$100-million tech companies | BCBusiness
We should take a moment to congratulate several B.C. tech companies who have recently hit the $100-million benchmark.
The club of B.C. tech companies hitting $100 million in sales will welcome several new members by end of 2014
Guy Kawasaki has made quite a career for himself talking about entrepreneurship, early-stage marketing and venture capital for technology companies. He’s published a great list on his blog, compiled by Scott Shane, a professor at Case Western Reserve University, called the “Top Ten Myths of Entrepreneurship.” The list details the myth that growth projections are usually achieved.
Like Kawasaki and his venture capital firm Garage Technology Ventures, I have reviewed thousands of early-stage business plans over the past 15 years. Each one projected $100 million in sales, sometimes within a year, sometimes within five or six years, but that amount seems to be the benchmark. One hundred million dollars has a nice ring to it, especially when said with a Dr. Evil lilt and a raised pinkie finger.
Kawasaki points out in his myths that very few companies reach that amount. He quotes U.S. census data that says of the 590,000 or so new businesses with at least one employee launched every year, less than 200 reach $100 million in sales within six years. That means one in every 3,000 businesses started hits the $100-million mark. According to the analysis, only about 9,500 companies reach $5 million in sales in that time. That is one in 62 businesses reaching the stage at which companies have validated a market opportunity and have real traction. But would investors be happy if it took you six years to get to $5 million?
Given those long odds, we must celebrate technology companies reaching that magic milestone of $100 million. It is a superb and hard-fought achievement. I remember starting in the technology business in 1994 in Vancouver when the tech sector had exactly none—zero—$100-million revenue businesses. Vancouver technology finance pioneer Haig Farris told me our industry would arrive when we saw that size of company, which he argued would matter on a global scale. Subsequently, we saw many such examples including Pivotal, QLT, PMC-Sierra, MacDonald Dettwiler, Creo, 360Networks, Sierra Wireless and Crystal Decisions (although not very many hit that mark within six years).
Avigilon just hit $100 million in sales (almost on the nose) for 2012. This is one case where the company went from essentially zero in 2007 to $100 million in 2012—just as other entrepreneurs’ business plans had projected, but not succeeded. Avigilon grew a jaw-dropping 67 per cent last year. We must genuflect to Alexander Fernandes and his team for how quickly the company has become a global player.
Here’s the most exciting news: We have one local technology company passing the mark in 2013 and two or three that should do it in 2014. Vision Critical is a private company, but has projected publicly that they will pass that mark this year. There, Angus and Andrew Reid have built a superb team and the firm will truly be a global player in the next generation of market research technology.
My 2014 predictions are mere conjecture, as none of these companies have told me they will crack the nine-figure barrier. HootSuite is on an Avigilon-like pace of growth and will likely pass the mark in 2014. Ryan Holmes and his team count more than 200 employees and it continues to grow well. BuildDirect has taken a little longer, but will get there in 2014, if not sooner. Its growth since 2009 has been astonishing. Absolute Software is also getting close (above $80 million in trailing 12-month revenue) and, although it has slowed in recent years, the company is on pace to hit the number in 2014 or early 2015.
Suddenly the $100-million club is getting crowded, and that is a fantastic thing for B.C.