Mon, 12 Nov 2012

In order to keep more companies and jobs in Canada there needs to be the creation of a “culture of investment” according to Ryan Holmes, CEO of Hootsuite.  

“So many Canadian entrepreneurs sell their companies too early on instead of continuing to build them locally, which is terrible,” he said in an interview with Fundica. “We need to create a culture of investment within Canada so that companies are inclined to remain here and build.” 

Arguably the greatest and most successful tech startup to come out of Canada, Hootsuite grew massively and expanded over the past year, gaining $20 million in investment through OMERS Ventures. 

For startups seeking funding, a bigger success story cannot be found anywhere else. Before OMERS there was a $1.95 million Series A round via Hearst Interactive Media, Blumberg Capital, Geoff Entress and Social Concepts. Then came another $3 million in late 2011 from Hearst, Entress, Blumberg Capital and Millennium Technology Ventures.  

Holmes started his first business at 16, selling paintball equipment online. At 23 he started a pizza shop before founding Invoke Media three years later. 

Success evidently came from humble beginnings, as he spent the majority of his childhood without electricity.

“I won a computer in school one year and my dad hooked it up to our car battery, allowing me to spend hours each night playing around on it.” He said. 

Launched in 2008 via Invoke Media, Hootsuite boasts over five million users today. It has sent over a billion messages, has seen its enterprise team members grow by 4706% and its pro team members by 450%. They’re used by 79 of the world’s Fortune 100 companies and are on track for 250 employees by the end of 2012.

HootSuite is a social media management system for businesses and organizations to collaboratively execute campaigns across multiple social networks from one secure, web-based dashboard. They’ve partnered with all the social media giants, including Facebook, Twitter, LinkedIn and Google +.

Here’s the full interview Fundica had with Holmes:

Fundica: Who are the founders and what are their backgrounds?

Ryan Holmes: I grew up in the Okanagan region of British Columbia and actually spent much of my childhood living without electricity. I won a computer in school one year and my dad hooked it up to our car battery, allowing me to spend hours each night playing around on it. 

I had a passion for computers and entrepreneurship from an early age and started my first company, selling paintball equipment online, at age 16. When I was 23 I started a pizza restaurant that I owned and operated for two years before moving to Vancouver and getting a job at a dot-com company. After four months the business folded and I took the time to teach myself CSS and HTML. 

Then, when I was 26, I founded a company called Invoke. Originally operating out of my apartment, Invoke built websites for clients mostly located in Vancouver. We launched a CMS product on August 1, 2003 and ended up creating a popular piece of software used to run contests online. Companies started to want social media backing for their contests. It was when providing this that we recognized the need for a social media management tool as staff would always be logging in and logging out of client accounts. From here, HootSuite was born.

 

Fundica: Did you ever pivot your focus during development?

R.H: We never shifted from our central idea, which was to create a dashboard where all social media platforms could be accessed and updated from one space. But as with any product, our approach to this changed and evolved.

 

Fundica: How did you go about finding funding? 

R.H: HootSuite started off as an internal bootstrapped project within my internet company Invoke Media. At that time we simply allocated 7 of our 20 person staff and the necessary resources to build the social media management tool. But when we saw how quickly it blew up we knew we needed to give it more attention and its own funding.

At the beginning it was essentially self-funded. The original group of three employees working on HootSuite was also funding it and at that time we weren’t making a profit, it was a zero-revenue venture. But we continued to build and grow and two months after we incorporated, in December of 2009, we got our first major series of funding totalling $1.95 million from Hearst Interactive Media and Blumberg Capital, and angel investors Geoff Entress and Social Concepts. This was followed, in September of 2011, by a $3 million investment by Hearst Interactive Media and Blumberg Capital, angel investor Geoff Entress, and new investor Millennium Technology Ventures.

More recently, in March of 2012, we received a $20 million secondary transaction from OMERS Ventures. This investment allowed some of the original investors and original employees to take a step back and relax knowing they didn’t have to have all their eggs in one basket.

Fundica: What has been your best moment with Hootsuite so far?

R.H: I’m not sure if there’s one moment that sticks out in my mind as the best. Every year we go to SXSW and it’s always an amazing experience for us. In our space you meet people from all over the world every day who love what we do and the brand we created.

A huge moment was when we hit our first 1 million users on November 20, 2010. The growth never stopped and it wasn’t too long before we had another million, but hitting that million mark for the first time was really gratifying. It was a seven-figure symbol of all the hard work we had put in. Today, over five million users have HootSuite accounts.

 

Fundica: What are some major obstacles you’ve had to overcome?

 

R.H: Our product depends on Twitter, Facebook, LinkedIn, Google+ and other social media sources allowing us a certain degree of access to their API, among other things. Now we’ve built a strong relationship with these companies and I’m not concerned about losing that access, but in the beginning this was always at the back of our mind.

Aside from that, most of the obstacles we faced were obstacles any company faces when they grow exponentially in a short period of time. We tried to scale staff at the same pace as our user growth which, over the last two years, has meant a lot of new faces nearly every week - averaging 6 hires each Monday. Trying to coordinate and manage each department during this growth has been a challenge but one I think we’ve overcome with fantastic results.

Fundica: What can Canada do to nurture future Hootsuites?

R.H: Canada is not yet seen as a good environment for tech startups, or any startups for that matter, to find investment and support. So many Canadian entrepreneurs sell their companies too early on instead of continuing to build them locally, which is terrible.

We need to create a culture of investment within Canada so that companies are inclined to remain here and build, which in turn would create local jobs and foster local talent who may in turn continue the cycle of investment and advisement. Canada has it’s fair share of successful entrepreneurs, and these are the people that should be leading the pack and helping the young startups. We need to keep our talent here.