Skip to Main Content
The Review

Ex-500 Startups partner Elizabeth Yin on breaking into the U.S., finding investors and more

Growth

Category Archives: Blog Categories

Ex-500 Startups partner Elizabeth Yin on breaking into the U.S., finding investors and more

Elizabeth Yin has spent years mentoring, managing and meeting with top entrepreneurs from across the globe. Her personal rolodex includes contact details for innovators at today’s biggest companies and since graduating from Stanford University and MIT in the early 2000s she’s helped founders raise millions in venture capital.

Some of her most notable accomplishments include cofounding B2B advertising platform LaunchBit — that was later acquired for an undisclosed amount — joining Google as one of its marketing managers, overseeing 500 Startups’ accelerator program and most recently starting her own pre-seed fund called Hustle Fund.

What are some of the biggest business lessons she’s learned throughout her career? Entrepreneurs should focus on the facts during investment meetings, understand networking is crucial for success and make smart hiring decisions.

Why Canadian entrepreneurs should stay home

 
For years, Canadian entrepreneurs were told that to grow their company or find investment they had to relocate to the U.S., and in particular Silicon Valley. That’s not technically true anymore says Yin, who credits Canada’s ever-growing reputation on the global stage for the change.

“Before you’d have to trek down to Silicon Valley for one to two months to network, but now VCs are coming up here … take advantage of that to get to know them and network at events.” Elizabeth Yin, cofounder of @hustlefund

“Here’s the dirty secret about staying in Canada,” she explains. “VC schedules are really busy with back-to-back meetings in the Valley. It’s really hard to get a meeting with them there, but when they’re up here their schedule is a lot more open. They’re here to learn about the ecosystem, mingle with startups at places, like the DMZ, and open to spending more time just talking.”

And, that’s not all. The high cost of living in Silicon Valley can be a detriment to bootstrapped startups. Why? Because they’re forced to spend most of their money on day-to-day living costs. A recent report by CNBC backs up this claim. It found startups in the San Francisco area are having a hard time recruiting tech talent because of high living costs.

“The cost of living — compared to San Francisco — is better here [in Canada] … you have access to grants that U.S. citizens don’t have and because more VCs are starting to come up here there’s more potential to network without having to spend money.”

Ask employees the right questions

 
Regardless of product or company, every founder needs a team of dedicated employees. Of course, onboarding new employees can be one of the most stressful, yet rewarding responsibilities for an entrepreneur.

Unfortunately, that also means hiring new employees can easily go wrong and cost entrepreneurs a lot of time and money. In an industry where startups are expected to scale as fast as possible, one bad egg can set a founder back years. For example, Zappos CEO Tony Hsieh estimates bad hires have cost him approximately $100 million.

“Your first couple of hires solidify your company culture, which sets the tone for the rest of your company,” explains Yin in her blog. “And most entrepreneurs tend to look at candidates purely based on skill. But looking at a person based on just one axis is a huge fallacy.”

Hiring the best people means analyzing their personality. For instance, like how they’ll operate under stressful situations or go above what’s expected.

“The people with the best skills for the job can be your worst performers if the environment isn’t a good fit for them.” Elizabeth Yin, cofounder of @hustlefund

A Harvard University paper found that even highly sought after employees who engage in harmful behaviour can hurt a business’s long-term prospects. Bad hires, it states, lower productivity, negatively impact employee morale, and can cost up to $12,000 due to employee turnover.

What entrepreneurs should know to survive in tech

Passing the investor smell test

 
While at 500 Startups, Yin worked with a variety of tech startups. One thing she noticed during that time was that investors all too often would fund companies that looked great on paper or spoke a certain way. However, those characteristics didn’t necessarily correlate with success. What did matter in the end was execution. This is why at the Hustle Fund, Yin does most of her early investment conversations via email. It helps her focus on a startup’s figures, success and more.

“When I’m doing due diligence I’ll ask a lot about execution and timeline. I want to understand what the velocity of this startup is. Is there some signal these companies are doing something worthwhile and moving fast enough?” So far, Hustle Fund’s innovative process has produced interesting results. In 2017 47 per cent of its portfolio companies had at least one female founder.

She also looks at how fast a startup is scaling. “Are you doing customer development in three days, three months or three years?” Yin adds. “Every business is different. If it’s taking you longer to reach certain metrics than others in the same industry that looks bad.”

“I’ll ask questions about unit economics. Do I think, based on how you’re approaching your business, that the cost to acquire a customer is going to be less than what they’re worth in the end?” Elizabeth Yin, cofounder of @hustlefund

At the end of the day not finding investment isn’t a sign to quit. “If you read TechCrunch it looks like everyone is getting funded, but it’s just not true,” she says. “The good news for [Canadians] is it’s easier to bootstrap here because your costs are lower and you can survive longer to acquire customers and reach a profit without running out of capital.”

Interested in learning more? Check out Robert Gold, host of BusinessCast, interview Michael Gord, the founder of MLG Blockchain about how he grew his business, the power of bitcoin and how he’s changing the tech industry.

Why community plays a pivotal role in startup success

Wattpad co-founder Allen Lau has created a million-dollar empire out of building engaging (and hardworking) communities. As a result, it means he understands just how pivotal they can be for a startup’s success.

These days his company is more than just a free story-sharing app based in Toronto. In fact, it’s now one of Canada’s most successful tech companies and raised USD $117.8 million from prominent backers like China’s billion-dollar Tencent Holdings, OMERS Ventures and BDC.

Part of the company’s rapid success lies in its ability to create a thriving workplace culture. An important feat in today’s ever-changing tech world where tech talent is in high demand.

In fact, Wattpad’s dedication to culture is a smart business move considering happy and “engaged” employees make better workers. A study from Warwick University found happy employees worked harder and were 12 per cent more productive, while a 2017 Gallup report discovered stressful work environments produced higher employee turnover and absenteeism.

“Culture is the most important part of a company,” explains Lau. “It’s the glue that holds a company together. Creating a supportive environment that allows everyone to thrive and do world-class work.”

How Allen Lau and his team create a thriving community:

  • Spend time with your employees: Wattpad management regularly meet with employees for one-on-one for feedback.
  • Create collaboration: A no-door policy and open space layout help employees work and collaborate more.
  • Keep communication open 24/7: Employees feel empowered to share ideas, thoughts and opinions, no matter their position, through shared internal platforms.

There are all kinds of communities

 
Of course, building a successful company goes beyond just investing in an amazing workplace culture. Community outreach plays an essential, yet sometimes overlooked part, explains Erin Bury, managing director for communications agency Eighty-Eight. Community outreach, she says, has the power to turn people into brand advocates and boost brand recognition.

“Building community outreach does not require a budget just time and authenticity,” the communication expert says. “Startups just need to identify what those communities are [that they want to help] and how they can help.” That can be something as simple as entrepreneurs volunteering their product or skills.

For example, Bury’s firm works pro bono for a Toronto-based charity called the Upside Foundation. Through its community work, the company works closely with some of Canada’s best tech startups all while making a difference.  

Maya Shoucair, Shopify’s community development manager for Toronto, understands how beneficial working with the community can be as well. The Torontonian has built a career out of helping companies grow and strengthen their local community. She is an integral part of Shopify team that helps solidify the company’s reputation as an important part of the tech ecosystem.

Her advice for companies hoping to mimic Shopify’s success? When engaging with communities outside of your office make sure employees share the same goals.

“Making sure everyone understands what problems you’re trying to solve. And also how you intend to bring your mission to life is crucial. Sometimes, this means over-communicating, so that everyone is on the same page.”

Shopify Community Manager Maya Shoucair shares three things startups should know:

  • Give, don’t just take: Never take more than you give when working in the community. It should always be a mutually beneficial relationship.
  • Be inclusive: Don’t create inaccessible spaces that don’t feel welcoming or open to different voices.
  • Share the wealth: Help employees take the lead on initiatives.

Don’t expect results overnight

 
Healthy Pets‘ founder Emma Harris has seen firsthand how community outreach can uplift emerging businesses. Despite only launching in 2017 her company has grown exponentially since joining Toronto’s tech community.

One recent success includes last week’s appearance on Dragons’ Den. The TV role garnered a $500K deal from Arlene Dickinson, but what the episode didn’t capture was how volunteering and attending community events was a crucial part of the company’s journey.

“Always raise the amount of money [you need] to support your growth, but you have to get out there and go to events or volunteer to truly impact your business,” she says. “I believe prioritizing community events is worth the cost.”

Dragons’ Den alum Emma Harris’ advice for community outreach:

  • Only attend or volunteer at one event per night: Instead of attending a few events every night for an hour or two, make an impact by choosing one and creating deeper relationships with people around you, so you stand out.
  • Rotate the type of events you attend: Attend a variety of meetups — an investment event one night, a sales-focused meetup the next to get as much as possible out of the city’s offerings.
  • Go in small groups or even alone: Attending or volunteering at an event by yourself forces you to meet as many people as you can and makes it less intimidating when you approach new people.

While community work helped Emma find new opportunities and grow in less than a year, not every founder can count on the same experience.

Shoucair suggests founders or companies dipping their toe into community outreach start small like Harris did. Attend events or volunteer at a manageable capacity to create real impact and change.

“Anyone looking to strengthen their community, whether they are in a community development position or not, is to never focus on growing as fast as possible at the start,” she says. “Your community will grow and strengthen organically if you’re able to provide the right value and direction.”

Sales-boosting advice to turn your startup into a million-dollar business

Being an entrepreneur is tough. In today’s startup ecosystem where investment can be hard to procure and one bad customer can make or break a company, finding the right kind of client (read: consistent) is crucial for long-term success.

Of course, this isn’t exactly easy. An always-changing tech landscape and 24-hour startup life can make prioritizing sales efforts challenging. While there are programs that can help — such as the DMZ’s sales accelerator –not every startup makes it into the program.

Danielle Brown, chief marketing officer for Hubba, has seen first-hand how fast the sales industry can drastically change and why it’s important to prioritize sales outreach. “Things are really growing and changing at a rapid pace. It’s a really different world … the way we consume information has drastically changed, so the way we market and sell has changed.”

Being social matters

 
Canadian startup Shopify analyzed social-driven orders to better understand how social sites can drive sales. They found that:

  • Facebook: Eighty-five per cent) of orders originated from the popular site and it accounted for most of its social traffic.
  • Timing: Companies that launch a product during the weekend saw social orders drop 10 to 15 per cent.
  • Video: Companies that incorporated video content saw a 1.9 percent higher conversion rates.

Brown, a marketing and sales guru, knows what she’s talking about having worked for business heavyweights like Universal Music, SiriusXM and e-commerce loyalty firm Points throughout her career. Now at Hubba, one of Canada’s fastest growing companies — she leads the brand’s marketing and sales vision. For entrepreneurs with limited budgets, the right online tools — that range from email tracking software to advertising tools — can help startups grow without bankrupting them, she says.
“Tried and true things, like Facebook, Instagram and those channels are getting so sophisticated about how you target people so staying on top of those platforms can be a cheap way for you to find the people you’re looking for.”

Outreach tips

 
Marie Chevrier is the founder of Sampler, a startup radically changing how companies get consumers to try their product. She and her team focus on getting samples to the right consumers instead of just merely distributing thousands of products in high traffic areas. In her business knowing how to push sales and garner leads is critical.

Since launching in 2013 her company has worked with more than 200 brands and reached 25 million consumers around the globe. Chevrier says focusing on low-cost tools played an important role in her company’s success.

“I suggest getting your teams on trials and measuring how much they use the technology before implementing. Everyone thinks they need the shiny new thing but implementing its usage can be tough across teams,” she explains. “Our team started by managing leads on Google Sheets before we moved to a CRM system.”

Another tip? Try cold outreach to potential clients or even partner companies you want to work with. It can yield positive benefits but only when done right. Novice businesses often rely on impersonal, template-based messages to save time, but this is bad for business, she says. 

“Remember to try and be useful in the first few seconds of a call and/or the first line of the email. Get to the point quickly,” Chevrier adds. “Remember to add value and where possible introduce your product indirectly. Share case studies from one of their competitors, a blog post on industry news that makes your product useful but skip the ‘At X we do this’ in the first few lines. Leave that to the end or even for the next email.”

Brown couldn’t agree more. Hubba still relies on cold outreach to connect with new customers, but her team makes sure to always customize each interaction

“Cold calling and cold emailing is very effective. We use it at Hubba and personalization is key. Know what you’re doing [and] who you’re targeting. Also text emails work better than designed emails because people respond faster. Entrepreneurs can over engineer things sometimes.” — Danielle Brown, CMO, Hubba.

 

The personal touch

 
In the midst of sales talks, it’s easy to overlook how important the human touch is for every interaction. Sometimes unlikely sales can be found through existing customers, former leads and ambassadors.

Ensuring you approach every meeting, interaction with industry peers or even networking event with a smile can be valuable. “I’ve found referrals and advocacy is way more valuable than tooting my own horn. If the messenger is a peer, I’ve found the message carries more importance,” explains serial entrepreneur Ben Baldwin.

The entrepreneur is the creator of The Founder City Project, founder of ClearFit and sits on Toronto’s Innovation Economy Advisory Council. Sometimes networking can provide long-term sales benefits. Don’t make the mistake of forgetting that people (not just tools) are important to your business, he says. “Peers are incredibly powerful teachers, especially when both parties are comfortable enough to be open and vulnerable with one another.”

Brown agrees. Acknowledging the role people play can either help or even hinder or startup depending on how it’s done.

“Regardless you’re always marketing and selling with everything you do,” she explains. “People will talk about their interaction with you — positive or negative. When startups are launching they tend to be more aware of their early interactions with customers and bigger companies might get lost with that stuff.”

Interested in learning more? Check out Robert Gold, host of BusinessCast, interview Michael Gord, the founder of MLG Blockchain about how he grew his business, the power of bitcoin and how he’s changing the tech industry.

Make sure to also visit our official iTunes page for all of our BusinessCast interviews.

The new afterlife: How tech is helping people live forever

Technology has transformed everything from what we eat, to international currency and even how we fall in love. Now today’s best entrepreneurial minds have set their sights on disrupting a far more challenging (and taboo) subject: Death.

Earlier this week a Silicon Valley-based startup called Nectome went public with a high-tech embalming process it says can preserve a human brain so it can later be uploaded to a digital cloud. The idea is that an individual’s consciousness — complete with quirks and memories — could then live forever. The downside? The fatal “treatment” is only possible through euthanasia because it requires a fresh, healthy brain for the procedure to work.

“If the brain is dead, it’s like your computer is off, but that doesn’t mean the information isn’t there” says @KennethHayworth, president of @Lets_Upgrade, in MIT Review. ‏

Right now the startup is still years away from commercialization, but the industry seems to be backing it nonetheless. Up to this point, it’s been awarded a $960,000 from the U.S. National Institute of Mental Health and raised $1 million in funding (with some of that amount from Y Combinator).

Of course, Nectome’s current success and ability to top news reports around the world isn’t shocking. The death market is a booming billion-dollar industry. It’s also one more reason analysts see it as a sector on the rise not just in North America, but also in influential markets like China.

In Canada, death services is a $1.6 billion industry, according to a report by the Toronto Star. The same story found Ontarians invested approximately $2 billion in funeral arrangements.

Is the ‘death market’ the next gold mine?

 
Everyone passes away at some point. In fact, death is a universal constant that impacts every person regardless of ethnicity, occupation or nationality. This makes it ripe for disruption and a slew of new startups are ready to do just that.

Entrepreneurs are creating new ways that either preserve a person’s life or make the death process easier.

Jevin Maltais, co-founder of a legal will generator called Willowbee, is one of those forward-thinking innovators. His startup helps consumers create wills that spell out everything from marriage to end-of-life care. Kevin Oulds, the founder of Willfull, another online legal will startup sees the digitification of services like estate planning become more and more popular.

“End-of-life and estate planning is just starting to move online, and it’s an industry that has a lot of potential for growth in the online space,” he explains. “Already I’ve seen everything from online memorial sites, to Facebook’s Legacy tool, which allows you to assign a contact who will convert your profile to a memorial account after you pass away, and of course online wills.”

For consumers hoping to use death services or industry-affiliated ones, it’s important to do your own extensive research first. “There are services online now that didn’t exist five years ago where you can talk with a therapist, invest your money and make an estate plan for an affordable price compared to traditional lawyers,” Oulds explains. “The key with services like [this] is trust, ease-of-use, cost, and time commitment. Users want to know they can trust that the documents created as legally-sound – we worked with several estate lawyers to create ours.”

The money behind living forever

 
Of course, eternal life comes with a price. Willful charges as little as $99 for its services while Nectome’s deadly procedure comes with a refundable $10,000 deposit.

Death-defying startups

  • Alcor: The Scottsdale company will freeze your dead body for $200,000 US (plus another $10,000 surcharge for users outside of North America or China) so it can be revived in the future.
  • Unity biotechnology: This biotech startup is focused on extending life through medicine that halts or reverses ageing so humans can live longer, fuller lives.
  • Calico: This Google-backed venture is still top secret but it’s working on creating a way to bring people back from major illnesses.

For tech enthusiasts looking at other digital alternatives, Eternime may be able to help. The startup, currently in beta testing, saves an individual’s online activity. It later uses that information to create a digital ghost that can interact with loved ones.

So far, the company has signed up almost 40,000 users. “This isn’t technology that is decades away,” founder Marius Ursache says in an interview with TechCrunch. “Building lifelike avatars is an iterative process. Think of it like search results; they’ll just get better and better, more and more accurate as time goes on.”

While the future is unknowable, the desire to live forever is an existential issue that has fascinated scholars for centuries. It’s only now that technology may be able to solve this complex problem once and for all.

Robot vs. humans: Workers of the future

Last week U.S. burger restaurant CaliBurger made a surprising hire. It onboarded a burger-making robot called Flippy.

The machine, made by Miso Robotics, can flip between 100 and 300 burgers every hour and run for 100,000 hours on a single charge. Essentially, it’s a super cook that takes zero breaks and requires no pay.

Understandably, labour critics are worried about what Flippy, and other robots like it, mean for the human workforce. In the end, Flippy was taken offline after one shift due to human issues, but it provided a sneak peek into what will soon be society’s fully-automated future.  

As technology advances, more businesses will likely adopt fast-paced robots that can maximize output and potentially displace human workers altogether. In fact, it’s already happening now at an alarming rate. Foxconn, a Chinese supplier that counts Apple and Samsung as clients, replaced 60,000 of its factory workers with robots. Meanwhile, banking group Swedbank now relies on AI- focused virtual assistant Nuance Nina, a robot that can provide a “human-like” experience, for its customer service needs.

Foxconn Technology Group, one of the world’s biggest electronic manufacturers, replaced 60,000 human workers with robots.

While shocking it’s just the beginning of what’s to come. A Mckinsey & Company report found up to 800 million workers could lose their jobs due to automation by 2030.

Business 2.0

 
To some degree, it was only a matter of time before robots took over human jobs. Tech firms have spent years perfecting how to create better, faster robots. In the process, these technological advancements are transforming decades-old legal frameworks designed to protect workers.

Although, replacing humans with robotic workers isn’t as easy as it sounds, at least not yet. Manufactures cannot simply fire humans and replace them with robots, due to work obligations. Those obligations include giving appropriate notice and consultation on redundancies.

Jobs robots are already doing:

An example of new workplace liability issues can be found in driverless cars. Manufacturers are using the latest digital technologies to help vehicles run using little-to-no human impact.

In those circumstances, if something goes wrong a number of different stakeholders would be liable for an accident. It also means companies will need to raise compliance issues under data protection laws. Robots open up more ways to capture personal data, which make companies compliant with privacy laws. 

The robot revolution

 
Aside from the liability side, an influx of robot workers could also have dire ramifications on society. “Possible mass unemployment could lead to human catastrophes and a wave of migration,” according to a report by the International Bar Association.

The effects could especially be devastating in developing countries that rely on low-skilled jobs. “About 47 per cent of total U.S. employment is at risk,” the reports adds, while up to 70 per cent of total employment in countries like Thailand are at risk.

Fast-paced automation means robot worker issues aren’t going away anytime soon and likely impact the law long into the future. Existing regulations will give way to legal grey areas that will require lawmakers and companies to play a pivotal role in navigating the future.  For companies, this means being more forward thinking when it comes to integrating new robots into their workplace until the law catches up. Already, companies right now are finding out the hard way that automated technology can be costly when it malfunctions.

To learn more about how robots and artificial intelligence are changing the world listen to  Robert Gold, host of BusinessCast. Make sure to also visit our official iTunes page.

 

Smart cities: Good or bad?

In recent years, both technology giants and entrepreneurs have set their sights on turning today’s biggest cities into self-sustaining metropolises.

For many, the city of Toronto is ground zero for future innovation and represents real smart city potential. For example, Sidewalk Labs, Google’s innovation arm dedicated to urban innovation, recently signed a deal with Waterfront Toronto to build a tech-focused neighbourhood on its shores. The revitalization project would use data-driven technology to transform the area and improve everything from transit to connectivity.

From science fiction to science fact

 
Of course, Google isn’t the first company to see smart city potential in one of Canada’s biggest cities. Entrepreneurs over the years have worked hard to create made-in-Canada tech to fuel future smart cities around the world. 

“The global smart city market is expected to reach $88.7 billion by 2025, according to market research company @NavigantRSRCH.”

In response to increased interest, the federal government launched its Smart Cities Challenge last year. The initiative gives municipalities and Canadian firms up to $50 million to come up with high-tech solutions. Meanwhile, Montreal’s Surveyor is building cloud-based software that optimizes how much energy-smart buildings utilize and Kitchener’s Miovision has discovered how to reduce commute times in large urban centres through public data.

Using cellular technology, Miovision adjusts traffic lights in real time. This means drivers are able to get from point A to B safer and quicker.  

“We’re basically putting …. an industrial cellphone into the little grey boxes that you see on the side of the road, and all we have to do is drill a hole in the side of the little cabinet, put an antenna on it and then we’re connected,” explained CEO Kurtis McBride in an interview with CBC.

The problem with smart cities

 
For tech’s early adopters and forward-thinking businesses, a focus on smart city technology could end up being a huge boon. While on the other hand, better-connected cities have the potential to widen the already growing gap between the rich and poor.

When it comes to regulation, not enough people are talking about the balance between innovation and inclusivity, explains Pamela Robinson. The associate professor, from the School of Urban and Regional Planning at Toronto Metropolitan University, recently participated in a panel that broke down how smart technology could impact Toronto. “We need to understand how this kind of technology maps itself on all of the people of Toronto and we need to start asking more people what they desire from this technology and what their fears are,” she adds.

Smart city issues entrepreneurs should be wary of:

  • Privacy: Cities create and improve smart services by collecting vast amounts of personal data. Safeguarding personal information will be crucial and necessary as connectivity grows.
  • Government: Public-private partnerships have emerged as one of the most popular ways to help finance big infrastructure projects. Learning how to navigate these tricky relationships is crucial. Entrepreneurs looking for national guidance an look to the Canadian Council for Public-Private Partnerships or locally to Civic Tech TO.

Building smarter cities also mean dealing with new technology that can disrupt and threaten livelihoods. Just like how Uber and Airbnb transformed the taxi industry, smart cities can do the same for other traditional sectors. With disruption comes potential labour upheavals that can leave the disenfranchised in a vulnerable position.

The future is here

 
It’s too early to know how Sidewalk Labs and other smart city technology will impact the city of Toronto. However, it is clear that interest and potential aren’t going away anytime soon. According to the National League of Cities, a U.S.-based advocacy group,  66 per cent of cities plan to invest in smart city technology.

How startups can partner with influencers the right way

Social media influencers mean big money.

They have thousands of followers, command “fans” around the world and can launch global campaigns with one well-timed photo or push of a button. In layman terms, these new-age “stars” have real power. And, brands have noticed.

More companies are eschewing big-name celebrities in favour of social media stars who have huge followings. In turn, startups have instituted special ways to recognize these individuals (and sometimes even profit off of them). Think Twitter’s checkmarks, Instagram’s badges and Snapchat’s special emojis.

“Influencers [and influencer marketing power] isn’t going away,” explained Jessica Clifton, U.S. managing director for strategic growth and development at Edelman about the rise of these socially savvy millennials.

Now tech startups are hoping to get in on the action. They’re tapping influencers to lead their businesses and manage their social strategies. But, is it a good idea? When done right these socially savvy individuals can generate international buzz. When things go wrong it can alienate existing customers and permanently tarnish a brand.

The rise of the influencer

 
The relationship between influencers and the tech industry isn’t complicated. In the early years, social startups sought out and helped amplify influencers on their platforms. For instance, Markham-based Lily Singh works with YouTube and special brands across the globe, while fitness guru Kayla Itsines is the poster girl for Instagram.

More recently tech-based startups (and tech enthusiasts) have started working with influencers in greater numbers, although with mixed results.

Blue Apron, a food delivery system based in San Francisco, fired millennial star Jenelle Evans last month after customers threatened to boycott the controversial star. Earlier this week Instagram star Claudia Oshry and her sister Jackie were fired by social media show Oath after old anti-Muslim tweets were unearthed.

These problems embody how wrong influencer partnerships can go: When done right it can be a great business move, but also easily lead to trouble if done wrong.

So what should entrepreneurs do? Make sure you perform an exhaustive search that takes into account an individual’s background and working relationships. “Brands need to do more research into these influencers,” says Delmundo CEO Nick Cicero. “There are more people to keep track of than ever before, and it’s harder to do quality control. So you have to do the research to make sure some YouTube kid won’t put your brand in a bad light.”

Rachel David, a former broadcaster turned YouTube star and now entrepreneur agrees. Her agency works with a slew of influencers across Canada and North America. For small companies or startups that see partnering with an influencer as easy “low-hanging fruit” it comes with unique challenges.

“[Startups and brands] realize that they want to attach themselves to influencers but they need someone like me to do a background check,” she says. “These are things that not every company knows how to do properly.” Her advice? Companies that don’t have extensive resources on hand should work with specialized agencies who understand the changing market.

David isn’t wrong. It doesn’t take much work to find companies (both big and small) that failed to do their due diligence and ended up paying the price. Disney’s brand was hit when its Youtuber influencer PewDiePie made anti semitic remarks while advertisers were up in arms after popular influencer Logan Paul aired a video showing a dead body earlier this year.

Platforms have to be wary too

 
It’s not just companies that need to be wary. The tech platforms that help promote these users face an uphill battle now-a-days too. Critics have long accused social media sites of not doing enough to stem the negative and sometimes ‘toxic’ content influencers produced.

Earlier this month, Unilever — a consumer goods company that owns Dove, Axe, Ben & Jerry’s– threatened to walk away from digital platforms. They continue to prop sites that promoted harmful content and influencers. The announcement was huge, considering it spends about $9.8 billion every year to promote its products around the globe.

In response YouTube and Google have committed to increasing the number of moderators and strengthened guidelines for its creators. It’s a step in the right direction and puts the onus back on providers. Although, David adds it won’t completely solve the problem.”Every creator is responsible for their actions. Advertisers are spending their money, they can’t control what comes out of a creator’s mouth. What they can control is who they put as “trending,” who they recommended.”

“Tech companies will now need to take on roles they never dreamed of when they started,” says Clifton. “These platforms are growing up and now can’t focus on merely just providing these free services.”

While it’s too early to know for sure what will happen, like any maturing industry, social media platforms are showcasing how crucial it is for companies to change as they grow with their users.

Startup problems: Why founders keep getting fired

Every founder dreams of making it big.

Stories about struggling entrepreneurs who turned their startup into million-dollar businesses have captivated the industry for years. But what founders rarely talk about is what happens when they’re asked to leave the very company they helped create.

“The interesting paradox is that when founder-CEOs do really well that also increases the chances that they’re going to be replaced.”

It may sound counterintuitive, but starting a company doesn’t guarantee a job for life. Founders are forced out all the time. Entrepreneurs behind some of today’s most-talked-about tech enterprises — like Steve Jobs (Apple), Jerry Yang (Yahoo) and Andrew Mason (Groupon) — all found themselves pushed out at one point in their career.

Getting the red slip

 
Interestingly a founder’s early success can play a crucial part in their firing. As startups grow, they often bring on more investors. These investors end up on the board of directors and can make management decisions about hiring and firing.

In fact, a study by Noam Wasserman, a professor at the University of Southern California, found founders rarely last. On average, four out of five entrepreneurs are forced to step down or removed from management. By the time startups reach the three-year mark 50 per cent of founders are no longer CEO. By the IPO fewer than 25 per cent still lead their company.

“The percentage of founder-CEOs who ‘go the distance’ is extremely low,” Wasserman explains.

“People like Bill Gates and Larry Ellison, who are able to lead their companies for quite a while, get all the attention because they are rare.”

Plan for the future

 
There aren’t any steadfast rules for founders who want to stick around, but here are three things that can help.

Ryan Howard, ex-CEO of Practice Fusion, was fired twice from his own company. He suggests entrepreneurs plan ahead in case one day they’re forced out too.

It helps, he says, to tackle the uncomfortable ‘what ifs’ by hiring a lawyer who can help, he explains in Fast Company. “That attorney can help draw up an employment agreement for the founders. [It] might include things like accelerated vesting and a severance package.”

Don’t give up too much control

 
Another way to prevent being pushed out is to properly vet board members. Ensure new members offer value, share the same vision and future plans for the company. By doing this, founders can spend less time worrying about being ousted and concentrate on work.

“Founders get fired when they’ve turned over majority control of their company to others in exchange for working capital, and the investors lose faith in the founders’ ability to create value” shared Ian McCullough, engineering manager for Uber.

Grow with the company

 
Changing with a company is crucial. Like everything in life, it can take time for entrepreneurs to get accustomed to a new environment. Founders that can grow with their team and adapt have a better chance of lasting.

“If you are a founder that constantly questions yourself as well as your business then the founder concerned is better positioned to carry on making the right decisions for the business,” explains U.S. VC Guy Lewis.

Best of both worlds: The non-profits that act like a startup

Technology influences everything we do. It affects how our economy runs, the way we vote and even the medical care we access. In fact, tech (and the startups that create it) are behind some of today’s most successful social breakthroughs and nonprofits are taking notice.

The new nonprofit model

 
In an effort to emulate their success, more not-for-profit companies are choosing to run their organizations like a lean startup. For Rumie founder Tariq Fancy the startup model has proven incredibly successful. 

Since launching in 2003, Rumie has provided its low-cost tablets — that hold up to 10,000 textbooks — to youth around the world. Through its technology students can learn about a variety of topics, which include science, math and history.

By adopting a scrappy can-do attitude and implementing new technological resources, they’re making a difference in the lives of those who need it most. Just recently the company was awarded the Google Impact Challenge award for their ongoing efforts while Fancy, himself, was named one of BNN’s Top 40 under 40.

According to Fast Forward, a U.S.-based nonprofit accelerator, the number of nonprofit startups has more than tripled since 2000. A figure that proves just how popular the concept has become over the years. More investors and wealthy benefactors are opting to invest in hybrid companies (like Rumie) with a social mandate. 

To learn more about how nonprofit startups are changing the world listen to  Robert Gold, host of BusinessCast, interview Fancy . Make sure to also visit our official iTunes page.

« Older Entries

Newer Entries »