It’s a rare tech entrepreneur who hasn’t changed direction – “pivoted,” in industry parlance – at least once along the way.
It’s not that John Baker, CEO of Kitchener-based D2L, doesn’t embrace change. The learning-management software company has ridden wave after wave of it since 1999, when Baker launched what was then called Desire2Learn as a third-year University of Waterloo student.
But Baker’s mission then – to transform the way the world learns – is the same one his 750 employees, spread across 13 countries, are driving towards today. And now, as then, Baker still sounds like he’s just getting started.
The perennial sense of newness that surrounds D2L makes it easy to overlook just how far the tech world, and the region’s place in it, have come since D2L launched.
In 1999, classrooms weren’t yet connected to the internet. No one carried a smartphone. “Software as a service,” Baker’s de facto offering, was still a pioneering concept; its acronym, SaaS, not yet a buzzword.
Student-led startups weren’t really a thing yet, either. We take for granted that they’re everywhere today, but when a 23-year-old Baker accepted an invitation to speak at a Communitech lunch in 2000, he half-expected to be laughed off the stage by the elder entrepreneurs who filled the room. Instead, he ended up connecting with an early customer, finding a new employee and fielding investment offers.
He and his team went on to build one of the region’s biggest contemporary tech successes, fending off a patent lawsuit launched by a much larger competitor and bootstrapping well into its second decade, when it raised US$165 million in two rounds in 2012 and 2014.
Once the only startup in downtown Kitchener, D2L now occupies two floors in the Tannery, home to the Communitech Hub, UW’s Velocity incubator, and the epicentre of a thriving startup scene. Its art-filled offices serve as global headquarters for an operation that provides an online learning platform, Brightspace, to more than 1,000 education and corporate clients with millions of individual learners.
To gain some perspective on D2L’s first 20 years, we sat down with Baker for a conversation this week.
Q – So, D2L is 20. Time flies. What would you say is the biggest difference between leading a 20-year-old company and running a brand-new startup?
A – The biggest difference as a leader is that we have the capacity to go off and execute against the vision that we have to a much greater degree than we did when we were a small startup. So we have a big dream for how we’re going to change the way the world learns, and now we have the resources to go off and really bring that vision to life. Whereas, as an entrepreneur, you’re surviving day to day.
You can still have the same dream, so that consistency of mission has not wavered in 20 years, which is pretty crazy when you think about it; most people talk about pivoting all the time. We’ve had a consistent mission for 20 years. But we just didn’t have the huge amount of resources that we do today.
I’d say that’s probably the biggest difference.
The other really big one from the personal side is, instead of doing everything yourself, you’ve got an incredible team of people around you who are all pulling in the same direction, and that actually gives me a ton of energy. I was just on a call with some of our people and, I go, ‘I don’t need to be on this call; you folks have this well in hand; I have total confidence that you’re going to do a better job than I would ever do on this.’
So, leading through and with people, that’s that’s also a huge difference.
Q – D2L isn’t the only thing that’s 20 years older. You started the company as a kid in university and have now spent nearly half your life building it. How has the experience changed you as a person?
A – I was 22 when I started D2L in the third year of university, and in 20 years there’s been lots of ups and downs throughout. But overall I think it’s been a period of incredible growth for me as a person.
I’ve learned so much. I’ve been mentored by so many great people. I have so many great D2Lers around me making me better each and every day. And the challenge of entrepreneurship, I think, has helped me grow tremendously as a person.
I still am present with my family; I have three little girls now, ages three, two and two months. So I’m present when I go home. I read them books before they go to bed. I put down the phone.
As much as entrepreneurship is all-consuming, I think it’s made me a better person. And I think I’ve got a lot of people to thank for that, first and foremost the D2Lers and the folks in the community that just continue to lean in and help make us a better company, and make me a better leader.
Q – What’s the biggest challenge your company is facing right now, and how are you meeting it?
A – The biggest challenge that we have right now at this moment, really, is getting the message out to the market and building as many relationships that we need to build to go off and execute the vision. So, we’ve got to go from adding hundreds of clients a year to adding thousands of clients a year, and that’s not an easy transition.
At the same time, we have an ambitious goal to make sure client satisfaction continues to rise. We’ve had good, steady increases in client satisfaction over the years as we’ve made these transitions to cloud and made these transitions to the latest modern architecture. This is the fourth big architectural leap that we’ve made as a company over the last five years. So, we’ve been doing a lot of the big, heavy lifts.
As of last month 100 per cent of our clients are now on the cloud. We have the most modern native cloud-based learning platform in the market, so we’ve got to get the word out.
So, I think our biggest challenge right now is really helping folks understand the problems we’re helping them solve, and really helping them understand how we’re different. And, with the energy of 20 years and one mission – and 20 years looking ahead with one mission – I think we’re going to be able to do some amazing things with our clients as we go forward.
Scaling it is exciting. We’re seeing accelerated growth; our growth year over year over year has been continuing to climb and that growth rate is continuing to climb. So, we’re doing good things, but right now we’re focused on the execution of that. That’s the internal mindset.
Externally, I think we’re facing the biggest challenge that we’ve ever faced as a company, in what we’ve been calling the future of work for the last few years. Communitech is actually a good partner on this front locally.
I used to think, when we started D2L, that where we had the biggest impact on people’s lives was in the education journey. We’d set them up for success as they go out into the workforce and hopefully they do well. Today, I think we have an equal opportunity to have an ongoing impact on people’s lives by making sure they get the right skilling, the right upskilling, the right reskilling, all the way through their careers. And they’re going to have multiple careers, especially in the face of automation and artificial intelligence.
It’s been well documented that there are millions of jobs at stake in North America; I think the estimate is over 60 million in North America alone in the next five to 10 years. I’m an optimist, so I think there are going to be tens of millions of new jobs created. I think the net gain of jobs is still going to be there. But they’re just going to be different.
I don’t think we as a society are ready for that change, and so our job as a company – to help people get the new skills and reskill faster – is paramount.
So, I’ve never been more excited about the opportunity in front of us. I don’t think we’ve ever been in a better position to go do that. We now just need to do it.
In our mindset, what we’re trying to do is work with our clients to help them connect with our other clients that can provide the reskilling, and just help connect the dots better so we can create a more efficient model for companies that are going through these transitions.
It’s a big problem. I can’t think of a bigger problem for our economy in the next five to 10 years than that. There’s climate change, which is a big issue. Economically speaking, I can’t think of a bigger issue than the complete transition of our economy.
Q – Does this mean your client base will evolve to include more types of clients?
A – The majority of our clients today are in education and we’re growing very fast there. I think we’re on track to more than double the number of new education clients this year compared to last year. I think we technically have already crossed that mark. And I see that trend continuing to accelerate. We’re finding a good product-market fit there and with education clients we’re helping them rise to this challenge by helping them do more online, because workers are not going to tend to want to go back to school to be reskilled and take two years to do that. Online is going to have to be a very big part of the mix for our clients, so that growth is awesome.
At the same time, our growth in corporate is skyrocketing. And again, we’re on track to double our corporate business in terms of new business coming in the door year over year. And I think we’re just scratching the surface of that. We probably should be tripling or quadrupling or five-times-ing our business as we go forward, given the challenge that’s being presented.
So I feel like we’re at this really interesting spot where all the things that we’ve done for the last 20 years are going to support us for the next 20, but we really need to dig in with urgency to solve these problems – with our partners, with our clients, with folks at Communitech as part of this future-of-work strategy – urgently.
I don’t think I’ve ever felt more anxious to get things done faster than I do today, and that’s saying something, since it’s been 20 years. This is big.
Q – How do you see D2L and its Brightspace platform helping to shape the future of work?
A – There are two things. From a platform perspective, what we’re doing is we’re saying, ‘Here are the skills you have’ and we’ll work together to say, ‘Here are the skills you need.’ And then we’re matching it back to, ‘Here are the courses, here are the micro-credentials, here are the other providers who are going to help you get those skills, or the ability for you to demonstrate that you’ve mastered those skills to help you with that next career path move that you need to make.’
For us, a lot of the future of work is about the future of skills. We’ve got some great whitepapers on those topics, and they’re not marketing whitepapers. If people are looking for recommendations on that, and how do they actually go off and implement it, that’s what I would point them to.
Then secondly, I don’t think we can do this alone. I don’t think a company can solve this problem by themselves. I don’t think a university can solve these problems by themselves. I think we need to have us act as an intermediary, connecting these two worlds together. We’ve got hundreds of education clients, and how do we leverage that base of educational clients to help with this future-of-work stuff?
Q – So is this the next big Waterloo Region collaboration, the next barn-raising?
A – Yes, this is it. As companies go through these transitions and automation comes in or jobs change, we as a community rally together to solve this together. So, to me, breaking down the traditional walls that separate industry from academia is a critical part of this equation, and groups like Communitech are a big part of that.
Q – The Waterloo Region tech community is virtually unrecognizable from the one you joined back in 1999…
A – We were the only tech company downtown.
Q – …and it has evolved through the dot-com crash, the rise and fall of BlackBerry, the great recession of 2008, the birth of social media and the rise of startup culture, among other things. What has it meant for D2L to be headquartered in Waterloo Region through all of that change?
A – Waterloo Region has been an incredible home for D2L for 20 years, and continues to be an incredible source of talent, mentorship, wisdom and support throughout the whole community.
The barn-raising nature of this community, to work together to solve problems, is second to none. The concept of leaving a ladder down – entrepreneurs who were ahead of me, providing advice and guidance to help me climb the ranks, if you will – I couldn’t be more thankful and grateful for. And the startup culture is a great spur to make sure that you continue to work hard, to take great ideas from next-generation companies to make your company even better again.
This virtuous feedback loop that’s in this community, of folks working together, sharing ideas together, collaborating together, building together and creating together, I am so proud of.
In our world, it’s not “location, location, location,” it’s “talent, talent, talent.” And the educational institutions that surround this community are world class.
Now, we’ve expanded beyond the community and we have people in 13 different countries around the world, and we find we find talent wherever they are. But we’re so proud of the community and the roots that we have here in Waterloo.
Q – This region now has a significant cohort of scaling companies, most of which didn’t exist a decade ago. ApplyBoard, Auvik, North, Vidyard, Magnet Forensics, Axonify – the list goes on. You’re a decade ahead of them in terms of longevity. What can those companies learn from D2L’s journey?
A – I learn a lot from those companies. I hope they take a few of the lessons that we’ve learned as an organization over the years.
The biggest thing that I’ve taken as we continue to scale is the investment in your people, to support their learning, to help develop internal leadership. I am so proud of the work that our team is doing on leadership development of everybody within D2L, not just the people leaders but individual contributors included.
If I was to leave them with one lesson, it’s to keep developing your people, keep investing in learning, so that you continue to have a team ready for the next stage that comes along.
There’s been lots of challenges that we’ve experienced, and I think the community has been very quick to learn from all of those. What I’m so proud of is how some of the things that we’ve tackled as a company, I see others in the community also tackle, and they’ve very clearly said, “If it wasn’t for you, John, doing this, then we would have never done it.” And so, I see that going both ways – we learn from them and they learn from us. And what’s great is, we keep sharing the lessons together.
Q – Examples are really powerful, aren’t they? It’s like, “If he can do it, maybe I can do that, too.”
A – Yes. You know, we were early pioneers of the SaaS (software as a service) model. We were cutting-edge on the cloud technologies. We’re a fairly large company today, relatively speaking, but we still have the most modern technology stacks going. We have this beautiful blend of cutting-edge technologies and scale. We learned that from some of the other folks in the community, but the reason why we’re doing that is because we’ve invested so heavily into the learning that goes on within our own people. So, they continue to grow with the company.
I’ve seen the struggles for others as they grow and they scale, and I keep going back to that as the lesson I would share. You covered us when we did the patent litigation work, and there are other companies that took that stance of actually fighting, like we did. Sandvine is a great example, and they won. Being able to band together and stand up to folks – sometimes you, as a community, can actually inspire each other. And what’s funny is, Dave Caputo, who was leading Sandvine at a time, was a mentor of mine.
So, you know, I think it just goes to show the strength in this community to see this virtuous feedback loop, with startups supporting larger companies and larger companies supporting startups.
Q – We’ve spoken before about key moments in D2L’s early history – that first talk you gave at a Communitech event when you were 23; the Blackboard patent suit that nearly sank the company. As time moves on and the company matures, what do those moments mean to you when you reflect on them?
A – I reflect back on those moments, the first presentation we did at Communitech when there were only two of us in the company at the time and the support that we got from the community, as incredibly emotionally positive for me. Those moments are things that inspired us, gave us energy, gave us drive, gave us reinforcement that we were on the right track. Those are things that were truly inspiring.
We just did a 20-year celebration and we actually had some of our early employees talk, we had some of the next generation talk, and we had some of what we call the torch bearers – the current generation – talk. And it’s amazing to see the story arc through their eyes, in terms of how we continue to stay true to our mission, stay true to our core values, how those values have gotten stronger because of the good things and the bad things that have happened to us over the years.
It’s almost like chiselling away at a sculpture – you start with a big block of marble and eventually you get something that looks very beautiful. We’re still chiselling away, but we know what it is now.
We know what we stand for today, we know what we live for today, and we know what our mission is today. And we know that we can persevere through almost anything. Those are good things to feel confident about as you reflect back on the good and the bad that’s happened over the last 20 years.
I think the thing I’m most proud of, as I do that reflection, is how much we’ve grown as a company, and how much better we’ve gotten as a company. And how we’ve gotten better is by retaining a lot of the key people that have made us, who have grown with us, and at the same time bringing on people who are just truly exceptional, who are helping us build this next generation of leadership that’s going to take us to the next to the next level as a company.
Q – If you could go back and speak with 22-year-old John Baker, what would you say to him?
A – You’ve asked me this before and I think my answer was very simple: Patent your technology, which we’ve done. We’ve got dozens [of patents] now, either issued or filed, pending approvals. That would be the quick remark.
Also, put good investment into product marketing, get the value-prop frameworks all nailed down tightly, if I was going back to 20 years ago. I didn’t realize how far behind our competitors were 20 years ago. I was just very focused on us and on building what our clients were looking for. I didn’t really take a good look at the competitive landscape, but, I mean, we were the first to do things like databases in our space. It blows me away today thinking back about that, but being able to really clearly understand what you stand for, what jobs you get done, and how you differentiate in the space to really get the word out to help scale faster – I think we scaled pretty fast – but those would be two lessons I would share with a 20-year-old version of me.
There’s a lot of learning after 20 years, and if I could go back and apply all of that learning to the 20-year-old version of me, I would be much further ahead, there’s no question.
Q – We’ve talked many times over the years, and each time you manage to make it sound like D2L is still new and it’s still all runway in front of you. Where does that come from? How do you maintain that sense of newness?
A – I actually think the market is just getting warmed up.
In our education business, when I was a student, there were only 100 million people enrolled in higher education globally, and I expect that number to be 300 million in the next 10 to 20 years. So there’s good growth in our core education sector.
Keep in mind there was no internet in the classrooms when I started, so the internet has helped us be able to really do this transformational piece. But a lot of what we were doing in those early days was really just digitizing. So, taking what we would do in the traditional experience and saying, “Well how do we go digital?” We might have been tinkering on some transformational stuff but we weren’t really transforming the institutions that we were working with or the companies that we were working with. It was really digitizing and optimizing, which is part of the transformational journey.
What gets me excited now is we actually get an opportunity to do more of that at a bigger scale, but also to work with our cutting-edge clients to really, truly transform the actual learning experience. And they’re ready now. A small number of our clients are ready for what comes next, and that gets me pretty excited.
I also don’t think there’s ever been a bigger shift in the labour force as we’ve seen which, to me, is an even bigger wave than the first wave.
The combination of those two things is what gets me more and more motivated. And again, I keep going back to the fact that we didn’t have the resources 20 years ago. We bootstrapped our company for 12-and-a-half years; we were living day-to-day. Today, we have resources to go and execute against this strategy now. And so I am more excited about the next five years than I was over the last 20.
The energy’s still there, the excitement is still there, the clarity of vision after thinking about a problem for 20 years has become very sharp. And I think we’re very highly differentiated in our market today, especially today. Most of my competitors have either been sold or are for sale.
So, us being true to our mission for 20 years and staying true to that for the next 20 will be a very different story – especially for our clients and the impact that we’ll have on millions of people.
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Communitech is a partner of Startup HERE Toronto. This article originally appeared on their site.