American company tops Canadian list for entrepreneurial success

Somewhere, there’s an American laughing his stars and stripes off at Profit magazine’s first annual ranking of Canada’s 50 hottest start-ups: the number one spot belongs to an American company.

Ranked by revenue growth between 1997 and 1999, the Toronto-based magazine which caters specifically to Canadian entrepreneurs listed Inc. of Seattle as its number one Canadian start-up with a 12,841 per cent revenue surge. Someone might want to suggest to the editors at Profit that Seattle is in the United States, but in fairness and at the time of the survey – a Web-based business services provider – was rooted in Canada as MegaDepot until 1998. We can rank ’em, we just can’t seem to keep ’em.

“We had some serious discussions about that one,” laughed Rick Spence, publisher and editor of the Rogers Communications-owned Profit magazine. “ still boasts about 35 per cent Canadian ownership and it was founded in Canada as MegaDepot by Canadians…to leave them off the list because they packed up and headed stateside, we felt we’d be depriving our readership of an important lesson learned.”

Spence was quick to point out what that lesson was, although it may be construed as a mixed message by Canuck entrepreneurs.

“There are still 49 other companies on the list that didn’t go to the U.S.,” he said. “There’s more venture capital in the United States and in [’s] case, they also went where the smart money is – there’s more of those people in the U.S., of that there is no question.”

Rounding out the top five Canuck start-ups: Internet telephony provider InfoInterActive Inc. of Bedford, N.S. (9,158 per cent growth), on-line travel agency (8,825 per cent growth) and Blast Radius Inc. (6,780 per cent growth) both of Vancouver, as well as Winnipeg’s CanTalk Canada Inc. (4,735 per cent growth).

“We are impressed with such a high ranking; like many Internet-based firms we have much still to do to be a successful company long term,” said Stephen W. Lewis, vice-president of “The Profit ranking is a milestone we are proud of and a good measure of our growth. The feeling is similar to when we found ourselves featured in Fortune, Fast Company and Upside earlier this year.”

The exercise begs the question why Profit’s ranking is called Canada’s Hottest Start-ups, and not simply the Web’s.

“The markets in the U.S. are enticing and we held out great hope in cracking them,” Lewis admitted. “The Internet seems to transcend borders in many cases.”

Crawling out from under the shadow cast by the unfurled American flag, Profit does offer other notable findings about those ranked: 46 of those companies are headed up by men, while four are run by women; high-tech companies account for just over half of the 50 enterprises on the list; combined, Canada’s hottest start-ups are projected to provide 3,600 new jobs north of the 49th parallel in 2000.

“Those 3,600 jobs are coming from companies that are less than four years old and that’s tremendous,” Spence said. “It’s exciting to see companies in B.C. or the Maritimes have a chance to grow at a geometric rate similar to companies in Ontario. [The list] shows companies launched in Canada are [serving] international [markets] right from the get-go, and that’s huge.”

Bill McMullin, CEO of runner-up InfoInterActive Inc., said his company’s ranking validates the efforts he and his staff have put forward.

“It’s ironic their magazine is called Profit,” McMullin told ComputerWorld Canada. “We’re proud of the fact that we’ve been listed above the rest but we’re never satisfied.”

InfoInterActive’s focus is on the next generation of IT-based call management features and the growing firm services clients across North America. Although he said he doesn’t consider the Canada/U.S. border from a business context as InfoInterActive is an Internet-based enterprise, McMullin admitted he was puzzled by Profit’s decision to list an American company as its top Canadian start-up.

“I don’t really understand that,” he said.

But industry analyst Kevin Restivo of IDC Canada in Toronto appears to have a firm handle on Profit’s methodologies.

“It’s that classic question, what is a Canadian company? What does it mean to be Canadian?” he pondered. “ is very much like any Canadian high-tech company whose focus ends up being global or one that needs a strong American presence.”

Of the companies Profit ranked, 21 hail from Ontario, nine from British Columbia, six call Alberta home, five are based in Quebec, three are in New Brunswick, two each are rooted in Manitoba and Nova Scotia, and one is from Prince Edward Island.