STARTUPS TO WATCH: Valydate

It was only a decade ago, when Michael Alam worked at Nortel Networks, that a schematic design for a “fairly complex” hardware board ran about 30 pages.

Traditionally, a company’s top hardware engineers each spent half a day reviewing the design, before meeting and collectively going through it line by line.

“It’s very cumbersome and has a high chance of letting errors through,” says Mr. Alam, adding those mistakes are frequently not found until the lab testing phase or, even worse, after the product is released.

Now, the designs he sees easily range from 100 to 150 pages, making manual reviews virtually impossible.

Realizing there was no automated schematic review tool on the market, Mr. Alam and his colleagues set out to build one and incorporated Valydate last year.

The company runs roughly 50 common checks per connection – adding up to hundreds of thousands of checks per design – such as ensuring one output is not driving another output. It also customizes its verification process for different industries or if the client has custom devices on their boards.

With a client roster that includes top telecom firms such as Ciena, Genband and Alcatel-Lucent, as well as customers in the defence and aerospace sector, Valydate is already turning a profit.

It’s a testament to the need for external review tools, since Valydate doesn’t charge its customers if it fails to find any critical errors. So far, however, that situation has only arisen once, and it was on a design that had already been in the field for some time, says Mr. Alam.

The company’s first clients were friends and former colleagues of the executive team. Armed with positive referrals, Valydate used those projects to win further business. As a result, about three-quarters of the company’s customers are in Ottawa, but Mr. Alam says that will drop to about 50 per cent by the end of the quarter as Valydate secures new clients in Montreal, Massachusetts and California.

In an addition to aggressively increasing sales, Mr. Alam says it is the company’s goal in 2011 to build a more generic tool that’s not only capable of verifying telecom schematics, but is intelligent enough to check electronic designs across all industries.

Designs are getting so complex that there is no way you can manually review them anymore. - CEO Michael Alam

Among the ingredients in Valydate’s early success is the National Research Council’s Industrial Research Assistance Program, commonly known as IRAP, says Mr. Alam.

He says IRAP advisors helped with the company’s business plan and connecting him with industry contacts, and strongly suggests other start-ups look into the program.

“Without them, we would have stagnated this year.”

Year founded: 2010

Local head count: Four full time, one part time

Funding: IRAP and investments from the two company founders

Product: Automated review and validation of hardware schematics