Backtype launches

backtype Christopher Golda and Mike Montano have launched BackType. Jevon writes about the BackType launch on StartupNorth. And includes coverage of their previous startup, iPartee and their interview by Austin Hill on StartupNorth. I had the priviledge of meeting Christopher at Mesh 2008 in Toronto, and we’ve shared a number of email conversations about iPartee.

BackType is funded by Y Combinator. It is a search engine for comments on blog posts and other media. The BackType engine forages the web for comments, allowing them to be searchable, trackable and attributable to authors across the web. Comments can be displayed and searched on the meta-data including by author, by topic, by time, etc. It can allow social media businesses like Radian6 and others to gather conversational data and begin associating reputation and impact of authors and their conversations.

I’m hoping the BackType guys are returning to Toronto. Their blog post indicates that “BackType, Inc is a privately-held consumer Internet start-up based in Mountain View, CA”. There are lots of reasons for a startup focused on social media to be based in Silicon Valley (Paul Graham has a few thoughts on moving to a startup hub).

A Microsoft venture fund

Kevin Merritt has a great suggestion for creating a Microsoft venture fund. This is not new, I wrote about my displeasure with the proposed Yahoo! deal back. Kevin has thought about a YCombinator-esque microfunding model.
  • A three person team comprised of Ray Ozzie, Don Dodge and Dare Obasanjo would be the investment committee.
  • Anyone can submit a 10-slide business plan. No NDA protection, which is the norm in the VC industry.
  • Plans are reviewed once a quarter. Those that make it through the screening are invited to a 90-minute in person demo and pitch.
  • At the end of the 90-minute demo & pitch, the three-person Ozzie/Dodge/Obasanjo investment committee makes an immediate decision. It’s pass/fail. You’re in or you’re out. American Idol style. You’re going to Hollywood or you aren’t.
  • If you pass, here’s what you get: an investment of $100,000 cash plus $25,000 per founder, but never more than $175,000;  all the Microsoft software you need; unlimited, free use of Microsoft’s cloud computing infrastructure for 3 years; mandatory office space for up to 5 people for the first year in either the Redmond or Silicon Valley Campus; all the non-sense administrative support services that typically saps a startup, a collegial environment working with other Microsoft funded startups.
  • In exchange, Microsoft gets: 10% of the company in common stock with no special preferences or rights; your commitment to exclusively use Microsoft development software and operating systems for 3 years, other than with written exception by Microsoft; your commitment to deploy your software to Microsoft platforms first (i.e. if you build a mobile app, it has to run on Windows Mobile before iPhone).

That’s it. Quid pro quo. Startups need cash, tools, infrastructure and elimination of noise and distraction. Microsoft needs access to innovation and a future generation of folks building software with Microsoft development tools and to be run on Microsoft platforms. My bet is that Microsoft will flat out buy some of the companies during their year of incubation. And if you assume each startup will have 3 to 5 people, even the ones that fail will produce a good stream of folks who could easily become employees. Microsoft probably already spends $50,000 per hire anyway, so it’s not really costing them much if anything at all.

Oh, there’s one more important twist to help stem the tide of people leaving Microsoft to found companies or join startups. Microsoft employees in good standing having spent at least 2 years at Microsoft can quit their job and can be admitted into the incubator program with only a single approval from the investment committee. No business plan, pitch or demo are required. You’re in. Your prior contributions are your ticket. How many young entrepreneurs-to-be are willing to put in two good years at Microsoft just to get into the incubator program? I think more than a few. It’s a VC spin to the army college fund. It’s the Microsoft future entrepreneurs fund.

This is a great, well thought out plan for putting $25M to work. The biggest questions for me are: how does the model scale around the world? What are the implications with respect to existing anti-trust agreements and funding companies?  What are the areas, much like the Y Combinator 30 ideas, that are part of the initial investment thesis? It feels like without a clearly defined investment thesis that this is really a public relations campaign with entrepreneurial leaning technologists.

Best places to live

Business Week has published it’s list of The World’s Best Places to Live 2008 which is based on Mercer Consulting’s 2008 Quality of Living survey. The survey is a strange set of 39 subjective measures compared to New York City as the baseline.

Mercer has designed an objective way of measuring quality of living for expatriates based on factors that people consider representative of quality of living. Our annual survey is based on detailed assessments and evaluations of 10 key categories and 39 criteria or factors, each having coherent weightings reflecting their relative importance.

The report is aimed at calculating “ fair, consistent expatriate allowances…for transfers to more than 350 cities worldwide”. Generally there was not a huge change year-on-year.

Rank 2008 Rank 2007 City Country
1 1 Zurich Switzerland
2 3 Vienna Austria
2 2 Geneva Switzerland
4 3 Vancouver Canada
5 5 Auckland New Zealand
6 5 Dusseldorf Germany
7 8 Munich Germany
7 7 Franfurt Germany
9 9 Bern Switzerland
10 9 Sydney Australia
11 11 Copenhagen Denmark
12 12 Wellington New Zealand
13 13 Amsterdam Netherlands
14 14 Brussels Belgium
15 15 Toronto Canada
16 16 Berlin Germany
17 17 Melbourne Australia
17 18 Luxembourg Luxembourg
19 18 Ottawa Canada
20 20 Stockholm Sweden

Typically these lists are much more North American focused. They all seem to have a well-thought out logic Best Cities for Entrepreneurs

  1. Phoenix, Arizona
  2. Charlotte, North Carolina
  3. Raleigh-Durham, North Carolina
  4. Las Vegas, Nevada
  5. Austin, Texas
  6. Washington, D.C.
  7. Memphis, Tennessee
  8. Nashville, Tennessee
  9. Norfolk, Virginia
  10. San Antonio, Texas Top 10 Up-and-Coming Tech Cities

  1. Columbus, Ohio
  2. Santa Fe, New Mexico
  3. Palm Beach County, Florida
  4. Houston, Texas
  5. Milwaukee, Wisconsin
  6. Pittsburgh, Pennsylvania
  7. Boise City, Idaho
  8. Iowa City, Iowa
  9. Lake Charles, Louisiana
  10. Yuma, Arizona

Paul Graham argues that Silicon Valley or Boston are the best places for startups. Richard Florida provides a unique look at a variety of different factors, from creative class to innovation and scientist to singles. And he provides a list of the best cities based on the characteristics on the individual.

The New Geography of Work


Innovation in a Spiky World



What do you think? Where is the greatest city for startups in Canada? What can you do to make your city a better place?

Viigo launches at WPC

viigo-home Viigo’s Project Tango launched this week at the Microsoft Worldwide Partner Conference in Houston. Viigo is based in Toronto and headed by Mark Ruddock, formerly EIR at Ventures West and founder of INEA Corporation. The Viigo team has included great folks like Alex de Bold who also founded

Viigo is a great user experience for accessing content on your mobile. Project Tango allows access to the News & RSS services that Windows Mobile and Blackberry users already had, but now includes a podcast browser and media player, and news has been rounded out to include weather, sports, and finance information. It is a great looking application, the user experience reminds me a lot of my iPhone. It uses animations to help users understand where they are in the application flow.

It’s a great application, the user experience is one of the best I’ve had on Windows Mobile. The Viigo team is building a cool platform that allows them to add new services that can be enabled and deployed for clients. Hopefully, announcements and partnerships with companies like Microsoft and Blackberry will help them raise additional rounds of funding, now that it looks like Ventures West is having some difficulty raising another fund.

Install Project Tango at

Dissident, Citizen

littlebrother-corydoctorow Governments are instituted among men, deriving their just powers from the consent of the governed, –that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.

Thank you Cory for Little Brother. I can’t wait for my children to be old enough to read it. It has been a few years since I couldn’t put a book down and decided it was worth giving up sleep to finish. Cory has captured the feelings behind my mistrust of government and corporations. And the power they can exert over citizens, and the challenges when this power is abused.

You’ve inspired me to take action to protect my rights. The anti-circumvention provisions of the C-61 copyright amendment does more harm than good. It prevents crucial rights for citizens in a digital age. It prevents citizens from having the right to “use digital works without permission for research, private study, criticism or news reporting”. Michael Geist has posted 30  Things You Can Do to help reflect a consumer view of this amendment.

“The Industry Minister has time to meet with the U.S. Ambassador to Canada, time to meet all the major telcos on the spectrum auction issue, yet hasn’t made time to meet with user community on copyright.”

Bill C-61 scares me. It represents a shift in public policy back towards corporations. It reminds of the acceptance of monopolies and oligopolies that Canadians accept as tradeoff for our geography. The bill makes it an infringement to circumvent digital locks to prevent copying and distribution. To make it worse this bill prevents the distribution of the tools that can be used to circumvent digital locks. This means that watching a European purchased Region 2 encoded disc, like the legal copy of The Future is Unwritten I purchased from, in Canada is illegal under Bill C-61.

This kind of thinking is important no matter what side of security you’re on. If you’ve been hired to build a shoplift-proof store, you’d better know how to shoplift. If you’re designing a camera system that detects individual gaits, you’d better plan for people putting rocks in their shoes. Because if you don’t, you’re not going to design anything good.

Trading privacy for security is stupid enough; not getting any actual security in the bargain is even stupider. – Bruce Schneier

Help keep Canada free! Free as in freedom! We need to ensure we have the freedoms so that we can continue to think, explore, innovate, question and challenge authority and government in Canada.

Thank you Cory!

Little Brother
by Cory Doctorow
Read more about this book…

Big ideas

integratesalesDan McGrady provides his feedback about the Ontario Summer Company program. On the surface the program looks like a fantastic program to support students creating companies. The program provides 15-29 year olds a $3000 grant and some basic business consulting to start a company. Dan has applied and been turned down for support to build integrate: On Demand Sales Management. It’s an interesting read about the experience of program administrators as related to software development. 

Dan’s lesson was that these student programs need to focus on teaching what a big idea is:

If your going to teach someone who [sic] to make a company the number one goal should be to help them identify what a good business opportunity is.

Dan links to one of the most important lists of what Sequoia Capital looks for in it’s investments. All entrepreneurs should be asking themselves these questions and evaluating their companies and products. I’m fond of Rich Customers who need Pain Killer solutions in Large Markets. Too often these are overlooked as unimportant, but they help define the type of company.

Sequoia Capital’s Elements of Sustainable Companies

  • Clarity of Purpose
    Summarize the company’s business on the back of a business card.
  • Large Markets
    Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.
  • Rich Customers
    Target customers who will move fast and pay a premium for a unique offering.
  • Focus
    Customers will only buy a simple product with a singular value proposition.
  • Pain Killers
    Pick the one thing that is of burning importance to the customer then delight them with the solution.
  • Think Differently
    Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.
  • Team DNA
    A company’s DNA is set in the first 90 days. All team members are the smartest or the most clever in their domain. “A” level founders attract an “A” level team.
  • Agility
    Stealth and speed will usually help beat-out large companies.
  • Frugality
    Focus on spending on what’s critical. Spend only on the priorities and maximize profitability.
  • Inferno
    Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.

Adjuvant Informatics


Greg Wilson suggested that I try profiling a company like Adjuvant Informatics from Hamilton, ON. This is a market that I have only passing exposure to, and therefore the details of this analysis could be questionable. I’d be happy to publish the feedback from others with more knowledge in the space.

Management Team

The Adjuvant Informatics management team is made up of Dan Meyer, Dr. James Paul and Anders Elmik. Dan Meyer is the founder of Med-Tel Software. As of 2006, Med-Tel was reporting having 1,000 clients and continuing to grow. Mr. Meyer has a track record in providing successful clinic billing and reporting software. Dr. James Paul is an anaesthetist with a specialty in pain management.   


I’m not an expert in this market. Suffice to say there is a lot of money spent on pain management ranging from the costs of medications to the management and effectiveness of treatments. Healthcare as a whole is an increasing part of the developed world’s economy, consuming over 16% of the GDP in the US and estimated to grow beyond $3.3 trillion annually.

The market for pain management medications in 2006 was estimated at approximately  $26 billion per year and growing. The market is estimated to be growing at an annual rate of near 30%, and will reach $40 billion by 2010. However the medication market is just one piece of a complex pain management puzzle. Understanding the market requires understanding the medications, the hospital costs, the medical staff costs and the impact on the patient.

In 1998, the average length of stay in hospitals for people who had surgery was 5.1 days and a greater than 160 million surgery-related days were spent in hospital. There is growing support that pre-operative risk management and post-operative pain control is thought to result in more efficient use of health resources, decrease overall costs and increase patient quality of life by reducing the chances of acute pain becoming chronic.


Adjuvant Informatics builds tools to help clinicians and hospital administrators manage information related to patient pain.

Its product, the APS Manager (for acute pain service) not only captures and analyzes patient drug orders, doctor visits and critical incidents, it also allows information to be saved in a searchable database. It was installed in Hamilton Health Sciences hospitals in 2002 and has since been picked up by Toronto General and Sunnybrook as well as hospitals in Australia and Norway. Others in Israel, Central America, the United States and Germany are studying it. – Steve Arnold, Hamilton Spectator

The product suite aims to provide standardized data capture and analysis tools for hospitals that take in patients scheduled for the operating room. The tools gather information to assist in research into patient risk analysis.

Coupled with the platform for each hospital, Adjuvant Informatics is building a centralized data store for clinical anaesthesia “allowing hospitals to make comparisons between their own patient outcomes – such as side effects and length of stay” with those of other hospitals. The centralized data store is being used in conjunction with Cardinal Health to provide data to patient’s drug-administering pump infusion devices to management the distribution of pain treatments and their effectiveness.

The goal of the product is to “make the use and tracking of pain medicine more accessible to hospital staff and hospital systems”. Adjuvant’s products allow hospitals to do systematic reviews of patient outcomes, of critical incidents, of cost management related to giving medicinal narcotics to patients.

Business Model

The market for health care solutions seems to have 2 main market opportunities: cost-reduction or safety-increasing. Basically, does the solution reduce the costs of the care provided or does the solution increase patient safety or the quality of patient care. Adjuvant Informatics sells an enterprise software solution to hospitals to help them manage their patient pain information. The solution includes a suite (read menu) of software applications including Pre-Op Clinic, APS Manager, and offers hardware and software solutions for bedside data entry. The business model is either a subscription model for software or a more traditional enterprise software license plus annual support contract. 


Adjuvant Informatics has a great list of local and international hospitals and healthcare networks using different parts of their product suite. The list includes:

  • University Health Network, Toronto, ON – Pre-Op Clinic
  • St. Joseph’s Healthcare, Hamilton, ON – Acute Pain Manager
  • Cardinal Health, San Diego, CA – APS Manager
  • Ullevaal University Hospital, Oslo, Norway – APS Manager
  • Prince Charles Hospital, Brisbane, Australia – APS Manager
  • Sunnybrook & Women’s College Hospital, Toronto, ON – APS Manager

It appears that customers come through focused conference attendance including: Canadian Anesthesia Society Annual Meeting; British Pain Society Annual Scientific Meeting; American Pain Society, etc. Targeted lead generation focusing on anaesthesiologists and pain management professionals. Then a standard enterprise/institutional sales practice that follows up after interest and demand is generated at events.

Strategic Relationships

Adjuvant Informatics has built strategic relationships with:

  • Cardinal Health – Integration of APS Manager software suite with Alaris Gateway suite provides access to networked pain medication devices that provide medication delivery for 1.5 million patients annually. And generates more than $2.7 billion in annual revenue for Cardinal Health.
  • University Health Network – Co-development of a new preoperative assessment module in partnership with Dr. Scott Beattie of the University Health Network.
  • National Research Council of Canada – to develop the International Clinical Anaesthesia Database

Relationships with key hospitals, like UHN, for product development and deployments are a great way to ensure functionality , usability and compliance. The strategic partnership with Cardinal Health allows access to a manufacturer and distributor of healthcare devices that allows for integration in existing hospitals and health maintenance organizations.


There are direct competitors in pain management software including Pain Associates International Network. However there is larger competition in traditional electronic medical records software providers. This is because the majority of the data gets captured by these tools today. Extending these systems to include pain management risk assessment criteria could put the Adjuvant Informatics solution at risk. However, the aggregated data in the ICAD solution offers an opportunity to perform robust cross facility analysis of risk factors and successes. There is an opportunity to build connectors to import data from the larger EMR companies. There is a growing category of new providers in the space including Microsoft Health Vault and Google Health which provide SaaS solutions for capturing and maintaining consumer health records.

Barriers to Entry

  • Government regulations
    Healthcare is a highly regulated space with concerns around patient safety, privacy, legal status, interoperability, future proofing, among other legislative and regulatory guidelines. Having a management team and company familiar with the process and an approach for approval is a huge advantage for Adjuvant Informatics. There are also a ton of standards for electronic medical records including HL7, ANSI X12, HISA and others.
  • Intellectual property
    Founded by an anaesthesiologist and a software developer, Adjuvant Informatics has a built a suite of tools for managing the clinical activity of the anaesthesia departments of hospitals. The in clinic experience and understanding of the practitioner’s concerns, coupled with a deep experience building billing software with Medtel Software should provide Adjuvant Informatics significant head start momentum. 


Adjuvant Informatics has shown there is an under-served market for pain management solutions. There are open questions to me about:

  • Average size of a deal with hospitals or other HMOs both in terms of revenue and profits
  • Length of time to close each deal

This coupled with further research into the actual size of the market, i.e., finding numbers about either the effectiveness of the solution for reducing patient costs or reducing patient risks are necessary. This will help determine if the model is to sell the solution to clinicians or hospital administrators, or insurance companies. It is unclear to me from looking at the publicly available information who has the largest financial pain or the great power in choosing the solution. It seems that there is still some work to be done in defining the revenue sources in order to find funding.

So far, Meyer estimated, Adjuvant has chewed up $400,000 in capital "with no real revenue stream yet.

"Clients are just starting to trickle in. Our goal is to become the standard, like Windows, and we have a chance of doing that, but there’s also a real potential of not making our goals," he said, adding the company is talking to angel investors, banks and other sources.

"With $1 million we could finance a very aggressive assault on the U.S. market," he said. "Until then, we have to be very tactical in how we market."

Going Broke for Biotech By Steve Arnold, The Hamilton Spectator, Jan 16, 2006

Business of Software conference

Wow, I hadn’t been following the development of The Business of Software conference. Brydon mentioned it was a not-to-miss conference for 2008. The provisional program was announced yesterday. It is an incredible list of software luminaries.

I’m intrigued to see Richard Stallman at a conference about the business of software. However, as many folks will point out that free software is one of the most successful cultural and business models, check out The Cathedral and the Bazaar (O’Reilly Media Book). Dharmesh Shah shared his pithy insights on the business of software. This is going to be an awesome conference.

Performance Anxiety

As Peter Childs commented, I’ve started performing mini-case studies (LearnHub; FreshBooks, Tripharbour) about local startups. The idea is to provide a relatively quick analysis for entrepreneurs to look at how to evaluate their startups. The idea started for me between StartupCampMontreal and MeshU. The idea was listening to companies do pitches at StartupCamp and 15-Minutes-of-Fame at Mesh, that I immediately start to do some quick in-my-head guesstimates about companies using the basic pitch framework.

A successful pitch will show:

  1. the pain you are solving,
  2. how you solve it,
  3. and the value to your customers.

This combined with a business case helps to build an understanding of the market, business models, the people involved and the strategic relationships that will allow companies to succeed. The outline for each analysis is based on David Rose’s The Pitch Coach and the It’s All in the Sequence for investor pitch decks.

  1. Company Title Slide
    Start with the name and logo of the company, the name and title of your presenter, a one-line description or tagline about the company, and the dollar amount of the round you are raising.
  2. Business Overview
    Boil down your elevator pitch to one sentence. Tell us what you sell or do in very concrete language. This sets the context for the rest of your presentation.
  3. Management Team
    Show us your talent and experience, with one line of background (two lines max!) on each member.
  4. Market
    What’s the environment in which you operate, how big are the segments, what are the pain points?
  5. Product
    How do you solve a customer’s pain? What exactly do you do? This can be illustrated with a clear product or screen shot, or a simple process diagram, but if we don’t know what you do, we won’t know why we should fund you. (But don’t spend too much time on this, since you’re pitching the company here, not the product.)
  6. Business Model
    Who pays whom, how much, for what and from where. What does this mean for annualized revenue streams?
  7. Customers
    Who are they, how many are there, how do you distribute to them, and how are they attracted and retained?
  8. Strategic Relationships
    If you have any, make sure we know about them.
  9. Competition
    Who and how threatening are they? What are the differentiation factors? Include both direct and indirect competitors. Remember that everyone has competition, even if it is just "the old way" of doing something.
  10. Barriers to Entry
    How will other potential competitors be kept at bay?
  11. Financial Overview
    Show us your top-line revenues and expenses, and EBITDA two years back and four years out.
  12. Use of Proceeds
    Where will our money take you?
  13. Capital & Valuation
    How much have you raised previously, who are your current investors, what are you looking for in this round, and how do you come to your suggested valuation?
  14. Review
    Provide a brief summary of what you said, in this same order, narrowed to the five or six most important points.
  15. Contact Info/Next Steps
    Lead us into the next step, such as a follow-up meeting for due diligence…and include your contact info!

The idea is that here is an analysis that moves very quickly in to the talking points for a pitch deck. It’s a framework that is not tied to a practical help me build the conversation around raising money. There are other analyses that can be performed including:

I’m looking for suggestions on who should be next? – All aboard It’s been fun to tease Stuart MacDonald about Tripharbour being his first startup. Stuart is the founder of, however, it’s hard to compare building a startup with a $400 million marketing budget with the experiences most entrepreneurs have, where they’re lucky if there is budget to hire a marketing person and not just have a couple of engineers doing marketing instead of sleeping. Stuart is getting a taste of the guerilla marketing activities and community building techniques that he has brought to Toronto as speakers at the past 3 Mesh conferences.

Quick Analysis

Management Team

The management team at Tripharbor includes Stuart MacDonald, Ian Burdett, John Starkey and Pat Perdue. This team  is full of ringers. Stuart is the former CMO for Ian Burdett was a Finance Director at Thomas Cook Canada and Signature Vacations. John Starkey was Director of Biz Dev at Expedia and ran an interactive agency in Vancouver. Pat Perdue was the customer experience manager for Tommy Hilfiger USA and Great group with strong backgrounds in travel, online retail and marketing.


According to Datamonitor, in 2003 the cruise line market segment had a market value of approximately $16.2B and was expected to grow at a compound annual growth rate of 3.8% to just over $19.7B in 2008. This is below the estimated 8% expected market growth, and the “the cruise market is the fastest-growing segment of travel, expanding at 9 per cent a year” according to Stuart MacDonald,. Hmmm, this might be biased in Tripharbour’s favour. However, the cruise industry appears to be growing even as other segments in the travel industry brace for a downturn due to less disposable income related to high gas prices.

In 2007, according to the CLIA over 12 million guests travelled on a CLIA cruise line. The general profile of cruise traveller is:

the 2008 cruise vacationer is upscale (with a median household income of $93,000), educated (69 percent have a college degree) and the median age of cruisers is now 46 years old, down from 49 in 2006, which shows that cruise vacations continue to appeal to younger travelers.

The next set of questions are about how and where customers learn about and purchase cruise vacations. The CLIA report indicates that travel agents are best for planning and booking a cruise and travel. comScore reported that online travel spending increased 14% between 2006 and 2007 to $20.3B. Phocuswright is predicting better applications will target the “50+ generation” to encourage online bookings. A review of UK online travel shows that approximately 9% of Internet users book travel online; and an additional 17% research holidays online before booking over the telephone. The NYTimes published that the cruise industry online booking sites are “an exercise in frustration”. This seems to be partially due to the CLIA continuing to support a channel that has withered in other parts of the travel industry. In the same NYTimes article, Terry L. Dale, president of the CLIA, said “because a cruise is a more complex product than a flight or a hotel room, "the cruise industry will always encourage consumers to work with an agent”. It just feels like an industry that is ripe for reinvention, with agent bookings shrinking from over 90% of all cruise bookings to under 75% according to Scott Barry, analyst with Credit First Suisse Boston. Phocuswright estimates that the 2007 US revenues from cruise sales was $13.4 billion with only 7% ($994 million) coming from online bookings. Of the online bookings, approximately 70% ($695.8 million) of purchases were through online travel agencies as opposed to cruise company Web sites.


I don’t have a lot of experience in the evaluation of cruise web sites. The CLIA estimates that 90% of all cruises are booked through travel agents. However, 54% of cruisers and 60% of non-cruisers believe that they will get the best cruise price from an online travel retailer. Most, 86%, are comfortable with planning their cruise online and just less than half are comfortable with booking online.  The Keynote Benchmark study offers the top drivers for cruise purchasing sites:

  • Booking process
  • Activities research
  • Site design and organization
  • Customer support

The Tripharbour tools are not as refined as a general travel e-commerce vendor, but they offer a cruise focused purchase experience including the presentation of ship plans and room locations during the checkout process. Tripharbour offers a community driven approach to review and comment on cruises and cruise lines. It will be very interesting to see if Tripharbour can build or leverage social networking tools to increase the conversion rates of users connected by the social graph. Stuart has already mentioned the use of social media to help build a deeper brand experience and to leverage community participation for their burgeoning cruising community.

It is still early days on the Tripharbour product and there is a lot of room for improvement. And it will be interesting to see the evolution of both the booking process tools and the continued development of social tools. These tools do not exist and there is an opportunity to define their effectiveness.

Business Model

I love these relatively simple business models. People use to find cruises, people book cruises using Tripharbour, cruise lines pay Tripharbour a commission of between 10% to 17% of the ticket price. The Tripharbour team has 2 main challenges, very similar to the challenges discussed for FreshBooks, reach and conversion. Reach is about capturing the widest swath of cruise purchasers possible. The most common solutions are related to providing great content, strong search engine optimization, and display and search advertising.  The Tripharbour team has great depth at both traditional and Internet marketing and advertising and looks to be equipped to adequately monitor and adjust their efforts.

The second challenge is conversion. Once potential clients get to one of the Tripharbour sites, getting them to purchase a cruise. A secondary measure is community vibrancy and activity as the creation of cruise related content and connections between members will help improve the content aimed at helping potential customers choice the right trip.

Over time an additional metric of loyalty or return rate can be added. Building customer profiling and communication tools to help clients build digital memories, share their experiences, and select more expensive cruises.

Strategic Relationships

I have very little understanding of the travel industry. Tripharbour is a member of TICO and CLIA. CLIA = Cruise Line International Association is a cruise line industry association focusing on the growth and promotion of the cruise industry including efforts towards increased safety, reducing environmental impact and regulations. TICO = Travel Industry Council of Ontario is a government mandated organization where membership is required to protect consumers under the Ontario Travel Industry Act, 2002. Tripharbour with membership has joined the association that let’s it legal operate in Ontario and a lobby organization for the industry in which it operates. Good basic, legally required pieces of operating a travel company.

Tripgarbour has developed relationships with 12 cruise lines, enabling it to offer cruises in wide variety of world wide locations. Tripharbour is an indirect sales channel for each of the cruise lines. 


Traditional competition from big online travel sites including Expedia, Orbitz, and Travelocity and from the cruise lines they are reselling. The majority of the online competitors continued to be focused on working with travel agents including EasyCruise, Galileo. The cruise lines are experimenting with social networking features to help potential customers plan and reivew their offerings. provides planning, scraplogging, cruise reviews, and message boards focused around the Carnival brand. It is easy for the existing cruise players to build similar community and social features, the advantage that Tripharbour brings is that it’s community is about the cruise lifestyle not a specific cruise line. Tripharbour should be able to build trusted third-party resources and continue to offer price based incentives to cruise shoppers.

Barriers to Entry

This is also to evaluate on an industry that I know very little about. All of the barriers to entry analysis appear to provide reasons to not get into the market.

  • Government regulations
    Different geographies have different requirements on travel agents and regulated insurance. Tripharbour operates in Ontario and has met the requirements to be a regulated travel agent. Compliance with the regulations is necessary for competitors but it is entirely dependent on their geography.
  • Economy of scale
    A large experience firm like Expedia may decide to capture the cruise market by decreasing their commission rate and passing the savings along to customers. This could dramatically reduce the prices offered by the competition. Equally, Tripharbour may appear more competitive by reducing the commission fees collected to help differentiate and beat out other players.
  • Advertising
    Again the majority of my arguments should dissuade the Tripharbour team from starting. The advertising budgets, the reach, and the amount of spend by the big players is incredible. However, there is an opportunity in both social media and in a niche market, i.e., cruising, to build a strong highly successful company. 

The barriers to entry for other participants are not particularly difficult to overcome. However, the experience and focus of the Tripharbour team should provide an advantage in understanding of the current industry including opportunities for partnership, product optimization, and gaps in current strategies. The Tripharbour team is key in differentiating from potential competitors and is a significant barrier to entry for other entrants to overcome.


Tripharbour has proven that there is a huge market opportunity in building tools to help sell cruises. There is a huge potential to leverage the social graph to optimize the marketing materials and increase the conversion rates for new purchasers, and to increase the average spend by returning buyers. Figuring out how to leverage social media and users behaviour away from the Tripharbour site may help improve the marketing spend. I wonder when the revenue curve exceeds the expenditure curve. On a small scale, I am assuming that Tripharbour is making money, the question really is how long until it is making more than currently invested, or how much more needs to be spent to gain significantly traction. Tripharbour has a team of online travel industry veterans engaged in building a differentiated product, and refining the marketing tools to increase revenues in a defined and growing market. The question will be how much marketing spend does Stuart and the team need to do to pull users away from the large online travel agencies/portals.

Tripharbour is an execution play. The depth of the management team provides a huge strength in being able to deliver a product in a focused industry and effectively market the service to grow revenues. The assumption is that the team can effectively use social media and guerrilla marketing to attract a large enough audience. And that the e-commerce experience and community features will provide the tools necessary to convert members to paying cruisers.