Between the Toronto and Waterloo Region corridor, startups are developing a reputation as key pieces to establishing the area as the centre of Canada’s burgeoning innovation economy. Recent visits by Toronto and Kitchener’s mayors to Silicon Valley, and the Prime Ministerto the Region itself, have only fueled the boosterism.
But speaking to a room full of Toronto’s — and at least one of Silicon Valley’s — top investors, Communitech VP of startup services, Steve McCartney, suggested that the corridor should have its eyes on a different goal.
“The whole Kitchener-Waterloo Region, and Toronto, has a stated mandate in the next decade to produce at least 10 $100 million+ revenue companies,” he said. “Valuations will lie where they lie but that’s an objective, and given that most companies take between five to 9 years, we kind of have one more year to spot them all.”
McCartney was kicking off Demo Day for Communitech Rev, Communitech’s accelerator dedicated to helping product-ready startups focus on sales and marketing processes. The focus on these processes has one outcome in mind: driving revenue, which in turn will help to create the sort of $100 million+ companies the corridor so desperately needs.
“At the end of the day, your sales team is not a cost centre and I think that’s something startups forget sometimes.”
The four startups were competing for $100,000 in prize money, with $25,000 decided by the Rev program mentors and $75,000 by the four Demo Day judges: including outspoken 500 Startups partner Paul Singh, making a stop in Kitchener-Waterloo and Toronto for his #rjtechtour; Janet Bannister, general partner at Real Ventures; Roger Chabra, partner at Rho Canada Ventures; and Jamie Rosenblatt, associate at Golden Venture Partners.
“We’re very serious about the Rev program and companies. We’re all about outcomes and results and the actual work that’s required to go into a startup,” said McCartney. “We’re totally avoiding the whole hype around ‘startups are cool, startup people are rockstars’. It’s all about building a good company and we’re very serious about that.”
As the judges deliberated on the pitches, Communitech Rev alumni spoke on a panel about the challenges facing startups that are often product-focused, and how they became more efficient at sales.
“Waterloo is known traditionally to build great products, but in the past, we haven’t necessarily had the focus on sales. But in the past 24 months as part of Rev, that’s all we do. Moving forward, you’re looking at a company that is driven by revenue now,” said Jim Robeson, co-founder of Piinpoint.
Ryan Denomme, founder and CEO of Nicoya Lifesciences and also a past Rev demo day winner, noted that there is hope for all startups who feel they’re lost when it comes to sales. “Naturally, you want go to where you’re used to being and where you feel comfortable, which is usually on the product side,” he said. “The biggest challenge is preventing yourself from going there. Eventually, you will get comfortable in sales and working on the business side, ensuring you have confidence.”
Fellow panel participant Bridgit is currently enjoying confidence-boosting momentum ,with a $2.2 million seed round and US expansion plans. Co-founder Mallorie Brodie said that just last week, the company hit the million dollar ARR milestone, and argued that companies should celebrate successfully completed revenue targets as much as the raising of outside capital.
“At the end of the day, your sales team is not a cost centre and I think that’s something startups forget sometimes. A sales team needs to be generating money and have an ROI, so we were very strict about the quotas we enforce and strict about the volume that we expected,” said Brodie. “Focus on that allowed us to grow sales team in a scalable way, there’s obviously experimentation that happens in that process but we’re constantly tweaking to try and get better.”
In the end, Dozr, a sharing platform for construction equipment not being used by contractors, was chosen as the top pitch. The company plans to use the funding to grow their sales team. “You’re in a big market. I think you’re directionally right and that early traction is really good,” said Singh of the company. “If you haven’t already, read public filings of publicly-traded U.S. companies like this and put a target on their back. Now it’s time to go big or go home.”
Photos courtesy Tim Fraser for Communitech