Startups: Don’t outsource your core competency

This is the seventh article in a continuing series chronicling the growth path of CommentAir Technologies, a startup based in Ottawa, Canada. CommentAir is developing a wireless technology fans can use at sports venues to receive the same real-time commentary as fans watching from their televisions, a wireless technology that also creates a platform for targeted consumer interaction. We invite your feedback.

By Francis Moran and Leo Valiquette 

It has been four months since we last spoke with CommentAir cofounder Katie Hrycak; four months of introspection and painful exercises in “if only” as the young entrepreneur and her brother and business partner Luke ponder the future of their startup.

When we last spoke with Katie, she had found herself in an awkward situation with Algonquin College, which had undertaken the task of creating the prototype for CommentAir’s earpiece through its Applied Research and Innovation department. The project included a team of students, faculty and an external engineering consultant working with $50,000 in government funding.

A functional prototype was considered crucial to securing the initial stadium contracts that would provide the market validation to make investors and lenders take notice. As self-capitalized entrepreneurs who have been bootstrapping the venture around their day jobs, Katie and Luke saw Algonquin as a more economical means to develop their prototype without incurring the costs of contracting a professional R&D shop.

But after several missed delivery deadlines which the college attributed to personnel issues with students, the ongoing viability of the startup had come into question. With contract obligations in dispute and accusations flying back and forth, the outcome of the whole affair promised to be messy, at best.

But four months later, the Hrycaks have come to an amicable, if less than satisfactory, end to it all. Katie, meanwhile, has been living in Toronto and working for another startup while she takes time to figure out her next move and reflect on the lessons learned.

First and foremost, she has come to realize the difficulty of being a layman trying to bring technology to market without a technical cofounder.

“I thought I had learned enough about radio and programming hardware that I would be able to notice if something was going wrong and notice if something wasn’t being built the way it should be, but I was wrong,” she said.

Algonquin’s efforts didn’t leave the Hrycaks with the functional earpiece they had hoped for. Instead, all they have is an Arduino circuit-board on a breadboard with no onboard power source, which must still be plugged into an external speaker. While this provides a proof of concept, it obviously does not fit into an industrial design intended to fit on the user’s ear, a design which the Hrycaks are not willing to compromise on.

‘Do not outsource your core competency’

In hindsight, Katie has realized that CommentAir’s greatest misstep was engaging with any third party at all to develop its core technology, which violated the old adage, “do not outsource your core competency.”

“I really have to make a decision about whether to find (a technical cofounder) to help me with it again, find a completely different way to do it, or stop altogether,” she said.

While many people have questioned her decision to move to Toronto, she felt that she had already engaged with everyone in the Ottawa startup community who could be of help to her. She also considers the startup community that she has found in Toronto to be much more dynamic. A critical difference, she said, is that it’s easy in Ottawa to find “startup groupies” who act as cheerleaders and provide encouragement. In Toronto, however, people are much more likely to challenge, even attack, an idea, with practical criticism that ultimately serves to test its true commercial viability.

Her brief time in Toronto has already allowed her to engage with a number of hardware engineers and get involved with a hardware meetup group that has led her to consider other avenues, such as developing a mobile app instead of a wireless device.

The decision to, for now, put the brakes on further development of the earpiece has led some people to say that she has admitted failure. But Katie, like any true entrepreneur, understands that failure, even repeated failure, is almost always a necessary step on the road to success. And admitting failure should not be confused with admitting defeat.

“I think if you legitimately have a great monetizable idea, you won’t have a problem finding a co-founder to jump on it, whether it’s hardware or software,” she said.

For Luke, it all comes down to finding that technical co-founder with the engineering chops they need.

“We’ll keep pushing, but it won’t be a full time thing until we can find this missing piece of the puzzle,” he said. “If we find someone, CommentAir may reappear. If not, you’ll likely find us in our next project.”

Francis Moran and Associates is an associated team of seasoned practitioners of a number of different marketing disciplines, all of whom share a passion for technology and a proven record of driving revenue growth in markets across the globe. We work with B2B technology companies of all sizes and at every life stage and can engage as individuals or as a full team to provide quick counsel, a complete marketing strategy or the ongoing hands-on input of a virtual chief marketing officer. 

Francis Moran
Francis Moran
Francis Moran is principal of Francis Moran & Associates, a consultancy that provides business-to-business technology ventures with the strategic counsel required to make their innovations successful in a highly competitive marketplace. Francis can be reached at [email protected].

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