Harvey: If you have a million-dollar vision, don’t surround yourself with one-cent minds.
Suits, S4:E1 “One-two-three go”
What is tech innovation?
“Innovation can come in any form, and it can affect any industry,” says Jamie Barron, a BDO Technology and Life Sciences lead who is extensively involved in the tech ecosystem across Ontario.
“Technology has advanced all industries,” adds Harry Chana, who has extensive experience in tech in addition to being an international Tax leader at BDO.
He illustrates: “Fintech: Is that financial services, or is that tech?”
“I think there’s an early-adopter advantage in many businesses,” observes Jeff Chapman, Managing Partner in Financial Advisory Services at BDO Canada. “In financial services, technology adoption is critical to competitiveness. You see people with significant knowledge of technology in leadership roles in successful financial-services businesses. They know how important it is to be technology savvy because of the prevalence of technology in the industry. It will be interesting to see how that phenomena transforms the rest of the economy.”
Jeff gives context: “Canada has been the darling of certain technology verticals. In the late 1990s and early 2000s, we were the darlings in the telecom space. In the mid-2000s, we were the darlings in the smartphone space. We wouldn’t have the technology we have today if it weren’t for companies like Nortel and Research in Motion. People look at those companies as though they were failures, but they were significant market movers […] having those types of technology giants in the country helped developed a large community of people in Canada with management competencies and a capital market to grow those kinds of ideas. A lot of the technology that we have today can be tied back to those companies.”
“Warren Buffet used to say he’d never touch technology. Now, he’s invested in Apple and Amazon because of how fundamental technology is to the economy,” Jeff explains.
Commitment to tech innovation
“As a tech company, our fundamental philosophical belief is you have to be constantly innovating,” says Tony Lourakis, founder and CEO of Fleet Complete, a company that has been on the annual Canadian Business “Growth 500” list for more than a decade.
Tony goes on:
“What we’re selling in the market today—the value proposition we’re providing to customers today—is stuff we worked on years ago. What we’re working on today is the value proposition we intend to be providing customers in the future. We’re constantly investing a meaningful percentage of our revenues into research and development. That’s what our industry and our customers count on us for—we’re a SaaS-based, cloud-based company. What our customers are signing up for when they choose Fleet Complete—they’re choosing a tech partner for their organization that will continue to innovate and evolve and provide them value as the world changes. Especially in fleet and vehicles, which has gone from, a few years ago, being a boring commodity industry to becoming an epicenter of technological innovation.
Companies in this space know that there’s so much change that’s happening—and more to come—with electrification, connected vehicles, autonomous vehicles and assets—industrial internet of things (IoT) or fleet IoT. They’re looking for partners who are going to help them through this and make sure their company continues to be at the forefront. That’s what Fleet Complete is doing. Innovation is in our DNA—it’s in the most fundamental depths of our organization.”
“We’ve had an antiviral technology in our portfolio of technologies for a while—since 2010–2011,” says Giancarlo Beevis, president and CEO of Intelligent Fabric Technologies, a GTA-based biotech firm that developed the first antimicrobial textile chemical proven via U.S. codes to deactivate Sars-Cov-2, resulting in 241% year-over-year growth in the second quarter of 2020.
“One of the major U.S. cruise-lines was having issues with norovirus outbreaks on board their ships, causing them to dock and fly passengers home to try to control the outbreaks. They came to us and said, ‘What can you do to help us?’ We commissioned a study, and found the vector of transmission. Believe it or not, it was the reusable napkins on board. They were washing them between every use, but as the napkins were coming from housekeeping ‘clean,’ they were then being folded by staff to place them on your buffet table, and the staff member who was doing that could have—or did have—norovirus on their hands. And, then you’d wipe your face, and there was the point of transmission. We went to them with two options: We can impregnate any new napkins you purchase with PROTX2 AV [a proprietary antiviral] so it’s durable, or we can give you a laundry additive that you will utilize during each laundry cycle—that will give you an active surface.
We proved it out—killed 99.9% of the norovirus. Unfortunately, at the time, we were still young as a company, we weren’t public, and there was a large janitorial company that owned the exclusive rights to anything deemed as disinfecting or cleaning on board. They wanted to own it out right. We weren’t prepared to do that. It just got shelved.
We focused on the antibacterial side of our products. Even after COVID-19, bacterial infections are still the number-one cost to the healthcare system. We have a solution to help people and save lives during COVID-19, but, long-term, we also have a solution to help people in a ‘normal’ healthcare environment—fighting bacterial infections, preventing re-admittance and lengthier hospital stays.
As the story goes, one of our long-term partners called me and said, ‘I know about your antiviral technology—do you think it would work against COVID-19?’ I said, ‘I don’t know, but I don’t want to be one of those companies that [just] tests against coronavirus.’ You see a lot of companies out there with claims of ‘kills coronavirus,’ and then you read the testing, and it mentions human coronavirus, which is nothing more than a common cold—not what we’re trying to deal with in this pandemic. So, we scoured the globe to find an accredited laboratory equipped with a biosafety level-3 lab that could test this commercially for us. We found it with his help. And, proved we could kill Sars-CoV-2, the virus that causes COVID-19, in under ten minutes with residual kill for up to 24 hours—it was an amazing verification for our technology.”
Giancarlo’s story is an important reminder to be open to the different ways opportunities might take shape as a tech business evolves. Even though Intelligent Fabric Technologies had a proprietary disinfecting agent, the timing to go to market wasn’t right for them because they wanted to retain the ownership and market it as theirs. Bringing a vision to life can mean being nimble and pivoting; but it can also mean being patient for when the right time for an opportunity presents itself.
“We talk about technology leading the recovery—I think that is related to technology forcing everyone to evolve at such a pace it requires [traditional] businesses to become technology businesses,” Jeff observes.
“We try to look at what’s going on in the marketplace and see how we can do it better. We look for new areas, new things, new trends that are coming out. […] We look to find existing products that need a boost and need to be brought into the future with sustainability and better efficacy—not just accept the status quo.”
That commitment to innovation has been game-changing for Intelligent Fabric Technologies.
“We’re certain COVID-19 is here to stay, and it’s had such a dramatic impact—where we were talking about antivirals for cruise ships and medical environments, now we’re talking about making antiviral yoga pants. That’s how much of a catalyst recent events have been for our business.”
“We go for goal A, and we end up with a product that gives us goal B, or C, or even Z. We looked at a technology that we thought was going to be a durable, fluorine-free water repellant for textiles—turns out that this will instead be a carrier agent for our PROTX2 AV antiviral product that will allow us to create an active all-surface coating. This type of product will allow us to walk into a movie theatre or sports stadium and coat all surfaces with an active antiviral coating that lasts for six to twelve months between applications. That’s what we’re working on now. That’s not at all what we intended to do—that’s just the fantastic surprise that comes out of a lot of these innovations.”
Giancarlo adds a strategic caveat:
“What we’ve done in a lot of our technologies, especially the antimicrobial and the antiviral, is design them so that the mechanism of action does not create microbial adaption. As we’re heard, the COVID-19 virus is mutating; we’re showing our technology still kills it with any of the current mutations.”
Jamie Barron suggests innovation can be engineered:
“I had a conversation recently with the director of infectious disease for a hospital, and we were talking about how innovation could help them with their challenges. They were describing having new problems and new challenges almost daily that they were trying to figure out. The traditional innovation model—innovative companies pitch you on what they do—may or may not help. Instead, we could help hospitals by asking, ‘Why don’t you tell us the top-ten problems that you have, and we’ll go and try to crowdsource the solution for you. It might be that in seven of ten of the cases there is a company or a solution that makes sense, and we could go and rapid-source and connect it for you because we know the ecosystem and there are ways to do that.
But, there might be items where there isn’t a solution, and we don’t have two years to figure that out. Maybe we could crowdsource a solution for those items—for X problem, we think it makes sense to get this company and that company, this funder and that consultant to crowdsource—basically, hack—a solution for the hospital. Then, if that makes sense, we can try to action it. It’s different model of innovation. It’s a way to rapid-deploy solutions where they don’t exist. If it works, the hospital gets their solution faster, and other stakeholders may realize there’s a business opportunity that a company can bring to others. So, it’s shortening the cycle in terms of innovation, ideation, and connectivity of the market stage.”
Setting a foundation to innovate
“Innovation is a common theme with our client base,” says Deann Young, who manages leadership-coaching at BDO Canada. “We look at innovation from the lens of curiosity, self-awareness, and change leadership. Innovation means a shift from how you currently work to something new, how you collaborate to bring different thinking and ideas together to disrupt the current state. A powerful part of that is mindset or perspective—how you view the world, how you view a challenge, how you view yourself.”
“Persevere through the difficulties, find ways to innovate where there’s deficiencies in the current marketplace, and creatively think about what kind of opportunities you have on the table,” says Giancarlo. “Don’t say no completely. Look at another way to potentially do that same business, but maybe in a different way.”
Perseverance is a corporate value Giancarlo suggests companies focused on high-growth innovation can benefit from keeping top of mind: “There’s been many, many a time when we thought we had gotten to the top of the mountain, only to get a downpour and find ourselves in a mudslide, and down the other side. So, certainly, perseverance. You’re going to have challenges of all shapes and sizes all along the way. Some big. Some small. But, what I find has always been our key to success is to keeping pressing, no matter how difficult or bleak it seems—keep pushing, keep your head down and just keep going, and you will get there. That’s been the top value for me for sure.”
He adds: “My personal mantra has always been ‘hire people smarter than you’—if you surround yourself with smart people, generally, the outcome will be positive.”
Undeniably, the need to keep innovating is inherent in tech scale-ups. Staying curious, following instincts, and being open to change can take you from shifting with markets to shifting markets. As a number of our contributors agree, while your tech business might evolve in any number of directions, don’t lose sight of your core vision—it’s what keeps the journey of scaling yours.
Explore other areas important to tech scale-ups:
- Peter Matutat, CPA, CA | Partner, National Technology & Life Sciences Leader
- Kelly Johnstone, CPA, CA, CPA (Illinois) | Partner
- Harry Chana, CPA, CA | Partner, International Tax Practice Leader & Transaction Tax Leader
- Daniel Ma, CPA, CA, CBV | Partner, Financial Advisory Services
- Deann Young, Senior Manager, Leadership Coaching
- Armand Capasciolto, FCPA, FCA | National Accounting Standards Partner
- Marc Fournier, M.Eng, P.Eng, CMC | Partner, Advisory Services
- Craig Mulcahy, CPA, CGA | Partner, SR&ED and Government Incentives Tax Practice Leader