm shooting for. It is extremely encouraging. I will continue to have these discussions but I already know we just need to build it.

So here we are ... quit job in April ... consult on the side... dream up ideas for months ... hang by the pool with family and friends ... get serious in September ... nail down general concept in October ... get friends to help ... and start building. Seems simple doesn't it? That's the easy part, but you have to start somewhere. There is no better way to raise money than to actually build something and use that in your pitch instead of just powerpoint. Seems obvious I suppose but it wasn't obvious to me months ago.

If you are interested in start-ups, here is a great link several people forwarded me recently from a blog written by Paul Graham (I quoted some of his stuff in an earlier post). The article is entitled "The 18 Mistakes that kill startups" http://www.paulgraham.com/startupmistakes.html

Since many of you on this post come from companies developing broadband, I thought you might like the analysis I've copied below from "The New Yorker". The full link to the story is http://www.newyorker.com/talk/content/articles/061016ta_talk_paumgarten

"In the church, he presented meticulously researched, technically correct, but completely ridiculous charts and graphs. He compared various data-transfer systems: ISDN, ADSL, Wi-Fly (that is, pigeons). Then he showed a slide of a snail hitched to a tiny chariot with DVDs for wheels. If each disk contains 4.7 gigabytes of data, and if the snail (chasing a scrap of lettuce) travels at 0.000023 metres per second, the snail-system performance rate is over thirty-seven megabits per second. That blows ADSL out of the water. (There are flaws, however. As Vardi noted, “In some regions, most notably France, culinary habits may pose a denial-of-service problem.”) Dubno rang a bell and shooed Vardi from the stage."

crush crush crush!

Do you remember that "Kids in the Hall" skit in which Mr. Tyzik would crush people with his fingers? It still makes me laugh!

I've been dealing with people asking me "why won't Motorola, apple or any other Goliath crush you"? A very valid question which I have asked myself many more times than others have.

This brings up many important questions for a start-up, but two key ones keep me up at night ... not with worry but to figure out the answer. The questions are:
1) have all good ideas been thought of already? If someone has thought of your idea, are you screwed?
2) if your idea is more of a concept rather than a technology, how do you defend it?

Let's tackle the first one. You come up with what you think is an awesome idea. With the giddy excitement of a child on Christmas morning, you type in your key words with shaky fingers into google .... and 100 links come up in 0.01 seconds!!! SON OF A BEEYATCH!. All good ideas have already been thought of, with some associated patents in and many websites describing your great idea. Radio TIVO? Done. MP3 player with WiFi. Done. With all the smart, motivated people out there, this is bound to happen.

Of course this is not true. However, it is wise to assume this is the case so that you can build a truly defensible product or service. If you assume you're the only one that thought of a particular way of doing something and that is your only foundation, the false sense of security makes you extremely vulnerable. New concepts fail or don't get implemented for many reasons (two of many are highlighted below).

Execution is key. The last $100M/yr product I was a major contributor on was not that novel. In fact, a major telecom equipment vendor had teamed up with a leader in DSL at that time and came up with what turned out to be a complete catastrophe. Our solution was so much better, it's not even funny. We were in a life and death situation where the whole company depended on the success of the product. We set very high goals, hired people with balls, executed with unbelievable focus. Failure was not an option and it showed. Our second product didn't fare so well.

Incumbents don't care. Big companies need big revenues and need universal appeal to hit their numbers. Even big companies have limited resources. Can you imagine if Apple came out with the next iPOD and it only sold 100k units per month. Heads would be rolling. BTW, they sold 14M iPODs in the last quarter. If we could sell 100k units/month, we'd be snorkeling in a pool of champagne (I wonder how much that would cost?)

Lots more to be said but best move on. Ok, so what if your idea is more of a concept, such as a service, rather than a magical technology, how do you defend it?

Everyone is looking for the secret sauce or that one ingredient that makes the sauce secret. I remember going to restaurants, trying to guess how they made the sauce so I could make it at home. I came close a few times but mostly didn't quite nail it. The trick is to mix ingredients such that they build on each other. Each one brings out the elements of the other. You see where I'm going with this. Amazon doesn't just have access to huge inventory and low storage costs. Their recommendations, often contributed by users, help people find other stuff. I often buy books two or three at a time to minimize shipping charges. Amazon often doesn't store items in their own warehouse. They just serve as a storefront and products get shipped directly from someone else's warehouse to you ... $0 cost to Amazon. Freaking genius. Nothing secret here.

Few people believed in search when Google was pitching. A site for crazy, user generated content called YouTube? Well ... we now have GooTube which controls an absolutely ridiculous number of eye balls and the equally ridiculous ad revenues.

Ye must have faith ... and balls.