Sean O'Mahony shares six (start-up lessons that stuck)

Sean O’Mahony, Principal of Lux Holdings, is curiously adept at flashing you past career milestones while he tells a story. Major milestones - the type you'd expect most entrepreneurs to focus on in Wikipedia-bright detail. Like how he launched both the world's first QuickTime streaming media service and Canada's largest Wi-Fi network. Why the unassuming tone? See Lesson #3.

Take a trip down Sean's start-up-lessons-lane -- then stick 'em to your company whiteboard.

(Sometimes you really just need to read the writing on your wall. And keep reading until you remember not to forget.)

Lesson #1:  Failure is part of the process

In essence my first start-up was a failure. I worked for this husband and wife team – software start-up in Silicon Valley. I learned: loads about a software start-up in silicon valley and to never work for a husband and wife team. It’s a disaster.  But I also learned that the other basic facet of a start-up is that failure is part of the process.  In all my other careers failure in that kind of sense was never acceptable. I was in the oil and gas drilling business – you couldn’t fail at that in the same way because people’s lives were at risk. But here,  the failure of the whole idea and the business was taken sadly, but the one thing investors were interested in was that you’d had that experience and you could apply the knowledge to do a better job next time. And they would invest much more willingly in someone who had tried and failed than someone who was just a novice.

Lesson #2:  You never know how quickly things happen.  

I moved to Vancouver and started two companies consecutively – this was around 1996: Bitmovers, for software development and Bopjet for webhosting and streaming. We were the world’s first Quicktime streaming. So we rapidly got a foothold in that business. The main reason I started the companies was because I was doing software development and we needed our own servers - to make it more profitable we started renting them out to other people. In no time at all I had five people working on that side of the business. At one time I think we had about 15 or 16 at Bitmovers. I had just sold Bopjet to Digital Forrest so I could focus on raising money for Bitmovers: then September 11th happened. Literally, within 3 weeks all my contracts were cancelled. We had no revenue. Done.  And within six weeks I had shut the company down. I lost about a quarter of a million dollars, my investors lost money – the whole thing was toast.

Lesson #3:  Ego will kill you every time.

I only kept the company going for the six weeks – paying out overhead - because I foolishly thought in a very paternal sense – what would all these people do without me? There was me thinking that I’m important to these people because I employ them. All of those people -- when I sat them down in a room on that very sad day and had to say it’s all over – of course they knew – within about three months they had either started up their own companies or gotten a job. And the only person unemployed was me, right? So it was one of those great lessons I learned. Ego will kill you every single time. Ego costs money.  If you’re going to take action take it really, really fast. And never ever think your ego is so substantial that life won’t just go on anyway. And always pay yourself first. Of course I ended up having to pay all this money to everybody else and didn’t have any money to pay for myself. I’m still, to this day, good friends with just about everybody who worked with me. They were just an incredible bunch of people. Incredibly creative. In a start-up people tend to be much more forgiving…they understand the risk. And that’s one of the things that keeps me coming back to start-ups: you tend to meet people who are very positive, very dynamic – you get a lot of energy from them. You demand a lot from them, so it’s nice to be infused with that energy at that level.

Lesson #4:  Timing is everything.

When I shut Bitmovers down – I’d been talking with this other guy about an idea for public Wi-Fi. We met for a coffee – this was about four or five weeks after I shut it down – and he said “I’ll pay you to write a business plan. If  we like it, we’ll fund it.”  I had the business experience, and with two other groups we brought together a Wi-Fi network here in Yaletown, the name FatPort and Michael Kuhlmann (lovely guy who is also on the panel – we’ve been friends ever since). We acquired Michael’s company, and raised $3.5 million for Fatport.  So off we went again. We opened up a shop in Harbour Centre and within about a year we were the biggest public Wi-Fi network in Canada. It was probably the best start-up I’ve done in terms of execution. Everything went perfectly. The brand was great, the network was great, the team was great. Our timing was great.

Lesson #5:  Own your own destiny. Self-fund.

Within about two years of launching Fatport there was a lot of interest to partner up and exit the business. But I could never get the investors – one in particular who I’m sure had his reasons – to exit or to execute on a deal. I became really frustrated. And I guess I learned from that: one of the problems with raising money is you don’t own your own destiny.  As soon as you raise money from somebody, for want of a better word, they own you.  And to be fair, it’s a significant amount of money they’ve given you. You’ve got the idea, but what’s more important, the idea or the money? If you need the money, that’s more important. So if you can do it yourself, always self-fund for as long as you can. Especially here in Vancouver, where there’s a lack of venture capital infrastructure and they’re not willing to take big risks. And that’s why with Plenty of Fish - he did it himself. People only tend to want to invest here if it’s a certain deal and of course start-up by its very nature isn’t. So always try and do it yourself as long as you possibly can. Which will limit many things but you’ll have more freedom in the long term to do a better deal if you actually pull it off.

Lesson #6:  Get to the finish line.

My ideas weren’t huge. None of them were big ideas – not in the Google or Twitter sense.  Just because you don’t have a $50 million idea – or the most original one – it doesn’t mean that your business model won’t make money. It’s the execution that matters. So many people focus on the money-raising part that you actually take your eye off the prize in terms of the execution of the business. Because that actually becomes the business in itself – raising money. You know? And you’re raising money, but someone else is getting the deals. And I think start-ups forget that all the time they’re spending trying to raise money could be spent actually acquiring users.

You can have a hundred people all setting out with the same idea – but only two will get to the finish line. Right?

Sean will be speaking at the F5 Expo’s Mobile Management and Virtual Conferencing panel on April 7th. 

Help NSERC Help You: The 5-Step Start-Up Guide To NSERC Scholarship Nirvana

Have you heard about the Industrial R&D scholarship awards through the Natural Sciences and Engineering Research Council of Canada?  Absolutely true, new fiscal year just about to kick up, applications opening to hire students at the undergrad, post-grad and post-doctoral stages ie: apply for wads of cashola from the government, employ student minions at slave wages.

Kidding! No, in fact, NSERC very much would rather students were not minions. And there are rules about the slave wage thing. But much as yesterday's discussion at Bootup Labs with Scholarships and Fellowships Division Program Officer Sarah Antonakos seemed to have a definite PR push towards glinting the application process with a silky shine, pop over to the NSERC site and you'll be pulling your hair out before you can locate something remotely resembling a sane place to start. (Seems a very simple and easy-to-navigate site was re-launched as a frustrating maze - which you'll discover while you're searching for answers like Alice going after the White Rabbit).

So let's help NSERC out - because the one thing that did come through clearly is this: Sarah and the NSERC Program Officers are accessible. Even if their company web design isn't.

The 5-Step Start-Up Guide To NSERC Scholarship Nirvana

Step 1 - Set your sights on the Industrial Undergraduate Student Research Awards (USRA)

NSERC will be looking at the financial viability of your company to sustain the award during a student placement, however requirements here are less stringent than for the Post-Grad or Post-Doc Scholarships. NSERC is trying to be flexible for new companies while ensuring students receive reliable placements. As in ones that won't go under two weeks into the summer. Which is fair, right?

Step 2 - Get cozy with what you need to know.

NSERC USRA program highlights:

  • 16-week student placements (co-ops are acceptable)
  • $4,500 towards student salary from NSERC - amount will be pro-rated if placement is less than 4 months
  • $1,500 additional minimum contribution from your company
  • Student must be a Canadian resident at time of application, enrolled in an undergraduate degree program in natural science or engineering field at time of placement, maintaining a B/B+ average
  • NSERC provides financing by re-imbursement at the end of the placement - after you whip off a simple report
  • Fiscal year is April 1st to March 31st

Step 3 - Not sure? Ask.

Not sure if your company is eligible under "Natural Sciences" and "Engineering"? Don't throw in the towel - there are always grey areas. Get in touch with Sarah. She'll direct you to your friendly local Program Officer. Which is a much better option than geting lost in the black hole of NSERC site self-interpretation.

Step 4 - Plan ahead. Avoid delays.

Turnaround times seem quite reasonable, but keep in mind that your company needs to be certified by NSERC in addition to the student scholarship application before all systems are go. Company eligibility may delay receiving a decision. An incomplete application will delay your decision.

  • 4 weeks to receive a decision for the USRA
  • 6 - 8 weeks to get your organization certified for eligibility
  • Time-saver: organization eligibility certification normally runs for six years
  • Start-ups with limited resources should opt for the "short-form" process and apply for eligibility on a per student basis
  • Heads-up: companies applying with more than 50% financing from government sources will not be approved
  • Your company must have its own research facility - students may not work from home or from an academic lab. "Research facility" is open to interpretation as long as you have a rental agreement and appropriate space for supervison on-site. 
  • Supervision provided should be at a level suitable for the program

Wondering if your facility qualifies?  Is the level of supervision provided high enough? See Step 3.

Step 5 - Forms & Tips

Keep an eye out for these form numbers:

Form #202 - Application for USRA

Form #183B  - Application for Organization Eligibility

  • Apparently there's a list of pre-approved candidates on the NSERC website conveniently broken down by expertise: these are students who successfully went through the approval process without receiving an award (not enough during the fiscal year). Submitting with a pre-approved candidate from the list means only your application will need to be approved. Now, if only we could find it. Bueller? Bueller?
  • NSERC is not suggesting that you offer a salary of $4,500 + $1,500 to a student for 16 weeks of full-time employment. The USRA  contribution is intended to supplement hiring a student for the same full-time wage you would expect to pay a regular full-time employee. The salary offered to your student will be considered during approval of your application.
  • NSERC is more likely to approve six-year applications rather than submissions on a per student basis - it's preferable for companies to wait until they have the means to afford the six year. Why? Less paperwork.
  • Sarah suggests finding students by lining up with local university co-op offices –

...some co-op officers have never even heard of our programs – why not let students be placed and have access to our money?


The approachable and helpful Sarah Antonakos is based out of NSERC's Ottawa office. She can be reached by email for specific questions about the R&D awards programs at Sarah.Antonakos (at)