They might be Tumblrs: The impact of Yahoo’s deal on Canadian startups

Sophie Perceval has no intention of comparing her startup to something as big as Tumblr, so I will.

Perceval is the co-founder of Wondereur, a Toronto-based firm whose Web and iPad app allows consumers to share stories about artists and their work and actually buy the art. Like Tumblr, its core value comes from the content; in this case the visual storytelling produced and curated by the Wondereur team.

It’s also a firm as natively rooted in the worlds of social media and mobile as Tumblr is – the point was to break down the barriers between consumers and poorly-displayed online art, and to build relationships between artists and their audiences. Most importantly, Wondereur is like Tumblr in that it was started without great fanfare and is aggressively focused on growth. Does that mean a juggernaut like Yahoo will one day come calling? Perceval isn’t sure.

“The parallel is that we’re a content company that has a following with no real revenue yet,” she said, acknowledging that Yahoo’s blockbuster Tumblr deal announced earlier this week has prompted considerable discussions within the entrepreneurial community. “It’s really raising interesting questions about what makes the value of the company, and what would make a company like Yahoo want to acquire it.”

These are critical questions in Canada, where many startups are born but not many reach the heights of a Tumblr. It’s not for lack of innovative ideas. Besides Wondereur, there are examples like WattPad, a sort of YouTube for authors to showcase their writing in ways that take self-publishing in a more social direction, or Keek, which helps users share videos with friends. David Crow, a longtime supporter of the startup community in Canada who has worked as a consultant and advisor to all kinds of young firms, said even after Tumblr’s exit, there are incredible opportunities around smart content-based applications.

“It’s a way for people to find their personality through personal expression online,” he said, noting that startups here could learn a lot from what Tumblr got right. “There is just incredible ease of use and a human element to the product. It gives you that dashboard and the experience you want across mobile and the Web.”

Of course, as much as an acquisition by the likes of Yahoo could be every entrepreneur’s dream, there is also the ominous possibility that a larger organization will stifle an innovative firm’s culture. Perceval noted that Marissa Mayer’s promise not to “screw up” Tumblr may be a welcome sign that the industry giants are learning about how to integrate startups more successfully.

“What’s happening now is that the spirit of the startup is being more respected by a lot of companies that realize the vision should not be destroyed by an acquisition,” she said. “It’s very inspiring.”

Of course, there are probably few Canadian startups that can expect a deal of Tumblr’s magnitude, but Crow said he’s been impressed by the increasing rigour with which entrepreneurs are showing their success to the market. “They’re really locking down metrics,” he said. “It’s not like it’s my opinion that Tumblr was growing – they had all kinds of numbers to prove it.”

Those numbers may become just as important than the startup ideas themselves. Even a company like Yahoo has to take a certain leap of faith when it buys a firm like Tumblr, because it’s ultimately more about the promise of financial success than anything else. “If you’re generating millions of pageviews and have millions of users being really active, someone will find a way to monetize it,” Crow said. Let’s hope so, because if not, the next crop of Tumblrs is set to take a tumble.