Canadian incorporation: what, why, and how.

BY Roger Huang

Sooner or later the question will come up: what should a startup, or any new venture do in Canada with regard to its legal status?

While entrepreneurs should focus on building, there needs to be some strategic thought placed into how the company interacts with stakeholders around it, from investors, to customers. A consideration of legal options is always something that is worth examining.

Incorporation with code(love)

There are three distinct legal forms in Canada that are the most likely to pop up: the sole proprietorship, the partnership or Corporation. Incorporation is the process of taking an organization to a corporate legal form, with all of its pros and cons.

A corporation does have three distinct advantages over the other two legal forms.

First, incorporating your business limits the liability of individual shareholders in the event of a lawsuit or bankruptcy, except in the case of fraud. This means that shareholders can lose only the amount that they had invested in the Corporation. For risky startups, this can be a key consideration for those who are not willing to risk all of their individual assets—however, be aware of the fact that banks will often ask you for personal guarantees even if you are incorporated. Still, incorporation does act as a shield between your personal life and the idea you are creating.

Secondly, a Corporation may allow a business to more easily raise and attract investment capital, in particular through the sale of shares, which also allows for greater ease during a change of ownership. For startups looking for venture capital, being incorporated is often a must—and it conveys a certain sense of legitimacy, and ease with which you can add on more investors.

Finally, the Corporation may offer fiscal advantages, as the business may implement effective tax strategies with their financial advisors to lower tax rates, an option not available to their unincorporated counterparts. They can claim losses for example, and perhaps even pay a lower corporate income tax.

Now that we’re done with incorporation in general, there are two specific incorporation types startups have to decide between in Canada.

Federal or Provincial?

In Canada, a Corporation can exist under either a Federal or Provincial Charter. Both offer the same advantages mentioned above, in addition to the possibility of doing business anywhere in the world. Your decision whether to opt for a Provincial or Federal Corporation will, in part, be motivated by the following factors:

1) Industry: Industries, such as telecommunications, are subject to Federal jurisdiction, which would favour a Federal Corporation;

2) Cost: Federal Corporations must register with and pay for registration at both the Federal and Quebec registrars, unlike Quebec Corporations;

3) Director’s Nationality: At least one-third of the board of directors of Federal Corporations must consist of Canadian residents, whereas certain provincial corporations do not have this requirement.

Sometimes when you build, it’s easy to get ahead of yourself and forget that your startup, no matter how exciting it is, has to operate within the law, and hew to certain principles.

You can choose to incorporate yourself, but that could be messy. Many law firms now offer free incorporations or very good packages in order to entice startups to stay with them through financing rounds. One such example is Quebec-based Legal Logik, which offers incorporation for free—you just have to pay for the fees themselves, but they’ll handle all of the legal paperwork free of charge.

It’s this sort of program that will enable builders to create faster, without having to worry so much about the gritty and sometimes messy details creation leaves behind. Digital entrepreneurship, and building out ventures are great ambitions to have—but you’ll need experienced advisors to thrive. Seek them out if you want to go through incorporation, and be sure that you use your skills to create something meaningful—and sustainable.

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This is a sponsored article from Legal Logik, and it is purely informational in nature and does not constitute legal advice. This article neither constitutes nor creates an attorney-client relationship.

Photo credit: qwrrty via photopin cc

Open Stories

An insider perspective on working in technology.

BY Roger Huang

Working in technology can obviously mean a lot of different things, from building better jet engines to the kind of tech that we do at Engagement Labs, which is creating “intelligence” from data.

That’s always challenging, since intelligence is not easy to come by.

The exciting part of working in this area of tech, is that with the right analysis and a novel perspective we can have an immediate impact on a client’s success. I’ve worked in several other, older industries (i.e. pharma, airlines) and what I can say is that the wheel definitely spins faster than in tech companies.

If you’re passionate about the sector you’re in and love the opportunity to create new and innovative products or the branding and marketing behind them, there’s nothing better.

However, it’s important to note that it can get intense, especially if you’re a startup. Direct competitors or products can spring up at a moment’s notice, so you have to always be on your toes. Chances are you’ll rarely get bored. For me, and most us at Engagement Labs, we are most excited about the power of tech to drive creativity and problem-solving. We’ve seen it time and time again, technology done right, can change the lives millions (sometimes billions) of people.

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Thanks to Jordan Stotland of Engagement Labs for the insider story on what it feels like working for a startup. If you want your story on code(love), email us at [email protected].

Learning Lists

The best coding language for you to learn.

BY Roger Huang

A few people have asked me what would be the most useful or best coding language to learn.

Skipping aside HTML/CSS—I think the answer rests on what you want to do with code.

Javascript and its frameworks are really useful for building something with just one language.

Angular.js can control the front side of the website that displays to your users, Node.js will act as a web server that can host all of your content, Express.js runs in the middle directing where information goes, and MongoDB acts as the storage center for data you accumulate from your users—the MEAN (Mongo/Express/Angular/Node) technology stack—an organizing framework that helps build everything you’d need for a web application—is the one favoured by a whole lot of startups these days. It’s a whole component of technologies that can build everything web-wise based on one language.

I’ve been using Egghead.io and Scotch.io to catch up on my Angular and MEAN stack skills. Egghead is focused on video tutorials that are structured sequentially, Scotch has some great graphics about the whole process of building web apps, including the following explaining the MEAN stack.

MEAN Stack from scotch.io with code(love)

They’ve got great tutorials on how you can go about building nifty applications such as basic search engines, and new ways to validate forms (making sure that when you create input forms, people are actually putting in valid criterion). With Angular itself, you can animate a website and make it move, with not too much in terms of setup, which is pretty nifty.

Python is very readable and legible, and has recently become the introductory language of choice for universities teaching computer science majors. It’s fantastic for playing around with data, and doing all sorts of nifty things you wouldn’t have thought possible with its various community modules, such as scraping web pages in their entirety, and doing advanced scientific data analysis. I started out with Learn Python, which suited my fashion of learning by doing.

Java and lower-level languages (languages that are closer to interacting with computer hardware) that are a bit more difficult to interpret for human eyes are wonderful for understanding more of how code actually works—and how you’re interacting with the computer. Java is also something that is used for mobile development on the Android ecosystem, which is something that will always be in demand.

If we want to switch briefly from knowledge to money, I’ve seen a lot of demand for iOS developers, and Objective-C and SWIFT aren’t that hard to pick up. Ruby, especially when used in conjunction with Rails, is also something a lot of startups are building on for which the learning curve isn’t that high (in fact, there was a children’s book for Ruby).

I myself am personally learning Python for playing with data, Javascript and the MEAN stack for building web applications, and Java for a deeper understanding of computer science, and building things for mobile, which I think is a well-balanced set of languages carrying forward. I’ve got together a bunch of learning lists, and resources to help me and you learn what we need to build great things. But none of these are the best coding language to learn.

The best coding language to learn—and how to go about doing it.

The absolute best thing to learn is to learn how to think like a programmer—learn how to solve problems mathematically, with clean and concise code. Coding languages evolve, they change, they fall in and out of favor. One community might morph into another. The great web applications of the present might be obsolete in a few decades. What won’t change is the need for people to think logically, and solve problems—and make it an automated and easier process with machines.

You can bank on the fact that going forward, if you practice your problem solving skills, you’ll be able to find your best language, and get the knowledge and money you need to build great ventures.

I’ve been opening up Project Euler, a set of programming math and logic problems, and using the Codecademy workspace in Python to try to create clean code to solve these problems. This was something a Google recruiter mentioned as being a great training step to learning code—and I don’t doubt it. I feel sharper and more confident in my ability not only to code—but to think.

The best language to learn is ultimately the language of logic, math, and problem-solving that is at the core of code. What are your thoughts?

Open Stories

How computer science made studying us so much easier.

BY Roger Huang

In 1859, the German physiologist Alfred Wilhelm Volkmann described an instrument—the tachistoscope—that soon became ubiquitous in psychology laboratories for studying learning, attention, and perception.

It displayed an image for a set period of time, making it easier to capture the reactions of people, and to learn about how humans reacted to stimuli: how they learned from what was being displayed to them, and how they perceived what was happening in the world around them.

Attention with code(love)

Fast forward. Cognitive neuroscientists have expanded the science that was pioneered with this instrument and, in the late 1970’s, they were able to replace the famed tachistoscopeby the personal computer. Today’s students of the cognitive neurosciences take Matlab programming courses rather than woodwork and metalwork courses to study human behavior.

The connection between technology and behavior made in the last decades is a natural evolution for a better understanding of the human physiological processes. Today, these two fields are intimately connected together by the emergence of exciting and promising research fields such as human-computer interaction, artificial intelligence and cognitive science.

From the Kinect to speech and face recognition systems, A/B tests to the Facebook new testing button, intelligent air transport systems to online customer services, the use of the computer as a super tachistoscope has spread to consumer research. As a natural form of presenting visual stimuli, web applications have played an immense role in opening up new possibilities for cognitive research.

More recently, this combination of advanced cognitive neuroscience research and programming have led to the development of new digital products to increase audience engagement and monetization for either video (Neon Labs) or online digital advertising (Neurométric). They have also led to a wealth of knowledge about how exactly humans perceive visual stimuli, and how they perceive and learn from the world around them.

This is the power of technology. This is how computer science made studying us so much easier.

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This open story is from Guillaume Fortin, CEO of Neurométric. If you have a story highlighting how technology is evolving, email us at [email protected], and we’ll get it the views it deserves.

Longform Reflections

How to strengthen your startup idea with design thinking.

BY Abhishek Gupta

Korakati, a remote village in India became the spot for a location of the ‘School in the Cloud’, an idea led by 2013 TED Prize winner Sugata Mitra.

His thesis was simple- “If you give a group of children a set of questions and a computer with an internet connection, they will be able to find answers — whatever the difficulty level. Interestingly, the more random the group, the better”.

What has to be borne in mind is that the computers were not known in the community where this was started. These children worked in English, a language they had never properly learned, nor had they ever encountered a computer before. In a matter of a few days, through just plain tinkering, they had taught themselves how to navigate the machine and find answers to whatever questions they had.

Design Thinking with code(love)

What can you learn from this?

If you have been around long enough to see the past decade and half pass by, you will have noticed that the presence of manuals with products has almost died out as a practice. We have ever more complex products that are sold that come without any manual and yet we are up and running within a few hours, sending tweets about how excited we are about the new phone and ‘Instagramming’ our dinner that night.

How do we learn about all the myriad things that the product has to offer without going through almost any documentation ?

We can take a cue from how children learn in the early stages of life. A child is never given a manual about life detailing how things are done. The learning process happens through the basic mechanisms of learning by doing and emulating the behaviour of others. The same analogy can now be applied to the adoption of services and products that we consume.

We have all heard enough stories about how young children unpack the latest iPhone, change wallpapers, customize the settings and play around with apps while parents are struggling to wrap their heads around how to send emails on the new device.

This demonstrates a fundamental difference in the way technology is being adopted by younger vs. older demographics. Your idea should cater to the way that the audience will adopt the new technology.

It also demonstrates how design has evolved to the point where it is easy and intuitive for all groups to grasp new concepts.

Design principles tailored to the target age-group would dramatically increase the effectiveness of how quickly the entrepreneur can achieve successful adoption. From varying font sizes to the structure of menus to reflect the trends that the demographic is used to, the approaches to do this are extremely varied. A thing that is not often looked at or ignored is the importance of having small bite-sized blog posts that would detail how a product works and how to make the most effective use of the features that it offers. This would be a very useful strategy for some of the adopters who fall outside of the Millennial generation.

Design thinking is critical. You have to make it as simple and as alluring as possible for your users to use your product, and for them to teach others to use it. This is the essence behind how an idea is spread—thinking about your user, why they’re using your product—and how to convince them to convince their friends to get on board as well.

AirBnB flatlined at $200 a week in revenue until they determined that taking professional pictures of their spaces sharpened the value proposition of what they were offering to the degree that more people were renting out AirBNB spaces—now that they knew exactly what they were getting.

Good design is crucial now.

Thinking about how a user goes through your product will determine your success or failure.

Nicholas Negroponte, in the 7 years of having run the One Laptop Per Child (OLPC) project, came to similar conclusions as Sugata Mitra. After having dropped computers in remote parts of Africa, children were teaching each other how to use the computer, something that they had themselves learned just a few hours ago. They understood how this new product would help them—and they understood very easily how to use it, and more importantly how to teach using this new tool.

You should aim to foster the same mentality with your own startup. It will mean the difference between stagnation, and explosive growth.

Open News

Indiegogo Canada and MakeWorks are partnering to mold digital and physical together.

BY Roger Huang

We previously wrote about MakeWorks and their co-working space revolving around the Internet of Things. It’s something of vast potential to see software principles embedded into physical goods—a revolution that will reshape how we view and control the objects around us.

It is the startups that will be on the frontier of hardware and startup that will direct this new revolution, and it’s good to see both funders, and spaces become part of the fun. Indiegogo Canada will actually move their offices into the space, allowing for there to be a union between creators, funders, and the spaces they need to truly change.

They’re raising money for this endeavour on Indiegogo—and so far traction has been good, with about 40% committed with plenty of days to go.

Here are some of the perks you can expect for supporting the future:

Here’s the link to the campaign.

Open Stories

My failed startup ThoughtBasin—and the lessons you can take from it.

BY Roger Huang

This is an edit of my original post on Techvibes about my first failed startup. Thought it was worth reflecting on again, as we near six months after that article posting.

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Getting involved with startups requires a healthy amount of delusion. It’s usually why you’re the last person to know that your startup is dying.

That didn’t happen for me. I knew that it was dying, and I (mostly) knew what I did wrong, so when I finally made the phone calls to thank everybody for their involvement, it was with cold sobriety, rather than emotional explosiveness.

It hurt to do it, but it was more of a chronic pain than an acute one. A lot of people will have stories about them slamming a door on an opportunity they had chased for miles and miles, but my story is more about tapping the door closed dutifully, and keeping that thin margin between the door and the wall open—if only for a tiny bit of light.

Every good story has a context to it, and this is mine. I started my first startup, ThoughtBasin, while I was still in university at McGill. I juggled economics courses, a part-time job at a pharmaceutical firm, and trying to jump-start ThoughtBasin at the same time. At the beginning, I had nothing more than a cofounder, a set of ideals, and something that vaguely resembled a good idea.

We wanted to take the work that students put into learning, and see if it had a use outside of the confined context of a class. We wanted to create an online platform where students could contribute easily to various problems, and be rewarded and recognized for doing so. The purest interpretation of our ideals would be that we thought the ideas of students could power societal innovation. In many ways, I still do, but as it turns out to be the case with every dying startup, we simply approached it the wrong way.

How do I begin to define and learn from the “wrong way” so that you can glean some insight while we move along my story? Well, as it turns out, while there were too many individual mistakes to count, let alone learn from, I have grabbed a collection of key lessons with my experience chasing dreams. Let’s begin.

make the leap with code(love)

WHO ARE WE SHARING OUR DREAMS WITH? BE SURE TO KNOW

At the beginning of any startup there is only you, a dream that masquerades as an idea, and if you are fortunate, one or two people with whom to share it with. I shared it with some of my closest friends, and stuck with them to develop it together.

That was my first mistake.

They always tell you to never mix business with pleasure, but it’s astoundingly easy advice to ignore once you’re involved with both business and pleasure.

Who do you choose to found with, if you choose anyone at all? I laughed at how easy it was for me: I founded with a set of close friends that I happened to share the idea with. End of story. That we were all of similar business backgrounds, had little to no technical knowledge, and sometimes had drastically different viewpoints as well as bad tempers to boot would be problems

Make sure you know who you are founding with. My cofounders were and are great people, hard workers, and talented. I like them very much. Unfortunately, that’s not a very good criteria for success.

GOOD CRITERIA FOR SUCCESS

When we went through the process of building the website, I had to start getting a sense of the code. If there’s one thing I would say, it would be that knowing code is essential. It’s why I started code(love) in the first place.

ThoughtBasin ended up with a new technical cofounder who brought us to the next level. He was the one who largely assembled the online platform with the help of two talented junior coders. We had an office at last where people dedicated days towards building ThoughtBasin. It had taken us a while, but we finally had a clear path to a product.

I started ThoughtBasin with zero technical knowledge, and now I’m not half-bad as a front-end developer, so I believe it’s very achievable to develop those skills if you don’t have them. We wasted so much time trying to start a website without knowing how to go about doing it at ThoughtBasin. It took us two years to get a proper landing page up. Now, I can build one in four hours.

I also believe that it is crucial to make sure everybody is a good fit, not only at the bar, but also in the office. Ideally, you would test a team before you even embark on a startup idea.

Like in any dedicated relationship, you don’t really know who you’re dealing with until you’ve had your first good fight.

BE A STUDENT, NOT A TEACHER

I believe my first real fight with my cofounders, and every subsequent fight after, had a common theme. I was trying to be a teacher rather than being a student each and every time.

The reality with startups is that everybody is on a learning curve. You can have all of the experience in the world, but a startup is all about examining a new path for everyone involved. I waded into every argument with a gung-ho attitude that I had nothing left to learn. That sparked some fights, and continued many. It was an incredibly bad attitude to have. When you’re a student, you can afford to make mistakes, and strive to improve on them. When you’re a teacher, it makes it that much harder to do so without looking like a fool to others. That fundamental difference made all the difference in the world at ThoughtBasin.

I remember an argument over whether or not we should incorporate, and one on whether or not to bring more people onto the team without clear pre-defined roles. In the end, we incorporated, and had a team of fifteen people. They were both bad mistakes on my part, and if I were willing to listen more, and to compromise more like a student should, perhaps we would have ended in the happy middle where we would have had a smaller, more well-defined team, and a company that had sales before we went through incorporation.

Ultimately, after a series of arguments that went nowhere, one of my original cofounders chose to leave for law school, and the other one gradually started working in banking.

ThoughtBasin was a constantly painful learning experience, and I would never consider it over. I look at this article as something I had to write to get some lessons I’ve learned on paper, and I don’t look to teach from these errors. I look to learn.

LOVE YOURSELF, BE DELUDED, AND BUILD GREAT THINGS

The reason why we broke too far was because one of our competitors in the student space was much further along than we thought they were. We had not been watching our competitors carefully, and this was another instance of working hard in our zone, while not working smart outside of it.

Their online platform was much more developed then ours, and so were their partnerships. We realized we would never be realistically able to catch up with them, and so we would be relegated as late-comers to a niche that wasn’t worth fighting over.

While this was the straw that broke the camel’s back, there were plenty of other bumps along the way. All of them struck me hard, because I had not been taking care of myself too well. Every failure of the company became a personal failure of mine. We missed tons of sales opportunities as I struggled to elaborate on why people should work with ThoughtBasin, and I learned how hard it was to maintain a thriving company while suffering personally.

If there was one note I’d strike on this: love yourself. Take a break once in a while. Playing a martyr will get you and your company nowhere.

As a corollary to this, love your community. I cannot help but think of the Montreal startup community as a godsend. The number of people willing to help you, and to take coffees with you as you navigate your path is truly staggering. The startup community, no matter where it is, is in it together to watch everybody succeed, so get help, and pay it forward. If you ever want to meet with me because you think I can help, shoot me an email at [email protected].

You do need a certain level of delusion to think that you and maybe a few other people can band together in a garage and change the world. Even now, I still have that spark, and I am constantly searching for how to exercise it. For now, I’ve settled on working on another good startup idea: Shout, a utility that takes your social media messages directed at a company, and shoots it off to every social media outlet the company owns if they don’t get back to you.

I look at ThoughtBasin as a means to an end, and though the means did not work perfectly, that did not mean it was not a worthy exercise, and that does not mean I can’t find another means to that coveted end.

So be deluded. Be silly. Think that you can build great things, because you can, even if it takes a few setbacks to get there.

Meaningful Multimedia

Entrepreneurship is a marathon, not a sprint.

BY Roger Huang

IPO with code(love)

Even with how much faster things move in the digital economy, the truth is it takes several years to see an idea through to its full potential.

Don’t lose patience. You’re nowhere close to seeing the end of the line if you’ve only been fighting for a year or two. Entrepreneurship is a marathon, not a sprint.

Open News

A curated list of great Python frameworks.

BY Roger Huang

Coding community with code(love)

One of the wonderful things with modern programming languages—the sense of community associated with them.

Volunteers from around the world work without thought of reward in order to build a foundation for others to build on. The open source and open data movements allow for there to be an infusion of decentralized innovation.

Good old Python is one language that has been used for an array of different tasks, from manipulating data, to creating entire web platforms. Popular templates such as Django allow it to build household names such as Pinterest. Recently Python has become the most popular introductory language taught at American universities.

It represents a canvas which individual volunteers have painted in. You can plug and play different modules for all sets of tasks with the Python framework. For example, you can use Scrapy for web crawling, or SciPy for scientific calculations.

Each one of these modules comes with healthy communities supporting their maintenance and continued development, as well as ample documentation to allow everybody to really understand the tools they’re using.

The list is right here.

Open News

Google will pay for you to learn code if…

BY Roger Huang

…you’re an under-represented minority.

As Google puts it, “this opportunity is available to all traditionally underrepresented groups in technology (including, but not limited to, African Americans, Hispanics, Native Americans, persons with disabilities, women and veterans).”

For the longest time, the meritocracy of Silicon Valley has been an ideal, and not a matter of practice. With steps like this, some of the balance will be adjusted, but this should only be the beginning.

As we noted on our piece on gender inclusiveness in startups, one of the minorities uplifted by this program has to cross these hurdles:

“Only about 5 to 10 percent of the venture capital devoted to early-stage ventures goes to females.”

“Only one out of ten people starting technology startups are women.”

“The ratio of women studying in computer science, one of the most valuable traits to have in a technology startup, has decreased from 37% of degree holders in 1985 to 14% in 2010.”

So this program is good for a beginning, a good first step—but there is much work left to do.

Learn code with code(love)