Written by Andrew Seale
You don’t learn to surf on a shortboard. It barely floats, it’ll take your eye out if you get your board in the face, and, if caught in front of the type of wave a shortboard is built for, that wave will gladly drive you into the seabed and scrape you across the bottom. A shortboard as a first board is pure naivety.
Yet that’s what leans against the wall of Wave’s boardroom in the former Wrigley gum factory in Toronto’s Leslieville.
“That’s mine,” says Kirk Simpson, co-founder of the financial services firm which provides a suite of tools for small businesses including accounting, invoicing and payroll software. He explains that it was meant to be one of his first boards.
Simpson could be coy, could claim it’s a friend’s or a gift from a client, but he doesn’t sidestep the topic of naivety, he owns it, sees it as integral to the business he’s built over the past nine years.
“What’s the expression – you eat an elephant one bite at a time?” he says. “I think in some ways naiveness plays a role, you just think ‘why not?’ then you get to the next stage and think ‘why not?’… you just build it one step at a time.”
This is how Simpson functions.
Wave started as accounting software for small businesses. It was 2009, QuickBooks was still selling on the shelves of Staples, and software companies targeting small businesses were “dying on the side of the road trying to make that market work.”
Simpson, who’d already run a few small businesses and Wave’s co-founder James Lochrie, who ran a tax prep company, both saw pain-points in the accounting sphere, and, the challenge of selling technology to small businesses.
So they threw their software online. For free. Yes, free.
No shelves, no door-to-door retailing. Just a simple, free solution, paid for by ads within the platform and hovering in the cloud (a relatively new concept at the time.)
“You had to have a really amazing distribution strategy to unseat QuickBooks on the shelves of Staples,” says Simpson. But today, the retail landscape has completely changed. “We'll sign up 83,000 businesses this month and all of it is through digital channels like search engine optimization and people finding you on google, app stores on mobile devices, etc…”
Wave has since grown to 175 employees; broadened its product offering to tools including accounting, invoicing, payments and payroll; amassed a client-base of more than three million businesses; and clinched several rounds of funding including $32 million last May, led by RBC.
But while Wave was maturing, Toronto was too, says Simpson.
There’s still that trademark spirit of collaboration the serial entrepreneurs in the city like to espouse, and the rich, diverse talent pool that tech startups have access to is still less expensive than counterparts in places like Silicon Valley.
But there’s an undertone of competition – a “co-opetition” as Simpson likes to call it.
“We want to be supportive of one another but at the same time, you're fighting for your startup all the time,” he says. And some of the startup scene’s breakout hits alongside Wave – Freshbooks and Shopify (which, though headquartered in Ottawa has a massive footprint in the city) – are after the same small business market.
“There's only so many dollars, so much talent, so much PR to go around, we’re all in competition for that time and space,” he says. “Even if you're in healthcare, in some ways we're still competing with you for talent and time and capital.”
So the emphasis has been on iterating offerings to be where small businesses need to be, the solutions they’ll need to build their businesses. Internally, there’s a focus on culture. That’s how you beat the competition.
When asked about the readymade staples of Startup Inc – the ping pong tables and candy bars – Simpson shrugs it off. That’s not what he’s talking about when he talks about culture, it’s deeper than that. Culture takes time. Building a business takes time.
“I think there are a lot of entrepreneurs that go into it with that mindset, that ‘I’m going to make something quick, I'm going to be able to flip it and make a lot of money,’ ” he says. “(But) you learn through the process that’s a really bad strategy, it takes ten years minimum to build something of meaning – it's going to be crazy hard.”
When he says that, it clicks: maybe the shortboard wasn’t naivety, maybe it was optimism.
Photo Credit: Cameron Bartlett (www.snappedbycam.com)