ON THE GROW

In­cu­ba­tors play­ing key roles for star­tups

Ottawa Business Journal - Techopia - - Front Page - BY CRAIG LORD

Cre­at­ing pro­to­types, find­ing clients, build­ing rev­enue streams, get­ting to scale – start­ing a busi­ness isn’t easy. It can all be very daunting, es­pe­cially to a new en­tre­pre­neur.

That’s where ac­cel­er­a­tors and in­cu­ba­tors come to the res­cue.

With plen­ti­ful busi­ness re­sources, men­tors and a healthy knowl­edge base, th­ese or­ga­ni­za­tions are there to help both fledg­ling star­tups and es­tab­lished busi­nesses hit their marks.

“It’s that old say­ing, ‘Chil­dren aren’t raised by just par­ents, it takes a vil­lage,’” says Pa­trick White, di­rec­tor of op­er­a­tions at L-SPARK, a Kanata-based in­cu­ba­tor and ac­cel­er­a­tor for en­ter­prise soft­ware star­tups. “It’s the same kind of thing with

The de­mand in Ottawa is huge. The (in­cu­ba­tors and ac­cel­er­a­tors) that are in place right now can­not cope with it. The more we have the bet­ter ... I think that Ottawa has done a won­der­ful job. We have In­vest Ottawa, we have L-SPARK, we have Lead to Win. This is a ma­jor in­teror­ga­ni­za­tional com­mit­ment to make Ottawa a mag­net to at­tract en­trepreneurs.

a com­pany, it takes a whole com­mu­nity. Some­one is al­ways go­ing to be able to point to that com­pany that was able to do it with­out any help” but of­ten that’s not the full story, he says.

L-SPARK had 175 ap­pli­cants for its se­cond co­hort and se­lected nine in to­tal. But lo­cal com­pa­nies look­ing for men­tors and re­sources are not lim­ited to pro­grams in Ottawa only.

Take Zighra, for ex­am­ple. The on­line and mo­bile bank­ing cy­ber se­cu­rity com­pany ended up look­ing to Lon­don, Eng­land to find the ac­cel­er­a­tor best suited to its needs.

The com­pany re­cently joined the Bar­clays Ac­cel­er­a­tor, which is spon­sored by the Bri­tish bank­ing and fi­nan­cial ser­vice com­pany. Yes, that Bar­clays, the mar­quee spon­sor of soc­cer’s English Premier League.

Zighra beat out 700 other ap­pli­cants from around the world to nab one of the 10 cov­eted spots in the lat­est co­hort of the fin­tech-fo­cused pro­gram. Bar­clays pro­vides tools, equip­ment and fa­cil­i­ties to help mem­bers get their ser­vices to mar­ket as well as men­tors who of­fer com­pa­nies ad­vice on ev­ery­thing from net­work­ing to pitch­ing.

“One of the rea­sons we went to (the Lon­don-based ac­cel­er­a­tor is) be­cause it was spon­sored by Bar­clays. It had a brand be­hind it,” says Vipin Menon, head of growth and part­ner­ships at Zighra. “We wanted to ex­pand into the Euro mar­ket, we wanted a beach­head. Get­ting us into Bar­clays gets us into the hands of cham­pi­ons that can … take down the bar­ri­ers of en­try.”

Menon be­lieves some ac­cel­er­a­tors can func­tion as a sort of an “MBA 101,” which is great for first-time en­trepreneurs but not so much for vet­eran com­pany-builders. He be­lieves that whether an in­cu­ba­tor and ac­cel­er­a­tor is nec­es­sary to help a firm grow all de­pends on the com­pany and its spe­cific needs.

UNIVER­SITY VS. IN­VESTORS

Tony Bailetti, di­rec­tor of Car­leton’s Tech­nol­ogy In­no­va­tion Man­age­ment mas­ter’s pro­gram and the school’s Lead to Win ac­cel­er­a­tor, sees such pro­grams as “ad­vanced cour­ses” for bud­ding en­trepreneurs.

UBI Global, a Swedish bench­mark­ing or­ga­ni­za­tion, re­cently ranked Lead to Win as the sev­enth-best univer­sity in­cu­ba­tor and ac­cel­er­a­tor pro­gram in North Amer­ica. The pro­gram has in­cu­bated star­tups since 2002, and com­pa­nies from the five years lead­ing up to 2014 that were part of Lead to Win gen­er­ated more than $19.3 mil­lion in sales in 2014.

Bailetti draws a dis­tinc­tion be­tween aca­demic pro­grams such as Lead to Win and in­dus­try-based ser­vices such as L-SPARK.

“We all com­ple­ment (each other, but L-SPARK is) run by in­vestors, they take equity,” he says. “The univer­sity, we don’t do this.”

But to Bailetti, there’s no com­pe­ti­tion be­tween the two. In his eyes, there’s more than enough room for many more in­cu­ba­tor and ac­cel­er­a­tor pro­grams in the cap­i­tal.

“The de­mand in Ottawa is huge,” he says. “The (in­cu­ba­tors and ac­cel­er­a­tors) that are in place right now can­not cope with it. The more we have the bet­ter.”

One new en­try into the field is the Founder In­sti­tute. The Sil­i­con Val­ley­based or­ga­ni­za­tion is ded­i­cated to help­ing en­trepreneurs who main­tain a day job but wish to ex­plore their own busi­ness ideas in their off-hours. Codi­rec­tor Stefan Ce­leski calls the Founder In­sti­tute an or­ga­ni­za­tion for “part-time en­trepreneurs.”

While the group hasn’t of­fi­cially con­firmed it is set­ting up shop in the cap­i­tal, Ce­leski says it will prob­a­bly launch in the fall. White be­lieves it will be an im­por­tant ad­di­tion to the Ottawa ecosys­tem.

“One of the is­sues is (L-SPARK is) only fo­cused on en­ter­prise (soft­ware-asa-ser­vice com­pa­nies),” he says. “Tony (Bailetti) has done some great stuff with re­spect to the aca­demic world. Startup Garage (at the Univer­sity of Ottawa) is as well, but I think we need some­thing in the middle. And Founder In­sti­tute is a great piece be­ing added.”

White says he doesn’t see the Founder In­sti­tute as a com­peti­tor to L-SPARK. Like Bailetti, he thinks there is a place for many dif­fer­ent kinds of in­cu­ba­tors and ac­cel­er­a­tors. He says some could fo­cus on pro­to­typ­ing and val­i­dat­ing, for ex­am­ple, while oth­ers could con­cen­trate on how to scale a com­pany and still oth­ers could em­pha­size client ac­qui­si­tion strate­gies.

“We’re not try­ing to com­pete against each other, we’re try­ing to el­e­vate ev­ery­thing,” he says.

“I think there’s room for other play­ers. It’s like a mar­riage. We give some­body a men­tor two days a week. That is a mar­riage. Not each in­cu­ba­tor/ ac­cel­er­a­tor is go­ing to be a per­fect fit. You have to go find out what else is out there and find out who is the per­fect fit for you.”

And this is just the be­gin­ning when it comes to such pro­grams in the Ottawa area. In­vest Ottawa of­fers a host of ser­vices to help get new busi­nesses on their feet, and the city is home to a num­ber of other ac­cel­er­a­tors and in­cu­ba­tors that are all aim­ing to im­prove the startup ecosys­tem.

“I think that Ottawa has done a won­der­ful job,” says Bailetti. “We have In­vest Ottawa, we have L-SPARK, we have Lead to Win. This is a ma­jor in­ter-or­ga­ni­za­tional com­mit­ment to make Ottawa a mag­net to at­tract en­trepreneurs.”

Get your ap­pli­ca­tions ready.

TONY BAILETTI DI­REC­TOR, CAR­LETON’S TECH­NOL­OGY IN­NO­VA­TION MAN­AGE­MENT PRO­GRAM

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