COVER: Ryan Holmes' Suite Success
HootSuite founder Ryan Holmes, one of the most tapped-in men on the planet — the man whose professional mission to revolutionize social communication is on pace to connect six million users this year — is actually waiting to hear from someone.
In Grade 5 he scrawled a fan letter to a video game developer, sealed it in an envelope and sent his praises off the only way possible — by mail. The hero? Richard Garriott, aka Lord British. Garriott created a video game called Ultima in the early 80s and the young Holmes was in love with computers and Garriott’s work.
Did Garriott write back?
“Actually, he didn’t. The big jerk,” Holmes recalls.
So much time has passed that Holmes has lost track of exactly what he is expecting in reply.
“He owes me an email. No, he owes me a letter,” the Vernon export amends with a laugh. “What’s worse, I can’t imagine back in the day he was getting very many letters.”
Honing his passion on his first computer, an Apple IIc that he won in a school district-wide programming contest, Holmes’ future impact on the internet would be charted around that time — long before his wise old owl came to roost. Despite the detours of starting a paintball company, dropping out of university and opening a restaurant, Holmes was ultimately drawn back to something very similar to his childhood passion.
Arriving in Vancouver in 1999, Holmes founded Invoke Media a year later. The still-thriving web services company had its biggest breakthrough in 2008, when Holmes and Invoke staff realized they needed a more effective way to handle the torrents of information flowing in and out via burgeoning social media sites.
HootSuite came from needing a better tool, but as they worked on the product, Holmes developed a deeper understanding of how much opportunity and appetite there was for what they were doing.
The free service quickly became a communication platform so pervasive it was used by Barack Obama and the Occupy movement.
It’s called positive K factor, a scientific term for having a product so popular the marketing takes care of itself.
The social media dashboard took two years to rack up a million users, eight more months to reach a deuce, and only six months after that to hit the three-million mark, where it currently perches. Holmes is confident they’ll cross six million by the end of 2012.
All that spells greater profit for a Vancouver company that refuses to sell out. Breaking the revenue bubble over a year ago with the release of a premium version of the product that hauls in well over $1-million a month, Holmes won’t rest until his company is worth a billion dollars. But not for the reason you might think.
“If we exit say at $100-million, I personally will do very well. My team will also have some money, but they won’t have a life-changing financial outcome.”
Exits, IPOs, acquisitions — call it what you will, things get more interesting for everybody after they cross the billion-dollar threshold.
Working towards that goal is not only good for Holmes and his staff, but it’s good for the country.
Seated in a busy coffee shop near his Eastside office, where staff and patrons greet him by name, Holmes lifts the curtain on why Canada has failed to generate tech-sector success stories to match the past decade of Silicon Valley start-up fury.
The Silicon Valley Cerberus of military, university and finance attracted a critical mass of brainpower to the San Francisco region in the 90s. As the internet gained in popularity, these three ingredients supernova’d and Silicon Valley became a centre of innovation and development.
There is now a growing shift towards decentralization but SF continues to have a stranglehold on tech for one playfully nefarious reason: the PayPal mafia.
This syndicate of American business people and investors who were founders or early employees of the e-commerce company aren’t feeding rivals to the fishes to maintain their monopoly, they are using their payout to propel new start-ups into household names. LinkedIn anyone?
“PayPal had an amazing acquisition. There was a group of people who got in early on who all took a ton of money off the table. Those guys are called the PayPal Mafia and what they continue to do is work together to co-invest in different start-ups.”
One member does the diligence and looks into a company. Once he decides to invest, he talks to the others and they kick in money as well.
“Those guys basically got into every big start-up that you’ve heard about over the last 10 years. It just blew up and these guys kept doubling down in what they were doing.”
So while Canadian equivalents exit, and have good exits (see Fredericton’s Radian6 at $326-million), they simply aren’t superstars in the incestuous, self-fulfilling universe of technology. And, according to Holmes, there haven’t been enough IPOs or acquisitions where the whole team does amazingly enough to re-invest in new ideas.
The Canadian government does what it can to support start-ups with programs like SR&ED (Scientific Research and Experimental Development) and IRAP (Industrial Research Assistance Program), but their finances and foresight are limited.
Holmes sums it up bluntly. “The government (isn’t) going to sit in rooms and come up with great ideas. It’s the entrepreneurs who drive it, but it takes some success to get people excited. Angel investors will come out of the woodwork if they see that [success] happening and they’re not getting in on it. Greed is a big motivator.”
So while the PayPal mafia picks its next lucky “victim,” Holmes makes his pilgrimage from Vancouver to SF for partnership meetings with Facebook, Twitter, LinkedIn and the like. After all, there’s nowhere else on the planet he can see all three in the same day. But the innovator remains wary of an independence-killing phenomenon known as groupthink, or social agreement on viewpoints that are incorrect or uninformed — a psychological mass steamrolling of ideas and alternatives commonly seen in hubs like San Francisco.
In contrast, remote outposts like New York, Austin, Boulder, Montreal and Holmes’ own “crystal cave of solitude” are emerging as start-up incubators.
As to why he refers to Vancouver with such reverence, he gets down to the business of talent retention.
“There’s always a new shiny ball in SF. First there’s Google and then the next thing that comes along is Facebook and then Twitter. People are always moving and there’s a lot of talent churn.
“It’s an amazing place, but here we’ve been able to keep our team focused and building out a big product and a big prize. We’ve been able to attract some of the brightest and best and that’s been a huge benefit to us.”
Vancouver wins as well. HootSuite currently employs hundreds of talented engineers, salespeople and creative minds. And the HootSuite team, which sat at 25 people last year, has increased tenfold and is expanding into a new, adjacent office space.
Iain Black, president and CEO of the Vancouver Board of Trade, isn’t surprised. “It’s a trend towards recognizing Vancouver as one of the three or four top locations in world in terms of talent in the area of digital animation and new media, of wireless innovation, of basic handheld application development, and broader technology industries.
“I think that the emergence of HootSuite as a global force is a testament to the innovation and creativity that has and will continue to come out of a city like Vancouver. [It] puts them, in my opinion, in the same leagues as traditional technology icons like Creo and Electronic Arts.”
Black also expects to see interest surrounding companies from Metro Vancouver and emerging pockets like Kelowna, translate into investment.
“It reinforces the message that Vancouver is increasingly being seen by the venture capital community as a place they should investigate for creative business plans, smart well-trained entrepreneurs and unbridled optimism.”
So while home base builds here, Holmes’ idea spreads worldwide. He smiles at seeing the beloved HootSuite mascot take on themes of hundreds of other countries, from the Japanese geish-owl to a Brazilian soccer-playing bird — one for every language his program is localized for. There was even a Steve Jobs owl in honour of the man he never got to meet.
Their reach still staggers the soft-spoken man, who has helped disrupt long-standing reigns, ranging from email to Hosni Mubarak.
“It’s given us some pretty amazing insight into the times we live in. In Japan, during the tsunami, we were heavily used. We had some of our biggest days through that, and through the Egyptian revolution. In Egypt, one day, we had a 16,000 per cent increase in registration. When they shut down Twitter and Facebook people were using us to indirectly access those. And then they shut down the internet to stop all communication.
“It is really interesting to see how disruptive and how core what we’re working on can be to the internet.”
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UPDATE (Mar. 29): HootSuite lands venture capital deal worth $20 million