Due South: Orchard knows it’s all about the network

Due South Compass

Welcome to Due South, a new series that profiles Canadian entrepreneurs who have founded companies outside of the motherland.
 
 
Bruno Wong is the co-founder of Orchard, a Toronto-based startup that makes it easy for iPhone owners to resell their old smartphones. After downloading the company’s app, iPhones owners looking to unload their phone are taken through a diagnostic process that helps determine the value of the device. Orchard then helps those people sell their phones on its marketplace or sells their phone on consignment. It’s a business that’s taken off recently and has the potential to take advantage of a large untapped market.

According to Wong, some $14-billion worth of smartphones enter the secondhand market each year. To date, the company has sold about $350,000 worth of iPhones in Canada, but it’s goal has always been to conquer the United States.

Wong recently moved to the United States to help the company accomplish just that.

iPhone 6

However, with so much of its business tied to the delivery of a physical product, Wong says Orchard needed a location in the United States if it ever wanted to do business there. It needed a place where it could direct inbound shipping and conduct quality control. In reality, Orchard could have set up shop anywhere within the U.S., but Wong decided on San Francisco for several reasons.

“Canadian investors are more attracted to business software as a service companies than consumer product companies.”

“The culture, energy and network of people—including investors, advisors and other entrepreneurs—is on another level in San Francisco,” he says. “I realized that Orchard’s successes up until now have been the result of my colleagues and I having built great relationships with people. I knew if I were to establish that network elsewhere it would only increase our probability of success.”

Wong adds that while the Canadian market offered further growth opportunities for the company, he felt that Orchard had gotten all that it could out of the country’s network of investors and advisors.

“It was difficult to find highly visible angel investors that were available to chat with us. From my experiences, Canadian investors are more attracted to business software as a service companies than consumer product companies. It’s not surprising: when you look at successes in Canada, people like to point to HootSuite, Shopify, and Slack, which are all in the B2B set,” says Wong. “I knew that by going into the Valley we could give ourselves an opportunity to engage with investors who were receptive to consumer facing companies and were less averse to risk.”

Wong’s bet paid off almost immediately. One of the first people he met after arriving in the Bay Area was a founder who had been through Y Combinator several months prior. The man’s response to hearing about Orchard was to tell Wong that his company was perfect for Y Combinator and that he had to apply. Wong was skeptical at first.

“We had applied to Y Combinator a while ago but we didn’t get in,” he says. “Reapplying hasn’t been a priority for us, especially with the move. But this particular entrepreneur insisted that we apply, and, not only that, he said he was willing to extend his hand and look over our application.”

Three days prior to doing this interview, Orchard received an email from Y Combinator. The email told Wong and his co-founders that their company had made it to the startup accelerator’s final round of interviews.

Y Combinator

Whether Orchard gets in or not, Y Combinator clearly thinks the company is more compelling than when it first applied. Wong says he’s been thinking about why that could be since receiving their email. Obviously, the recommendation of someone who had gone through the program helped, but so too did the fact that the company could show traction and growth. In Wong’s estimation, there’s probably a factor that’s more important than all the others.

“The other thing is that I’m in San Francisco now,” he says. “I think when they see that a company is willing to take the leap and relocate in order to succeed, it sends a really strong signal to them that the team is fully motivated to succeed.”

Of course, it hasn’t all been smooth sailing.

“There’s a difference in mentality between what I’ve seen here and my experiences in Canada. I’m starting to soak it up.”

There’s a saying about New York City that it’s the greatest city in the world to live if someone else is paying your rent. The same can be said about San Francisco. Follow anyone that lives in the city on Twitter and you’ll soon enough hear how expensive it is to live in the city. Wong admits that one of the main challenges he faced when he moved to San Francisco was finding a place to live. He says he spoke to one woman who received 50 emails a day after putting her apartment on Craigslist.

“What I realized that I saw I needed a way to stand out,” he says. “So I decided to completely ignore the listing with photos; instead, I started to go over the listings without photos. I did that because I knew most people were going to skip over those.”

Wong’s efforts paid off quickly. He says he found a spacious apartment that’s walking distance from the BART and includes a cable subscription with HBO and utilities for $1200 a month.

He has other advice for Canadians contemplating the move. First, he says it helps to work out a co-working space where it’s easy to meet other people. Mostly, however, he says it’s important to have an open mind.

“Be more open minded, and evangelize your startup as much as you can. There’s one thing that’s becoming more and more clear to me, and that’s there’s a difference in mentality between what I’ve seen here and my experiences in Canada,” says Wong. “It’s not tangible enough for me to completely articulate what that is, but I’m starting to soak it up and feel it. It has come through in all the meetings that I’ve set up. The way people here think and the way they articulate certain questions is very different from my experiences in Canada, and I’m starting understand that more and more.”

“Canada has been really great to me, but it was time for me to grow that perspective.”

Igor Bonifacic

Igor Bonifacic

Igor Bonifacic is a Toronto-based writer interested in exploring the intersection of technology, entrepreneurship, and life.