Lifetime Achievement Award: Ottawa's startup pioneer

Courtney
Courtney Symons
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How John Kelly learned to find opportunity where no one else did

On a lazy Sunday afternoon in 1985, John Kelly was sitting in a Manhattan apartment visiting his soon-to-be-wife, Hanna, and watching a football game.

The phone rang. It was Don Carroll, chief financial officer of Campeau Corp., which was funding Mr. Kelly’s computer technology company NABU Network Corp. It wasn’t good news.

Mr. Carroll told Mr. Kelly that Campeau Corp. was calling its debenture, the multimillion-dollar loan keeping the company afloat.

“It was him telling me it was all over,” Mr. Kelly recalls.

He hung up the phone, sat back down on the couch and kept watching the game.

“Is that phone call from Don what I think it is?” Hanna asked him.

“Yeah,” he said.

“And you’re going to watch football?”

“Yeah.”

“How can you possibly do that?” she asked.

“Well,” he responded, “it’s 3 o’clock on a Sunday afternoon. What am I supposed to do? If I jumped out your apartment window, it wouldn’t be high enough anyway.”

That was the moment, Hanna tells him, that she decided he was the man she would marry.

 

FINDING NABU

It was the lowest point in Mr. Kelly’s career, an experience he can only describe as “devastating.”

The company wound down, all 600 employees displaced.

But before that day, NABU was something special, a shooting star in the tech world that was years before its time.

The idea came after Mr. Kelly met a local lawyer named Gordon Henderson (later to become part of Gowling Lafleur Henderson LLP) who was president of Ottawa Cablevision and taught Mr. Kelly about cable.

In the late ’70s, mainframe computers were giving way to smaller versions that could be used in offices. Mr. Kelly began to visualize the value and potential of a computer in the home.

He decided to build a network that delivered software to home computers using cable television. The cable companies thought he was crazy, and they weren’t the only ones.

“They thought, ‘Home computers – what is that ever going to amount to?’” Mr. Kelly recalls. “‘What are you ever going to do with a home computer?’”

Something told him things would change, so he founded NABU in 1982.

Since the technology was so new, the company set out to create a home computer, an operating system, applications to run on it and a high-speed cable broadband network to deliver software to the home.

“Some people say (NABU) was five years ahead of its time. Some people say it was 20 years ahead of its time,” Mr. Kelly says. “Whatever it was, it was ahead of its time.”

The idea was thrilling and the company scored funding from Robert Campeau, a prominent real estate developer and financier. The company went public. It had a fair amount of money and 5,000 active users in Ottawa.

NABU teamed up with Telesat, a local satellite telecommunications firm, to beam its software to Alexandria, Va., where the company found a cable operator that believed in what it was doing. Using a Telesat satellite, American users had the same service as people in Ottawa.

But the company was too ambitious and took on too much. Mr. Campeau lost faith in the company’s ability to deliver, and so Mr. Kelly received that fateful phone call in 1985.

His entire career would be punctuated by moments where he saw potential when no one else did. A resumé stacked with companies he has advised, founded, run and purchased are a testament to his ability to say yes when others would say no, to enjoy risks instead of fearing them, and to pick himself up and carry on when others would have crumbled.

 

THE EARLY YEARS

Mr. Kelly was born on Feb. 12, 1940. in St. John’s, N.L.

“It was fabulous,” he says. He played sports every day. For seven years, he delivered the local newspaper, which he would read before tossing onto doorsteps.

Reading current events exposed him to placelines such as Ottawa, Toronto and New York where all the action seemed to happen. (Appropriately, he would go on to live in all three cities.)

“That’s when I began to realize that most things weren’t happening in my province,” he says.

After graduating from high school, he kissed his engineer father and homemaker mother goodbye and headed to New Rochelle, N.Y. to attend Iona College. He majored in philosophy for two years before switching to finance.

The decades of time he would serve in the tech world weren’t yet a dream in those days.

“I wasn’t, quite frankly, aware there was a tech world when I was growing up,” he says.

He was accepted into a CIBC management training program, jumping through 10 different positions in a year to learn how to do them all.

Before he knew it, he’d been offered the role of assistant manager at the main branch of CIBC in Ottawa at 119 Sparks St.

He didn’t know it then, but he’d soon become a landmark on Ottawa’s business map and spend most of his life in that city.

 

DISCOVERING TECH

Mr. Kelly met many IBM employees who became clients and friends. He quickly realized they had more exciting job experiences than he did in banking.

When three IBM guys spun off their own company and asked Mr. Kelly to join their team, he didn’t hesitate.

“I didn’t know a lot about technology, but nobody knew a lot about technology,” he says.

In 1969, he quit his banking job and became a business adviser for Alphatext Ltd., which acquired technology from IBM to allow word processing on mainframe computers – a function most had never heard of.

It was Mr. Kelly’s first startup.

Alphatext operated on the first floor of the Public Service Alliance of Canada building at 233 Gilmour St. Customers could enter a document into a terminal, which linked to Alphatext’s computer through a phone line. It was then printed and delivered to the company. For legal firms, which typically were not permitted to correct typos on their documents and instead had to completely redo them, it was a godsend.

With a nod to Mr. Kelly’s history with his mentor Mr. Henderson, the latter’s law firm Gowlings was one of Alphatext’s first customers.

The company saw fast and significant growth. Alphatext was on to something, but the manufacture of minicomputers was becoming more common. Why would people pay Alphatext about $2,000 per month when they could purchase a computer for $10,000 and do it themselves?

“The lessons learned were how exciting technology is,” Mr. Kelly says, “but also how quickly technology changes.”

 

LAW AND ORDER

After a brief stint working for Leigh Instruments, a local tech company that developed aircraft crash position indicators, Mr. Kelly applied to law school to round out his competencies, as he puts it. Hewas accepted into the University of Ottawa’s common law department and worked his way through the program with the help of two fellow students – Larry Kelly, who later founded Kelly Santini LLP, and Margaret Ross, now a partner at Gowlings.

He needed all the study help he could get, because while completing his law degree, he was working for yet another startup: Softwarehouse, a small private company providing programmers to businesses in need. Jack Davies was president of that company, which was soon acquired by Systems Dimensions Ltd., an IBM spinoff. Mr. Kelly found himself at the head of the software division for the new company.

 

OPPORTUNITY

SDL, as the firm was known, developed software for mainframe computers, but Mr. Kelly thought the company was missing the chance to market itself in the minicomputer industry – so miniature that it only filled a few shelves of a cabinet instead of an entire room.

He and Mr. Davies approached the president of SDL to tell him the company should diversify its offerings, but faced resistance. The president, George Fierheller, said he didn’t want to deal in what he saw as competing industries.

But the two men’s psychic senses were tingling. The mainframe industry was going to die, and the explosive opportunity was in minicomputers.

So in 1974, they spun off their own company: SHL Systemhouse Ltd.

 

SYSTEMHOUSE

Mr. Kelly was chief operating officer; Mr. Davies was president. Soon, local moneymaker Rod Bryden joined the ranks as the big bucks of the operation. Through his holding company Kinburn Capital Corp., he owned 50.1 per cent of the company.

“John is a real gentleman,” Mr. Bryden says now, looking back. “He’s very personable and upfront to deal with.”

They didn’t always agree, but they each presented their sides level-headedly to avoid undue stress.

“I can’t think of any case where John appeared to be upset,” Mr. Bryden says. “I’m sure there must have been occasions where he was, but in all the years I worked with him, I don’t recall him looking upset.”

Perhaps it was because of Mr. Kelly’s unfaltering ability to keep calm and carry on.

“I don’t like to say I’m not easily stressed, but I’m not easily stressed,” he says with a laugh.

In the 1970s, most people still didn’t know what software was, but Systemhouse continued to grow. Sales ballooned by 50 per cent each year and profits increased by 90 per cent during the first six years.

“It was a risk, but I never focused on the risk,” Mr. Kelly says of the company. “It was exciting. We were growing something, opening offices across the country, we were constantly hiring people.”

The company went public in 1980, but by then Mr. Kelly was itching for something new.

That’s when he decided to develop NABU.

 

NABU NETWORKS

One of the major selling points of NABU was that using cable was many times faster than telephone lines. It was sent out like a radio broadcast, without phone lines clogging up and slowing down the system.

While the lowest point of Mr. Kelly’s career was during his time with NABU, so was the highest.

“The peak and valley of NABU was much greater at the peak and much lower at the bottom than any of my other business experiences,” he says.

Looking back, he thinks perhaps the company might have survived had it focused on software alone and approached a major computer company for the hardware portion. The heartbreaking part was that when Mr. Campeau pulled the debenture, NABU was just months away from finishing a universal adapter that would have made it compatible with any computer.

But Mr. Kelly says he seldom reflects on things that are negative. Soon enough, he was on to something else.

 

DIGITAL MEDIA

In the late 1980s, Mr. Kelly founded DVS Communications and Why Interactive. The former, a tech company that digitized photos by broadcasting them over cable, was the first Canadian company of its kind, he says. The latter was an online learning module that was later purchased by Calian Technologies Ltd. as part of its education program.

Shortly thereafter, Mr. Kelly was approached by the founders of JetForm Corp., a local online form builder. They wanted him to lead their company, and so he did. During his time as CEO from 1995 to 1999, the company’s revenues increased from $10 million to $100 million.

Around the same time, Systemhouse reached sales of more than $1 billion. Mr. Kelly was no longer a part of that company, but it would never have existed if not for him.

 

HEALTH CARE

Meanwhile, Mr. Kelly continued his involvement in Ottawa’s tech sector by becoming a board member of more companies than he can count on his fingers and toes.

Never one to be pigeonholed, he also made the jump into a different industry – health care. In 2011, Mr. Kelly acquired a majority interest in Comfort Keepers Ottawa, a provider of in-home seniors’ services.

“I’ve been high-risk oriented all my life,” Mr. Kelly says. “But Comfort Keepers is a company that had a little more ... substance. It had a value to it that was different than tech.”

He also excitedly explains his interest in a burgeoning industry called nutraceuticals – like pharmaceuticals, but with natural, plant-based products. He was recently approached by a company called Canmedor Healthcare International Corp., a nutraceutical company that has already received Health Canada approval for three of its products.

“It’ll be a growing market, and I’m very much involved in talking to people about the opportunities,” he says, as he has been saying his entire life about one thing or another.

Meanwhile, he’s still chairman of the board at local clean-tech firm Thermal Energy International Inc. and a board member at Clearford Industries Inc.

All this and he still has time to fit in a job at Murphy Business Ottawa, a franchise of a North American business brokerage, where he works alongside local lawyer Debbie Weinstein and franchise president Sandra Harvey.

He’s now 72 years old.

 

FAMILY

His phone rings in the middle of the interview. It’s one of his five children, a son currently completing his master’s degree at Carleton University.

“You’re a good man,” he ends the conversation with his son. “Work hard.”

These days, Mr. Kelly and his wife Hanna live in a penthouse in the Great Canadian Theatre Company building at the corner of Holland Avenue and Wellington Street West. They begin and end their days together, playing gin rummy almost every day.

A condo two floors below that they also own serves as a “quasi-basement” in which their children can live and visit.

Mr. Kelly says he loves this city and can’t imagine living anywhere else.

“I continued to find opportunities in Ottawa that interested me. I was never bored in my work and I was comfortable in the community,” he says. “It is quite frankly a great city to be working and living in.”

 

REFLECTIONS

One of his favourite expressions is a Newfie saying that goes, “Sometimes, I sits and I thinks. Sometimes, I just sits.”

The sitting, to Mr. Kelly, symbolizes dreaming. Most people don’t allow themselves the freedom to dream about what could be, he says. They restrict their thought processes. That’s something Mr. Kelly has been able to get around. If he dreamt it, chances are, he did it. Sometimes it led to brilliant success and at other times, as was the case with NABU, it led to devastating failure. But he says he wouldn’t change a thing.

“I don’t allow my failures to negate the opportunities with which I deal,” he says. “The honest answer is that I probably would have done the same things again.”

 

ON RETIREMENT

“People say to me, why aren’t you retired? My answer to that is, what is retirement? It’s having the freedom to do what you want to do. That’s what I’m doing.”

Mr. Kelly says he has no great desire to go golfing or live on a beach. It’s not for him.

“Hopefully, I’ll always be busy doing something,” he says.

In the meanwhile, his phone continues to vibrate on the table, with calls from family, friends and business partners wondering what he’s up to.

 

SIDEBAR: BIG BUSINESS, BIG HEART

When Mr. Kelly was first transferred to Ottawa with CIBC, he took over his predecessor’s responsibility of taking care of finances for the local United Way. It was the beginning of a decades-long relationship with the organization, culminating with his election as chair of the annual campaign in 2000. He remained on the charity’s cabinet until about three years ago.

“I consider myself to be quite fortunate in terms of the opportunities I’ve had in Ottawa,” he says. “I wanted to be broader than just a particular company with a particular technology. I felt a sense of responsibility to give back to the community.”

In the past, he has served as a board member for the Queensway Carleton Hospital Foundation and the Community Foundation of Ottawa. He was honorary chair of the Canadian Cancer Society’s Relay for Life in 2001. As well, he remains on the board of the Ottawa Senators Foundation.

“John has had a very strong commitment to the community throughout his business career,” says Rod Bryden, a former colleague. “It’s a characteristic of his that stands out in my mind.”

Organizations: Iona College, Campeau Corp., NABU Network IBM Telesat Ottawa Cablevision CIBC SDL Public Service Alliance of Canada Gowlings University of Ottawa Kinburn Capital DVS Communications Why Interactive Calian Technologies Ltd. JetForm Corp. Canmedor Healthcare International Health Canada Thermal Energy International Inc. Clearford Industries Inc.All Murphy Business North American Carleton University Great Canadian Theatre Company

Geographic location: Ottawa, Ottawa.NABU, Alexandria, Va. Toronto New York New Rochelle, N.Y. Holland Avenue

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Recent comments

  • Daniel Rogall, Stoneway Creative
    April 08, 2013 - 10:41

    Mr. Kelly was by far one of the biggest influences in my career. I have had the distinct pleasure to work with John both at Cable Consumer Channel, and Digital Video Services (aka DVS Communications). I wish him well and hope that some day we might work together again in some capacity, there is still so much to learn from him. Kudos John on this well-deserved award. -- Dan

  • Richard Bruggink
    April 04, 2013 - 12:25

    Really interesting story, I had the pleasure of working with Mr. Kelly as a Graphic Designer at DVS and Why Interactive and I can say he's one of the best I've ever worked for, very smart and kind hearted.

  • Gordon Mason
    January 10, 2013 - 16:55

    Neat story as I came through the same tech phase as this having a small part in building interfaces for the D.E.C. computers that were then assembled in the old woolen mill in Carleton Place.