Disrupt or Be Disrupted. In the ever accelerating world of technological advancement this statement is not just a clever tweet, it’s a sober competitive reality. We live in a digital world where every company, industry, city and country is being disrupted at a very fast pace. Recent history proves that new winners are emerging and past champions are afforded no certainty.

The Digital Age, which officially began in 2010 and is expected to continue until 2030, will be 5-10 times bigger than the Information Age (1990 – 2010)[1]. This Digital Age is driven by the Internet of Things (IoT) and is estimated to have an economic benefit over the next decade of $19 trillion, or the equivalent to the US economy today. The Digital Age takes us beyond simply accessing volumes of data. It moves us closer to controlling and predicting complex outcomes. Advancements in software analytics and operational automation will drive a major wedge in the growing digital divide.

The inflection point of the Digital Age arrived in 2015 when we looked back to see how far we had come. Here’s the IoT growth by the numbers[2] since 2012:

• 18.2 billion things connected to the Internet today versus 8.7 billion[3];
• 13x growth in sensors shipped;
• 5.9 billion machine-to-machine connections (M2M) in place today versus 2.6 billion connections;
• $779 billion in IoT revenue today versus $450 billion;
• 2x growth in M2M service revenue of $122 billion today up from $66 billion; and
• $1.4 billion in predictive maintenance revenue versus $400 million.

Over the past five years we have seen the number of corporate groups engaged in the IoT and, more specifically, the Industrial IoT (IIoT) soar. Corporate consortia involvement has grown 50-fold since 2012. Today more than 350 different corporations belong to IoT consortiums as they prepare to survive and thrive in the new Digital Age.

McRock was founded in 2012 when only a handful of corporations like Cisco and GE seriously understood the potential of the IIoT. We had a vision that the profound digital transformations taking place in the consumer and enterprise markets would similarly provide massive opportunities and disruption to large trillion dollar industries.

Today companies such as Électricité de France, Schneider, Pitney Bowes, SKF, Siemens, Rio Tinto, and Schlumberger have now started the transition into the Digital Age. GE has aggressively positioned itself as the Digital Industrial company.  This provides exciting opportunities for venture-backed IIoT tech companies looking for reputable customers, channel partners and ultimate acquirers. 

Canada is well positioned to be a leader in the IIoT given its formidable resource sector, highly technical workforce, and innovation eco-system. Companies like Dundee Precious Metals have created a completely connected underground mine. BC Hydro has reduced energy theft by 75% and generated $224 million in self-service savings. The City of Mississauga has sensored the city to significantly improve public safety. Equally as exciting, IIoT tech companies in Canada are leading the charge with global deployments, profitable business models and demonstrable scale.  

Take industrial app company, RtTech Software, based in New Brunswick. RtTech has deployed its industrial apps with 30 top-tier customers in 67 sites across the world. In 2016, GE Digital said, “One Canadian IoT technology company that has figured out the ROI from its products is RtTech Software, a Moncton, N.B. firm. The company has developed apps that help industrial clients − ranging from window and door manufacturers and bottling plants to corporate giants such as Michelin, Rio Tinto and Potash Corp − improve their operational efficiency”.

mnubo is another example of a Canadian IoT tech company that has experienced impressive growth since its inception only four years ago. The team has worked with a variety of customers in the smart home, manufacturing and agriculture sectors. In April 2016, mnubo announced it was collaborating with CaSA, a Montreal-based energy management company, to deliver actionable insights to thousands of connected smart home clients.

These are just two of many examples of how Canadian IoT tech companies are working with corporations to enter the Digital Age. The companies, industries, cities and countries taking action today will be the leaders of tomorrow because they understand they must keep moving or die. Which side of the digital divide are you on?

Author: Whitney Rockley, Co-founder & Managing Partner, McRock Capital

[1] Cisco Chairman, John Chambers, IoT World Forum December 2015, Dubai
[2] Source: Machina Research, IDC, ABI Research, Cisco Consulting Services
[3] Source: ABI Research, Business Insider, Cisco, EMC, Ericsson, Forbes, Gartner, Hammersmith Group, Intel, Internet Consensus, Internet World Stats, Machina Research, Navigant Research

November marks the one-year anniversary of that desperate moment that proceeds success. Only hindsight makes this statement true as failure is also proceeded by the same desperate moment. It was a time where hope was challenged, success was no longer on the horizon, yet we kept holding on. We didn’t quit.

People ask me how we did it. How did we hold on when others started to give up on us? I found it fascinating that some people appeared to get a perverse sense of comfort from watching us struggle. I also found eternal gratefulness to those who guided us and stood beside us during those challenging days.

But when it came down to it, it was really about every relentless inch. We had no idea if the things we tried would move us closer to success or perhaps take us backwards. We just knew one thing – we had to wake up every day and do something. The small things added up and were manageable to action. Those inches demonstrated to ourselves, and the people we needed to reach, that we were relentless. We weren’t going away.
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My co-founder would always tell me that we could do 10 more push-ups. And we did. He would always have these crazy ass creative ideas that would immediately send me into exhaustion but I knew he was brilliant and, if I executed on his ideas, we would get one more inch closer.

One of our favourite rituals that I enjoy sharing is that we would toast our week’s accomplishments every Friday late in the afternoon over chicken wings and beer at our neighbourhood pub. Some weeks we had awesome things to celebrate while other times we simply celebrated the fact that we cycled our butts into the office through rain and snow. Reminding ourselves of every little inch and ending the week on a positive note was nothing short of powerful. It was a recipe for success.

We believed, never gave up and hustled for every inch. So here we are today…one year on and life is pretty okay.

​Author: Whitney Rockley, Co-founders & Managing Partner, McRock Capital

Last summer when I wrote the blog “No, This Is Not My Boyfriend’s Computer”, I embarked on a mission to understand resiliency. When I think of resiliency, I am not talking about how people overcome everyday challenges but rather how people overcome life altering challenges. When facing adversity, why is it that some people stand back up and thrive while others don’t? Why do some people fall victim to circumstances while others push forward, stay positive and figure things out?

My quest to understand resiliency started because of three reasons. One, I met Ping Fu, the founder of Geomagic, at a GE Leading & Learning Event in NY. Her story of persistence in the face of adversity is simply incredible. Two, I judged a First Robotics competition and saw underprivileged kids triumph against kids that were given every luxury to succeed. Third, I started my own company, McRock Capital, my dream and passion and in order to be successful, I needed to be resilient.

My first revelation is that the topic of resiliency is a fairly new area of investigation. Researchers have been trying to figure out why some people are more resilient than others and whether we can learn to be more resilient.

Here is what I found. Resilient people are flexible, adapt to new circumstances quickly and thrive in constant change. They are inherently positive, empathetic and have confidence they will bounce back even though they may feel totally overwhelmed at first. They take responsibility for their actions, think through consequences and have a certain level of self-control and discipline. They allow themselves to feel grief, anger, loss and confusion but they don’t let it become a permanent state[1]. When we fall, which we all do, resilient people don’t automatically say “here we go again…I am failing” or “that idiot, his actions have ruined my life and made me miserable”. The resilient person says “what can I learn from this experience so I can do it better next time.”

Researchers know that resilient people are less likely to become ill during difficult times. They heal and bounce back stronger than before. They give their families a better chance of bouncing back from tough situations and even help their communities get through hard times. But one of the most interesting findings I read was that researchers believe that experience trumps genetics. The key is to find your passion and purpose in life[2].

When I think of the entrepreneurs I have known that have demonstrated incredible resiliency and achieved outstanding success, they had, without a shadow of a doubt, an incredible passion and purpose in life. Many of them also stared adversity in the face at a young age and bulldozed through it. They did not give up because they couldn’t out of necessity. They didn’t have a safety net. They didn’t have parents running to their side to rescue them. They had to figure things out for themselves. Self-managed learning is one of the cornerstones required to being resilient.

 

 

 

 

 

 

 

 

 

As I was doing this research I realized that I loved the underdog. The person who defies all odds and wins (like Ping Fu) or the robotics team from Runnymede Collegiate, the inner city school that kicked the butts of the private schools. Perhaps it’s not surprising that I prefer to work with resilient underdogs and, on the other end of the spectrum, I want to tornado kick the parents who call in a favours to get their kids jobs.

I do know one thing for sure. Resilient people don’t give up. They are unstoppable, relentless and possess all the great attributes characterized by researchers. The resilient underdog is the royal flush.

Author: Whitney Rockley, Co-founder & Managing Partner, McRock Capital

[1] Dr. Al Siebert, The Resiliency Advantage
[2] Dr. Robert Brooks, The Power of Resiliency

It’s that exhilarating moment when you have mastered a skill to the point where you take it to the next level…and you want people to see it. As a venture capitalist I have an appreciation and respect for business operators that crank their businesses to not only achieving revenue growth but also profitability.

When it comes to the creation of shareholder wealth, there is much debate over growth metrics vs revenue (let alone profitability). I have no desire to tackle this argument here but I can tell you I like revenue and profitability. Too often companies that have developed great products and have paying customers still have an addiction to continuous equity injections to sustain operations.

If your company is experiencing any of the following symptoms, beware:
1) Yet another new CEO;
2) Not enough board room chairs for investors; and
3) Any round of financing beyond the letter “C”.

We live in a world where a select group of technology companies can create significant value by simply leveraging their viral coefficient. For all the rest, revenues must grow and eventually lead to profitability or wealth creation never materializes. I recently experienced an exhilarating moment in a company’s evolution from start-up. I have been a Director of Pure Technologies (TSX:PUR) for a number of years and on March 13th, the company announced its first ever dividend.  The company’s news release states, “We are generating strong free cash flow from our operations in addition to growing recurring revenues…we are pleased to be in a position where we can begin to return a portion of our free cash flow to our shareholders on a regular basis. This significant announcement reflects our confidence in our ability to enhance shareholder return while continuing with investments important to our growth.”

What can one say about any company that delivers growth AND Yield. Wait for it…”Look Ma, No Hands!”

Author: Scott MacDonald, Co-founder & Managing Partner, McRock Capital

I want to set the record straight.  Just because you work at a start-up does not make you an entrepreneur.  Just because you invest in entrepreneurs does not make you an entrepreneur.  Just because you sit on a board that makes decisions about entrepreneurs, does not make you an entrepreneur. For some of you (and I hope a lot of you), I expect you to say “No Kidding” but you would be shocked with how many people call themselves entrepreneurs but just suffer from Narcissistic Personality Disorder.  Yes, we are calling bullshit on the posers.  

One earns the title of entrepreneur when he or she takes significant personal risk and financial risk.  Personal risk means you are willing to put your 

reputation on the line for a new cause.  Financial risk means you are willing to put your family’s savings and equity on the line to build something from scratch.  For those of you who have never taken both personal and financial risk, you are not an entrepreneur.  For those of you that have, FAN-FRIGGIN-TASTIC!

Entrepreneurs have such an unhealthy level of commitment because they are fully responsible for success or failure.  Failure is ugly and failure hurts – it is not something to celebrate but rather something to learn from.  

So ask yourself a few simple questions:

• Have you experienced sleepless nights because you are staring failure in the face and cannot even comprehend the personal and financial implications because they are so big?  
• Have you ever made a shareholder loan to your business? 
• Have you ever had to look in the eyes of your child to tell him that everything is going to be alright even though you know you don’t have enough money to get you through next month? 
• Do you know how unbelievably good it feels to win when you have worked so hard and put so much on the line?

Entrepreneurs will have answered ‘yes’ to the first three questions and hopefully to the forth one as well.           

Put another way, if you negotiated a base salary before your first day of work, you are not an entrepreneur.  If you work within a larger organization and have responsibility for a business within that organization, you are not an entrepreneur.  If you have steadily increased your net worth through hard work but never sold or mortgaged those assets for your business, you are not an entrepreneur but you are likely an excellent operator.  Being an operator is a good thing but call a spade a spade.

The BS radar goes off when an entrepreneur encounters a poser.  Unless you have lived it, you can’t claim it.  So if you invest in entrepreneurs and are not one yourself, surround yourself with a few that have a clue.  Having half a clue is better than just being a pathetic poser.    

Author: Whitney Rockley, Co-founder & Managing Partner, McRock Capital