Toronto

The local product design economy

Update: I changed the verb acquiring to joining. A lot of the chatter has been about how this is not an acquisition. And I agree. It is not. As the post states at the top, TeehanLax is shutting down. It is reminiscent of the Smart Design closing (see Dan Safer’s post) and some of the reasoning behind the Adaptive Path acquisition by Capital One. It sucks. But I’m not planning on leaving Toronto, and I’m celebrating my friends like a wake and trying to understand the implications.

TeehanLax is shutting down. This is getting a lot of coverage:

Why so much coverage? Well it is because TeehanLax was one of the best design firms around, if not the best in Canada. They designed 2 of my favourite apps: Prismatic and Medium. You could see the tension between the services side of their business and the desire/pull of being a product company.

I first met Jon and Geoff back in 2004. It was after the release of their PVR report comparing the user experiences of the Bell and Rogers PVRs to TiVO. They had an interesting approach, doing interesting work, just trying to build a different kind of company. That was evident when Jon agreed to host BarCamp Toronto in November 2005. It was a different approach than Sapient, ModemMedia, Scient, Viant, Razorfish or other agencies in Toronto were taking. It wasn’t a client development strategy, it wasn’t a recruiting strategy, it was an offer to participate in the conversation.

Photo by John Lam

The shutting down of a company that I described last week as a “building big, impactful [indie] company” is interesting. Jon, Geoff, David (Jeremy, Peter, Tamera and the entire team over the years) you built a company that I respected. And I am very happy that you’ve made the best decision for you and your families. It’s your company, you get to make the decisions, so don’t listen to the naysayers.

Photo by Tom Purves

Here are a couple of observations about one of my favourite design firms shutting down in Toronto.

Short term: design talent availability
There is a bunch of design and development talent that is available for other Toronto companies to hire. These people have been trained in one of the best design cultures in Canada. They produced an environment that produced some of the best products in the world. If anyone from the TeehanLax team needs connections to interesting companies please drop me a note and I will do my best to connect you.
Short term: More people evaluating Toronto companies for acquisition
This is the third Toronto design and development company acquired in the past 24 months. JetCooper acquired by Shopify. Xtreme Labs acquired by Pivotal. Now TeehanLax shutting down and joining Facebook. This is important. Toronto is a great place to acquire talent. Hopefully there is an equal respect for the design and development work being done here. (This excludes the amazing talent like Mike Beltzner, Mike Shaver, Scott Boms, Sam Ladner and others).
Longer term: The loss of a gravity centre for design talent
There are other places that are gravity centres. Pivotal Labs is a great place for engineers and designers to learn the power and efficiency of paired environment. Farhan and team are doing wonders to explore and implement a very powerful cultural tool. TeehanLax built a culture that produced great digital products and experiences.

“We were happiest when the products we were creating reached our standards. We were happiest when we spent time thinking about how to create the conditions and circumstances for this to happen. We were happiest when we were working with our team members.”

It will be interesting to see if the T+L diaspora can have an impact on the ecosystem like the Trilogy diaspora in Austin or IDEO diaspora in Palo Alto.
Services firms are not destined to be huge companies
The back of the napkin math I use to calculate a services business is approximately $200k in revenue per employee. Sold at under 5x EBITDA (given a 20-30% margin and averaged revenue of past 2 years plus forecast using error correction of previous forecast, lets say 1x revenue). There is great business, it’s just a hard business to scale nonlinearly. And when “someone slides a number across the table big enough that you just can’t say no” a product company that is scaling like crazy is likely to be able to slide a bigger number than a services company. It feels like we’re seeing that ceiling being hit by XtremeLabs (sold to Pivotal), TeehanLax (joining Facebook), JetCooper (sold to Shopify), maybe BNotions (AK has departed for Gallop Labs).
Opportunity in the product/design/user experience space
TeehanLax was a design firm. It was a design firm that respected technology. There are other firms in Toronto that are a mix of product, design and technology including Normative, SayYeah, BoltMade, Nascent, TailoredUX among others (including those with a more technology focus Venn, Pivotal Labs, OK Grow!, Isle of Code, The Working Group, BNOTIONS, EndLoop Studios, Unspace, Rangle.io, People & Code, Digiflare, Functional Imperative, Metaware Labs). TeehanLax showed that it was possible to build a world-class design shop in Toronto. I’m hoping someone realizes this is the combination of the caliber of the output, the process to build the culture and the requirement of building the business/revenue streams.

Interesting times in Toronto. Congratulations to Jon, Geoff and David. Thank you for being amazing. And the best of luck on your journey.

Hacking Health

by davidcrow

A Hacking Health Follow @hackinghealthca event is happening October 19-21, 2012 in Toronto. The event focuses on bringing innovation to health care. It brings together clinicians with developers, designers, and entrepreneurs to look for real world solutions based on real clinical experience. It should be a very interesting event. The Montreal event has a 138 developers, 28 designers, 66 healthcare experts and 32 mentors. This signals a huge opportunity in the healthcare clinicians and practitioners for new tools and change. I wonder if the health care funding mechanisms/decision making will limit both the development and the adoption of any potential tools. It would be an interesting to discussion to have with others at the event.

The event in Montreal generated 19 projects, including:

HemoTrack – a mobile app that collects real time usage of Factor VIII, bleeding events and uploads that information to a web application accessed by physicians to monitor their patient’s health. This project included Dan McGrady Follow @dmix
Kinect Burn Area App – Using the off-the-shelf Microsoft Kinect, the 3D depth sensor feature accurately and rapidly provides doctors measurements of total body surface area. The camera feature allows clinicians to visualize and accurately mark the area of the burn on screen and automatically calculate the % of body surface area burnt as well as fluid requirements of the patient.

I’m hoping to get out and participate (weekends are incredibly valuable, taking time away from kid activities and time means this really has to deliver value for my participation).

Mesh is TO’s most important DIY conference

by davidcrow

Mesh Conference is Toronto’s most important DIY conference.

That’s right Mesh Conference is a DIY event. It’s the Do-It -Yourself endeavour of small dedicated group of individuals. And you can see each of their personalities and interests in the schedule and speakers. Rob Hyndman (@rhh), Stuart MacDonald(@stuartma), Mark Evans(@markevans), Mathew Ingram(@mathewi), and Mike McDerment (@mikemcderment) have been working very hard since 2006 to build a world-class that has attracted renown speakers, mayors, and attendees. The secret is that Mesh is an event that all of them want to attend. The reason they invest time and effort into this event is because it is really for them.

Why is Mesh Toronto’s most important DIY event?

There are great events ranging from my DemoCamp to EcommerceCamp, from MakerFaireTO to Open Toronto, TechTalksTO to HackTO. There are a great number of local events that have emerged. The thing about Mesh is that it started in 2006. Over 5 years ago, shortly after the first BarCampToronto. And since the very first Mesh, it has always had an air of professionalism that others should strive to obtain. Mesh from the very first event was an event that was world class. It was Canadian in size (about 1/10th the size of a US event). But it has always been DIY, it has never felt DIY.

Rob, Stuart, Mark, Mathew, Mike and Sheri deserve true accolades for building an event that defines the emerging technology, emerging culture, emerging policy in Canada. Thank you!

I hope to see everyone at the Allstream Centre this week.

Mesh 2011

by davidcrow

Apparently I’m late to the game with the recognizing that Mesh Conference 2011 has announced a new location and their schedule.

New Location

The conference moves to the Allstream Centre at the CNE grounds. This is a first year Mesh won’t be at MaRS. I’m hoping the new space allows for new conference experience. MaRS is a fantastic venue, but Mesh has really outgrown the space. It will be interesting to see how Sheri and the team organize lunch, social events, and other interactions to build strong connections between attendees.

Speakers

I’m excited there are a lot of my friends who are speaking at Mesh. These folks are just world class and it will be interesting to hear about their experiences.

I’m also incredibly stoked about Gabe Zichermann (LinkedIn) from GamificationCo. Gabe wrote Game-Based Marketing and hosted The Gamification Summit. Looks like another conference that covers marketing, culture/society, business, and media. It’s a great Canadian take on the web, technology, politics and culture.

I am disappointed that MeshU did not survive the fiscal constraints of running a conference. I know from our past experiences running StartupEmpire the lack of sponsorship and revenue that a smallish conference can generate. I’m hoping that there will be something for design technologists and entrepreneurial technologists in Toronto in the near future.

Inside the Lean Startup

by davidcrow

Very late notice, but I have been busy running a startup. I’m joining my friends Leila Boujnane (@leilaboujnane) and Satish Kanwar (@skanwar) tonight at the Inside the Lean Startup event at MaRS. We’ll be chatting about our startups. The customer development process. And some of the tools we use. If you’re not in Austin for SxSW, and you need to get out of the garage/basement/office and chat with others that are struggling/succeeding/striving/doing it to. Come out tonight.

You might also consider checking out the AppSumo Lean #SxSW Bundle which includes access to a set of tools I use including:

VentureHacks Bible
Sean Ellis & Andrew Chen’s LeanPub books
Twilio
KissMetrics
99designs
Batchbook (time to try this again thanks to jealousy over BMann’s German efficiency)

Plus there are some new tools that I’m excited to try:

Launchbit

The 2 books that are not included in the Lean SxSW Bundle that are must reads:

Steven Blank’s The Four Steps to the Epiphany #mustread
The Entrepreneur´s Guide to Customer Development for Tech Startups:A “cheat sheet” to The Four Steps to the Epiphany #mustread

Reflecting on The Low Road

by davidcrow

Fred Wilson has a great post about community. It captures the sentiment of DemoCamp, Founders & Funders, and StartupNorth, which shouldn’t be a surprise given the related nature of these vehicles to the communities that read Fred’s blogs. But more importantly you can see the sentiment in my posts:

It’s about building the connections between the people. The greater the number of connections between different nodes allows more opportunities for the exchange of value. Whether this is because the group is large, or because the opportunities are more valuable. DemoCamps are events. But they bring people together. They give them the opportunity to connect. To take the stage. To learn. But it’s supposed to be about the connections with others, it’s about the beers in the bar afterwards. It is a social event. Founders & Funders is a social event. There is no stage. There is no pretension. It’s about the realization that their is an opportunity to connect socially with the people that start high potential companies and the people that fund them.

Read the poem in Fred’s post.

A couple days ago my son “graduated” from 8th grade and in the moving up ceremony his teacher read this section of a poem called The Low Road by Marge Piercy. As she was reading the poem, it made me think of this community and what it means to me. So this is for all of you.

—————-

Alone, you can fight,
you can refuse, you can
take what revenge you can
but they roll over you.

But two people fighting
back to back can cut through
a mob, a snake-dancing file
can break a cordon, an army
can meet an army.

Two people can keep each other
sane, can give support, conviction,
love, massage, hope, sex.
Three people are a delegation,
a committee, a wedge. With four
you can play bridge and start
an organisation. With six
you can rent a whole house,
eat pie for dinner with no
seconds, and hold a fund raising party.
A dozen make a demonstration.
A hundred fill a hall.
A thousand have solidarity and your own newsletter;
ten thousand, power and your own paper;
a hundred thousand, your own media;
ten million, your own country.