It was a tale of two companies, one old and one new, but both faced with the challenge of championing innovative solutions.
Ron Holdway, vice-president of COM DEV International in Ottawa and co-founders Mark van Hees and John Kenny of Solium Capital Inc. in Calgary, spoke last week to the Calgary Enterprise Forum Society about the guts and glory involved in being advanced technology companies in a world where nothing can be taken for granted.
A 30-year-old company, COM DEV has been through a rough patch. Its stock, a darling at $40 per share, plummeted to $2.25 in 1998 when demand for its microwave satellite systems disappeared.
Now back on track, COM DEV has made the transformation from a space company to a wireless communications company, with anticipated revenue of $300 million this year.
“Whatever the reason a company goes down, everybody suffers,” said Holdway. “A big mistake we made was when times were going very good, customers demanded a discount and we thought why not, as long as business was booming. But when the bottom fell out of the market, our margins couldn’t even pay for the overhead. You need to protect your margins in good times for the recovery.”
Today, COM DEV, head-quartered in Cambridge, Ont., has several research and manufacturing facilities in Canada, the United States and the U.K. It has made headway in selling to China, the world’s largest wireless market. New wireless product lines have helped COM DEV regain some its momentum. MERGY, a third-generation telephone product where users can surf the Internet and talk on the telephone simultaneously, should be released within the next three years.
The Solium Capital co-founders stressed the importance of managing human capital. The 18-month old Calgary company has been developing a Web-based employee stock-option administration platform, conceived by van Hees, a former stock broker.
“People are your most valuable and expensive resource. They are the only asset in your company and they can form an opinion. Machines can’t do that for you,” said van Hees. “Surround yourself with smart people and just because you are a founder of a company, this doesn’t give you the licence to be a president.”
A human-resources consultant was hired to ensure that employees are properly rewarded.
He advised entrepreneurs to dream big, but also consider integrity. “When you are starting a company, there are so many opportunities to cheat. It could take an entire life to build integrity, but just one move can tear it all down.”