Bridging the
Canadian Commercialization and
Sales Gap:
A Canadian Cookbook of
Essential Initial Strategies and Tactics for
“Launch” and Scaled Sales
Sault Ste. Marie Presentation
November 2014
Albert Behr
Copyright 2014, Behr & Associates Inc.
Why Are We Here: Playing the Swiss (or Swedish
or Israeli…) Game for Success

Quick...Name five “Swiss” Companies or Products.

Chances are you would come up with Knife Company, Watch, Chocolate, and Bank
Names. All World Brands.

…From a small landlocked country with no natural resources and with a population
half of the Province of Ontario.

Now quick, name any five World-Class Canadian Companies in any industry. Much,
much harder a list to create.

We are educated, natural resource rich, next door to the largest economy in the
world, and yet we are outperformed on the world-stage by countries like Switzerland.

This is the essence of the Canadian Commercialization Gap. This is what we directly
address today in our discussion. How to scale sales!
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Today’s Agenda
Basic Principles for Any Canadian (Technology) Company to Succeed on a World
Stage:
1.Purpose of today’s Presentation – Time to Get Real in Today’s Environment
2.Realities of the Global Market Today – Time for a History Lesson!
3.Realities of the Global Tech Market Today and How To Respond as Canadian
4.The “Name of the Game” on how to Scale Sale -- Rules to Live by as a Canadian
Entrepreneur
5.The Process in Real World Steps for the aspiring Canadian Firm
6.Summary
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Basic Principles for Any Canadian
(Technology) Company to Succeed on a
World Stage
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Purpose of Today’s Presentation – Time to Get Real!


Dr. Phil Time!!! -- Time to Get Real!

A chance for you to step back and, think critically where you want your company to
go, given the today’s tough environment.

The motto for my entire chat today is for you to learn to play to your strengths today,
not what you “think you want to be”!
Everything has a Lifecycle; Embrace it and Win – Ignore It At Your Own Peril

With very few exceptions, companies that were hot 3 years ago are not now, and
those today probably will not be in 3 years – get the hint?

Don’t believe you own bull or count the money before the “cheque clears”

Be humble and not greedy (Gordon Gecko in Wall Street was WRONG!). Vast
majority of exits are ones you never hear about and they are $10-$30m in value

To scale sales, you need “Big Friends”
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Behr & Associates Inc. – Who Are We?
Who Are We and Why am I Giving This Chat?
•
Born, raised, and escaped from Winnipeg! ;) Generation 1 hacker with a tech MBA from the US a BILLION
years ago…
•
Lived in Silicon Valley, Redmond/Seattle, Tokyo, and Europe for some of the largest tech companies in the
world
•
Based out of Toronto and work with promising Canadian companies help vend their products and services
on a world stage with very large players.
•
Co-Founder Cleantech North, and Behr & Associates
•
Lecture at several Canadian universities and work with numerous Incubators and Accelerators in Ontario
What The Does Behr & Associates Inc. do?
•Behr & Associates Inc. is a successful & recognized Technology Commercialization Practice focused on helping select
companies achieve market leadership and liquidity options .
• We have lots of friends in “big companies” in US, Europe, and Asia, and connect people to them for mutual benefit
• This is accomplished through the focused implementation of strategic partnerships, relevant
financial capital, as well as senior advisors and managers for promising firms.
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Small Sample of Current Major
Technology, Distribution, & Financial
Partner Access
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
What Should You Take Away From This Session?

As Proud Canadians, know what we are really good at and do it! We are world class
engineers/ and designers -- Direct corollary – don’t do what you are not t good at which is to
try to scale sales “on your own”!

Following the “old” model of Canadian sales scaling and funding has not worked in the past.
Time to follow the Swedes, Israelis, Koreans, etc., etc! OECD 19th out of 20 on
commercialization! Look outward, not inward!

That it is very possible to win large, and not blow your brains out on trying to raise huge
amounts of money something very hard to in today’s austere environment

Protect, protect, protect your core Intellectual Property! Do it now! Do it often! Without it, a
strong exit is most unlikely

Partner, Partner, Partner for scaled sales! Do it now! Do it at least once a year! Without it,
exits are far less certain, and scaled sales are very, very difficult
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Realities of the Global Tech Market Today
Time for History Lesson!


Automotive Industry redux

In the start of the automotive industry, there were literally hundreds of different car vendors with their own
standard

Within 30 years, the industry boiled down to approximately six major vendors (NONE CANADIAN!) and all
their “feeder” suppliers (SOME CANADIAN); this still exists today and look what is even happening to
them! Supply-Chain, Supply Chain (e.g. Magna).

If you tried to “Storm the Bastille” by competing directly with the majors you died…Remember the Tucker,
Delorean, and Bricklin Automobiles - Are you Crazy? Only one Elon Musk in the past 50 years!

There is always room, however, for the next 8 track player, GPS, or battery-pack! Much much safer to
supply the big guys than fight them!
Today’s market: Back to the ’30s!

We are now approximately 40 years into the IT industry. Maturity time people! Volume and margin game.
Very difficult to attain new innovation on a world-basis.

We are now 10 years into the “Cleantech” industry with 30 to go. ROI-focused innovations can make a
worldwide impact, assuming proper go-to-market and distribution

There are around 20 “majors” in both industries across the “stacks” – 1 to 3 players per segment and
that’s that!. Worldwide supply chain is the order of the time!

We are NOT in the “geo” or “player” loop! We are badly strategically disadvantaged here…You think you
can outgun them because of your local technical prowess in today’s environment?...Are You Crazy?
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Realities of the Canadian Technology Company Today:
The Canadian Technology Vendor marketplace is generally characterized by:

Many small (sub $1m – 5m revenue) technology and “infrastructure” focused firms

2-5 years old. Most slowly “bleeding out”

Generally 5-25 staff with 90+% engineering

Virtually nonexistent expertise in corporate strategy development/execution, business
development

Funded to date through founders, friends and family, small angels, etc. No institutional
funds to date invested. Unsuccessful in attracting next phase investment capital.

They all generally feel that they have to “go direct” in sales activities

Not connected to the outside world and very insular in operating/financial mindset
Sound Like You?
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Realities of the Canadian Technology Company Today:
The Canadian Technology Investor marketplace is generally characterized by:
Founders, Angels, and Friends & Family – Up to $500-$750k but very tough
Labour Sponsored Funds – Evacuated Market and/or freezing investment portfolios
Private Venture Capital Funds – Generally will not invest under $5m for min 40% equity
position. Generally also have evacuated market. US generally will not invest here
Venture Debt Players – Generally will not invest funds into firms with less than $5m revenue
and be cash flow positive/neutral.
Chartered Banks – Generally, operating lines only. Venture groups have been closed or
narrowly curtailed to bank-related technology investment
Government Grants/Rebates- SREDs, IRAPs, SDTC, ERI IAF/IDF, etc. Certainly possible but
not for sales/marketing. Generally only for development not commercialization!
There is an investment hole here…. There has to be another way?!
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Realities of the Canadian Technology company today
(cont’d)

What are we good at? What aren‘t we good at? Hint we are BAD at sales,
generally!

Illusion of investment capital – using OPM is real hard! Only one way to do
this – The old-fashioned way, revenue and contracts!!!

Beating “their” engineers to the the punch! You can do this if you are
focused!

Protecting your IP in the US. You can and must do this! You can afford this!

“Living in Moose Jaw sucks” so let’s be an “Arms Dealer to the Big Boys!” –
In other words, Big Friends are Mandatory!
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Realities of the Canadian Technology company today
(cont’d)

Sales and “Channel” Partnering. Do it now! Do it with the Americans and the
Europeans NOT the Canadians! I know this is completely unnatural….

Love those Canadian Engineers -- Play to our strengths and perceptions!,
Canadian Businessmen…who? – Don’t play to our weaknesses!

Don’t pick a fight with the guys down south…We are outgunned at every
junction. Generally at least 10X behind….They are your FRIENDS not your
enemies!!!

Big guys prefer to buy than build themselves….We fit well here, if done
properly

Get in – Get out!!!! Three - Five years or die trying! Canadians have not
demonstrated longevity in the IP world….
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
The “Name of the Game”: Getting Ready for the Dance –
Base Lessons for Canadian Tech Entrepreneurs

“Dog & Tail” – Admit it and take advantage of it! Beat their own engineering
team to the market and use their sales teams to sell it!

Integration, Integration, Integration dammit! Extension to their environments.
Go deep and extensive!

“Crack Cocaine” Selling – Get in the front door (don’t be greedy!!!) and then
grow from there! Quick story here…
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
The “Name of the Game”: Play to Win, not Come in Last!

Locking down dat der ‘IP! NOW!!!


Get out into market NOW!



As soon as you have a prototype, go south immediately! Do not spend 2-3 years
“testing” in Canada!
By the time you are “ready” the market will most likely have already passed you…
Go-To-Market Strategies – Leverage, Leverage and don’t build it out yourself!





You will rarely get taken out if you don’t own your intellectual property and “fence” it
Leverage OEM or US Distribution deals
Don’t be afraid of the “E” word – Exclusivity! Lets talk about this!
Leverage those contracts with loans/lines of credit and/or focused private equity
Don’t be greedy!
“Go South Young Man!”– Stop being a Canadian!!! (e.g. 300 Wal-Mart
Canadas, 4300 Wal-Mart USAs!)
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
The “Name of the Game”: “To Thine own Self Be True” -- Gotta Know When
to Hold ‘Em, Know When to Fold ‘Em…
 Itch and scratch the big guys! You get to itch them only once generally! Sooner
rather than later!
 Don’t try to take on the American’s alone. You will FAIL!
 Nature abhors a vacuum. Recognize that! If you don’t dance, someone else will
right behind you! Don’t be arrogant!
 Hope beyond logic…When they say no, when everyone says no (usually around
10 partners), it is time to look in the mirror real hard!
 3-5 Years and the market is “baked”. Now what? Succession Planning?
Lifestyle? “Strip and Annuitize”?
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
The Process in Real World Steps for Scaled Sales

You have to build a direct business yourself to $100,000-$250,000 with local reference
customers– Canada is great for that!

You start locking down IP at a rate of (minimum) 1- 2 per year FORVER!

You determine the 6-8 most likely strategic partners

You start deep technology integration into them immediately

You (after integration), go after theirs sales/distribution channel in the US

In parallel with channel, you go after the OEM throat for Scaled Sales. DON’T BE
GREEDY!!!!! Quick story here!!!

2X OEM cycles and wait for the knock from the CFO or Corporate Development!

3-5’ish years – in and out!
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Great…But How Do I Capitalize This?

Assume little or no “up-front” local capital injection with this exercise

To break the chicken-and-egg problem, you need to get a “real” MOU/LOI from a partner in the
US for “real” sales/dist/OEM/or large end-user contract FIRST. You don’t need a P.O….yet!

If you have some US activities already, pass to partner to accelerate interest.

You need to take this MOU to:

existing investors, to keep cap table tight to fund MOU => P.O.

Partner who just signed MOU, to discuss strategic investment/provisional site
license/”exclusive” dist.

When P.O. is attained, you need to factor this through facilities like EDC to facilitate ops costs
and assure as little dilution as possible.

Rinse and Repeat!...

Nice and Tight Cap. Table Diluted upon Success!
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Government Programs/Assistance that can be leveraged

SReD: obvious

IRAP: investigation absolutely

SDTC: Very difficult

BDC “small” loans, $150k, $500k and above….

Universities & Ontario Centers of Excellence/OCE

EDC: Critical for manufactured product and international customers

DFAITD: Fantastic to get connections to local partners! In the cities you want to
get to such as Boston, NY, Munich, San Fran, etc

Local State Programs and agencies are great for local market introduction. Example
is Massachusetts green Energy Council
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Summary
 There are still AMPLE opportunities for Canadian Cleantech firms on the
world stage. IT and areas where we should excel…
 You must come to terms with what you are good at what and you are not.
Canadians are NOT good at Scaled Sales, Americans are!
 You must respect “the curve” and recognize the tight timeframes for
most companies lives. Get your product out as fast as possible outside
of Canada.
 Lock down that IP!!! It is really your only defensible asset….
 Get those International Partners to validate, invest, and drive your
business
 You need to always “Get Real” and “Stay Real”!
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.
Thank You!
Albert Behr
abehr@behrassociates.com
www.behrassociates.com
(416) 893-0747
Copyright
2014, Behr & Associates Inc.
Copyright 2014, Behr & Associates Inc.