MaRS Convergence - Winter 2009/10 by MaRS Discovery District

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Canada Gairdner Awards fabulous at 50

Apple gives nod to MaRS prize winner

MaRS on the Road: Silicon Valley, NYC & Boston

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Peter Nicholson01 on the Future of Innovation

Convergence Volume 4 Issue 2

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Energizing Ontarioâ&#x20AC;&#x2122;s Cleantech Industry UP FRONT

MaRS By The Numbers How we’re helping to grow Canada’s next generation of innovative companies.

10,000

1,850

400

Number of mentorship hours provided to clients in 2009.

Total number of clients served since MaRS began its Advisory Services practice in 2006, and through the Government of Ontario’s Business Mentorship and Entrepreneurship Program.

Number of active MaRS Advisory Services clients as of December 2009.

200

Percentage growth in client portfolio in 2009.

Total number of MaRS advisors, both staff and volunteers.

$0 The cost to entrepreneurs to access our Advisory Services.

Source: MaRS Performance Management Program as reported to MaRS Board of Directors Note: MaRS Advisory Services is funded by MaRS Centre operations, philanthropic donations and the Governments of Ontario & Canada.

UPFRONT MaRS Future of Medicine & The Business of Aging

MobileMonday Marketing Awards @ MaRS The first mobile marketing campaign was executed in 2003. Since then, thousands of campaigns have harnessed the power of mobile technology to reach, engage with and entertain customers. The first MobileMonday Toronto Marketing Awards, held at MaRS in September 2009, celebrated some of the leading applications that have been launched in the mobile communications market. Five companies pitched their best recent mobile marketing campaigns. Presenters had seven minutes to wow the crowd and judges — their campaigns were evaluated on creative concepts, innovative use of technology and ability to meet business objectives.

Big issues were on the agenda this past fall with the Business of Aging and MaRS Future of Medicine conferences. An intensive day-long event in November, MaRS Future of Medicine 2009 (www. marsdd.com/futureofmedicine) bridged the worlds of science and industry, exploring the next generation of technologies in stem cells and oncology for 170 attendees. Through a combination of talks, panel discussions and dozens of one-on-one industry-scientist meetings, conference-goers examined important advances and commercial opportunities emerging from Ontario’s active stem cell biology and oncology clusters. For Dr. John McCulloch, senior life sciences advisor at MaRS and conference organizer, the format was an experiment – and a successful one at that. “We work every day with life sciences innovators throughout Ontario and are well aware of the high standard that exists here,” McCulloch says. “MaRS Future of Medicine 2009 was our first major attempt to present Ontario leaders in two important sectors to a top tier industry audience at MaRS and we’re thrilled that so many leading biotech, pharma and VC companies made the trip to Toronto to see for themselves the talent available here. “The fact that our event generated 80 oneon-one meetings in a single day really testifies to the high quality of Ontario’s life sciences.” Weeks later, in partnership with the Government of Ontario, MaRS shone a light on one of the most pressing issues of our time with the Ontario Innovation Summit: The Business of Aging. Leading experts in technology, community and policy-making gathered at MaRS to explore the profound public policy challenges as well as a myriad of market opportunities associated with the aging demographic phenomenon, including: •

Rethinking how we put our science, technology and social innovation to work in reducing chronic disease and encourage independence and inclusion;

•

Redesigning our communities to enhance the quality of life for seniors, caregivers and the wider community;

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Re-engineering how we keep our brains, as well as our bodies, fit and agile; and

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Reinventing how we view the human capital contributions made by a healthier and autonomous aging population.

Read more about the conference – and the dynamic lineup of speakers – at www. businessofaging.com and in the next issue of Convergence.

With clients as varied as MTV, Fox Apparel and BlackBerry, presenters showcased a wide range of applications that captured customers’ attention and increased brand recognition. The winner of the first-ever MobileMonday Toronto Marketing Award was Addictive Mobility for ARTWIST, its iPhone and iPod Touch app for Lipton Brisk. Brisk ARTWIST allows users to create unique designs on their iPhones using backgrounds, stencils and brushes. Addictive Mobility took home delegate passes and a feature speaking opportunity at the Mobile Media World 09 conference, recognition from the MobileMonday community and, of course, bragging rights.

CONVERGENCE Convergence is published two times per year by MaRS Discovery District. ©2009 All rights reserved. — Editor Linda Quattrin, 416.673.8104, lquattrin@marsdd.com — Writer Vanessa Caldwell, 416.673.2240, vcaldwell@marsdd.com — Designer Meagan Durlak, 416.673.8413, mdurlak@marsdd.com — Mailing Address MaRS Discovery District, 101 College Street, Suite 100 Toronto, ON M5G 1L7 — Publication Agreement# 41366530 — Printed in Canada

All kinds of ideas at IDEA2009 Information architects from around the world descended on MaRS this September for IDEA2009, a conference of big ideas and accessible insights. This year’s theme, Meet Up at the Interaction of Social and Experience Design, reflected the fact that you can’t be socially engaging on the web without considering the experience design. IDEA2009 brought leading interaction design thinkers together to examine how access to information is changing our world. Conference speakers were challenged to “share beyond the concepts that inspire them most, and deliver practical guidance for attendees to begin making an immediate difference in the networked world of today and tomorrow.”

Sustainability City Something spectacular is happening just outside Abu Dhabi in the United Arab Emirates: construction has begun on Masdar City, the world’s first carbon-neutral, zero-waste city. According to planners, who visited MaRS in fall 2009, Masdar City will be “a sustainable city that incorporates the highest quality of life with the lowest environmental footprint.” “The objective of Masdar City is to create a city that is economically viable, environmentally sustainable and socially responsible,” says Dr. Nawal Al-Hosany, Masdar City’s associate director of sustainability. The city will take advantage of renewable energy generation, energy efficient building design and new water technologies to achieve its zero-carbon goal. It will reduce its dependency on energy through passive design — wind tunnels, day shading and northeast/southwest building orientation will decrease energy demand and create comfortable public spaces for the city’s anticipated 40,000 residents and 50,000 business commuters. Dr. Al-Hosany and other representatives from Masdar City visited Toronto in September as part of the Clean Technology Business to Business Seminar, a full-day cleantech event presented by MaRS and the Ontario Ministry of Economic Development and Trade. To learn more about Masdar City, visit: www.masdarcity.ae.

IDEA2009 was presented by the Information Architecture Institute, a professional organization dedicated to advancing the state of information architecture through research, education, advocacy and community service. For more information about IDEA2009 and the Information Architecture Institute, visit: www.ideaconference.org.

UPFRONT

Tom Sandler

Speakers examined social discourse, cultural framework and personal communication through the lens of interaction design. What does that mean? It means that sessions spanned the ways we interact with each other, from how to sell cupcakes using social media (If you build it using social media, they will come, by Mari Luangrath) to examining the integration of a community into online experiences (Bare Naked Design: reflections on designing with an open source community by Leisa Reichelt) to learning information architecture lessons from radical architects (Social spaces online: lessons from radical architects by Christina Wodtke).

Michael J. Fox and Bryan Adams bring down the house. Actor, advocate and undeniably charming guy, Michael J. Fox brought his optimism and sense of wonder to MaRS in September for a day-long celebration of science in association with the University Health Network, the McEwen Centre for Regenerative Medicine and Toronto Western Hospital. Marking the newly-minted status of the Michael J. Fox Foundation for Parkinson’s Research as a registered charity in Canada, Fox participated in a news conference, a feature interview with George Stroumboulopoulos (top, left) for CBC’s The Hour and a research roundtable to highlight advances in Parkinson’s research. In the evening, he shared the MaRS stage with Canadian rock icon Bryan Adams (bottom) at a gala event that raised over $500,000 for Parkinson’s research.

Gairdners Fabulous at 50 Sixty past winners of the Canada Gairdner Awards (including 22 Nobel Laureates) converged on Toronto in late October for The Gairdner Foundation 50th Anniversary Toronto Symposium. The symposium was a three-day biomedical extravaganza of lectures, panels, public forums and interviews. An industry breakfast panel at MaRS brought together Caltech immunology and AIDS pioneer Dr. David Baltimore (Nobel ’75), MIT cancer research leader Dr. Phillip Sharp (Nobel ’93) and neuroscientist Dr. Corey Goodman, most recently of Pfizer. The Gairdner Foundation recognizes the world’s leading medical research scientists through the Canada Gairdner Awards, which have come to be known as the Baby Nobels because of their remarkable track record in predicting Nobel Prize winners. Since 1959, 75 Gairdner Awardees have gone on to win the Nobel. For example, Dr. Elizabeth Blackburn and Dr. Carol Greider, winners of the 2009 Nobel Prize in Medicine (with Dr. Jack W. Szoztak), received Gairdner Awards in 1998.

Celebrating Canadian biotechnology National Biotechnology Week is an annual celebration of the imagination and innovation of Canadian scientists and entrepreneurs across the country. This year, MaRS and BIOTECanada hosted The Business of Biotech: Enabling Innovation in Tough Times, a dynamic breakfast panel, to address the challenges, opportunities and threats to the emerging biotechnology sector in Ontario. Attended by more than 200 participants from industry, government, education and venture capital, the event delivered a thoughtful, energetic and at times controversial examination of the state of the industry in Ontario. Engaging with tough questions from the moderator, MaRS CEO Dr. Ilse Treurnicht, panel members responded in kind with candid observations founded on their collective experiences in the industry: • Lisa Crossley, President and CEO, Natrix Separations • Rafi Hofstein, President and CEO, MaRS Innovation • George A. Ross, Deputy Minister, Ontario Ministry of Research and Innovation • Peter Van Der Velden, President and CEO, Lumira Capital • David S. Young, Founder and Managing Partner, Actium Capital Advisors Watch for more from this lively panel in 2010 — and check out BIOTECanada, the national voice for the biotech industry, at www.biotech.ca.

(From left) Dr. Corey Goodman, Dr. Phillip Sharp, Dr. David Baltimore

Angels up bright and early

Deloitte Technology Fast 50 awards recognize up-and-coming companies

Entrepreneurs are always on the hunt for money — to develop and test their products, to create sales teams, to expand their offerings or to do any number of other things required to build a business.

The Deloitte Technology Fast 50 program recognizes Canadian companies for their revenue potential, technological innovation and entrepreneurial spirit, so it’s no surprise that four clients of MaRS and partner organizations Communitech and OCETA were honoured with 2009 Fast 50 awards. Aeryon Labs (www.aeryon.com) and Bayalink Solutions (www.bayalink. com), both from Waterloo, received Companies-to-Watch Awards. These awards are given to promising Canadian technology companies that have been in business for less than five years. Vive Nano (www.vivenano.com) from Toronto and Real Tech (www.realtech.ca) from Oshawa received Deloitte Technology Green 15TM Awards for the development of new products that compete with existing products while reducing impact on the environment. MaRS was a community sponsor of the 2009 Deloitte Technology Fast 50 program. For more information on the Deloitte Technology Fast 50, visit www.fast50.ca.

On October 7, MaRS held its second invitation-only angel investor event to help our entrepreneur-clients connect with new funding sources. The breakfast event, held in the auditorium at MaRS, gathered angel investors to hear from three high-potential startup companies looking for funding. Each of the three presenting companies represented one of MaRS’ advisory services technology practices: •

Information and communications technology: ConnectedN is an online community platform that provides tools for people to build secure, private networks around activities, organizations and groups.

•

Cleantech: NIMTech Inc. is the developer of SonicGauge, an ultrasonic system that can “see” through pipes to better track chemical reactions and finetune factory efficiency.

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Life sciences: ArcticDX is the inventor of Macula Risk, a prognostic genetic test for ophthalmologists to identify people at high risk of developing macular degeneration, which affects 2.7 million people every year. Early intervention can prevent blindness.

UPFRONT

ErgoTotal inventor survives reality TV in the Middle East Hectic product development, 12-hour days and constant accompaniment by a film crew were all in a day’s work for contestants on the reality TV show Stars of Science, filmed in Qatar. Hamiltonian Mohammed Khalaf, inventor of the ErgoTotal keyboard and MaRS advisory services client, was one of 16 competitors on the show in 2009. Contestants, all of Arab descent and between the ages of 21 and 31, were chosen from over 5,600 entries from around the world. On Stars of Science, they were pitted against each other in a fastpaced competition to develop new products and innovations. “It was like Survivor meets Dragon’s Den,” Khalaf says of the three-month tech immersion, which was filmed on location in Qatar and aired in summer throughout the Middle East. “I learned a whole lot, from design and manufacturing to networking to how to build a team.” ErgoTotal is a portable, permanently malleable ergonomic keyboard that can be used with desktop or laptop computers. On Stars of Science, Khalaf worked with a team of industrial and graphic design engineers to change the design and appearance of the keyboard. “The product went through great improvements; not only was it simplified, but the new idea opened up another market opportunity,” says Khalaf, who is continuing to work with MaRS advisors to build his business. With the help of a design team at the Qatar Science and

InDanio shortening the drug discovery path The road to drug discovery is long and expensive — it can take up to 30 years and $1 billion to develop a new drug. Only one in 10,000 promising compounds make it through screening, preclinical trials and clinical trials to FDA approval. InDanio Bioscience, an early-stage drug discovery company and client of MaRS advisory services, has developed a new in vivo drug testing system that aims to reduce the time and money it takes to get a drug to market. Dr. Henry Krause, director and co-founder of InDanio, joined the MaRS Drug Development Discussion Group in August, explaining to an audience of 45 researchers the high-throughput screening system that InDanio has developed to test new drugs. Using zebrafish – which have strong genetic equivalents to humans – researchers at InDanio are able to see how chemicals can affect an entire organism. They can measure uptake, delivery, stability, toxicity and effective dose response much more effectively and completely than with traditional drug screening tests. InDanio’s high-throughput system “could change the drug development pipeline,” says Krause, by enabling pharmaceutical companies to eliminate much of the preliminary testing and proceed straight to pre-clinical trials. This could reduce drug development time to as little as five years, he adds. In terms of InDanio’s own development, Krause says there are plans in place to ramp-up high-throughput screening so it can be done robotically. InDanio is forming relationships with pharmaceutical companies to screen their existing libraries of candidate molecules and, in the long term, plans to develop lead candidates for drug development from its own screening process.

Technology Park, Khalaf also modified the keyboard to be used with laptops. For Khalaf, the highlight of participating in the show was the opportunity to work with other young innovators. “It was so collaborative. Even preceding rounds of elimination in the competition, we all helped each other…you were not alone. After all, everyone left his or her family, job and ventures back home to build his or her dream.” Khalaf was eliminated in the second round of the competition, but unlike most reality shows, Stars of Science contestants aren’t sent home after elimination: they join another team. Khalaf joined the team that eventually won second place. He won a $5,000 cash prize for his participation on the winning team and came away from the show with patents for ErgoTotal in Egypt and the Middle East’s six Gulf countries.

UPFRONT

MaRS wins Creative City Award The Canadian Urban Institute’s (CUI) Urban Leadership Awards honour individuals, groups and organizations that have made significant contributions to improving the quality of life in Canada’s cities and urban regions. MaRS won the 2009 Creative City Award for its role as a “leader in stimulating the creative capacity of [Toronto] and advancing entrepreneurship, not only in science and technology but also in social ventures,” says Glen Murray, CUI President and CEO. “MaRS has found a creative way for science and business to collaborate rather than compete and to help Canada become a knowledge-based economy.” The award recognizes MaRS as a geographic cluster of creativity advancing knowledge and facilitating the commercialization of research. “The underlying reason for creating MaRS is to capture the value of Canadian discoveries and to better commercialize these innovations at home in Canada,” says MaRS CEO Dr. Ilse Treurnicht, who joined 500 of Canada’s top city builders at a June awards luncheon to honour 18 groups and individuals for their efforts in making Canadian cities exciting and dynamic places to live and work.

APPLE

GIVES THE NOD TO

MaRS PRIZE WINNER ‘When you bring the right people, the right skill set and the right invention together, things just happen.’

(From Left) JosephYan, COO & Founder, and Paul Vice, CEO

Toronto start-up Dreamcube has come a long way since winning the 2009 Upstart Competition at MaRS, the spring conclusion to CIBC Presents Entrepreneurship 101. The company has a new name, a new CEO, new funding and – most significantly – newly acquired approval from Apple to develop the hardware portion of Dreamcube’s product, UiRemote, the only universal remote for the iPhone and iPod Touch. Until recently, hardware development for the iPhone was restricted to big fish in the gadget pond, but changes to Apple’s model for third party accessory development have created opportunities for smaller companies, like Dreamcube, to create and distribute hardware with Apple’s approval. And with the $10,000 prize from the Upstart Competition and funding from Ontario Centres of Excellence Market Readiness Program, Dreamcube is poised to jump right in.

“There are over 50,000 software apps for the iPhone, but Apple is now pushing for new hardware apps,” says Paul Vice, CEO of Dreamcube. The UiRemote has received hardware license approval from Apple, so Dreamcube engineers are working to integrate an Apple authentication chip into the hardware and tweak the package to fit with Apple’s specifications. After these changes are made, the hardware and software will be submitted to Apple for final approval. The Dreamcube team hopes to launch the UiRemote in spring 2010. Vice acknowledges that things can progress quickly in the land of start-ups. He credits the speed of Dreamcube’s development to three things: “When you bring the right people, the right skill set and the right invention together, things just happen.”

UPFRONT

Creating a sustainable business with a little help from MaRS

Experienced advisor makes a difference to Canadian companies

Harvey Coleman is the first to admit that he made a lot of mistakes throughout his 40-year career in the computer industry. “In that much time, you make a lot of mistakes – but people help you by correcting those mistakes,” says Coleman, a MaRS volunteer advisor to entrepreneurs in the information and communications technology and clean technology sectors. Coleman brings what he’s learned from these mistakes, as well as considerable business experience, to his clients at MaRS. He also brings enthusiasm, toughness and a desire to instill confidence in the start-ups that meet the criteria for working with MaRS. “I joined MaRS to put back into the community that I had been a part of. And I’m passionate about MaRS’ success,” he says. The most important piece of advice that Coleman offers clients remains the same, no matter the product or service: building a business doesn’t happen overnight. “I’ve been very happy to see a number of clients achieve sales and contracts, but it’s only one step. I’m always reminding clients that there are new steps to take to go forward in building a sustainable business.” When working with clients, Coleman looks for interesting projects that can answer two questions: can they create jobs in Ontario, and can they grow internationally? If the answers are yes, then Coleman acts as a tough critic. “When I provide advice, I’m very tough. I tell clients what they need to hear. One has to be prepared to say fairly tough things, but I feel I provide the best value by doing this,” he says. While this might not be what clients want to hear, Coleman’s advice goes a long way because he refuses to sugarcoat things. “He has such a great dedication to his clients,” says Don Duval, MaRS VP Business Services. “He provides coaching, preparations for negotiations and connections – he’s an all-star advisor.” Coleman has also participated in CIBC Presents Entrepreneurship 101, MaRS’ flagship educational program. Last year, he delivered a Lived It Lecture titled Creating and Developing a Successful Business. Coleman has over four decades of experience in the IT industry. In the mid-80s, he headed pre-sales support for banking systems and was responsible for marketing strategy systems for the Olivetti Group. He has also been managing director of the Acorn Group plc in the UK, president of Olivetti Canada, president of Dell Canada and EVP of Geac, a Canadian-based global software company. Coleman’s experience and enthusiasm are two of the elements that make him a trusted advisor to a current roster of six clients at MaRS. Coleman has a number of reasons for volunteering as a MaRS advisor, but there are two things that keep him involved in the process of helping start-up companies develop and grow: “I believe in what we do here...and it’s been great fun.”

ADVISOR PROFILES

Greg Pelling became a volunteer advisor at MaRS to make a difference to entrepreneurs in Ontario. His advising philosophy is simple: “If I come out of a meeting with a person and they aren’t going to do something differently than before I came in, then I’m not making the right contributions to advisory services.” Pelling believes that Canada needs to develop more programs to create new businesses and foster entrepreneurs, and that’s why he chose to volunteer at MaRS. “Our clients are achieving incremental gains as we help them [develop] their great innovations. But for each new innovation we start in Canada, there are probably three companies in the U.S. trying to do the same thing, and many of those companies have 10 times the funding,” says Pelling, who would like to see a venture fund set up for MaRS clients. In the meantime, he’s working with clients to develop relationships with U.S. companies and investors who can help Ontario-based entrepreneurs grow their businesses. When MaRS sent a delegation to the AlwaysOn Stanford Summit in July (see page 7), Pelling saw an opportunity for Canadian start-up companies to make some important connections. He helped organize meetings with his senior contacts at Cisco and Google. He also helped facilitate pitching sessions with Silicon Valley VCs. “Meeting [with these influential people] before the conference meant that our companies were able to refine their messages. MaRS companies rose above the crowd at the Summit, demonstrating that they were ready to conclude deals, not just introduce ideas and start deal discussions,” says Pelling. The meetings also helped put MaRS and its clients on the radar in the U.S. as an important source of start-up deal flow. Pelling is currently SVP with Sierra Systems, one of Canada’s largest systems integrators, and a director of CounterPath Corporation, a Vancouver-based provider of VOIP software and technology. In the past, he’s started companies, raised tens of millions of dollars and strategized and executed M&As. He’s also been a Senior Industry Partner at PricewaterhouseCoopers and a member of the strategic leadership team at Cisco Systems Inc. Pelling holds a Bachelors degree from UBC and an Executive MBA in International Management. Ideally, Pelling wants MaRS clients to maximize their revenue opportunities as quickly as possible. His extensive VC experience means that he can coach clients to deliver the right messages to potential investors, but it’s not just strategic coaching that he provides. Building a business requires building and developing relationships, so Pelling also helps his clients by sharing his network of connections, “All I do is make introductions into trusted relationships, and let nature take its course.” He makes it sound so easy.

MaRS ON THE ROAD AlwaysOn & STVP Summit Stanford Recession aside, Silicon Valley was abuzz with innovators and entrepreneurs during the 7th AlwaysOn & Stanford Technologies Ventures Program Summit. MaRS led a delegation of six promising Ontario tech companies to the Summit, held at Stanford University on July 28-30, 2009. The Summit highlighted the significant economic, political and commercial trends affecting the global technology industries by bringing companies, technologists, investors and journalists together for pitches, panels and debates. The Summit was an opportunity for MaRS to build relationships with Silicon Valley and showcase some of Ontario’s best tech companies to the world. “More than ever before, our technology start-ups across Ontario need increased market visibility with potential reference customers, investors, industry analysts and other key opinion leaders in major markets, such as Silicon Valley,” says MaRS CEO Dr. Ilse Treurnicht. CEOs of the six Ontario companies (profiled on page 8) at the Summit presented their pitches, promoted their products, garnered media attention and received tailored advice from MaRS advisors. Dave Krotsch, President of Aeryon Labs Inc., says, “ One of the highlights of the trip was conversations with MaRS staff…They were in-depth and relevant to my company.” Hussein Fazal, CEO of AdParlor Inc. says, “One thing that really stood out, right away, was the quality of all the CEO presentations. This is a testament to the fact that MaRS advisors had put significant time and effort into providing feedback and preparing all the CEOs.”

practiced their pitches with seasoned Silicon Valley VCs, who were impressed by the professionalism and deal quality of the Ontariobased entrepreneurs. The CEOs used the confidence that came out of this luncheon to deliver some of the best presentations seen on stage at the Stanford Summit.

The MaRS quality really shone through. The AlwaysOn Summit at Stanford was a success for MaRS for a number of reasons: it opened the door to customer and investment deals, started building the foundations of international relationships and put MaRS and Ontario on the global technology radar. “Beyond the obvious development opportunities for our aspiring CEOs, these types of programs deliver measurable value to our clients in the areas of business development, market visibility and capital introductions,” says MaRS advisor Peter Evans. “Our CEOs got customer introductions; earned the attention of key members of the technology press such as CNet.com; and received a number of follow-up meetings with top-tier VCs, including Benchmark Capital, Velocity Ventures and Khosla Ventures.” Most importantly, this program allowed MaRS to do what it does best: support and foster Ontario entrepreneurs. Hassan says, “When attending an event like [this one], you realize what a good job MaRS does in selecting high quality companies, advising them and providing a high quality support network. Many of the other companies at the event did not have the same level of pre-selection and support, and the MaRS quality really shone though.”

The trip to California also offered Ontario CEOs the chance to interact with other local executives; representatives from the Ontario VC community and the Canadian Venture Capital Association joined the MaRS delegation. Kamal Hassan, CEO of Skymeter Corp., says, “One of the best parts of the AlwaysOn Summit at Stanford was mixing with the rest of the team from Canada.” Before attending the Summit, the MaRS delegation took advantage of the conference’s location to conduct detailed briefings with leading venture capital firms and corporate players such as Google, Cisco and Microsoft. At a special luncheon sponsored by Sam Angus at Fenwick and West’s Palo Alto offices, MaRS company CEOs

MaRS ON THE ROAD

Participating companies at AlwaysOn & STVP Summit at Stanford

AdParlor Inc.

Aeryon Labs Inc.

www.adparlor.com

www.aeryon.com

AdParlor helps social networking application developers monetize their apps while helping advertisers enter social media. Its proprietary ad server technology currently delivers over 50M targeted (age, gender, location, theme, etc.) ad impressions daily on custom applications for leading social networking sites such as Facebook, MySpace, Hi5, Bebo, Orkut and Friendster. AdParlor also helps application developers monetize their virtual currency by offering direct payments and enticing users to complete offers. The company has worked with large brands such as Nike, Motorola and Blockbuster. The company is profitable and has realized consistent growth in this exciting market.

Soldiers and police need real-time tactical information to make better decisions and keep personnel out of harm’s way. Current methods of collecting aerial intelligence such as helicopters are costly and cumbersome. Aeryon Labs designs man-packable, easyto-use autonomous hovering aerial systems that allow minimally trained operators to capture high resolution imagery. With its small size, weighing just over two pounds, the Aeryon Scout is targeted for the backpack of every soldier and the trunk of every police car. Featuring a simple touch-screen interface, anyone can operate the system with just minutes of training.

IPeak Networks Inc.

Dejero Labs Inc.

www.ipeaknetworks.com

www.dejerolabs.com The Mobile Broadcast Platform developed by Dejero Labs for Electronic News Gathering (ENG) permits broadcasters to gather real-time video content for reporting of live news and other time sensitive events over the cellular network. The Dejero solution replaces existing legacy systems such as satellite or microwave. The solution was created based on in-field observations with hundreds of reporters who struggle with current technologies for submitting their videos from remote locations.

IPeak Networks has developed IPQ™ to deliver a dramatic reduction in network packet loss and effectively eliminate its damaging effects. With IPQ™, best efforts networks such as the Internet take on the performance and quality characteristics of expensive private network services and can support demanding real-time network applications. With IPQ™, enterprises can reap the cost-reduction and productivity benefits of voice, video and virtualized applications reaching all the way out to the far edges of the corporation without the high network services costs.

Skymeter Corp.

Sysomos Inc.

www.skymetercorp.com

www.sysomos.com

Skymeter provides data needed to migrate roads and parking from taxpayer-subsidized to pay-per-use funding, cutting citywide emissions by 15 per cent and traffic congestion by 30 per cent. Its technology — including a small dashboard-mounted GPS device — generates financial-grade data and has been proven by Cisco Korea and California’s Department of Transportation. Applications include parking, insurance, car rental and emission metering services.

Sysomos is redefining social media analytics to give organizations instant and unlimited access to all social media conversations. This proprietary platform allows users to quickly see what’s happening, why it’s happening, and who’s driving the conversations. Through the use of contextual text analytics and data mining technology, Sysomos collects billions of social media conversations from blogs, Twitter, social networks, message boards, wikis and major new sources, giving organizations the ability to quickly discover the tone of the social media conversations and break down sentiment by gender, age and location.

Funded by the Ontario Regional Business Mentoring Network, through continued support from the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP), MaRS was able to provide participants of this and other delegations with mentorship, connections and preparatory support to optimize their success on the road.

MaRS ON THE ROAD

Life Sciences takes a bite out of the Big Apple

Participating Companies at the 2009 Life Sciences & Healthcare Summit, New York

BPI Inc. www.confocal.com BPI develops and sells multispectral tissue scanners for digital pathology, biomarker profiling and a wide range of research applications. BPI’s TISSUEscopes offer a major competitive advantage – in sensitivity, range and scan speed – for biomarker profiling.

INTERxVENT Canada www.intervent.ca

There has never been a more challenging business environment for Canadian life sciences and health-care entrepreneurs. Money is tighter than ever and recession-battered investors remain guarded amid an uncertain landscape. “There is recognition that health care represents a strong investment opportunity in the long term, but the current policy environment makes it difficult [for investors] to make large bets in the short term,” says Veronika Litinski, MaRS life sciences and health-care practice lead, referring to the eHealth movement in Ontario and health-care reform in the U.S. Anticipating this market potential, MaRS bet on success at the 2009 Life Sciences & Healthcare Summit in New York City in October. Seven Ontario ventures, all high-potential clients of MaRS advisory services, travelled to the Summit to establish connections with U.S. venture capitalists and angel investors. This was MaRS’ first trip to an international biosciences venture summit with clients prepared to pitch. Preparation was a rigorous process for the companies. It included sessions with Mike Grandinetti, Managing Director at Southboro Capital, who came to Toronto to work directly with companies to polish their pitches. Grandinetti has a unique cross-disciplinary background and deep operating experience as a serial venture capital-backed entrepreneur. He currently serves as an advisor to numerous global start-ups and VC firms across the IT, medtech and cleantech sectors. “We chose to go to New York when we did because our companies were ready,” says Litinski, who also moderated panel discussion with corporate VCs called Beyond the Money. “The entrepreneurs who lead the seven companies are committed and knowledgeable, and they all have solid visions of how their unique technologies can create new markets and solve expensive problems in established markets. “Through insight, perseverance, small amounts of capital and a good deal of luck, these companies have reached an inflection point in their development where an additional dollar invested yields far greater shareholder value than it would have at a prior stage,” says Litinski. While in New York, MaRS CEO Dr. Ilse Treurnicht also showcased MaRS and its network of Ontario companies at a dinner organized by Foreign Affairs and International Trade Canada at the residence of John McNab, Deputy Consul General of Canada.

INTERxVENT helps organizations reduce medical costs and improve productivity through comprehensive, customized self-help and coach-assisted programs and health statistics reporting to enhance decision-making and resource utilization.

Profound Medical Inc. www.profoundmedical.com Profound Medical offers an MRI-guided transurethral ultrasound device for less invasive, more precise treatment of prostate cancer, allowing unparalleled treatment planning options.

Colibri Technologies Inc. Colibri Technologies has licensed numerous patents from Sunnybrook Health Sciences Centre related to image-guided therapy with applications in interventional cardiology.

MedCurrent Corp. MedCurrent has developed a simple-to-use web-based tool that guides doctors to the best radiology test to order for each specific patient, an approach that is more effective, less expensive and more favorably accepted by physicians.

Rejuven8 Labs Inc. www.rejuven8labs.com Rejuven8 Labs Inc. develops eco-safe products in eight growth industries; its first commercial product is a powerful, fast-acting, biodegradable weedkiller called Weedphyter®.

Somnaform Corp. www.somnaform.com Somnaform Corp. designs, manufactures and distributes medical devices internationally for diagnostics, remote testing and monitoring and compliance management in the sleep medicine market for adults, children and neonates.

MaRS ON THE ROAD

Energizing Ontario’s Cleantech Industry “Prepare, pitch and conquer,” says Tom Rand, MaRS Cleantech Practice Lead

Tom Rand, P.Eng, PhD, is an entrepreneur, angel investor and evangelist for the cleantech movement in Canada. He also leads MaRS’ cleantech and physical sciences practice.

UP FRONT

Is there anyone out there who doesn’t yet grasp the climate change imperative? Not likely. But in case you’ve just landed here on Earth: we have fewer than 20 years to dramatically reduce the output of carbon into our overloaded atmosphere – or face what scientists predict will be an escalating cycle of ecological disruptions with unpredictable, nasty consequences on what we eat and where and how we live. Ontario has set the stage with progressive policy and MaRS is ramping up a cleantech practice for entrepreneurs that’s already getting serious global attention.

group of MaRS cleantech clients made the trek to present at Cleantech Boston in September 2009. Why? For the clients, it was to raise money. For MaRS, it was our introduction as a serious cleantech dealflow engine, one capable of delivering quality deals to

American venture capital firms. Leading a group of clients to present in Boston was a strategic investment on our part — and one that I believe Ontario needs to do more of. We road-tested our client list for the best bets we’ve seen in this sector — their technology, their business plan, the early customer feedback and, most importantly, their pitch readiness. These CEOs had to tell a coherent, compelling and credible story to some of the savviest investors in the world. And those investors were impressed. Not only were the technologies themselves of huge interest (see p. 11), but the participating CEOs followed through on their polished pitches with a lot of one-on-one time with the VCs. More than 45 individual connections were made with VCs during the show itself. Getting these guys — the VCs — to take your calls or book a meeting is no mean feat. They have thousands of possible deals crossing their desks and there is a real need to differentiate yourself. MaRS is a part of that differentiation, in that we supply them with access to companies that have been pre-filtered. They know a MaRS company is worth their time. That is a part of the brand we’re building here: if they want access to Canadian cleantech companies, MaRS is becoming the place to go. Since we’ve been back, those companies continue to talk with the contacts they made in Boston and now have the luxury of a battlehardened pitch (and the confidence that goes with it). On the policy side of the industry, Ontario now can confidently say it leads North America: the Green Energy Act, which came into effect in May 2009, sets in place the framework for the transformation of the Ontario economy. The Feed In Tariff (FIT) will stimulate the deployment of huge amounts of renewable energy: wind, solar, biogas and hydro. There is a “Canadian content” clause that will spur the emergence

of made-in-Canada solutions. Another key component is guaranteed grid access, which will initiate the emergence of the Smart Grid. The Smart Grid is like putting the intelligence of the Internet on top of an upgraded electrical grid and is considered by many in the industry (like Cisco and Siemens) to be an even bigger infrastructure play than the Internet itself. This Act will energize the energy sector, create jobs and stimulate a Canadian cleantech economy. In January, MaRS will host an event designed to examine European best practices and inform the marketplace about opportunities under the new Act. Political leadership and an enabling policy framework are essential; cash flow and investment critical. But in any industry, it truly comes down to people – dynamic yet diligent characters with vision and ambition – who are going to propel this sector forward. There are three things the cleantech entrepreneur can learn from the MaRS Boston trip: Stop thinking about Canada (or even just Toronto) as the place to pitch. I – and many others – often complain about the dearth of risk and venture capital here at home. So let’s stop talking and solve the problem — let’s go where the money is! American venture firms may have felt the heat of the last annus horribilus of capital constraints and liquidity crunches, but that doesn’t mean deals aren’t happening. Cleantech is the hottest sector and, in my view, will remain the hottest sector for some time to come. And funders are starting to write cheques. But if you’re going south to look for money, remember this: you need

You need to think big, world-dominating big. to think big and get into shape. American venture firms are unlikely to do small deals and even less likely if the CEO isn’t thinking big, world-dominating big. Don’t ask for less than $4 or $5 million and be prepared to let them know that you’re building a team capable of taking on global markets. Anything less just won’t turn heads. And your pitch? Practice for hours and hours before even thinking about hitting the stage. Seasoned MaRS advisor Peter Evans – a veteran of pressure cooker dealmaking in ICT – helped whip our clients into shape, both in the form of the pitch and the cadence. You have to come across as a person capable of delivering a global company, building a global team. That means you need to project confidence and have a pitch honed to grab the attention of VCs. Remember: all the pitch gets you is a meeting, but that meeting is hard to get! Once you’ve got the meeting, the real work begins. The last thing? MaRS is a brand that can help. We are establishing ourselves as the source of high-quality deals, of interesting and promising companies. When MaRS brings a client forward, we put our name and reputation on the line. So be prepared to work, but also — be prepared to get some attention. You’ll deserve it. Our next trip is to Cleantech San Francisco in February. The best and brightest may apply at advisors@marsdd.com.

Tom’s take on some of MaRS’ leading cleantech clients: Environmental Electric Inc.

Hybrid Energy Systems Inc.

Wind farm + pumped hydro = first in the world

Lighter, cheaper batteries to revolutionize how we power everything

Grid energy storage is an elusive but very important part of the evolving “smart grid”. Large-scale storage is hard to come by and often involves huge batteries or compressing air into underground caverns. But the only commercially viable form of large-scale storage currently in use is “pumped hydro”, which involves using excess electricity to pump water up a hill for use later as conventional hydro power. Environmental Electric is getting into the pumped hydro business but with a twist: their reservoir, located on a hilltop near Lake Superior, will be filled using only clean, windgenerated energy. It’s a wind farm with pumped-hydro – and the first of its kind in the world. www.environmentalelectriccompany.com

Batteries play a central role in electrified transportation, but there are problems: the leading contenders, lithium ion batteries, contain toxic metals, rely on a scarce resource (lithium) and do not yet have a power-to-weight ratio that will really let electric cars take off. They are also still very expensive. Hybrid Energy Systems plans to build the next generation of lighter, cheaper batteries that do not depend on rare elements. They are “disruptive” to the battery sector as their zinc-manganese rechargeable battery has the lowest “cost-perunit of energy” of any battery technology today. Imagine a Duracell battery but much more powerful — and rechargeable: cars, grid storage, the works.

Morgan Solar Inc. As RIM is to smartphones, Morgan is to solar cells

NIMTech Inc.

Everyone is trying to make solar energy more cost-efficient. Some work on cells to increase efficiency. Some use “concentrated” solar, where the sunlight is magnified onto a solar chip up to 500 times. Morgan is a concentrated solar company that has patented a very interesting way of guiding light onto the chip. Using a kind of clear resin as a wave-guide (like fiber optics but larger) they can have light land on a surface, and at the same time, be guided along that surface horizontally to hit a chip. What’s really cool? Their game-changing IP is basically based on some lines and angles: very elegant solution. In my view, they’re the RIM of solar energy. www.morgansolar.com

Ultrasonic device to build “smart” factories

Realtech Inc. Next generation ultraviolet for clean water There is a new class of toxins in our water that is not detected by existing detection systems. The new standard emerging is UV254, based on ultraviolet light, and RealTech is a market leader. They have good traction with the EPA and Homeland Security (on both accidental and intentional toxin detection). www.realtech.ca

Skymeter Corp. Pay-as-you-drive GPS for traffic control, fair pricing Skymeter has built a “financial grade GPS” — solving the “urban canyon” inaccuracy problem of GPS in cities — which can accurately meter distances traveled by cars and trucks. Their little dashboard device can replace the sorts of huge infrastructure associated with per-mile or zoned-billing (like in London or on a pay-peruse highway). The device can even be used as a parking meter. There are huge contracts for these sorts of systems around the world — metering cars has been shown to significantly reduce CO2 immediately when implemented in an urban environment — and Skymeter is the market leader. They’ve picked up some really nice reviews from the U.S. Senate, California Department of Transport, etc. www.skymetercorp.com

NIMTech has developed an ultrasonic device called the SonicGaugeTM — similar to those used to peek inside the human body — that can look inside any pipe and generate a detailed chemical fingerprint of what’s happening, in real-time. It can do this without disrupting or piercing the pipe or container. Until now, whatever happened in the pipe couldn’t be seen in real-time, which means factories are often “dumb” and inefficient. With the SonicGaugeTM, factory processes can be “tuned”, eliminating waste and energy. For example, in the ethanol industry, the amount of fuel produced per unit of biomass increases.

Vicicog Reinventing the transmission, boosting wind turbine and auto efficiency Vicicog has developed a new kind of transmission system, based on belts, which can deliver huge benefits to the struggling automotive and wind sectors by increasing system efficiency. The amount of energy coming out of a wind turbine, for example, could be increased by more than 10 per cent. That significantly changes the financial picture of wind farms, which typically have quite narrow margins. Vicicog’s Synchronised Segmentally Interchanging Pulley Transmission System (SSIPTS) uses leading-edge chain and computer control technologies and can shift under load, handle high torque and provide a greater range of gears. www.vicicog.com

Talking about Cleantech in Canada Seminar series at MaRS The popular Cleantech in Canada seminar series, held at MaRS, is in its third year with a lot of momentum to build on. Predictions that the latest recession would push interest and investment away from clean technology haven’t materialized. Instead, there is recognition that the sector is here to stay. The series was created by Ogilvy Renault, Deloitte and MaRS to engage investors and innovators in clean technology. What began as a modest seminar in Ogilvy Renault’s Toronto office in 2007 saw its popularity soar, leading to the need for a bigger venue. The next seminar was held in the MaRS Centre’s auditorium, which has been home to the events since 2008. Over 200 people attended a recent seminar on the future of the car. Other topics have included the future of agri-biotechnology, water and the evolution of the smart grid. The latest seminar, in November 2009, focused on opportunities in the energy storage market. “A key to success in the seminars is choosing a topic that isn’t news yet, but will be soon,” says Richard Sutin, partner at Ogilvy Renault and co-chair of the firm’s cleantech practice. “Since these events take months to plan, we need to offer topics that will be timely in the near future. That’s a big part of the value we want to provide our audience. It’s also what they need to hear to want to come back.” Having a panel of leading experts do the talking — rather than members of the sponsoring organizations — is another key to the successful seminars. Members of Ogilvy Renault, Deloitte and MaRS only speak at the events to introduce the panel or moderate. This lets the audience hear directly from leading Canadian and international

Great ideas and one great green idea, at TEDxTO On September 13, MaRSian Tom Rand took to the stage at the inaugural TEDxTO at Theatre Passe Muraille in Toronto. The goal of TEDxTO was to shine a light on some big ideas from thinkers right here at home. Rand, lead advisor to MaRS cleantech clients and co-founder of Planet Traveler, North America’s greenest hotel, delivered a clear message about shaping the environmental future of buildings in Toronto in his talk, Planet Traveler: The Green Hotel: Going green can make you money

experts, ask questions and speak with the experts afterwards. “It’s proven to be a successful formula,” says John Ruffolo, national leader of Deloitte’s Technology, Media & Telecommunications Industry Group. “The audience hears from industry experts, the experts have an open forum to share their knowledge and we, as sponsors, build business relationships with every event. People are always impressed with the MaRS Centre. It really is an all-around winning situation.” Dr. Kamiel Gabriel was one of the panelists who participated in the future of the car seminar. At the time, he was Associate Provost, Research at the University of Ontario Institute of Technology (UOIT). Today, he serves as the Assistant Deputy Minister of Research and the Science Advisor in Ontario’s Ministry of Research and Innovation, where he focuses on ensuring that Ontario research agenda objectives are successfully met. ”The Cleantech in Canada seminars provide superb opportunities to bring together individuals from diverse backgrounds to discuss important issues as they relate to emerging green technology,” says Gabriel. The series will continue with a new slate of seminars in 2010. “Cleantech startups are always looking for ways to profile their efforts, network with their peers and generally participate in what is a growing public awareness of the importance of cleantech to Canada’s economic future,” says Dr. Ilse Treurnicht, CEO of MaRS. “The Cleantech in Canada series provides a unique forum for players in this fast-growing sector to do all this and more.”

too. Rand is developing Planet Traveler to produce 80 per cent less carbon than traditional commercial buildings. Planet Traveler will utilize existing technologies, such as geothermal technologies, LED lighting and solar panels on the roof, to reduce its carbon footprint, and, as Rand enthusiastically explained, reduce operating costs to between 70 and 80 per cent those of a regular hotel. TED offers an annual event where the world’s thinkers and doers are invited to share what they are most passionate about in the realms of technology, education and design. TEDxTO is a local, self-organized event that brings people together to share a TED-like experience in the context of a city. In addition to developing Planet Traveler

and advising MaRS clients, Rand is an entrepreneur, investor and author of the soon-to-be-released book Kick the Fossil Fuel Habit: 10 Clean Technologies to Save Their World. See more of TEDxTO at www.TEDxTO.com.

Octane Medical Group: Leveraging growth through MaRS from space shuttle to medical research Smith says, “We were already up and running and looking to see what groups could help us leverage our growth.” MaRS has helped Octane grow in a number of ways. Veronika Litinski, life sciences practice lead, provided international marketing research. John McCulloch, senior life sciences and biotechnology advisor, helped the company understand the Canadian biotech scene. The MaRS market intelligence program assembled market studies. MaRS also facilitated meetings between Octane and international groups, and invited Octane to participate in an important stem cell workshop.

Not many companies can say they got their start on a space shuttle, although more and more companies can claim to have done business on MaRS. Octane Medical Group, a Kingston-based company that specializes in the commercialization of medical devices for research and clinical markets in regenerative medicine, has done both. Octane’s primary focus is the development and manufacture of medical products, a plan that came about after Dr. Tim Smith, CEO and co-founder, worked with NASA and the Canadian Space Agency on a project to examine the effect of weightlessness on astronauts. By building a bioreactor — an electronically controlled mini-system that mimics the human body and allows biological processes to go forward — that travelled on the space shuttle, Smith and a technical team were able to test how cells and materials interact in space. Back on Earth, Octane Medical Group was born in 2007 when Smith and Ian Grant, Octane’s COO and co-founder, realized that the biological relationships studied on the space shuttle could be applied to medical research. “It all comes together. The ortho aspect, which is cells and materials, and the biotech come together for therapeutic and medical research,” says Smith. Octane is made up of three separate affiliates with very different goals: Octane Orthobiologics specializes in advanced biomaterials for skeletal reconstruction; Octane Biotech focuses on clinical systems for cell and tissue therapy and Octane OEM offers contract manufacturing of ISO-certified clean-room conditions. “Our three sections allow us to share technical resources between companies while maintaining different financial aspects and partnership opportunities,” says Smith. Octane has found a particularly useful partner in MaRS. Unlike most MaRS advisory services clients, Octane joined MaRS relatively late in the development of their business. By the time they joined MaRS,

COMPANY PROFILE

With multinational clients, including Becton Dickinson & Co. and Medtronic Spinal and Biologics Inc., and collaborations with the Catholic University of Leuven in Belgium and University Hospital Basel, Switzerland, Octane Medical Group is an international presence with its heart in Ontario. Octane runs a biotechnology cluster in Eastern Ontario and participates in a collaborative program between the Ontario Centres of Excellence and Queen’s University. It was awarded a grant of $670,000 from the Eastern Ontario Development Fund, which is “directed towards expanding the manufacture of innovative projects in Ontario,” says Smith. The grant will allow Octane Orthobiologics to create six new full-time manufacturing set up and technical positions in Kingston over the next four years. Octane is in the process of establishing itself as a major player in large global health-care markets, but Smith still believes that Ontario is the right place to be based. “Canada is very well placed [for] pursuing this type of work,” says Smith. “Ontario is quite an open, receptive community in terms of bringing in advice and resources and it’s a well-established community in terms of programs.” For more information on Octane Medical Group, visit www.octaneco.com

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A proprietary method — invented by scientists Dr. Ian Rogers and Dr. Robert Casper of the Samuel Lunenfeld Research Institute of Mount Sinai Hospital — to create multi-potent stem cells (MPSCs) from human umbilical cord blood and bone marrow. With preclinical data demonstrating efficacy of MPSCs in diabetes, peripheral vascular disease (a complication of diabetes that can lead to amputation) and neurological conditions, the technology has significant potential to address multiple unmet medical needs.

With four promising and varied technologies moving forward, MaRS Innovation — the deal-flow engine formed to optimize the commercialization of discoveries at 14 Toronto academic institutions – is now in full swing.

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A novel sustained-release formulation of nitric oxide — invented by Dr. Ping Lee and Dr. Yan Li of the University of Toronto — for applications in wound healing, including diabetic ulcers, which afflict some 45 million diabetics worldwide.

Under the leadership of Dr. Rafi Hofstein, MaRS Innovation now includes business development expertise across life sciences and medical devices, physical sciences, cleantech and ICT, and has been working diligently to screen scores of invention disclosures.

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A proprietary platform of multimodal imaging contrast agents – invented by Dr. David Jaffray of the Ontario Cancer Institute, University Health Network and Dr. Christine Allen of University of Toronto — relating to the development of novel contrast agents to allow imaging using multiple modalities. The technology has a variety of applications, including image guidance for precision of cancer radiation therapy.

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A novel anti-addiction compound – invented by Dr. Fang Liu of the Centre for Addiction and Mental Health – that, in preclinical studies, acts directly on the mammalian brain to block molecular pathways related to alcohol and nicotine addiction.

MaRS Innovation revs up Toronto’s deal flow engine Umbilical cord stem cell technology for the treatment of diabetes. Nitric oxide for wound healing. Image guidance for cancer radiation. A compound to block addiction.

“MaRS Innovation is deeply committed to facilitating strategic research collaborations with industry partners, strengthening the innovation capacity of Canadian industry through adoption of new technologies and launching a new generation of robust, high-growth Canadian companies that will become global market leaders,” says Dr. Hofstein, who began as CEO in July 2009. The technologies that MaRS Innovation has selected to advance are:

All aboard the Social Innovation train The growing global momentum around social innovation means that the offices of Social Innovation Generation at MaRS (SiG@MaRS) are busier than ever. With several important international experiences under its belt (and more to come in the upcoming year), SiG@MaRS is busy building a reputation as a global leader in the social innovation and entrepreneurship landscape, both here at home and around the world. First stop: San Francisco. SiG@MaRS and Causeway, an Ontario-based collaborative initiative on social finance, traveled to the city by the bay in September for the Social Capital Markets Conference (SoCap09). Over 900 people from 32 countries attended SoCap09, proving that the social finance community is ready to collaborate with the traditional investment community to build new models for financing social and environmental businesses. Social finance was also central to much of the discussion at the Social Enterprise World Forum (SEWF) in Melbourne, Australia, which SiG@ MaRS attended in October. Canada and Australia have similar social enterprise sectors, especially in terms of market size, population density and taxation and regulatory systems; the SEWF provided the opportunity to compare the social venture spaces on opposite sides of the globe. Based on information from these two conferences, plus in-depth research and analysis, SiG@MaRS will release a series of white papers in the coming months to assist social entrepreneurs, government and networks like MaRS navigate the complicated territory of social finance

in Canada. The white papers will complement the newly implemented social entrepreneurship component of CIBC Presents Entrepreneurship 101 — the inclusion of social entrepreneurship in Entrepreneurship 101 is a reflection of the growth of social enterprise within the traditional business environment. SiG@MaRS has made it easier than ever for businesses and individuals to partner with, purchase from or invest in social enterprises by launching The Ontario Social Venture Registry, hosted on the MaRS website. The registry provides a platform for social ventures to report on their activities. The enthusiasm for this service confirms that social enterprise is an important way of doing business today, and SiG@MaRS is proud to have supported hundreds of social entrepreneurs as they fulfilled their missions to make money AND a difference. To continue developing a culture of social innovation in Canada, SiG@ MaRS hosted two special events in late 2009. SiG@MaRS partnered with the Public Policy Forum to host Accelerating Social Innovation: Smart Ideas for Canada on November 10. This event explored best practices for social change and creative thinking about current and emerging social issues. In December, SiG@MaRS welcomed Jed Emerson to Toronto. Emerson is an international leader in the field of strategic philanthropy, social entrepreneurship and blended value investing – a term he coined. He spoke as part of the Lived It lectures at MaRS. Through its involvement in social finance and social enterprise on a global scale, the development of educational tools for Ontario and its role as host to national and international social innovation leaders, SiG@MaRS continues to be a true accelerator of social innovation, and 2010 will be no different. Momentum is the name of this train and it’s picking up steam. You don’t want to miss it.

MaRS PARTNERS

Is Canadian Business Poised to Become More Innovative? by Peter J. Nicholson Peter Nicholson is the inaugural President and Chief Executive Officer of the Council of Canadian Academies. He has held a number of senior strategy roles in the private and public sectors and earned many prestigious awards, including the Order of Canada.

Another important indicator (Figure 2) of Canada’s innovation

UP FRONT

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Peak Year-1984 93%

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Analysis undertaken by Statistics Canada shows that Canada’s lagging productivity growth has been due to persistently weak growth of multifactor productivity (MFP), a statistical measure that captures the efficiency with which labour and capital are combined to produce goods and services. The Council of Canadian Academies’ expert panel on business innovation concluded that the growth of MFP over long periods of time is a good statistical indicator of innovation, interpreted broadly to include not only advances arising from science and technology, but also from improvements in business models, more effective marketing and business processes of all kinds. From this broad perspective, Canada’s persistently weak MFP growth points to an equally persistent shortfall in business innovation, relative not only to the U.S., but also to the majority of advanced countries with which we compare ourselves.

FIGURE 1 PRODUCTIVITY GAP

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Canada’s number one economic challenge is to increase the rate of productivity growth (total output per hour worked) in the business sector. As Figure 1 shows, our productivity has been falling behind that of the U.S. since the early 1980s and is now back to where it was (about 75 per cent of the U.S. level) in the early post-war period. Further improvement in the material living standards of Canadians will depend increasingly on productivity growth; the number of workers as a proportion of the population is already high and will face a demographic headwind in the years to come.

weakness is the remarkably low investment in information and communications technologies (ICT), again relative to the many other advanced countries. The reasons for this persistent gap are not well understood, though it appears to be due in large part to a tendency of small-and medium-sized companies in Canada to be technology followers, not leaders. Since ICTs are cutting-edge drivers of innovation today, the gap in Figure 2 has serious consequences

Real GDP per Hour Canada as % of U.S.

Innovation — new or better ways of doing valued things — is, directly or indirectly, the main driver of productivity growth and thus the principal source of national prosperity.

(GDP per Capita = Productivity X Hours Worked per Capita) Catching Up Falling Behind

Labour productivity difference in percentage terms (U.S. - Canada)

Data Source (CSLS, 2008a)

— who are always a strong source of motivation and direction for innovation.

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Second — Canada’s domestic market is relatively small and geographically fragmented. Small markets offer lower potential reward for undertaking the risk of innovation. They also tend to attract fewer leading-edge competitors, and thus provide less incentive for a business to innovate in order to survive. Of course, the innovation successes of countries like Finland, Sweden and Switzerland show that the disadvantage of a small domestic market can be offset by a strong orientation toward innovation-intensive exports. But largely for the first reason above, this has not been Canada’s habit.

First – Canada is “upstream” in many North American industries owing to a comparative advantage in resources and adjacency to the American powerhouse. These factors conditioned our economic history as a commodity supplier and technology adopter. Canada’s upstream position in many continentally-integrated value chains has had the effect of limiting contact with ultimate end-customers

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Economic Crisis in Finland Peak of the Tech Boom Widening Gap between the U.S. & Canada

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The compelling evidence of Canada’s business innovation weakness, as outlined above, begs the question “why”. If innovation is good for business, why is Canadian business on the whole less committed to innovation than analysts and policy makers believe it should be? The question is all the more puzzling since it has been asked for decades, yet things have not changed much in relative terms. The causes of Canada’s innovation weakness must therefore run deep in the nature of the economy. Three factors appear to lie at the root.

FIGURE 3 R&D INVESTMENT

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A final indicator of the innovation shortcoming is Canada’s traditionally lagging investment in business R&D, shown in Figure 3 as a percentage of GDP. Following the collapse of the tech boom in 2001, business R&D (as a percentage of GDP) in Canada – which had been underpinned by the telecom equipment sector, and notably by Nortel – has declined by 20 per cent. Meanwhile, Finland has moved to near the top of the global R&D rankings following an economic crisis in the early 1990s due to widespread bank failures and the implosion of Finland’s principal export market when the USSR disintegrated. This illustrates the power of crisis to motivate concerted national strategy; in Finland’s case, to become an innovation-driven economy. While there are lessons to be learned from Finland’s example, innovation strategies are invariably situation-specific and not easily transferred – particularly not from a compact, relatively homogeneous society like Finland to a far-flung and highly diverse society like Canada.

for Canadian productivity and business competitiveness in leading sectors, particularly in dynamic services such as logistics, wholesaling and many professions.

Data Source (CSLS, 2008a)

ICT is Today’s Key Driver of Innovation and Productivity

The third factor is that Canadian companies have adapted very profitably to the foregoing circumstances (Figure 4). The surprising fact is that in more than 80 per cent of the years since 1961, pretax corporate profit in Canada (as a % of GDP) has exceeded that of the U.S. Remarkably, there appears to have been little or no research as to the reasons for the pattern in Figure 4. The Council’s expert panel on business innovation speculated that it may be due to more subdued competition in Canada’s domestic market compared to the U.S. But whatever the reason, Canadian business overall has been quite profitable and, acting rationally, has not been motivated to change its strategy from what has been working well. The bottom line is that Canadian businesses cannot be expected to adopt more innovation-oriented strategies — and thus underpin improved MFP-driven productivity growth in the economy at large — unless the circumstances of Canadian business change in ways that make innovation strategies superior to the status quo.

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BERD as % of GDP

Canada’s ICT Investment Gap

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ICT Investment per worker: Canada as % of U.S.

FIGURE 2 ICT INVESTMENT GAP

In fact, the circumstances are changing dramatically and the implications are likely to become much clearer as the global downturn gives way to recovery. The new business environment has the following principal characteristics: •

Resources — While resource-based activities will always be important for Canada, they are inherently volatile, very unevenly distributed across the country and subject to increasingly stringent environmental constraints.

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The U.S. Market — Canada’s dependence on access to the U.S. market faces a growing threat of protectionism as America itself adjusts to new competitive pressures from emerging markets. And the ever-present terrorist threat creates a constant risk that the U.S. border could close overnight in the wake of an attack.

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Emerging Markets — At the same time, by far the biggest growth opportunities today and in the foreseeable future lie in emerging markets, particularly of Asia but also of Latin America. This is a tremendous opportunity, too little exploited by Canadian businesses, but also a new challenge as China, India and others acquire sophisticated skills and cease to rely exclusively on labour cost advantages. New Leaders — A new generation of Canadian business leaders is now in the wings. This is a generation that feels at home in the world and often has strong links to the dynamic economies of Asia and elsewhere. They have few of the old habits of mind that, traditionally, may have curbed business ambition in many sectors of Canada’s economy.

FIGURE 4 CORPORATE PROFITABILITY

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Corporate Profit (Before Tax) as % of GDP

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Whether or not these new circumstances are sufficient to stimulate a new innovation focus in Canadian business strategy remains to be seen. The incentives certainly are shifting in that direction. Penetrating new markets and reducing the excessive dependence on Canada’s upstream role in integrated North American value chains will only be achieved through a greater strategic focus on innovation.

The primary responsibility clearly rests with business itself, but an important question remains as to the role of public policy in complementing the new incentives arising from the marketplace. The power of governments to shape business strategy today is more limited than we perhaps imagine. To borrow a metaphor from surfing, the role of government may be to wax the board, but the real action depends on business being able to catch the wave. In this sense, public policies can indeed enhance the incentives that are already being created by external forces — for example, by fostering competition, facilitating trade and being proactive in a limited number of areas where Canada has particular strengths or opportunities. Proactive sector policies — based, for example, on procurement, regulation, public-private partnership, targeted assistance and support for early-stage financing — have been effective in the past in promoting innovative businesses in computers, telecom and aerospace, and to a more limited extent health care, cleaner hydrocarbons and other ‘green’ technologies, and remote sensing, among others.

The role of government may be to wax the board, but the real action depends on business being able to catch the wave. The innovation weakness in Canada is deeply-rooted and very long standing. There are no silver bullets or quick fixes. Many of the constructive things that governments can do that could have real impact – regulatory changes in some areas; strategic procurement; public-private partnerships; concentrated support for certain “clusters” (and not for others) — are either politically controversial or of little political salience, and may thus be of too little interest to public decision-makers in our image-obsessed media environment. So the conundrum is how to generate the political appetite to take on the innovation/productivity nexus in ways that really matter. Meanwhile, the same challenge exists — and with even more at stake — for the business community, where there is still too much complacency and short-termism in the face of a new and far more challenging, and potentially more rewarding, global business environment. V.O. Marquez, the former Northern Electric CEO writing in 1972, was right when he said we need “small catastrophes” – shock enough to force change, but not so severe as to wreck everything.

This article draws heavily from the report Innovation and Business Strategy: Why Canada Falls Short. The report was prepared by a panel of experts convened and supported by the Council of Canadian Academies. The report can be downloaded from the Council’s website www. scienceadvice.ca

Vanessa Garrison Photography

Cultivating the Collaborative City Building on a legacy is never easy. Building on the legacy of legendary urban activist and writer Jane Jacobs is particularly daunting.

into a locus of active creativity, just as the shop floor became a source of innovation for leading manufacturers like Toyota.

When the Creative Places + Spaces conferences debuted in October 2003, Jane Jacobs, Richard Florida and 50 other speakers led a captivated delegation from across Canada, the U.S. and U.K. in an exchange about the growing importance of creativity to cities and the new economy. It was a watershed event in the advancement of the creative cities movement in Canada, which expanded in 2005 with the second offering in the conference series.

UK artist and climate change activist David Buckland offered impressive evidence of the power of art and performance to unlock the passion for making change. Lyn Heward, Executive Producer of Cirque du Soleil lifted the veil on the widespread success of Montreal’s hottest cultural export. And Charles Landry unpacked his ideas on “creative bureaucracy”, the reinvention of complex systems to re-energize effectiveness and harness greater human potential.

The dialogue continued in Toronto in October at Creative Places + Spaces 2009 with study tours, dynamic keynotes, provocative panels, video spotlights and breakout sessions for a national and international audience gathered over two days at the Carlu and MaRS.

Among the panels, MaRS CEO Dr. Ilse Treurnicht moderated an accessible discussion titled Open-Access Science, with Structural Genomics Consortium CEO Dr. Aled Edwards and Dr. Pekka Sinervo of the Canadian Institute for Advanced Research, teasing out the practice of and broader lessons from the vanguard of collaborative science.

Programmed by Artscape in partnership with MaRS, the Martin Prosperity Institute at the University of Toronto’s Rotman School of Business and the City of Toronto—Economic Development, Culture and Tourism, the conference offered up pan-Canadian examples of collaboration — in science and medicine, art and culture, education and urban development — and set those against the perspective of global thinkers from the worlds of art, the academy, education and beyond. The result was a rich mix of ideas designed to inspire and activate the keys to the collaborative city. Atop the list of persuasive (and thoroughly charming) speakers was Sir Ken Robinson, an internationally recognized leader in the development of creativity, innovation and human resources. He works with governments in Europe, Asia and the US, with international agencies, Fortune 500 companies and some of the world’s leading cultural organizations. With bone-dry wit and penetrating wisdom Sir Ken outlined and coloured in his core idea: creativity is a process of having original ideas that have value and, although public education may have squeezed it out of us, creativity is a process of “applied imagination” that can be understood and, most importantly, can be taught to everyone regardless of age and perceived ability. Urban studies consultant and professor Richard Florida spoke passionately about the need to transform our burgeoning service sector

At the heart of the conference emerged some essentials underlying successful collaborations, among them: • Trust, which has to be earned in order to be valued, is the foundation. • Time and patience are key; don’t rush to judgment or try too quickly to quantify the success of a given collaboration. • Insight is often intuitive and even esthetic in nature; find ways to value the intuitive. • Flexibility is paramount; constantly challenge what you take for granted and rethink the question you’re collaborating on if your project is floundering. Is there one handy toolkit out there to ensure your collaborations are fruitful? Would that it were so simple. But there is a wealth of material to tap into from CP+S. Check it all out at www.creativeplacesandspaces.ca And in the words of Abraham Lincoln, as delivered to Congress in 1862 and as quoted by Sir Ken: “The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise — with the occasion. As our case is new, so we must think anew, and act anew. “We must disenthrall ourselves, and then we shall save our country.”

The Collaborative City

Nona Heaslip Supporting entrepreneurs in technology and life sciences Nona Macdonald Heaslip’s relationship with MaRS began over 30 years ago, before MaRS was even a glimmer of an idea. In 1975, MaRS’ founder Dr. John Evans, then president of the University of Toronto, hired Nona Heaslip as the first public relations manager of the university. Between 1975 and 1986, she advised three university presidents, modernized the university’s approach to external relations and won several awards for her work. Nona Heaslip began her career in the 1950s as a reporter for two Canadian newspapers, then worked on public affairs programs at the Canadian Broadcasting Corporation. In 1964, she moved to New York City to work with United Nations Radio-TV, researching and producing programs for international distribution. Two years later, she was appointed radio and television publicity director at Time Inc.’s corporate public relations headquarters in Rockefeller Center. She returned to Toronto in 1973, working as the public relations manager for Ontario Place before joining the University of Toronto’s Sesquicentennial Celebrations team, chaired by Dr. Evans. “He was a motivational leader, always charming with a ready wit – a man for

all seasons. Personally, I hoped he would become Prime Minister of Canada,” she exudes. In honour of and with respect for John Evans and Ilse Treurnicht, MaRS’ current CEO, Heaslip has pledged a gift of $250,000 to MaRS. Her gift will support the MaRS Best Practices series, a series of workshops on key topics of interest to technology and life sciences entrepreneurs delivered by industry specialists. It is fitting that Heaslip’s gift will fund a series of events for entrepreneurs in the life sciences and technology. “The sciences deserve a priority place in the Canadian way of life,” she says. Growing up in a medical family — her father and brother were both surgeons — helped spark her interest in science and health care. Nona Heaslip holds a B.A. from the University of Toronto and an honorary LL.D. from her alma mater. In addition, the University of Prince Edward Island recognized her with an honorary doctorate. Her Scottish ancestors settled in PEI in 1772 and their descendants continue to prosper there. With her late husband William A. Heaslip, she has been a generous supporter of education. Their foundation funds 10 major undergraduate scholarships at Canadian universities and one graduate scholarship at Oxford. “MaRS is unique — it’s is a wonderful concept that brings together [science,] academic and business brains,” says Heaslip.

Gerald Heffernan ‘My MaRS was the army’ The entrepreneurial bug bit Jerry Heffernan early in his life. As a young engineer in 1953, Heffernan saw an opportunity to build a steel plant in Alberta. He independently drafted a feasibility study for the plant and presented it to the company he worked for. Management rejected his proposal. Heffernan was frustrated, then someone made a brazen suggestion. “I had a great mentor,” says Heffernan. “He was an electrical engineer who ran his own business in Vancouver. He said, ‘Why don’t you build the plant yourself?’ ” So Heffernan quit his job, and in nine months, built a steel plant in Edmonton. He’s been an entrepreneur ever since. It’s Heffernan’s enthusiasm for entrepreneurship and belief in mentorship that make him so passionate about supporting MaRS. “MaRS provides great resources for people with technical educations,” he says. “We’re not training people with great ideas to start businesses [in Canada], and we must fill in that gap.” Heffernan sees MaRS as a tremendous step forward in bridging the gap between research and commercialization. MaRS provides

DONOR PROFILES

opportunities to get answers from professionals, courses on entrepreneurship, contact with companies that are already playing a role in developing start-ups and access to mentors. Heffernan has personally led a charge to help ease the transition between great ideas and viable businesses. He is working with the provincial and federal governments to set up a fellowship program that would support university students as they develop commercial opportunities from their inventions. MaRS would play a central role in the mentoring of some of these companies. “There are no easy starts in business,” says Heffernan, “and entrepreneurs have to have tremendous fire in their bellies.” However, when an entrepreneur has that drive, combined with a willingness to listen and a dedicated work ethic, they’re off to a good start. And with access to MaRS’ many services, entrepreneurs may have a leg up on the competition. MaRS didn’t exist when Heffernan began his first entrepreneurial venture. “My MaRS was, of course, the army,” he says. “But if MaRS had been around when I was starting out, I’d have been there fullbore, getting as much help as I could.”

$250,000+ • • • •

CIBC The William and Nona Heaslip Foundation The Henry White Kinnear Foundation Wilf and Anne Lewitt

$50,000 • J.P. Bickell Foundation • Richard and Donna Ivey Fund at the Toronto Community Foundation

$25,000-$49,999

MaRS Convergence Club 2009 MaRS gratefully acknowledges the support of our donors.

• • • • • •

Avie Bennett John and Gay Evans Geoff and Jill Matus Gordon and Janet Nixon Ogilvy Renault LLP St. Joseph Communications

$10,000-$24,999 • • • • • • • • • • •

AstraZeneca Canada Inc. cm3 Davies Ward Phillips & Vineberg LLP Deloitte. Alison Fisher Gowlings Gerald Heffernan, O.C., BaSc. Hurley Corporation Miller Thomson LLP John F. (Jack) Petch, Q.C. Ilse Treurnicht

$5,000-$9,999 • Canadian Wireless Telecommunications Association • Richard M. Ivey • Genuity Capital Markets • Rotman Family Foundation • TAL Group • Craig C. Thorburn • Thorek/Scott and Partners • Anonymous (1)

$2,500-$4,999 • • • •

Peter and Carolyn Evans John Manley Wendy and Chris McDowall Sheila O’Brien

$500-$2,499 Additional funding generously provided by

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Allstream, in honour of Steve Forbes The Biotechnology Initiative Honor and Michael de Pencier Gordon and Pamela Gibson Tim McTiernan Tina Urman William White Anonymous (1)

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