From startup to success: How TMU’s leading tech incubator is advancing entrepreneurship

Amanda Cupido: This is The Forefront, a Toronto Metropolitan University podcast that explores ideas for cities. I’m Amanda Cupido. 

So here’s the problem: in the world of entrepreneurship, having a great idea is just the beginning. The real challenge is turning that idea into a scalable, successful business. With fierce competition, limited funding opportunities and a constant pressure to find the next great innovation, many startups struggle to survive. According to the Business Development Bank of Canada, more than 50,000 startups are founded every year in Canada, but one out of three of those businesses will close their doors within their first five years. 

Success in this space takes more than just creativity and drive. I know this firsthand, as someone who owns a podcast production company. I launched my business in 2020 but I’m always in search of networking opportunities, mentorship and resources. In the beginning, I was waiting for this moment where I’d have it all figured out. Yeah, I’ve learned that day is never going to come. Running your own business can be tough!

And yet, entrepreneurship in Canada is on the rise. A 2021 study from the BDC says a quarter of Canadians say they are interested in running their own business instead of opting for a more traditional career. The study also shows it’s not just younger people. Demographics that haven’t commonly been associated with entrepreneurship, like Canadians over the age of 55, women, and newcomers are all showing more of an interest in entrepreneurship than ever before. 

But while the number of startups continues to grow, so do the challenges. Founders need the right support to turn their visions into thriving companies.

Nathaniel Bagnell: I’ve always had the desire to be an entrepreneur. I know it sounds a bit cliché, and I’ve always had this sort of idea book that I would make. So back in high school, I would sort of just see ideas, or think of things, and write them all down.

Amanda Cupido: That’s Nathaniel Bagnell. He’s the co-founder of LiveGauge. They provide automated sponsorship ROI measurement for brands and agencies. In other words...

Nathaniel Bagnell: What LiveGauge does is it helps measure physical spaces effectively. So we’ll do a lot of work with experiential marketing agencies, property managers, where we help them understand how many people are coming to the space, how long they spend and whereabouts they go within that space.

Amanda Cupido: Nathaniel explains that while brands and companies could rely on general ticket sales and foot traffic to determine their success, LiveGauge gets them customized, accurate numbers. This helps companies understand their best selling products, most dedicated customers, and which elements need to be tweaked.

Nathaniel Bagnell: Let’s say I am doing an auto show, and I might know as a brand that they’ve sold 500,000 tickets for the show. But out of those 500,000 tickets, I don’t necessarily know how many of those people came within my area of the booth. And from there, what types of vehicles do they sit in? What did they go see? So when we’re able to get that type of insight to this potential customer, they were just over the moon. Because up to that point, they only relied on ticket sales. So, you know, albeit, yeah, we sold half a million tickets for the auto show to the brand, but they can’t obviously say that all half million people came and saw their display.

Amanda Cupido: The idea first came to Nathaniel in the early 2000s, back when he was a merchandiser at Future Shop. He thought up a more logical and forward-thinking way to stock the store and to understand what was driving customers to make purchases.

Nathaniel Bagnell: We would change the store shelves every Thursday, when the new flyer came out. Sometimes brands will pay for a placement on the shelf, and when that promo window is finished, we’ll just move it to wherever the point-of-sale system says did the best job. The gap was, you’re using sales data to understand how to make better sales. But what would be really cool is if you could understand how the customer even got to that point to make the purchase in the first place.

Amanda Cupido: Sounds smart, and very complicated to execute. For a few more years, the idea never left Nathaniel’s notebook. Fast forward to 2010, Nathaniel was studying Entrepreneurship at Toronto Metropolitan University when he heard about the newly launched DMZ, TMU’s tech startup incubator.

[Clip from Welcome to DMZ Toronto:

“At the DMZ, we’re focused on founders first and building for greatness. And there’s a reason you’ve been handpicked to join us. It’s your ambition. And let me tell you, you will be pushed to new limits.”]

Amanda Cupido: The potential drew Nathaniel’s attention back to the original idea he had for LiveGauge. He turned to his friend Sam, who would soon become Nathaniel’s co-founder, to begin the application process.

Nathaniel Bagnell: We had no idea what we’re going to actually do in terms of execution and whatnot. We filed for the interview, I remember going into it, and we were so nervous. We were so nervous. We had to meet with the committee, a panel, and then from that point, we basically had to get the majority votes. So we were five to four. We just got in. That was an exciting time. And they showed us all the resources that the DMZ had, the portal that we could access, and we had these one on one, check-ins with advisors, and it really helped us understand our foundational structure that we needed to roll forward and grow the way we grew.

Amanda Cupido: Nathaniel says him and his co-founders had their idea for LiveGauge down pat. Where the DMZ came in handy was with all the other businessy stuff that would help determine the company’s goals, audience, and, most importantly, how not to get swindled by a bigger, more experienced company.

Nathaniel Bagnell: Anybody who wants to scale and to grow, you’re gonna encounter large enterprise, I find that they’re gonna either exploit you quite heavily in terms of, okay, we’re gonna give us, like crazy pilots that would that are like, six months long with no cost to us or ask for very crazy, unfavourable terms in the contractual agreements, it almost like you had to walk the walk, and if you didn’t, then you’re going to be in deep trouble. And obviously, if you haven’t walked the walk before, you don’t know what you’re doing. So the DMZ was a huge component to that.

Amanda Cupido: The DMZ also helped prepare LiveGauge’s exit strategy, which focused on the importance of continual growth and new innovation.

Nathaniel Bagnell: There truly are plateaus I find, particularly in sales and growth. And you can really get comfortable on your laurels for a while. At the DMZ, we would meet with these advisors. We had to always keep ourselves sharp and up to date. But when you know, checks are coming in. Clients aren’t asking for anything crazy. We’re getting inbound leads. We’re like, “Yeah, this is wonderful.” That’s just chill and hang out. It’s very easy to not catch yourself and sort of roll that way.

Amanda Cupido: Since leaving the DMZ, LiveGauge has worked in more than seven countries, with more than 130 customers, including some big names like Coca Cola, Lego and the NFL! 

But Nathaniel’s story is one that the DMZ has seen many times. The DMZ has worked with more than 800 startups like LiveGauge and raised more than $2.5 billion in funding. It’s been ranked the number one university-based tech incubator in the world, and it’s the type of resources that Canadian entrepreneurs say they need. 

According to a 2021 report by Startup Canada, 91.8% of entrepreneurs reported difficulties in accessing funding, and 56% said they could use more mentorship on how to run a business.

Shane Flynn: When the DMZ first started back in 2010 there weren’t a lot of other programs that existed like the DMZ, especially in Toronto and even Canada.

Amanda Cupido: Meet Shane Flynn, the Director of Alumni Relations and Special Programs at the DMZ.

Shane Flynn: That really did give us an opportunity to be one of the first to really start to, I think, experiment and learn about how to best support entrepreneurs.

Amanda Cupido: He’s been working with the incubator since he was a student at TMU back in 2012.

Shane Flynn: My role specifically focuses on helping to support alumni who have been a part of the DMZ over the past 14 years that we’ve been around. And in addition to that, supporting our special programs, which is pretty much any type of entrepreneurship that exists outside of tech. So think of small mom and pop shops, e-commerce businesses, retail stores. You know, really individuals who are doing some form of entrepreneurship, but it’s not solely focused on developing the next great app or website.

Amanda Cupido: He says that having 14 years of experience working with startups gives the DMZ an edge that you won’t find in other incubators.

Shane Flynn: We can always go into something with an assumption that we think entrepreneurs need X, but they really need, you know, A, B, C and D, and X was never on their radar. And I think being around for so long has really given us a lot of that insight. We recognize that not everybody kind of starts at the same level when it comes to access to opportunities, capital, introductions, even their networking connections. And what we did was we put a very specific focus on helping to support founders through our Stream Programs.

Amanda Cupido: Stream Programs are uniquely developed to support underrepresented founders.

Shane Flynn: We have our Black Innovation Program, we have our Woman Founder Program, we have ones looking to support newcomers to Canada. We’re also developing programs to support Indigenous entrepreneurs.

Amanda Cupido: Shane says these programs have helped the DMZ attract entrepreneurs who have certain challenges that more general programs simply don’t address, which, in turn, has helped create an incredibly diverse community.

Shane Flynn: That’s something that I think oftentimes these entrepreneurs, in our experience and feedback from them have kind of said is, you know, they’re oftentimes the only woman in the room or the only person who identifies as Black in the room. And the DMZ is almost the exact opposite, where now, you know, when they participate in a session, they see many individuals who also have that kind of same identity as they do, and that’s a very big breath of fresh air. They’re now able to better network amongst each other. That’s oftentimes something that comes up through our Stream programming.

Amanda Cupido: These Stream Programs are offered on top of the DMZ incubator and pre-incubator programs, which meet founders where they’re at, whether they’re a fully operating business, or if they need help making their idea a reality.

Shane Flynn: We only end up working with about 10 to 15 entrepreneurs per cohort, which means it’s a very, very intimate cohort size where each company has a direct kind of person from the DMZ team to work with them. We’re with them every step of the way. So for the next three months, they may be focused on, let’s say, fundraising. We can really help them support them specifically just on fundraising, and if they are able to successfully close their round, what we can then do is shift gears and then say, okay, you now have this million dollars. Usually, most entrepreneurs then need to think about how to actually spend this money. So we can then shift our resources to help that entrepreneur specifically focus on this, while at the same time, we could be focusing on supporting another entrepreneur in the cohort, just on sales. That’s all they care about, for example, or maybe they’re going through some type of regulatory hurdle, and so there’s a lot of support that they need on the legal side of things.

Amanda Cupido: The DMZ could even help you schedule a space launch, if that’s your thing!

Shane Flynn: Going back a few years, there was a company that DMZ worked with called Kepler Communication. They basically want to send satellites into space to provide WiFi to areas that typically haven’t had any type of internet connectivity. That’s where the DMZ was able to make those connections to different members of the government and regulatory bodies so that they could understand what safety regulations they had to go through to be able to actually send their satellites into space.

Amanda Cupido: With connections like that, it’s no wonder that founders who have graduated from the DMZ have chosen to return as Alumni-in-Residence. Shane likens it to moving out from your childhood home for the first time.

Shane Flynn: You kind of go back to mom and dad’s every once in a while, and you raid their fridge. That’s almost sometimes what alumni have. But I would also say, too, a big piece that alumni miss when they leave a program like the DMZ is they don’t have that access to the community, and so a lot of alumni love to kind of come back to the DMZ to reconnect with the community. They love to kind of see what the current startups within our program are working on, and how they can also help get involved. They’re able to provide that direct advice and experience to say, hey, six months ago or a year ago, I went through that exact same situation. This is how I was able to kind of navigate it or resolve it. And for a lot of our founders, that tactical, “this is what I did” type of advice is incredibly important for them.

Amanda Cupido: Nathaniel is one of those Alumni-in-Residence.

Nathaniel Bagnell: By actually helping out the community, you get a pretty cool perspective on what’s going on, because once you get into your own sort of world, your head’s in the sand, in a way. And that’s not necessarily a bad thing, but you really sort of disconnect, in a way, from the broader community and the trends that are happening outside of your scope. So it’s almost a great refresher to keep myself sharp when I meet with these new companies and help them out with what they’re asking for, the level of reward that you get to see the assistance that you give, it sort of helps out I find, in another way, when you spend that time with others.

Amanda Cupido: There’s definitely something special going on here. And I’m not just saying that because of the feel good sentiments from Nathaniel and Shane. It’s actually been proven working with the DMZ can play a huge role in a company’s growth. Here’s how the DMZ measures success.

Shane Flynn: Typically, most startups, about 75% of them, are still in existence five years after being a part of the DMZ. Other things and other kind of statistics and metrics that we look at are, you know, how much revenue are the businesses actually bringing in? Do they go from five employees to 10 employees to 50 employees? And then, of course, beyond kind of how much funding has been raised, you know, what companies actually end up getting acquired? What companies end up acquiring companies? 

Success is different for every entrepreneur. So regardless of which kind of path they take and which exit they end up going towards, we track that information to be able to then say, like, “Hey, that acquisition was a huge success,” or them acquiring this other company was a big success for us.

Amanda Cupido: Before we go, here’s Shane one more time on the instrumental role of TMU.

Shane Flynn: It would be really hard for the DMZ to exist without TMU. I think TMU has really kind of equipped and provided DMZ with the resources for us to really kind of grow in our own way, which has been really exciting where, when we first started, it was a space for students to be able to kind of come together and work on a business. But very quickly we realized that it could be so much more than just that, and TMU really gave DMZ the autonomy to be able to kind of go in that direction.

Amanda Cupido: This podcast was created for alumni and friends by University Advancement at Toronto Metropolitan University. Special thanks to our guests on today’s episode: Nathaniel Bagnell and Shane Flynn. This podcast was produced by me, Amanda Cupido, and Jasmine Rach, who also edited the show. We are both proud grads of TMU. The team from the university includes Haweya Fadal, Meredith Jordan and Rivi Frankle. To help fuel the research and learning coming from the DMZ, consider donating to Toronto Metropolitan University. Join us in shaping a brighter future together. Visit torontomu.ca/alumni.