I found two startup companies that stood out, both in the “do good” space:

H2O3 Inc

Tim Piwonka-Corle, presented H2O3 Inc, whose product is a portable water disinfection unit that you can see on the right. The process is done using an ozone sterilizer, which uses less than 100 Watts of power (think incandescent light bulb). Each unit is able to produce 20 liters of sterile water in about 15 minutes.

Now the original purpose of this device was to help the third world countries, where contaminated water sources is the main cause of a high death-rate. And since this unit’s operation cost is supposedly quite affordable in poor countries it could make a huge difference to people who live in those areas. The upfront cost though might be still pretty high though, but Tim suggested that they will get that cost down as they improve things.

But the interesting thing is that this same device could have a variety of other applications, where a lot of money can be made. And two things that Tim mentioned were military usage and residential pool & spa industry. While the former is quite obvious, the latter has to do with chemicals used to disinfect water in pools. Those chemicals aren’t very healthy for our bodies, and therefore using Ozone to disinfect water is a much better proposition. And if the price is right, it could get a huge adoption there.

Apparently this is not a new idea, but H2O3 advantage is that they have a patented technology that is much more efficient than most current competitors have.

It’s an interesting company, since it has a potential to accomplish two goals - do good and also be quite profitable for those involved in it.

MakeGood Technologies Inc.

Rick Goosen said that his company is all about giving things in a new way (giving 2.0 he said on his site). One of the projects that start with is socially responsible yellow pages. Rick identified the need for being able to find companies that are socially responsible, as there is a growing segment of population that boycotts companies that aren’t socially responsible. Yet it’s very difficult to find the companies that fit the bill. Rick’s idea is to develop a process that will certify companies as socially responsible and give budges to those companies, which they can post on their sites and products, and thus attract more customers.

As any new idea, it’s hard to tell how their idea will work out, so we will just have to wait and see.

There were a few companies that I found particularly interesting.

fundfindr.com

This company’s idea is to help entrepreneurs with fundraising. Startups make a video of their pitch and upload it to fundfindr’s site. Potential investors can watch those videos and contact the entrepreneurs if they are interested in the idea. The site also provides listing of various investor groups and their contact information, which is a helpful resource.

I think it will probably be a very useful tool for both investors and startups. Though entrepreneurs should be careful at posting their pitches in public. If your video tells too much, you might be creating an unnecessary competition. No need to be paranoid, but exercising common sense is probably a good idea.

letsgofordinner.com

Apparently millions of restaurants have a problem with not being able to fill in the empty seats and lose money because of that. letsgofordinner is set to solve this problem, by equipping the restaurants with software that will send SMS messages to potential clients offering a 50% discount (restaurants are still very profitable, even at 50% discount - imagine the real cost of the meal). The startups says that people are embarrassed to use coupons and therefore having the payment done via the site removes the awkwardness element.

peerfx.com

I will gladly become their user once they live and running. peerfx brings a solution for an interesting problem - currency exchange spread that banks take is huge. When exchanging big sums of money this becomes pretty expensive. Personally I don’t use banks to exchange money, but go to smaller shops that specialize in money exchange and get much better rates. e.g. one such shop in Vancouver is Vancouver Bullion & Currency Exchange and another is Custom House Global Foreign Exchange. You just call them ask for the rate and if you come within a few hours they will reserve it for you. My teller at VanCity told me that they now also give custom rates to customers who exchange bigger sums of money. And of course there is xe.com that tries to give the best rates, but the problem is that it involves wire transfer and it might take a few days to convert your money.

Back to the peerfx story - banks charge higher rates, because they take the risk of buying foreign currency reserves (and because they can charge more). peerfx solves the problem by letting two people simply swap currencies removing the middle-man and the need to have a cash reserve. Of course peerfx is still the middle-man, but they are going to charge a lot less than banks. This is very exciting and if successful may force banks to reduce their rates (or may be not).

One thing I’m not sure about is how quickly peerfx could grow, before competitors realize that this is a great idea and provide the same features. I’d imagine that it shouldn’t take longer than a couple of weeks for paypal, google cart and alikes to provide such solution. They already have everything in place, including huge user-bases. Florence Leung, the CEO of peerfx.com, tells me that they have a patent on the whole idea. But I’m not quite sure how defendable that patent would be.

wommp.com

wommp is the �??word of mouth marketing project�??. Alexandra Skey had an impromptu presentation where she impersonated a typical consumer and a provider, each having a problem of communicating to each other their wants and needs. Users don’t want to see irrelevant advertisements, marketers in turn would love to figure out how to find the consumers that want their products and services and have everybody happy. The ultimate goal of the project is to implement “permission marketing” as coined by Seth Godin. i.e. they want to attract a lot of users which will specify their needs in a very detailed way, so that marketers could talk directly only to consumers who want their products and services. The idea is interesting, but as they say the devil is in the details. Let’s see what Alexandra can come up with. Watch Alexandra’s presentation here.

Typically there are two segments to each meeting. There are 5-minute pitches, for those who do it for the first time. If the 5-minute pitch went well and people found the presenter prepared, then the next time they are given 15 minutes. They also get time to answer questions — typically 10 minutes presentation, followed by a 5-minute Q&A session, where startups get “grilled” a bit, or should we say get a “reality-check”.

Recently one of the meeting organizers, Thealzel Lee, started running prescreen sessions, which allows startups to run their presentation in front of a small expert panel, which give suggestions for improvements and the panel also decides whether the company is ready to do the long pitch, do the short one, or send them home to do their homework.

There is one more nuance to the selection process. A startup that wants to pitch to VanTEC investors group has to find a sponsor investor who either had already invested in the company or considers to do so. This is a great filter, because if a startup can’t find a single investor themselves, chances are that they will waste other investors’ time.

Meetings are held monthly - usually the first Tuesday (but not always) morning of each month between 7:30 and 10:30am. Attendees are charged a nominal $10 to cover the coffee and snacks. Attendance is by invitation only, but if you really want to come and look at other companies present (hint, hint for you entrepreneurs) you will be let in. Most of the attendees are active investors, but there are always a few wannabes and handful of MBA students.

There are two kinds of meetings: Technology startups and Biotech/Life Sciences startups. The two alternate every month, so investors interested only in one kind of startups don’t have to attend every month.

You can read more about the VanTEC group.

If you would like to come and pitch to Vancouver Investors you need to contact Thealzel Lee tlee@rocketbuilders.com if you are a Biotech/Life Sciences startup and Mike Volker mike@volker.org for all other startups.

Often I find myself wearing one of the two hats: entrepreneur hat and investor hat.

I run my own business, but there are too many things I’m interested in and I can’t possibly work on too many projects at the same time and actually accomplish anything. I could hire people to work for me, but I don’t like management. I want to work on exciting projects, not manage people who do those projects. Some of us quit their employers to start their own company, because they hated being a slave to their company and not being able to work on things they really want to. And then they end up having their own company, but because now they need to manage people they don’t really get to enjoy their own company either. There must be a better way.

I outsource some of the work to contractors that works out quite well, since I don’t need to manage those people. The secret is finding an outsourcing company that will do the management for you and just deliver the results. But that only works for simple tasks that can be explained in a step-by-step spec. Anything that requires “thinking” is often not very suitable for outsourcing. I sometimes find independent people in the outsourcing industry, but it’s quite quite rare.

Some time ago I found a solution to my big dilemma. I now find startup companies that want to work on similar projects to mine. I then invest in those companies with cash and mentoring time. Startup companies love getting me on board because typically they don’t have extra cash to spend and I don’t charge them anything for my services, but accept stock options in lieu of cash. Because I have so much experience in a variety of industries I often can advise on a wide range of subjects. However I often need to be careful not to get too deep into the low-level details, because this is precisely what I wanted to avoid in first place — low-level details are very time consuming, and if I go there I can help with the big picture. So I need to remember that others can figure many of those things out without my help.

The kind of investments I do is called ‘angel investments‘. Basically this is the riskiest of the investments because typically it involves investments in companies that have very little or nothing accomplished at the time of the investment. They need money to hire people and buy equipment so that they could build the thing that dream of. As this is the riskiest type of investment, the returns tend to be the highest as well.

However the way I do it, this is the actually the safest kind of investment, because I’m directly involved with those companies. This is very close to having hired all those companies to work for me. So just like having my own employees if I’m good at helping the companies, I invest into, do the right choices — I increase the chances of success. Compare that to stock market investing, where most of it is a pure gambling - you have zero control at whether the company performs better or worse. Moreover often stocks perform badly regardless of how the company performs.

In the course of research I watch many startup pitches, talk to other investors and some interesting observations are made. I will try to share those observations in this blog and also talk about interesting events happening when I wear the entrepreneur hat.

Enjoy.