Ryan Holmes | BCBusiness
Building a billion-dollar tech company in Vancouver has its challenges, as homegrown success story Hootsuite can attest
Around the world, Hootsuite is famous for its social media dashboard, the go-to for companies managing multiple Facebook and Twitter accounts—which, these days, is pretty much all of them. But here in B.C., the company is known for another rather remarkable accomplishment: staying home.
The Vancouver-based tech titan went from 20 employees to its current headcount of 800 in just four years, evolving from a young startup into a major local employer—all the while promising not to skip town. Often, the story for our tech startups ends much sooner: the company sells for $50 million, deciding it doesn’t have the resources it needs in Vancouver to become the next Facebook. So how does a company like Hootsuite—founded in Gastown in 2008 by Ryan Holmes—stay and grow so significantly?
Onward & Upward
As for that guy who sold Flickr, Stewart Butterfield is now CEO of Slack, a corporate messaging company worth US $2.8 billion according to an April valuation. While headquartered in San Francisco, Slack has a Vancouver office with 45 employees (as of September) and plans to grow, having just upgraded to a bigger space in Yaletown
“It starts with an outstanding entrepreneur who has a big vision and can rally people,” says Boris Wertz, founder of Vancouver venture capital firm Version One Ventures and co-founder of AbeBooks, which sold to Amazon in 2008. There’s also a matter of timing. “You look at Flickr: back in the day, there weren’t a lot of U.S. investors investing in Canada,” Wertz says, referring to the popular photo-sharing website, founded by Vancouverites Stewart Butterfield and Caterina Fake in 2004 and sold a year later to Yahoo for $35 million—far less than it would eventually be worth (San Francisco-based Instagram, for example, another photo-sharing site, sold for $1 billion in 2013). Fewer dollars were being invested in Canadian companies back then, Wertz explains, “and Flickr was a hard product to monetize.”
Which brings us to the third special ingredient: revenue. Hootsuite has been earning money since 2010 with premium accounts. “When you look at most of the Vancouver startups, a lot are in commerce—things that monetize early on,” Wertz explains. Flickr, on the other hand, was an Instagram or Facebook: a social network with no immediate ROI strategy. In Canada’s more conservative climate, those are the sorts of businesses that don’t stick around for long—at least not locally.
And the fourth pillar of Hootsuite’s success? Talent. While Vancouver has designers and programmers aplenty, it lacks senior talent, Wertz says. “We just don’t have enough big companies where you can hire people who have seen and done it before.” The solution, he says, is twofold: create your own leaders by promoting employees who show promise; and identify candidates you think could be convinced to move to Vancouver, like Canadians working abroad (by one estimate, Silicon Valley is home to 350,000 Canadians). Hootsuite’s senior leadership team is a mix of both. VP of talent Ambrosia Vertesi, who joined the company in 2011 from Aritzia, has seen her responsibilities grow with the company, while CTO Ajai Sehgal, a Canadian who held VP roles at Groupon (where he helped launch a Seattle office) and Expedia, was poached from the former just last year.
For CEO Ryan Holmes, however, there’s a more basic reason he kept Hootsuite at home: because he could. Because, in the new world order, being at the “centre of it all” isn’t everything. “We’re seeing a decentralization of startups around the world,” he says. “Why do these disruptors have to be in San Francisco? They can be anywhere. They can be right here in Vancouver.”