Grow 2012 Live Blog #growconf

9:00am

Debbie Landa, the founder and CEO of Dealmaker Media, introduces the conference with some philosophy.

“Entrepreneurs are crazy,” she says bluntly. “I would know.” She goes on to say that this conference, and the people attending it, will push everyone to “think bigger.”

She brings up Catalina Briceno, the director if industry and market trends for the Canada Media Fund. “We truly believe that Canada is a great place to be at this exciting moment in time,” she tells the audience. “You are the next generation of entrepreneurs. You will bring Canada to the digital media world stage.”

Next up is Sam Zaid, the founder and CEO of Getaround. He explains how broken the automobile industry is: we buy cars and use them just 5% of the time. It’s inefficient; “It’s car overpopulation,” he says, “and car-sharing is a solution.” People actually rent their own cars out to other people. Sam says this works at this point in time because of a few factors: a growing sharing economy, ubiquitous connectivity that drives new efficiencies, and urbanization—”cities are out-competing suburbs.” 

He says people in cities like Vancouver just don’t need cars. “Why own when you can simply access?” Millenials aren’t buying cars, he notes. A trillion-dollar market is unfolding as human mobility changes more dramatically than it has in 100 years.

9:30am

Disruption: Harnessing the Crowd.” He starts by saying that everything the entrepreneurs at the conference are doing is “inspiring and humbling.” His company Indiegogo launched in 2008 (before Kickstarter) and it works in Canada (unlike Kickstarter). They raised $1.5 million in funding in 2011 and $15 million this year in a Series A.

Adam says that “traction comes from action.” You have to actually do things to convince people to give you money whether they’re a venture capitalist or a stranger on the web coughing up five bucks. Another lesson is that “ideas are nice, but execution kills.” That action and traction validates your idea, at which point more people will give you more money.

To run a successful campaign, use a video and reveal the people behind the project. People fund people, not projects. Campaigns with video raise more than double the amount of campaigns without video. A personal connection establishes trust. Another tip is frequent updates on the campaign. Keep investors in the loop on progress and you will raise more money. Specifically, 31 updates increases the average amount raised by a staggering 408%.

Next up is Matt Mickiewicz, co-founder of 99designs. He was the youngest homebuyer in Canada when he bought a house two weeks after turning 19. He starts by naming disruptively innovative companies across industries, including Square, Second Market, and Airbnb, and explaining how they fundamentally change their industries by rethinking the whole process of how things work.

Matt circles back to 99designs. He explains the disruptive aspects of his startup: hiring a designer was a slow, expensive, and risky process before crowdsourcing came along. Now you can define budgets up front, no contracts, get results within a week or two, and you can even get a refund if you’re not satisfied. 

“What they don’t tell you when you’re disrupting an industry, though, is that disruption creates backlash,” Matt says. The companies he mentioned, including Square and his own company 99designs, which has received plenty of hate. 

99designs has paid out $39 million to designers across 158,000 contests. A new design uploads every five seconds.

Want to disrupt? Ask what services and processes are fundamentally broken and overpriced? What assets have no liquidity and need a marketplace that connects buyers and sellers? How can you create a solution that is not just better, but 10 or even 100 times better? What services can be provided significantly cheaper and reach a much wider market?

“The best disrupters are outsiders,” Matt says. “They’re not tied to any status quo. They tackle problems with fresh insights. They don’t have any experience in the industry they disrupt.”

10:00am

Discussing the role that venture capital plays in the transforming businesses is a panel consisting of Softech VC’s Jeff Clavier, 500 Startups’ Dave McClure, Bessember VP’s Ethan Kurzweil, and Anthem Worldwide’s Mark Silva.

“Seed investing is in vogue now,” Dave suggests. 

When asked what VC brings to startups outside of money, Ethan says that VCs take a product idea and turn it into a company. Building a company with infrastructure requires money and expertise, both of which a VC firm offers.

“We are trying to put a structure in place to support a company,” Jeff says of what VCs do.

“The earlier you invest, the higher chance of failure,” Dave says. He explains that he can invest in 200 companies with Jeff can invest in 20 and it works because the objectives are different; both models of venture capitalism work (and can not work). A seed investment is a small investment used as a “discovery”; virtually all VCs aim to make most of their return on investment from the second and third rounds.

“I don’t think anyone is good at detection early,” Dave admits. “You want a 7-foot-6 person for your basketball team but you have to pick your players when they’re eight years old.” Some things can guide your decision but nothing is ever for certain. “You’re either early and contrarian or you’re late and you’re right,” Dave adds.

On the topic of international venture capital, Ethan says you have to be “crazy not to think international.” His firm has offices in India and elsewhere overseas. “And some of our best investments have been in places where we don’t even have offices,” he adds.

“There are bigger opportunities in Brazil and elsewhere,” Jeff says, “But if we don’t understand their markets we can’t deliver a value add.” However, he says Silicon Valley investors and invest in Canada easily, as if it were an extension of the valley.

“Invest in what you know,” Dave affirms. “50/25/25” is his firm’s strategy right now. That’s 50% Silicon Valley, 25% rest of US, 25% rest of world. So in that sense Canada has to compete with the BRIC countries and other international markets.

If you want to invest internationally you should hire people familiar with local culture, geography, etc. You can’t just fly in for a couple weeks and expect to understand an overseas market. There is potential in international markets but an organization can’t realize it without the correct tools.

“Venture capitalism is a small market,” Jeff notes. “Many firms are still using Office spreadsheets to manage dealflow.” He suggests VCs better adapt to social media and other related products and services.

“LinkedIn is a undervalued tool for everyone,” Ethan says. “It has a wealth of information and data.”

“AngelList is another great tool,” Dave adds.

Dave says of his particular investment organization, “We’re competing with business schools more than later stage VC firms. But we think we’re going to fucking crush them. They charge $100,000 and tell you to read case studies. We give you $100,000 and say, ‘don’t fucking read a case study, build one.'”

11:00am

Senia Rapisarda takes the stage after a short break. A vice president with BDC, Senia likes Canadian companies to the Oakland baseball team in the movie Moneyball. If North America were a league of startups, Canadian startups would not have the same resources as teams in Silicon Valley. But that doesn’t mean it’s hopeless: there are ways around this problem. Entrepreneurs simply have to be more creative and more innovative. In the end, it’s even more beneficial than being handed money.

After Senia is David Cancel, chief product officer of HubSpot. He explains why sales and marketing is just as important—or even more so—than products. 

David launched Bolt, a social network, in 1996. But he was “way too fucking early”—the term “social network” didn’t even exist back then. Another venture of his was Compete, which launched after the dot-com crash. This one was “way too early”—no one cared about the data Compete provided when it first came out. After that came Lookery, a data exchange for ad networks. This startup was “too early.” In 2007 Lookery didn’t target a big market; it withered away but these days similar services have become popular.

He finally got his timing right with Performable. David’s startup timed the market well. Performable, which turns visitors into customers by using web-based software to optimize marketing efforts, was “close to perfect” with its timing. HubSpot acquired Performable, and David stuck around.

 “I finally figured out a secret around product market fit,” David reflects after 16 years of mostly ill-timed startup launches. “You don’t need a fucking product.” Performable didn’t have a product for a while, and when it did, it was “very weak,” but HubSpot still acquired it. You need one eventually (unless you want to be acquired early) but a startup can build a customer or client base and gain valuation without one.

11:30am

Julia Hartz, co-founder of Eventbrite, takes the stage.  “What makes a company great?” she asks the audience. “People, products, or technology? It’s people.”

Eventbrite, which has handled $1 billion in gross ticket sales, has hired 100 people this year. The company’s attrition rate is 5%; the area around the company averages 17%. In 2009 with a team of 30 people they raised their first round of funding. After that they needed to triple their headcount; Julia said this scared her. She worried it would destroy the startup’s culture.

“The culture tenets and the brand tenets [of a startup] are inherently linked,” she realized. If every employee of a company believes he or she is the company, that company will never lose its soul; its startup culture becomes scalable.

One way to foster this is to allow employees of any type to share their knowledge about stuff; let people venture outside of their roles. Another way to unite staff outside of work through passions and hobbies, such as with afterhours yoga sessions.

But don’t sacrifice your company’s performance for internal happiness. Employee happiness does not directly create company performance. The two can co-exist but they don’t by default. The key is to align everyone’s goals.

At 150 employees, companies lose intimacy, efficiency, and interdependency. But at 200 people, Eventbrite has a 2% undesirable attrition rate for the first half of 2012. And performance is also there: the company is on pace to process $600 million in gross ticket sales this year. Have a genune, innovative, dedicated, empowering, social, accessible, and delightful team culture—and then clarify company objectives to staff—and you have nirvana: happy employees and a top-performing organization.

12:00pm

Before lunch, Canadian entrepreneur Brian Wong of Kiip interviews Mikkel Svane, the founder and CEO of Zendesk. Mikkel jokes that Brian is 14 years old (he was the youngest entrepreneur to raise VC money).

“Zendesk is a customer service app with more than 20,000 businesses using it to service 800 million customers,” Mikkel says of his company.

With Denmark having no culture of entrepreneurship, Mikkel moved to the US to build his company. He was also attracted to the shiny bauble of Silicon Valley. “If you’re in fashion, you want to go to Milan or Paris,” he says. “As a tech entrepreneur, we wanted to be in the Valley.”

“I didn’t realize how big a deal it is for an American VC to take a leap of faith and invest in a tiny Danish startup,” Mikkel goes on to say about his journey to the US. But he found an investor who fell in love with his idea. At the early stage of Zendesk, he was relying on “founder dynamics” to raise money. “Everything else is unknown,” he affirms. “There is so much doubt.”

For international entrepreneurs wanting to launch startups in North America, Mikkel advises “marrying” a lawyer. Build a long-term relationship of trust with them—unless you think you can handle hundreds of pages of legal gibberish on your own.

Brian asks if Zendesk has made any disasters. “As a startup, you make mistakes all the time,” replies Mikkel. “You have to embrace your mistakes, live with them, and move on.”

Zendesk reveals that, “one day,” it will IPO.

12:30pm

Lunch break. Back in an hour.

1:00pm

Cory Smith raps.

1:30PM

Ben Huh, the CEO of Cheezeburger, takes the stage. His intro music is PSY’s “Gangnam Style” as he dances onto the stage to many laughs and applause.

“We have one of the ugliest websites in the world,” Ben admits. Craigslist, Amazon, eBay, the original Facebook… terribly ugly things can become extremely popular is they are a value-offering utility. 

“Today we use the internet to create culture,” he says. “Before you would go on the internet to buy something or complete some other transaction; that was 1.0.” Now people tell their Twitter followers what they ate for breakfast. It seems useless and a lot of it is but it represents the social dynamic that has been added to the web.

Marc Ruxin, CEO and co-founder of TastemakerX, begins his discussion on “Why Taste Matters.” When he was younger he wanted to be a tastemaker.  He says it’s not about good or bad taste, but about your own personal taste. Our taste defines us.

“Everything is the same now,” Marc says. This hyper-connected world has made the world more similar than ever before. Which is why taste is more crucial than ever. It informs us who you want to be. And taste is always evolving. It also applies to everything: for every interest or passion, there is a world of people who care deeply about the exact same thing.

“Taste is a core social organizing principal,” he explains. “If you could see taste and make real connections, you wouldn’t feel like an outsider.”

“In the old days we read, watched, and listened,” Marc continues. Editorially biased, curated environments created tastes for us. Now everyone can create, can establish their own platform—and their own taste.

2:00pm

After that Jeremy Toeman, the CEO of Dijit Media, discusses how mobility is creating opportunity in the television industry. 98% of mobile owners us their mobile devices every day. He describes this trend as “extreme mobility.”

Another trend Jeremy brings up is “extreme personalization,” where everyone does there own thing. This hasn’t been due to a change in people. People haven’t changed. Innovation in TV has changed. TV is an escape. That’s one big reason why it’s not dying. It has innovated but  TV is still ripe for disruption, he argues.

“TV is big,” he notes. “$500 billion per year big.” Jeremy says that to disrupt TV you must understand a few things, including how money flows in the industry. You must also understand how deals are made and legal rights.

Trends in TV coming are “binge viewing,” YouTube original content, turf wars, TV everywhere, the iPad, social TV. These trends represent opportunities, areas for disruption, Jeremy concludes.

2:30pm

ModCloth’s Eric Koger is up next. Huge opportunities exist in fashion, he says—social, mobile gamification—but also new challenges. How do you capture attention when competition is so fierce and attention spans are short? How do you convert customers in an era of effortless comparison shopping?

ModCloth employs “community-centric commerce.” There’s three C’s, but they represent another five C’s: curation, content, collaboration, conversation and culture.

Eric says that growth and capital constraints can actually lead to new insights. Roadblocks helped create ModCloth from its original business model. They used to scout samples and place orders themselves, but now the buying community drives this process. This didn’t happen because Eric innovated it mentally; it came because the old process wasn’t scaling. But it was the best thing that could have happened to the startup—to come up against a brick wall. Instead of climbing over it they found a door through it.

Another benefit to community-built businesses is that the users feel that they define the brand, fostering customer loyalty, Eric says.

3:00pm

Discussing how to “innovate to get shit done” is PayPal’s West Stringfellow. 

“Innovation is a long term investment,” West tells the audience. “Hypergrowth is an anomaly. You can’t predict it.” He also affirms that “Fear kills innovation.”

To innovate, you must know your customers. You must know yourself. You must communicate consistently. You must iterate consistently. You must maintain persistent self-awareness. And you must fail fearlessly.

West cites Research In Motion as an example of failing to be self aware and how that can destroy innovation. They iterated, had an amazing product, dominated the market… and then fell from grace because they weren’t true with themselves over changes in the mobile landscape. “And now today they’re ultimately irrelevant.” Guess you shouldn’t expect any BlackBerry apps from PayPal in the future.

3:30pm

After a short break is Zite’s Mark Johnson, CNN’s Louis Gump, and Anthem Worldwide’s Mark Silva. Their panel is called “The Web Goes from Search to Personalization.” 

This time last year Techvibes broke news that CNN acquired Zite for $20 million. Zite curates content across the web and delivers relevant articles to users from mobile devices. It also becomes smarter the more you use it. CNN saw Zite and said it solved two of their problems. It gave them a running start in the personalization business. And Zite was also a standalone business; CNN accepted that readers like to read their news from multiple sources.

“Even though we’re an established media company with a well known brand, we have ambitions,” Louis explains. Before Zite, CNN had never acquired a digital property.

“At the time of acquisition, we were five people,” Mark says. “Now we’re 15. And we’ve launched an iPhone app and an Android app and a Windows app.” All because of CNN’s acquisition. And Mark is stil CEO of Zite; in fact, he’s the only CEO at CNN (the head honcho their is only titled as the president).

In acquisition, Mark advises entrepreneurs to have their acquirers “put their promises on paper.” Don’t “over-paper” your acquisition, but don’t trust verbal promises either.

4:00pm

Dan Levin, the chief operating officer of Box, takes the stage to discuss the emerging cloud trend. 

“This shit is hard,” he says of entrepreneurship. “You think everything is so great and you won’t have to work for anyone. Then reality sinks in. And you say to yourself, ‘I don’t think I can do this.'”  You have to believe in yourself and power through this dark phase.

Box has raised more than $250 million in funding, including $125 million this year. 

Dan says that product-centric companies can exist and succeed. He cites the example of the Google search engine and the Apple iPhone. Amazing products can attract customers on their own. “But what I’m here to tell you is that this doesn’t happen very often,” he affirms. Sometimes it’s not about product, it’s about perception. And then perception can become reality. 

Box was smaller than its main competitors for several years before it surpassed them, but it acted bigger from the beginning because it was convinced its product was the best on the market.

4:30pm

The final four smackdown startups are Mover, Contractual.ly, Freakin Genius, and Kawkfighter.

  • Mover gets a low of six and a high of eight.
  • Freakin Genius gets a low of five and a high of nine. 
  • Contractual.ly gets a low of four and a high of eight.
  • Kawkfighter gets a low of zero and a high of 10.

Runner up is Contractual.ly.

Winner is Mover.