Backbone magazine_The best of everything

Top predictions for 2013

Innovation Campaign success stories

Reimagining the computer interface

$100,000 in prizes

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in Canadian tech Bac kbone

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The best of everything in Canadian tech

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co ntents

march/april 2013

22

cover

22 All the best

We scoured the Canadian tech

scene for 200 notable organizations, products, events and places.

Lawrence Cummer, Ian Harvey, Trevor Marshall and Peter Wolchak

features

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Upbeat 2013

Our annual look into the near future of technology and business.

By Danny Bradbury

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38 Canadian successes

The winner and runner-up of our Innovation Campaign are growing, selling and learning.

By Lawrence Cummer

departments

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4 editor’s letter 6 letters to the editor 8 backspace

The Internet is saving you $9,000 every year. No, really.

Plus: Rolodexes, teen relationships and highly qualified team players need not apply.

By Peter Wolchak

34 e-trends

Get funded Not every good idea gets funded, but you can improve your odds.

By Ian Harvey

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40 tek gadgets

Go-go gadgets Google’s laptop upstart, Kobo’s contender, and phones for those bored with the same old same old.

By Peter Wolchak

10 big ideas

Ultra-high definition TVs are dead in the water PCs, however: still alive and well.

By Jim Harris

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14 hot tech

10

Think touchscreens are innovative?

Computers that respond to your expression and body language are on the way.

By Gail Balfour

events

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Enter our Innovation Campaign: $100,000 is on the line And then read about Canada’s best tech offerings in the Backbone200 The second annual Innovation lion in annual revenue, we Bac kbone The 2 Annual Backbone Campaign is now live. Last year, want you to enter our contest. we at Backbone decided it was If you know someone who , time to get out of the stands could be our next winner, tell Start Me Up Innovation Campaign and join the game, so we crehim or her about the Innovaated the Innovation Campaign tion Campaign. to boost deserving Canadian Full details—including tech start-ups. From a list of eligibility rules and entry inhundreds of Canada’s beststructions plus the full prize and-brightest young compalist and the names of our sponsors and judges—is online at nies, our judges narrowed the field to 10 and then chose one winner and www.backbonemag.com/startmeup. The one runner-up. They received cash prizes, contest closes March 30th. mentorship opportunities, products and services (such as office space in some of Introducing the B200 Canada’s leading incubators) and ongoing Canada is a big place and technology procoverage in Backbone and on our Web site. gresses at warp speed. These two factors Winning paid off for EidoSearch and make it tough to stay up to date on our runner-up TitanFile, as both companies business tech scene. And that’s where the have experienced dramatic growth in the Backbone200 comes in.

This is a brand new list of the best Canlast year. EidoSearch helps companies conduct analysis against complex data. ada offers in work, play and productivity The company doubled its customer base, solutions. We have information for those more than doubled it workforce, improved seeking funding, investment targets, highits user interface and increased its pack- paying jobs, events or e-learning, outsourcing and cloud providers. And we’re aged data sets.

Secure file-transfer company TitanFile not all about business: we can also help landed $1.1 million in financing, which it is you buy a cool gadget, watch Kevin Spacey plowing back into product development yell at incompetent employees or read and expansion into the U.S. It was also about Steve Jobs yelling at incompetent selected by McInnes Cooper and Stewart employees. The companies, organizations McKelvey, the two largest Atlantic Canada and products that made the Backbone200 law firms, as a secure communication so- are not necessarily the biggest or richest; lution. “We were able to leverage the at- many are, but some entries are ones that tention from the campaign to get more our writers and sources felt were deservclients. It helped establish us,” said co- ing of recognition because they are promising, interesting or unique. founder Milan Vrekic.

We don’t guarantee you’ll agree with Last year, TitanFile also released a new version of its product and the company all of our picks; in fact, we’re sure you has been successful in recruitment. Be- won’t, and we look forward to hearing ing the runner-up and receiving ongoing your feedback on our choices. But we do editorial coverage “helped us attract really promise that you’ll find much here that is interesting and useful. Who knows, maybe great people to the team.”

The future looks bright for both com- your next employer or big business project panies. “Take what we did in 2012 and add is somewhere in the Backbone200? a multiplier to it,” said EidoSearch cofounder David Kedmey.

We’re thrilled that we could help dePeter Wolchak serving Canadian start-ups, and now we’re Editor ready to do it again. If you run an earlypwolchak@backbonemag.com stage tech company with less than $2 milb u s i n e s s

technology

lifestyle

$100 000 nd

Raising innovative entrepreneurs to the next level

Publisher Steve Dietrich sdietrich@backbonemag.com

EDITORIAL Editor Peter Wolchak pwolchak@backbonemag.com Contributing Editor Lisa Manfield lmanfield@backbonemag.com Art Director Shelley Walker swalker@backbonemag.com Production and Prepress Peter Pasivirta Online Communications Manager Sue Ansell sansell@backbonemag.com Publishing Assistant Vera Lourenco vlourenco@backbonemag.com Contributing Writers Trevor Marshall, Jim Harris, Danny Bradbury, Lawrence Cummer, Ian Harvey,Gail Balfour Contributing Illustrators Jon Berkeley, Gavin Orpen, Vin Ganapathy Contributing Photographers Steve Uhraney, Miguel Hortiguela

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SMARTER TECHNOLOGY FOR A SMARTER PLANET

FROM DETAILS TO DESIRES: Companies aren’t short on data.

In fact, with the average large business storing more than 200 terabytes, companies have more than enough data to tell them when, where and who is buying their product. But few Canadian businesses have embraced the potential in all those valuable bits of information.

To remain competitive in this increasingly competitive world of ours, data is going to play an increasingly more important role – but not just data; big data.

DATA’S NEW VOICE. Welcome to the world of big data. Big data isn’t just sales and inventory numbers; it is tweets, videos, clickstreams and other unstructured sources. It’s the data of desire. And today, we have the technology and tools to make sense of it.

So now, instead of learning which customers it has lost, a company can learn which customers it might lose and present timely offers or products motivating those customers to stay. Using IBM Smarter Analytics to identify which customers were most likely to switch

“For the first time, we can decide which promotions to run based on facts rather than gut feel.”

Patrick Neeley Chief Business Officer, Chickasaw Nation Division of Commerce

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Combining big data with company data paints a better picture of the customer.

80%

of the data currently produced is unstructured – coming from sources like images, videos, tweets, posts and e-mails.

MINING MOTIVATION Enter Smarter Analytics from IBM – software, systems and strategies that help companies combine their own enterprise data with their consumers’ unstructured data to see a fuller picture. A big data platform, paired with predictive and sentiment analytics, allows organizations to correlate, for example, sales records with social media mentions for more relevant insights.

to another communications carrier, XO Communications was able to predict likely customer defections within 90 days, reducing churn by 35 percent the first year.

Data can help Canadian businesses become more innovative and competitive players in the Smarter Planet.

How do we know? Let’s just say, we have the data to prove it. ibm.com/smarteranalytics/ca

Tweet Tweet Tweet Tweet Tweet Tweet

Share

LET’S BUILD A SMARTER PLANET.

IBM, the IBM logo, ibm.com, Smarter Planet, Smarter Analytics and the planet icon are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the Web at www.ibm.com/legal/copytrade.shtml. © International Business Machines Corporation 2013.

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funds are available But finding and figuring out government innovation programs is tortuous

illustration: jon berkeley

Stop me if you’ve heard this: a man walks into a business, looks around and says, “I’m from the government and I’m here to help.”

Bogdan Ciobanu isn’t laughing. As director general of the National Research Council’s (NRC) Industrial Research Assistance Program (IRAP), he insists he is actually here to help Canadian businesses go digital, and he’s got more than 210 agents and $197.5 million to devote to that goal.

And it’s badly needed help. Last spring, the World Economic Forum ranked Canada 35th in digital economy leadership out of 138 countries, down from 26th place in 2010. For government prioritization of ICT, Canada sits at 31st.

This is not good. The goal of both government and industry was to make Canada a digitally driven innovation economy by 2017, and it isn’t happening. So, what to do? More government funding, more tax breaks? No, say leaders like Tom Jenkins, CEO of OpenText, who chaired and delivered a review of federal support for research and development last fall.

“Government needs to do a better job helping our innovative SMEs grow larger,” Jenkins said in tabling the report.

“What we found was a funding system that is unnecessarily complicated and confusing to navigate.”

We need to move quickly, because as Jenkins wrote last year in a paper on public policy: “We are at the dislocation point between an old economic order and a new one that may last for decades, if not centuries. Innovation is the wealth creator in this new order, and we would

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be wise to structure our economy to optimize our ability to innovate and thus compete globally.”

Money itself isn’t the issue. There is approximately $7 billion in federal funding alone and hundreds of millions more in provincial programs. But the application process can be so tortuous and rife with hidden qualifiers and disqualifiers, many shy away or are unaware of whether they even qualify.

Programs, said Jenkins, must be more visible and accessible, and driven by results. Start-ups and existing companies looking to grow need access to capital and to new markets, and they need to recruit and retain key people. His panel’s report made six simple suggestions: n create an Industrial Research and Innovation Council with a clear business innovation mandate as the centerpiece to all government programs n simplify the successful $3.6 billion Scientific Research and Experimental Development (SR&ED) program by basing the tax credit for SMEs on labour-related costs n use the government’s substantial purchasing power to buy innovative products and demand leading-edge goods, services and technologies from Canadian suppliers n restructure the National Research Council to create a business-driven collaborative agency separate from public policy research n help high-growth, innovative firms access the risk capital they need through the establishment of new funds where

n

gaps exist through the Business Development Bank of Canada (BDC) in collaboration with the private sector establish a clear voice for innovation, with an Innovation Advisory Council of external experts, and engage in a dialogue with the provinces to improve co-ordination and impact.

How may I help you?

Knowing where to look for support is key, said Jenkins, arguing for the creation of a service—a concierge—that can guide companies to relevant federal and provincial programs.

Perhaps surprisingly, the feds reacted immediately; in the spring budget, the government initiated the concierge concept under Ciobanu’s NRC-IRAP program and rolled it into the Digital Technology Adoption Pilot Program (DTAPP). It launched last fall and is in the process of cutting cheques to 431 companies to help them adopt digital technology. Another 200 will likely be added when the funding wraps up in 2014.

DTAPP is an extension of what IRAP has done for 60 years, Ciobanu said.

IRAP has 210 Industrial Technology Advisors (ITAs) who consult with business leaders and provide funding from an $87.5-million budget for technology and training to help businesses be more productive and competitive.

Those ITAs—and more are coming— will match SMEs to DTAPP and to other programs where there may be a good fit, such as IRAP, SR&EDs or provincial funds.

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the program and working with their consultants to research and organize ourselves for the implementation of an Enterprise Resource Planning system. To top it off, our ITA has also started the wheels turning for additional program funding through IRAP, which could amount to a cool $1 million in matched funding for new product development. Wow! Thank you Backbone.

­—Eric Pierce, a division of Waycon Canada, Waterloo, Ont.

Some Canadian politicians impress Great government funding experience I felt compelled to report on my experience utilizing the information in your article “Finding and figuring out government innovation programs” by Ian Harvey (September 2012, http://goo.gl/sW6Oc).

I had heard about these government programs in the past but never believed I would be able to find the appropriate program or that I would find the right person to talk with. After reading your article and

“

Our ITA (Industrial Technologist Advisor) has also started the wheels turning for additional program funding through IRAP, which could amount to a cool $1 million in matched funding for new product development. Wow! —ERIC PIERCE

”

using the references to the DTAPP and IRAP programs, I made an initial pursuit through the 800-O’Canada general information service and referenced these two programs. To my amazement, I received a call back with contact information for the Industrial Technologist Advisor (ITA) in my area. I sent off an e-mail and left a message for the ITA on a Wednesday and on the following Friday I got a call back. (Gasp!) The ITA asked a few simple questions and I described our company profile, then she asked if we could meet on Monday morning! (Whaat?! Unimaginable!)

The next Monday morning we meet, I took her on a quick tour of our company and she told me we were eligible for the DTAPP grant program which would start next March. (This can’t be that easy!) We are now preparing for 6

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You wrote a very good column on Canada’s digital economy strategy (November 2012, http://goo.gl/0qPCL). I loved the way you contrasted the Malaysian and Nigerian focus on ICT with the fact that our own PM would not travel 40 minutes to be there. Very telling. i-CANADA ran a SUMMIT the day before the WCIT. Our Governor’s Council is chaired by the premier of New Brunswick, David Awlard, and he was there, as were the mayors of Canada’s smartest cities and the heads of Canada’s smartest corporations and sectors.

Some people get it, but you are right: the policy setters don’t.

Remembering 300 baud modems Your September 2012 editorial (“Technology and vacations: a terrible confession,” http:// goo.gl/7uf0t) got me into a nostalgic mood.

In your reminiscing you stated: “Broadband has wiped the reality of 28.8 Kbps from your memory. A link you would click from home or work without a thought takes two minutes to open...” Well, Peter, I have news for you: as a student circa 1975, I recall working at 300 baud on an acoustic coupler. We thought we’d died and gone to heaven! And when I then got out into industry and had a 1200-baud modem, well...I could hardly contain my excitement!

What’s interesting is two things. First,

“

As a student circa 1975, I recall working at 300 baud on an acoustic coupler.

We thought we’d died and gone to heaven!

—Barry Gander, co-founder, i-CANADA

Little government action Interesting comments in your November editorial. Welcome to the world of “supportive” politics. You are absolutely right in saying that what we are doing isn’t working, in your area of expertise as well as mine. For the past seven years our literacy rates have remained virtually the same and no one is talking about changing anything.

Keep up the good work, I really enjoy reading your magazine.

b ac k b o n e m ag . c o m

What big data means to you

Mentoring start-ups

how right so many futurists back in the ’70s and ’80s were who were saying that telecom costs would soon be negligible. The second is how our productivity does not seem to have gone up in commensurate measure.

Today I have a 7Mb connection, roughly 100 times more bandwidth. Am I 100 times more productive? Not at all.

Best regards, and thank you for keeping the magazine so wonderfully readable.

—Steve Pozgaj

No Kindle library loans

—Edda Manley Holiday gift guide

”

—Steve Pozgaj

Stories from the funding trenches

Dress for career success

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BYOD: you have no choice anyway

Out of the fog, into the cloud Why cloud computing may be right for you

I appreciate receiving Backbone with my Globe and Mail and read or scan almost all articles. Like me, all of your readers support their public libraries through their municipal taxes, therefore hundreds of e-books are free to library members.

(The November issue recommended the Kindle e-reader: http://goo.gl/WSN92.)

Other e-readers are a better recommendation. Especially in this economic climate, the price is right: $0 per book. This is because publishers do not allow libraries to loan e-books in a Kindle-compatible format in Canada: http://goo.gl/4DVyj. —Jean Williams

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istockphoto.com / svetikd

The Internet is saving you almost $9,000 per year The unconnected pay more and drive more istockphoto.com / Shane Obrien

inventory, often through aggregator sites n finding discounts and coupons n saving gas and the time burned by shopping in bricks-and-mortar stores.

While many complain about the cost of Internet access— especially in Canada—it turns out the expenditure is well worth it. According to the Internet Innovation Alliance (IIA), American households with Internet access saved US$8,870 in 2012, compared to those with no ’net access.

The connected save money by: n comparison

shopping and negotiating better deals with retailers n accessing deeper

“More consumers are realizing that the Internet is an essential ingredient for keeping more money in their pockets year-round with deals regularly available and many online retailers making value their central differentiator,” Nicholas J. Delgado, certified financial planner and principal of Chicago-based wealth management firm Dignitas, said in a release.

The IIA pegged last year’s savings at US$7,695. The savings increased because products and services have become more expensive and online comparison shopping services have become more common.

That smartphone is so 10 months ago Teens swap devices faster than adults Teens are not known for long relationships, and that is as true of their smartphones as it is of their romantic pairings.

A recent Ipsos Mobil-ology study found that teens have handsets that are typically newer than adults’ phones (10 months versus 13 months for adult Canadians) and are more inclined to want to switch their brand of device within the next six months.

“Teens are simply more fickle. They have more of a ‘love-‘em-and-leave-‘em’ attitude when it comes to their smartphones, craving the freshest trend and the latest brand,” Mary Beth Barbour, senior vice-president with Ipsos Reid, said in a statement.

“Even if their device is newer, they are still more inclined to want to switch or upgrade than their adult contemporaries.”

market tablets, such as the Nexus 7. “At the moment, this is a win-win for TV networks that can monetize tablet viewing via advertising, pay-per-

view or subscription [overthe-top] revenue, while at the same time reaping the benefits of increased viewing of their regular TV programming.”

Smaller screens are not stealing business from the home’s big-screen business. It’s quite the opposite: tablet devices are actually increasing the number of hours we spend watching TV shows.

According to research firm TDG, 88 per cent of adult tablet owners use the devices to watch video, and television programs rank high on their content list. Among those aged 18 to 49 (a key TV demographic), 39 per cent report tablet viewing has led to an increase in regular TV viewing, while 46

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per cent report no change and 15 per cent report a decrease in regular TV viewing.

“This is a conclusion of particular relevance to those involved in the TV industry, including networks, multi-channel operators and advertisers,” Bill Niemeyer, TDG senior analyst, said in a statement. “The data clearly shows that watching online TV shows on a tablet drives greater TV viewing among the highly desired and increasingly hard-to-reach 18 to 49s.”

And this trend will only grow with the introduction of mid-

m ar ch / ap ril 20 13

istockphoto.com / Xavier Arnau

Tablets are actually good for TV stations

Half of us use smartphones to access the Internet

Look it up in your Rolodex and then fax me photo: istockphoto.com / pidjoe

Source: Ipsos OTX and Ipsos Global @dvisor

Only half? Get with it, everyone else

The bad news: modern offices are still stuffed with faxes and tape recorders. The good news: people want to get rid of all that old stuff. And suits; people also want to get rid of suits.

This is according to a LinkedIn survey of more than 7,000 global professionals, asking which technologies are becoming more prevalent and which will become extinct over the next five years. Canadian respondents told LinkedIn: > tape recorders are on the way out: 85 per cent > Rolodexes, too, will soon be history: 81 per cent > we want to get rid of formal business attire like suits, ties and pantyhose: 32 per cent > tablets are the office tool of the future: 58 per cent > also important in the near future: cloud storage (54 per cent), flexible working hours and smartphones (tied at 52 per cent) > workplace dreams include natural sunlight and a place to take a nap: 25 per cent each.

For more, see LinkedIn’s blog at http://goo.gl/FL6Pp∆17

Delete these terms from your résumé Staffing services company OfficeTeam asked 1,300 senior managers in the United States and Canada “What is the most overused or meaningless phrase you see on résumés?” If you use some of these terms, delete them and revise your résumé to highlight experiences and lessons learned.

Highly qualified: highlight accomplishments and emphasize specific skills instead.

Team player: this is now a given, so provide examples of how you partnered with colleagues or individuals.

Self starter: show how you took action when you saw an issue that needed to be fixed.

Flexible: meaningless, so instead describe how you responded to a major change at work or dealt with the unpredictable aspects of your job.

More details here: http://goo.gl/jWydk

Resolved to make more money?

The big money is in IT, according to Robert Half Technology and Creative Group. The following positions in the information technology and creative fields will see strong demand in 2013: network engineers can expect starting salaries between $79,500 and $104,250; mobile applications developers, average starting salaries from $79,000 to $112,000; business intelligence analysts, between $76,000 and $105,750; Web designers, base compensation ranging from $75,000 to $120,000; SEO/SEM specialists, starting salaries ranging from $75,000 to $95,000; and user experience (UX) specialists, starting salaries between $65,000 and $115,000.

Ipsos reports that 55 per cent of people around the world use smartphones or mobiles to access the Internet once per week to check a movie time, find a restaurant, assess traffic or look up sports scores. Those in the Middle East and Africa use the mobile ’net more: that figure is 70 per cent. And, of course, the figure is higher for under 35s (69 per cent) than those 50 to 64 (33 per cent).

The surprise, really, is that the usage numbers aren’t higher.

Canada’s telecom space is just fine A rare defence of our networking speeds and costs “When you look at the whole picture, Canada is very much within the norm for developed countries with regard to prices, available technologies and network speed,” according to Yves Rabeau, author and associate professor at University of Quebec at Montreal. He said “one must be particularly careful not to generalize from a single piece of data” and we need instead to evaluate many variables.

He pointed to the following factors: a 2012 study by Wall Communications found high-usage Canadian rate plans are less expensive than similar American plans on average; the OECD said Canada is the 7th least expensive of 34 countries examined when

it comes to roaming fees; and Canada places 24th in broadband penetration, not far behind France and ahead of Germany and Italy.

Rabeau also said the Canadian use of smartphones has increased from 33 to 45 per cent from March 2011 to December 2011.

These and other conclusions are covered in Rabeau’s economic note entitled “Is the Canadian Wireless Sector Competitive?” It is available at www.iedm.org. B

image: Economic Note; story by Yves Rabeau

Really office workers? Rolodexes and faxes?

All content also at: backbonemag.com/magazine

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2013: mobile continues its march, PCs still sell and no one wants UHD TVs Jim Harris (jimh@jimharris.com, @JimHarris) is a management consultant who works with organizations on change, leadership and sustainability.

His book Blindsided is a number one international bestseller published in 80 countries worldwide. He speaks at 40 conferences and seminars a year around the world

Two recent tech events highlighted a fascinating sea change in the global consumer electronics (CE) market. Only two categories in the market are experiencing growth: smartphones and tablets. They combine for 40 per cent of CE sales, worth one trillion dollars annually, but every other category is contracting.

This trend was evident at both the Consumer Electronics Show (CES) in Las Vegas and Deloitte’s Technology, Media & Telecommunications (TMT) Predictions 2013.

Here are the key insights:

King Samsung. Samsung has become the number one smartphone supplier, and the company created the “phablet” space, the intersection of the smartphone and tablet, with the introduction of the Galaxy Note. Samsung used its vast marketing war chest at CES to highlight its dominance in Android-based smartphones and tablets, and even TVs.

times HD’s pixels. What will that be called? Super ultra high definition (SUHD)? And if there isn’t going be a critical mass of UHD content for many years, 8K content is a distant fantasy.

Here’s a reality check for the TV industry: people like streaming content, and Netflix now consumes an amazing 25 per cent

Super-res TVs are silly. Speaking of TVs, Samsung and others trotted out 4K TVs, also called ultra highdefinition (UHD) TVs, at CES. These have large screens (84 inches or bigger) and offer amazing picture quality, but they have serious drawbacks. First, they cost around $20,000. Second, it is literally difficult to get them into many living spaces. Finally, there is no content for them. The first high-definition broadcast in the U.S. was in 1996, meaning it took about 15 years for HD to achieve broad adoption.

With no UHD content on television networks now, how long will it be before it’s widespread?

Even more out there, Sharp introduced an 85-inch 8K TV. With resolution of 7680 x 4320, it has 16

of U.S. bandwidth, according to Yahoo! Finance. Can you imagine what would happen if people started demanding UHD streaming content? It would absolutely blow past all ISP data caps and, in fact, the Internet as it currently exists could not manage the load.

TV makers have simply overshot with the launch of UHD and SUHD. The TVs are too expensive and too big, and we can’t stream content to them. This case exemplifies an industry that doesn’t understand what its customers want. B

Mobile even more important.

Qualcomm CEO Paul Jacobs was the opening keynote at CES, a spot that had belonged to Microsoft for years (Qualcomm is the leading global mobile chip maker). This is a small example of a worldwide shift as mobile overtakes desktop in the stock market: in 2012, Qualcomm’s value exceeded Intel’s for the first time.

The PC isn’t dead. The death of the PC is greatly exaggerated: 350 million were sold in 2010, 2011 and 2012, according to Gartner. At Deloitte’s prediction event, almost everyone in the audience said they owned a smartphone and/or tablet. When the presenter asked, “How many of you have created a spreadsheet on it?” only one person responded. The point was simple: mobile devices are used primarily to consume content, while creation occurs primarily on PCs. And that will keep the PC world alive for quite some time.

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istockphoto.com / Kristina Hopper

Apps moving into new places.

Plug your iPhone into the new Chrysler demoed at CES and it serves as your GPS, displaying its maps on the dashboard. Why buy a dedicated GPS?

All content also at: backbonemag.com/ magazine

iPhone 5 deserves the largest LTE network.

1

With your business on Bell, you get access to Canada’s largest LTE network.1 Plus, you get unlimited access to the largest Wi-Fi network across Canada, including coffee shops, fast-serve restaurants and bookstores.

Visit a Bell store • 1 855 272- 0781 • bell.ca/MobileBusiness

Current as of January 4, 2012. Available with compatible devices within network coverage areas available from Bell Mobility; see bell.ca/coverage. Subject to change without notice. Other conditions apply. (1) Based on total square kms of coverage on the shared 4G LTE network available from Bell vs. Rogers’ LTE network. See bell.ca/LTE for details. Apple and iPhone are trademarks of Apple Inc.

$100,000 The 2nd Annual Backbone

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See me, feel me Touch screens only tap the surface of humancomputer interfaces.

A better experience is coming

Large display lab at Queen’s University’s Human Media Laboratory

If you have a tablet computer, you probably remember how quickly it became second nature to interact with it hands on. Soon you were swiping the screen, collapsing and expanding text with the tip of your finger and wondering how you ever got by without it.

But this mode of interaction is just the beginning—and despite their raging popularity, touch screens are actually not very sophisticated or natural. Many researchers believe the computers of the near future will be able to respond to your eye movements, gestures and body language, and read your tone of voice for urgency and respond in a way that best fits the situation.

They will take on 3-D organic forms and may even change shape to adapt to their environment or task.

Do what comes naturally “Think about it. If you want to pick up a pen, you just pick it up. You don’t issue a command to pick up a pen, and then have something else pick it up. ‘Tap and hold’ is not something we do in the real world,” 14 b a c k b o nem ag. com

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said Chris Harrison, a Ph.D. candidate in the Human-Computer Interaction Institute at Carnegie Mellon University in Pittsburgh.

Most interfaces still require a “decoupling” to take place before an action is carried out—clicking on an icon or issuing a command. What people currently do with touch screens is not much more than poking and swiping, he said.

“But our hands can do a lot more than poke at things. Think about how difficult it would be to get ready in the morning if you had to poke at your clothes to put them on, or poke at your buttons to do them up.”

Harrison is researching ways in which using different parts of the hand, such as knuckles or fingernails, could invoke different types of commands. Another area of research looks at turning a small computing device into a projection computer by using a combination of inputs (including vibration and measurement of gestures via small cameras) to turn any object into an extension of your device.

“So one day I might be able to put my phone down at Starbucks and the whole

table becomes interactive. And then I’ll pick my phone up and walk away when I’m done.”

This project, called OmniTouch, is exploring a wearable system that enables graphical, interactive and multi-touch input on arbitrary, everyday surfaces. You can even project the computer right onto your own skin, so that your hand, arm or leg essentially becomes your device, because “you are not going to walk around carrying a table with you,” Harrison said.

The changes in mobile adoption have already altered how Web sites are designed. The biggest change has been the demand for responsive Web design (RWD), said Scott Christie, principal at Christie Stewart, a Toronto-based marketing design firm. RWD refers to an approach in which a site is crafted to provide an optimal viewing experience—easy reading and navigation with a minimum of resizing or scrolling. Another big change is that Web sites are getting smaller and simpler: thanks to robust social media sites, rich content can now live elsewhere.

Armura, a novel interactive on-body system, supports both input and graphical output Chris Harrison, Human-Computer Interaction Institute at Carnegie Mellon University

Pediluma, a shoe accessory designed to encourage opportunistic physical activity. It features a light that brightens the more the wearer walks and slowly dims when the wearer remains stationary

TapSense is an enhancement to touch interaction that allows conventional screens to identify how the finger is being used for input (tip, pad, nail and knuckle) without the user having to wear any electronics

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Scott Christie, principal at Christie Stewart Top: diagram showing responsive Web design (RWD) “It’s irresponsible to design a Web site that is not responsive in all platforms,” Christie said. “I also can’t remember a time in the last two years where I have developed a Web site that was more than four pages long.”

Talk to me When people think of computer interaction, they tend to think about touch and visuals. But what about voice? Torontobased Unified Computer Intelligence was started by three engineering graduates

looking to develop something less disruptive than a traditional computer.

“We wanted it to be accessible but not distracting, so that it disappears into the background,” said Leor Grebler, the company’s CEO. The timing was right because “voice recognition technology was getting to the point where it was no longer excruciating to use—plus, it became open.”

Available early 2013 for around $200, the company’s Ubi plugs into a wall outlet and accesses the Internet through Wi-Fi. It has a microphone and speakers and listens for plain language commands directed at it, and communicates back with speech or lights. It runs on Android and has sensors to measure temperature and light. It can hook up to any device already on your network, so that you can “tell” it to turn up your music, or look up a phone number, or ask about the weather. “We see a huge potential for Ubi to assist those who have visual, hearing or mobility impairments,” Grebler said. Any data measured can be stored online or used to trigger alerts to your mobile device or e-mail.

Dr. Roel Vertegaal of Queen’s University and a sample of a flexible display developed by the University’s School of Computing

The future’s taking shape In the near future, predicts another researcher, computers will have the ability to take on any shape or form. This could be through projections, but also through flexible computer displays that will feature more organic user interfaces than we have today.

Picture these flexible displays “shrinkwrapped” around any three-dimensional object, and the potential this could hold for interaction with the environment

Augmenting your reality Augmented reality (AR) is a hot term right now, driven by the explosion in popularity of mobile devices with cameras. A recent report from Juniper Research in the U.K. found AR elements within mobile applications will lead to nearly 1.4 billion annual downloads worldwide by 2015.

Many companies are getting on the AR bandwagon. Canada Post has released an AR app called “Stamps Alive” that enables users to see “3-D games and interactive fun” within the stamp image, according to the company, using phones. The city of Ottawa has an AR-based tour guide app where users can get information about landmarks and events on site.

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According to Warren Shiau, director of research, buyer behaviour at IDC Canada, users like these features because they are “passive information gathering” where “the input isn’t coming from you or the device” and they instantly provide an experience that is relevant to you at that moment or physical place.

This sounds familiar Contrary to what most people think, touch screens are not a new concept.

Prototypes were first developed in the late 1960s.

around you, said Dr. Roel Vertegaal, professor of Human-Computer Interaction (HCI) at Queen’s University’s School of Computing in Kingston, Ont., and director of the school’s Human Media Laboratory.

One big change has the potential to alter everything: flexible screens will soon be cheaper to produce than rigid screens, he said. They will probably start out in rigid frames, because that’s what everyone is used to. But it won’t be long before product designers and developers will start offering bendable products, or ones with 3-D organic shapes. Eventually, these displays will become “dollar store cheap” and that will open up worlds of possibility that were cost-prohibitive before. Suddenly, the ability to interact with everyday objects will be within reach.

Your whole dashboard may be replaced with a flexible display that shows the road, or you could have entire walls in your house that change from a TV or computer screen to stylish wallpaper, depending on the whim of the user, Vertegaal said.

“You might have a coffee cup that knows a lot about coffee, but nothing about beer.”

Warren Shiau, director of research, buyer behaviour at IDC Canada in Toronto, agreed that the price of flexible screens

could drop drastically, and this could very well change the whole market and appetite for new devices.

“If you think about what happened with storage, you realize how quickly this could happen. In the ’70s, storage was expensive and bulky, it filled entire rooms, and now you can fit terabytes of storage on a small USB stick,” he said.

wikimedia commons / marcin wichary

Left: Ubi plugs into a wall outlet and accesses the Internet through Wi-Fi Above: Amin Abdossalami, Mahyar Fotoohi and Leor Grebler of Torontobased Unified Computer Intelligence

More than 30 years later, Alan Kay, a programmer at Xerox PARC, conceptualized the Dynabook, a portable electronic device the size of a three-ring notebook. It had a touch-sensitive liquid crystal screen and a keyboard for entering information. The device won a Turing Award in 2003 and is said to have heavily influenced the design and development of the laptops and tablets on the market today.

Alan Kay holds a Dynabook

All five senses And this new breed of computers won’t just be touch screens, but multi-modal. In other words, these interactive shapes respond to touch but also to users’ gestures, eye movements and voice. Vertegaal is researching ways in which “attentive” devices can determine the appropriate type of interaction. For example, a phone that will go into speaker mode if it “sees” your eyes are focused on driving, or go into vibrate mode if it “hears” you are already on a call.

“Think of all the scenarios people need this for, so they don’t kill somebody while they are driving, for one thing. Devices interrupt us; they are not talking to each other, they are all beeping at once, and this needs to be fixed.”

People will probably still carry around a bunch of different devices, but they will likely not be thought of as devices in the future, thanks to the “dollaramification” of the LED screens that will eventually happen. Phones may hinge and fold “like origami,” their screen sizes adapting to fit the needs of the user, or they might be more

like a stack of cards you carry around, Vertegaal said.

“We need to do away with the idea that we will have one device that will do everything. In all other areas of life we have specialized tools for specific tasks. In my kitchen, I have both a corkscrew and a steak knife.”

The ultimate result of all this may be a world in which tangible, interactive computers are able to dynamically change their form, and are virtually indistinguishable from real objects. It sounds like science fiction, but it isn’t. This combination of modular robotics with systems nanotechnology is called claytronics, or programmable matter. There is a lot of research going on in this field, but these realworld transformers likely won’t be hitting stores anytime soon.” B All content also at: backbonemag.com/ magazine ma r c h / a p r il 2 0 1 3

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A YE A R OF

optimism 2013 will be a forward-looking year, full of disruptions and surprises

Are you ready for 2013? Probably not, at least not entirely, as the year promises to be a vibrant and eventful one in technology, and we have an optimistic set of predictions for you. This year’s annual Backbone predictions run the gamut, from online entertainment and mobile payments, through to e-commerce, public sector IT and privacy policy.

We brought together individuals ranging from academics to analysts and entrepreneurs to lawyers, to tell us what they think will happen in the technology realm over the next 12 months.

Bricks roar back Pundits have long predicted the death of bricks-and-mortar retail as e-commerce takes over, but this year our panel sees it differently.

“The relationship between e-commerce and retail will continue to change,” said Derek Smyth, managing director of OMERS Ventures, the venture capital arm of the OMERS pension fund. “We will see interesting blended models. You will see brands like Starbucks leverage bricksand-mortar locations and start to partner with e-commerce providers.”

What might this look like? Smyth envisages a Starbucks with a virtual store featured as a pop-up display on a wall. Items on the wall could change dynamically depending on the time of day, music that’s playing in the store or current events.

We’re starting to see some signs of this already. In the U.S., online grocer Peapod partnered with advertising firm Titan 360 to feature catalogue posters on commuter routes. Shoppers can scan bar

codes underneath items while waiting for the bus, and have them added to their online shopping cart.

This is one way for e-commerce firms to partner with retailers and other physical locations. Another is to have retailers handle delivery of non-competing e-commerce items. Amazon is already partnering with 7-Eleven in the U.S., which has lockers designed to take same-day ecommerce deliveries for customers.

Over-the-top video 2013 will be a breakthrough year for overthe-top video, delivered via the Internet rather than conventional network channels, according to experts. “Paid OTT content is crossing seven million subscribers in Canada. That’s 20 per cent of the population, or about half the households,” said Lars Goransson, general manager and group vice-president, IDC Canada, adding that the main market disruptors are Netflix and iTunes. “We expect that trend to continue accelerating rapidly.”

And while IDC doesn’t forecast a drop in subscriptions for traditional TV

in its five-year forecast horizon, revenue will remain flat.

The much-expected launch of an Apple-manufactured TV could also shake things up, said Chetan Mathur, CEO of IT and management consulting firm Next Pathway. In spite of analyst predictions that it won’t include unbundled channels, self-diagnosed Mac addict Mathur said it could do to TV what the iPod and iTunes did to music.

“It’s analogous to the [early] 2000s, where there were music companies popping up everywhere. It was a very fragmented industry, much like it is today,” he said. “I believe that Apple has the opportunity to do this once and for all. The key will be the content.”

Makers go mainstream “Maker” culture has traditionally been a hobbyist one. Technology enthusiasts who like to take things apart and put them together in unexpected ways have sparked a grassroots movement, resulting in magazines such as O’Reilly’s Make, ma r c h / a p r il 2 0 1 3

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Maker Faires all across North America, and maker spaces in cities such as Toronto, New York and Vancouver.

Ryan Poissant, acting practice lead at Toronto’s MaRS Discovery District technology innovation centre, thinks that maker culture will hit the mainstream in 2013. “It’s moving out of the basement for hobbyists, and into a more viable community that will have many fascinating and unique implications that we can’t even think of,” he said.

Poissant cites companies like MakerBot, which sells 3-D printers, as an example of products aimed at makers. These enable people to publish and exchange their own designs, and create objects from them at home. He’s not the only one who has noticed this trend. “Right now you can see them in the media but they’re just for early adopters,” said Goransson. “We expect people to buy 3-D printers next Christmas.”

Canada: start-up leader The Canadian tech start-up community has often limped along, hindered by a lack of funding, but things are set to change in 2013. “We saw a doubling of the number of start-ups in the last year,” said Ian Klugman, CEO and president of Kitchener-based Communitech, a non-profit that promotes the area’s technology cluster. “There’s a new level of confidence.”

Much of that comes from new technology funds launched in the last 12 months, but many entrepreneurs are also attracting capital from opportunityhungry investors across the border. “The understanding of what Canada is will change in the next 12 months, from being a great resource economy to being the next start-up nation,” he said. “We will surpass Israel with that title.”

Things are looking good at all stages in the funding chain, said Perry Dellelce, a partner at legal firm Wildeboer Dellelce. “The number of angel investors and the amount of early-stage venture capital has increased,” he said, arguing there is a new level of interest in the Canadian tech scene.

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“Everyone’s portfolio in Canada is filled with oil, gas and mining,” he said, adding that these industries have been slow. Expect to see a new generation of post-VC, pre-IPO technology companies approaching Bay Street and Wall Street for public institutional capital investment in about 12 to 18 months, he said.

Dave Olson of HootSuite (left)

Government finds technology Expect all three layers of government to become more technologically savvy, both in their own service delivery and in their broader economic policy, experts said.

“Government will recraft service delivery along mobile and social lines,” Goransson said. “Part of that involves what’s happening at Shared Service Canada, but we expect it to also involve cloud-based services directly to consumers.”

2013 will see a continuation of this, but the public sector won’t reach its goals this year, Goransson said. The Shared Service Canada initiative, which will see the government implement a single e-mail communications system and rationalize its data-centre portfolio, is a multi-year project. Shorter-term techfriendly measures will be policy-based, said Valerie Mann, a partner at law firm Lawson Lundell. “Governments at differ-

“

We expect people to buy 3-D printers next Christmas.

”

—Lars Goransson, IDC Canada

ent levels are supporting tech start-ups.

There’s a need for clusters and industry sectors,” she said, predicting innovative support structures for tech firms.

Provinces are now battling for tech talent. Quebec and Ontario are providing tax breaks for digital media companies, and have enticed some large games developers away from B.C. Last month, the

City of Vancouver leased cheap downtown space to rapidly growing start-up HootSuite, which has an option to buy the 33,000-square-foot, $9.6-million property. Mayor Greg Robertson said he had been trying to persuade the firm to stay in Vancouver for a year, rather than depart to Silicon Valley.

“The HootSuite arrangement is indicative of something that’s beneficial for tech companies,” Mann said. Cities like Vancouver are competing and making financial concessions to keep these promising businesses generating employment. They are recognizing that they want to keep their homegrown talent as long as they can.”

Tablets swallow PCs Expect PC sales to decline by double digits in 2013, as tablets and smartphones continue to take centre stage, said IDC’s Goransson. The hit to enterprise sales will be lower, in single digits, but consumer sales have dropped off significantly and that trend will strengthen. “A lot of that is because of a shifting of dollars to tablets,” he said. “I think it’s fair to say that tablets are actively cannibalizing the PC market.” Tablets will also make even more headway in the enterprise space as bring-your-own device (BYOD) culture takes hold.

Apple will continue to dominate the tablet space, which will see fast expansion in the sub-8-inch product category.

“We see that as an opportunity for adoption to grow rapidly among first-time buyers, students, for education and seasonal shopping,” Goransson said. IDC expects mini tablets to make up 30 to 40 per cent of tablet shipments in Canada in 2013.

Titans battle for smartphone 3rd 2013 will see Android widen the lead it established over Apple’s iOS phones in late

All about digital payments The marketplace for small electronic payments needs more development, and Canada could be the country to do it, said Ryan Poissant at MaRS. There’s certainly room for someone to step up. The marketplace for digital payments is busy and confused. Google has its Wallet technology, which relies on near field communications (NFC), and yet Apple didn’t include NFC capabilities in the iPhone 5. The likes of Square, Verifone SAIL, Intuit GoPayment and PayPal offer a confusing array of choices for digital payments.

In Canada, Rogers and CIBC launched SureTap, an NFC-based mobile payment system that is also usable anywhere that Visa Paywave or MasterCard PayPass are accepted. And in April, the Royal Canadian Mint launched a competition for developers to create applications for its own digital currency, called Mintchip.

“They’re one of the most forward-think-

“

The understanding of what Canada is will change in the next 12 months.

”

—Ian Klugman, Communitech

Not according to the Task Force for Payments System Review, which in 2011 called Canada’s system for digital payments out of date. If it doesn’t step up, it will leave another two percent of GDP (around $32 billion) on the table each year, said the Task Force. Perhaps that could be just the driver Canada needs to move ahead of the curve in digital payments.

Much will depend on how tech-friendly Canadian retailers are, and on whether Mintchip ever actually makes it to market.

Vic Toews

Lawful access will die “I don’t think we will see the return of lawful access legislation,” said Michael Geist, law professor at the University of Ottawa. He’s referring to Bill C-30, drafted by public safety minister Vic Toews earlier this year and lambasted by privacy groups. “The public reaction to it overwhelmed the government.”

The bill, which sought to give the government unprecedented surveillance powers over Internet use in Canada, was reintroduced to replace original

legislation drafted before the last election. Even business users balked. ISPs complained to Backbone about the costs of installing the surveillance equipment requested in the bill, which would have to be passed on to the customer.

“It is a political hot potato,” Geist said. “They could just leave it as is, which would be a bit of an embarrassment. Another alternative is if they prorogue. That would allow them to formally kill it.”

istockphoto.com / Troels Graugaard

ing mints, in terms of Crown corporations and government entities, around the world,” Poissant said. “They’ve been thinking for years about what happens when [physical] transactions go away.”

The world is still two years away from seeing clarity in the digital payments space, he said. “But for local players, despite the fact that it’s a little while before we see clarity, Canada will be looked to as folks on the leading edge of this. We’ve been good at embracing new types of payment.”

wikimedia commons / soggybread

2011, IDC predicts. RIM, which has been limping along, beleaguered by poor sales, will still outpace Microsoft’s newly released Windows Phone operating system in sales next year. As of late 2012, RIM was still in the latest stages of development with its new BlackBerry 10 OS. “BlackBerry will continue, but it will be a shadow of its former self,” Goransson said.

Others see a different fate for RIM. Mathur doesn’t think the company will see the end of the year, in its current form. “The early indications are that Microsoft didn’t buy RIM because they had Windows 8 in the pipeline,” he said.

“RIM has over 75 million active customers around the world, and they are upgrading their OS to BlackBerry 10.”

Microsoft traditionally served a business market in which Apple and Android have yet to establish a strong foothold. The ailing RIM has a strong business footing. “I believe that this is an opportunity for Microsoft to grab this space before it gets rolled over for Android and Apple,” Mathur said.

From BYOD to MYOD Bring Your Own Device was the buzz term of 2012, but 2013 will need a greater focus on managing personal devices in the workplace. “These devices can create weak spots in robust, resilient enterprise computing environments,” said John Weigelt, national technology officer, Microsoft Canada. “One way to help maintain confidence in the corporate environment is to perform some management on devices that are brought into the environment.”

Expect to see more password policy enforcement and device wiping capabilities in enterprise environments, he said.

The most forward-thinking and securityconscious companies will fully manage mobile devices as they would manage traditional desktops in the organization.

2013 marks another year of timid recovery for the Canadian economy overall, but the optimism and renewed focus on growth opportunities in the tech sector highlighted by people like Klugman and Dellelce could be just what the economy needs. Disruptions in electronic payments and digital entertainment could spark new business opportunities for savvy Canadian start-ups, and a continuing sea change in client-side devices could lead to enhanced productivity in the workplace. If our panel’s predictions are correct, the next 12 months will be exciting ones indeed. B All content also at: backbonemag.com/ magazine

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best of everything

cover story

The

in Canadian tech Bac kbone

200

The best of everything in Canadian tech

By Lawr ence Cummer, Ian Har vey, Tr evor Mar shall and Peter Wolchak

photo: istockphoto.com / René Mansi

Welcome to the Backbone200. Months of work and innumerable interviews by a team of writers have resulted in this, your comprehensive guide to the best the Canadian tech and business worlds offer. The Backbone200 consists of organizations, people, events and products that stand out, that contribute to our competitiveness and economic strengths, and—as in the case of our world-leading game developers—our ability to have fun and make money.

So, if your company requires legal advice, needs to invest in cloud technology or make connections through an industry association, this guide is for you. If you want to brag about Canada’s accomplishments and need some talking points, this guide is for you. And if you’d rather kick back and read a management book or watch a movie that makes you feel better about your boss, this guide is also for you.

Note that the items on these lists are not necessarily the largest, richest or speediest. Some may be, but most are included because they’re unique, progressive or innovative. For example, to select our three best events we didn’t look at square footage or attendee numbers, but instead highlighted events that reached beyond typical trade-show parameters.

Canada has a lot to offer, and you’ll see that breadth and depth of talent in the following pages.

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Where ideas and

innovation

meet capital Over $11 billion has been raised by technology companies on Toronto Stock Exchange and TSX Venture Exchange.

$11.1 billion raised from 2003 to 2012 by companies listed in the Technology sector.

TMX, Toronto Stock Exchange, TSX, TSX Venture Exchange, and Exchange with Us are trade-marks of TSX Inc.

the best of everything in Canadian tech

■ best

3

MOVIES ABOUT WORK

Hollywood is not kind to workplaces, but maybe that’s why we love movies about the world of nine-to-five: it’s comforting that some people have it worse than us. With honourable mentions to Glengarry Glenn Ross, The Man in the Gray Flannel Suit and Clerks, here are the three best movies about the daily grind.

1 Office Space: “Since I started working, every single day of my life has been worse than the day before. So every day that you see me, that’s the worst day of my life.” Great characters, a fun revenge plot and a famous fax-machine death scene make this a must-see.

2 Swimming with Sharks: “Shut up, listen and learn!” Kevin Spacey clearly had a ball playing the world’s most abusive boss. “What you think means nothing, what you feel means nothing, you are here for me, you are here to protect my interests and serve my needs.”

3 Horrible Bosses: what can you do when your boss is intolerable? Well, there’s always murder. A funny movie with a Strangers on a Train vibe, this is well worth watching, even if the Jennifer Aniston sexual harassment bits are overdone. B

Bac kbone

200

The best of everything in Canadian tech

For a complete listing of the organizations covered in a number of our categories (including legal firms, incubators, government funds and many others) see our Tech Resources portal below.

The portal is Canada’s largest list of tech and business providers.

w w w. b a c k b o n e m a g . c o m / Te c h - R e s o u r c e s - f o r - C o m p a n i e s - i n - C a n a d a

FACILE ABORDABLE EASY D’ACCÈS TO ACCESSET AND AFFORDABLE

TECHNOLOGY FINANCING Do you need to purchase new computers, software or hire specialized consultants?

HARDWARE

|

SOFTWARE

|

CONSULTING

|

INTERNET

Businesses of all sizes can benefit from the Business Development Bank of Canada’s technology loan.

Apply for one today!* Visit bdc.ca/techfinancing * Subject to approval. Certain conditions apply.

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If you build it, they will fund it.

Maybe

Stories from the funding trenches

Ideas by themselves are worthless without the ability to execute. And that ability is what attracts money.

Even then, the real secret to business success is not the cash itself, it’s finding the right people to invest in your idea, said Ben Bittrolff, chief financial officer at Cyborg Trading Systems, which makes automated trading software for the financial services sector. Built and designed by Bittrolff and two other derivatives traders, the company started with a $100,000 angel investment five years ago. It generated revenue within the first year.

They snagged $2 million in VC funding from New York investors last spring with an assist from the Canadian Digital Media Network, a national collaborative and support entity for entrepreneurs, which hooked them up with a beachhead space in Manhattan.

“Going to New York was huge for us,” he said, “because it’s a world financial services hub. We would have had to go eventually, but we were able to go early. It allowed us to scale up and scale down without getting tied up in leases. We had no idea how much space we’d need or for how long.”

Bittrolff said the real gold is in the mentoring and networking investors bring to the table, so it’s better to get the relationship off to a good start. “The money is out there, but you’re going to be married to these guys, literally, so you want to get to know them,” he said. “So it’s not just any VC, it’s the right VC, and there are a lot of different ones out there, ones that want to fold you into another portfolio a year down the road and don’t tell you that.”

The investor search is like dating. “We’d sit down and say, ‘Why don’t you tell us about you and, if we like you, we’ll tell you about us.’ You spend a lot of time dating but you don’t, and you shouldn’t, take the first dollar offered to you.”

illustration: vin ganapathy

The money is out there Indeed, there is enough money out there. “Companies are still getting funding,” said Steve Currie, vice-president Venture Services at Communitech, responsible for the new $30 million Hyperdrive, a program that introduces companies to a network of investors with a goal of going from seed money to Series A financing in 24 months.

“The VC community may be smaller than it was but the good companies get funding.”

Getting that funding is the trick. There are many ways to turn off investors, from having no revenue, no feedback from

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potential customers, over-estimating the market, being too complex or simply being oblivious to the competition.

Getting the right investor on-board is about the basics.

First, they want to see something that has commercial viability and can be easily conceptualized.

“We would only explain parts of it, so it didn’t get too complex,” Bittrolff said.

Next, investors like teams, because that suggests bench strength, but they also want a team leader to take the beating if deliverables aren’t met.

“The question is also how long have you known each other and can you work together,” said Michael Litt, CEO of Vidyard, a secure Web video platform aimed at companies that want control of their content and audience beyond what sites like YouTube can deliver. A serial entrepreneur still in his twenties, he has two partners and warns the stress of a start-up can fracture even the strongest relationships. “We’ve already been through a founder breakup.”

Having revenues also kindles interest, Litt said. Vidyard started as Redwoods Media, making video content for clients before shifting to building a platform and shifting clients to the new model.

Litt and his team won a coveted spot at the Y Combinator, Silicon Valley’s top incubator, and from there caught the attention of YouTube co-founder Jawed Karim, who ponied up $1.7 million.

Litt is no stranger to the world of entrepreneurs. His former Waterloo housemates Rahul Bhagat and Eric Migicovsky first thought up a smartwatch that connects by Bluetooth to an iPhone or Android device. They, too, struggled to find money and Migicovsky’s efforts in Silicon Valley came up empty.

“It was being built in China and there wasn’t a lot of quality control and that’s what investors saw,” said Litt. Migicovsky turned to Kickstarter, a crowdsourcing site. They sought $100,000 to make 1,000 watches and got $10.3 million from 69,000 investors. They sold 85,000 watches and Pebble was born.

“There are always new ways to get money and that’s one of them,” said Kevin Tuer, managing director of the Canadian Digital Media Network. “I think a lot of gadget makers will look at the crowdsourcing option.”

That Y Combinator connection pops up again for another Waterloo start-up, Tenthbit, whose Pair app for iPhone and

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t t t t t

e - t rends

Android allows couples to privately share pictures and text instantly. It was founded by a quintet of grads who met at the University of Waterloo’s Velocity accelerator and created Maide CADRemote, an iPhone app that lets users control 3-D modelling software during presentations.

Building on that success, they created Pair and won a spot at the Mecca of incubators, Y Combinator, where showing off their app on a demo day resulted in 50,000 user downloads.

Since they were making an app aimed at consumers, their numbers weren’t strong but their story carried the day, said cofounder and CEO Oleg Kostour. “I spent hours and hours that week telling the story to myself, practicing over and over,” he said. Partner Jamie Murai agreed: “It’s not like we were selling an enterprise app where we could tell them how much money they could save. We had to make an emotional connection.”

The demo triggered a stampede of interest from investors.

“We went from office to office to office for a week in San Francisco,” Kostour said. “We wanted to strike while the iron was hot.” They raised $4.2 million from more than 15 investors who are hands off, he said. “If we have an issue or problem we ask them or they’re really good at sending ideas or links to us,” he said. “It helps that some of them are using the app too.”

Their experience has taught them many things, but the most important thing, said Murai, is to focus on the product and the user experience.

“Some people think start-ups are all about business and taking meetings,” he said. “It’s not. Ignore the BS, the meetings and conferences and focus on the product and customers.”

Celebrate failure

$

Accepting failure is part of that focus on product and customers. Thomas Edison famously said: “I haven’t failed, I’ve just found 10,000 ways that won’t work.” Sadly, that failure-is-good spirit is rarer in Canada. “We don’t celebrate failure as they do in the United States,” Currie said. “We don’t tuck our tails between our legs, but it’s not the same.”

Still, there are investors out there who get it, and while Cyborg went to the United States for funding, that doesn’t mean there isn’t money here, it’s just not always available in the right places, said John Ruffalo, president and CEO of OMERS Ventures, the $55-billion VC fund carved out of the pension giant. OMERS and U.S.-based New Enterprise Associates recently invested $80 million in Desire2Learn, an e-learning platform.

Money, money, money The Canadian Venture Capital and Private Equity Association said VCs invested $438 million in 135 companies in Q2 this year, up 17 per cent from 2011, with slightly more companies (six per cent) getting money. For the first half of the year, however, investments were down three per cent at $725 million, mostly because Q1 was soft and dragged the numbers down.

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Money never comes easy, even if you’ve been around 20 years Does success guarantee funding? Not always. Ask Gary Hedges, president and CEO of RTI Cryogenics, a Cambridge-based maker of a turnkey cryogenic technology that turns waste tires into fine rubber crumb.

Last year, it made second place on the Deloitte Fast 50 list with revenues of $23 million, up 46,278 per cent from five years ago. The self-contained systems cost about $13 million a pop and RTI is trapped in a classic loop after 20 years in development and business. It can’t get funding because it doesn’t have enough orders and it can’t get orders because it hasn’t got the funding to chase them.

“This recession is hurting a lot of people,” he said. Adding to his frustration is a bad experience with tire kickers who signed a deal for two plants but then reneged because their funding flopped.

Money feeds the supply chain, he said, and if there’s no money for start-ups or if angels fade out or if VCs keep their hands on their wallets, good companies at critical stages of their development stall. “We’re looking to invest in the $10-million and up range,” Ruffalo said. OMERS has signed 10 deals worth $100 million since opening in October 2011. “We’re looking for companies that are ready to explode out of the pack and need capital to get them out of the stratosphere.” For a while, he said, VC and angel money dried up after the recession, but it’s trickling back, especially over the last 12 months.

Bryan Watson, executive director of the National Angel Capital Organization, agreed. The angel community has stepped up and last year invested $82.4 million in 134 deals with its members, with average funding of $614,000, up $172,000 from $442,000 in 2010.

“We have one funding of $3.4 million,” he said, noting the average angel play is rising. “This is very much a back-to-theroots trend, because before VCs this is how companies were funded, through individual private investors.

Ruffalo said the federal government, too, has set aside $400 million for entrepreneurs, but ultimately he calls that a temporary fix to smooth over residual air pockets left in the money pipeline. “Ultimately, this is a private sector problem, not a government problem,” he said. “Government should do what it does best: get universities to fund programs for entrepreneurs.

That’s what we need; entrepreneurs to stimulate the private sector or visas for start-up companies to bring in talent they don’t have.” B All content also at: backbonemag.com/magazine

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S TART M E U P

SPECIAL FOCUS SUPPLEMENT

Innovation the Ceridian way

The president of Ceridian Canada shares the secrets of its success through innovation Evolve or die, because resting on laurels will cripple a business in the face of today’s relentless local and global competition. This underlies the need to be constantly innovating, says Dave MacKay, president of Ceridian Canada.

In fact, the heightened degree of competition—in some cases from start-ups using the Web or cloud services to ramp up and get into distribution cycles quickly—is what helps keep MacKay excited and focused on innovation.

“I’m having the most fun I’ve had in business in a long time, because of the level of competition,” he says. “It’s responsible for the acceleration of cycles. It’s ‘game on,’ and you

“

You’ve got to listen to and engage your customers all the

”

time. They bring up great ideas for innovation.

—Dave MacKay

have to be listening to customers and out there watching for new entrants to the market.”

Never stop innovating From the smallest start-up to the largest enterprise, businesses must foster a culture of innovation like that found at the human capital solutions leader.

“We really focus on making innovation part of our lifestyle,” he says. “It needs to be in the DNA of the company.” To do that he says Ceridian embraces a certain amount of risk.

After all, failures lead to breakthroughs, lessons learned and rewards.

“We try to celebrate good failures.”

While Canadian entrepreneurs, like the winners of last year’s Alpha Exchange Innovation

Campaign and this year’s start-up hopefuls, already have a healthy culture of innovation, MacKay urges them to keep it by maintaining funds for more blue-sky projects, and retaining their “innovative essence” for the life-cycle of the company.

Mind the mobility push Mobility isn’t just the future, it’s here and now and changing the way everyone does business, MacKay notes. As such, it’s important for businesses to factor mobility into their product development efforts.

Here again, Ceridian’s efforts have been all about its customers: their changing dynamics and the Bring Your Own Device (BYOD) issues they face. The company saw the opportunity to free customers’ employees from the constraints of their desktops.

“Mobility really helps with employee engagement. Young people in retail, for example, want to get on their mobile and have access to schedules or trade shifts, whenever and wherever they are,” MacKay says. “So that was a big push for us.”

Many of Ceridian’s customers are also embracing mobility through its payroll for smartphone app, which lets customers complete payroll, but also hire, edit and terminate employees and generate records of employment, all from the convenience of a smartphone app.

MacKay similarly stresses the importance of ensuring solutions are developed with the cloud in mind. As well as providing the flexibility customers are demanding, offering Software-as-a-Service (SaaS) allows frequent updates and incremental feature improvements without the need for customers to install upgrades.

Dave MacKay president of Ceridian Canada

Don’t do it alone MacKay also stresses the importance for businesses to tap into and engage with their customers habitually, as Ceridian does, in order to drive and direct development. Ceridian uses multiple touch points to keep connected with customers and understand their needs, from inperson meetings to cloud-based networking.

“You’ve got to listen to and engage your customers all the time. They bring up great ideas for innovation,” he says.

Through its own innovation effort Ceridian has itself evolved to provide a full spectrum of products from simple payroll through to managed human capital solutions, available on cloud, mobile and desktop platforms.

The partnership with its customers has been a cornerstone of Ceridian’s success. As its customers grow, Ceridian grows with them, and better understands their needs. MacKay says Ceridian’s customers see the company as a virtual extension of their businesses; one that scales with them, minimizes stress and provides them with greater degrees of confidence.

“It’s amazing how invested in your success your customers are, because it translates into products and services that lead to their success.”

For more information on t he Ceridian, visit: www.ceridiansmallbusiness.ca

t t t t t

in n o va t i o n c a mp a i g n / la w renc e c um m er

Start-ups boosted Winning recognition in the Backbone Innovation Campaign helped these entrepreneurs win new business There have been occasional losses, but 2012 was a year of mostly wins for the winner and runner-up of the Backbone Innovation Campaign. After impressing judges at the live pitch-off during the Discovery 2012 show in Toronto last May, winner EidoSearch and runner-up TitanFile started seeing immediate benefits.

“We were able to leverage the attention from the campaign to get more clients. It helped establish us,” said Milan Vrekic, CEO and co-founder of Halifax-based TitanFile. The company also used its winnings to assist in patent filing. David Kedmey, president and co-founder of EidoSearch, said the pitch-off gave the company further opportunity to practice and perfect its message.

Both companies are looking forward to more challenges and even bigger successes in 2013.

EidoSearch EidoSearch helps professionals in the financial industry conduct queries against complex data without the need for time-consuming programming. Its solution, primarily delivered on a Software as a Service platform, helps business professionals ask one-off questions (“When is the last time the market was like this and what happened?”) as well as supporting “quants”—quantitative analysts who perform deep analysis.

2012 milestones

photo: steve uhraney

“We doubled our customer base,” Kedmey said of 2012. “That was a big milestone for us.” In addition to that growth, EidoSearch ex-

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panded its breadth, targeting customers in new areas of financial services. It’s like a checkerboard, Kedmey said, with marquee customers in new areas leading to additional prospects in those same spaces. They also help the company guide product development.

“There’s nothing better than a paid customer to shape your development plan.”

The company also more than doubled its team. The majority of hires were out of Ryerson University of Toronto, where the company’s lab is housed and where CEO and co-founder XiaoPing (Steven) Zhang is a professor.

EidoSearch also achieved numerous product milestones over the year. For example, it expanded its packaged data sets, enhancing the power and speed with which searches are made; it also improved the user interface to make it easier to ask a greater variety of questions.

Lessons learned The single greatest lesson learned in the past year was to better define its customer base and its messaging, Kedmey said. By understanding the customers and knowing the potential audiences, communication can be more targeted and effective. “We kept getting this consistent message from very experienced entrepreneurs in the financial industry,” he said.

“To that end, you might have 10 great things to say but, if you know your audience, maybe only one of them is relevant. You could be working against yourself talking about the others.”

EidoSearch more than doubled its team this year.

Co-founder Xiao-Ping Zhang is in front, with cofounder David Kedmey behind his left shoulder.

Photo courtesy of TitanFile

The TitanFile team: partner Milan Vrekic, second from left, and partner Tony Abou-Assaleh, far right Kedmey said another important lesson was around the evolution of management practices as the company grows. “Managing a team of seven is going to be different than three, or than a team of 20.”

Looking ahead “Take what we did in 2012 and add a multiplier to it,” Kedmey said.

The company wants to at least quadruple its customer base this year. “We’ve reached a point where if a customer isn’t signed, it’s in our pipeline, and now the focus is on closing them. It’s a virtuous cycle, because already our new customers lead to some great leads. Other people in the business are hearing about the powerful things you can do [with the software].”

Kedmey hopes to double the team again by the end of 2013, ramping up sales and marketing, and to move its offices into the Ryerson Digital Media Zone in downtown Toronto. In addition, he intends to build a stronger foothold in on-premise enterprise software, allowing firms to use their own data for even more powerful analytics.

TitanFile TitanFile helps SMBs transfer confidential and large documents using military-grade encryption. The company’s solution organizes security around people and context, not files and systems, according to Vrekic.

2012 milestones The company had a successful year of recruitment, funding and product development. Vrekic said building on the legitimacy and exposure gained from its involvement in the Innovation Campaign, he put together a banner team.

“It helped us attract really great people to the team,” he said.

Adding talent allowed him and co-founder Tony Abou-Assaleh to focus on business strategy.

In October, the company received $1.1 million in financing from members of the First Angel Network, which it is using to enhance its product and expand into U.S. markets. Last year, TitanFile released a new version of its product that allows customers to add messages to transferred files and create channels for sending messages, along with numerous other improvements, all making it more focused on relationships rather than merely cloud-based storage.

Lessons learned “The number one lesson for us is to never put anyone or anything between me and the customer,” Vrekic said, adding that he maintains an open-door policy and all customers have a direct line to him. In addition, when appropriate, he directly connects customers to development.

Related to that, he said it was important to learn to listen. “We tend to talk to people who validate what we think,” he said. “It’s important to learn to hear what the customer is telling you and not what you are trying to tell them. It seems so simple, but it’s really not.”

For example, when the company released the new version of its product, Vrekic learned a big lesson around resistance to change.

Despite various improvements, including unlimited storage, customers were slow to make the upgrade. The company had to spend more time with those customers, and set up webinars, calls and even in-person meetings to facilitate the change to the new system.

“We knew we had to make a commitment to help with the change, but we underestimated how much.”

Looking ahead “This will definitely be a make or break year for us,” Vrekic said.

“And it’s about breaking into the U.S. market.” To that end, the company has identified three tradeshows it will be attending to reach its audience of legal firms and professionals.

Vrekic would like to see his team continue to grow and, most importantly, he wants to compensate them better. “The biggest reward for me is knowing that someone can pay their mortgage because of the work they do with us.” He’d also like to open a Vancouver office in order to recruit top talent there.

By the end of 2013, he hopes TitanFile will be the big name in file sharing in the legal industry. “We’re on our way there in Canada,” he said. “The U.S. is going to be tricky, and it’ll come down to finding the right partner. We understand that we cannot do everything on our own.” B

All content also at: backbonemag.com/magazine ma r c h / a p r il 2 0 1 3

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t t t t t

t e k g a dget s / p et er w olc ha k

grab-and-go gadgets Simple, powerful and cost effective Google Samsung Chromebook Google Chromebooks are not available in this country, but I managed to arrange a loan through Google Canada, and I am glad I did: Chromebooks represent a useful alternative to traditional notebooks.

Chromebooks run Chrome OS, which is to say they are basically Web browsers with a notebook attached. Owners can surf the Web (YouTube, Facebook, online banking), check e-mail, and create documents, spreadsheets and presentations (through Google Drive, formerly called Docs), but they cannot run traditional programs such as Office, Photoshop or iTunes.

This means a Chromebook will not be your primary computer.

But Samsung’s model makes an excellent second computer: it is small (11.6-inch screen), light and it boots up fast; the battery easily lasts through an average day; the keyboard and trackpad are excellent (although the keyboard is not backlit); and, while not a premium notebook, the build quality is quite good. Most importantly, Chromebooks are almost immune to malware, they are always up-to-date (because they run Web-based software) and they will not slow down over time, a notorious Windows problem.

Hopefully, Google will decide to sell Chromebooks in Canada. The education market is an obvious fit, and Google is apparently investigating that in this country. Samsung’s model sells for US$249 in America, and at that price it is a fantastic value.

Kobo’s tablet is a contender Kobo Arc The Kobo Arc is a great 7-inch Android tablet that competes directly with Google’s Nexus 7. The specs, build quality and price are comparable; at $199, the 16GB Arc is $10 cheaper than the Nexus. So the choice comes down to interface.

The Nexus runs a pure version of the Android operating system; the Arc layers on Tapestries and the Discovery Ribbon. Tapestries are folders of related items (books, music, Web sites, etc.) and in the Discovery Ribbon the Arc suggests items that might interest you. When I created a Tapestry devoted to the War of 1812 and populated it with books and Web sites, other 1812 items popped up in the Ribbon. It’s a neat trick but it didn’t do a lot for me; if I want more info, I’ll search for it.

Other than that, the experiences are comparable. The Arc can access the full Android Marketplace, so you can indeed load Kindle software on it, and once I loaded the apps I like the two devices were very similar. If you’re shopping for a 7-inch tablet, choose the interface you prefer.

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A great—but incomplete— smartphone BlackBerry Z10 The Z10 is a hit. BlackBerry’s long-awaited phone is well built, deep black and sleek in a little-blackdress way. It has no buttons on the front, weighs only 135 grams, has a 4.2-inch display and boasts 356 pixels per inch to the iPhone 5’s 326ppi, sports an 8MP rear camera and a 2MP front shooter, and offers Near Field Communications for applications like tap to pay. The Z10 is all touchscreen (no physical keyboard) and its onscreen keyboard is the best I’ve ever used.

The BB10 operating system is a fresh take on mobile interfaces, and as such there is a learning curve, albeit a short one. But BB10 is a slick and fluid interface. Useful features include the BlackBerry Hub, a single message stream for all your e-mail and social media accounts; Peek, which lets you look at notifications without

The bet-everything phone Nokia Lumia 920 Nokia made a Hail Mary play in 2010: it decided to tie its fortunes to Windows Phone and produce only devices running Microsoft’s fledgling mobile platform. The October 2012 release of Windows Phone 8 provided an opportunity to launch refreshed hardware on a refreshed OS. The result was the Lumia 920, and it’s fair to say the mobile is critical to Nokia’s future. And so far, so good: in Q4 2012, Nokia sold about 4.4 million units worldwide, beating each of the previous quarters.

So how is the phone? It’s solid hardware, with premium build quality and feel. The camera is fantastic, especially in low light, and it comes with useful and fun photo software.

Nokia Maps and Drive are also highlights: maps

necessarily interrupting what you’re doing; and Balance, walled gardens containing your phone’s personal and work content.

But even a hit has some misses, and the Z10’s biggest drawback is the new BlackBerry World app store. BlackBerry bragged about the 70,000 apps available at launch, but it didn’t mention that many of those are junk and that critical apps are missing, including Netflix, Kindle and Kobo, Evernote and HootSuite. (Read my longer piece on this: http://goo.gl/mzR9U.) Hopefully these holes will be filled in quickly.

But no product is perfect, and there is no doubt that BlackBerry has delivered a great smartphone. It—and the upcoming keyboardtoting Q10—have given BlackBerry back some much needed mojo. The Z10 will appeal to BlackBerry fans, corporate IT departments and to people who just want a fresh take on the mobile space. $149 on contract.

can be downloaded for almost anywhere and the turn-by-turn directions work well. The software experience is not as rosy. Phone 8 offers a fresh take on mobile interfaces, and the updated Live Tiles work well. But there are still gaps in Microsoft’s online store. Apps like Kobo, HootSuite and Temple Run are not there, and you can’t buy or rent movies or TV shows.

Also, some of the basic things people do with smartphones are far too difficult. Podcasts, for example: I could find no way to easily subscribe to, download and listen to podcasts. If there’s a way to manage podcasts on the 920, I gave up before I found it.

Overall, then, the 920 is a divided experience: the hardware delivers while Windows 8 pulls down the experience. The 920, $100 on a Rogers contract, is a solid, if not stellar, package.

The bigger-is-better phone Samsung Galaxy Note II When you first pick up a Note II all you can think is “Wow, this is huge.” And at 5.5 inches, it’s the largest smartphone screen on the market. But you get over that quickly and start to value the extra real estate. For example, to watch Netflix I would sometimes reach for the Note instead of my Nexus 7, trading weight for screen size.

The other big Note advantage is its stylus.

You can navigate with it, but it’s really meant for the included note and drawing apps. I rarely pulled the stylus but I know people who use it often.

There are many other specs and features, but it comes down to this: if you like Samsung’s flavour of Android, buy the Galaxy SIII or—if you want the bigger screen—the Note II. It’s a niche product because of its size, but if you’re in that niche you’ll love it. $200 on a carrier contract.

All content also at: backbonemag.com/magazine b a c k b o n e ma g .c o m

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M a r c h /ap r i l 2 0 13 41

t t t t t

events

conferences expos tradeshows

and other events

March

May

CeBIT 2013 Hannover, Germany, March 5-9, 2013

IFHIMA Congress - 17th Annual Montreal, Quebec, May 13-15, 2013

DX3 Canada Toronto, Ontario, March 6-7, 2013

Itech Summit Montreal, Quebec, May 13, 2013

eMetrics Marketing Optimization Summit Toronto, Ontario, March 18-21, 2013

Canadian CommTech Show Calgary, Alberta, May 14-15, 2013

Strategic Internal Communications | Advanced Learning Institute Toronto, Ontario, March 19-22, 2013 IMC Toronto, Ontario, March 20-21, 2013 Search Marketing Expo, SMX Toronto, Ontario, March 20-21, 2013 Predictive Analytics World Toronto, Ontario, March 20-21, 2013 Facebook Marketing Toronto, Ontario, March 27, 2013 EPIC Technology Day April 2013 Winnipeg, Manitoba, April 16, 2013

April CIO Peer Forum Edmonton, Alberta, April 18-19, 2013 Canadian Videogame Awards 4th Annual Vancouver, British Columbia, April 20, 2013

photo: istockphoto.com / zveiger alexandre

forums

Canada 3.0 Toronto, Ontario, May 14-15, 2013 Mesh Toronto, Ontario, May 15-16, 2013 Itech Summit Toronto, Ontario, May 16, 2013 C2-MTL Montreal, Quebec, May 21-23, 2013 CVCA Annual Conference Banff, Alberta, May 22, 2013 e-Health Ottawa, Ontario, May 26-29, 2013 Discovery13 Toronto, Ontario, May 27, 2013

June The Canadian Telecom Summit Toronto, Ontario, June 3-5, 2013

July-October AccelerateAB Calgary, Alberta, July 10-11, 2013 GROW Vancouver, British Columbia, August 14-16, 2013 Itech Summit Edmonton, Alberta, October 8, 2013 SecTor - Canada’s Premier IT Security Conference Toronto, Ontario, October 8-9, 2013 Itech Summit Vancouver, British Columbia, October 10, 2013

ProjectWorld and Business Analyst World Toronto, Ontario, June 3-6, 2013

FITC Toronto, Ontario, April 20-23, 2013

SC Congress Toronto, Ontario, June 11-12, 2013

Social Media Camp Victoria, British Columbia, May 6-8, 2013

SES Toronto Toronto, Ontario, June 12-14, 2013

If you would like more details on these events go to: Backbonemag.com/events

For monthly updates on upcoming events sign up to Backbone’s FREE enewsletter at www.backbonemag.com/enews

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