Nine of Canada’s top 10 start-up companies this year are involved in technology, but only two out of the top 50 are dot-coms, a trend that is indicative of things to come, says the editor of the magazine responsible for the list.
“I think the dot coms are running and hiding,” said Profit publisher and editor Rick Spence. “They haven’t had the success we thought they were going to have and their time sort of ran out. However, some of them will emerge as other things.”
He continued that one of those companies successful in reinventing itself was career company Job Shark.
“They are much more a real-world company right now and they have adapted to the changing realities so they are still here and we are going to see a lot more of that as we integrate the Internet into people’s lives instead of setting up your own, self-sustaining business on it,” he said.
That’s why the people at Toronto-based Jobshark Corp., particularly CEO Matthew Von Teichman, were so proud of being among the top 50 of Canada’s Hottest Startups in the second annual ranking by Profit magazine Monday. The companies were ranked by revenue growth over two years.
“I knew our idea was good and I knew it had a lot of room to grow,” Von Teichman said. “It has been challenging, especially lately. Dot-coms, well, we were lucky because we were well financed, and that is were a lot of them suffered. However, there were a lot of terrible, terrible, business models out there, and they deserved not to exist. I think when I reflect, our industry still has legs.”
Leading on the list this year is SiGEM Inc., a Kanata-based company that provides wireless location-based applications for the telematics market. SiGEM experienced two-year revenue growth of 19,891 per cent.
“We probably don’t have very many good ideas – most of our ideas come from our customers,” CEO Herb Woods said after the presentation of the list Monday.
“The key is that it was a very dynamic, high-growth market. Industry analysts say that 80 per cent of cars manufactured by 2005 will have these devices in cars. They will be Internet-enabled, wireless-enabled and they will have on-board diagnostics.”
For example, he continued, if someone locks keys in a car, they can simply click on an icon or call, and the command will go over the network and unlock their car. The market for this sort of service is expected to go to $6.2 billion by 2004, he added.
The average two-year growth for tech companies on the list was 2,297 per cent. The same statistic for non-tech was 1,097 per cent.
“Our list favours fast growth and technology favours fast growth, so there is going to be a wonderful correlation,” Spence said. “Technology enables you to leverage, to grow faster, to sell all over the world and to move quicker. Those technology companies are celebrated on our list and that will grow because technology is creating so much value. Technology has the power to pole-vault you to other levels that you never dreamed you could be.”
All of the 50 companies were founded in 1997 or 1998 and posted an average two-year growth rate of 1,688 per cent. Average sales for these firms were $5.3 million.
Between 1998 and 2000, they collectively created 2,466 new jobs.
Although only two companies out of the 50 are dot-coms, 26 firms say the Internet was an important part of their vision from the start.
For more on Canada’s Hottest Startups, visit http://www.profitguide.com/hottest
For more information on SiGEM Inc in Kanata, go to http://www.sigem.com
For more information on Jobshark Corp. in Toronto, go to http://www.jobshark.com
Top Ten ranked by two-year revenue growth
1. SiGEM Inc., Kanata, Ont. 19,891 per cent
2. Delano Technology Corp., Markham, Ont. 6,568 per cent
3. Exclamation International Inc., Toronto 6,137 per cent
4. The Pressure Pipe Inspection Company, Mississauga, Ont. 5,513 per cent
5. CanopCo Inc., Toronto 4,505 per cent
6. 724 Solutions Inc., Toronto 4,227 per cent
7. Swift Trade Securities, Toronto 3,917 per cent
8. Quartet Service Corp., Toronto 3,177 per cent
9. Millennium Care Inc., Toronto 2,367 per cent
10. Pak N’ Stack, Mississauga, Ont. 2,180 per cent