SmallCapPower managed to corner and interview two ‘friendly dragons’ from the CBC show Dragons’ Den at the Cantech 2015 Investment Conference. Although Mr. Wekerle enjoyed a good joke at his expense, there was definitely ‘fire in his belly’ when he revealed what he thinks is the ‘next big thing’ in technology.
SmallCapPower: SmallCapPower managed to corner two friendly dragons from the CBC show, Dragons’ Den, at the 2015 Cantech Investment Conference held in Toronto. Among the things Michael Wekerle tells us is what Canadian tech plays will be the next big thing to change the world.
Michael: Well, I’m sitting here with Dianne Buckner from Dragons’ Den, and we’ve talked about this a lot. It’s really the innovation that’s coming out of Canada. It’s really what has started at the university level with education, computer engineering. There’s more computer engineers that come out of the tri-region of Kitchener-Waterloo, and Laurier, Guelph etcetera, and I think that you combine that with Montreal, Ottawa, the universities that are throughout Canada, B.C., et cetera, you find there’s companies like Hootsuite, Desire2Learn, Vidyard, and one of my favorites, BuildDirect. These are companies that are going to come out and change the world. QuickPlay, which is streaming video. It’s about second screen TV. It’s about wireless, SaaS model, service as a software. It’s about creating a revenue source based upon non-traditional advertising. It’s going to be media, social media, and what we believe is going to be the next era is the cloud.
SmallCapPower: What is your outlook for the tech sector in 2015?
Michael: Better than 2014, and Dianne Buckner is the big factor.
Dianne: Yeah, right. Dragons’ Den might help.
Michael: But, isn’t Dragons’ Den a big part of where we’re going with this. Next Gen Den is really one of the key things. The likes of Dianne and Tracy and Amy and all the crew at Dragons’ Den have created a show, Next Gen Den, which is an online show for entrepreneurs under the age of 40 up to a maximum of $100,000 you can now, in addition, I think it was February, I believe. But what a great thing to do, to take that ground floor innovation and make it mainstream the ability to invest directly. There might be second screen ability to actually co-fund. And now, we’re hearing about crowdfunding coming into Canada, we’re very excited at the Dragons’ Den, because maybe you could have a situation where the audience can participate in what the entrepreneurs do. That is the key.
SmallCapPower: What’s the biggest red flag investors should look for when putting money into a tech stock?
Michael: Me. Come on. Look. No, there’s no red flags in technology. It’s all about a cycle. There’s a ten year cycle. We’re in the second year into a ten year cycle.
I said three years ago on BNN that the market will correct. It’s cyclical. It’s a function of supply and demand. Oil will be $50, but it might go lower, because that’s where the marginal cost of Canadian oil sands are at. Now, I believe right now that we’re here, but three years ago people thought I had three heads.
I believe that technology is based upon strength, entrepreneurship. You have to be excellent to be successful, and we have successful excellent companies. That will drive investment. Why is Google in Waterloo? Why is all the U.S. corporations coming here to Canada and saying, “I can come here. It’s a third of the cost.” We have a population a tenth of their size, and we have Dianne Buckner.
SmallCapPower: What do you think will be the next big thing in technology, and how can investors profit?
Michael: Well, difference in capital is probably a good start, but we’ve had a tough time. We went from $3 to $1. We’re a merchant bank that takes a wide group of stocks that are involved in the different areas. But if I had to focus on areas of specific, it’s about logistics, technology that relates to logistics, taking anything you do and make it simpler, easier, faster. It’s the Intel way. Take historically what you do, shopping, now you have online shopping. Take what you did before in delivery of systems. Take everything that you’ve done and look where we are today. It’s going to be commerce, an e-wallet, the cloud, wireless, and something that can produce a service that is repeatable and is a subscription model like your cell phone or anything of that nature. And, we’re getting away from all the historical mediums. I still read the newspaper. Children under the age of 30 do not do that. I still have a land line to find my cell phone, but no one else has one. Cable, I love Jimmy and all the guys at Roger’s, but at the same time, Sean Rogers, they actually understand that it’s about content. They’re creating their own content, which is where it’s going with that.
Dianne: We need an app that helps people dress like Michael Wekerle, don’t you think?
Michael: Well, don’t too closely, actually. I crocheted this last night [chuckles].
Narrator: Keep up to date with all of your favorite Small Caps. Subscribe to our free newsletter and get daily investment ideas, breakout stocks, momentum gainers, expert mail, stock picks, and more. SmallCapPower.com, investing ideas and research.
