We snickered when we heard the pitch. Everybody snickered.
How could you not? It was a media briefing for a startup called EquityEngine.com, held in hotel in downtown Toronto. It was the year 2000, when everybody wanted to be an incubator and there was, for once, more money than there were
developed ideas.
The brains behind EquityEngine.com had a unique way of dealing with this problem: using proprietary software, it would solicit startup ideas from pretty much anyone, sift through them and then a community of entrepreneurs would analyze them. If an idea for a startup touched on an area where a member of the community had expertise, they would work on the project in return for an unspecified stake in the company.
Sometimes the media fails to properly probe new ventures for the areas where they could come up short. Not this time. Almost every journalist in the room had their hand up, ready to pour their own cup of skepticism. How could they possibly manage the community-style (I considered it ‘commune-style’) nature of the organization, which could involve thousands of members? How could you prevent good ideas from getting stolen by those who opted to run off and do the project themselves? Many new economy incubators seemed a little exploitative — there was a fine line between nurturing new talent and simply bleeding dry innovators who lacked business skills — but this one struck many people as utterly absurd. To the surprise of absolutely no one, EquityEngine.com did not survive the dot-com meltdown.
The aftermath of those halcyon days has probably left a bad taste in many venture capitalist’s mouths, but it just showed how hard it was for anyone to pick a winner out of all the possible contenders. I certainly can’t claim any special skills there. I sat in on the very first conference call with Research In Motion to discuss its new wireless pager; I went back to my editor and laughed about the “”BlackBerry”” that seemed little better than a glorified organizer. I’ve learned not to laugh at what could turn out to be the next big thing.
It is in that spirit we launch a new semi-regular feature on ITBusiness.ca, called “”One to Watch.”” It’s a common phrase, but the name was chosen for a reason. We had considered an approach whereby we would look at a young company and, based on a range of interviews, try to conclude if it would fly. We considered calling it “”Make or Break,”” but “”One to Watch”” will be more exploratory than that. This isn’t intended to be any kind of seal of approval with which we are guaranteeing a startup’s bright future. We will look at companies that are still in the early financing stage, where actual products may not have even been brought to market. We’ll talk to the company, of course, but we’ll also try and speak with customers that fit within the firm’s target customer base to assess demand, and follow up with industry analysts to get their take on the company or its technology’s potential.
Even if the company involved doesn’t survive, I’m hoping “”One to Watch”” might give our readers a sense of future trends or technologies that are just around the corner. I also want to do what we can to support entrepreneurism in this sector by highlighting Canadian companies that catch our interest. Is it still possible for any of these firms to launch a IT juggernaut in an economic downturn? Maybe — just watch them.
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