Chen poised to launch new BlackBerry phone as sales keep sliding

27 Feb

Chen poised to launch new BlackBerry phone as sales keep sliding

BlackBerry Ltd. Chief Executive Officer John Chen has presided over five new phones during his two and a half years running the company, none of which have managed to turn around steadily declining smartphone sales. Some analysts are wondering who would buy a sixth.

BlackBerry is hosting a live online event on July 26. Although it hasn’t confirmed phones will be on the agenda, Chen said Tuesday the company would talk about them in the next “week or two” and Chief Operating Officer Marty Beard said last week the next phone launch was “very, very imminent.”

Chen has said he’ll unveil two phones between now and March 2017, both running Google’s Android operating system. A “mid-range” handset selling for about $350 is scheduled to arrive before September. It’s a response to tepid demand for its first Android-powered phone, the high-end Priv, which Chen said had a limited audience. In Chen’s first full quarter as CEO, which ended Mar. 1, 2014, BlackBerry sold 1.3 million phones. In the most recent quarter it sold 500,000.

A new phone highlights an apparent contradiction for BlackBerry: the company has consistently said its future lies in sales of security-focused software, which recently overtook hardware as the dominant source of revenue, yet it keeps coming up with new phones. This despite the fact that some analysts say the company should cut the money-losing hardware business altogether.

Right Formula “A lot of people are looking at it and saying ‘Wow I don’t know why they’re even in that business,’” John Butler, a senior analyst at Bloomberg Intelligence, said by phone. Chen “clearly has been struggling to find the right formula for the hardware,” Butler said.

BlackBerry reported fiscal first-quarter earnings on June 23 that broke even, compared with the average analysts estimate of a 6-cent (U.S.) loss. Revenue in the quarter was $424-million, including software sales of $166-million that were 21 per cent higher than the same period last year. Shares of the Waterloo Ontario-based company have dropped 31 per cent in Toronto this year to $8.82 (Canadian) for a market value of $4.6-billion.

The company needs to keep making phones for its most important government and corporate customers who see BlackBerry handsets as the most secure on the market, Chen told journalists on Tuesday at an event in New York to show off its software products. If it cut phones completely, those clients might abandon its software as well, he said.

Hub System “There’s a certain number of customers that want to have the whole integrated product,” Desmond Lau, a Toronto-based analyst with Veritas Investment Research Corp., said in a phone interview. “They may be trying to milk that for as long as possible in order to ensure that the software revenues are maximized.”

Chen has said he wants the company’s hardware unit to be profitable by September and recently restructured the unit to include revenue generated by licensing some of its hardware-related software like its BlackBerry Hub notification system.

“It looks like they’re trying to make it work in every which was possible,” Lau said. The focus on large business and government clients makes sense since BlackBerry has lost traction with regular consumers, he said.

Wishful Thinking

“They’re not in a position to capture much consumer share just by making another Android device,” he said.

Earlier this month BlackBerry announced it was ending production of its Classic phone, a keyboard-equipped device modelled after the most popular phones from BlackBerry’s heyday in the late 2000s. The announcement came just days after the U.S. Senate said it would not provide BlackBerrys to staffers any more. Chen said he went and spoke to the Senate and explained his plans for the new phones.

“They really want to test out our new products,” he said. “Everybody made it sound like we’re getting out of the handset business. It could be wishful thinking on some peoples’ part but it’s not true. Not yet at least.”

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23 Feb

Dear Milo: The six stages of lifetime-ban grief from fellow Twitter exile Charles C. Johnson

By now it’s probably seeming more real to Milo Yiannopoulos, formerly @nero on Twitter and now banned for life, that the little blue bird is never coming back. His followers will find new heroes, his enemies will stop caring about his tantrums; it’s all coming to an end.

If you missed it, Mr. Yiannopoulos has been banned from Twitter after Ghostbusters and SNL actress Leslie Jones was subjected to a campaign of racist and sexist harassment seemingly at the direction of the Breitbart writer and champion of so-called “alt-right” politics on the Internet.

There’s maybe only one member of the right-wing blogosphere who knows exactly what the next year of Mr. Yiannopoulos’s life is going to be like now, and that’s Charles C. Johnson.

We reached out to Mr. Johnson, 27, who lives in California, to find out what it has been like to become Twitter famous for right-wing online trolling, and then have all that access taken away. “I was the canary in the coal mine,” he says, speaking from the Republican National Convention. “I’m the man who was banned from Twitter before it was cool.”

Some might recall that for a hot minute in 2015, Mr. Johnson was the subject of think pieces on whether Twitter is a mall or a public square, whether it was a free-speech paragon or just another media company trying to sell ads. “Chuck,” as Mr. Johnson also goes by, was referenced in passing this week as new waves of those think pieces sloshed around pondering Mr. Yiannopoulos and those same questions about Twitter’s role and responsibility in our social-media society. “A moment of silence for the dearly departed Milo Yiannopoulos. May he rest peacefully in his Twitter grave next to Charles C. Johnson,” wrote Teddy Wilson, a reporter for the non-profit online news agency Rewire, on Twitter.

Mr. Johnson is a serial provocateur who has a habit of making false claims that he usually does not retract in the face of evidence. There’s a reason he was once described by Gawker as the “Web’s Worst Journalist” and by The New York Times as “mood slime.”

For instance, back in his tweeting days, he frequently claimed, with no evidence, that President Barack Obama was gay: “Once you accept the premise that Obama is gay a lot of things start to make sense,” he wrote in December, 2014. So take everything he claims with a grain of salt.

The stages of Twitter-ban grief:


On May 24, 2015, Twitter permanently suspended Mr. Johnson, after temporarily banning him three times earlier, in what looks like an escalating series of misdeeds, including falsely claiming that a picture of a young woman he posted was that of a high-profile rape victim. The proximate cause of his final ban was a tweet that was a solicitation of funds to “take out” Black Lives Matter organizer and spokesperson DeRay Mckesson, which many interpreted as a threat against his life or livelihood.

“I was watching Anthony Bourdain, and I went to bed. I woke up, my grandma called me up, ‘Go turn on CNN … They are saying you want to assassinate a civil rights leader!’ Twitter has never given me a reason – to this day – as to why I was suspended.

“They IP-blocked my house, my entire street. Anyone who sets up a Twitter account at my house, they can’t get on. They shut down accounts they think might be affiliated with me. They shut down my company’s account.”

Fast forward to this week: “Milo was like, ‘no, they’ll never ban me … because people like me more than they like you.’ His view was, if you’re a celebrity they will actually protect you on Twitter. I didn’t think that was true. I was like, ‘They’ll figure out an excuse to ban you.’ I had a conversation with him three days ago about how this was going to happen.”


“They say you’ve been kicked off, your account will not be restored. I sent them like 40 messages. I’ve used various Silicon Valley connections, to offer a truce. I’ve actually sent attorneys to send them messages. I’ve offered to cut deals with them where I can just put my account on locked and not broadcast to everyone, just to my followers. I have no problem paying Twitter like a thousand dollars a month or whatever.

“I want to sit down with them and just talk to them. I want 15 minutes of [Twitter CEO] Jack Dorsey’s time. I want them to tell me why I was kicked off. Why is there no Twitter court? Why can’t you adjudicate. If you’re going to suspend somebody’s account, at least give me a reason or an appealable process.

“We used to bust up monopolies in this country, and I think that’s probably what needs to happen with Twitter if its behaviour continues. We expect to file a lawsuit in my case against Twitter in the near future. I’m trying to talk to Milo about essentially joining that suit.”

Anger/Race blaming

Mr. Johnson has written pieces that blame Twitter’s user-growth issues on an explicit policy of being “anti-white.” Challenged again in our interview, he rhymed off what he believes are examples.

Twitter has a policy on not discussing the accounts it suspends in aggregate or in specific, and declined to comment on Mr. Johnson’s allegation of racial bias.

“People have called me the Nelson Mandela of Twitter, which is hilarious,” he says.


“It does affect you, but it affects more your psychology … you get e-mails from people: ‘I’m sorry to see you go.’ I do miss Twitter, I do think it’s a very useful tool for getting out your message. In all honesty, being off of Twitter has hurt me financially. Traffic on my website is up, though my donations are down. The one thing I miss the most about Twitter was the relationships with all these people who send me information.

“In a way, my banning actually made things worse. What it did was created this view of a war on Twitter. Twitter has descended into something much more vicious, like the comment sections on a lot of websites. I think that might also be because of the larger economic forces.

“It’s terrible that people have to deal with racism, anti-semitism, anti-feminist or anti-conservative or anti-whatever views … but this is just part of life now on the Internet. If you get really angry on the Internet, or really sad … maybe don’t go on the Internet. Maybe go outside. Maybe go read a book, hang out with a loved one. These are all things I’ve learned about dealing with the stress of it.”


“Being kicked off of Twitter was a freeing experience. It does make it harder to broadcast your views on things in the moment, but maybe it’s not always good to say what you think in the moment. Maybe less is more. It’s also forced me to build relationships behind the scenes that have actually elevated my career.

“I do enjoy having my day back. I saw Milo a few days ago, he looked a little haggard being on Twitter all the time. I have other friends who have a difficult relationship with their wives or girlfriends because they are obsessed with Twitter. In a way, being off of Twitter forced me to prioritize my business decisions, and my life decisions.

“One thing I like to do now post-Twitter, I like to go for long swims in the local pool or lake … that way no one can reach me on the Internet and it feels really good.”

Moving on

“I’m not as noisy as I once was but I’m very much involved behind the scenes. I’m going on various YouTube channels. The mistake a lot of people make is that you’re no longer present when you’re off Twitter, but there’s a big Internet out there.”

Note: there are still lots of accounts that claim to be Mr. Johnson. One such account is @ChuckCJ0hnson, which retweeted photos and videos from the Republican National Convention in Cleveland this week that appear to have been taken or made with his co-operation, though he denies he is operating the account.

“I’m not on Twitter under my name. If people want to create fan pages to me, and other accounts, they are free to do that. I have nothing to do with those accounts,” he says.

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19 Feb

Pokemon Go creators working to be ‘respectful’ of reality

The creators of “Pokemon Go” say they’re working to remove real-world locations that don’t wish to be included in the mobile gaming sensation.

The Pokemon Company’s consumer marketing director J.C. Smith said in an interview this week that they’re updating the augmented-reality game so it remains fun for players but respects the real world.

“When something is really popular, we have to figure out the most respectful way to deal with it and make sure that everyone is playing safely and doing things in a respectful manor,” said Smith. “It’s only been two weeks since it launched, and there’s been so much attention and so many people playing that it’s tough to think of all the ways it could affect the world.”

The location-aware game provides virtual rewards for players who visit real sites designated as “Pokestops” in the game. Several locations, such as the Hiroshima Peace Memorial Park in Japan and the Arlington National Cemetery in Washington, D.C., have asked to be removed from “Pokemon Go.”

Since the free game launched July 6 for mobile devices and rocketed to the top of the download charts, some players have injured themselves in pursuit of virtual monsters or have been distracted while playing “Pokemon Go” while driving.

“For us, we’re making sure the play experience is done right,” said Smith. “Initially, there was some server overload, which we’ve worked on. Now, we’re looking at features in the game and how to fine-tune them so that it’s appealing to the fans but also respectful of the private institutions that are affected by it.”

Smith wouldn’t offer a timeline of when updates will come to the game. “Pokemon Go” developer Niantic offers an online form to request exclusions, but changes to the game are not automatic.

For some sensitive locations, change has already come to “Pokemon Go.” U.S. Holocaust Memorial Museum spokesman Andrew Hollinger said the museum had been removed from the game per its wishes.

Despite the monumental success of “Pokemon Go,” Smith said the mobile game’s triumph isn’t affecting how the Pokemon Co. is approaching future projects based on the 20-year-old franchise, such as a live-action film to be produced by Legendary Entertainment or the upcoming “Pokemon Sun” and “Pokemon Moon” games for the Nintendo 3DS system.

“We don’t need to directly tie anything to ‘Go’ for it to benefit our fans or the brand as a whole,” said Smith. “In the end, the characters are the same. Pikachu in our animated series or Pikachu in our upcoming Legendary film or Pikachu in ‘Go’ are all the same.“’

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11 Feb

Twitter shares rise on report of news streaming deal with Bloomberg

Twitter Inc’s shares rose 6 per cent on Monday after a report that the company is partnering with Bloomberg LP for streaming news, marking the stock’s third straight day of gains following strong results last week.

Twitter and Bloomberg Media will create a service that will stream news produced solely for Twitter, the Wall Street Journal reported.

“(The share movement) is solely because of the Bloomberg partnership. There will be exclusive content streaming on Twitter, and that’s innovative. The market appears to like that,” said Wedbush Securities analyst Michael Pachter.

Twitter reported its strongest user growth in over a year last week. Chief Executive Jack Dorsey cited technical changes to Twitter’s timeline as one of the reasons for the growth.

The microblogging service’s user growth had stalled in the past few quarters, prompting the company to take steps to attract subscribers and advertisers alike.

“There is a steady string of positive news on Twitter that is changing the narrative. And as the narrative improves, it makes that much easier for the advertisers to have comfort with the platform,” Richard Greenfield from BTIG said.

Twitter received a setback last month when it lost a deal to live stream NFL games this year to Inc.

CFRA analyst Scott Kessler said the Bloomberg deal could allay some investor concerns following the loss of the NFL deal and the prospects of live video, a big focus area for Twitter.

“I think a lot of people wondered how (Twitter) is going to fill up that hole and what does that say about the future of live video,” Kessler said.

Dorsey snapped up more than half a million of the company’s shares for about $9.5-million, according to a filing on Friday.

Twitter was abuzz with takeover chatter last year involving big names such as Inc and Walt Disney Co . The rumors died down due to the lack of concrete offers.

Including Monday’s gains, Twitter’s shares are now up 6.8 per cent so far this year. The stock had lost about 30 per cent of its value in 2016.

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7 Feb

Uber looks to soar with flying taxis by 2020

After upending the taxi market with its ride-hailing service, Uber Technologies Inc is now aiming for the skies with its flying taxis.

The company expects to deploy its flying taxis in Dallas-Fort Worth, Texas, and Dubai by 2020, Chief Product Officer Jeff Holden said at the Uber Elevate Summit in Dallas on Tuesday.

Uber’s flying taxis will be small, electric aircraft that take off and land vertically, or VTOLs, with zero emissions and quiet enough to operate in cities.

Flying taxis would cut down travel time between San Francisco’s Marina to downtown San Jose to 15 minutes, compared with the more than two hours it takes by road, Uber estimates.

In an early scale operation, the company can get to $1.32 per passenger mile, a little higher than taking an UberX for a similar distance, Holden said.

In the longer term, Uber expects the cost of taking flying taxis to fall below car ownership.

The company is working with Hillwood Properties to make four vertiports – VTOL hubs with multiple takeoff and landing pads, and charging infrastructure – in Dallas starting next year, Holden said.

Uber, valued at $68 billion, has also teamed up with companies such as Bell Helicopter, Aurora, Pipistrel, Mooney and Embraer to make the flying taxis.

The company has also partnered with U.S. electric vehicle charging station maker ChargePoint Inc. Uber is working on developing an exclusive charger for its network.

Uber, which has partnered with the Dubai government, expects to conduct passenger flights as part of the World Expo 2020 in Dubai.

The ride-hailing service has recently been rocked by a number of setbacks, including detailed accusations of sexual harassment from a former female employee and a video showing Chief Executive Travis Kalanick harshly berating an Uber driver.

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3 Feb

Canadian tech IPO drought to end as Real Matters files to go public

Real Matters Inc. is set to end Canada’s two-year drought for information technology IPOs.

The Markham, Ont.-based mortgage-services firm filed a preliminary prospectus late Monday to raise an undisclosed sum in an initial public offering on the Toronto Stock Exchange. BMO Nesbitt Burns and Infor Financial Group, the company’s past financial advisers, will lead the deal. The last Canadian software company to go public was Shopify Inc. in May, 2015.

“Today, we have established an industry-leading position serving approximately 60 of the top 100 mortgage lenders in the United States; we continue to gain market share, and we believe we have just begun to tap into the potential gains possible by doing more for our clients,” Jason Smith, founder and chief executive of the 13-year-old company, wrote to prospective shareholders in the prospectus. Real Matters had been expected to file since its board approved the process to go public last year.

Unlike many tech firms that go public, Real Matters’ path to an IPO was financed primarily by conservative Bay Street financial institutions, rather than Silicon Valley venture-capital firms. (Its two largest shareholders, with more than 10 per cent each, are Canadian real estate advisory firm Altus Group Ltd. and Toronto fund manager Edgepoint Investment Group Inc.) The company, which has raised $164-million (U.S.) in private capital, said a year ago during its past fundraising round that it was valued at $650-million (Canadian).

The company has staked much of its growth on bringing technology and improved service to the U.S. mortgage-appraisal business. Real Matters assigns and manages appraisers through an online software platform that informs appraisers in its network how their performance statistics stack up against others. The company selectively recruits and screens independent appraisers, keeping tabs on them and paying above-average rates. As a result, Real Matters boasts faster turnaround times and lower error rates than industry peers. The company said it “routinely” captures at least 15 per cent of the appraisal business of new lending clients in the first year, rising to 35 per cent or more after three years.

Real Matters estimates it provides one in 20 residential mortgage appraisals in the United States and has a 16-per-cent market share in Canada, where three of the big five banks are clients. Real Matters’ stated goal is to at least triple its share of the $3.2-billion (U.S.) appraisals market in the United States in the next five years and to increase its 0.4-per-cent share of the $13-billion American title and closing business – which it entered with last year’s purchase of Linear Title & Closing – to as much as 3 per cent.

The firm forecasts 20 per cent to 25 per cent annual revenue growth over the next five years, from a base of $248.5-million posted in the fiscal year ended Sept. 30, and is aiming to increase adjusted earnings before interest, taxes, depreciation and amortization to between 25 per cent and 30 per cent of net revenue, up from 18.8 per cent.

Real Matters disclosed that it anticipates revenue in its second quarter ending March 31 to be “significantly lower” than its $78.9-million posted in the first quarter, as rising interest rates have dampened the U.S. residential mortgage market.

But Mr. Smith pointed to Real Matters’ 95-per-cent client retention rate, adding “we focus on the things we can control in order to consistently outperform our competitors, grow market share with our clients and attract and retain franchise clients. We believe that the true value of our business will be realized by building a business that can weather the peaks and valleys and thrive over the long term. It’s working.”

Mark McQueen, president and CEO of Wellington Financial and a Real Matters backer since 2010, said “Whether rates rise or fall next year, Real Matters has a substantial amount of market share to capture. Given the company’s success to date, one can imagine another Shopify in the making.”

The company is also dealing with a personal tragedy following the sudden death last week of 45-year-old chief operating officer Alistair James Blackburn, who joined Real Matters in 2008. The funeral of the married father of two was held on Tuesday in Oakville, Ont. The family asked that donations be made in his name to the Foundation for Angelman Syndrome Therapeutics.

Editor’s Note: An earlier version of this story said Real Matters calculates adjusted EBITDA margins as a percentage of revenue; in fact, the firm calculates this figure based on net revenue.

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29 Jan

Twitter creates ‘lite’ version for data-starved users

Twitter Inc is launching a faster version of its mobile service on Wednesday aimed at people with sporadic connections or little data on their smartphone plans, hoping to pick up users in harder-to-reach emerging markets.

The company calls the version Twitter Lite and it will be aimed largely at users outside the United States. Twitter Lite works through a web browser, not a stand-alone phone application, but its appearance and functionality are nearly identical to what app users experience, according to a preview shown to Reuters.

The launch comes on the heels of similar products from other U.S. tech firms. Facebook Inc released Facebook Lite in 2015 and on Tuesday, Alphabet Inc’s YouTube unveiled a low-data mobile app designed for India.

San Francisco-based Twitter lags behind those companies in building a user base. It had 319-million average monthly active users at the end of last year, up 4 per cent year-over-year but still a fraction of Facebook’s 1.9-billion users.

A primary reason in some parts of the world is how much data its app and earlier website consumed, Keith Coleman, Twitter’s vice president of product, said in an interview.

“We didn’t feel like we were reaching these other countries well enough, and this will allow us to do it faster, cheaper and with a better experience than we’ve had before,” he said.

The company estimates that, with several changes it is making to its mobile website,, users will see their average data consumption on the browser version go down 40 percent.

With an additional data-saving feature users can turn on, data consumption will drop some 70 percent on average, said Patrick Traughber, a Twitter product manager. The reduction will come from differences such as initially displaying previews of pictures instead of full pictures.

Like YouTube, Twitter is eyeing India’s 1.3-billion people, and it timed the release of Twitter Lite in part to coincide with the start this week of a major cricket event there, the Indian Premier League’s Twenty20 tournament.

Cricket is the most popular sport in India and following sports in real time is one of the main ways people use Twitter, which unlike many other social media networks still has a chronological timeline to emphasize immediacy.

Other countries where the company said it expects Twitter Lite to be most useful include Indonesia, the Philippines, Brazil, Argentina and Mexico.

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28 Jan

German cabinet agrees to fine social networks over hate speech

Germany’s cabinet approved a plan on Wednesday to fine social networks up to €50-million ($53-million) if they fail to remove hateful postings quickly, prompting concerns the law could limit free expression.

Germany has some of the world’s toughest laws covering defamation, public incitement to commit crimes and threats of violence, with prison sentences for Holocaust denial or inciting hatred against minorities. But few online cases are prosecuted.

“There should be just as little tolerance for criminal rabble rousing on social networks as on the street,” Justice Minister Heiko Maas said in a statement, adding that he would seek to push for similar rules at a European level.

The issue has taken on more urgency as German politicians worry that a proliferation of fake news and racist content, particularly about 1 million migrants who have arrived in the last two years, could sway public opinion in the run-up to national elections in September.

However, organizations representing digital companies, consumers and journalists, accused the government of rushing a law to parliament that could damage free speech.

“It is the wrong approach to make social networks into a content police,” said Volker Tripp, head of the Digital Society Association consumer group.


A spokesman for Facebook, which has 29 million active users in Germany – more than a third of the total population – said the company was working hard to remove illegal content, but expressed concern at the draft law.

“This legislation would force private companies rather than the courts to become the judges of what is illegal in Germany,” he said, adding that Facebook’s partner Arvato would employ up to 700 staff in Berlin for “content moderation” by year’s end.

A spokesman for Twitter declined to comment on the legislation, but said the company had made a number of changes in recent weeks, including adding new filtering options, putting limits on accounts it had identified as engaging in abusive behavior and stopping those users from creating new accounts.

The draft law would give social networks 24 hours to delete or block obviously criminal content and seven days to deal with less clear-cut cases, with an obligation to report back to the person who filed the complaint about how they handled the case.

Failure to comply could see a company fined up to €50-million, and the company’s chief representative in Germany fined up to €5-million.

Bitkom, an association which represents digital companies, said the government should build up specialist teams to monitor online content for potential infringements, rather than expect social networks to do it themselves.

“Given the short deadlines and the severe penalties, providers will be forced to delete doubtful statements as a precaution. That would have a serious impact on free speech on the internet,” said Bitkom manager Bernhard Rohleder.

Since it was unveiled last month, the draft law has been amended to include new categories of content, such as child pornography. It also now allows courts to order social networks to reveal the identity of the user behind criminal posts.

To address free speech concerns, the legislation was tweaked to make clear that a fine would not necessarily be imposed after just one breach of the law.

“It is clear that freedom of expression is of huge importance in our vibrant democracy … however, freedom of expression ends where criminal law begins,” Maas said.

Maas said a government survey showed Facebook deleted just 39 per cent of content deemed criminal and Twitter only 1 per cent, even though they signed a code of conduct in late 2015 including a pledge to delete hate speech within 24 hours.

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27 Jan

How a U of T professor is creating high-tech superstars

Cian O’Sullivan is the picture of confidence as he speaks to a packed lecture hall at the University of Toronto’s Rotman School of Management.

A tall, lantern-jawed man, Mr. O’Sullivan begins his presentation with a slick video explaining the genius idea developed by Beagle Inc., his Kitchener, Ont.-based startup. Using artificial intelligence (AI), Beagle’s software reviews dense contracts and other legal documents and roots out critical information in minutes. Most of the 30 million small- and medium-sized businesses in North America don’t use lawyers for commercial deals; Beagle’s product saves them hours of aggravation.

The founder throws out some impressive numbers and names. Already, it has 750 customers and prospective investors have shown “an immense amount of interest,” he tells the Rotman crowd. So have Volkswagen AG and Thomson Reuters Corp.; Mr. O’Sullivan is spending 20 per cent of his time working on these new giant customer leads. Everything seems to be going Mr. O’Sullivan’s way on this mid-April, 2016, day – that is, until the audience starts barking questions.

John Harris, a retired steel magnate, asks why Beagle only charges $83 per month. If it works, that’s too low, he says.

Barney Pell, a Silicon Valley entrepreneur and investor who once led U.S. National Aeronautics and Space Administration’s AI branch, says Mr. O’Sullivan should raise much more than the $400,000 (U.S.) he’s seeking or investors won’t take him seriously. “Right now you’re in no-man’s land,” Mr. Pell says.

Mike Serbinis, one of Canada’s most successful tech entrepreneurs, says Beagle must decide if it’s going after small or large customers, but not both. Others agree: Beagle has a focus problem. “I just want to know what kind of business this is,” says Shivon Zilis, a partner with San Francisco venture-capital firm Bloomberg Beta.

Watching the scene unfold is the man who designed this interrogation chamber for entrepreneurs: Ajay Agrawal, one of Canada’s foremost business academics and founder of Creative Destruction Lab (CDL), a ground-breaking program for startups housed at Rotman.

CDL has accomplished what few incubators of technology startups in Canada have managed to do, already making a major impact on a teeming startup ecosystem. Now in its fifth year, it has developed a promising method for helping early stage companies- many of them using AI and other leading-edge technology – to grow, flourish and attract private capital.

Mr. Agrawal’s aspirations go far beyond that, however. He also hopes that what the CDL team has created can point the way to a solution for a problem that has vexed our economy for decades: our sputtering ecosystem for innovation. Canada is blessed with excellent research universities and a strong pool of engineering and technical talent. Where we often stumble is in the process of turning bright ideas into cash, and spinning out technology businesses that can grow to become global players. Since Nortel Networks Corp. went bankrupt and BlackBerry Ltd. flamed out, there has been a shortage of truly large anchor companies in the Canadian tech sector. That will have to change if Canada is going to have an economy built on the jobs of the future.

With the federal government set to unveil what has been described as an “innovation budget” next week, perhaps CDL’s most impressive accomplishment is that it isn’t part of a grand public-sector innovation strategy, nor based on a recommendation from one of the many past reports on improving Canada’s spotty record for commercializing technology. Rather, CDL has acted like a startup itself, driven by ingenuity and purpose and managed by a skeleton staff on a shoestring budget mostly financed by the private sector and individuals .

At the time of Mr. O’Sullivan’s presentation last spring, Beagle was one of 13 AI firms left in CDL’s machine-learning program, down from 25 that started the previous fall. All were trying to build new businesses around algorithms that can learn on their own, rather than just perform tasks programmed by humans.

To stay in the program, Mr. O’Sullivan and the other fledgling entrepreneurs had to convince at least one of the “mentors” – accomplished businesspeople who act as advisers, objective setters and judges – that it’s worth devoting four hours out of their busy schedules to Beagle over the next eight weeks. If none are willing, participants are booted out of the program.

“When they come here most [CDL companies] are science projects,” Mr. Agrawal says following the session. “By the time we get to this meeting” – the fourth day-long session out of five over the course of nine months – “they are ready to raise a seed round of capital.” That explains why the 60-odd observers in the room include several San Francisco-area venture capitalists. Their presence “is an important indicator” of CDL’s success, said founding partner Dan Debow. “It tells you they’re not coming to do you a favour, they’re coming to do themselves a favour.”

Some liken CDL to a cross between Survivor and Dragon’s Den because most firms that start get cut. That comparison irks the cerebral and serious Mr. Agrawal. Dragon’s Den “rewards the ability to pitch,” Mr. Agrawal said. “CDL rewards an ability to perform … our ratings are the success of these companies.”

If so, CDL is a huge hit. Mr. Agrawal’s initial goal was to see CDL alumni create a combined $50-million in equity value after five years. That’s how he sold the program to early benefactors, including Mr. Debow and Mr. Harris, tech entrepreneurs Michael and Richard Hyatt and ex-Research In Motion Ltd. chief financial officer Dennis Kavelman, who each donated $300,000 to get CDL started.

CDL has already surpassed that goal – 20 times over. Leading the way is Thalmic Labs Inc. of Waterloo, Ont., a maker of wearable technology that was one of the first companies to go through the lab in 2012-13. Thalmic raised $120-million (U.S.) last year from Intel Capital, Amazon’s Alexa Fund and others. Much of Thalmic’s early guidance and funding came from CDL mentors.

Even without Thalmic, CDL would be a success: Other CDL graduate firms are valued at about $500-million combined and sell such eclectic innovations as anti-frost coatings, low-energy display lights and speech-analysis software that detects the onset of dementia. It’s still too early to know if any will break out and emerge into significant enterprises; startups typically need seven to 10 years to reach that point.

Now, like a startup entrepreneur, Mr. Agrawal wants CDL to build on its early success and expand into something significant. This year, the program welcomed 100 companies – half of them focused on machine-learning. It expanded to the University of British Columbia, where “Creative Destruction Lab West” boasts early Yahoo president Jeff Mallett as a mentor. It has fielded interest from Dalhousie University in Halifax, the University of Calgary’s Haskayne School of Business and New York University to host similar offshoots. Companies have flown in from France, Israel, Boston, New York and even Silicon Valley to participate.

But there’s no time to waste: Canada’s early lead in the now hot area of machine learning, a type of AI, has eroded somewhat as U.S. giants swooped to snap up leading Canadian scientists and startups. Google, Microsoft and their ilk have set themselves up to be big beneficiaries of Canada’s AI talent pool.

Mr. Agrawal says now is the time to act on another field where Canada has built an early lead before the industry giants clean up: quantum computing. It’s an emerging field based on a still developing technology that harnesses the power of subatomic particles. Quantum computers are expected to one day be significantly faster than the most sophisticated machines on the planet, enabling researchers to solve complex problems beyond current capabilities.

If things break as Mr. Agrawal hopes, Canada could hold that lead. To help, he’s set this spring to announce a CDL stream exclusively centred on companies developing quantum computing-based AI companies.

“Our mission is that by 2020 the quantum-machine-learning initiative will have produced more, well-capitalized, revenue-generating quantum machine learning software companies than the rest of the world combined, and majority will be based in Canada,” Mr. Agrawal says. “We have a model that works for building companies, but we are still in catchup mode.”

Ajay Agrawal at a Creative Destruction Lab session.

Doubling down on global leaders

The idea for Creative Destruction Lab came to Mr. Agrawal during a dinner in Toronto about five years ago. The topic that evening was what Canada could do to improve its woeful record for harnessing Canadian ingenuity to stimulate economic growth.

This was familiar ground for Mr. Agrawal, now 47, an expert on innovation economics and one of Rotman’s most popular professors; he’d attended an “endless number” of government-sponsored panels, round tables and meetings on the subject during his career, and many of the usual suspects were in attendance, including CEOs of some of Canada’s largest companies.

But something bothered him that night. Everyone at the table “was very deferential” to the CEOs “who were talking about how important innovation was,” he said. “But they hadn’t really done anything that’s innovative.”

Rather, it was the scientists in attendance who were the true innovators, including regenerative medicine expert Molly Shoichet, quantum computing and robotics visionary Geordie Rose, and Steve Mann, a pioneer in wearable computers. “I thought to myself, ‘In this room … everyone is focused on the bank CEOs, but as soon as we go global, they’re not really that relevant – and the other people here are.’ A light went off and I realized, ‘OK, we need to double down on the people who are global leaders and they’re not the ones everyone else in the country is focused on.’”

That lightbulb moment had been 20 years in the making. Over the course of his academic research Mr. Agrawal, who studied engineering before earning his PhD in strategy and economics at UBC had focused on why most universities struggle to help their research scientists achieve commercial success from their inventions.

That was a particularly acute problem in Canada. This country’s 36 leading research universities earned a combined $62-million (Cdn) in licensing income from campus inventions in 2015, according to the Association of University Technology Managers, a paltry fraction of the billions of dollars in on-campus research expenditures annually. By comparison, U.S. commercialization powerhouses Stanford University in Palo Alto, CA. and the Massachusetts Institute of Technology alone last year brought in $94.2-million (U.S.) and $62-million in licensing income, respectively.

It wasn’t that Canadian scientists were less inventive than their U.S. counterparts; in a 2008 paper, Mr. Agrawal found U of T scientists disclosed as many inventions per capita as those at MIT. However, the “technology transfer” system whereby Canada’s top research university helped campus inventors commercialize their research breakthroughs was less efficient than MIT’s as there were fewer patent applications, issued patents and licensing income, he wrote. When Mr. Agrawal broadened the study to 160 Canadian and U.S. universities, he found a similar gap between the two countries.

“In Canada we have a lot of important technical breakthroughs,” Mr. Agrawal said. “But we have comparatively very little capital flowing in to commercialize those. That begs the question, ‘Why?’”

He rejected conventional wisdom that Silicon Valley had better ideas, smarter people and more money. The main reason for the gap, he believed from his years of research, was what he described as a lack of good judgment in Canada – judgment that was essential to help scientists turn into successful entrepreneurs. That key ingredient was in abundance in Silicon Valley’s established technology commercialization ecosystem.

Mr. Agrawal cited a compelling example to make his point.

A 1997 e-mail in Stanford’s archives shows a campus graduate student working through a potential deal to license technology he has developed to early Internet company Excite. The student writes to Stanford’s technology transfer office that he is willing to sign over rights for Excite to use his technology in exchange for a salary. He figures his time is worth $100,000 a year.But his e-mail also reveals someone named “Vinod” has advised him to instead buy a company that would own the technology. The “punchline,” Mr. Agrawal said, is that the technology in question was Google’s search algorithm. The student was Larry Page, who co-founded Google a year later. “Vinod” was venture capitalist Vinod Khosla, whose early backing helped to turn Google (now Alphabet Inc.) into the world’s second most valuable public company.

“The most remarkable thing about [Mr. Page’s] e-mail is how unremarkable it is,” Mr. Agrawal said. “There’s not an ounce of genius there. That could have been from a computer science student [anywhere in Canada]. In my view, the only reason this turned into a company the way it did is because of the judgment from people like Vinod.”

Canadian venture capitalist Haig Farris, centre, provides feedback at a Creative Destruction Lab session.

The market for judgment

Mr. Agrawal started to develop an idea he called the “market for judgment.” He wanted to bring together some of the sharpest and shrewdest investors to advise cutting-edge Canadian research scientists and help them build companies around their technology breakthroughs, providing them with the kind of business guidance Mr. Khosla had shared with Google’s co-founder.

“The problem is if you are a person who needs judgment – like a PhD in computer science who’s come up with a new way to organize the world’s information online. You can’t go down to Bay Street and buy five units of judgment. It’s not for sale. And therein lies the problem. [Creating that market] became the essence of the Creative Destruction Lab.”

The academic began developing the idea with a small group that included his former UBC entrepreneurship professor and pioneering Canadian venture capitalist Haig Farris, the late Osler, Harcourt & Hoskin LLP technology lawyer Geoff Taber, and Dan Debow, a successful Toronto tech entrepreneur and Rotman alumnus that Mr. Agrawal had met through Next 36, a program the professor had helped create to expose bright Canadian undergraduate students to entrepreneurs. Mr. Debow initially told him the world didn’t need another accelerator, to which Mr. Agrawal replied, “‘Well, I don’t want to build that, I want to build something different,’” Mr. Debow recalled.

Unlike most accelerators and incubators, CDL wouldn’t offer companies free office space nor take an equity stake. This was meant to be a purely altruistic venture “that emphasized something very specific: the judgment mechanism,” Mr. Debow said. Mr. Agrawal also had a distinct idea how he program’s success would be measured: not by number of jobs or startups generated – a typical yardstick – but equity value created by CDL companies as they raised money. “That’s how investors measure the success or failure of their investments,” said Mr. Debow.

To build one side of the judgment market, Mr. Agrawal felt it was crucial to take a different approach to mentorship. While mentors are a common feature of incubators and accelerators, “they generally fall into two categories,” said Mr. Agrawal: people who were “well-meaning but haven’t really built a significant business,” or “the occasional superstar mentor” who was typically too busy to provide much help. “We wanted judgment that was neither mediocre-and-highly committed, nor superstar-but-not-committed. We wanted superstars that were committed.”

Mr. Agrawal set out to assemble a stellar group of seven entrepreneurs – the G7, as he called them – who had built successful businesses from scratch through to a successful sale or public offering, and who would be willing to commit five full days to CDL, spread out over the program’s nine months. “Time is the most valuable thing they have,” he said.

He was also wanted them to put skin in the game by investing in CDL companies they liked, though he made a handful of exceptions for entrepreneurs whose companies hadn’t yet paid out from a sale or IPO, such as Geordie Rose, a former UBC classmate who had gone on to co-found quantum-computer maker D-Wave Systems.

The G7 would be matched with an initial annual cohort of 23 early stage companies, sourced from mentors, benefactors, the Next 36, other accelerators and, most of all, university science labs. When they met, the G7 would collectively determine three short-term goals judged to be the most likely milestones to advance each CDL startup. The firms would then have eight weeks to deliver. If they couldn’t they would be out.

If they did, they’d get three more objectives to meet eight weeks later. At any meeting, the G7 could invest – or vote them out. Every meeting, at least one company would be automatically cut. “We knew half [of the CDL startups] probably wouldn’t make it through,” said Mr. Agrawal, noting yet another difference from other startup assistance programs. “It turned out to be less than that.”

Inside the workspace at Thalmic Labs in 2013.

Thalmic for the win

Mr. Debow, Wind Mobile founder Tony Lacavera and the Hyatt brothers were among those who signed up as mentors and financial supporters. Mr. Agrawal had further success wooing other mentors through Canada’s tight-knit tech sector, including Mr. Serbinis and Calgary entrepreneur Chen Fong, who were sold on his pitch that they could make a meaningful contribution to Canada. Many were impressed by the company they’d be keeping. “I say no to almost everything,” said Ted Livingston, co-founder of popular Waterloo-based mobile instant messaging service Kik and an early G7 member. “I just looked at the entrepreneurs [Mr. Agrawal assembled] and was like, ‘Wow, yes. I would be honoured.’ I thought this was one of the highest densities of great people I’ve ever seen.”

But when he asked U of T and Rotman for help, Mr. Agrawal said “we didn’t get a nickel.” The extent of Rotman’s support was allowing him to book rooms in the building. “This was really happening despite the university. We weren’t really doing anything that fit within the university mould,” said Mr. Agrawal. (To date, CDL has received $2.5-million from individuals, $900,000 from companies, and $400,000 from the publicly funded Ontario Centres of Excellence)

The plan came together within months and the first CDL cohort started in the fall of 2012. Almost immediately, several of the G7, including Mr. Debow, got excited about Thalmic, which just months earlier had been a mechatronics class project at University of Waterloo to make a gesture-control armband guided by electrical signals of a user’s muscles.

That December Thalmic closed a $1.1-million seed financing round. “A big chunk of that came from the G7 and others they introduced us to,” Thalmic CEO Stephen Lake said. “One of the first value-adds was that not only were we getting advice from people in the room but they actually were writing cheques and becoming investors.” The following June, Thalmic raised another $14.5-million; Boston’s Spark Capital, an early backer of Slack and Twitter, and Intel Capital led the deal. “I feel comfortable saying we can put [Thalmic] in the win column,” said Mr. Debow, who joined the board.

The Creative Destruction Lab in March, 2017.

Just-in-Time MBA

Far from celebrating CDL’s early successes, however, Mr. Agrawal took the approach of an entrepreneur, tinkering to make it better. He recruited world-renowned U of T professors including Ms. Shoichet and Mr. Mann to act as CDL “chief scientists,” testing technology brought in by the startups. He asked professional services firms including Osler and Ernst & Young Global Ltd. to advise the startups. Additional observers, dubbed “G7 Associates,” were invited to participate. These carefully curated guests – “we look for community builders, not lone wolves,” Mr. Agrawal said – included venture capitalists such as Mr. Farris and successful entrepreneurs who were expected to provide feedback, introductions and even funding to the startups.

He also changed how the G7 weeded out CDL companies. At first the selection was done by a show of hands after each meeting. Mr. Agrawal didn’t like that, so the G7 was instead asked if they’d be willing to devote four hours of their time to each startup over the following eight weeks. If just one put up a hand, the startup would stay. “The best voting mechanism is individual conviction,” Mr. Agrawal said. Committing four hours “makes it expensive for them to raise their hands.”

That proved to be the saving grace for some. Mr. Livingston took to two founders in CDL’s second year who were developing a robot tea dispenser called teaBOT. Their rough prototype looked like a high school science project but Mr. Livingston was intrigued by the team: one was a U of T aerospace robotics engineering PhD candidate who loved to build machines, and the Kik founder wanted to see what they could accomplish. “I just believed in these people,” Mr. Livingston said. He alone voted to keep them in initially. At each successive meeting the prototype and pitch improved, and several G7s ultimately invested. There are now 17 teaBOTs in service, including machines in three “365 by Whole Foods” stores.

The biggest change came at the behest of steel magnate John Harris, a founding donor and regular observer of CDL meetings. He was learning from the CDL sessions himself and said “It’s crazy this is happening right here in a business school and there is not a single MBA student in the room,” Mr. Agrawal recalled.

Mr. Agrawal and a PhD student designed a self-directed course for CDL’s second year whereby students did standard MBA analysis, observing the startup-G7 interactions and producing slides with prim recommendations. Mr. Debow called it “a lot of wasted effort, a classic MBA make-work project. Their insights were not that helpful.”

But there was such a surge in demand from students and inquiries to admissions about CDL the following year that Rotman administrators took notice.

That coincided with the arrival of new dean, former Bank of Canada deputy governor Tiff Macklem in July, 2014. After giving many high-level speeches over the years about Canada’s chronically stagnant productivity, Mr. Macklem quickly embraced CDL for the impact it was having. The dean has since thrown Rotman’s support behind the program and the launch in 2015 of an annual CDL machine learning conference, promoting the lab publicly and meetings with government and business. “CDL is very results-oriented but it’s also an experiment in how you teach entrepreneurship and how you actually accelerate companies,” Mr. Macklem said. “It’s working, and there are not enough examples of accelerators that are truly working.”

To improve the MBA class in the third year, Mr. Agrawal decided to get students directly involved by working with the startups. Now young companies led by scientists with limited business know-how had access to “this team of super motivated, super engaged, highly talented MBAs working for them,” Mr. Debow said.

Forget reading stale Harvard Business School case studies: students were now living real-time case studies. “They’re not doing an academic exercise, they’re taking their academic tools and applying it to a real problem – and it’s a problem the founders and the G7 care about,” Mr. Agrawal said. Meanwhile their professors were expected to write class notes based on the latest challenges CDL startups faced, not just wheeling out well-worn lectures. One visiting academic from Harvard called it “just-in-time education.” The CDL course became “the most competitive at Rotman to get into,” said Mr. Agrawal.

“It was one of the most beneficial classes I had,” said Sasha Kucharczyk, who took the CDL course as an MBA student in 2013-14. “It taught you to think and act differently [to] help you attack and execute on abstract problems [to get] meaningful results.” Two years later he entered his startup Preteckt, which uses AI software to predict when heavy vehicles will need maintenance, into CDL.

‘World class talent’

It’s 8:01 on April 13, 2016, and the fourth meeting of the CDL’s “machine learning” stream for the year is under way. Mr. Agrawal, who acts as master of ceremonies, runs a tight ship. He asks everyone in the room to describe themselves in one sentence – and cuts off anyone who lingers.

One by one the 13 startups still in the program get up for their 30-minute slots. Each firm is introduced by a mentor who revisits how they’ve performed and proposes the next three objectives. Most of the discussion is among the associates and Mr. Agrawal, who pick over the companies as if talking about specimens while their founders stand awkwardly at the front, occasionally responding to pointed questions. “I’m really not sure yet about the company,” says Mr. Pell, the former NASA AI head, of Heuritech, a startup from Paris that assesses social media posts using AI to determine fashion trends. “They’re smart people,” he says of the team of four AI and machine learning PhDs. “My concern is: how big is the business opportunity?”

In 2015-16, for the first time there are two CDL streams, with this one focused exclusively on startups based on “machine learning,” a form of AI where algorithms automatically build themselves based on big data troves fed in. (CDL has since doubled down and now runs two machine learning streams, each starting with 25 companies.) The idea was initially met with some skepticism internally that CDL was getting too narrowly focused, but it’s worked so far. Two San Francisco-based machine learning experts are mentors, known here as the ML7: Mr Pell, introduced to Mr. Agrawal a year earlier by a CDL alumnus, and Ms. Zilis of VC firm Bloomberg Beta.

The machine-learning focus has also attracted interest from top U.S. venture capital firms, which regularly send partners to observe, including Bessemer Venture Partners, True Ventures, and Google Ventures. “All the companies have been very impressive,” says Adam D’Augelli, a True partner. “They have real technology and at this point will have early revenue or early product traction, which for something coming out of university is relatively rare.” One Silicon Valley early stage investment firm, FundersClub provides $50,000 to any CDL company that raises money from at least one ML7 and another $100,000. By this point some CDL companies have landed seven-figure venture financings.

“There’s world class talent” in Toronto, Mr. Agrawal says. “When we built [a CDL program for machine learning], that was the first time people got on a plane from Silicon Valley to Toronto rather than the other way around. Once they make that investment, they are schlepping to Canada every quarter for a board meeting. Making a second investment is a far lower hurdle. One of the most important things we’re doing for the country is getting some of the world’s top investors to go from zero to one” in Canada.

As the meetings progress, the ML7 ask who are the startups’ customers – the Beagle dilemma – what they should charge, what key positions they should fill and whether their businesses can scale into something big. “If I don’t have an understanding for how this could potentially be a billion-dollar company or if I don’t believe the founder has that ambition, I categorically can’t invest,” Ms. Zilis says later.

Mr. Agrawal says there are three main startup risks: technology, market and entrepreneur. Through CDL, he says, entrepreneurs can show their technology works and determine initial market interest – while addressing the third point by showing they can steadily deliver on time-sensitive objectives.

Some companies are doing well. Preteckt seems to be winning over the ML7 with news it has completed its second-generation protoypes, has installed its technology on several vehicles and is working on a letter of intent with Volvo.

“I like everything they are doing,” declares ML7 and tech entrepreneur Shahram Tafazoli. The ML7 assigns Preteckt objectives to install 100 revenue-generating units, file a patent application and return with a signed letter from Volvo in the next eight weeks.

Deep Genomics, meanwhile, doesn’t have a product yet, but for Silicon Valley investors, that doesn’t always matter. What Deep Genomics does have is CEO Brendan Frey, a renowned deep learning pioneer and U of T professor who is trying to apply his lab work to improve diagnostic yields. Like many AI experts who’ve started companies, he’s attracted Big Silicon Valley money at a very early stage, raising $5-million from Bloomberg Beta and others. It’s a reminder that south of the border, investors are willing to take larger, more speculative bets than more conservative Canadian VCs, who as a result miss out on the gigantic returns when some of those flyers turn into global giants. He’s the rock star of the room, looking cool and confident in a silver paisley shirt and salt-and-pepper beard. “I got on the phone with Brendan and within five minutes I said ‘You can have my money and I will help you no matter what,’” Ms Zilis says in an interview later.

Brothers Alex and Eric Dolan have developed a smartwatch app that can detect when a person with epilepsy is having a seizure and alert others. The technology was inspired by their epileptic mom and 2,600 people are testing it. “We are working with people who are scared … giving them tools so they can manage their lives,” Alex Dolan tells the room.

But while some ML7s praise the Dolans, they’re not convinced their Neutun Labs Inc. is a billion-dollar opportunity. One concern is that the Neutun sends out “false-positive” alarms close to half the time to emergency contacts about attacks that aren’t happening. “Can it deliver something that has value? I think it’s been nebulous,” says ML7 Moe Kermani, a Vancouver venture capitalist.

Alex Dolan isn’t backing down. “I’ve found a high satisfaction among users,” he says in an emotionally charged and defensive tone. “I’m thanked profusely for it….we’re focused on the one metric that matters – growing our users and engaging with them.” Neutun is cut later that day.

“The ML7 just didn’t think they could add a lot of value to the company anymore,” Mr. Agrawal explains later. He says CDL “can really only help companies that are willing to be coached.”

One such company is Validere Technlogies Inc. It entered the non-machine learning CDL program in 2015-16 with technology to sniff out knockoffs of perfume brands. At the behest of the G7, Validere changed its pitch and is now a hazardous waste detection service. Alberta-based G7 Chen Fong introduced the founders to oil patch executives, securing an entree that might have otherwise taken years, and the team raised $3.3-million (U.S.) in 2016 from investors in Canada and Silicon Valley.

Mr. Agrawal is particularly proud of Rotman MBA student Alyssa Randall, who “went rogue” after a machine learning company she favoured was cut early from CDL. She helped the team anyway and thanks to her efforts they have had some breakthroughs – and been accepted back into CDL for this meeting. MBAs “are viewed as suits that are overpriced and underdeliver,” Mr. Agrawal says later. Ms. Randall, on the other hand, has taken big risks and overdelivered on a long shot, rather than taking the safer route of being reassigned to a company that made it through. Her company, called Algocian, graduated from CDL and hired her. “I was really happy,” she said months later, though Algocian ultimately shut down. “It was an opportunity for me to solidify a positive reputation for the company.”

As for Beagle, the company did end up graduating and focusing on larger enterprise customers, and CEO Cian O’Sullivan praised the program as “a fantastic initiative … an absolute perfect crash course for running a company.”

That said, there are ways it could improve, he said months later. Not all advice he got from mentors from helpful, and Mr. O’Sullivan said he would have appreciated advice earlier on how difficult it would be “to train the marketplace” for a new type of product rather than attacking an existing market. He wondered if there were too many companies for mentors to keep track of, sometimes diluting the effectiveness of advice he received, and felt the mentors could have been more open to CDL companies airing their vulnerabilities, rather than “looking for strength after strength after strength. Highlighting weakness doesn’t fit well in that environment.”

Some wonder whether CDL can replicate its success as it expands. “The real challenge is it’s all about Ajay,” said Boris Wertz, a Vancouver venture capitalist who is one of CDL West’s G7s this year. “As long as Ajay stays motivated he can create a real legacy.”

CDL now faces the same challenge as any flourishing startup: not getting too cocky about its early success. “CDL’s measure of success will ultimately be 10 years in the making,”said ML7 Lisa Shields, who is now mentoring CDL West companies. Says Mr. Debow: “One of the worst Canadian diseases is to convince yourself you’re world class. Have we created Facebook yet? No? Then keep moving.”

Indeed, Mr. Agrawal, who actively solicits feedback about improving CDL, hardly seems satisfied; he rejected out of hand recent suggestions CDL throw a party to celebrate its alumni hitting the $1-billion value creation mark in value. “We are so far away from achieving the mission” of improving Canada’s competitiveness, he said.

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25 Jan

LinkedIn fails to reach agreement with Russia on restoring access to site

LinkedIn Corp. has failed to reach an agreement with the Russian authorities to restore public access to the social networking website, the company and Russia’s communications regulator said on Tuesday.

Russia blocked access to LinkedIn’s website last year after a court found the firm guilty of violating a law that requires companies holding Russian citizens’ data to store it on servers on Russian soil.

Both LinkedIn, which is owned by Microsoft, and Russian regulator Roskomnadzor have said they were seeking to resolve the issue but acknowledged on Tuesday their talks had been unsuccessful.

“While we believe we comply with all applicable laws, and despite conversations with Roskomnadzor, including meeting with them in Moscow in December 2016, we have been unable to reach an understanding that would see them lift the block on LinkedIn in the Russian Federation,” a LinkedIn spokesman said by email.

Roskomnadzor said in a statement LinkedIn had refused to move its storage sites holding the personal data of Russian users to Russia, “confirming its lack of interest in working on the Russian market”.

LinkedIn said its website would continue to be available in the Russian language and that it hoped to restore its service in Russia in the future.

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