Since announcing its $30 million fund for Canadian startups in March, 500 Startups has shown no signs of slowing down in its quest to attract top-notch Canadian startups. The organization recently hired a crew of veteran Canadian entrepreneurs for 500 Canada and established 500 Labs to find Waterloo Region and Toronto-based talent looking to work on and scale ideas.
“Product engineering is much more core to the founder and the team, so we focus mostly on marketing.” – Mathew Johnson, head of Distro Dojo
After seeking strong Canadian startups early in the summer, 500 Startups announced the end of its growth marketing program, Distro Dojo, at Ryerson’s DMZ in Toronto. Distro Dojo helps post-seed startups with strong traction accelerate and operationalize growth to eventually secure a stronger Series A. As part of the program, 500 Startups flies in growth mentors from its network alongside top local mentors to work hands-on with the founders in the program. This was the first time the program came to Toronto.
“The Canadian startup scene has been booming the past few years,” said Sanjay Singhal, venture partner for 500 Canada. “There have been many success stories as of late including Shopify, Wattpad, Influitive, and Lightspeed. Bringing a growth marketing program like the 500 Distro Dojo to Toronto gives more startups the opportunity to experience and leverage Silicon Valley knowledge to get to their next milestone.”
The DMZ provided space for the program free of charge. “We are delighted to partner with 500 Startups’ Distro Dojo as they arrive at the DMZ to guide Toronto startups in using their entrepreneurial talents to find great opportunities for growth,” said Abdullah Snobar, DMZ’s executive director. “Toronto has a thriving community of innovators and Distro Dojo’s growth marketing program will play an important role in showcasing their talents as they continue to scale their business.”
Canadian companies that have participated in the program include CareGuide, Flixel, Sampler, FlipGive, Glambot, and Turnstyle. Speaking with Betakit, Distro Dojo head Mathew Johnson said that the companies going through two-month program work on a similar two-step process. Distro Dojo startups receive an average of $200,000 after fees for participating in the program.
“Step one is testing positioning and messaging, and ensuring that the product itself for product-market fit is well-articulated because if you don’t do that, any of your marketing activities will have a shaky foundation,” said Johnson. “Once we measure that to the right degree of success, we do optimization because even if you find the greatest marketing channel that people really want, the conversion funnel is not optimized then the channel may not look good, and it may not be profitable for you. So you need to focus on conversion rate optimization.”
Johnson said that 500 Startups chooses to focus on marketing as growth because the companies it invests in should already have a strong core team who know their product, but may just be struggling in marketing.
“It’s not a success if we invest in a company and based on the founder’s vision and market opportunity that she or he has found, and then tell them ‘you don’t know what you’re talking about and your product should be totally different’,” said Johnson. “Product engineering is much more core to the founder and the team, so we focus mostly on marketing and we think it’s differentiated for us, it’s our expertise as a VC firm.”
While the program identifies the challenges unique to each company, many of the companies that have come out of the program have appreciated the fact that the program gives startups a formula to repeat their success.
“Growth hacking is a model for the entire operation and now permeates our culture,” said Mark Bachman, CEO of FlipGive. “Everyone in our organization actively conceives test ideas for growth. And, the number of tests we run on a weekly basis has increased 300 percent.”