What we learned going through the Ontario start-up ecosystem

This is a guest blog written by 3terra. 

It’s fair to say that 3terra has received more than its fair share of support from publicly-funded entrepreneur programs in Ontario. We wanted to share our experience participating in these programs over the past three years, as we went from building a small proof-of-concept to licensing 32 Ontario hospitals on the analytics platform that grew from it. We hope that it gives some insight into how new participants can most effectively utilize these resources.

For the first 6 years of its existence, 3terra was a professional services firm that focused on data warehouse development and analytics in healthcare. In 2013, we began to focus on developing licensed software products so we could solve a problem once and reuse the solution across many hospitals. It was actually a very big shift for us. In most ways, being a consultant was much simpler than trying to market licensed software.

We started at the RIC Centre in Mississauga, participating in their incubator program. We then moved into TechPlace and became a client of Haltech. We’ve also had interactions with MaRS and several other of these Regional Innovation Centres (RICs). I’ve tried to distill the important things that we learned without regurgitating knowledge that’s better described in the many well-written books on starting a business:

  1. We had no clue what we were doing at first and it became clear that we had to become students of entrepreneurship. We built a product that we thought people would like, instead of what people would actually pay for. That’s a costly lesson to learn through failure, and a lot of pain could have been avoided by listening, understanding, and following established guidance for new entrepreneurs.
  2. Proving that your product is marketable is one thing. Building a business is something completely different and requires different skills. Once we turned the corner from developing a new product to operationalizing a business we realized that our old jobs were essentially gone and we were thrown into new ones. We weren’t really prepared for that but the RICs and their advisers helped.
  3. While it is true that RICs can be used to make connections for the purpose of new sales, that wasn’t particularly true for us (they did make us better salespeople though). What was incredibly useful were the introductions to the professionals that we needed to grow, including many different types of lawyers, accountants, HR consultants, marketing experts, insurance brokers, and industry advisers. Bad professional firm service can be a huge problem and personal referrals help.
  4. Being in a shared workspace environment has so many unanticipated positive effects. Motivation and excitement are contagious and you can learn from others on the same journey. Don’t pass it up.
  5. I had no clue what many of our peer companies actually did. Start-ups really need to work on clearly articulating their value in a way that’s conversational and natural. People don’t focus on this enough and its so important given people’s short attention spans. You may lose the opportunity to connect with someone important because they can’t figure out what you’re about. I think RICs should focus even more on helping start-ups with essential communication skills.
  6. We received IRAP funding with help from the RIC Centre, as well as SR&ED credits. Other than that, we bootstrapped. Many start-ups view getting external investment as “winning”. I’m not going to say it’s not. For some, it’s essential to enter a capital-intensive sector or take advantage of a rapid growth opportunity. I will say it can be an unhealthy distraction for entrepreneurs that lack a nuanced understanding of the subject matter. Being profitable without diluting equity sounds better to me, if you can put the pieces together yourself.
  7. I’m shocked that extremely successful people took the time to meet us just to give advice, without any expectation of getting something in return. Many entrepreneurs feel some sort of responsibility to pay it forward, presumably because they received the same help when they started out. It’s an amazing thing that you should take advantage of and aspire to do yourself, should you succeed.
  8. Not everything applies to you. Sometimes generic advice that you will receive works for most companies but isn’t going to work for you. While most budding entrepreneurs (including us at the beginning) disastrously ignore good advice due to inexperience, ignoring bad advice is a skill that you need to develop. When you work with advisers, it’s all about identifying and following the great advice that moves you in the right direction.
  9. Similarly, don’t confuse action with progress. We wasted a lot of time doing things that added no value but made us feel that we were contributing to the business. Success requires focusing on the tasks that are necessary, not the ones that are fun, comfortable, or convenient.
  10. Keep on talking to RICs until you find the right one. MaRS was not a good fit for us because we were too small on their radar. However, the RIC Centre and Haltech were great for us.
  11. You only get out what you put into it. A lot of people don’t go out to talk to potential clients or make full use of the resources made available to them in these programs. Whether that’s from comfort zone issues or believing that they don’t need the help, it’s a mistake. Talking with people and absorbing the lessons from their experiences was the cornerstone of all progress we made.

We would likely have failed in our venture without help, simply because being a team of good software developers isn’t enough to succeed in the software business. While 3terra is not the next Blackberry, I think that level of scale is an unrealistic goal for most RIC participants. From my perspective, the social benefit of these programs may not be the immediate businesses and jobs created, but the ones created years or decades down the road from RIC participants that just need time to grow, and who otherwise would go back to full-time jobs, discouraged. It’s not easy to measure this type of benefit but I’m sure it’s significant.

We owe a lot to RIC Centre, TechPlace, Haltech, other members of the Ontario Network of Entrepreneurs, as well as various municipal economic development groups. The Southern Ontario area has a great support system for new businesses and I hope it continues to get the funding and attention it deserves.

Since 2007, 3terra has been trusted by hospitals across Ontario to help solve complex data needs. Our Data Quality Assist (DQA) software helps hospitals identify problems in clinical documentation that directly affect hospital funding. Correcting these errors such that patient records reflect the reality of the care provided ensures that patient acuity is accurately represented across the province, leading to equitable funding distribution.