Marcus Daniels is CEO of Highline, the first pan-Canadian accelerator platform. Highline, the name a nod to the 49th parallel separating Canada and the United States, will focus on providing programming and support to help Canadian startups compete internationally, with the goal of keeping them north of the border. He spoke with Report on Small Business at the 2014 GROW conference in Whistler.
Q: Now that Toronto-based Extreme Startups and Vancouver’s GrowLab have merged to form Highline, how is the single entity going to differentiate itself?
A: We’re moving away from a generic, singular, traditional cohort program that’s 12 weeks long and architecting what I call ‘acceleration products.’ There are specialized accelerator programs – different lengths with different core focuses. That’s a layer where we offer the most value, specifically with the success metric both GrowLab and Extreme Startups had over the years.
Our core focus now is to find companies that have a product in-market and help them accelerate to get to the point of product-market fit.
The model is to speed to institutional seed and the only way we’ll be able to fulfill that proposition is getting companies that are timed at the right points into a program so the peer learning is at the same level. You see a lot of these accelerators where one company’s still coding its (first version), while another company has already got an anchor customer – it’s hard to create that competitive, co-operative culture that really pushes hard, so that’s one of the core elements.
The other advantage comes back to the geo-programming opportunities. We’re starting with two anchor cities, but we also have deeper connectivity to New York and San Francisco. For the last 18 months, GrowLab has been running part of its program in San Francisco. In the last 12 months Extreme sent the companies down to New York. We can extend that and have a strategy for how we’re going to build better activations there. From that point, we’re going to see a bit more renewed level of excitement within the whole portfolio.
We currently have 40 active companies. There are so many great companies in Vancouver that are looking to come to Toronto, and now they have a landing spot and can participate in the activations and mentor pools and specific investors that are in our network, and vice versa.
Q: How did Extreme Startups and GrowLab come together?
A: We started the conversation October, 2013, and a lot of it stemmed around the Industrial Research Assistance Program (IRAP).
I was reaching out to different ecosystem partners and accelerators to collaborate. Jonathan Bixby at GrowLab shared the vision of doing something national. We wanted to figure out how to create a premiere league of accelerators.
The traditional demo day was not yielding results for the founders or for the investors. The project helped us see the synergies, shared culture and vision. We started asking the question: what happens if we were a stronger entity and became more of a national platform as opposed to continuing as independent programs?
There are about 1,700 accelerator programs in the world. Sixty per cent of them have not helped companies get follow-on capital, less than 90 per cent have ever had an exit. How do we compete to become a Top 10 program globally, where we’re not just retaining the best Canadian founders but we’re getting great deal flow?
Both of us were doing about 10 companies a year. Twenty companies a year isn’t enough. If you look at 500 Startups south of the border – each batch is 30-plus companies. YCombinator’s doing batches of 75 companies. This is a volume game in some perspective. These Canadian accelerators haven’t had big exits but it’s still early innings. YC’s been around for about 10 years whereas in Canada, GrowLab and Extreme have been around about 30 months.
Q: Why did you think combining these accelerators was the right decision?