2012 Predictions for Montreal’s Tech Startup Community

by Ben Yoskovitz on January 8, 2012

Some people love ‘em, some people hate ‘em … but regardless, predictions are fun, and now is a perfect time for some of Montreal’s tech community leaders to make their own. I asked a number of people to share their predictions for 2012 and encourage you to share your own in the comments below.

Here are some of the answers:

Hugh McGuire from Pressbooks has a few predictions:

1. We’ll start to get a sense of the worth of incubators

The city is now packed with them, with YearOneLabs (RIP), FounderFuel, and more, giving small amounts to tens of short-term projects, along with coaching. Do incubators make for more successful companies? We’ve had a few good signs so far, notably LocalMind. I hope we can get the YComb model working in this city, because it seems like a better path to successful companies than a more standard VC approach.

2. Many of the Best Incubator & Lean Startups will Leave Montreal

If I had a dollar for every time someone said: “If you want to raise money/succeed, you should leave Montreal and move to San Francisco, New York or Boston…” I would have, well about $20. In general I think they are right. You don’t NEED to be elsewhere to succeed, but Montreal has a problem: we don’t have that many successful entrepreneurs to talk to. And that, I am convinced, is the X-factor that helps build success: talking to other successful startup entrepreneurs. Talking to other entrepreneurs who’ve done it is worth about a million blog posts about Lean Startup methodology. So: many companies will heed the advice. Some won’t. Hopefully we’ll maintain a growing and increasingly successful startup scene in Montreal. Maybe some of those big-shots will come back.

Hugh shares a bit of concern around the lack of exits in Montreal as well:

There were a couple of exits in the Montreal tech scene in 2011: Tungle and Coradiant. Were there others? Will we see more? If we don’t see more, we’ll have to start scratching our heads and wondering what’s wrong with us.

Mark MacLeod from Real Ventures is much more optimistic and bold:

At the risk of being controversial, I predict that Montreal will become the #1 city for startups in Canada.

Why?

* Density: between Founderfuel and Real, a lot of seed funding is happening.

* Capital: As above. Plus now iNovia has a shiny new fund and will likely invest part of it here. Rho will likely also have a new fund.

* Visibility: these funds, founderfuel demo days and events like International Startup Festival are shining a big light on what’s happening in Montreal.

I don’t know if that’s really controversial, but it’s definitely bold. Toronto saw much more capital raised and many more exits than Montreal. If you include Waterloo as well, Ontario pulled far ahead of anywhere else. We’ll see what happens in 2012.

Tara Hunt from Buyosphere shared her predictions as well (although also told me that she’s not a fan of predictions!):

I’m not a fan of predictions, but I do think this is the year that people will get more realistic. It’s not a bubble and it isn’t the end of the startup frenzy, but with money being tighter and the US elections taking place, focus will be taken off of the big valuations and college dropouts turned billionaires and more onto making businesses that are really useful for people. There will also be a huge emphasis on using web tools to improve democracy. The startup world will also continue to grow ‘at the edges’ – I predict this will be the year of the accelerator, launching all over the world and in various niches. This is neither a good nor a bad thing, but it will help the diaspora of startup entrepreneurs and investors.

Chris Arsenault from iNovia also shared some predictions, but I’ll save those for another post…

Here are my predictions:

  1. Montreal will continue to lead the cheerleading game. Montreal has a fantastic group of tech startup leaders – startup founders, angel investors, venture capitalists, and many others – that all contribute to building the ecosystem. That’s not going to stop. I believe it will grow even more. Startup Festival 2012 will be bigger than its inaugural edition. We’ll see more events, Notman House will make progress, and we’ll -collectively- make a lot of noise. No city in Canada does it better than Montreal.

    I also think 2012 will be a year that we balance that hype with results…

  2. More exits and later stage investments. There will be more exits in Montreal and more later stage investments. I see a gap in Montreal at the Series A level, with lots of early stage / seed startups emerging, and a decent number of bigger, more established businesses as well. The middle will remain weak.
  3. New leaders will emerge. I believe we’ll see new community leaders emerge. It’s time. New people will step up and contribute.
  4. Salaries are on the rise. This is going to become very clear amongst some of the hardest-to-find talent: developers (particularly senior, but even junior/mid-level people), designers and UI/UX people.

And here are two things I hope for:

  1. A concentration of successful e-commerce startups. With Beyond the Rack leading the way, and some other earlier startups playing in the e-commerce space, this is one of those niche areas that Montreal should be successful with.
  2. A concentration of successful game startups. The gaming space is even more ripe for success, and I’d like to see more indie game startups emerge (funded or bootstrapped), to expand on Montreal’s already-great reputation in the game space.

So back to you? What do you think will happen in 2012?