Exploring augmented reality from the ByWard Market
I recently interviewed the tall, charismatic 30-year old Select Start Studios CEO Tariq Zaid at the company's cool headquarters in an old stone building fronting Rideau Street in downtown Ottawa.
The studio has just been remodelled so it can fit up to 25 highly skilled, highly paid app developers in an open space filled with natural light, top-end workstations, and a play area dominated by a big-screen TV, for any downtime they get.
The company, which is also known as S3, will soon be out of room, having gone from three employees to 19 as revenues grew over the last year by 600 per cent. It's on its way to $10 million in sales within two years.
Employees enjoy profit-sharing, and everyone gets to keep an Apple MacBook Pro, even if they leave - which few do.
They have Boot Camp, Knowledge Transfer and Hacking Days where developers can pursue their own projects, some of which get spun out of S3 into stand-alone businesses such as Adaptiv, which produces mobile solutions for hospitals using the iPad.
I asked Mr. Zaid what the pixie dust is in S3's business model. He replied: "We take a strategic, design-oriented approach to every project we work on for clients. We focus exclusively on the mobile space, which is the fastest-growing part of the world economy, developing for both Android and iOS which make up 90 per cent of the market. We'll also do work with Windows Phone 7 and BlackBerry."
But further questioning unearths a more fundamental truth - the company's corporate culture is really its key weapon. Employees are not afraid to push the envelope, experiment and even fail.
They initially tried to launch some of their own products: first, a server technology for mobile multiplayer games; then, their next release, AppNotify, competed directly with Silicon Valley-based Urban Airship, which crushed them.
Instead of being downcast over these failures, the company used them as learning experiences that shaped its corporate culture to this day - it now uses its intellectual property as a platform for its clients' custom work. Those customers doubly benefit, since S3 also knows now not to do something. That forms part of the strategic planning it does for and with each customer.
Company officials have also learned how to be better marketers in the process, which helps their clients grow faster and obviously helps S3 too. Like Shopify's Guru Program or Apple's Genius Bar, S3 goes one step further - the firm's always thinking not only about how to help its clients, but also its clients' clients too.
As a result, the Ottawa-based company ends up embedded in its customers' business ecosystems, making it harder to dislodge or knock off.
Its clients include well-known names such as Avaya, PwC, the Yellow Pages Group, the Ottawa Hospital and Entrust, as well as lesser-known startups such as Arrived and Getaround, which won Tech Crunch Disrupt NYC.
Mr. Zaid and his team - which includes co-founders Adam McNamara and Josh Tessier - are not afraid to try to rebuild their own products again and again, and expect half of their sales to come from this approach within two years, with the balance coming from custom apps for third party clients.
They are experimenting with augmented reality apps, which I think will be the next great frontier as the Internet becomes an always-on overlay on real life. Think about holding up your smartphone to the scene before you and seeing an overlay of local news on the geography around you. They are working on apps that are beyond fantastical and plan to announce some of them soon.
S3 plans to have a business development presence in Los Angeles, Silicon Valley, Austin, Texas, New York City and Boston, but keep its headquarters in Ottawa.
When asked if the firm can build a great company from a northern shelf city like Ottawa, Mr. Zaid said: "Sure. It's a vibrant startup community here, with lots of top-tier talent that you can't find anywhere else. Most importantly, they're like-minded individuals who share a common purpose and culture. Plus, we're in the right place. The ByWard Market is where this new tech community wants to be."
He later added that federal assistance - key to kick-starting the company - is another reason to stay close to home.
"We would not be where we are today without IRAP grants and other forms of government support, which were very helpful in terms of commercializing our first products. SR&ED tax credits are way too valuable to us to even think about moving our headquarters to the States."
People used to be in either the hardware business or the software business. Then maybe they were in the services business. Now they might be in the product or app business. The fact is tech boundaries are blurring, and consumers and enterprise clients appear to be benefiting.
Professor Bruce M. Firestone is entrepreneur-in-residence at the University of Ottawa's Telfer School of Management; founder of the Ottawa Senators; executive director of Exploriem.org; and a broker at Century 21 Explorer Realty Inc.