I met with Barry Pâquet and I was very impressed and amazed by his story of how he started up his company. He was working as a consultant for another software company and eventually, he had a great opportunity to come up with a product that was superior from the one his client was using. Then, from that one sales, he built his portfolio of clients and making money.

I always like to listen to how people become entrepreneurs and in my experience, most people became entrepreneurs serendipitously.

His company, Quantum Whisper, offers a nifty solution for product development teams scrambling around coding and user feedback. I used to funnel users feedback to the product team and I knew how messy things can get. From the product team perspective, the challenge is to link the user feedback to the specific code or feature in a solid way. Most of us just uses a kind of spreadsheet or paper to take notes between the bug and the code related to it. However, if the project gets too big, the paper or spreadsheet solution can become very overwhelming.

The solution he has is  a platform that links users feedback directly into the development side, so no programmer nor product manager has to do the dirty work of linking those two things every time. This is a great value proposition and I bet it is going to grow a lot.

The smartphone industry is moving to follow the same path of the personal computer (PC). Both industries have a lot of manufacturers. For example, Dell for computers and Motorola for smartphone. PC and smartphones have operating systems. For PC, the major OS is Windows and for smartphone, there are more than one major operating system. There are iPhone OS, Blackberry and Android (Google). It seems that there is a platform war among the manufacturers and Google. Imagine that a company can implement a system that is used by most of the cellphone manufacturers. This company will be able to control the smartphone industry, just as Microsoft controls the PC industry.

Nexus One Homepage

Google launched its official cellphone with Android operating system today. It is entering the smartphone market by providing a free OS to cellphone and aligning with manufacturer to provide a better user experience through better applications and superior hardware.

Google may reach a dominance in the smartphone market if it can have more manufacturers using its OS. However, manufacturers are not going to rely 100% in one software company. At the same time, most industry players do not have core competency in software development, thus they may rely on Google Android this time.

Meanwhile, iPhone is growing and Blackberry is responding to the new threats in the market. Nokia and other cellphones company are losing ground. It is an interesting time for this fast changing industry.

My 2 cents.

It is so hard to come up with a nice name for startup or new blog when most of the basic names are all registered. Then, most people come up with strange or too creative names to their website which are hard to search. But imagine that you can search for domain names with prefix and suffix easily and Nomaine can provide that type of domain name search. I will use this tool and some others (Google Insight for Search) for domain name registration.

http://nomaine.com/

Bookhu is a book review website that shows if a book is read more by men or women. It is a food for thought website. It shows if I have more male or female preference. In my searches, most of my books related to entrepreneurship, venture capital and languages are read more by men. However, my books related to culture are read more by women.

Zynga is the company responsible for all those spam like games, such as FarmVille or MafiaWars. All these games are targeted to Facebook and they make money by showing advertisements. All these social type of games target the very basic human emotion of achievement. Most people play these games because they want to receive a higher status or position in their character or their skill level. In Facebook, players can show off their “new virtual and acquired ability” and get recognition from friends and other players. This is a big driver for the success of these games.

Zynga

I wonder why Facebook doesn’t merger or buy these game companies. It is part of Facebook anyway. It should acquire and get the game revenue. Currently, game companies can show ads from AdSense or any other place. Facebook loses ads revenue because of this.

The impressive thing is that the company is receiving more $180 million. I wonder what they are going to use that money for.

More at http://www.businessinsider.com/zynga-takes-180-million-venture-round-from-dst-others-cue-russian-mafia-jokes-2009-12

Times Skimmer

I was reading this news Google Faces A Different World in Italy from the New York Times and it is about Google’s criminal charges related to privacy in Italy. A senior executive in Italy may get to jail because of an outcry over an online video involving an autistic boy.

The implication if Google loses is that opens the discussion of who should be liable for information in the internet platforms, such as YouTube and even Google Search, in Europe. In the US, most of this discussions were solved by the Digital_Millennium_Copyright_Act that creates a safe harbor for online service providers. Basically, people can only sue internet companies if it’s proven that the company hasn’t  done anything to stop the offence (copyright or other legal offences). I’m impressed that Europe does not have such laws protecting online service providers yet.

It reminds me of a similar situation when the Google Brasil’s managing director was being held accountable for pedophile pictures on Orkut. Google Brasil and US created huge task-force to curb the infestation of that problem with people and new tools for the federal police. The initiative went really well and the government abandoned the charges. However, there is still no laws defining clearly what the responsibilities are for online service providers regarding about illegal or offensive material in their websites in Brazil.

I’m worried if governments start demanding companies to act as a censor for information flow. The cornerstone of Internet as we know is sharing information. When companies and government start blocking access to information, the internet will not be the same. Consequently, the way we use and do business on the Internet may also change.

Thanks for Dan M., JS C., Mark E. and Tim T. for your suggestions!

This is a complete list of all the VC firms in Canada. JS made a good suggestion of adding of which firms invested in the last 12 months. I will add this info in the next update.

= A must see.

= A firm dedicated mostly in early stage companies.

= Firm that invested in any startup in the last 3 months (from September 09). You can click the icon to see the news related to the investment.

= Firm that received fund or selected to participate or manage a province venture capital fund in the last 2 months. You can click the icon to see the news.

= Firm that sold or IPO a company in the last 3 months (from September 09).

VC firms only

Anges Québec NEW INCLUSION!

AVAC Ltd.
Avrio Ventures Management Corp.

Blackberry Partner Fund NEW INCLUSION!

Brightspark Capital
Business Development Bank of Canada (BDC) Venture Capital

Canadian Medical Discoveries Fund Inc.
CAPE Fund/Fonds CAPE

Celtic House Venture Partners
CentreStone Ventures Inc.

Covington Capital Corporation

Desjardins Capital de risque

Discovery Capital Management Corp.

Elgner Group Investments Ltd.

Emerald Technology Ventures

Fond de Solidarité FTQ NEW INCLUSION!

Foragen Technologies

Genesys Capital Partners

Greenstone

GrowthWorks

GTI Capital

Hargan Ventures

ID Capital Management Inc.

InNOVAcorp – Halifax NEW INCLUSION!

Innovatech Québec

iNovia Capital Inc.

Investeco Capital Corp.

J.L. Albright Venture Partners (JLA)

Jefferson Partners

JOG Capital Inc.

Lumira Capital

McLean Watson Capital Inc.

Mercator Investments Limited

Montréal Startup NEW INCLUSION!

MMV Financial Inc.

Multiple Capital Inc.

New Brunswick Innovation Foundation

Novacap NEW INCLUSION!

Ontario Venture Capital Fund (OVCF) 

Propulsion Ventures Inc

Rogers Ventures NEW INCLUSION!

RBC Venture Partners

Renewal2 Investment Fund

RHO Venture Capital NEW INCLUSION!

SAINT – Saskatchewan Angel Investor Network

Skypoint Capital Corporation

Springbank TechVentures

Société Innovatech Québec

Summerhill Venture Partners

Tandem Capital NEW INCLUSION!

Tech Capital Partners Inc.

TELUS Ventures

Trellis Capital Corporation

VanEdge Capital NEW INCLUSION!

Venture Coaches

Ventures West Capital Ltd.

Walsingham Fund

WesleyClover NEW INCLUSION!

Yaletown Venture Partners

Internet Speed and Costs Around the World

I wonder what people in each of the high Internet speed market do.

This is a complete list of all the VC firms in Canada.

= A must see.   = A firm dedicated mostly in early stage companies.

VC firms only

AVAC Ltd.
Avrio Ventures Management Corp.
Brightspark Capital
Business Development Bank of Canada (BDC) Venture Capital
Canadian Medical Discoveries Fund Inc.
CAPE Fund/Fonds CAPE

Celtic House Venture Partners

CentreStone Ventures Inc.
Covington Capital Corporation

Desjardins Capital de risque

Discovery Capital Management Corp.

Elgner Group Investments Ltd.

Emerald Technology Ventures
Genesys Capital Partners
Foragen Technologies
Greenstone
GrowthWorks

GTI Capital
Hargan Ventures

ID Capital Management Inc.

Innovatech Québec

iNovia Capital Inc.

Investeco Capital Corp.

J.L. Albright Venture Partners (JLA)

Jefferson Partners

JOG Capital Inc.

Lumira Capital

McLean Watson Capital Inc.

Mercator Investments Limited

MMV Financial Inc.

Multiple Capital Inc.

New Brunswick Innovation Foundation

Ontario Venture Capital Fund (OVCF)

Propulsion Ventures Inc

RBC Venture Partners

Renewal2 Investment Fund

SAINT – Saskatchewan Angel Investor Network

Skypoint Capital Corporation

Springbank TechVentures

Société Innovatech Québec

Summerhill Venture Partners

Tech Capital Partners Inc.

TELUS Ventures

Trellis Capital Corporation

Venture Coaches

Ventures West Capital Ltd.

Walsingham Fund

Yaletown Venture Partners

There is a news from the CNET that tells that Smartphones and low-cost handsets will keep dominating the wireless market. The post tells that despite the fact of economic downturn, demand for smartphone remained high and this category grew 27% compared to the same quarter a year ago. Also, smartphones have been the fastest growing segment of the mobile industry. Moreover, the prices for smartphones have been decreasing steadily in the last 5 years.

In my experience, smartphones were quite expensive. For instance, Palm Treo 700p was launched on 2005 and its price was around $650.00 with a two year contract. Now, you can get an iPhone with 8G with two year contract for about $99.00. I am not even counting the fact that we can do more things in the current generation of phones and we have more services than in the past.

Palm Treo 700p with two year contract around $650.00

From Gartner report from 2008, Market Share: Smartphones, Worldwide, 4Q08 and 2008, the Global sales of smartphones in 2008 reached 139.3 million devices, up 14% compared to 2007 . The smartphone market is definitely growing. It is expected that with the economic rebound, people will upgrade their mobile phones and they may buy more smartphone if the service costs and the phone become cheaper.

Looking at the Table 4, Worldwide: Smartphone Sales to End Users by Operating System, 2008 from Gartner, we can see that in spite of the 13.9 growth for the overall smartphone market, Research in Motion and Mac OS X grew really well with 96.7% and 245.7% respectively.

Smartphone market landscape 2007 - 2008

This type of growth is similar to what happened with the PC industry during the 80s and 90s.

As you can read these excerpts:

Chip makers post record results bolstered by booming PC sales

HOME COMPUTERS, 1994

PC Sales Over Holidays Rose 33% From '93 Level, 1994

Strong Gains For U.S. PC's, 1995

As you can see 1994 and beyond were the years when the PC industry had the greatest growth in history. The growth relied on the consumer market. While B2B has always been the initial driver of the PC industry, the B2C market was essential for the popularization of the personal computers.

Also, late in the 1997, the PC manufacturers started to sell PC in the sub-$1,000 category. This happened at the same time with the first big internet growth (Yahoo!, Amazon.com, etc.) and the high adoption of internet. In the following graph from ITU, the internet user’s rate grew 70% (the blue line from 97 and 98).

Internet users per 100 inhabitants 1997-2007

Also, the sales of PC grew immensely with the introduction of PC that cost less than $1,000.

Sub-$1,000 PC sales soar

As you can see from 25-Years PC Anniversary Statistics , the number of units of PC sold jumped from 5.7 million in 1981-1985 to 1,540 million in 2001-2006. That is a 27 times growth!

25-Year PC Anniversary Statistics

25-Year PC Anniversary Statistics Chart

Although, we do not have the power to see the future, there are some patterns from the PC industry that shows us that the smartphone industry will also have a spectacular growth. Definitely, there are differences, such as the number of operating systems and platform and also the fact that in the wireless industry, the manufactures and the carriers have a big say in the definition of the market, but undoubtedly, smartphone will growth.

And if the smartphone market grows as big as the PC industry, there will be a lot business opportunities and innovation.

There is a very interesting article about this question: http://bits.blogs.nytimes.com/2009/05/14/do-web-entrepreneurs-still-need-venture-capitalists/

It basically says that given the lower cost to create web companies, the current venture capital model may not be attractive enough for those web entrepreneurs. It gives some examples such as the iPhone Apps developers that do not need a huge  amount of money to create their products. 

However, it ends the article saying that is why some venture capital firms are changing its strategy by creating special funds for this type of development or some VCs creates smaller fundings specially designed for these web entrepreneurs.

I believe it is a must read for web VCs and entrepreneurs.

Facebook valuation again...

Some highlights:

Facebook chief executive Mark Zuckerberg just had a board-level conversation about possibly accepting money at a $4 billion valuation, but decided against doing so…

Also, the company has more than $200 million in the bank, which is enough to cover its costs for up to two years…

 TechCrunch says it hears Facebook also received investment offers from two private equity firms that value the company at $2 billion. However, Facebook internally is valuing itself at $4 billion. And if Zuckerberg rejected the $4 billion offer, he’s certainly not going to be interested in a $2 billion offer…

Read more at : 

http://venturebeat.com/2009/04/15/facebook-rejects-funding-at-4-billion-valuation-may-not-raise-more

So, it seems that the $15 billion valuation was certainly overrated.

Another news:

…one potential investor submitted a term sheet for a valuation in the neighborhood of $2 billion.

What we’ve heard: Facebook stock trades privately at between a $2 billion and $3 billion valuation. That’s consistent with the numbers that everybody else is tossing around. And we’ve known for a while that when the ConnectU vs. Facebook legal spat was settled, Facebook valued itself around $3.7 billion.

What’s new this time around is that reports indicate Zuckerberg is extremely adamant about rejecting investment cash at a valuation he considers too low. When Facebook took a $240 million stake from Microsoft in November 2007, the investment was at a $15 billion valuation. Since then, it’s become clear that it was a preferred-stock deal and that Facebook’s true valuation has never been that high. But from what it sounds like, Zuckerberg would like it to get up there.

It was long before the massive Microsoft stake, after all, that Yahoo offered to buy the social network for $1 billion.

Read more at:

http://news.cnet.com/8301-13577_3-10220845-36.html?part=rss&subj=news&tag=2547-1_3-0-20