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Tips from Founders
Sep 12, 2014
Managing an Intercontinental Startup with Global Ambitions
By Mat Goldstein and Tim Jones*
We interviewed Damien Veran, co-founder of SlimCut Media, to get an in-depth perspective on building a start-up in Toronto.
Tell us about the background of SlimCut Media.
Thomas Davy and I started the company three years ago. The big idea is to help publishers monetize their content and make the transition from a legacy business model (newspapers, magazines, and TV) to a digital one.
The idea is that a sustainable media industry strengthens democracy, since it is important to have diverse opinions heard. So that's the vision of the company: helping publishers to be stronger in order to make an impact on the world.
How do you do that?
We sell publishers a single platform that has three different components. The first component is a loyalty program, where the more you engage with the website, the more it rewards you. The second component is a video advertising unit, where playback is triggered by the user scrolling to it or mousing-over.
The last component is a paywall unit. The advantage we offer is that when all three pieces are integrated (loyalty, video, and payments) you can give people a choice. People can choose to use their loyalty points from sharing articles or watch an advertisement or pay a subscription fee in order to access premium content.
Where are you based?
SlimCut Media is on two continents. We have our whole commercial team here in Toronto, and our development team is in Europe.
Why did you decide to have your development team in Europe, away from your commercial team?
When we co-founded the company, my co-founder was in Paris, and we decided right off the bat that it would be in the DNA of our company to be international. This has its challenges: it's hard when you are not in front of each other every day. You need strong discipline to keep having real conversations. For us, though, it's hugely important to be on two continents because it gives us access to all our markets.
Toronto was a great place for our commercial team to put down roots. Founding a company here is very easy. It doesn't cost a lot to incorporate in Canada, so the initial cost of entry is very low. After the corporate structure is in place, it's just about your vision. If you have a great vision you can share with people, the community will help you.
Do you find the ecosystem is fertile enough for you to recruit talent here?
It varies from industry to industry, but I've seen amazing engineers, amazing account managers... there's a huge pool of talent here. We are surrounded by world-class universities, which makes it easier to find good people.
Everything about the company's success, including team-building, comes back to your vision. If you don't micromanage people, and if you give them an opportunity to buy into the vision, they'll do a good job for you.
Tell us about your role as co-founder.
I'm in charge of managing vision. The sales, business development, marketing, strategy - that's what I do - but my main role is really to drive the business forward and to get some cash into the company. What are your biggest challenges? We are entering a new stage. We have become a proven solution for the Canadian publishing industry, and we have traction with some of Canada's biggest media companies as our clients. My challenge right now is to figure out how to get the same type of credibility that we have in Canada in the United States.
If you had the opportunity to build the company over again, would you do anything differently?
We learned from every single step we took. We needed that education. I wouldn't take anything back.
What's your best advice for founders?
A startup needs the Three Ts - Team, Traction and Technology.
When I talk about the team, I mean: are you getting along extremely well with your cofounder? Do you have a team that is complimentary, meaning that someone is an expert in each area you want to launch in? If not, you'd better figure that out before you launch. It doesn't matter whether you are at seed or Series C, investors need to see that the right people are in place to take the company to its next level.
Traction allows you to get that extra cash from investors. A lot of people think traction is just about having a prototype, but traction really comes from your first clients. If investors see you take modest resources and get a little bit of success, they know that if give you $200,000 or $500,000, you will be able to have a lot of success. Your initial traction shows them that value proposition.
Technology is critical. It needs to be unique, not just good. Having the right technology is more than having the newest thing, or the most complicated code. It's about how you organize and present it.
Do you launch and then try to acquire the three Ts as you go, or do you wait until you have the finished technology before you launch?
If you really want to succeed, you need to "start at the end." If I have the product today, will my clients buy it? That's your end point. That's when it's time to launch.
In 99% of cases, you might think the product is interesting, but nobody will want to buy it. They might think that part of the product is interesting, but other parts might be neglected, so won't buy it. So if you start at the end - if you have a market-ready product when you start - and if you have something that will resonate with the people who sign the cheques, you are ready.
How do you get in front of those investors?
Being affiliated with Ryerson's Digital Media Zone helps us. That attracts people. It has attracted a lot of CEOs to check us out. The DMZ is the largest startup incubator in Canada, with 72 startups here. It brings a lot of important people through. Although the incubator is helpful, most of it is just legwork - finding the right people.
Do you make a spreadsheet of your targets, and try to figure out who knows them, or who can put me in touch with them?
Yes, or you ask a good lawyer! But seriously, ask anyone who might be connected. Even if you can get connected to someone at the front desk of a target company, they might know someone who knows someone else.
I rarely say no to things, because I believe in karma. Not in the spiritual sense, but in the business sense - if you give up your time, you usually get something back, like a name or a connection. You need to be curious, not greedy, to do business.
Spending time making connections is hard, especially for someone as obsessed with return on investment as I am. Why would I spend an hour with a guy who is just interested in seeing the DMZ space? Because sometimes it generates real outcomes. It's important to find the balance with direct ROI, of course, but balancing that is part of the magic of being an entrepreneur.
It sounds to me like your vision goes beyond financial returns.
If your only goal is to make money, you'll never be happy, because you can always have more money. But money is still a great measuring stick. It's a way to measure success, and to measure what people do with their time.
Speaking of money, tell us about your fundraising efforts.
We're in our second round of funding, and are looking for $2-3 million. One good thing about this is that we're not burning very much cash. We are almost profitable. This means we're not in a rush. We can find the right people, the right investors, to help us. We can find smart money - people who are in the media themselves, here and overseas.
Did you have your Three Ts in place when you originally started your seed round?
We had to hire someone to complete our team before we could fundraise. We needed the third T in place before people could take us seriously - we needed to be at the end before we could start.
* Tim Jones was a summer studentÂ at Aird & Berlis LLP.