Training Mobs and reelyActive shed light on start-up success (Views: 4134)
Wed, 05 Sep 2012
Two local start-ups in Montreal recently spoke to Fundica.com about who their companies are and how they found funding.
Training Mobs is a new social fitness tool that brings together potential workout-seekers into organized groups. One of the company's co-founders, David Sciacca, spent three and a half years doing investment banking at CIBC World Markets before he and his partner decided to create a business.
They knew there was a niche market with a problem that could be addressed. The problem was that access to a quality workout was too complicated or time-consuming for some people working long hours.
The two-year-old idea officially launched in January 2011 and provides people with the information they need to go out and find a suitable workout. The company recently pivoted it's focus though, as they have teamed up with over 60 gyms, studios and trainers to provide a universal “Mob Pass”. The new component gives trainers discounted access to any affiliate, without membership. Although the company hasn't developed an iPhone or Android app, they plan to soon.
Ideologically, Sciacca and his co-founder also shifted their target workouts from any workout, anywhere to group-fitness in small, independent studios. They originally assumed that the idea could revolve around community-driven fitness where people would congregate on their own but soon realized that they had to have people, gyms or studios to lead these workouts, giving way to the new 'Mob Pass'.
Meanwhile another Montreal start-up reelyActive has taken a similar path to fruition. Self-described as the “proximity identification platform”, the company uses a central 'cloud' to use radio frequency identification (RFID) technology to locate anything: objects, people, pets, vehicles, etc. 'Active RFID', which the company uses, has batteries and can emit a signal over longer distances. They built their own technology and currently manufacture it in Quebec: little proximity tags and 'reelceivers' that can chain together to form a reel
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The company's website explains, “by associating devices with humans, objects and places, linking them to additional content, complementary platforms or social media, and then selectively sharing this information, the possibilities are limitless.”
One of three co-founders, Jeff Dungen, explained they set out to build a simple and accessible cloud-based active RFID platform. Nobody was doing this well when the trio started the company and they decided after years of RFID consulting and working for other companies that they would create reelyActive.
Like Training Mobs, reelyActive has also slightly pivoted it's focus to other markets, like connecting people's online-shopping habits with their in-person habits. If online data aggregators know what to suggest for online shoppers, why can't device identification allow shopkeepers to know what customers are looking for before they walk into the store? Of course this means people have to share a bit of information about themselves, but Dungen emphasized that the idea works as people are free to disclose how much or how little information they want. Similarly this idea can work with parking habits too, minimizing the daily annoyances of city driving by connecting people's vehicles with the closest parking metre or lot.
Currently their greatest business is coming from the existing markets: supply chains, securities, basic controls, or “a lot of stuff that doesn't seem cool or web 2.0ish,” admitted Dungen.
Both companies mainly bootstrapped their first years in business with a little help from federal R&D credits, small business loans and love money. TrainingMobs consulted Fundica.com about all their options and eventually applied for and received grants from the Fondation du maire de Montreal and the SAGE Jeune promoteurs for about $30,000 in total.
“If I don't go through somebody like Fundica and I don't have an endless amount of time on my hands to do this type of work, then I'm not going to apply and If i'm not going to apply then I'm definitely not going to get this grant or tax credit,” said Sciacca. “Fundica on the other hand has experience in going to do these things and getting these grants or credits.”
Sciacca said that rather than “doing the hunt all on your own,” it helps to have a company like Fundica aggregate information for him to look into a grant more thoroughly.
reelyActive on the other hand used 'shred' money to continually gain R&D tax credits while Dungen was working as an RFID consultant. This consulting work provided the main seed money for the company and they continue to seek out funding from different means.
“We're applying right now to two [grants] that are young entrepreneur things,” said Dungen. “If we get those, great, but now we're getting to the point and in the right circles where we'd be able to get some angel investment and some things to get us further. Now you play the game where the further you go without taking it, the more equity-stake you have.”
In their path to starting up companies and seeking out financial stability the two companies also shed light on the growing, intimate local start-up scene in Montreal. “Montreal is a really great place, if you know what you're doing, to really bootstrap a start-up,” said Dungen. “And then the fact that you have four universities cranking out grads, it means you have a pretty good technical base here.”
Starting up in Montreal means forging relationships in a smaller market than most, where people are willing to invest and support locally. “There's enough support out there if you're a start-up,” said Sciacca. “There's starting to be a bigger cohort of successful start-ups in the Montreal area so if you're willing to reach out and talk to the CEO's of these companies and get to know them, you can learn a lot.”
For those interested in checking out TrainingMobs or the Mob Pass click on the links. For information on reelyActive click here.
by Joseph Czikk
jczikk@fundica.com
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