IT companies dominate list of hottest startups

IT companies dominate the top 10 of Canada’s hottest startup enterprises, according to Profit magazine’s annual ranking. The magazine unveiled its list of Top 50 startups in the country Monday at an event in Toronto.

Eight of the top 10 enterprises were in the IT field, and 14 of the total 50 businesses listed were IT-related companies. The rankings appear in the September issue of the magazine. The source of candidates came from a self-nominating ballot published in three magazines, as well as an online ballot on Profit’s Web site.

Ian Portsmouth, acting editor for Profit, found a few trends related to the IT enterprises that made this year’s list, including a surprising one.

“The most noteworthy phenomenon is the fact that there are seven or eight Internet-related companies on this list, so just when we thought all the dot-coms were dead, suddenly there are many survivors on this list that have grown very fast. Some are already profitable and they look like they’re here to stay,” Portsmouth said. “The important thing about any of those Internet-related companies is that they were not just born, because the Internet was born. They were actually born because they had a value proposition, and it wasn’t delivering 50 kilogram bags of pet food to people.”

That definitely holds true for Webhelp Inc., a Toronto-based online customer support services company that topped the hottest startups list for 2002 with sales of US$10,785,516 in 2001.

President and CEO Kerry Adler credits his company’s current success to teamwork and innovation. In 1999 the company set out to develop technology that allows for a “real-time experience” on the Internet that lead to the creation of a new architecture.

The architecture is a Java-based solution using push-and-pull technology that created a real-time capability for information sharing in a more dynamic manner, Adler stated. The solution, called Web application event framework, powers all the company’s solutions, including its voice-over-IP (VoIP) application, online chat, e-mail-based solution, and data-entry solutions. The company’s client base comes from Fortune 1,000 enterprises like Microsoft, America Online and Sony.

ERP Staffing Solutions Inc., a Calgary-based enterprise resource staffing service, which came in at number 18, credits finding a niche market in the IT staffing and consulting market, according to Paul Peterson, senior partner of the firm. He identified that niche market as enterprise resource planning (ERP) software from SAP. Peterson said about 75 per cent of its business comes from the complex software package from SAP. The U.S. market, specifically the Fortune 1,000 companies in the U.S., make up 80 per cent of the company’s business, Peterson said.

This was another trend for IT companies that appeared on this year’s list, according to Portsmouth. He believes the companies’ success south of the border can be linked to the great respect Americans have for small business owners and entrepreneurs. Forty-one per cent of sales generated by the top 50 came from outside of Canada.

“For 200 years it (free enterprise) hasn’t been part of our (Canada’s) social or economic model,” Portsmouth said. “In the U.S. it’s always been about going out on your own, so people just have a natural born respect for that down there.”

For more on the Top 50 startups, visit Profit magazine at