Canada’s Digital Media Companies to Watch (Part 2)
September 09, 2011 | Alicia Androich, Eve Lazarus, Norma Ramage | Comments
SEPT. 12 ISSUE SNEAK PEEK. TO GET THE ISSUE, SUBSCRIBE NOW.
Marketing shines the spotlight on seven small-but-mighty innovators shaking up the marketplace with weapons like mobile rewards, live-event gaming and accounting software (yes, we said accounting software). Meet the rising stars of the Canadian digital media world.
• Part One
Wave Accounting (Toronto)
Targeting very small business, CEO Kirk Simpson meets their demand for both number crunching and (very soon) procurement
Wave’s free online accounting application, which launched last November, aims to make accounting and bookkeeping quicker and easier, says president and CEO Kirk Simpson. The software pulls from and categorizes users’ bank and credit card transactions, and also handles invoicing and monitors expenses.
This financial management tool is targeted at businesses of nine employees or less. As Simpson puts it, “It’s not like Microsoft is using our system.” That’s fine because the small business market is, well, huge. Simpson cites statistics that there are roughly 28.5 million small businesses with 20 employees or less in North America, and about 67,000 new small businesses start each month.
That’s not to say it’s an easy market for advertisers to crack. “[Agencies] are the first ones to admit that small business owners are very hard to reach,” says Simpson. Wave, he explains, helps by aggregating advertisers’ offers against specific data points. Say, for example, a Wave user spends an average of $200 or more on office supplies each month. Simpson says that small business owner will then get an offer from an advertiser that sells those goods. (He emphasizes that Wave operates on a non-personally identifiable basis, and doesn’t sell or pass any data to advertisers.)
Simpson is excited by the opportunities around allowing advertisers to target against transactional data about where users are spending money. By bringing small businesses together with the right mix of advertisers, he says Wave can essentially act as a procurement department for small business owners.
Users have responded well—especially recently. While the company was founded in July 2009, Simpson says Wave has been signing on roughly 400 new users a day since April. He attributes the explosion of sign-ups to an increase in word-of-mouth via social media channels, and integrations the company has built with, for example, Google’s Chrome Web Store. As of mid-August, Wave had approximately 45,000 users.
Moving forward, Simpson would like to ramp up the team around the advertising component. He’d also like to expand the tech team so that Wave can execute more integrations like the one with Chrome Web Store. (Wave also recently launched in the Google Apps Marketplace.) Plus, there are plans to roll out the first paid product around the core bookkeeping engine in late fall.
With all this growth, would Simpson consider selling to a parent company? He laughs. “Anybody who says ‘no’ to that question outright is limiting themselves… If something comes along that’s life-changing, obviously you’re going to have that conversation.”
Number of employees: 19
Revenue: “Essentially zero. We are still pre-revenue until the fall.”
Competitors: Spreadsheets and shoeboxes; outright.com; WorkingPoint.com
Fast Fact: Wave has 45,000 small business users in 188 countries
Venture Capital Funding: $1,500,000
After selling AskMen.com, Ashkan Karbasfrooshan launched a web video content factory whose partners span the globe
It often takes a shake-up to forge a new career path. That’s what happened to Ashkan Karbasfrooshan. In 2005, AskMen, a men’s lifestyle website where he was a partner, was acquired. “I was like, ‘What am I going to do with my life?’” says Karbasfrooshan. He sensed opportunity in online video. “I felt that content, over time, would be a fairly smart bet,” he says.
So, in 2006, Karbasfrooshan founded WatchMojo,com, a video content producer, publisher and syndicator based in Montreal. Its programming covers over a dozen categories, including film, sports, travel and business. Videos range from a biography of boxing promoter Don King to an interview with heavy metal group Deftones.
Even though venture capitalists urged Karbasfrooshan to add user-generated content to the site, he didn’t because he didn’t feel advertisers would be interested. Instead, he chose to focus on producing high-quality, online content.
The strategy was straightforward. “We said ‘Let’s just build the IP, which for us is the catalogue and distribution, and once that’s built we can start worrying about monetization.’” It seems to be working. WatchMojo.com has 12 strategic partners and clients, its advertisers include Molson Coors and Telus, and its content is on major portals such as AOL, Yahoo and—most recently—MSN.
“It’s paid off, but it’s not like we’re sitting here laughing,” says Karbasfrooshan. “It took us five years to get to where we are now.” For the first time in its history, Karbasfrooshan says WatchMojo.com will “most definitely” break even this year.
It helps that the site’s content is reaching audiences in new ways. For instance, academic publishers like Belin in France and Lungteng in Taiwan are licensing it to use in English-as-a-second-language programs. Karbasfrooshan says such publishers appreciate that WatchMojo.com content is professionally produced, accurate information on a wide spectrum of topics. “You hear about gateway drugs; I’d say our content is gateway content. If we can hit students and young professionals early, I think that’s a great marketing trick to engage with them over time,” says Karbasfrooshan.
WatchMojo.com is also aggressive with its out-of-home strategy, which sees its content in places like cabs and malls.
And while Karbasfrooshan loves being independent, he realizes “in this day and age, scale matters.”
He’s excited about the company’s future. “We’re on the right side of the fence. There’s a shift to digital and I think video is going to be on every page on the web. We have so much content that it could be our videos on every page, and that’s a good position to be in.”
Revenue: Expected to be in $1 million to $5 million range this year
Competitors: Traditional media companies as well as YouTube channels
Fast Fact: Three months after launch, WatchMojo was sued by News Corp. for violation of a non-compete agreement. Karrbasfrooshan won and since then, News Corp. has become a partner.
Venture Capital Funding: $0. “I funded the company early on, but we have been profitable or breaking even since Nov. 2010″
Co-founder Derek Ball found success with a copy-and-paste tool. Now Tynt is taking online tracking to even bigger heights
When Derek Ball co-founded Tynt Multimedia in Calgary in 2007, it was one of several companies the high-tech entrepreneur had created in his career. Four years later, Tynt is showing signs of becoming one of his most successful start-ups. It has added offices in San Francisco, Salt Lake City and New York and its software is resident on 500,000 websites.
Its original software tool, which allows online publishers to monitor copy-and-paste use of their online content, has been broadened to collect data for advertisers and to track brand interaction across the internet.
Tynt was originally created by Ball and Dayton Foster to market a tool for use on social network sites, but it switched direction in 2009 when it experienced difficulties. “As Facebook grew, other companies were disappearing and our business was shrinking,” explained Ball, who is Tynt’s CEO.
However, youth magazines the company had worked with told them of their concerns about tracking material that users were copying and pasting from their sites.
Although most websites have share buttons to help them monitor usage, the majority of users opt to copy-and-paste. Tynt introduced a software tool that embedded an attribution link in the original content when it was copied, providing valuable information about the specific content users were interested in, plus potentially driving more users to the original content site.
The product was picked up by major media websites and Time Warner, Sun Media, MarthaStewart.com, National Geographic, Sports Illustrated, Conde Nast and other media heavyweights currently form the bulk of Tynt’s client list.
Tynt provides the software for free to publishers and then sells the resulting data to marketers to help them better target their advertising dollars.
The company recently introduced Interest Graph, which allows publishers and advertisers to track user interaction with their brand across hundreds of sites. The information is then aggregated to create a graph of anonymous users, interests and behaviours. Bell cited the example of a user initially exposed to a Ford ad online using the Tynt cookie. Tynt can then see where users again interact with the Ford brand on other sites where the Tynt software is resident, for example.
“It provides an unequalled perspective on the effect of brand advertising” says Ball.
The advertising and brand work is “a relatively new piece of the puzzle”, but one Ball said opens up opportunities for Tynt in new market sectors including automotive and travel.
Revenues: N/A (privately held)
Competitors: ShareThis (San Francisco) and Clearspring (McLean, Va.)
Fast Fact: Tynt’s software currently tracks 1.5 billion anonymous users on the Internet
Venture Capital: US$12.5 million
Founder Brian Wong’s simple but brilliant idea is redefining mobile advertising
The idea behind Kiip came when Brian Wong, now 20, was on a plane travelling through Asia. He’d just been laid off from the social news giant Digg where he was lured from Vancouver in 2009 to work after graduating with a commerce degree from the University of British Columbia.
“I did the ‘iPod creep’ on the plane and I could see everybody playing with their iPods, phones and Android devices,” he says. “People don’t actually work on these things—they just play a lot of games—and I realized just how ubiquitous mobile gaming had become.”
Wong mulled this over for a month and launched Kiip in Silicon Valley last fall. He says what every game has in common are “achievements.”
“I started diving deep into what made an achievement so special and realized it was less of the achievement itself and more of the moment of achievement—the moment where you feel you have accomplished something.”
The idea behind Kiip rewards is deceptively simple. Wong believes that when people play mobile games, they don’t just want to play for a high score, they want to be rewarded for it. So he developed the technology that allows brands such as Vitamin Water, 1-800-Flowers, Sony Dash and Dr. Pepper to reach an affluent audience with product samples or gift cards.
When a player hits a high score they are congratulated by the brand and asked to send their e-mail for information about how to redeem their reward. The brands pay up when a user signs up for a reward and the e-mail address is never used again, says Wong.
“The major benefits [for marketers] are they have audiences that are extremely engaged and guaranteed to be looking at the screen when they hit an achievement,” says Wong, adding that the average mobile social gamer is a 28-year-old, college-educated female, according to a study by mobile analytics firm Flurry.
Currently, the rewards platform is integrated into 15 games, although Wong is mum on which ones.
Wong says his company is much like DoubleClick in the early days and he sees opportunities that extend beyond mobile. But unlike DoubleClick, he doesn’t want to be acquired by a Google.
“This is a billion-dollar opportunity and I want to build this into a billion-dollar company,” says Wong. “We have created an entirely new market.”
Number of employees: 18
Revenue: Not disclosed
Competitors: Won’t say
Fast Fact: Kiip rewards are now in 15 games, reaching 15 million active players who can be targeted through game genre, demographics and location
Venture Capital Funding: $4 million in Series A funding; $300,000 in seed money
• Part One
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