BC Business
“It wasn’t the housing industry collapse that hit us—it was the credit crisis, because people didn’t have the credit to be able to buy anything. In 2008 we were on pace to do $50 million in sales, and then Lehman Brothers collapsed and all of a sudden sales were less than half.
That caused all of us to look deeper at what we had. Because of the way we built our business around logistics, we had the data to tell us what was selling. We looked at products on the other side of the ocean, that were being shipped on a long lead time, and we said to manufacturers, ‘Put your inventory in our warehouses on this side of the ocean, because we think we have the perfect signal that will tell you exactly what to sell and where to sell it.’
Manufacturers started to do that in early 2009. Even though the market was bad, the demand actually exceeded supply. We kept running out of stock, and the business was accelerating again—but we still didn’t have enough money to support it.
I went home to my wife and said, ‘It’s going to be a zero unless we go all in, and that means selling our house.’ I believed it was a 100 per cent chance that we would succeed, but I told my wife it was a 70 per cent chance. I told her that because I wanted her to understand the downside. The truth of it was probably a 50 per cent chance.
We talked about what it would look like in a complete collapse. And we realized that the only real downside was letting it fail right then.
So we sold our house in Richmond and rented a really small house. Some other friends came in with me and we put together a funding round of about $5 million. We invested more in data. Six months later OMERS [Ventures] saw how much the business was accelerating and invested $16 million.
We tend to look at everyone else’s lives and see only the high points. But lives don’t look like that. In fact most of the value comes from the lows. You find out who you are, who your friends are and what you’re capable of.”