Three young entrepreneurs split $750,000 to start their own companies
Launching a startup company is risky. For some, it means giving up the security of a salaried job. For others, it’s putting their savings on the line. For all, it’s the uncertainty of going from conceptualization to market without running out of money. It’s a lot of work, but the rewards can be enormous for the founders, the employees and the community. In fact, innovation and entrepreneurship are two of the most critical activities Atlantic Canadians need to undertake to both add value to our traditional sectors and create new ones. But to make it possible, talented people with bright ideas need to know it’s possible, something that the New Brunswick Innovation Foundation (NBIF) is very passionate about fostering.
One way is through NBIF’s biennial Breakthru Startup Competition. The largest of its kind in Canada, with a prize pot of $750,000, its aim is to uncover new champions of innovation across the province and give them the opportunity to turn their dreams into reality.
“Providing venture capital to startup companies is something we do all year long,” says NBIF CEO Calvin Milbury, “however, those companies must be investment ready. For example, their business plan must be fully developed, some form of intellectual property or trade secret secured, and a product or service that’s nearly ready to launch.”
Breakthru is the only time that NBIF considers making investments based on ideas alone. The 2015 competition landed applications from 62 teams which, after going through Breakthru Bootcamp and submitting their first business plan was boiled down to five finalists and three winners.
The top prize of $287,000 went to a company called Castaway Golf. The company, headed by a few 20-somethings, developed an automated solution for retrieving, sorting and repackaging golf balls lost to water hazards.
“Recovering and reselling lost golf balls is a $200 million industry in North America alone, and it’s a hazardous job,” says Castaway CEO Josh Ogden, “many golf courses are in areas where water hazards house dangerous animals like snakes and alligators.”
Most golf courses employ professional divers to reclaim lost balls. Castaway’s technology can do the same thing much faster, leaving fewer balls behind. Since winning in March, the company already has dozens of customers on board for their tech and supply deals with retailers including one major Canadian company, to be announced this summer. The second and third prizes, worth $222,000 each, went to SimpTek Technologies and NB BioMatrix.
SimpTek, led by Asif Hassan and Keelen Gagnon developed a software platform that, through your power meter, can detect all of the different types of appliances in your home. Using their dashboard, customers can see, in real time, how much energy each appliance is using and how much it costs. After users set a budget for the month, the dashboard automatically monitors energy use and gives instructions about how and when to reduce usage of specific appliances to reach their target.
“While our software platform is a great tool for using less energy and saving money, there is a bigger opportunity for power companies,” says Asif Hassan. “To maintain their profit margins, power companies need us to consume less power at certain times. Because energy prices are regulated, when we demand more energy than they can supply, they have to buy it from another company at a higher price or use more expensive methods to meet that demand.” As a result, the company is working with several power utilities in North America to provide the service to all of their customers.
Hassan and Gagnon also had the opportunity to pitch their company on CBC’s Dragons’ Den, for their upcoming 2015-16 season, after winning the Breakthru Audience Choice Award. During the week leading up to Breakthru Live, CBC News New Brunswick broadcast stories about each of the five finalists so viewers could learn about each company and vote for their favourite. By the time of the live event, which attracted an audience of almost 600 people from across the region, 34,000 people engaged with videos posted, generating over 4,000 tweets on Twitter. In fact, #breakthru trended on Twitter around the time NBIF announced the winners.
“Pitching on Dragons’ Den was a great experience,” said Gagnon. “Upping the caliber of our pitch and interacting with the dragons left us even better prepared to interact with the C-suites of the large corporations we’re targeting.”
Third prize went to NB BioMatrix. Led by scientist Dr. Keith Brunt, its product, Naqua Pure, removes toxic heavy metals from the wastewater of heavy industry.
“It’s sort of like a really small sponge that you can throw into the water; that cleans up the water,” said Dr. Brunt in an interview with CBC. “And then we can pull those sponges out of the water, and we can sequester those heavy metals away.”
Today, most industries pump the wastewater into deeply drilled wells, the cost of which for industry can reach as high as $700 million per year. The company’s product and process are currently being scaled for industrial use, and when launched, will solve a difficult, expensive and environmentally precarious problem for industries all over the world.
“This was our fifth Breakthru competition at NBIF, and even though the winners represent just three of our 21 venture capital investments this year, the competition helps to stimulate the cultural change we need for innovation and entrepreneurship to thrive everywhere in the province,” says Milbury. “The Breakthru experience reaches and engages thousands and thousands of people of every kind from all over New Brunswick, across Canada, and even the United States.”
As a result, Milbury says this has led to increased interest in the foundation’s other activities, such as its new Innovation Voucher Fund. Through it, established companies in New Brunswick can receive up to $80,000 to work with the scientists and engineers they need to develop a new or better product, process or technology.
“It’s competitions like Breakthru and the light it shines on innovation and entrepreneurship that open people’s minds to doing something new,” Milbury continued. “We are grateful to all of the participants who took action and put their best ideas forward. These are the people who truly inspire us all to do the same.”
The next Breakthru Startup Competition launches in the autumn of 2016.